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- [00:01]
A
Welcome to the New Books Network.
- [00:06]
B
Hello, I'm Julie Annixter.
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C
And I'm Dan Hill.
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B
And this is Real Transformations, where we talk about business change that works from the inside out.
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C
Today's guests are Phil LeBrun and John O'.
- [00:18]
D
Werner.
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C
They are both enterprise strategists at Amazon Web Services. Phil was previously a corporate VP and international CIO at McDonald's. Interna was formerly at DHS, DHL rather, and studied uncertainty dynamics in academia. Very curious about that. We'll come back to it. Their book is called the Octopus A Guide to Thriving in a World of Continuous Transformation. The publisher, Harvard Business Review Press.
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B
Yes, we've heard of them. So welcome, Jana and Phil to Real Transformations.
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A
Thank you so much for having me.
- [00:52]
C
Absolutely.
- [00:53]
B
And I have to start with a question. You guys both work at aws. You wrote the book together ostensibly while you're working at aws. So talk a little bit about how that all worked because that's really interesting.
- [01:06]
D
Yeah. So we've both been here, what is it, about six years, Johanna?
- [01:10]
A
Yes.
- [01:11]
D
Yeah, so about six years. And we've sort of worked on and off with each other in different teams. We're now part of the same team called Executives in Residence. And we work with some fantastic people. The former Chief Technology and Innovation Officer from NASA Jet Propulsion Lab and a former COO from US Government and a former CTO from Capital One. So some really interesting folks. And our job is to help executives make their own mistakes, not someone else's. Because in every business, we hear the same thing. And I used to be guilty of this at McDonald's, which is. Yeah, but you've got to understand we're different through every. Every conversation. So that's what we do. And part of that, we have this privileged role of working with about 1500 customers on executive level a year, distilling some of those learnings, our own learnings, learnings from Amazon as well, and using those to help our customers innovate. Particularly now with AI, where you actually want to experiment and experimentation, you'll make mistakes, but you don't want to make the same mistakes everyone else has made before. So we get to do a lot of research as part of that. Johan and I bumped into each other about two and a half years ago and said, let's write a book. And we started to write a book.
- [02:22]
C
Well, it's a wonderful book because it really moves through in very concise fashion, all these anti patterns and solutions. And you have recommendations, but good critiques. I have to say, I really happen to love the wizard of Oz. So as I mentioned to Phil, I will forgive you for defaming the Tin man, but I guess I'm glad that you maybe didn't take the Godfather. I was on a KLM flight once from Amsterdam to London and apparently based on a survey of British business people, the Godfather was the overwhelming favorite movie of all time. And I thought, oh my God, if this is going to be the application to business, wouldn't that be something else?
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A
It'd be very fast solutions.
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C
Very fast solutions indeed. So the very first anime pattern goes after jargon. And I was really intrigued by that because a few years back I did a book with Howard Moskowitz called Blah Blah Blah, A Snarky Guide to Office Lingo because I care a lot about language and communication. So the obvious question is that's your first thing out of the out of the gate. Why did it have that priority status? What's going on with clarity and particularly with jargon and why that's a worthy first target?
- [03:33]
A
Yeah, absolutely. We've bucketed the anti patterns that we see. The mistakes companies make, those knee jerk reactions that we all make as leaders or our go to reflexes to deal with challenges, we bucketed them in. We're not creating enough clarity for decentralized action and context. We're not pushing ownership far enough into the organization and we're not creating enough curiosity in the organization. Especially nowadays where you have to operate differently and learn how to use AI and in clarity. One that is just pervasive through many, many companies. And we certainly have done this, we are guilty of all the sins is this use of what Scott Galloway calls yoga bubble or we call corporateees. So this idea of we are an AI forward company that is data centric, customer focused and leverages its corporate synergies, blah blah blah. And you go, I'm falling asleep. And I also have no idea how I leverage my corporate synergies on a Wednesday afternoon when I have to make a practical decision. So we found that people hide behind it. It gives a comfort, it gives a belonging. It's also sometimes a shorthand that requires us not to be really. I love this old. I think it's citzero. It's attributed to many people. The sentence of if I had more time, I would have written you a shorter letter. So the idea of when you want to be clear, it actually takes energy and time to create clarity and we avoid it because we don't have the time or we think we'll just get by without it for many, many reasons. It avoids difficult conversations like saying we are right sizing instead of saying, sorry, we have to let people go. And actually, it takes away trust, it takes away transparency, it takes away clarity for people, what to do. And so because it's so pervasive in so many organizations and many layers of the organization, that was one we said, let's start with that one. I think a lot of people, like you said yourself, Dan, will recognize it. And we give some really practical advice what to do.
- [05:31]
C
Yeah. For instance, George Orwell noted the use of jargon by authoritarian regimes. It gives you a chance to hide. You don't have a personal connection, a voice. I mean, it just deprives you of so much and provides so little.
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A
Exactly right, exactly right.
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B
Well, going to the core metaphor of the octopus, which is so powerful. So the octopus is very different than the way that most hierarchical organizations are built. They're built like machines, they're risk adverse, they're optimized for efficiency, they're top down, they're too slow, especially for a world that's constantly changing. But an octopus apparently has a central brain, but its arms also have distributed intelligence. Each arm can sense, decide and act locally while still working as part of the whole. So that image of the octopus is so powerful. Talk to us about why you chose that and what it means to you and you know, what you've seen, where you've seen it work.
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D
The octopus is just this absurdly sophisticated animal that has this amazing ability to adapt. Shape shifting, changing the texture of its skin, this amazing ability to learn. It grows up without parents. It has to learn its way around its environment. It can even alter its rna. So if it moves from cold water to hot water over a few hours, it can adapt its body to that. But the one thing that really drew us to the octopus was the fact that two thirds of its neurons are in its arms. So while there's this overarching intent set by a brain, each arm, each tentacle can act independently. And we find it a beautiful metaphor for organizations where we hire all these brilliant people and then every decision has to pull up a corporate hierarchy because we believe the central brain has all of the answers, which especially in today's world, just simply isn't the case. So this idea of pushing decision making, the ability to innovate, the ability to sense the environment and adapt to the edges of, of the organization, it just was a beautiful metaphor. And the octopus can play a piano, but that's probably less important.
- [07:38]
B
So how do you help hierarchical organizations, which we're all Very familiar with begin to make the shift to distributed intelligence.
- [07:48]
A
It starts with leaders understanding the value of that and it also starts with leaders getting comfortable. I certainly, I have to be honest, we really come from a place of humility. I wasn't comfortable letting go of control. I was a perfectionist. Someone was kind enough at some point to tell me, I micromanaged my people and I'm glad they told me. And I took the feedback. It's really hard to do that. So we work with leaders to get them to create the clarity they need to create so that there can be decentralized ownership. Because without that people won't want to take ownership. It's often career limiting. If I make the first decision, it goes wrong and I'm told, yeah, you're out. So you need to create the conditions for leaders to wanting to let go and give ownership. And you then need to create the conditions in your organization for that to happen. That means the psychological safety, asking leaders, how long can you go without making a decision? Like Reed Hastings so famously said at Netflix, how can you get rid of all the people who want to help and give opinions? In big we call it the A bombs, the approval bomb that many sign offs, et cetera. So first is the mindset shift, the psychological and feeling of failure culture and psychological safety. And then is dismantling bit by bit the layers of structure, bureaucracy. It's like mowing the lawn. You don't do one top down, you do it iteratively and bit by bit and you learn what works and you slowly get people comfortable doing that. It's a process and it needs a lot of kindness and empathy because it takes time and it's deeply human. Actually sure.
- [09:31]
C
There was one phrase I really love. Well, there's lots of phrases I love in the book. One of them was decriminalizing bad news. You know, admitting that yes, mistakes have been made and so forth. So I love what you just said about trying to move these people to some comfort that mistakes do happen, we need to work for them. It's an iterative process. You have many, many good exercises and ways of thinking about issues differently. Have you found for some of the people who are maybe most rigid, most given to micromanaging, that some of these have been kind of your go tos, the best ways to kind of nudge or move these people along? I'm curious what your experiences have been along those lines.
- [10:08]
D
I think one thing we look for is or people look to is their peers, people they trust. Maybe not the most cutting edge people in the organization, but people like them. And if those people can embrace some of these ideas, then it gives them the confidence to. Having a strong feedback culture is also critical for a number of reasons. It's a good sign of the ability to innovate, to transform. It saves all of this lost time going back to the yoga babble, conversation about trying to figure out what was actually said, asking questions, all of that is so giving people feedback, but simple signs. For instance, if the leader such as we talked to Benedito Vigner, the CEO of Ferrari, when he joined Ferrari, he went on TV because he was quite frustrated. This was an amazing brand that was known for innovation, but it stopped innovating. And because people didn't want to fail, he went on TV and talked about a particular failure he had had. And some of that was actually sharing with the general public. But a lot of the audience was really his own people in his organization saying, look, if we're going to try hard, if we're going to protect the brand, if we're going to grow the brand, these things are going to happen. Another technique we've seen is if you give leaders enough people so their spanner control is very broad, they lose the ability to micromanage. And if you see, for instance in Amazon, often we'll have a span of control of 20 people. Nvidia Jensen has very renowned for having very, very big spans of control because he doesn't want to micromanage. If he's micromanaging, he's probably got the wrong people under him. So there's various little tweaks that can be made to an organization that either highlight through feedback the micromanagement is happening or starts to put enough stress on the system that it's not possible to do it.
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C
One reason I love this, there's a story where the Ford CEO is having a meeting with his direct reports and they're all giving him rosy pictures back. He said, this is. He suddenly interrupted the meeting, said, this is totally wrong. We're lo $10 billion a quarter and you're telling me there's nothing to fix here. Let's get real. So anyway, I like where you're going with all this. Julie, what do you want to jump to next?
- [12:26]
B
I've felt for quite a while, I've spent a lot of time working with CIOs and IT leaders that it in many ways becomes the culture of the company. It's so pervasive. It's how we work in many ways. It sort of sets the infrastructure. And I'm curious because you're aws, one of the true infrastructure giants in the world. What is the role of infrastructure in creating psychological safety?
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D
And when you say infrastructure, are you talking about technology?
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B
I'm talking about technology, yes. I'm talking about. Yes, technology.
- [12:57]
D
I'll just take one spin on that. I worked at McDonald's Corporation and we went through cycles over time of centralization and decentralization. A lot of that manifests through the technology. So are you going to build a central platform which basically says all decisions will be controlled centrally, or are you going to build a thin platform which enables each of your business units to innovate at pace? So I think the way the technology is put together, it's actually a reflection of the culture rather than set on the culture. And sometimes that's about control. We see the same today with artificial intelligence. Often the natural tendency in a big multinational company is to try and bring it all into the center. It's about control. That Tin man behavior that we're going to tightly control it, we're going to gatekeep who gets access to it. The most progressive companies, they push as much of that to the edge as possible. Why wouldn't you give the people closest to the customer the tools that they can use to actually address that? I'm sure you are missing some stuff there.
- [13:58]
A
No, I think I would add one single point. What fascinates me and when I got to know Amazon better is that part of our culture is technology. So we create such technology systems that people can operate fast and as decoupled and independent on small teams as possible. So how we use the technology intrinsically is part of and supports our culture.
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B
Can you say a little bit more about what you see working in terms of pushing AI out and not controlling it? Are there some examples where. Cause I think people are really struggling with how much governance versus how much freedom.
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A
Absolutely. And everyone's learning their way through this. Right now we're doing a large scale study. We found that those who give more freedom at the start. So many companies had the first knee jerk instinct to control and tighten it. And it's understandable, it's new, it's scary, but what it actually does, it means you don't give people the opportunity to learn. So even at Amazon when we had this first knee jerk reaction, we very, very, very quickly corrected that and actually democratized the use of AI and provided tools. And the most open startups and scale ups we talk to, we have CEOs from them even saying, I don't look at the cost, I don't care. I know that a short term cost hit is actually in the long term going to drive my people to really upskill fast and reinvent and make much more revenue and through innovation than my short term thinking. Yet the companies that do this well, let people experiment for a while, but then at some point they pivot and say, now we're going to start looking at connecting this to goals, to value, and even in some cases put it into job description. So for example, you might have goals that can no longer be achieved without the use of AI, without explicitly saying you must use AI. So adoption isn't the goal itself. The companies that do this really well, they think about value and adoption in service of value. I can talk hours about this. We've just done a detailed study on this. It's fascinating and we have some really fantastic finding on it.
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C
Sure. I want to go back to. You mentioned the importance of the feedback loop earlier and you talk about an advisory board model, which is my question. In a moment. I'd like to position that maybe a little versus nps. Net promoter score. I remember being with a Canadian company and I went around with the researchers and I said, so what are you doing in your job? And all of them are doing nps. And I was kind of stunned. So after really I said, why such an emphasis on that? I said, oh, all the executive bonuses are tied to, to the NPS scores. And I said, are you actually learning anything? Is it helping the organization? Is it making you more sensitive? Not so much, but it's the mandate. So tell me about the advisory board. Tell me about any other initiatives that you really see work well to make that feedback important, because Julie and I are both really believers in dialogue and the importance of making those real and substantial.
- [17:02]
D
Yeah, the problem is often we chase metrics. Was it Peter Drucker that said something along the lines of people will do such bizarre things to achieve a metric, even to the detriment of the company they're working for. So we see things like vanity metrics. How many downloads of an app have Berdini? Well, how many people are actually using it? Or perverse metrics which actually reward in some cases unethical behavior to achieve a goal. We've seen examples of that in finance in the U.S. for instance, over the past few years. So to us, metrics are part of the solution. To your point about nps, NPS became this golden measure everyone chased, and it often led to strange things happening. But what it did lead to was us missing signals in Many organizations. So we're so fixated on customers that were filling in NPS surveys that we were missing those weak signals. And it could be data, or it could even be an anecdote. A customer said something to a help desk. We miss that because we're not communicating it. We're not debating it. We're looking at the sort of medium of a bunch of data. So we believe metrics are really important for learning. And learning, obviously, to your point, takes dialogue. And we should be approaching metrics with curiosity, not just blindly trying to meet them. They should be something we're willing to challenge on a regular basis, too, because too often metrics become a proxy for the customer, not the actual view of what a customer is trying to achieve.
- [18:32]
B
You know, Dan and I are both big sports fans, and of course, the World cup is going on right now, and I have a hypothesis I want to test with you that distributed intelligence can really be easily seen in sports teams. Right. They're out on the field, and when the teams are playing really well together, it's not a hierarchical. There is a coach on the sidelines, but there are decisions being made in split seconds. So is that a good metaphor for an octopus?
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C
Yeah.
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A
We see sport, interestingly, we see a lot of research that comes from sports teams and then goes into a business team. So there was an incredible basketball player who himself wasn't outstanding in terms of the metrics that he was measured by, but whenever he joined a team, the team became much better. So I've forgotten his name. I think it was the 90s. I can look it up for you afterwards. But it's quite interesting because what this shows us is that a group of mediocre people actually outperform a single tower of knowledge or genius player in an organization. Every time we call them brilliant jerks, they cause usually more drama and challenge in an organization than a group of people. So we agree with you. We see this in Formula one as well, how a pit stop team works together in seconds to change tires and what that means without talking to each other. So I absolutely agree with you. They are learning a shared set of values. They understand what each other's qualities are that they bring. If you think about a football or basketball team, they learn to react and work with each other. They have underlying systems or tenants, which we also use in our teams in Amazon. Underlying tenants and principles of how you operate in case of doubt. So, absolutely, I agree with you. There is so much to learn from sports, and we're doing that. I've seen this since the 70s, 80s, 90s, the sports research and learning has influenced a lot of management and team research as well.
- [20:35]
C
You know, I know which player you're talking about, but I can't summon his name to Duke University. He was on about five different teams and the statistics are kind of mediocre, but, boy, does he change the chemistry and the outcomes for the teams once he's on the court. It's a lovely view.
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A
Do you remember the name? Yeah. Do you remember the name of the.
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C
Yeah.
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D
Shane. I think it was Shane Batt here.
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C
That's who it is. That's who it is.
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A
That's it. Thank you, Phil.
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C
Yeah, well, I was a distributor. I played center midfield in soccer. But we're going to move on.
- [21:03]
A
It's football, Dan. It's called football.
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C
It is indeed called football. So I lived in Italy as a boy, so. But anyway, you've been on a lot of podcasts, in fact, with my friends at Behavioral Groove, so I'm going to ask you to say, choose something you haven't had a chance to talk about in one of your other interviews for this book, something you'd like to talk about that you haven't had the opportunity.
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D
Oh, that's a tough question.
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A
That's a great question.
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B
Well, let me. What is your wish for the readers of the book, for companies out there, for leaders that you're not working with yet? This is a big idea. Like, what do you wish for them?
- [21:43]
D
The best outcome we have when we talk to customers, to executives, is when you could see a light go off in one of their eyes and they think, maybe this is a better way of doing something. Then they leave the room and they say, I'm going to try something, I'm going to take a bit of a gamble. Or I can think about this from a different mental model perspective. I've seen myself in the mirror. I don't like what I've seen. It's been framed in such a way I sort of challenge my own thinking about how things have always been done. Those dreaded best practices, which you can't possibly get better than a best practice. So you never change. So that's one of the things we love to see, is when someone leaves the room, they think there's a different way. One thing I don't think we talk about enough, ironically, given it's one of the biggest barriers to the adoption of technology, particularly AI at the moment, is downplaying people development. One of the shocking stats we came across was over the last 10 years, the amount of money we've invested in. The average employee hasn't changed. So with inflation, it's gone down. The amount of money we've invested in senior leadership training has tripled in the same time period. And so we've tripled down on teaching people the things that aren't working. So I really hope that organizations that Yana and I talk to in the wider team, they understand they have the people they need, they may not have the skills they need. And we can address that. We can address that by turning the workplace into a place to learn, not just a place to be seen to be performing.
- [23:15]
C
Julie, you want to take us home? We're pretty much near the end of time.
- [23:19]
B
This is a profound book. It is both practical and it is also, it's paradigm shifting for all of the reasons that you've just said. So first, congratulations on the book.
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A
Thank you.
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B
We are so delighted we got to connect with you. We hope everyone will read the book. We definitely want to follow up. I want to introduce you to some of the people that I just mentioned, but really, Yana and Phil, congratulations. This is, this is a glorious book.
- [23:46]
A
Thank you so much. We appreciate it comes from our hearts and our hard learned experience and empathy with everyone going through these journeys. Thank you.
- [23:56]
B
Thank you so much.