December 11, 2024 • 55 mins
This week on The Evolving Leader podcast, hosts Jean Gomes and Scott Allender spend an hour with Salim Ismail. In 2011, Salim Ismail co-wrote ‘Exponential Organizations’, a book that has since been widely read by CEOs who are looking for a new way to navigate uncertainty and embrace disruptive technologies and business models. In 2023 Salim and his co-authors updated the book and during this conversation he talks to Jean and Scott about ‘Exponential Organizations ExO 2.0’.
Salim is also the founder and chairman of OpenExO which helps companies implement the ExO playbook. He is a serial entrepreneur, the Founding Executive Director of Singularity University and serves on the board of the XPRIZE Foundation, and all of that is really just scratching the surface as to the work that Salim Ismail is part of.
Topics covered during this conversation include:
Core Principles of Exponential Organizations
The Exponential Mind Map and Hyper Scaling
Challenges and Successes in Adopting Exponential Organizations
The Role of Purpose in Exponential Organizations
The Impact of AI on Organizations
Navigating the Unknown and Embracing Technology
The Future of Leadership and Institutional Evolution
Referenced during this episode:
https://salimismail.com/
Other reading from Jean Gomes and Scott Allender:
Leading In A Non-Linear World (J Gomes, 2023)
The Enneagram of Emotional Intelligence (S Allender, 2023)
Social:
Instagram @evolvingleader
LinkedIn The Evolving Leader Podcast
Bluesky @evolvingleader.bsky.social
YouTube @evolvingleader
The Evolving Leader is researched, written and presented by Jean Gomes and Scott Allender with production by Phil Kerby. It is an Outside production.
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Transcript
Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
Jean Gomes (00:03):
A decade ago, a book fundamentally changed how I and
others looked at how anorganization could grow
exponential organizations wasthe result of a deep research
project to uncover the practicalthings that leaders had done to
grow their organizations 10times faster than conventional
market leaders using newtechnologies and ways of working
(00:27):
today. Its author, Salim Ismail,is in huge demand to advise CEOs
and heads of state, one reasonbeing that the data shows that
organizations adopting EXOattributes deliver 40 times
shareholder value compared tothose who don't. Tune In to a
vital conversation on theevolving leader.
Scott Allender (01:08):
Hey folks, welcome to The Evolving Leader,
a show born from the belief thatwe need deeper, more
accountable, more holistic, morewell understood and more human
leadership to confront thebiggest challenges facing us in
the world today. I'm ScottAllender, and I'm Jean Gomes.
How are you feeling today Mr.
Gomes, what are you bringingwith you into The Evolving
Leader studio?
Jean Gomes (01:29):
I am beside myself.
I've been waiting to talk to ourguest for a very long time. I've
been reading his work for a verylong time. I've been immersed in
it. I've been using it. I'vebeen working with people who
work with him. So, yeah, Icouldn't be more excited. I have
to say, I'm trying to control myenthusiasm. How are you feeling,
Scott?
Scott Allender (01:53):
Similar. You introduced me to our guest's
book a decade ago I think, and Ilove it, and I'm feeling all the
excitement to have thisconversation. So let's jump in.
Today. We are joined by a truepioneer, a strategist who
advises business leaders andheads of state. His book
(02:16):
exponential organizations hasbeen one of the most widely read
by CEOs over the past decadelooking for a new way to
navigate uncertainty and embracedisruptive technologies and
business models. One reason forthis is the data that shows that
organizations adoptingexponential organization
(02:36):
attributes deliver 40xshareholder value compared to
those who don't, it's justincredible. He is the founder
and chairman of OpenExO, whichhelps companies implement the
ExO playbook. He is a serialentrepreneur, a VP at Yahoo, the
founding executive director ofSingularity University, and
(02:57):
serves on the board of X PRIZEFoundation. Jean, I know you're
not only a massive fan of hiswork, but you've also been to
Singularity events, and this isgoing to be an incredible
conversation. So, Salim, welcometo The Evolving Leader.
Salim Ismail (03:11):
Great to be here.
Jean Gomes (03:12):
Salim, welcome to the show. How you feeling today?
Salim Ismail (03:16):
Very well. Things are kind of, you know, I was
asked by one of my boardmembers, and I remember a quote
where somebody said, 'How areyou feeling in the answer was,
I'm hanging on by my fingernailsand fake as pouring oil from
above. I think the visual is apretty good one for most leaders
today.
Jean Gomes (03:34):
Yeah, that's a really great metaphor or way of
bringing to life. So by way ofan introduction, acknowledging
some of our listeners. I don'tknow who they are, but may not
be familiar with your work withexponential organizations. Can
we start with the basics? Canyou give us a refresher on the
core principles of exponentialorganizations?
Salim Ismail (03:53):
Sure, it's important to note that it came
from seven years of a buildingSingularity University and
reading most of the programsthat right? So there's this, I
have this framing that we have20 Gutenberg moments of
technology disruption hitting usat the same time AI being just
one of them, autonomous cars,drones, life extension,
(04:15):
Blockchain, solar energy, thelist this goes on, and the
challenge is most of ourorganizations were designed for
efficiency and forpredictability. And for about
100 years, that was how we kindof designed all our
organizations, because marketsdidn't change that often, and
therefore you could do strategicplanning in a very traditional
(04:36):
way, etc. And what we noticed,starting in about 2010 was that
there was a completely differentmodality, where organizations
had learned how to scale the orgstructure as fast as you could
scale technology. And we'd neverseen this before. And so we
started, we looked at a coupleof 100 of the fastest growing
unicorns, and said, How are theydoing it? Ted leveraging its
(04:58):
community to scale to. A globalbrand, or Uber knock on its own
staff, or Airbnb left tappinginto other people's bedrooms as
we teased out a model. Andimportantly, we didn't invent
anything. We just labeled whatwas going on and put it into a
cohesive framework. And then thebook is half analytical and half
prescriptive. The original bookon how do you apply the model,
(05:20):
and it's now been 10 years wherewe have data, evidence,
anecdotes, etc. We just launchedthe second edition last year,
updating it the A, the data andB, looking at the nuances of the
model. And we're very excitedabout the we're very excited
about the idea, and it's prettyclear to us, one of my my head
of community, calls us thedecade of be x. So because it's
(05:43):
pretty clear that by the end ofthe next few years, pretty,
pretty much every organizationsin the world will be leveraging
these characteristics, whetherit's a nonprofit or an impact
project or a for profit orgovernment department, just
because we can see that it'sbetter.
Scott Allender (06:01):
So at the front of the book, you recap the Exo
Mind Map, which is now like amental tattoo for many leaders.
Can you give us a sense of theorigin story, and what was the
source of why and how thesecompanies thought and acted so
differently from conventionalorganizations.
Salim Ismail (06:19):
Yeah, I think the birth, the birthplace for this
is for us, Amazon Web Services.
Because Linda launched, we couldtake computing up a balance
sheet and make it a variablecost, and then scale your costs
along with your user base, ifyou were a software company, and
that for us, was an importantinflection point, because for
the first time, you didn't haveto make major capital investment
before you launch your product,right? And this led to the lean
(06:42):
startup movement and to hyperscaling, and all the other
movements that go get a productout there, as Reid Hoffman
famously said, if you're notembarrassed by your product and
you launch it, you wake it forlong, right? So you get it out
there, and then use data toiterate very, very aggressively
to iterate the product, and thenyou you can't be beaten, because
you're constantly going to wherethe evidence is as to where
(07:05):
things are, what tactics areworking, etc. My most famous
example of this is probablyAmazon Prime, where there's all
this naysayers at Amazon sayingthis will not work. People are
going to order a toothbrush at atime, and we're going to lose
money on each transactionbecause of the delivery costs,
and this will be a disaster. Andthe only way to test whether
(07:28):
work or not was to run anexperiment. So they ran an
experiment and found the peoplewho use it buy tons more and buy
tons more together, andtherefore they didn't lose
money. And now everybody usesit. Nobody ever unsubscribed
from Amazon Prime, right? And soyou see the outcome when you're
you're operating with thatmodality, if you're a truly
flexible organization. And theheuristics here are flexibility,
(07:50):
adaptability, agility and beingpurpose driven. And all the
characteristics in the Exo modelguide towards those few
heuristics. And if we can moveto that, then basically, in a
world that's becoming more andmore volatile, your your ability
to adapt will drive marketvalue. And the daily reference,
which I could touch on a littlebit more really, really reflects
(08:11):
that.
Jean Gomes (08:15):
So since you wrote the book, a lot has changed,
particularly with the sheerspeed at which new players are
getting to scale, can you kindof bring that to life for us?
Salim Ismail (08:27):
What we've been seeing is that more and more
organizations are following thistrend. And there's a, there's a
there's a huge bifurcation inhow we build organizations. Now
there's either new organizationsthat are following models like
this, and even if they're notconsistent saying EXO, they're
using attributes, that's fine.
And then there's companies thatare trying to maintain their
(08:47):
status quo, and those arebasically falling off a cliff,
right? And let me just reflecton the data study we did so in
2015 when the book, a few monthsafter the book first came out,
we actually analyzed the fortune100 against this model and said,
okay, is Goldman Sachs purposedriven? Is the leveraging
community? Is IBM usingdashboards and lean OKRs or not,
(09:11):
etc? And we kind of came up withan index. We scored them all for
one to 100 and I did a segmenton Squawk Box, the TV program.
So here's an index of theFortune 100 ranked by how
flexible, agile, yet so friendlyare they. Seven years later, he
did the trailing analysis, oneof our community members who've
done a bunch of work for UBS,tracked for seven years the top
(09:34):
10 to use the characteristicsthe most and the bottom tend to
use the least, and found thatrevenue growth was 3x higher,
profitability 6x higher intoyour earlier point, shareholder
returns were 40 times higher,right? And that just kind of
gives you a very clear guidancethat if you're not going to
navigate towards this type of amodel, you're not going to be
(09:56):
around very long the second.
Thing that I think we found overthe decade is the nuances and
the interdependencies betweenthe attributes we didn't quite
expect and when we first wrotethe book, because there we just
had no experience with it. Butfor example, GE trained 60,000
executives on lean startupcampaign, the biggest training
(10:19):
corporate training actualized inbusiness history, and it failed.
And the reason it failed is ifyou can't allow do
experimentation without allowingautonomy as to what to
experiment on, right? And sothere's we found, I think the
big difference between the firstand second book of A, the data
and the delivery of the modeland the evidence we have, but B,
(10:40):
we teased out some of theinterdependencies. And how do
you now progressively,prescriptively apply the model
in a powerful way?
Scott Allender (10:48):
So in organizations where they, you
know, they are trying to staymore status quo, and you're
trying, you know, they're moreconventional. What are some of
the the challenges you're seeingin bringing this to them in
terms of kind of changing theirmindset, getting them to to
adopt the playbook?
Salim Ismail (11:09):
It comes down to one, which is, I call it the
immune system bubble, right? AndI first came across this at
Yahoo when I was the head ofinnovation, running their
incubator. And it turned out,the more disruptive a product we
created the left the companycould absorb it and handle it
and take a benefit. And ofcourse, I've seen this in banks
or telcos before, but Yahoo wasa Silicon Valley company less
(11:29):
than 10 years old. Why should ithave this problem? And it really
bothered me. And it wasn't untilI had a conversation with Jeff
Kowalski, the CTO lot adjuster,who said, Oh, immune system
problem. And I kind of went deepon that, and we realized that
every big organization, when youtry anything disruptive, the
default answer is no. Andtherefore, as the world is now
(11:52):
being driven by disruptiveinnovation, which is the high
order big, big organizationsthat legacy organizations have
to figure out how to juxtaposewith this, otherwise they won't
be around. And a really greatexample of this is the car
industry, where for years andyears and years, they said,
Tesla is going to fail. It'snever going to work. We do cars.
(12:13):
We've been doing cars forever.
And boom, the market cap toTesla at some point was, you
know, all the others combined.
And I think that, and they wouldsay that companies were hugely
overvalued. And I'm like, Yeah,but would you rather be them or
you, you know, so the there'sthis unbelievable legacy,
(12:37):
calcium and understanding andadopting this, just because
every, I mean literally, there'ssingly, simply not an MBA
program in the world yet todaythat teaches you how to build
Uber right? Every MBA program inthe world teaches you how to
build a 20th century, scalableefficiency, uh, predictable or
highly structured organization,top down, hierarchical command
(12:59):
controls, and the world wascompletely changed. And I have
this crazy anecdote I can talkabout with with the deans of
business schools. If you want meto do something, yes, please. So
I got asked about six years agoto speak at a conference of 700
deans of business schools, likewho knew? But apparently they
all get together once a year,and the announcer asked me to
(13:21):
come and give you open keynote.
I'm like, wow, I'd love to kindof pop of that audio. So I get
on stage and he's introducingme. Thing, oh, we're gonna hear
from Salim, the latest scenewith X Men film Greg from the
pepper. Except what he sees inthe audience is complete blank
stares, no flicker reaction atall. And he notices this, and
he's like, just a quick show ofhands. How many of you read
(13:42):
exponential 700 deans ofbusiness schools and two put up
their hands? Wow. And you'relike, Are you kidding? That's
unbelievable. I mean, you know,okay. I mean, if I'm a car
designer, I'm near me, not likethe Tesla, but I should jolly
will know what it's about. Andthe fact that they had no idea
that this even existed was justcompletely blew my mind, and the
(14:04):
seller took me aside. Later,later, of course, I was mobbed,
and they were like, Hey, how canwe partner with you? Etc, etc.
Later on, I found out that thedeans of all the business
schools, they're researchers.
None of them run a business, sothey're all focused on the
little areas of research, andnone of them practically replied
them. And it just completelyshocked me that this is what
(14:28):
people are paying hundreds of$1,000 to get that type of
education.
Scott Allender (14:33):
That's incredible.
Jean Gomes (14:34):
And you still think that's the same kind of deal now
,that it hasn't changed thatmuch?
Salim Ismail (14:38):
Yeah, because when I talk about immune systems, the
three worst immune systems I'veever seen, third worst of
healthcare. The second worst iseducation and academia. But God
help you to kind of take that.
The worst being religion, wherethey'll literally kill you if
you don't, you know, follow theorthodoxy. I actually got one of
the strangest. Uncle, obviously,was a few years ago from the
(15:01):
Vatican, saying, look, thePope's trying to change the
church. His immune system is is2000 years old. So I actually
went and did a workshop with thead Senior Legal clerk, and it
was one of the more eye poppingexperiences I've ever had,
because these the fundamentalchange that's coming, right? Is
something that people need torecognize and then just deal
(15:21):
with, just talk a little lifeextension, right? I mean, that
changes a lot of things insociety. If you suddenly extend
or double human lifespan, whichwe're likely to do in in the
next decade, pension plans,insurance models, unemployment
benefits. I mean, it cutsthrough the entire stack of what
it means to be alive and howcivilization is structured. The
(15:42):
specific conversation with theradical I had was, your business
model is to sell habit, and howare you going to sell heaven if
people aren't dying, right? Andthat's that's a conversation to
be had. Why do you adapt tothat?
Jean Gomes (16:02):
There's a chapter in the book I love the title of it,
which is the death of the linearorganization. Now that might, in
the light of the things thatwe've been talking about, seem
fairly obvious, but can we talkabout how you embrace non
linearity? What does that meanto the conventional ways of
thinking and structuring anorganization.
Salim Ismail (16:21):
Great question.
Maybe the one most importantquestion is, how do you deal
with it, right? And and this isthe conversation of having,
increasingly, with boards and Csuites around the world. There's
only one model that we've foundin the kind of 15 years I've
been looking at this and 10years since the book came out,
which is, if you have a legacyorganization, you have to run an
(16:42):
immune system disruptor in thecore organization, we've
developed a 10 week engagementthat we've open sourced, we
piloted with Procter and Gamble.
We found a way of hackingculture at scale. In a legacy
environment, you have to runthat to change the conversation,
soften people up second. Thenwhat you do is that every
(17:02):
organization has about 5% oftheir employees and team members
that are completely crazy.
They're very hard to manage,very smart, very loyal, right?
And you never know if you'regoing to get them, they're going
to be fired or they're going tostick around. It's 5050, kind of
thing. You take those folks tothe edge and have them build
disruptive, exponentialorganizations at the edge of the
(17:22):
organization, pointing intoadjacent spaces. So Larry Page,
a few years ago, came to me andsaid, Hey, your unity Yahoo is
released at Frostburg. Did Ihave an incubator at Google? And
I said, No, you'll have thisimmune system problem, but do
something like it, keep itselfand point it away from the core
organization. And along withmany other conversations that
(17:42):
you have, you see the revokersGoogle X, where they have the
core information managementinside Google. But then to use
hardware, Google cars, Googlecontact lenses, Loon, etc, to go
into adjacent area. In myopinion, the master of this
technique is apple. And yes,they have a great design
capability and a greattechnology supply chain, I argue
that Apple's real innovation isactually organizational. Because
(18:06):
what they will do, and whatnobody didn't even notice that
they do, is they will form asmall team that's very
disruptive, put the team at theend of the organization, keep
them secret and stealth and savethem. Go disrupt another
industry, and whether it's carsor watches or payment or retail,
there's no limit to their marketcap. They just have, I think, at
(18:26):
last count, that they have 18teams looking at different
industries. And when they thinksomething's ready for
disruption, they pop into it,and then they iterate very well,
right? And and so therefore,that model is something that I
think will and then they fold itall back into the broader
ecosystem. And you see Uberdoing that with Uber health and
(18:47):
Ibu. To see Facebook doing thatwith Instagram and WhatsApp,
leaving these brands with theedges rather than trying to
merge them in. And so the thetransformation that's taking
place over the last kind of5070, years, is operating
company turning in the platform,turning the ecosystem. The
problem is, it's if you're a 20year C suite leader in a legacy
(19:10):
organization, you have nomechanism for understanding
this, seeing it, migrating toit, and then if you get it, how
do you get the rest of theorganization to follow you? So
this is most of the work thatI've been doing, which is why
I'm bold.
Scott Allender (19:29):
I wish I had an excuse for why I'm bald. I'm
just bald.
Jean Gomes (19:34):
Can you bring to light this conversation about,
you know, you're talking withit, and I don't want you to
reveal all the secrets.
Obviously we can't got time forthat, but you're talking to a
CEO about making the shift fromrunning a conventional, linear
type of organization to thisecosystem approach which can
adapt to the opportunities andchallenges facing it. What they
need to do as an individual tomake that kind of change.
Salim Ismail (19:59):
Yeah, honestly as an individual, they need to mind
factor and the biggest mindsetKerby need to make this is the
disruptive mindset and theexponential mindset. Okay? And
let me explain in a couple timeswhat I mean by that. The
disruptive or change basedmindset basically said you have
to recognize that the world wasfundamentally changing. It's
(20:19):
never going to be the sameagain, the market you thought
you had doesn't really exist inthe market you're in. You don't
really understand it, thereforeyou have to guide. You have to
give autonomy to your teams togather as much data and read as
many experiments as possible, tokeep tabs on what's happened,
because you have no clue. Bydefinition, that's one and I
(20:41):
think the second is theexponential mindset, where you
you place your your bets in aanything that could grow in a
radical fashion. The master ofthis particular mindset is Elon,
where his methodology forbuilding companies actually
absurdly simple. He will look atthe technology that's growing
exponentially and doubling on aprice per coins pattern, solar
(21:02):
energy, lithium ion batteries,neural interfaces, whatever. And
then you look at 10 years, wherewill that technology be on a 10
year doubling pattern? And thenyou'll build a company.
Intercept that curve, because ittakes about 10 years to build a
global company. Now, non trivialto last that 10 years, right?
But if you can do it, then youcatch that curve as of going
vertical. And now, for example,lithium ion batteries have
(21:26):
dropped 93% in the last 10 thecost, that's unbelievable. So
now the cost of building a$20,000 test is really
incredible compared to a testthat was 10 years ago. So the
the exponential mindset and thedisruptive kind of change based
mindset is two important thingsfor the CEO. Then tactically,
(21:50):
what you do is you take yourcrazy people to the edge and go,
go, follow your passion, pick aproject, create an MTP or
massive transformative purposefor that project, etc. Once in a
while you see a legacyorganization actually doing it,
and kind of hats off to them.
My, my kind of favorite exampleof this is Philip Morris, which
(22:11):
makes you know, cigarettes. Idid a discussion with the board
about 10 years ago, and it was alittle delicate, because I said,
What's your purpose? Yourpurpose can't be to have people
smoke. You know, that's not aviable structure going forward.
And along with a bunch of otherconversations, absolutely not,
not just me, they they had athey voted and collectively got
(22:36):
together as an employee, basedas a management team as
stakeholders and shareholders,and fundamentally changed the
company. The head of innovationcalled me about five years ago
and said, Go, have a look at ourwebsite. And literally their MTP
is a smoke free future, right?
And you're like, is this aparody? Is this like, this?
(22:57):
Unbelievable, but they did it.
They did 180 degree pivot, andall of the bonuses released
African has now come from smokefree product and wellness
product, which is kind ofincredible. And so once in a
while, you'll see a companyreally taking it on. But most
ways you have to kind of launchthese and let the new thing
become the gravity center.
(23:19):
Because if the second order ofsuccess that we found is if you
launch these things at the edge,like Amazon launching web
services or etc, you can't bringthem back in, because if it's
disrupted, it will fit neatly,right, and all you'll do is kill
it, which is, what is thepattern of legacy? Or they get
up to float it off and let it bethe new thing. So for example,
(23:41):
Amazon Web Services. Do you knowabout the Amazon institutional
Yes, yes. Can I describe thisreal quick, though? Yeah.
Amazon. Jeff Bezos realizedearly on that it's really hard
in a big company to say, to getto get disruptive ideas handled.
It's easy to say no, and one or20 people will say no, and
(24:02):
they'll know the idea. So youcame up with a blocker for this,
and in the the ideas policycalled the institutional Yes. So
if you're inside Amazon, youcome to me with an idea, and I'm
your manager, my default answermust be yes. I'm not allowed to
say no. If I want to say no, Iforgot a two page thesis on why
it's a bad idea, and post itpublicly in the intranet. So
(24:24):
they've created friction andembarrassment to say no meaning
that many more ideas. Because ifyou come to me, I'm just it's
much easier for me to say you'rean idiot. That idea is never
going to work. But you go rightahead and you deal with the
embarrassment and it's and thenI can kind of wash my hands with
it. And actually, Amazon WebServices was one of the outcomes
of this. Nobody could figure outhow to say no to it. Nothing
(24:46):
could do with their corestrategy, and now it's
delivering what 75% of theirglobal profits. Right? That's
just the most unbelievableconcept and and I've got a kind
of another model around this,one of the biggest vitality. In
the world is worth about I'llgive you the negative use case
here. And one of the biggesthotel teams in the world was
worth about $70 billion okay, ifthey had launched Airbnb,
(25:11):
TripAdvisor, booking.com, theirmarket cap would be closer to
$300 billion and the reason Iuse that example is all those
ideas were sitting inside thecompany, but the immune system
would not let them out. So forfear of cannibalizing the
existing model, they'reliterally eating Forex on the
pool. And that is the patternthat has to be broken. And in
(25:34):
this conversation, 10 years agowas very hard, right? When I'm
sitting down with the CEO said,BMW or something. There's just
no play in this. They're like,yeah, we'll build Tesla in a
year. You know, 10 years later,it's a much easier conversation
across industry to tackle. So Imay have been I thought I was
late when the book came out. Itturns out of maybe a decade
(25:56):
early.
Scott Allender (26:02):
Let's zoom in on on the purpose comment you made
about Philip some more. As yousaid, MTP, which stands for
Massive, transformationalpurpose as a real strategic
imperative that moves far beyondthe sort of like bumper sticker
approach to purpose or sort ofwriting a purpose statement on
the wall, but you're talkingabout something that really
transforms an organization. Andyou used a great example with
(26:24):
Philip Morris. Can you hone inon the concept a little bit more
and why that's so critical inthe exponential model? Yeah.
Salim Ismail (26:31):
So when we analyzed those 200 unicorns way
back in the day, we had a biggraph and we had a big matrix.
Okay, who's doing what? Tickboxes? Uber does this? They use
dashboards, they use AI vehicle.
And what they had uniformlyacross all of them was a very it
was very clear what problem theywere trying to solve. Uber
everybody should have theirprivate driver, Google, organize
(26:52):
the world's information, etc.
And they all had it. And we werelike, wow, this is like, really
important every one of theseExos in Douglas. So we came up
with the framing of a massivetransformative purpose, saying
you have to go for a really bigproblem. It has to be
transformative, and it has to bevery purpose driven. And that
(27:13):
gives the ethical basis of anExo and future organizations,
because this applies tononprofits. Governments have a
natural NPP, etc. So I coinedthe phrase, I think was about
late 2012 and then it was in thebook, and that last time went
on, people started driving thispurpose driven ethos a lot more.
(27:33):
Why? Because if you have an MTP,it excites an entire community
to swarm around you, like Elonwith SpaceX, right? Every
engineer in the world is dyingto work for SpaceX or a company
like or Tesla, right? And so itcreates a gravity well, where
everybody wants to get involved.
And what's really magical aboutit, it's if you're an evolved
(27:55):
leader in your framing, if,let's say my MTP is a career
counselor, and I'm kind ofplugging away doing my thing. If
somebody else solves thatproblem, I'm thrilled a bit
because it's such a big problemwe're going to spend lifetimes
trying to figure this out.
Therefore, kind of the you endup with a much more cooperative
(28:16):
environment, the rather than awinner, kickball network, state
network company, typical model.
And so it changed the ethos. Andalso we found was in big
companies, 99% of theconversation is about what's
happening inside the company.
And when you have an MTP, youcan start looking outside.
Whereas people are like, Okay,how are we going to deliver that
(28:38):
MTP? Right? When some leaders atGoogle are trying to evaluate
this project or this project,they can simply ask the
heuristic of which one helpedorganize the companies in the
world for making better and thenput their resources there. And
so it propagates in a verypowerful way. Creates community
around you and for us, thefuture of most organizations
(29:00):
will be a purpose with acommunity around it, and then
products and services pullingout from that community.
Jean Gomes (29:07):
So how, because everybody's talking about AI at
the moment, how does AI change(or does it change) what's
happening with with your work?
Salim Ismail (29:17):
It does radically better from so a couple of
important points around AI here.
I absolutely don't believe AItakes all the jobs. In fact, I
don't think it takes any jobs,to be blunt. Okay, why? Because
the evidence we've seen whenwe've had major technology and
prevention in the past is weincrease job employment, not
(29:38):
deep reason. So we can talk moreabout that, if you want to get
into that. But I look at it as aslide rule to excel spreadsheet
information. It's just thismassive game changer in how we
think about things and whatallows us to do. I think the
thing that I'm most excitedabout is. Will eliminate a huge
(29:59):
area of what I call white collardrudgery. So let's say I'm a
booking agent for a familyresort in the Caribbean, right?
And a family calls up and says,We've got three families coming.
We want to have rooms that arejoining the kids should be near
the pool. There's all thiscomplexity. I could spend, like,
a day and a half trying tofigure out that crap, whereas in
(30:20):
AI is going to go, Oh, give themthese three rooms and you're
done, right? And so, especiallywhen the advent of generative
AI, and so, I think there's anenormous ability now to really
uplift most organizations. I'llgive you a simple example. We
came across a company recently.
(30:40):
It felt like Palantir in a box,okay? And what they use? They
drop an AR into yourorganization, into your back end
servers, and they suck up allthe sales force and and slack
data or whatever, and theyinstantly can store all
institutional knowledge, so if akey employee leaves, you don't
lose all of their their insightswith them. That's just, that's
(31:02):
just a complete gain change overright there, in terms of a
concern about, how do you manageyour organization, the
redundancy you have to have invarious roles, all that stuff.
So I think AI will become amassive game changer in the
cleaning up internal processesand over time, over time it
(31:23):
will, it will replace the needfor more and more work. But if
you think about, say, softwaredevelopment or a truck driving
is a great example, right? Wekind of you hear all this money
about, oh my god, autonomoustrucks are coming, and we're
gonna have 3 million jobs out ofthe window, etc, etc. Whereas,
if you go and talk any of thetrucking companies, they're
like, we would hire 1000 truckdrivers today. We just can't
(31:46):
find them. Nobody really wantsto do that work. So we will
absolutely need autonomous carsin places like Japan and China.
China, especially with the agingproblem, need robotics and AI to
do a lot of the work goingforward. So I think from as a
societal level, the thetechnology will be massively a
(32:07):
game changer, on the positiveside.
Jean Gomes (32:09):
One of the things that we are constantly asking
ourselves and our guests here isaround as AI comes in into more
and more of our lives. What doorganizations need to do ensure
it kind of lifts people up andthat you get more of the, you
know, the very precious aspectsof human value, creation,
(32:30):
decision making, creativity,relationships, you know, all of
the kind of stuff that peopleare brilliant at, rather than
getting them pushed down intomore kind of almost serving the
technology.
Salim Ismail (32:40):
Well, I think if you go back my earlier comment
about the white collar drudgerythat will solve, I mean the job
satisfaction that people willget, having that problem handled
in two seconds. It's like goingback in the old days when you
had to kind of tap out on a, ona on a path, register the
different line items and add itup at the end and do a big
(33:00):
thing, and this thing wouldprint out, and then you can't
collect the money, and now it'sall digitized completely. We
just want it, okay, no cashierwants to go back to the old
days. So we forget, we forgetthat part of it. We worry about
the kind of like, oh my god,what would people do? Etc. But
we forget that there's weenable, generally, when you have
(33:21):
an injection of technology, ituplifts the value the human can
do much more customer serviceand deal with the exception
handling and the harder,difficult problems, which is the
main way more fun stuff to do.
And so I think if I just followthat meme and that vector over
time, AR just makes things a lotbetter and faster. Like, for
example, imagine an AI istracking all the conversation
(33:43):
and comes to you every two days.
And so this is the biggest HRproblem you have right now,
right? And it's surfacingproblems that you could not
surface in other way. And Ithink this is the key part
around the AI than most peoplein this is that people think
it's going to replace humanendeavor, whereas I think what
it's going to do is areorthogonally add massive
(34:05):
capability given
Scott Allender (34:08):
So there's, there's a lot in there, I think,
in terms of mindset, right? So,you know, going back to the cash
register example, I'm sure atthe time when there was, you
know, I'm speculating, but whenthere was talk about the sort of
scanning, I'm sure there wasfear that it produced in the
cashiers in terms of, what doesthis mean? Huge. So it's, you
know, there's always thatunknown, right? So it's like
(34:29):
we're always moving towards theunknown. So as people, as you
work with organizations, or aleader who wants to adopt some
of these principles and push theorganization into the unknown,
how do you help? Or how can theyhelp an organization ready
themselves to have a tolerancefor the unknown with an optimism
for what's going to be possibleby adopting these principles.
Salim Ismail (34:52):
So I think the biggest challenge that I see
with humanity Rick Lark is whatPeter identified. In the book
abundance, what he calls theamygdala. So we all have in the
back of our brains with littleorgan that's about the size of a
walnut that's constantlyscanning for bad knees, and it's
(35:13):
a danger warning signal. When wewere running around on the
plains of Africa, you heard anoise in the Bucha and you ran.
Why? Because bad news could killyou. If you wait around to see
if it was your friend, the tigereight years so we're 10 times
the more likely to pay attentionto bad if I missed a piece of
good news, I might get somefruit of activity. If I missed a
piece of bad news, I likely diedback when, degree with a fraud,
(35:36):
with danger in our environment.
So we relate to uncertainty andunknown is danger, and then our
mid below lights up and we runfrom it. So anything new, like
if you talk to somebody whenthey first come across auto
cars, the first reaction is, oh,my god, the car might kill
somebody. Banned the car, right?
Because people don't want to bekilled by robots. They'd much
(35:57):
rather be killed by drunkpeople, because what's happening
today. So the we have toovercome this, and it turns out,
we're 10 times more likely topay attention negative news than
positive news, because of thatold survival bias, which is why
Fox News does very well, right?
If you watch Fox News, you'regoing to die this week, if
you're lucky, laughs Well nextweek. Peter calls CNN the crisis
in these network because whenyou can track every bank robbery
(36:20):
in real time, high definite onscreen to 20 devices, you think
the world is going to hell, andyou vote on that. And this is
the mismatch that we have withthe news cycle today, where good
stuff doesn't report it right?
The world is an incidentally,better place than we've ever had
it in the history of humanity.
And very few people will sharethat view, because they just
(36:44):
live in the negativity, becausetheir amygdala is lighting off
all the time. So I think the theif I could make an evolutionary
change to humanity today wouldbe just to put out that
amygdala, because the amount oftime in our lives that we're
faced with real, physical,existential threat of new route
zero, and yet it dominates ourconversation.
Jean Gomes (37:13):
So what is kind of on the horizon for you right
now? So then, what are youreally excited about in terms
of, you know, trying to bringmore of the thinking here to the
wider world. What are you doingin Singularity University and
other things that you're doing?
What's the thrust of yourfuture?
Salim Ismail (37:32):
So I think there's a so singularity is doing a
great job of training executivesand people on here's the future
of technology, and be aware ofit we provided, and that gives
the why. Why, since you kind ofpay attention to this, we've
provided the how. Here's how yougo about doing this. What's
happened? About a few years ago,a political consulting firm came
(37:54):
to me and said, Hey, we usedyour book, goodbye Fauci state.
And I was like that, that wastotally not designed for that.
What are you talking about? Andwhen I looked into it, it turned
out to be several dozen heads ofstate. I was like, Wait, we have
a community and a tool set andsome credibility, but now we
have access. And so I did do,like, a year of psychedelics to
kind of get my head around, letthe future hold, because that's
(38:16):
a gift from the universe youhave to take. And I've been
thinking about, how would yourewire society at scale, and
think and navigate the future?
Because all our institutions aregoing to break with the
onslaught of all of thistechnology. The famous biologist
E O Wilson put it back. He said,The problem with humanity is our
(38:39):
emotions are Paleolithic, ourinstitutions are medieval, and
our technologies God like if youthink about that, pretty much
all the problems in the worldcome from the gaps in those
three layers. And as leaders, ifall evolving leaders are going
to spend the next 20 years ofour careers dealing with those
gaps, because the technology ismoving in its pace, you can't
(39:01):
slow that down. So we have tokind of bring humanity up and
individuals, kind of, we have apretty good tool set to navigate
individuals, where I think thebiggest weakness, and if I could
think about from the leadershipperspective, is, how do we
update our institutions? Becausewe have no mechanism or feedback
loop of updating oldinstitutions like the UN or
monetary systems or legalsystems or healthcare systems,
(39:24):
intellectual property broken.
Education is broken that I thinkof the biggest challenge. So
we've been thinking about, howwould we rethink society in that
model? I have this hobby inmetaphysics and philosophy,
okay, and I did this TEDx talkcalled, how do you pick
civilization? My at the time, my90 year old dad came to it, and
(39:49):
he puts up his hand. He goes, Iheard about your talk, can I
Heckle? And I'm like, Yeah, ofcourse you can Heckle. He goes,
I totally disagree with yourthought. I said, Whoa, okay. Do
you do you not think you need topick civilization? Really is
like, no, no. The fixing,obviously, but the problem I
have with civilization, becausewe have not civilized the world.
We've materialized the world.
We're apes with tools, actingwith a genomic animality that
(40:10):
that we have tribal wars atscale now, all we've done a
scale tribal conflict. And youlook at the Middle East this,
it's like, of course, he'sright. His comment was, we still
have to do the work to civilizethe world. I was like, Wow. You
know, wisdom bomb from theelders, right? Boom. And I've
been thinking a lot about, howdo we actually go about that in
(40:32):
an era where our existinginstitutions don't work, our
religions don't apply, and thethe technological changes
hurtling us ever because the oneinstinct is slowed down, but you
can't slow it down. And so whatdo you do? And so we have to
kind of accelerate our humanendeavor and our human
(40:53):
organization, the better copewith this. And really, when
technology you have newtechnology injection, the big
challenge is always, how do youextract a promise without the
peril? Because I can use fire tokeep my house and I can use it
to burn down your house. And viaour secular laws around the
world, we've done a pretty goodjob of doing that over the
century, but now thetechnological innovation is so
(41:17):
high between CRISPR and genesequencing and editing and organ
transplants. And Lord of whatthat, that our institutions are
all going to break in the faceof this. I don't know if you saw
the story about the Uber carcrash a few weeks ago. Um, so,
so a couple in an Uber had a badcar crash when they sued Uber,
(41:38):
okay, and so they were goingthrough this lawsuit, and then
what happened was their 12 yearold daughter ordered something
Uber Eats by using theiraccount. And on Uber Eats, it
says he cannot sue. And so it byaccidentally, it wiped out their
entire legal case. Because, Imean, it's just we can't even
handle internet from a legal,regulatory perspective. So
(42:01):
again, everything up coming,right? It's, I think this is a
big challenge that we have as aglobal speech we break up.
Jean Gomes (42:08):
So can you give us just a couple of insights into
how you think our institutionsdo need to evolve, the fact that
they are unable to because ofthe way they are set up.
Salim Ismail (42:22):
There's the immune system problem, okay, but let me
give you. Let's take education,because I've got fair bit of
experience in that world, givensingularity, and I get awful
lot. I've been talking to manyof you had the state looking at
how do you think? So? I wastalking to one of the bigger
countries in Southeast Asia forthe Minister of Education. This
is literally about three monthsago, and he's like, Yeah, I've
(42:44):
got a big problem. I need tohire 40,000 English language
teachers in the temple. And I'mlike, hello, AI can teach you
English in two seconds.
Colleague, you don't need 40,000decoup. And he's like, I can't
do that. I have to hire people,right? And that, that problem is
what needs to be solved. Becausetoday you could take all the
health care data, you can takeall the legal data, all the
(43:06):
legislature led the laws, andtake all the educational data
and put it into three differentllms for any country, and give a
kid three links, a doctor, atutor and a lawyer, and and you
just have to sit back while theydo gun. You just need to get out
of the way, is my opinion. Andwhere we keep trying to control
(43:28):
where things are going, and wecan't, all we do slow down the
progress. And so therefore, Ithink what needs to happen is,
if I was thinking from anevolved leadership perspective,
is let the technology out,police the negative use can't
take, and then you go for it.
From the there's a really greatlittle insight here, effective
(43:48):
broader data point. 20 yearsago, when we had eBay and Craig
was emerging as meager kind ofplatforms to be E commerce. You
know, it's pretty easy. I'm oneBay to fake a transaction. I
can put a picture of a MacBookup, and you send me $1,000 and I
can be right, I can mask myemail address pretty quickly. So
sociologists and anthropologistsare really excited, saying,
(44:08):
okay, we can actually studyhuman nature of scale. Okay, so
now we have no news oftransactions. What's the actual
ratio of good to bad? And itturns out, consistently cross
credit with eBay and otherplatforms like this, the ratio
of positive, fraudulenttransactions consistently
something like 8000 to one. Andthat should give you enormous
(44:31):
optimism for humanity, becausein an open playing field where I
can do either 8000 to one, isthe ratio consistently right?
Does that means the bear. Whenyou technology go like draws,
our first entity gets banned thedraws, because somebody
negatively loaded up with sequelin front by the White House,
(44:51):
whereas the proper thing and thebad character is not. So we ban
the drills, the bad guys not litfrom the regulations anyway. So
that doesn't help you. And allyou need to stop all the good
innovation. Whereas if we said,said everyone you do whatever
they want with it, you'd haveall this unbelievable explosion
of innovation. And then you putthe regulatory and put in the
police, the negative use case,society would benefit way more.
(45:15):
And I think that kind ofmentality needs to seep into our
how do we think aboutregulatory, institutional,
institutions, etc, and that'sjust not there.
Jean Gomes (45:26):
That's an interesting insight, really, to
understand that 8000 to one,crazy the other, the other. The
other side of that, and it isreassuring. The other side of it
is that as the as an exponentialorganization, becomes more
successful, it also gets morepowerful, and then its moral
responsibility becomes greater.
And many, many of theorganizations that have done
(45:50):
this have questionable moralkind of code in them.
Salim Ismail (45:57):
Very much so, but I think where that where that
happened, the market tends tofigure things out a little bit.
But for example, I'm a cheapskate, so I never take search
pricing on Uber. I have a friendwho was always late, so he
always accepts it. And we can bestanding next to each other
order the same card of the samedestination, he'll be totally
kind of the price, becausethey've gained it down. They
(46:19):
know he's going to pay extra. Sothey just give them extra, a big
fee every time, right? Andthat's just, you know, that's
just that in certain level, andthe drivers getting very little
of that. It would be okay if thedriver got a big gun, the driver
is getting almost none of thatupside. So there's, there's some
nasty practices in some ofthese, but I think competition
helps with some of that. I don'tknow where how we navigate this,
(46:44):
but what we found is, if youhave an MTP, generally,
organizations are trying to dothe right thing.
Sara Deschamps (46:51):
If the conversations we've been having
on the evolving leader havehelped you in any way, please
head over to Apple podcasts andleave us a rating and review.
Thank you for listening. Now,let's get back to the
conversation.
Scott Allender (47:04):
If you were sitting down with a CEO or one
of our leaders right now whowant to adopt the ExO playbook,
what would you advise them to doas sort of first steps?
Salim Ismail (47:15):
So being him over the years, female of a community
of something like 40,000consultants, entrepreneurs,
innovators, technologists, inthe giant community, in 150
countries. And so what we do iswe we have a weekly EXO
discovery call, if they come tothe call, get a sense of what
(47:35):
it's about, and then we pair youup with a coach from the
community. And we have a veryinexpensive, I think we tried,
like 10 or 20k for this, an Xalready program where in a week
or two, we analyze your companyscored against the model, and
then create a roadmap for theorganization for the future. And
so then the CEO has a clearroadmap on how to connect the
(47:57):
organization and implement thesebecause those nuances of which
ones are you doing already attechra. We can navigate a lot of
that. And so we, we are able tolaunch those. We're doing a
whole bunch of those where CEOswill call us. We'll go, Okay, go
talk to this coach, run thissilly exercise, and then you can
do it yourself, or ask some ofthe coaches for more help.
Jean Gomes (48:20):
And if you were talking to somebody who was, I
don't know, 14, 1516, and theywere asking you for advice about
how to think about the future,where would you start that
conversation?
Salim Ismail (48:34):
Oh very easy. So I'll speak a little bit to
education. Back to educationjust for a second. Okay, we've
been doing education on what Iwould call a push basis, or a
supply side basis, the block twogrand here, where the
educational system you trainthem through the early 20s to be
really good at one particularskill, because whether it was
podcast host or or graphicsdesigner or accountant or
(48:58):
engineer or doctor or whatever,and then you went to the job
market and sold those skills inthe job market. But all
education for the last couple of100 years has been supply side.
I think what's happening now ismoving over to the demand side.
We'd say, what problem do youwant to fundamentally solve as
an adult? What's your purpose,etc. Which moves you over to the
demand side. Elon is a greatflag bearer for those because he
(49:21):
had no experience in the car orenergy or space sectors in yet
he's built market loopers andall of them, right? And so when
you move somebody over to thedemand side and say, what big
problem do you want to solve,then drops out of that. What
technologies, what techniques,what skill sets we need to solve
that Matt Brown, your educationfrom that perspective. So that's
(49:41):
one major shift happening ineducation. It's going to happen
no matter what, and it'shappening in front of us. What I
say to young people is, pickyour MTP, and it doesn't have to
be your ever, forever. MPV,what? What gets you excited now,
right? And then go join astartup or build a startup doing
that because. So today, there'sno environment in which you can
(50:04):
use leverage legacy environmentsto learn very well. So it used
to be that the you people duringgene your proctor and YAML to go
through management trainingschools and etc, etc, and it
just doesn't apply. It turnsout, by the way, the best
leadership training in the worldtoday is playing World of Work
on so, you know, there's there.
The younger generation has kindof figured it out. We just need
(50:31):
to get out of their way. Is myview.
Jean Gomes (50:35):
What haven't we talked about that's really
important to you, that we shouldget, you know, close, our
conversation with?
Salim Ismail (50:42):
Well first, I just want to acknowledge the work you
guys do is so important.
Because, you know, when it comesdown to leadership, the future
of leadership is one of the mostimportant topics for them. You
can see the fundamental lack ofleadership and toxic leadership
around the world. And so thework that you're doing along
with other was is probably someof the most important work in
(51:03):
the world today. In that realm,I think if I had to pick an area
to talk about, it would beprobably in the mindset realm.
We finished the second editionof the book where, what are the
mindsets you need to have, likethe exponential mindset. And I
think it'd be really amazingexercise for people to as you're
(51:25):
making any kind of a businessdecision. What mindsets are at
play right now in my head,driving it to Sweden, and are
they the right mindset? Becauseif you're coming from, say, a
fear or cautiousness or awhatever you really need, some
future, focused mindset,gratitude, experimental mindset,
(51:45):
trust, etc. One of my committeemembers, Jerry Mikulski, put
this amazing framing. He said,scarcity equals abundance minus
trust. And you're like, youknow, you have to think about it
for like, an hour, and becauseif we can solve trust, then we
can get to abundance. And Ithink one thing to think about
(52:09):
would be, how do we navigate theworld as technology delivers
abundance to us? And this iswhere our everything has to
shift to a different side of theUkrainian, whether it's
education going from demand tosupply, supply to demand side,
or business models going fromscarcity to abundance. Model
with pepper. And I thinknavigating that is a big
(52:29):
challenge, and being open enoughto make that leap and live from
the other side is probably thebiggest heuristic, I think about
for leaders right now, the bestpath we ever podcast, like
yours, or psychedelics, or both,you know, and that's the path to
follow.
Jean Gomes (52:47):
What's the mindset that you struggle most with?
Because it was hard to imagine.
You know that you you do. Butwhere do you find yourself, kind
of like at the edge?
Salim Ismail (52:59):
So I have a framing for the human condition
which has your soul in themiddle of it, your subconscious
filters at one level, and thenyour concuss filters on the
other side. And I maintain thepoint that our job as a human
being is either vertical, backkaleidoscope, so your soul
expressive in some way, ordissolve those barriers so that
(53:20):
the soul can just express right?
So a finger like a Christ orBuddha did the work to dissolve
all but they're just in theseshiny Lake. Whereas, if you
take, say, a Tiger Woods, theyrotate that kaleidoscope,
they're really good at golf, andyou can see a soul expression
there, the messy playing soccer,but they're somewhat compromised
in other areas of their lives,what they say. And so how do you
(53:41):
navigate yourself as a leadergoing forth? And I think a lot
about when I'm making a choice,what level is it coming from? Is
it coming from my consciousbubble, subcon level, Soul
level, and do I have the courageto listen to that field? And I
probably struggle to moat withis that level area of my talk.
You know, there's this conceptof fail fast and make decisions
(54:07):
quickly. I have an uncle. He's abusiness turnaround wizard, and
his thing would just make a lotof this ring very quickly. You
only have to be 51% forever. AndI really struggle with that, one
of those that agonizes foreverabout this thing, Should I do it
or not? And etc, etc. And I hadto think about one area,
especially as the volatility ofthe world is increasing. I could
(54:30):
add one superpower would be makedecisions ruthlessly quickly and
just get on with it.
Jean Gomes (54:39):
But I love that insight about the layers of
where the decisions are comingfrom, I think that's super
helpful. Thank you.
Scott Allender (54:45):
Yeah Salim, thank you so much for joining us
today and for all your insights.
And folks, if you, if youhaven't ordered it already, get
the second edition ofExponential Organizations, you
will be glad that you did.
Salim Ismail (54:58):
Thank you so much.
Many thanks to both of you.
Scott Allender (55:01):
And until next time, folks remember, the world
is evolving. Are you?
A decade ago, a book fundamentally changed how I and
others looked at how anorganization could grow
exponential organizations wasthe result of a deep research
project to uncover the practicalthings that leaders had done to
grow their organizations 10times faster than conventional
market leaders using newtechnologies and ways of working
(00:27):
today. Its author, Salim Ismail,is in huge demand to advise CEOs
and heads of state, one reasonbeing that the data shows that
organizations adopting EXOattributes deliver 40 times
shareholder value compared tothose who don't. Tune In to a
vital conversation on theevolving leader.
Scott Allender (01:08):
Hey folks, welcome to The Evolving Leader,
a show born from the belief thatwe need deeper, more
accountable, more holistic, morewell understood and more human
leadership to confront thebiggest challenges facing us in
the world today. I'm ScottAllender, and I'm Jean Gomes.
How are you feeling today Mr.
Gomes, what are you bringingwith you into The Evolving
Leader studio?
Jean Gomes (01:29):
I am beside myself.
I've been waiting to talk to ourguest for a very long time. I've
been reading his work for a verylong time. I've been immersed in
it. I've been using it. I'vebeen working with people who
work with him. So, yeah, Icouldn't be more excited. I have
to say, I'm trying to control myenthusiasm. How are you feeling,
Scott?
Scott Allender (01:53):
Similar. You introduced me to our guest's
book a decade ago I think, and Ilove it, and I'm feeling all the
excitement to have thisconversation. So let's jump in.
Today. We are joined by a truepioneer, a strategist who
advises business leaders andheads of state. His book
(02:16):
exponential organizations hasbeen one of the most widely read
by CEOs over the past decadelooking for a new way to
navigate uncertainty and embracedisruptive technologies and
business models. One reason forthis is the data that shows that
organizations adoptingexponential organization
(02:36):
attributes deliver 40xshareholder value compared to
those who don't, it's justincredible. He is the founder
and chairman of OpenExO, whichhelps companies implement the
ExO playbook. He is a serialentrepreneur, a VP at Yahoo, the
founding executive director ofSingularity University, and
(02:57):
serves on the board of X PRIZEFoundation. Jean, I know you're
not only a massive fan of hiswork, but you've also been to
Singularity events, and this isgoing to be an incredible
conversation. So, Salim, welcometo The Evolving Leader.
Salim Ismail (03:11):
Great to be here.
Jean Gomes (03:12):
Salim, welcome to the show. How you feeling today?
Salim Ismail (03:16):
Very well. Things are kind of, you know, I was
asked by one of my boardmembers, and I remember a quote
where somebody said, 'How areyou feeling in the answer was,
I'm hanging on by my fingernailsand fake as pouring oil from
above. I think the visual is apretty good one for most leaders
today.
Jean Gomes (03:34):
Yeah, that's a really great metaphor or way of
bringing to life. So by way ofan introduction, acknowledging
some of our listeners. I don'tknow who they are, but may not
be familiar with your work withexponential organizations. Can
we start with the basics? Canyou give us a refresher on the
core principles of exponentialorganizations?
Salim Ismail (03:53):
Sure, it's important to note that it came
from seven years of a buildingSingularity University and
reading most of the programsthat right? So there's this, I
have this framing that we have20 Gutenberg moments of
technology disruption hitting usat the same time AI being just
one of them, autonomous cars,drones, life extension,
(04:15):
Blockchain, solar energy, thelist this goes on, and the
challenge is most of ourorganizations were designed for
efficiency and forpredictability. And for about
100 years, that was how we kindof designed all our
organizations, because marketsdidn't change that often, and
therefore you could do strategicplanning in a very traditional
(04:36):
way, etc. And what we noticed,starting in about 2010 was that
there was a completely differentmodality, where organizations
had learned how to scale the orgstructure as fast as you could
scale technology. And we'd neverseen this before. And so we
started, we looked at a coupleof 100 of the fastest growing
unicorns, and said, How are theydoing it? Ted leveraging its
(04:58):
community to scale to. A globalbrand, or Uber knock on its own
staff, or Airbnb left tappinginto other people's bedrooms as
we teased out a model. Andimportantly, we didn't invent
anything. We just labeled whatwas going on and put it into a
cohesive framework. And then thebook is half analytical and half
prescriptive. The original bookon how do you apply the model,
(05:20):
and it's now been 10 years wherewe have data, evidence,
anecdotes, etc. We just launchedthe second edition last year,
updating it the A, the data andB, looking at the nuances of the
model. And we're very excitedabout the we're very excited
about the idea, and it's prettyclear to us, one of my my head
of community, calls us thedecade of be x. So because it's
(05:43):
pretty clear that by the end ofthe next few years, pretty,
pretty much every organizationsin the world will be leveraging
these characteristics, whetherit's a nonprofit or an impact
project or a for profit orgovernment department, just
because we can see that it'sbetter.
Scott Allender (06:01):
So at the front of the book, you recap the Exo
Mind Map, which is now like amental tattoo for many leaders.
Can you give us a sense of theorigin story, and what was the
source of why and how thesecompanies thought and acted so
differently from conventionalorganizations.
Salim Ismail (06:19):
Yeah, I think the birth, the birthplace for this
is for us, Amazon Web Services.
Because Linda launched, we couldtake computing up a balance
sheet and make it a variablecost, and then scale your costs
along with your user base, ifyou were a software company, and
that for us, was an importantinflection point, because for
the first time, you didn't haveto make major capital investment
before you launch your product,right? And this led to the lean
(06:42):
startup movement and to hyperscaling, and all the other
movements that go get a productout there, as Reid Hoffman
famously said, if you're notembarrassed by your product and
you launch it, you wake it forlong, right? So you get it out
there, and then use data toiterate very, very aggressively
to iterate the product, and thenyou you can't be beaten, because
you're constantly going to wherethe evidence is as to where
(07:05):
things are, what tactics areworking, etc. My most famous
example of this is probablyAmazon Prime, where there's all
this naysayers at Amazon sayingthis will not work. People are
going to order a toothbrush at atime, and we're going to lose
money on each transactionbecause of the delivery costs,
and this will be a disaster. Andthe only way to test whether
(07:28):
work or not was to run anexperiment. So they ran an
experiment and found the peoplewho use it buy tons more and buy
tons more together, andtherefore they didn't lose
money. And now everybody usesit. Nobody ever unsubscribed
from Amazon Prime, right? And soyou see the outcome when you're
you're operating with thatmodality, if you're a truly
flexible organization. And theheuristics here are flexibility,
(07:50):
adaptability, agility and beingpurpose driven. And all the
characteristics in the Exo modelguide towards those few
heuristics. And if we can moveto that, then basically, in a
world that's becoming more andmore volatile, your your ability
to adapt will drive marketvalue. And the daily reference,
which I could touch on a littlebit more really, really reflects
(08:11):
that.
Jean Gomes (08:15):
So since you wrote the book, a lot has changed,
particularly with the sheerspeed at which new players are
getting to scale, can you kindof bring that to life for us?
Salim Ismail (08:27):
What we've been seeing is that more and more
organizations are following thistrend. And there's a, there's a
there's a huge bifurcation inhow we build organizations. Now
there's either new organizationsthat are following models like
this, and even if they're notconsistent saying EXO, they're
using attributes, that's fine.
And then there's companies thatare trying to maintain their
(08:47):
status quo, and those arebasically falling off a cliff,
right? And let me just reflecton the data study we did so in
2015 when the book, a few monthsafter the book first came out,
we actually analyzed the fortune100 against this model and said,
okay, is Goldman Sachs purposedriven? Is the leveraging
community? Is IBM usingdashboards and lean OKRs or not,
(09:11):
etc? And we kind of came up withan index. We scored them all for
one to 100 and I did a segmenton Squawk Box, the TV program.
So here's an index of theFortune 100 ranked by how
flexible, agile, yet so friendlyare they. Seven years later, he
did the trailing analysis, oneof our community members who've
done a bunch of work for UBS,tracked for seven years the top
(09:34):
10 to use the characteristicsthe most and the bottom tend to
use the least, and found thatrevenue growth was 3x higher,
profitability 6x higher intoyour earlier point, shareholder
returns were 40 times higher,right? And that just kind of
gives you a very clear guidancethat if you're not going to
navigate towards this type of amodel, you're not going to be
(09:56):
around very long the second.
Thing that I think we found overthe decade is the nuances and
the interdependencies betweenthe attributes we didn't quite
expect and when we first wrotethe book, because there we just
had no experience with it. Butfor example, GE trained 60,000
executives on lean startupcampaign, the biggest training
(10:19):
corporate training actualized inbusiness history, and it failed.
And the reason it failed is ifyou can't allow do
experimentation without allowingautonomy as to what to
experiment on, right? And sothere's we found, I think the
big difference between the firstand second book of A, the data
and the delivery of the modeland the evidence we have, but B,
(10:40):
we teased out some of theinterdependencies. And how do
you now progressively,prescriptively apply the model
in a powerful way?
Scott Allender (10:48):
So in organizations where they, you
know, they are trying to staymore status quo, and you're
trying, you know, they're moreconventional. What are some of
the the challenges you're seeingin bringing this to them in
terms of kind of changing theirmindset, getting them to to
adopt the playbook?
Salim Ismail (11:09):
It comes down to one, which is, I call it the
immune system bubble, right? AndI first came across this at
Yahoo when I was the head ofinnovation, running their
incubator. And it turned out,the more disruptive a product we
created the left the companycould absorb it and handle it
and take a benefit. And ofcourse, I've seen this in banks
or telcos before, but Yahoo wasa Silicon Valley company less
(11:29):
than 10 years old. Why should ithave this problem? And it really
bothered me. And it wasn't untilI had a conversation with Jeff
Kowalski, the CTO lot adjuster,who said, Oh, immune system
problem. And I kind of went deepon that, and we realized that
every big organization, when youtry anything disruptive, the
default answer is no. Andtherefore, as the world is now
(11:52):
being driven by disruptiveinnovation, which is the high
order big, big organizationsthat legacy organizations have
to figure out how to juxtaposewith this, otherwise they won't
be around. And a really greatexample of this is the car
industry, where for years andyears and years, they said,
Tesla is going to fail. It'snever going to work. We do cars.
(12:13):
We've been doing cars forever.
And boom, the market cap toTesla at some point was, you
know, all the others combined.
And I think that, and they wouldsay that companies were hugely
overvalued. And I'm like, Yeah,but would you rather be them or
you, you know, so the there'sthis unbelievable legacy,
(12:37):
calcium and understanding andadopting this, just because
every, I mean literally, there'ssingly, simply not an MBA
program in the world yet todaythat teaches you how to build
Uber right? Every MBA program inthe world teaches you how to
build a 20th century, scalableefficiency, uh, predictable or
highly structured organization,top down, hierarchical command
(12:59):
controls, and the world wascompletely changed. And I have
this crazy anecdote I can talkabout with with the deans of
business schools. If you want meto do something, yes, please. So
I got asked about six years agoto speak at a conference of 700
deans of business schools, likewho knew? But apparently they
all get together once a year,and the announcer asked me to
(13:21):
come and give you open keynote.
I'm like, wow, I'd love to kindof pop of that audio. So I get
on stage and he's introducingme. Thing, oh, we're gonna hear
from Salim, the latest scenewith X Men film Greg from the
pepper. Except what he sees inthe audience is complete blank
stares, no flicker reaction atall. And he notices this, and
he's like, just a quick show ofhands. How many of you read
(13:42):
exponential 700 deans ofbusiness schools and two put up
their hands? Wow. And you'relike, Are you kidding? That's
unbelievable. I mean, you know,okay. I mean, if I'm a car
designer, I'm near me, not likethe Tesla, but I should jolly
will know what it's about. Andthe fact that they had no idea
that this even existed was justcompletely blew my mind, and the
(14:04):
seller took me aside. Later,later, of course, I was mobbed,
and they were like, Hey, how canwe partner with you? Etc, etc.
Later on, I found out that thedeans of all the business
schools, they're researchers.
None of them run a business, sothey're all focused on the
little areas of research, andnone of them practically replied
them. And it just completelyshocked me that this is what
(14:28):
people are paying hundreds of$1,000 to get that type of
education.
Scott Allender (14:33):
That's incredible.
Jean Gomes (14:34):
And you still think that's the same kind of deal now
,that it hasn't changed thatmuch?
Salim Ismail (14:38):
Yeah, because when I talk about immune systems, the
three worst immune systems I'veever seen, third worst of
healthcare. The second worst iseducation and academia. But God
help you to kind of take that.
The worst being religion, wherethey'll literally kill you if
you don't, you know, follow theorthodoxy. I actually got one of
the strangest. Uncle, obviously,was a few years ago from the
(15:01):
Vatican, saying, look, thePope's trying to change the
church. His immune system is is2000 years old. So I actually
went and did a workshop with thead Senior Legal clerk, and it
was one of the more eye poppingexperiences I've ever had,
because these the fundamentalchange that's coming, right? Is
something that people need torecognize and then just deal
(15:21):
with, just talk a little lifeextension, right? I mean, that
changes a lot of things insociety. If you suddenly extend
or double human lifespan, whichwe're likely to do in in the
next decade, pension plans,insurance models, unemployment
benefits. I mean, it cutsthrough the entire stack of what
it means to be alive and howcivilization is structured. The
(15:42):
specific conversation with theradical I had was, your business
model is to sell habit, and howare you going to sell heaven if
people aren't dying, right? Andthat's that's a conversation to
be had. Why do you adapt tothat?
Jean Gomes (16:02):
There's a chapter in the book I love the title of it,
which is the death of the linearorganization. Now that might, in
the light of the things thatwe've been talking about, seem
fairly obvious, but can we talkabout how you embrace non
linearity? What does that meanto the conventional ways of
thinking and structuring anorganization.
Salim Ismail (16:21):
Great question.
Maybe the one most importantquestion is, how do you deal
with it, right? And and this isthe conversation of having,
increasingly, with boards and Csuites around the world. There's
only one model that we've foundin the kind of 15 years I've
been looking at this and 10years since the book came out,
which is, if you have a legacyorganization, you have to run an
(16:42):
immune system disruptor in thecore organization, we've
developed a 10 week engagementthat we've open sourced, we
piloted with Procter and Gamble.
We found a way of hackingculture at scale. In a legacy
environment, you have to runthat to change the conversation,
soften people up second. Thenwhat you do is that every
(17:02):
organization has about 5% oftheir employees and team members
that are completely crazy.
They're very hard to manage,very smart, very loyal, right?
And you never know if you'regoing to get them, they're going
to be fired or they're going tostick around. It's 5050, kind of
thing. You take those folks tothe edge and have them build
disruptive, exponentialorganizations at the edge of the
(17:22):
organization, pointing intoadjacent spaces. So Larry Page,
a few years ago, came to me andsaid, Hey, your unity Yahoo is
released at Frostburg. Did Ihave an incubator at Google? And
I said, No, you'll have thisimmune system problem, but do
something like it, keep itselfand point it away from the core
organization. And along withmany other conversations that
(17:42):
you have, you see the revokersGoogle X, where they have the
core information managementinside Google. But then to use
hardware, Google cars, Googlecontact lenses, Loon, etc, to go
into adjacent area. In myopinion, the master of this
technique is apple. And yes,they have a great design
capability and a greattechnology supply chain, I argue
that Apple's real innovation isactually organizational. Because
(18:06):
what they will do, and whatnobody didn't even notice that
they do, is they will form asmall team that's very
disruptive, put the team at theend of the organization, keep
them secret and stealth and savethem. Go disrupt another
industry, and whether it's carsor watches or payment or retail,
there's no limit to their marketcap. They just have, I think, at
(18:26):
last count, that they have 18teams looking at different
industries. And when they thinksomething's ready for
disruption, they pop into it,and then they iterate very well,
right? And and so therefore,that model is something that I
think will and then they fold itall back into the broader
ecosystem. And you see Uberdoing that with Uber health and
(18:47):
Ibu. To see Facebook doing thatwith Instagram and WhatsApp,
leaving these brands with theedges rather than trying to
merge them in. And so the thetransformation that's taking
place over the last kind of5070, years, is operating
company turning in the platform,turning the ecosystem. The
problem is, it's if you're a 20year C suite leader in a legacy
(19:10):
organization, you have nomechanism for understanding
this, seeing it, migrating toit, and then if you get it, how
do you get the rest of theorganization to follow you? So
this is most of the work thatI've been doing, which is why
I'm bold.
Scott Allender (19:29):
I wish I had an excuse for why I'm bald. I'm
just bald.
Jean Gomes (19:34):
Can you bring to light this conversation about,
you know, you're talking withit, and I don't want you to
reveal all the secrets.
Obviously we can't got time forthat, but you're talking to a
CEO about making the shift fromrunning a conventional, linear
type of organization to thisecosystem approach which can
adapt to the opportunities andchallenges facing it. What they
need to do as an individual tomake that kind of change.
Salim Ismail (19:59):
Yeah, honestly as an individual, they need to mind
factor and the biggest mindsetKerby need to make this is the
disruptive mindset and theexponential mindset. Okay? And
let me explain in a couple timeswhat I mean by that. The
disruptive or change basedmindset basically said you have
to recognize that the world wasfundamentally changing. It's
(20:19):
never going to be the sameagain, the market you thought
you had doesn't really exist inthe market you're in. You don't
really understand it, thereforeyou have to guide. You have to
give autonomy to your teams togather as much data and read as
many experiments as possible, tokeep tabs on what's happened,
because you have no clue. Bydefinition, that's one and I
(20:41):
think the second is theexponential mindset, where you
you place your your bets in aanything that could grow in a
radical fashion. The master ofthis particular mindset is Elon,
where his methodology forbuilding companies actually
absurdly simple. He will look atthe technology that's growing
exponentially and doubling on aprice per coins pattern, solar
(21:02):
energy, lithium ion batteries,neural interfaces, whatever. And
then you look at 10 years, wherewill that technology be on a 10
year doubling pattern? And thenyou'll build a company.
Intercept that curve, because ittakes about 10 years to build a
global company. Now, non trivialto last that 10 years, right?
But if you can do it, then youcatch that curve as of going
vertical. And now, for example,lithium ion batteries have
(21:26):
dropped 93% in the last 10 thecost, that's unbelievable. So
now the cost of building a$20,000 test is really
incredible compared to a testthat was 10 years ago. So the
the exponential mindset and thedisruptive kind of change based
mindset is two important thingsfor the CEO. Then tactically,
(21:50):
what you do is you take yourcrazy people to the edge and go,
go, follow your passion, pick aproject, create an MTP or
massive transformative purposefor that project, etc. Once in a
while you see a legacyorganization actually doing it,
and kind of hats off to them.
My, my kind of favorite exampleof this is Philip Morris, which
(22:11):
makes you know, cigarettes. Idid a discussion with the board
about 10 years ago, and it was alittle delicate, because I said,
What's your purpose? Yourpurpose can't be to have people
smoke. You know, that's not aviable structure going forward.
And along with a bunch of otherconversations, absolutely not,
not just me, they they had athey voted and collectively got
(22:36):
together as an employee, basedas a management team as
stakeholders and shareholders,and fundamentally changed the
company. The head of innovationcalled me about five years ago
and said, Go, have a look at ourwebsite. And literally their MTP
is a smoke free future, right?
And you're like, is this aparody? Is this like, this?
(22:57):
Unbelievable, but they did it.
They did 180 degree pivot, andall of the bonuses released
African has now come from smokefree product and wellness
product, which is kind ofincredible. And so once in a
while, you'll see a companyreally taking it on. But most
ways you have to kind of launchthese and let the new thing
become the gravity center.
(23:19):
Because if the second order ofsuccess that we found is if you
launch these things at the edge,like Amazon launching web
services or etc, you can't bringthem back in, because if it's
disrupted, it will fit neatly,right, and all you'll do is kill
it, which is, what is thepattern of legacy? Or they get
up to float it off and let it bethe new thing. So for example,
(23:41):
Amazon Web Services. Do you knowabout the Amazon institutional
Yes, yes. Can I describe thisreal quick, though? Yeah.
Amazon. Jeff Bezos realizedearly on that it's really hard
in a big company to say, to getto get disruptive ideas handled.
It's easy to say no, and one or20 people will say no, and
(24:02):
they'll know the idea. So youcame up with a blocker for this,
and in the the ideas policycalled the institutional Yes. So
if you're inside Amazon, youcome to me with an idea, and I'm
your manager, my default answermust be yes. I'm not allowed to
say no. If I want to say no, Iforgot a two page thesis on why
it's a bad idea, and post itpublicly in the intranet. So
(24:24):
they've created friction andembarrassment to say no meaning
that many more ideas. Because ifyou come to me, I'm just it's
much easier for me to say you'rean idiot. That idea is never
going to work. But you go rightahead and you deal with the
embarrassment and it's and thenI can kind of wash my hands with
it. And actually, Amazon WebServices was one of the outcomes
of this. Nobody could figure outhow to say no to it. Nothing
(24:46):
could do with their corestrategy, and now it's
delivering what 75% of theirglobal profits. Right? That's
just the most unbelievableconcept and and I've got a kind
of another model around this,one of the biggest vitality. In
the world is worth about I'llgive you the negative use case
here. And one of the biggesthotel teams in the world was
worth about $70 billion okay, ifthey had launched Airbnb,
(25:11):
TripAdvisor, booking.com, theirmarket cap would be closer to
$300 billion and the reason Iuse that example is all those
ideas were sitting inside thecompany, but the immune system
would not let them out. So forfear of cannibalizing the
existing model, they'reliterally eating Forex on the
pool. And that is the patternthat has to be broken. And in
(25:34):
this conversation, 10 years agowas very hard, right? When I'm
sitting down with the CEO said,BMW or something. There's just
no play in this. They're like,yeah, we'll build Tesla in a
year. You know, 10 years later,it's a much easier conversation
across industry to tackle. So Imay have been I thought I was
late when the book came out. Itturns out of maybe a decade
(25:56):
early.
Scott Allender (26:02):
Let's zoom in on on the purpose comment you made
about Philip some more. As yousaid, MTP, which stands for
Massive, transformationalpurpose as a real strategic
imperative that moves far beyondthe sort of like bumper sticker
approach to purpose or sort ofwriting a purpose statement on
the wall, but you're talkingabout something that really
transforms an organization. Andyou used a great example with
(26:24):
Philip Morris. Can you hone inon the concept a little bit more
and why that's so critical inthe exponential model? Yeah.
Salim Ismail (26:31):
So when we analyzed those 200 unicorns way
back in the day, we had a biggraph and we had a big matrix.
Okay, who's doing what? Tickboxes? Uber does this? They use
dashboards, they use AI vehicle.
And what they had uniformlyacross all of them was a very it
was very clear what problem theywere trying to solve. Uber
everybody should have theirprivate driver, Google, organize
(26:52):
the world's information, etc.
And they all had it. And we werelike, wow, this is like, really
important every one of theseExos in Douglas. So we came up
with the framing of a massivetransformative purpose, saying
you have to go for a really bigproblem. It has to be
transformative, and it has to bevery purpose driven. And that
(27:13):
gives the ethical basis of anExo and future organizations,
because this applies tononprofits. Governments have a
natural NPP, etc. So I coinedthe phrase, I think was about
late 2012 and then it was in thebook, and that last time went
on, people started driving thispurpose driven ethos a lot more.
(27:33):
Why? Because if you have an MTP,it excites an entire community
to swarm around you, like Elonwith SpaceX, right? Every
engineer in the world is dyingto work for SpaceX or a company
like or Tesla, right? And so itcreates a gravity well, where
everybody wants to get involved.
And what's really magical aboutit, it's if you're an evolved
(27:55):
leader in your framing, if,let's say my MTP is a career
counselor, and I'm kind ofplugging away doing my thing. If
somebody else solves thatproblem, I'm thrilled a bit
because it's such a big problemwe're going to spend lifetimes
trying to figure this out.
Therefore, kind of the you endup with a much more cooperative
(28:16):
environment, the rather than awinner, kickball network, state
network company, typical model.
And so it changed the ethos. Andalso we found was in big
companies, 99% of theconversation is about what's
happening inside the company.
And when you have an MTP, youcan start looking outside.
Whereas people are like, Okay,how are we going to deliver that
(28:38):
MTP? Right? When some leaders atGoogle are trying to evaluate
this project or this project,they can simply ask the
heuristic of which one helpedorganize the companies in the
world for making better and thenput their resources there. And
so it propagates in a verypowerful way. Creates community
around you and for us, thefuture of most organizations
(29:00):
will be a purpose with acommunity around it, and then
products and services pullingout from that community.
Jean Gomes (29:07):
So how, because everybody's talking about AI at
the moment, how does AI change(or does it change) what's
happening with with your work?
Salim Ismail (29:17):
It does radically better from so a couple of
important points around AI here.
I absolutely don't believe AItakes all the jobs. In fact, I
don't think it takes any jobs,to be blunt. Okay, why? Because
the evidence we've seen whenwe've had major technology and
prevention in the past is weincrease job employment, not
(29:38):
deep reason. So we can talk moreabout that, if you want to get
into that. But I look at it as aslide rule to excel spreadsheet
information. It's just thismassive game changer in how we
think about things and whatallows us to do. I think the
thing that I'm most excitedabout is. Will eliminate a huge
(29:59):
area of what I call white collardrudgery. So let's say I'm a
booking agent for a familyresort in the Caribbean, right?
And a family calls up and says,We've got three families coming.
We want to have rooms that arejoining the kids should be near
the pool. There's all thiscomplexity. I could spend, like,
a day and a half trying tofigure out that crap, whereas in
(30:20):
AI is going to go, Oh, give themthese three rooms and you're
done, right? And so, especiallywhen the advent of generative
AI, and so, I think there's anenormous ability now to really
uplift most organizations. I'llgive you a simple example. We
came across a company recently.
(30:40):
It felt like Palantir in a box,okay? And what they use? They
drop an AR into yourorganization, into your back end
servers, and they suck up allthe sales force and and slack
data or whatever, and theyinstantly can store all
institutional knowledge, so if akey employee leaves, you don't
lose all of their their insightswith them. That's just, that's
(31:02):
just a complete gain change overright there, in terms of a
concern about, how do you manageyour organization, the
redundancy you have to have invarious roles, all that stuff.
So I think AI will become amassive game changer in the
cleaning up internal processesand over time, over time it
(31:23):
will, it will replace the needfor more and more work. But if
you think about, say, softwaredevelopment or a truck driving
is a great example, right? Wekind of you hear all this money
about, oh my god, autonomoustrucks are coming, and we're
gonna have 3 million jobs out ofthe window, etc, etc. Whereas,
if you go and talk any of thetrucking companies, they're
like, we would hire 1000 truckdrivers today. We just can't
(31:46):
find them. Nobody really wantsto do that work. So we will
absolutely need autonomous carsin places like Japan and China.
China, especially with the agingproblem, need robotics and AI to
do a lot of the work goingforward. So I think from as a
societal level, the thetechnology will be massively a
(32:07):
game changer, on the positiveside.
Jean Gomes (32:09):
One of the things that we are constantly asking
ourselves and our guests here isaround as AI comes in into more
and more of our lives. What doorganizations need to do ensure
it kind of lifts people up andthat you get more of the, you
know, the very precious aspectsof human value, creation,
(32:30):
decision making, creativity,relationships, you know, all of
the kind of stuff that peopleare brilliant at, rather than
getting them pushed down intomore kind of almost serving the
technology.
Salim Ismail (32:40):
Well, I think if you go back my earlier comment
about the white collar drudgerythat will solve, I mean the job
satisfaction that people willget, having that problem handled
in two seconds. It's like goingback in the old days when you
had to kind of tap out on a, ona on a path, register the
different line items and add itup at the end and do a big
(33:00):
thing, and this thing wouldprint out, and then you can't
collect the money, and now it'sall digitized completely. We
just want it, okay, no cashierwants to go back to the old
days. So we forget, we forgetthat part of it. We worry about
the kind of like, oh my god,what would people do? Etc. But
we forget that there's weenable, generally, when you have
(33:21):
an injection of technology, ituplifts the value the human can
do much more customer serviceand deal with the exception
handling and the harder,difficult problems, which is the
main way more fun stuff to do.
And so I think if I just followthat meme and that vector over
time, AR just makes things a lotbetter and faster. Like, for
example, imagine an AI istracking all the conversation
(33:43):
and comes to you every two days.
And so this is the biggest HRproblem you have right now,
right? And it's surfacingproblems that you could not
surface in other way. And Ithink this is the key part
around the AI than most peoplein this is that people think
it's going to replace humanendeavor, whereas I think what
it's going to do is areorthogonally add massive
(34:05):
capability given
Scott Allender (34:08):
So there's, there's a lot in there, I think,
in terms of mindset, right? So,you know, going back to the cash
register example, I'm sure atthe time when there was, you
know, I'm speculating, but whenthere was talk about the sort of
scanning, I'm sure there wasfear that it produced in the
cashiers in terms of, what doesthis mean? Huge. So it's, you
know, there's always thatunknown, right? So it's like
(34:29):
we're always moving towards theunknown. So as people, as you
work with organizations, or aleader who wants to adopt some
of these principles and push theorganization into the unknown,
how do you help? Or how can theyhelp an organization ready
themselves to have a tolerancefor the unknown with an optimism
for what's going to be possibleby adopting these principles.
Salim Ismail (34:52):
So I think the biggest challenge that I see
with humanity Rick Lark is whatPeter identified. In the book
abundance, what he calls theamygdala. So we all have in the
back of our brains with littleorgan that's about the size of a
walnut that's constantlyscanning for bad knees, and it's
(35:13):
a danger warning signal. When wewere running around on the
plains of Africa, you heard anoise in the Bucha and you ran.
Why? Because bad news could killyou. If you wait around to see
if it was your friend, the tigereight years so we're 10 times
the more likely to pay attentionto bad if I missed a piece of
good news, I might get somefruit of activity. If I missed a
piece of bad news, I likely diedback when, degree with a fraud,
(35:36):
with danger in our environment.
So we relate to uncertainty andunknown is danger, and then our
mid below lights up and we runfrom it. So anything new, like
if you talk to somebody whenthey first come across auto
cars, the first reaction is, oh,my god, the car might kill
somebody. Banned the car, right?
Because people don't want to bekilled by robots. They'd much
(35:57):
rather be killed by drunkpeople, because what's happening
today. So the we have toovercome this, and it turns out,
we're 10 times more likely topay attention negative news than
positive news, because of thatold survival bias, which is why
Fox News does very well, right?
If you watch Fox News, you'regoing to die this week, if
you're lucky, laughs Well nextweek. Peter calls CNN the crisis
in these network because whenyou can track every bank robbery
(36:20):
in real time, high definite onscreen to 20 devices, you think
the world is going to hell, andyou vote on that. And this is
the mismatch that we have withthe news cycle today, where good
stuff doesn't report it right?
The world is an incidentally,better place than we've ever had
it in the history of humanity.
And very few people will sharethat view, because they just
(36:44):
live in the negativity, becausetheir amygdala is lighting off
all the time. So I think the theif I could make an evolutionary
change to humanity today wouldbe just to put out that
amygdala, because the amount oftime in our lives that we're
faced with real, physical,existential threat of new route
zero, and yet it dominates ourconversation.
Jean Gomes (37:13):
So what is kind of on the horizon for you right
now? So then, what are youreally excited about in terms
of, you know, trying to bringmore of the thinking here to the
wider world. What are you doingin Singularity University and
other things that you're doing?
What's the thrust of yourfuture?
Salim Ismail (37:32):
So I think there's a so singularity is doing a
great job of training executivesand people on here's the future
of technology, and be aware ofit we provided, and that gives
the why. Why, since you kind ofpay attention to this, we've
provided the how. Here's how yougo about doing this. What's
happened? About a few years ago,a political consulting firm came
(37:54):
to me and said, Hey, we usedyour book, goodbye Fauci state.
And I was like that, that wastotally not designed for that.
What are you talking about? Andwhen I looked into it, it turned
out to be several dozen heads ofstate. I was like, Wait, we have
a community and a tool set andsome credibility, but now we
have access. And so I did do,like, a year of psychedelics to
kind of get my head around, letthe future hold, because that's
(38:16):
a gift from the universe youhave to take. And I've been
thinking about, how would yourewire society at scale, and
think and navigate the future?
Because all our institutions aregoing to break with the
onslaught of all of thistechnology. The famous biologist
E O Wilson put it back. He said,The problem with humanity is our
(38:39):
emotions are Paleolithic, ourinstitutions are medieval, and
our technologies God like if youthink about that, pretty much
all the problems in the worldcome from the gaps in those
three layers. And as leaders, ifall evolving leaders are going
to spend the next 20 years ofour careers dealing with those
gaps, because the technology ismoving in its pace, you can't
(39:01):
slow that down. So we have tokind of bring humanity up and
individuals, kind of, we have apretty good tool set to navigate
individuals, where I think thebiggest weakness, and if I could
think about from the leadershipperspective, is, how do we
update our institutions? Becausewe have no mechanism or feedback
loop of updating oldinstitutions like the UN or
monetary systems or legalsystems or healthcare systems,
(39:24):
intellectual property broken.
Education is broken that I thinkof the biggest challenge. So
we've been thinking about, howwould we rethink society in that
model? I have this hobby inmetaphysics and philosophy,
okay, and I did this TEDx talkcalled, how do you pick
civilization? My at the time, my90 year old dad came to it, and
(39:49):
he puts up his hand. He goes, Iheard about your talk, can I
Heckle? And I'm like, Yeah, ofcourse you can Heckle. He goes,
I totally disagree with yourthought. I said, Whoa, okay. Do
you do you not think you need topick civilization? Really is
like, no, no. The fixing,obviously, but the problem I
have with civilization, becausewe have not civilized the world.
We've materialized the world.
We're apes with tools, actingwith a genomic animality that
(40:10):
that we have tribal wars atscale now, all we've done a
scale tribal conflict. And youlook at the Middle East this,
it's like, of course, he'sright. His comment was, we still
have to do the work to civilizethe world. I was like, Wow. You
know, wisdom bomb from theelders, right? Boom. And I've
been thinking a lot about, howdo we actually go about that in
(40:32):
an era where our existinginstitutions don't work, our
religions don't apply, and thethe technological changes
hurtling us ever because the oneinstinct is slowed down, but you
can't slow it down. And so whatdo you do? And so we have to
kind of accelerate our humanendeavor and our human
(40:53):
organization, the better copewith this. And really, when
technology you have newtechnology injection, the big
challenge is always, how do youextract a promise without the
peril? Because I can use fire tokeep my house and I can use it
to burn down your house. And viaour secular laws around the
world, we've done a pretty goodjob of doing that over the
century, but now thetechnological innovation is so
(41:17):
high between CRISPR and genesequencing and editing and organ
transplants. And Lord of whatthat, that our institutions are
all going to break in the faceof this. I don't know if you saw
the story about the Uber carcrash a few weeks ago. Um, so,
so a couple in an Uber had a badcar crash when they sued Uber,
(41:38):
okay, and so they were goingthrough this lawsuit, and then
what happened was their 12 yearold daughter ordered something
Uber Eats by using theiraccount. And on Uber Eats, it
says he cannot sue. And so it byaccidentally, it wiped out their
entire legal case. Because, Imean, it's just we can't even
handle internet from a legal,regulatory perspective. So
(42:01):
again, everything up coming,right? It's, I think this is a
big challenge that we have as aglobal speech we break up.
Jean Gomes (42:08):
So can you give us just a couple of insights into
how you think our institutionsdo need to evolve, the fact that
they are unable to because ofthe way they are set up.
Salim Ismail (42:22):
There's the immune system problem, okay, but let me
give you. Let's take education,because I've got fair bit of
experience in that world, givensingularity, and I get awful
lot. I've been talking to manyof you had the state looking at
how do you think? So? I wastalking to one of the bigger
countries in Southeast Asia forthe Minister of Education. This
is literally about three monthsago, and he's like, Yeah, I've
(42:44):
got a big problem. I need tohire 40,000 English language
teachers in the temple. And I'mlike, hello, AI can teach you
English in two seconds.
Colleague, you don't need 40,000decoup. And he's like, I can't
do that. I have to hire people,right? And that, that problem is
what needs to be solved. Becausetoday you could take all the
health care data, you can takeall the legal data, all the
(43:06):
legislature led the laws, andtake all the educational data
and put it into three differentllms for any country, and give a
kid three links, a doctor, atutor and a lawyer, and and you
just have to sit back while theydo gun. You just need to get out
of the way, is my opinion. Andwhere we keep trying to control
(43:28):
where things are going, and wecan't, all we do slow down the
progress. And so therefore, Ithink what needs to happen is,
if I was thinking from anevolved leadership perspective,
is let the technology out,police the negative use can't
take, and then you go for it.
From the there's a really greatlittle insight here, effective
(43:48):
broader data point. 20 yearsago, when we had eBay and Craig
was emerging as meager kind ofplatforms to be E commerce. You
know, it's pretty easy. I'm oneBay to fake a transaction. I
can put a picture of a MacBookup, and you send me $1,000 and I
can be right, I can mask myemail address pretty quickly. So
sociologists and anthropologistsare really excited, saying,
(44:08):
okay, we can actually studyhuman nature of scale. Okay, so
now we have no news oftransactions. What's the actual
ratio of good to bad? And itturns out, consistently cross
credit with eBay and otherplatforms like this, the ratio
of positive, fraudulenttransactions consistently
something like 8000 to one. Andthat should give you enormous
(44:31):
optimism for humanity, becausein an open playing field where I
can do either 8000 to one, isthe ratio consistently right?
Does that means the bear. Whenyou technology go like draws,
our first entity gets banned thedraws, because somebody
negatively loaded up with sequelin front by the White House,
(44:51):
whereas the proper thing and thebad character is not. So we ban
the drills, the bad guys not litfrom the regulations anyway. So
that doesn't help you. And allyou need to stop all the good
innovation. Whereas if we said,said everyone you do whatever
they want with it, you'd haveall this unbelievable explosion
of innovation. And then you putthe regulatory and put in the
police, the negative use case,society would benefit way more.
(45:15):
And I think that kind ofmentality needs to seep into our
how do we think aboutregulatory, institutional,
institutions, etc, and that'sjust not there.
Jean Gomes (45:26):
That's an interesting insight, really, to
understand that 8000 to one,crazy the other, the other. The
other side of that, and it isreassuring. The other side of it
is that as the as an exponentialorganization, becomes more
successful, it also gets morepowerful, and then its moral
responsibility becomes greater.
And many, many of theorganizations that have done
(45:50):
this have questionable moralkind of code in them.
Salim Ismail (45:57):
Very much so, but I think where that where that
happened, the market tends tofigure things out a little bit.
But for example, I'm a cheapskate, so I never take search
pricing on Uber. I have a friendwho was always late, so he
always accepts it. And we can bestanding next to each other
order the same card of the samedestination, he'll be totally
kind of the price, becausethey've gained it down. They
(46:19):
know he's going to pay extra. Sothey just give them extra, a big
fee every time, right? Andthat's just, you know, that's
just that in certain level, andthe drivers getting very little
of that. It would be okay if thedriver got a big gun, the driver
is getting almost none of thatupside. So there's, there's some
nasty practices in some ofthese, but I think competition
helps with some of that. I don'tknow where how we navigate this,
(46:44):
but what we found is, if youhave an MTP, generally,
organizations are trying to dothe right thing.
Sara Deschamps (46:51):
If the conversations we've been having
on the evolving leader havehelped you in any way, please
head over to Apple podcasts andleave us a rating and review.
Thank you for listening. Now,let's get back to the
conversation.
Scott Allender (47:04):
If you were sitting down with a CEO or one
of our leaders right now whowant to adopt the ExO playbook,
what would you advise them to doas sort of first steps?
Salim Ismail (47:15):
So being him over the years, female of a community
of something like 40,000consultants, entrepreneurs,
innovators, technologists, inthe giant community, in 150
countries. And so what we do iswe we have a weekly EXO
discovery call, if they come tothe call, get a sense of what
(47:35):
it's about, and then we pair youup with a coach from the
community. And we have a veryinexpensive, I think we tried,
like 10 or 20k for this, an Xalready program where in a week
or two, we analyze your companyscored against the model, and
then create a roadmap for theorganization for the future. And
so then the CEO has a clearroadmap on how to connect the
(47:57):
organization and implement thesebecause those nuances of which
ones are you doing already attechra. We can navigate a lot of
that. And so we, we are able tolaunch those. We're doing a
whole bunch of those where CEOswill call us. We'll go, Okay, go
talk to this coach, run thissilly exercise, and then you can
do it yourself, or ask some ofthe coaches for more help.
Jean Gomes (48:20):
And if you were talking to somebody who was, I
don't know, 14, 1516, and theywere asking you for advice about
how to think about the future,where would you start that
conversation?
Salim Ismail (48:34):
Oh very easy. So I'll speak a little bit to
education. Back to educationjust for a second. Okay, we've
been doing education on what Iwould call a push basis, or a
supply side basis, the block twogrand here, where the
educational system you trainthem through the early 20s to be
really good at one particularskill, because whether it was
podcast host or or graphicsdesigner or accountant or
(48:58):
engineer or doctor or whatever,and then you went to the job
market and sold those skills inthe job market. But all
education for the last couple of100 years has been supply side.
I think what's happening now ismoving over to the demand side.
We'd say, what problem do youwant to fundamentally solve as
an adult? What's your purpose,etc. Which moves you over to the
demand side. Elon is a greatflag bearer for those because he
(49:21):
had no experience in the car orenergy or space sectors in yet
he's built market loopers andall of them, right? And so when
you move somebody over to thedemand side and say, what big
problem do you want to solve,then drops out of that. What
technologies, what techniques,what skill sets we need to solve
that Matt Brown, your educationfrom that perspective. So that's
(49:41):
one major shift happening ineducation. It's going to happen
no matter what, and it'shappening in front of us. What I
say to young people is, pickyour MTP, and it doesn't have to
be your ever, forever. MPV,what? What gets you excited now,
right? And then go join astartup or build a startup doing
that because. So today, there'sno environment in which you can
(50:04):
use leverage legacy environmentsto learn very well. So it used
to be that the you people duringgene your proctor and YAML to go
through management trainingschools and etc, etc, and it
just doesn't apply. It turnsout, by the way, the best
leadership training in the worldtoday is playing World of Work
on so, you know, there's there.
The younger generation has kindof figured it out. We just need
(50:31):
to get out of their way. Is myview.
Jean Gomes (50:35):
What haven't we talked about that's really
important to you, that we shouldget, you know, close, our
conversation with?
Salim Ismail (50:42):
Well first, I just want to acknowledge the work you
guys do is so important.
Because, you know, when it comesdown to leadership, the future
of leadership is one of the mostimportant topics for them. You
can see the fundamental lack ofleadership and toxic leadership
around the world. And so thework that you're doing along
with other was is probably someof the most important work in
(51:03):
the world today. In that realm,I think if I had to pick an area
to talk about, it would beprobably in the mindset realm.
We finished the second editionof the book where, what are the
mindsets you need to have, likethe exponential mindset. And I
think it'd be really amazingexercise for people to as you're
(51:25):
making any kind of a businessdecision. What mindsets are at
play right now in my head,driving it to Sweden, and are
they the right mindset? Becauseif you're coming from, say, a
fear or cautiousness or awhatever you really need, some
future, focused mindset,gratitude, experimental mindset,
(51:45):
trust, etc. One of my committeemembers, Jerry Mikulski, put
this amazing framing. He said,scarcity equals abundance minus
trust. And you're like, youknow, you have to think about it
for like, an hour, and becauseif we can solve trust, then we
can get to abundance. And Ithink one thing to think about
(52:09):
would be, how do we navigate theworld as technology delivers
abundance to us? And this iswhere our everything has to
shift to a different side of theUkrainian, whether it's
education going from demand tosupply, supply to demand side,
or business models going fromscarcity to abundance. Model
with pepper. And I thinknavigating that is a big
(52:29):
challenge, and being open enoughto make that leap and live from
the other side is probably thebiggest heuristic, I think about
for leaders right now, the bestpath we ever podcast, like
yours, or psychedelics, or both,you know, and that's the path to
follow.
Jean Gomes (52:47):
What's the mindset that you struggle most with?
Because it was hard to imagine.
You know that you you do. Butwhere do you find yourself, kind
of like at the edge?
Salim Ismail (52:59):
So I have a framing for the human condition
which has your soul in themiddle of it, your subconscious
filters at one level, and thenyour concuss filters on the
other side. And I maintain thepoint that our job as a human
being is either vertical, backkaleidoscope, so your soul
expressive in some way, ordissolve those barriers so that
(53:20):
the soul can just express right?
So a finger like a Christ orBuddha did the work to dissolve
all but they're just in theseshiny Lake. Whereas, if you
take, say, a Tiger Woods, theyrotate that kaleidoscope,
they're really good at golf, andyou can see a soul expression
there, the messy playing soccer,but they're somewhat compromised
in other areas of their lives,what they say. And so how do you
(53:41):
navigate yourself as a leadergoing forth? And I think a lot
about when I'm making a choice,what level is it coming from? Is
it coming from my consciousbubble, subcon level, Soul
level, and do I have the courageto listen to that field? And I
probably struggle to moat withis that level area of my talk.
You know, there's this conceptof fail fast and make decisions
(54:07):
quickly. I have an uncle. He's abusiness turnaround wizard, and
his thing would just make a lotof this ring very quickly. You
only have to be 51% forever. AndI really struggle with that, one
of those that agonizes foreverabout this thing, Should I do it
or not? And etc, etc. And I hadto think about one area,
especially as the volatility ofthe world is increasing. I could
(54:30):
add one superpower would be makedecisions ruthlessly quickly and
just get on with it.
Jean Gomes (54:39):
But I love that insight about the layers of
where the decisions are comingfrom, I think that's super
helpful. Thank you.
Scott Allender (54:45):
Yeah Salim, thank you so much for joining us
today and for all your insights.
And folks, if you, if youhaven't ordered it already, get
the second edition ofExponential Organizations, you
will be glad that you did.
Salim Ismail (54:58):
Thank you so much.
Many thanks to both of you.
Scott Allender (55:01):
And until next time, folks remember, the world
is evolving. Are you?
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