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At Work with The Ready
43. Dual Transformation Is The Future...And Nobody's Prepared
00:49:54
Rodney and Sam explore why companies struggle to reinvent their core business while building what’s next—and what it actually takes to pull it off.
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- [00:01]
A
I think there's often a lot of kind of this, like, hand waviness or like, everybody knows there's, like, the new thing that we're trying to do and then there's the old thing, but nobody actually explicitly talks about it. So all we have is this, like, vague bad feeling of whether you're on the fun side or the not fun side. And that's not helpful to anyone.
- [00:20]
B
Hey, everybody. Welcome back to Outwork with Ready? I'm Rodney Evans, and that guy is Sam Sperlin.
- [00:25]
A
I am Sam Sperlin. You are Rodney Evans, and we are here to do a podcast.
- [00:30]
B
Good job, dude. AI is rewriting the rules of work in this moment. The future of work is here, and the question isn't whether or not you're gonna adapt, but how you design work for what is coming.
- [00:41]
A
What my illustrious colleague is saying is that work design is no longer optional, and the teams that treat it like a side project are actively being left behind. The ones that treat it as essential will keep up with the pace of change.
- [00:54]
B
So today, very apropos our intro, we are talking about dual transformation. And if you don't know what that means, don't worry about it. There's a whole book that we're going to reference. That's one of my faves. But first, Sam's going to check us in. Sam, what do you got?
- [01:10]
A
What I got for us today is what is some type 2 fun you've had recently? And for those who aren't familiar with that nomenclature, I have no idea where it comes from. The first person I heard describe it was our former colleague, Spencer Pittman. Type 1 fun is the type of fun where you're like. While you're doing the thing, you're like, wow, this is fun. I am having fun. Type 2 fun is the type of fun where in retrospect, you're like, okay, that was pretty fun. But while you were actually doing the thing, you maybe weren't having so much fun. And I don't know if There's a type 3 fun, but I would imagine it's even less pleasant than type 2.
- [01:43]
B
I'm having such a hard time thinking of an answer to this question, because everything that I think of, I'm like, no, I enjoyed that at the time. I think it's because I'm too generally. Maybe you could have a really enneagram 7.
- [01:56]
A
You have a broad definition of what.
- [01:57]
B
Fun is, so I kind of do.
- [01:59]
A
Type 1 fun is very wide.
- [02:01]
B
I kind of do have a broad definition. Okay, you go first and Then. And then I'll think while you talk.
- [02:06]
A
Sure. So one of my kind of 20, actually. I probably started this last year. But I really like periodically reading a book that is just way too hard. Like one of those books that just has the reputation of, like, everybody knows this book, but nobody's actually read it. I'm actually trying to read those, and they often are pretty type two fun. So I'm like, maybe two reading sessions away from having finished Ulysses by James Joyce. Yeah. And it's been some type one fun. I would say mostly type two fun. And I will be glad to be done with this project.
- [02:43]
B
Hmm. Okay. First of all, I think this is an interesting, like, psych test. Because what I'm realizing as I try to think of an answer is, A, I generally don't do things that aren't fun, and B, I think I take more joy in the process of most things than most people because I'm like a nerd who likes learning and doesn't feel generally confronted by being bad at things. But I will say I've done a bunch of house projects at the lake, which I generally enjoy, but this one isn't finished yet. I wanted to put up track curtains like you have in a hotel room. And then I looked into them and it was going to cost like $6,000 for this house that, like, you know, is basically made of balsa wood. And I was like, I'm not doing that. I'm going to figure this out myself. The figuring out process is fun. The actual, like, assembling and installation process is fun. The part where I have to go to Lowe's like, four different times because I don't know what anything is called and I don't know what size of anything I need, and I have to, like, return the thing for the second time because I brought it all the way home. Also, nothing there is close. This was like a 45 minute round trip. Every time I fuck up. I do not enjoy that part. In hindsight, the whole thing is going to have a real halo when it's done. And I'm just going to be delighted by this thing that I did for, like, $500. But I don't like gear and I don't like the tooling part of craft. And anytime that's the blocker, I'm just like, ugh, I don't want to learn about hammers today. Like, I don't want to learn about drill bits right now.
- [04:22]
A
Yeah, all right, that's a great answer.
- [04:24]
B
Does that count?
- [04:25]
A
Sounds like it counts to me.
- [04:27]
B
Okay, cool. Sweet. So what we're gonna talk about today is this book and the concepts in the book. Not just the book. We're not gonna just glaze this book for 40 minutes.
- [04:37]
A
I hope we're not. Because I'm gonna be honest right up front, did not read it.
- [04:41]
B
So I haven't read it in a long, long time. It's almost 10 years old. But the reason I'm bringing up this idea of dual transformation is because I'm working with several clients right now, and they all share a very similar pattern, which is this. All companies are built to do what they do. How many times have we said every system is perfectly designed to get the results that it does? Like, companies are built to do what they do. But what that means is that when a company's core business, whether that's a product or a service, inevitably decays, either because there's a disruptor, or it gets commoditized, or it gets automated, or it falls out of fashion, most companies struggle to build something new. And so then they put all of their focus on trying to get more out of the thing that is dying, which prevents them from incubating something new. And before my practitioner homies tune out, I think that the core of this pattern is true whether you are providing an internal service to clients and customers or whether you're providing a product or service to the market. The really uncomfortable truth of complex systems is that they die and that from within them, you have to build the new thing or you have to go down with the ship. That's just true whether you're the internal OD function or you're tip of the spear selling, you know, AI technology to someone. So don't turn that proverbial dial well.
- [06:22]
A
And let me throw even just one more wrinkle or layer onto that kind of. The last note that I put into our board before we started recording is that, like, you can think about dual transformation on an individual level as well, too. Like, we are all, you know, kind of optimizing for our current situation and our current relationships and, like, what our current context is needing from us, as we should be. And inevitably, there's something coming around the corner in terms of our career or what our family needs from us or what our friends need for us. And there's, I think, a similar pattern kind of going on at the individual level. So whether we're talking individual, functional, team, entire organization, I think the pattern stays the same.
- [07:08]
B
I love that. That's so smart. Maybe we should record early in the day. Are you like very smart. Early because I'm dumb without coffee, but I don't know, you might just be extra.
- [07:19]
A
Maybe I am bit of more of a. A morning person.
- [07:21]
B
You are a morning homie. Okay, so this is the book. It's called Dual Transformation. This book was published in 2017. This is not like a new. This is not a new thing. And in fact, in reading it, I'm like, oh, this is before AI was really a thing. But I find myself referencing it a lot because A, we do work that is often catches transformation work, and I think it's really smart. And B, because it names very clearly this essential issue, which is the following. If you think of your core business or your core product or service, if you're an internal function as being business A, when that starts to decline, or when customers don't want it anymore, or when you can't make the same amount of money or you can't hire the right talent, whatever, whatever's wrong with it, when it starts to go wrong, and it will, eventually everything does start to go wrong. Eventually you have to reinvent that core business to some extent, but also on the side, you have to incubate a new business and that is business B. And so the idea of dual transformation is that you have to transform two things at the same time. That's why it's dual. And so I'm going to read you the definition because it's really smart. So transformation A is repositioning today's business to maximize its resilience. Transformation B is creating a separate new growth engine. And C, the third part of the equation is what these guys call the capabilities link. Fight unfairly by taking advantage of difficult to replicate assets without succumbing to the sucking sound of the core. Yeah, it's so rare for companies to be able to do this. And actually it is so core to being able to survive, especially now as like AI is disrupting. Trying to do two transformations at once is one to two more transformations than most CEOs can lead at one time. And so I feel like this book, this concept is such a helpful framing for especially those right now who are struggling. And I'm just, I'm around a bunch of companies right now for various reasons that were a rocket ship and in the last, you know, 10 to 15 years and now are going in the wrong direction and are like, oh my God, what to do? And to me, this is the most elegant answer. It is also very much not easy. And so I'm looking forward to digging into it.
- [10:02]
A
Yeah, for sure. And if it helps to contextualize this a little bit more. So if you're familiar with Clayton Christensen's idea of disruption. I'm not talking to you, I'm talking to the listener here. Rodney, I know you know this and in a very.
- [10:14]
B
I know Sam, I do know him.
- [10:18]
A
This is basically the response to what do you do when you are in a condition where you are being disrupted? I'm by no means kind of like the, a strategy expert here, but I do know that the way Clayton Christensen talks about disruption is different than just the colloquial use of the word disruption. They often get kind of mixed together. The disruption that he was talking about and they talk about in Innovator's Dilemma is the situation where a cheaper, simpler product, often created by a competitor, starts serving people who are not your current core customers. And over time they move up market and they essentially eat your lunch.
- [11:01]
B
And is this like taxis and Ubers?
- [11:03]
A
I think yes, it can back in the day. And I don't have the examples that he uses in the original book in front of me, but I know that the way he talks about it and the way I've seen others talk about it is that it's almost, in some ways it's an inevitability. Like the, the thing that makes a company really good at what it is currently doing makes it susceptible to disruption because it is continuing to make the right, the quote unquote right decisions in the eyes of the board and, and shareholders to serve your best customers and keep increasing margins and don't worry about that low margin crap, that's not very good down market. And when you make all of the right decisions on that short time frame, you find yourself in a situation where suddenly this competitor that you didn't think 2 thoughts about 5 years ago is completely in your market eating your customers and you're kind of screwed. So transformation is the move, hopefully the set of moves that you can do as the incumbent to ensure that doesn't happen.
- [12:06]
B
Yeah, it's interesting because disruption and the dying off of anything does feel so inevitable. And yet, particularly because of short term incentives and pressure from boards and just quarterly goals and things like this, it is so difficult, especially for large organizations, to properly incubate the new growth movement. And we'll talk about why, but generally, you know, it's underfunded, it's under loved, it's under clarified. Everybody wants to argue about how it's going to cannibalize the core business, which spoiler alert is the point. Over time but feels very unpopular to say in the moment when the core business is paying for the new bet. It just this idea really requires a different posture that says death is inevitable. The best thing that we can do is accept that and be realistic about the fact that we are going to have to use what remains to create what is new or it's over. And that as like just an inevitability is not really what growth based American capitalism wants to believe.
- [13:25]
A
Right, right. I think when you describe dual transformation upfront kind of that definition, it's, it's, it seems quite simple. Like I don't think anybody does would like argue like, okay, so we have a thing that we've been doing for a long time. It makes all of our money. We should like keep that alive as long as possible. And then, yeah, like let's figure out what's next and make that happen too. And then when it becomes obvious, we kind of switch from one to the other and we're just continuing on. It's obviously not that simple. What is like the real complexity that you see kind of happening in organizations that makes it that it's not like that, just straightforward to do.
- [14:04]
B
This is my opinion only, and I would love for your opinion also. I think it's two things. The first one is I see very few leaders who are really clear on what the next growth engine is.
- [14:23]
A
Yeah.
- [14:23]
B
And when I say that, I don't mean like, I see lots of leaders who have lots of ideas and are like, you know, succumb to shiny object syndrome. That's not what I'm talking about. I'm talking about the leaders who are like really tuned in to the landscape to what their customers want, to what they could potentially provide, to like the quiet signals. And I don't know if I've said this before on this show, but I'm working with someone right now who I've worked with before who I think is like one of the best CEOs I've ever been around. She's also the person who introduced me to dual transformation. Ironically or coincidentally or perhaps not at all her basic feeling, and she's been in a couple of businesses that were declining is like, it's your job as the CEO to be out listening to customers, to be paying attention to the market, to be talking to competitors, to be an interdisciplinary learner so that you can find, find the spark. And what she says is like for every business there is a spark. And what she's talking about with the spark is the combination of what the new growth thing is and your special capabilities that mean you can provide that new growth engine. Most leadership teams are so consumed with the chaos of their own organization that they are just not doing that work. They're just not out there talking to customers, identifying patterns, listening closely, learning to discern what the spark is so that they can even build an experiment around it. So that's number one. That's the number one problem, I think, is, like, it's very hard to talk about transformation B when you have no fucking idea what the new thing is that you might build. But two is, I think this comes down to money mostly. Yeah, I think that most companies have a really difficult time because budgets are built for generally for the core business and maybe for some innovation that's like buying another company or hiring consultants. Budgets are mostly not built for incubating a separate new business and actually keeping it separate enough that it can become a real going concern. And as much as I hate to admit it, ultimately you can learn everything about a company by just learning how the money comes in and gets spent.
- [16:53]
A
Sure, sure. Yeah. There's like three different things that you said there that hopefully I'll remember to circle back on. The first thing, though, that I was thinking along the same lines is that I think a lot of times the CEOs that are hired by boards are the CEOs that are going to run the core thing really well. Really well, because that's where the money is, and that's where the quarterly, you know, results show up. And that's what we. We care about. And then maybe they kind of talk out of one side of their mouth about, you know, the new thing that we're supposed to be incubating. But really they know, and the board knows that their primary reason that they are in the position is to make sure the core business does really well, and it's somebody else's problem to handle. Like what happens at the end of that? You know, the golden parachute happens, that CEO is gone, and then the new one comes in and has to deal with the mess that's behind.
- [17:46]
B
I think that's generally right.
- [17:48]
A
The visual that came to my head as you were talking is, you know, the Eisenhower matrix for, like, decision making, like urgent, not urgent, you know, important, not important. I think organizationally the. You get stuck in the urgent and important, which is always the core business. That's the urgent stuff, always. And that's the important thing through one lens. And if you spend all your time in the urgent and the important, you don't spend any time in the not urgent, but important, which is the new stuff where not only are you not making money from it, you are spending money to make it happen. And it's not a sure bet. And it is, you know, it is unknown if it'll actually pan out the way that we think it will. So it always gets short shrift. And then my last thought here is like, I wonder. I think a lot of times M and A is the shortcut to dual transformation.
- [18:37]
B
100%. They're like, what if we just bought something rather than figured it out?
- [18:41]
A
Yeah, like, and, you know, we feel behind the eight ball. We know we should have been doing this for a lot longer. Let's go buy something. Which, okay, fine. But there's all sorts of things that need to happen after that if that's actually going to jumpstart the new thing that you are doing. And I think too often the thing that is bought you gets subsumed in such a way that all of the bureaucracy of the old thing gets imported into the new thing. The best parts of the new thing potentially get injected into the core business. And now the new thing is not the new thing. It's just kind of an appendage on the core business that we already had.
- [19:15]
B
Yeah, I think that's right when you were talking about the Eisenhower matrix. Also, I think another very natural tendency, again, for, like, people in most jobs in knowledge work, not even just leadership teams, but especially leadership teams, is what falls into that urgent and important category is mostly what's not working.
- [19:38]
A
Yeah, yeah.
- [19:39]
B
It's mostly like, we have a customer leaving, our revenue is declining, our talent is leaving, our opex is growing. It's mostly something bad. And that's very under. It's very understandable that we're all like, squirrel when, like, revenue quarter after quarter is dipping. And for the most part, I've really never been in a room except inside of the ready, where people go, like, maybe we should, like, let that thing die. Like, maybe we should just, like, understand that rather than trying to reverse this trajectory, we should build a new trajectory alongside of it and then eventually let it die. And then what that looks like is, you size that appropriately, you cut out any waste that you can. You make it as efficient as possible so that you're basically keeping the lights on so that it can feed the new thing. But to your point, when you're not making numbers and your stock price is down, you know, 10 to 90%, it's very difficult to go, like, what if we just let this continue to slowly perish? It's not really anybody's instinct. And also it's not really what's rewarded. Every board and every leadership team just wants a plan for reversal. They're just like, show me how this trend line changes directions in three months.
- [21:05]
A
Yeah, well, I think in even the best case scenario. So I'm picturing an organization that is doing everything it needs to do with its core business. It's evolving it, it's protecting it, it's continuing to push it forward. It's also actually doing the dual transformation, the other new stuff. There is still a overlap of the new thing. Kind of taking the spot of the old thing where I think you inevitably have dips in everything we care about across the board, you know, revenue and just all the financial stuff that we probably care about. There is going to be that messy middle of that new thing, taking that that incumbent spot of like, this is now our main thing. And that pain is hard to sit with for a board, for a CEO, for a leadership team because of that just incredible short termism that I think is just endemic across capitalism.
- [22:00]
B
Absolutely. And you know, one of my favorite sections of this book is there's a section on the three conflicts in dual transformation. And like, two of the three crises are so related to what you just said. The first one is the crisis of commitment, where transformation, a transformation of the core business, needs like, reassurance because nobody likes being in the business. That's the sinking ship. Like when you're basically just like, you know, throwing sandbags over so that it, like doesn't sink as fast. Like, that's not a super fun place to hang out. And especially when it is very clear to people that the life raft is really going to be where it's at. But they're like, no, no, you stay here on the Titanic and keep throwing deck chairs over so we don't sink as fast. Like, that's a hard place to ask people to stay.
- [22:53]
A
Sure.
- [22:54]
B
And transformation B needs like a lot of inspiration because it's hard to do a new thing that's unproven, et cetera. That middle part is very messy because you have to hold both of those truths in mind at the same time. And then the second crisis is the crisis of conflict, which is basically arbitrating between A and B with a bias toward B and deflecting criticism. And it's like, talk about like the messy middle. It's like, there's gonna be a period of time when those numbers dip. That business A is like, this isn't gonna work. You should never have Left us behind. And you know what I mean? Like, the messiness of this is inevitable. Which in my opinion is probably why this book wasn't more popular. Like, I think that this should have been like a seminal canonical text for anyone doing any kind of anything, any kind of growth, any kind of strategy, any kind of organizational change. The fact that like, I only know the one CEO who references this book, of all the CEOs I know, and to me it is like the most, the clearest way of understanding corporate cycles and what is required. I think mostly it's not popular because it's really fucking hard.
- [24:14]
A
Like that's too real.
- [24:16]
B
It's too like strategy. Leaders love this book. CEOs do not love this book because they're just like, boo, I don't want to do that. That sucks. Which it does. Like, it's just, I think it asks a lot of people who are going to have to make those choices, be in the mess, watch all of the numbers look like shit for a period of time, ruthlessly protect this thing that's unproven while reassuring these people who are steering the Titanic. It's a mess. It's a whole mess.
- [24:44]
A
There's too much conflict, too much conflict. Inevitably there will be some people who are upset. There is no path forward where everybody is stoked. And I think that's just a sign that, you know, it's actually speaking to something true in the complexity of how this shit actually works.
- [25:02]
B
Yeah. And you know, one of the reasons that I really like doing Polarity's work with companies or with, you know, in workshops and shit like that is like our ability to hold two truths at the same time is very difficult. And dual transformation requires that on every level. Like it requires you to hold two things as important. Like our core business is important and our new growth engine is important. Yeah, our old culture did get us here and we're gonna have to do something radically different. This thing was proven and feel safe and it's no longer working and we have to do something risky.
- [25:45]
A
Like, and it doesn't mean anybody did anything wrong and that somebody's to blame because I think that's the natural follow up totally to that that people often will oversimplify to. Oh, so if our current culture isn't what we need it to be, then whoever advocated or championed the current culture are wrong in some way. Which. No, like they context changes and that's exactly.
- [26:08]
B
Well, and the thing that I remind leaders of who I talk to about this stuff is that I'm like, bro, you Built a rocket ship. Like, that's so rare. It is so rare to build a business to be a hundred or a 200 or $300 million business out of nothing. Like, almost nobody does that. I have no idea how you actually do that. It seems like lightning in a bottle. So like, you didn't fuck this up. It's just that now you're confronted with the inevitability of death and like that also I think is very difficult for people to reconcile when they're like, no, no, no, I do birth stuff. Like, I do growth stuff. I create things. I, I don't like, let them die. Yeah, it's just, you know, holding. It's, it's a lot of like being in conflict with your own history and your own perspective.
- [27:12]
A
Yeah, I just had this image of the difference between talking to somebody like a CEO who has to look at the whole view of the organization. And I think a conversation like this probably hits them differently than somebody who, you know, lower in an organization, hasn't been there from the beginning, who is like, yeah, that's fine. I don't give a shit about any of that. This is my paycheck, Whatever this organization is going to be in 20 years. Cool. Not really my problem. I need to do my job and you need to leave me alone.
- [27:49]
B
Right.
- [27:49]
A
And I think there's, yeah, there's, there's, there's like an empathy that kind of hit me in a little bit different way. Picturing that person being like, I don't really care all that much about the overall strategy. Like, am I going to have a job for the next five years? Like, yes. Okay, great. Like, let me just get to it.
- [28:04]
B
Yeah, this is a little bit of a tangent, but like, is that okay? I guess my deeper question is just like in a large, especially in a large organization, but honestly, I see this even in smaller companies. Is it okay to be insulated from what's really going to happen out there?
- [28:26]
A
It's a coping mechanism, I think.
- [28:27]
B
I do think there are a lot of people in a lot of companies who don't know what the P and L looks like and don't sort of pay a lot of attention to the stock price. They're concerned about the org chart and they're concerned about their day to day. And I feel like that's very understandable. And also I think a lot of people are caught off guard because they aren't sort of paying attention to the landscape and being like, oh, the trend line is in the wrong direction and these cost cutting things and these layoffs and stuff, like, they're not just performative. It's because, like, we. We aren't making money anymore. You know what I mean? And it's like, what's the right balance, especially for people who are listening, who aren't CEOs or, you know, chief strategy officers, like, what's the right balance between doing your job and being primarily concerned about your internal customers and, and what they want and need and paying enough attention to the broader landscape to be like, oh, I am in business a and it is dying. Yeah, I should probably think about that.
- [29:33]
A
Well, I think to. To your point about, you know, people not necessarily being super concerned about, like, what's happening in the broader kind of sky situation of their organization, what's the numbers actually looking like? I think a lot of leadership teams use that as permission to not be transparent about that and to not care to essentially say, like, our people aren't asking about it, so we're not going to be transparent about it. I think when I. When I look at a couple of the organizations that I've worked with that I think have done a pretty good job about this, there's actually a higher expectation about what you should be aware of and how I am going to treat you as a member of this organization and you're going to get more information so that things aren't kind of coming out of nowhere. And we're going to talk very explicitly about. We are doing this sort of dual transformation. We do have a legacy business which is super important. There's still juice to be squeezed from it, and there is still opportunity to make it work better. And it is the engine that will allow us to do anything else in this organization. And yes, there's also this new thing that we're all super stoked about. And there's kind of this halo of, you know, this is the fun new future thing thing. And that is also true. And we actually need both of these cultures, both of these entities to, like, own their shit and really move forward. If any of us are going to be doing anything in 10 years.
- [30:52]
B
Yeah, I love that. I think that's the right. I think it's the right blend. Okay, so Sam wrote a manifesto. It's good. That's like, about, you know, his. His future. What it's really about is like, the organizational design function inside of companies and how it should be structured and what it should be doing and why Sam should be probably stewarding it. Let's say that you are in that role inside of a company because a Lot of our listeners are. And you don't have a big team, but you have a lot of access to the top team. What are you doing? Yeah, what are you doing? As you're listening to them ring their hands about the core business declining and the market moving away from them, and they're saying, like, just using AI instead and find efficiency and, like, fire people so that we can get this thing back on track. Like, what role do we have to play in that discussion if we're inside the house?
- [31:55]
A
Yeah, that's a great question. So where my head goes immediately is getting really crisp and clear about what are the capabilities that we can use to really bridge these two?
- [32:09]
B
I love that.
- [32:10]
A
And what is the OS that we need for the core business? And is it the best possible version of itself? Spoiler alert. No, there's more to be done there. All of the really boring stuff that we've always done a lot of work around operating rhythm and just everything around how does this thing work? And the nice thing about that is it should be more knowable. There should be less unknown variables. We've been doing it for a long time. We know how this machine more or less works, but there's still opportunities to make it work better. Great, let's be really explicit about that. Now, for the new thing or new things that we are testing. What is the OS that this entity needs in order to do its version of its work better? And being very open to the idea that it is potentially a complete opposite of what the core business is and being very okay, like, defining that and saying that that is okay and not getting kind of bogged down in like. And ideas of, like, fairness, like, how come the new thing doesn't have to do this process? Well, because of what it is and where it is in its life cycle, it's completely inappropriate for us to import this more robust process from the core business. And I think there's so much education and facilitating and hand holding around those conversations, basically, and making it okay that these two things are very different. And then what unites them? How do we talk about the thing that we're actually trying to do? Probably, like, purpose stuff and some other very foundational shared services that can be used equally by both sides of the business, and making sure that is being used and designed as thoughtfully as possible and probably helping adjudicate more of that attention into the new thing, when I think by default it'll probably go to the more known thing. So how do you have more people advocating for the new thing without completely strangling the old thing, like all of that is so intention. And I think having a team or somebody whose job it is is to like really own and feel that tension so that everybody else can be a little bit more directly focused on the thing in front of them. I think just helps kind of the whole system function a little bit better.
- [34:25]
B
I think that's really smart. And it's like, you know, before you have transformation, be sort of up and running and separate, you know, because it does need to have really clear boundaries around it. There's a bunch of work to do from a bunch of the first team roles that isn't really anybody's job to do. So like coming at this from an external perspective, like a lot of times when I'm working with a leader, sometimes just talking about their function, but sometimes talking about their whole organization, I find that actually the spark that I mentioned earlier, they do know just takes work to sort of pull it out of them. They actually do have the idea. They have seen the quiet signal. It's just completely buried under 60 hours a week of meetings and no cognitive space at all to think about shit, I think as transformers helping, like pull that out of that role. For example, working really closely, like, for example, with the CFO on, like, how would you fund something like this? Because it's all. It's easy to say there's no money, but when you decide to buy a company suddenly and there's money, when you decide to like hire McKinsey to do a new strategy deck for you, suddenly there's. There's always money. Like, if you actually really feel the pressure to do this thing. But again, first you need the thought on what transformation B is going to be. And then there's just. There's a lot of. How often there's a lot of work. If you have a chief strategy officer that's like, okay, which of these things is the thing that you're going to sort of incubate around? And how are we going to be sure if you're working with product or like tech or R and D or whoever? It's like, how are you guys really getting the customer insights to do the transformation on A, to make it better and more efficient and more streamlined and cheaper and whatever. And then to really understand who you're building for in transformation B, like, there's a lot of how work just to be able to do two transformations at once.
- [36:32]
A
Yeah.
- [36:33]
B
And it's nobody's job to do that work, actually. And so I think there is a real benefit whether you're working with an internal team or. Or a team like, like from the ready. If this is the situation that you're in, just having someone in the role of like, architecting. Architecting this. So it can even happen because it's not in anybody's plan. It's not in anybody's operm. It's not in anybody's disposition. Like, nobody is instinctually going to do this. And so it's just like, how do you even start to have two companies inside of one company that have different operating systems? Yeah, that is a. That is a lift.
- [37:20]
A
It's a lift and a half.
- [37:22]
B
It's a lift and a half. Yeah.
- [37:25]
A
And I think it starts with being really explicit about, like, that's what we are doing. And that is okay because I think there's often a lot of kind of it's like hand waviness or like everybody knows there's like the new thing that we're trying to do and then there's the old thing, but nobody actually explicitly talks about it. So all we have is this, like, vague bad feeling of whether you're on, like, the fun side or the not fun side. And that's not helpful to anyone.
- [37:49]
B
It's so true. You know, I've been part of transformations like this. They weren't called this and they weren't done like this necessarily. But where, you know, the. A business, the emotions run really high when people are like, why are you abandoning our core customers? Why are you abandoning the leaders who built this place? Why are you defunding the work that made us all rich and got us all here? Like, basically, like, what is under the question, And I have heard this from like a bunch of BU leads is like, why don't you care about my thing anymore?
- [38:25]
A
Right. Yeah. That is care can look like a.
- [38:28]
B
Lot of different ways of doing new shit like that people really underestimate.
- [38:34]
A
Yeah, no, totally what care looks like when your bu 10 years ago was. The new thing that we're trying to figure out is a different type of care. When it's the core thing that we all know is not going to be what takes us to the next level. There's lots of different kind of flavors of care. Like the care of, like, maintenance and repair and iterative evolution is different from the care of, like, if I stop caring about this thing, this spark goes out and everything goes along a path of care. And if we expect it to always kind of be of the same intensity and same flavor.
- [39:09]
B
Yeah.
- [39:09]
A
We inevitably feel like we're getting kicked to the Curb at some point.
- [39:12]
B
Yeah, I think that's right.
- [39:14]
A
Okay, Rodney, we've done a good job of this already. But let's be even more explicit about what folks could try or do instead to kind of get potentially their dual transformations up and running the way they need them to.
- [39:28]
B
Yeah. So my first tip, and this is truly for anyone who's providing a service or product internally or externally, is you have to have time in your week where you are talking to customers. You have to have a discipline around customer discovery. And there are two different kinds of customer interaction. I have now really learned this lesson and I know how to do both kinds, but I didn't until like two years ago. If you are trying to optimize the thing that you're already doing, basically you're trying to get to deeper empathy with your current customers. If I'm an org design leader, if I'm an HR leader, if I'm a finance leader, I am talking to my end user to understand how their expectations are changing, what their pain points are, that maybe we could solve for them, how our offerings could start to shift to better serve them. We're basically just saying, you guys are my guys. How can we do for you what we already do for you, but better and faster and more? That's core business customer engagement. And then there is what we call like customer discovery, but it's a more exploratory kind of customer research that's related to transformation, B, that's related to the new thing. Again, if you're an org designer and you're core business is fucking spans and layers, you should be doing this to figure out what the next iteration of your offering is. Internally, this is where we are doing much more generative, much more exploration. We're not assuming that we know the customer. We might actually be building for a different customer. We are now looking for like jobs to be done, quieter signals, discovering bigger problems that we're not already trying to solve that might be worth investigating. This is where, you know, if I'm an HR BP and my core offering to my end user has been executive coaching. And I'm starting to be like, okay, in 2026, what's really going to be up for you? What's really going to be up for this team, what's going to be most strategically important, blah, blah, blah, blah, blah. And what they're saying to me is, I need this team dialed. And it's not. I am now hearing a different problem set that I potentially could build around. I potentially could build capability around more team Level coaching, more facilitation, more whatever. That's a very, very small and localized example. But this is what I'm talking about because in A it's like how do we do better coaching that's more efficacious for you. And in B it's like what is the different kind of problem? And maybe you're not actually exactly the custom, even just getting really smart, that there are those two kinds of customer engagements and that they do different things and that neither of them is do you like me? Which is a lot of the customer research that I see companies doing is basically like, did I do a good job? Are you satisfied with the job I did? Yeah, it's not that interesting to me. This is really the only thing that I'm that interested in.
- [42:51]
A
Totally. And to that last point, every company that has ever sent me a survey immediately after some sort of interaction that's like how did we satisfy? Stop. I hate that.
- [43:01]
B
Stop doing that.
- [43:02]
A
You're not getting any useful information out of that. Okay, that was great. Here's my idea. I think one of the most common failure modes of all the ones we talked about is that the new thing gets scrunched, gets crushed by the process of the old thing. So I think a really concrete thing that you can do is find parts of your old operating system, your existing operating system, or even call it old, the existing operating system that are inappropriate for the new thing that is trying to be cultivated and see if you can find a couple of those things, processes, practices that you can remove, that you can strip away. Maybe the new thing can use a slightly less heavy handed hiring process. Maybe that's what you need to get like the right folks in. Maybe the folks working on the new thing have a lighter budgeting process because they're doing more experimentation and they don't. It doesn't make sense for them to go through the full company okrs or budgeting or planning process, things like that. Be very careful about what is being imported from the existing OS into this new space where we're trying to cultivate something that hasn't existed before.
- [44:16]
B
I love that. And I think even investigating that like recursively, it's like, then you could also look at whether those things are really necessary for company a broadly.
- [44:26]
A
Yeah.
- [44:28]
B
You know, one of the things that struck me as I was like re skimming through this book last night is a lot of the examples that are in the book and they're really good examples Even though they're 10 years old are companies that were already really well run. Like their core business declined because that's inevitable, but their OS wasn't totally fucked. And so like, you know, Amazon was able to lean into AWS because Amazon's core business was quite well run. It wasn't like total chaos or like total bureaucracy inside where they're like, we can't even do the thing we do much less like try to try to figure out what a new thing is. You know, And a lot of the examples are like that. Like Netflix has been a very well run business which has allowed them to go from DVD to streaming to content creation because like their OS is very dialed in. It's not, you know, it's not mayhem internally.
- [45:27]
A
That just made me realize that I think a lot of times when we talk about tool transformation, I'm assuming that people are really focusing on like the new thing because that's the fun thing where our brains naturally go.
- [45:37]
B
And I think dual Sam.
- [45:39]
A
Dual. I know. So actually investing more time and effort into better running the current thing. I actually, even if you have no idea what the second the new thing is, doing that first will create space for transformation be. But that's not the sexy work that people I think are drawn to.
- [45:57]
B
It's really not. My other idea is for those of us who are in a place where we're sort of stuck and playing mental ping pong between the core business that we would like to keep breathing life into and the future business that we think, you know, we'll eventually need and is sort of the bridge to survival. I like the idea of like actually writing sort of a memo or a business charter or a short narrative about each one. So like, what is the description of the current business that we are in optimally? First of all, a lot of companies don't even have that. Like they have a plan or they have a strategy deck which, with a bunch of bullets. But they're not like, this is the description of our business today. These are the kinds of clients we serve. Here's the kind of things we do. This is how the money works. Like, we don't often even see that written down. So write that down, that's cool. And then do the same thing for the business that you wish you could start. A lot of startups begin with a founder manifesto or a pitch or a pitch deck. And that's essentially what this is. It's like what would the pitch deck look like for your core business and for your future business? Just so that you could start to have a vivid picture in your mind of both as a starting point that is not going to be wasted work that could be completed, you know, in a few hours.
- [47:24]
A
Totally. All right, Rodney, did we do the thing?
- [47:28]
B
I think we did my last plug, which isn't really an idea, but, like, actually just, like, read this book. It's a really good book, and I sort of forgot how good it was, but it's just I've been reminded of it in so many situations lately, and what I didn't remember is that there's, like, a whole workbook at the back that I never filled out, but I'm going to, because it's really practical. It's really smart and practical, and I sort of wish that this had become like the transformation Bible instead of a lot of dumber shit that's out there that's more popular, which is like, you know, a lot of things. So I don't know. You know, we're. We're not sponsored by these guys, these three guys who wrote this book 10 years ago. But I think it's good, and I think it should be more referenced than it is. And I think the workbook is pretty sick. If somebody wanted to sit down and.
- [48:19]
A
Actually complete it, hell yeah.
- [48:21]
B
And with that plug, I'm finished.
- [48:25]
A
Beautiful. We're always looking for new topics for the show, so if you have an org pattern that you're having trouble changing, shoot us a note@podcasttheready.com this show is.
- [48:35]
B
Engineered by Taylor Marvin and produced by Jack Van Amber. At Work with READY is created by the ready, where we help organizations around the world change the way they work. Thank you for listening.