← Embracing Digital Transformation
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- [00:00]
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How teachers have been taught to teach to the test, and students learn how to study to the test. And now we go to work and I learn how to perform to the goals. There's no sense of ownership, creativity, contribution. It's just let me perform like a good robot.
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Welcome to Embracing Digital Transformation, where we explore how people process policy and technology drive effective change. This is Dr. Darren, Chief Enterprise architect, educator, author, and most importantly, your host on this episode, how Human Centric Leadership Transforms Business, with Norman Wolf, visionary and author of Living Organizations. Norman, welcome to the show.
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A
Thank you, Darren. It's a pleasure to be here.
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B
Hey, I'm actually really excited about this because I've been doing a lot of writing around organizational structures and a new book I have coming out called AI Augmented Organizations. And when we first talked and you talked about the Living organization, I went, hey, I got to talk more to Norman, so I have to have you come on the show.
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A
Well, thank you.
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B
But before we dive into any of that, everyone that listens to my show knows that I only have superheroes on the show, and every superhero has superpowers. And a background story, and we'll explore your superpowers later. But what's your origin story? Where'd you come from, Norman?
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A
I was born in a Jewish family in Brooklyn, New York, and my mom and my grandparents actually migrated from the. They were evicted during the pogroms in Russia and Poland. My mom was actually born in Poland and they migrated through Israel. My grandfather came over, established himself in the US Then brought the family over. So that's kind of the contextual background of my family roots. Went to Brooklyn Tech High School, which is a kind of a. One of those three high schools in New York City that you had to take a test to enter. Early on, I wanted to be a pilot, and I thought I'd study aeronautical engineering. Ended up going to New York University, not because I couldn't afford it, but because I was on the fencing team at Brooklyn Tech. And my coach told me to apply to nyu and I was accepted on a full scholarship for fencing at NYU. NYU's fencing team was one of the top teams in the country. And so I was honored to do that. I was enrolled in a special program. It was a five year program. Bachelor of arts in one of the sciences. I chose mathematics and a bachelor of Engineering in one of the fields I would have enrolled in aeronautical engineering. After four years of academia, I decided I wanted to go out into the world and do something. So I applied to all of the aeronautical Firms, you know, McDonnell Douglas Honeywell Prattman Whitney Aircraft I got a job at Prattman Whitney Aircraft instead of engineering. I ended up in the computer group. I ended up programming, testing and data acquisitions systems to test the fuel cells, which got me in touch with Hewlett Packet. And I think that was the path that my life took me on. That really changed everything. So I left problem with me in 1973 and went to HP. Started off as a systems engineer, supporting customers and salespeople in the sales process. Was highly respected, very well known throughout the country, not just in my own region. And somebody came along and said, hey, would you like to be a manager of the service department? And I said, oh yeah, I see from early on I had a kind of an experience in my college and my last year in college of what you might call an openness to the concept of universality of love. And I just, my heart opened up. I don't know how or why, but I had that kind of experience. And so I had this really orientation towards caring for people. So here I am, helping customers, helping salespeople, and now I have an opportunity to help employees by being a leader. Well, I'm really proud to say my first year as a, as a manager, as a district service manager, my performance review was by Vice one or Jane Wolf was unacceptable in every category.
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B
Oh no.
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A
I say that with a certain amount of pride because I gave me an opportunity, put me at a crossroads. And I was going to go back being a technical guy because I was really good at it. But a number of mentors within the, the sales region encouraged me to stick with it. So I applied my systems engineering orientation, my thinking of what complexity and systems and how do, how do they work and how do you solve them. I applied it to the art and skill of leadership and I began to dive into what does it mean to lead a group of people. Throughout my career at hp, I. Never took over an organization that I was technically good at. So I was from systems engineering and sales, managing a service department. My next big promotion was to manage the administrative organization of hp, which meant I now am involved with it. Order processing, credit, accounts receivable, accounts, paper, all the things I knew nothing about,
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B
all the operations stuff you knew nothing about.
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A
I had to learn what a debit and the credit was, right? I had to learn what chart of accounts were. I mean, I knew nothing about any of that. And not only that, but I also seem to always have the opportunity to, to take over organizations that were failing. So I was sort of an internal turnaround guy. Nothing by design. None of this was by design. It was just the opportunities life offered me and gave me an opportunity to enhance and develop new skills. And so very successful, turned it around, became one of the top administrative organizations in the world, not only in the country, given an opportunity by HP to go through, to help redesign the sales regions because we're going through another major shift. And I did. And I ended up redesigning myself out of a job, figuring I'd find another job. Hell, I had a 15 year career with HBO going on 15 years. But instead of finding another job, I ended up finding my way out. I decided to leave and start consulting, take all this knowledge of organization and leadership and performance and success in creating extraordinary results and, and help other leaders to learn how to do what I learned how to do. A little bit of an arrogance and a little hubris at the time, but which kind of gotten knocked out of me over the years and. But I work with a lot of leaders in a lot of different areas, doing a lot of different things. And in 2001, I was talking to one of my clients. I. That's been a client with me for a number of years. And I asked him, why does he keep hiring me as a client? I was in a remarketing phase of my consultant, trying to bring some focus to it. And he said, Norman, that's really easy. You help me execute faster. So in 2000, I entered this new path of addressing the issue of execution. Why 70% of companies fail to execute and why 70% of employees are disengaged.
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B
And yeah, that's, that's a huge, that's a huge deal, Norman. I mean, that's huge. What, what an awesome career. What, what a great. Starting with fencing. When was the last time you picked up a fo.
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A
Stopped in Portland, Oregon in 2011? About 2013. 14. I decided, you know, I'm going to check out. I loved fencing and I thought that might be a great way to achieve exercise and all of that. So I found a fencing style here in Portland and I went and tried it out. I did that for two times, I think. And I realized, one, the younger kids are way more better than I am. And two, the style of fencing changed so rapidly over the years.
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B
Oh, I bet it has.
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A
And there was no way I could be effective at it. And honestly, I just didn't want to start over. So instead of fencing, I took up tai chi and qigong. It was much more suited for my age and my orientation in life.
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B
That's. That's awesome. That's awesome. All right, let's. Let's dive into, through these years, use the systems approach to management. Use it right. Which must have been kind of a shocker for a lot of people, because traditional management style back in that time, and I think we've got huge gaps in management training today, but management style back then was extremely hierarchical and kind of archaic is what is a good word to put it.
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A
Unfortunately. Unfortunately, yes. And unfortunately, not much has changed, believe it or not. We changed. Yeah. We changed the language, we changed the, you know, we talk a different way, you know, like, like it's not, you know, like people are most important assets and.
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B
Yeah, but we know they're not. I think we're seeing that in droves right now. The most important asset for most companies is their AI. Bill. Right.
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A
The problem with, with business is recording what I call a paradigm trap. What I mean by a paradigm trap, you know, if you know what a paradigm is, it's a way of seeing the world. It's a worldview, it's a frame of reference.
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B
Right.
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A
And when you live within that frame of reference, the world looks a certain way. And the frame of reference for business is the same frame of reference from 1900s. It's a black box. It's. And it takes inputs, produces outputs, and inside that black box is a bunch of component parts. And the leader's role, we call it plan, organize, lead, and control. That's the old terms. The leader's role is to plan it, which is really, say, design the black box, design the machine, organize it, put in the right component parts, turn it on and watch it go and watch it, control it, observe it, and then modify it, which usually means new strategy, reorganization, different component parts. Let's put in robots instead of people to run our warehouses. Let's implement AI instead of people. It's just this mindset we have that's paradigm trap. This illusion, I like to call it, of thinking an organization as a machine of production to be optimized, streamlined, made as efficient as possible. That's the underlying course context, the core belief system that drives leaders to decide how to make the decisions they make.
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B
So hasn't that worked for us, though, for the last 150 years?
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A
Absolutely, unfortunately.
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B
So why change?
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A
Well, the environment changed. There's a lot of people who want to talk about organizations as living systems, and it's a beautiful image because living systems are adaptable, they're resilient, they adjust to the environment as needed. One of the arguments I make against that, and why I say it's not A machine. And it's not a living system, it's actually a person. Because living systems naturally adapt. Well, look at the environment we're in today versus the environment of 1900. The people we have in the organization are much more educated. The environment is much less stable. Have our organizations naturally adopted to the change of environment like living systems would have? No, we're still stuck because as people, people create a framework, a paradigm, a belief system, I call it the context of how we're going to operate that's going to be safe and successful. And we draw on past experiences and to move to a different frame of reference is very difficult because it's uncertain, it's unknown. Will it work? Won't it work? Is that really true? You know, look at what happened with any major shift in paradigm that, that humans have had to face. Whether you go back to the Earth is flat versus the Earth is round, whether you go back to the Earth revolves around the sun versus the sun revolves around the Earth. Whether you go back to quantum physics versus Newtonian physics, we do not change very easily. And the reason for that is we're not really given the framework of how to transition from one paradigm to another. And that was really the systems thinking challenge I set out to change.
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B
And so. Well, that's really fascinating. So you've laid out kind of a roadmap, then, you know, where we want to go to. And what you're saying is in the past where change was there, no one really laid out a way of making the change. It was like, obviously you can see that, you know, the, the Earth goes around the sun. I mean, it's obvious, but it's not that obvious.
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A
That's right.
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B
That's right. So, so what does that. Let's talk about the end state first. And then what is the, what are the steps to get to that end state? So what, what do you see as the end state of an organization? Where we should be, not where we're at today?
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A
That's a great question, Darren. And I think it's the same thing a lot of people are talking about. And the way I like to say it is imagine an organization where people came to work and chose to want to do what the organization needs to have done. Just step back and imagine that environment that the they want to come to work. They understand the goals, objectives, vision, future of the organization they choose. And that's a key word, they choose to want to contribute their talents and energies to achieving those goals and visions. They're confident enough to overcome whatever challenges they Face. They look at challenges as a way of growing, not as a way of protecting against failures. Don't. Failures, quote, unquote, failures, mistakes, errors, whatever you want to call them are not something to avoid, but they're something to learn from. Now imagine an environment where that is. Imagine you're the leader of an organization where those are the kind of people that's the. Right. And new technology comes along and people don't see it as a threat to the job because it's not going to replace them. They embrace it because they see the new technology as a way of enhancing what they're already doing. And they want to embrace robots and learn how to use them more effectively. They want to embrace AI to make the menial daily tasks that they don't really like to do anyway simpler and easier so they can apply a greater sense of contribution. Now imagine an organization like that. Right? Imagine an organization that understands that customers own transactions, but their relationships and the experience customers have with the organization at every level matters to the success of the organization.
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B
So I want to stop you right there for a second because we're in the throes of trying to do that in my organization right now.
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A
Yeah, sure.
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B
And there are some people in the organization. I being one of them, I love my job. And everything you mentioned there, I was like, that's me, right. I love what I do. I'm given the freedom to do what. Because I. I've grown. I'm. I'm a white hair, right. I've got white hair. I've been around a long time. I know how to provide value to the company and feel engaged. But I'm rare, and I'm understanding that I'm rare as I talk to more people in my organization. So what? Yeah. How do I replicate that? It's not because I'm good at it or anything. It's just I'm engaged. I feel happy to be.
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A
A, wisdom. Yeah. And wouldn't it be wonderful if everybody felt that way?
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B
Yeah, but why don't they?
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A
I guess because they've been taught from early childhood that that's A, not their job, so to speak, and B, it's kind of risky. Think about it, what it means for you to choose to do what you want to do. It puts a certain level of ownership and responsibility in your lap, Right?
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B
Yeah, it does. Yeah.
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A
It also gives you a lot of freedom. But freedom comes with responsibility and responsibilities don't always feel good.
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B
Yeah, it's a little scary.
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A
It's a little scary. You know, I had a. I Had a personal experience. I was 40. I was going through quite a number of changes in my life, and I was doing some reflecting on my life, and I looked back and I said, you know, for the first 10, 15, 20 years of my life, I lived under the rules of my parents. I grew up. My family told me how to behave, what to behave, what to think, how to think, what's important, what's not important, the values. And I kind of broke through that, and I went out and did my own thing, and I joined, you know, got to work. But there was a pattern of thinking about what life meant and what work meant that was sort of ingrained in me. And I stepped back and said, wow, you know, I'm 40 years old. I have all this experience. Back then, it seemed like a lot of experience. I have all this experience, and I can do anything I want. I can choose what I want to do in my life. It was such an open, freeing moment. And almost instantaneously, the second thought popped into my mind, saying, oh, my God, I'm the one. You see that? You see that?
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B
Yes. Yes, I do see it. It's like, oh, no. Because the decision I make, I'm now accountable.
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A
Exactly right. Exactly right. Interesting. So there is this. It's sort of like it's a maturity thing in many ways. And we talk a lot about maturity in the living organization framework because it's that moment in time when we're faced with that choice that we go to the next level or not, depending on whether we mature or not. And so what you're really dealing with, and this is the biggest issue in business and why we're shooting ourselves in the foot by living in this paradigm, the goal of business is to get results. I, as a leader, have a time crunch. I can't take three years to get the results. I got to do it next quarter, next year, whatever the timeframe is, that never goes away. In doing that, it's so much easier for me as a leader to be more directive. Even if I'm participatory management, I'm theory Y instead of theory X. And all of that, I'm still driven to want to tell people. I just had a conversation with a CEO who literally said to me, you know, Norman, when I go to my people and I see them struggling, it's my job to help them. So I give them guidance. I tell them how to move forward. Well, look at what that's done. It's taken away from the person that opportunity to learn, to grow. So unconsciously, we're Keeping people locked into. Now, it doesn't start at work in elementary school, in high school, even in universities. I was talking to a niece of mine who's a teacher, and we were talking about how teachers have been taught to teach to the test, and students learn how to study to the test. And now we go to work and I learn how to perform to the goals. There's no sense of ownership, creativity, contribution. It's just let me perform like a good robot. You see how the system has.
- [23:09]
B
I do, yeah. The system was the system. And, you know, I'm fighting this battle right now in education. I teach at Vanderbilt University, and. And I've changed all my courses because I saw the same thing. My students were just jumping through the hoops to t. To. To get their programs to pass my tests.
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A
Yes, right.
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B
And then they would get a hundred, and that was done. And I changed.
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A
And then they forget everything they learned.
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B
Because they forget everything they learned, Jenna. So, in fact, I graded their finals this morning, their final projects, actually, this morning, and I changed it all up. I. I don't grade based off and. All right, they're probably listening. So this is going to destroy everything.
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A
But don't give away your secrets.
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B
Yeah, don't. My. My secret is I. I grade off of not their content, but their analysis of their content.
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A
Yes. Right.
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B
Why did you choose what you did?
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A
Yes.
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B
Right. What did you learn from doing this? I find far more beneficial to me and to them as well. So I am trying to make that paradigm shift. But, Norman, it is so hard.
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A
It's hard.
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B
So how do we do that in an organization? Because I've got. I'm going to say faulty robots. I've got robots coming in and I want humans coming out. Right. How do I change that?
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A
Well, you have to shift from this plan lead, organized, control mindset that we talked about, this machine production mindset, and look at an organization like you're raising a child. We talked about maturity. The leader's role is to develop the organization's capacity to execute. That's the way I like to look at it. And when you think of it from that point of view, the goals we set for an organization become the challenges that serve as the catalyst that create the opportunity to learn. So a leader should be thinking just like you are, about what's their thinking process, what's creating them to behave the way they do and work with those elements. We call them working with the context field and the relationship field, not just the activity field. Right. Most leaders just care about how well are they doing what they're doing right. And are they gaining the results? They just look at what we call the doingness, the activity. But people are driven more by the relationship and context. And by context, I mean that collective of stories that define and determine actually drive my behaviors unconsciously. And if I can, as a leader, reveal what's driving this collective of people or what's driving this individual, what's their underlying context, and we learn how to reframe it so it's supportive of the behaviors the organization needs. And now we're talking about developmental orientation. So a leader's role becomes setting the context, setting the ground rules, setting the rules of the game, I like to call it. Right. Why are we here? What do we stand for? What character do we want to have? Not just what values we believe in, but what's our character as a collective? And, and then allowing people the room to. To operate, to contribute, and then helping them. First of all, you got to help them overcome this fear of doing that.
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B
Yeah, that's a huge fear, right?
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A
Yeah. And then. And that's part of setting that stage to, To. To let them understand that they. That they, like, they have the authority. The, you know, people. We talk about empowering people, but empowerment and choice go hand in hand. And we just talked about the difficulty people have of choosing. You know, there's a number of books out there that talk about don't tell people what to do, ask questions. But there's sort of a balance in doing that because you can frustrate people a lot by just asking questions, you know.
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B
Yes, you can.
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A
So. So you gotta. You gotta learn the art and skills. And that's why, you know, within the Living Organization framework we developed, we've identified six skills that leaders need to add onto their repertoire to be able to do this. And a lot of it is learning the. The art and skill of really connecting with people. It kind of goes back to my very early epiphany that I mentioned where I. Where I sense this. This kind of universality of love. Is not just an emotion, it's a state of being. Love is a way of caring for people, truly caring for them, accepting them for who they are, not who they, not how I can use them. Right. And once I have that kind of relationship with somebody, I can invite them to want to contribute. You know, we talk about psychological safety in the workplace, and we're trying to create it through the traditional machine way. Here's the seven steps you follow. But psychological safety is an experience, not a set of steps. Do I feel safe talking to you and revealing my background to you. I mean, that's like you said, that's a bit risky. And I didn't make up a well scripted story. It's like, wow, I just opened myself up a little bit because I felt safe with you to do that. So psychological safety is really a feeling where I can be truly who I am with you. Now think about a leader who can have that type of relationship with people. And I'm not talking, you know, people think this is all woo. Woo Yupacholi, former CEO, chairman of Best Buy, took Best Buy through its major turnaround, wrote a book called the Heart of the Company. This is the new direction. Right. This is where we have to go. And like you said, the difficulty is nobody's developed a pathway to go there. Nobody's explained to you, Right?
- [29:55]
B
Because that's all, I mean, Norman, that's all fluffy unicorns and rainbows and unicorns. But I mean, tactically, I, you know, because I, we, I think we are even leaders are trained in business school, right? Because I have my mba and yeah, here's, here's what you do, right. There's the formula.
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A
That's the formula. Here's the way you develop the strategy. Here's the way you communicate it down through the organization.
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B
Yeah. No build it. No really solid building of principles or character. I like your word character better than value.
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A
Yeah, it's these subtle, subtle shifts in our thinking, like character versus values. Right. It creates a different quality. And yeah, that's, that's the shift we have to make and that's what we help leaders learn how to do. That's what the living organization now, it does have a lot of soft stuff in it, obviously.
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B
Oh, we need. But we need that. Right? We're humans.
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A
We're humans and organizations are humans. So we've got to start thinking in terms of human development, not machine optimization. Very different point of view.
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B
Do you think that human part of the organization is going to slightly go away as Gen AI starts replacing humans?
- [31:23]
A
Absolutely not. I have an orientation about. I use genai a lot and I'm actually looking, you know, I'm practicing now with Claude Cowork to do tasks for me. Agentic AI. Right. I'm learning about that. Wonderful tools. Do I feel it replaces me? Absolutely not. I feel it actually enhances me. It frees me up. You know how many hours I used to spend trying to analyze a situation, doing research? I mean, even the Internet, the Internet came along and it saved me hours and hours. I never I didn't have to go buy books. I didn't have to go to the library. I didn't have to. Right. That's the way we used to do research. Google came along. I can do a search and get 17,000 papers on the subject. And I. Right at the tip of my fingers. It saved me hours.
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B
Amazing. Yeah.
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A
But then I had to read them all. How to digest them now?
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B
You know, you can have it summarize it, or I search it.
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A
Yeah, I can search it, I can summarize it. I can. I can probe it, I can dive deeper into it. I'm becoming a real expert overnight in so many fields. Well, it only enhances me. It doesn't detract from me.
- [32:35]
B
Yeah, I use the word augment in my course. AI Augmented. You used the word earlier context, which. I loved how you used that word. Context and relationships are so important. And guess what? In the concept of generative AI, context is everything.
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A
Everything. That's right.
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B
And so I'm wondering if, because we've been robots at our jobs for so long, the context was never clearly stated. It was just kind of there. Now, with generative AI, we have to be more explicit about context. I'm hoping that this will bleed over into our relationships with the people we work with, where we can give each other some grace and give each other that context, because now we're going to be used to giving that context.
- [33:26]
A
I. I totally agree with you. I hadn't thought about that correlation. But you're right. I mean, the opportunity is for the skill we learn in. In applying context to AI, so AI performs better. We can actually apply it to people and say, here's the context. This is the environment. You're free to contribute any way you want within that context. It brings to mind a time when I was at a conference and there was this consultant speaking, and he talked about setting boundaries and the power of boundaries. And it's sort of the same thing with setting context. And the way he described it, he said, one of the things that makes America different than everybody else is our Bill of Rights, not our Constitution.
- [34:19]
B
It's our Bill of your right.
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A
Yeah. And in the Bill of Rights, it's very clear. Everyone starts with shall, not right. We're setting boundary conditions, and as long as you stay within those boundary conditions, you got the freedom to do whatever you want. So it's generated a highly innovative society, and we've been known for years for that, Right?
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B
Yes. Yeah.
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A
The minute you start telling people what they can do when you create standard operating procedures, and you say, this is how you do this, this and this. You take away that human condition of creativity and innovation because you're telling them you're making them into robots, like we've been talking about.
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B
Yeah. But now, Norman, I'm seeing an organization with total chaos going on.
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A
But that doesn't just like. You're not just like with AI. And I guess that's a really good metaphor because if you didn't set the context. So the number one responsibility of a lead is to set the context. Right. That eliminates. Setting the context is like setting those boundaries. You know, when I was at hp, we had the notion of management by objective.
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B
Oh, yeah.
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A
We weren't given specific standard operating procedures. We were given a dozen. I think there were 12 GP core objectives that set the boundary condition. And we were told, as long as you don't violate any of those, do whatever, you can get the job done. Why not an environment to create? And that's why HP was so creative in its heyday. It had to say.
- [36:01]
B
But big companies tend. I've seen this before. Big companies go that direction and then they tend to revert back. So why that reversion? Why not embrace.
- [36:13]
A
Cause of the paradigm trap I mentioned?
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B
Because the paradigm trap, that drags us
- [36:17]
A
back in, that's why I call it a trap, because it's like a black hole. It sucks us all into that way of thinking. The bigger we get, the more mechanized we become, because it's easier to control
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B
it and predict it.
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A
And predict it.
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B
Yeah.
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A
Right. And predictability is one of the. Predictability and efficiency are the two cornerstones of the trap, and they're delightful human conditions. We love predictability.
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B
Oh, yes.
- [36:50]
A
And we love consistency. Right. And we love efficiency. But the world doesn't work that way. That's not the way the world works. Right. The world is really chaos. It's unknown, it's uncertain. Right. One of the skills we teach is what we call improvisation mindset. If you look at how improvisers work, there's a story, there's a little film clip we use about Miles Davis and Herbie Hancock. Herbie Hancock is playing in Miles band and he's on the keyboards and he tells this story about. Miles is doing his number one number and he's. And we're just really clicking and I'm on the keyboard and then all of a sudden I hit this note and it's off and I go, oh, God. And Miles takes but a second and takes his off key chord and plays a few notes and makes it Right. And he says, you know, that's the way life is. Something happens, and instead of going, oh, my God, what we do wrong and who's to blame, and you just adjust it up and figure out how do you. And Herbie Hancock uses the term morals turned poison into medicine. What a beautiful way to think of.
- [38:15]
B
Oh, that's beautiful. I am metaphor.
- [38:17]
A
And those are the skills we want to teach leaders how to do so they can. So they can harness the creativity, the creative power that create a spark that makes us human. That's. That's the beauty of being humans, and that's what we want to achieve.
- [38:32]
B
Hey, Norman, we are out of time. We're over.
- [38:35]
A
Oh, that's a shame.
- [38:36]
B
Which is. Which is a shame, right? Because we could talk for a long time if people want to find out more, Norman, and engage with, with your, you know, your philosophy and your, your system that you've come. I don't want to even call it a system. It's a way of framework.
- [38:51]
A
It's a way of framework.
- [38:54]
B
How do they go about it?
- [38:56]
A
Well, you can go out, check all about the living organization at our new website called livingorganization.com very simple. And they can reach me@quantumleaders.com that's my consulting firm site. That's my site. And they can reach me at N W O L f e@quantumleaders.com.
- [39:18]
B
norman, this has been wonderful. We could talk for hours, but I may lose my audience because we're having fun. I don't know about anyone listening, but we're having fun.
- [39:28]
A
We are having fun.
- [39:29]
B
Thanks for coming on the show.
- [39:31]
A
Thank you, Dan.
- [39:36]
B
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