← The Brainy Business | Understanding the Psychology of Why People Buy | Behavioral Economics
The Brainy Business | Understanding the Psychology of Why People Buy | Behavioral Economics
495. The Human Side of Leadership w/ Willie Pietersen
00:56:26
In this episode of The Brainy Business podcast, Melina Palmer welcomes Willie Pietersen, author of the insightful book, Leadership: The Inside Story. With decades of experience in both law and international business, Willie shares his unique...
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- [00:00]
Melina Palmer
Welcome to episode 495 of the Brainy Business Understanding the Psychology of why People Buy. In today's episode, I'm excited to introduce you to Willie Peterson, author of Leadership the Inside Story. Ready? Let's get started.
- [00:20]
You are listening to the Brainy Business podcast where we dig into the psychology of why people buy and help you incorporate behavioral economics into your business, making it more brain friendly. Now, here's your host, Melina Palmer.
- [00:36]
Hello. Hello everyone. My name is Melina Palmer and I want to welcome you to the Brainy Business Podcast. What's the difference between Management and leadership? If you ask my guest today, Willie Peterson, he would tell you that in his decades long career he's learned that management is about things and leadership is about people. As he says in his book the Inside Story, both management and leadership are important. The challenge is to create the right balance between the two. He goes on to explain that there are three domains of leadership, personal, strategic, and interpersonal. When they all come together properly, you can practice integrated leadership. After that, he shares a great example from General Edward Meyer, who is a former US Army Chief of Staff, who said that leadership is like a diamond. A diamond is formed when three things come together, carbon, heat and pressure. When any one of these is absent, there's no diamond. In the same way, the three domains of leadership are interdependent. When any one of them is missing or deficient, it undermines the effectiveness of the whole. Combining them successfully makes a fully integrated leader and striving for excellence in all three is a lifelong learning process. We will of course be talking about that lifelong learning process and leadership and all sorts of amazing things in our conversation today because as you might have guessed, Willie is my guest on today's episode. We're going to be talking about his insights on a human approach to leadership and business strategy. A little bit about him and his background. Willie was raised in South Africa and received a Rhodes Scholarship to Oxford University. After practicing law, he embarked on an international business career. Over a period of 20 years, he served as the CEO of Multi Billion dollar businesses such as Lever Brothers foods division, Seagram USA, Tropicana and Sterling Winthrop's consumer health group. In 1998, he was named professor of the Practice of Management at the Columbia University Graduate School of Business. He specializes in strategy and the leadership of change and his methods and ideas, especially strategic learning, are widely applied within Columbia's executive education programs and also in numerous corporations. He has served as a teacher and advisor to many global companies including cna Insurance Group, Cubic Deloitte Ericsson, Electrolux, Exxon Mobil, First Command, Girl Scouts of America, Henry Schein, Inc. JJ National Council on Aging, Novartis, SAP srp, UGI Utilities, United Nations, Federal Credit Union, and Univation Technologies. So, yeah, we're going to have some really great insights today. Really quickly, before we get into the conversation, I want to be sure you know that there are links in the show, notes for my top related past episodes and books, ways to get in touch with Willie and myself and more. It's all within the app you're listening to and@the brainybusiness.com 495 now let's jump right in. Willie Peterson, welcome to the Brainy Business Podcast.
- [03:46]
Willie Peterson
Thank you, Melina. Happy to be with you.
- [03:49]
Melina Palmer
Yes. I'm so excited to have you here. And we're going to be chatting about leadership and some brand strategy and really great stuff over your tenured career. For everyone who doesn't yet know you yet, can you share a little bit about yourself and the work that you do?
- [04:05]
Willie Peterson
Yeah, certainly the first thing that probably strike you is that I have an unusual accent. So let me explain that. I was born and raised in South Africa and my first career was practicing law. I was a litigation lawyer in Cape Town and then I became a corporate executive with an international career and was a CEO of various companies over a period of 20 years. And I'm now in the midst of my third career as a faculty member, a professor of the practice of management at Columbia Business School. Have been doing that now for the last 27 years. I enjoy it a great deal and I also, alongside that do a good deal of consulting work with various corporations as well on strategy and leadership. So essentially that's my thumbnail sketch.
- [04:59]
Melina Palmer
I love it. And as you said in our pre chat, your newest book is about leadership. And so we'll definitely be having a great focus on that. And knowing that in the book you talk about kind of those early days, you know, when you were stepping into your CEO role, can you share a little bit about, you know, a little bit deeper into the work, you know, that you did and what you learned there?
- [05:26]
Willie Peterson
Yeah, certainly this was part of the Unilever group and I had joined them in South Africa. And after one assignment overseas, they brought me back to run the foods business in South Africa. I was young. I felt a little bit unprepared and overawed. So I embarked on this with a certain amount of, I guess, trepidation. It's kind of a proving ground. Unilever had placed a bet on me And I had to show that I could live up to their expectations. Now I had a mindset going in. I'd practiced law before, and law has kind of got those rigorous disciplines of following the logic, and if you lose the logic track, you tend to lose your case. So that's pretty rigorous application of it. And so my ingoing assumption was that running a business was a bit like playing a game of chess. Understanding all the right moves, thinking ahead and thinking logically and rationally. And that if you explain the logic of a particular approach or strategy to the organization, they would instantly get it because the logic made sense. That would motivate them to excel at what they were doing and create a great deal of inspiration and excitement. Logic does it all. And I began to learn things along the way that we were all social animals, and developing meaning and inspiration and recognition become important aspects of leading effectively. It was a bit of a revelation. Not that I'd ignored it. I always enjoyed people and so on. But when it came to business, I would sort of, let's get down to business now and explain the logic. An interesting thing happened after three months on the job. The chairman of the group, CJ vanjasveldt, who is a wonderful leader of people, asked me to come to his office for a discussion. And he posed a question. He said, well, you've been doing this for three months now. Tell me what you've learned. What has surprised you in this role? And I said, you know, C.J. i was really surprised at how much time I needed to spend on people issues beyond just explaining the logic, taking care of their careers, making sure that they were inspired and committed to what we were trying to do, encourage their levels of motivation, always encouraging the heart, so to speak, in addition to, you know, cultivating the logical approach. And I remember him vividly smiling in a kind of a very benign and knowing way and simply saying to me, peterson, welcome to leadership. That phrase rang in my mind. You know, Confucius, I'm a great. You know, one of my hobbies, reading, is philosophy. Confucius got it right thousands of years ago. If you want to be a leader, you must first be a human being. And so I've now, since that time and increasingly in today's complex world, realized that leadership is about people. Essentially, management is about things and projects and getting work done. But great work happens through inspired people. So that's kind of, for me, an object lesson. And I've kind of enriched my thinking on that aspect and thought of underlying tools to make that a reality.
- [09:21]
Melina Palmer
Yeah, Definitely. So very aligned, kindred in study of behavioral sciences, behavioral economics, and knowing the human side of business, for the most part, we're working with other humans, at least for a while. Right. And then knowing even the people that we're selling to, our human people need to buy our products. Right. So there's so much overlap there. Any thoughts on. I know you said you have, of course, from years of, you know, running that group at Unilever. How. How do you think that ties in with brand experience and selling?
- [09:59]
Willie Peterson
I think that's a crucially important question. And as you mentioned, you know, not only do we sell things, if we run a business, we buy things as human beings. We both do the corporate side of it, whatever business we're in, and we also do the other side of it. We buy things. And so we should be aware of the psychology that drives demand for a product and product loyalty. It's a little bit like you drive in a car and a pedestrian suddenly darts across the road and you say these silly pedestrians, and then you get out of your car and you're a pedestrian. And we need to be able to understand both sides of it. What I found useful, Melina, was developing a definition of what a brand is, telling people that the basic job in a consumer products business is to make brands successful, and that's what drives profitability. So I developed a definition, borrowed from various sources, that we could then share as business to understand its components, its drivers. So here's my working definition. I'd be interested to know your reaction to it. A brand is a perception of value in the mind of the customer, not in your mind, in the mind of the customer. And it's based on a promise to deliver unique benefits, and that promise is faithfully kept. Now, for me, those are really, really good guidelines. It's all very well for us to say, well, you know, our brand image is this and that. What is it in the mind of the customer that drives customer behavior? And I'm a great fan of Maslow's hierarchy of needs to understand how these things build up. A need, once satisfied, ceases to motivate. That was his underlying idea. And then we go up and up and up to the higher level of needs. Those higher level of needs are very often. They often reside in the psychological realm of what drives behavior. I think it's true to say that the purpose of a business is to generate and retain customers. Do that efficiently, we'll be very profitable. It sounds like a stark simplicity, but consider the alternative. And you're going to Go broke. I think that's really. I mean, what it's all about is generating and retaining customers. The most profitable thing you can do in a business is to create customer loyalty. Customers come back and buy your product. Now, there's a lot to unpack under that definition and examples, which I'm happy to discuss with you on companies that have kept their promises brilliantly well and retained customer loyalty and those that have broken that brand promise and suffered the consequences.
- [13:05]
Melina Palmer
Oh, yes, I would love to hear that. And I really like your definition as well as it's showing the. You said that expectation and having to do with the promises being kept and knowing that it's kind of this, you know, continual and ongoing relationship that exists. And knowing it's not just in who we say we are, but how people perceive us is really what's so important when it comes to a brand. One of my favorite definition statements, you know, for this is where it said a brand is a memory and. And in this way, a series of memories, right? And so as they stack up together, they can either be building something cohesive and that's consistent and stands together. And I can very easily say, oh, yeah, this brand is this, and it's this set of memories that go together, or if it's all over the place as we get into omnichannel and this experience was bad, but this was good and they're fun over here and they're really difficult to work with there. The memories don't line up in a way that it creates this kind of, you know, cognitive dissonance that it's hard to buy from them because I'm not really sure where they fit exactly right.
- [14:15]
Willie Peterson
So these things have to be regardless of the various avenues of communication. We need to have a level of integration so that the brand has some basic integrity, just like beings need to have integrity. The interesting thing about the customer experience is that the customers are having an experience whether you design it or not. So it's much better to design purposefully and intentionally. It happened ad hoc and we tend to have a distorted view. Again, back to Maslow's hierarchy. What the research shows is that organizations who sell brands, products typically think they're selling attributes and that the psychological aspects, the customer experience element, is secondary. If the attributes are strong, then you're going to make a lot of money. In fact, if you look through the other end of the telescope, which is the customer point of view, you find that the experience element, how they feel about the brand, looms much larger in their minds than simply Just the attributes. So we tend to underestimate the importance of having that experience that matters to customers, that resonates with their expectations. I think of Amazon as a kind of an interesting example. You know, Amazon doesn't sell a single unique product. You can buy the same products in Walmart or in any mass merchandiser in your neighborhood. They don't sell distinctive products at all. And their winning proposition is as follows. This is out of the mouth of Jeff Bezos. We make it easy for customers to buy things by providing a wide range of products with great prices and fast delivery. Now it's the pricing matters, but it doesn't have to be sort of hugely discounted price, but the elements of the convenience element. You can shop at any time of the day or night. And the fast delivery has an amazingly psychological, satisfying component. Psychologically you order something, if you have Amazon Prime In 48 hours, it's there. And that's very satisfying, gratifying. And they constantly honing those elements and doing them better and better. So it's their service model that is their most distinctive aspect of the brand, not their products at all. So I think that's pretty instructive. Now keeping promises and breaking promises in a brand can be fatal. So I think of two examples. One was I believe in 1982, going back a little bit in time. And that's the story of the Tylenol cyanide poisonings that occur. And these occurred in a very localized place in Chicago. And I think seven people died from was very scary and there was a lot of uncertainty. How pervasive is this? Evidence showed that it was only in Chicago. But Johnson and Johnson, who were the owner of the brand Tylenol, have a credo. And the credo is a well known credo that first and foremost before shareholders, they care about service providers in the healthcare business and the needs of their own customers. And then if they do that very well, their shareholders will thrive. Now this was an asset test. And what J and J did is rather than just withdrawing the product from Chicago, they actually withdrew Tylenol from every outlet in the entire United States. So it was simply not available for sale. And they withheld it until they found or the police found the culprit and removed him from society, so to speak. And the JJ then developed safety packaging and they were the first to introduce it and reintroduced the brand only after it was available with that safety packaging, tamper proof packaging, they were the pioneer of that. So they kept their promise at enormous cost to the bottom line in the moment. But what it did was enhance the trust on the part of their customers, and the brand very quickly rebounded to where it was before with a very strong belief in its integrity. I think it's a noteworthy story and not an easy decision to make. If you believe strong enough in the credo that you live by, it should become an automatic decision, because you make your decisions in terms of the values that drive your behavior. So that's one story that I think is very enlightening. There's a contrary example, and that's the story of Perio, which was the sparkling water from France. All good things from France. Very sophisticated product, came from, as they claimed, came from a natural spring and was sold on the basis of purity. I remember when I was running Seagram's United States liquor business, it was housed in a building in York still known as the Seagram Building. And at the bottom of it, on the ground floor, was the Four Seasons restaurant, one of the premier fancy restaurants in New York. I often used it when I was entertaining important guests, et cetera for the company. And I remember very well that on most of the tables there, there'd be a bottle of Perrier to demonstrate as a kind of a badge. People, this is me. I believe in something that's important, et cetera. And a bit like one of our premier liquor brands was Chivas Regal, kind of a badge of sophistication. Well, what happened is that it was discovered that Peria actually contained benzene. And the company danced around for a while with a bit of prevarication in terms of being forthright about admitting it and saying, well, we're quickly going to withdraw supplies and correct the problem. So they weren't forthright enough. I don't want to malign them here. I don't want to claim that they were lying to people. I'm not saying that they did. I'm simply saying it wasn't clear to customers that they were keeping their promise of purity and protecting them from harm in the same way that J and J had done with China. Now, what consequences did they suffer? There was a broken promise in the minds of customers. It doesn't matter what they think or how hard they might have tried to be forthright, et cetera. They just didn't nail it in the mind of the customer. We're back to that again. You don't own it. The customer owns the perception. And it almost disappeared entirely from restaurant tables, and it became San Pellegrino. And now that's what you see most prominently. So it took a big dive in their business. And I think again, it's illustrative. Keeping a promise is not an incidental, ad hoc thing. It's very intentional. And if you don't keep that promise in a way that customers really believe in it, see it in action, et cetera, you can lose your business.
- [22:10]
Melina Palmer
Definitely. And I think with both of those examples, and thank you for sharing them, it's, it's one thing to keep your promise in the good times, right. And then it's, it's definitely another. And the thing that people are watching of what you do when it's not easy. And like with the J and J example, you said with Tylenol, it's not inexpensive to pull your mo, like potentially like most popular product from every single shelf, every bottle, right. Like, and tell everybody, if you have it, throw it away, get rid of it. Don't, you know, try this, you know, and there's a fear, right? Like, what if everybody goes and buys the competition and then they never come back to us because we pulled it because it could have happened. But you know, to, to show that integrity in the moment when it's hard is, you know, a really good testament to a solid brand. And I think that ties in, of course, as a leader. Right. As a manager as well, because there will be slip ups in the back office as well. And so how you show up in those difficult moments matter, you know, just as much or more as on the day to day when things are good and easy.
- [23:23]
Willie Peterson
Yeah, that's well said. I think, you know, we talk about, I certainly mention in the book that I think there are two major characteristics of effective leadership. Competence and character. And competence can be outsourced, where you get other managers do things, you hire people who can do things better than you can, and you can outsource activities to people as well and get the job done. But character can't be outsourced. You own it. It's you, it's part of your essence and you're accountable for it. And it only really shows up, as you've mentioned, when you're tested. I often think of moral courage as standing up to do the right thing regardless of the consequences. It's very easy to do the right thing if the consequences are minor, inconsequential, and you do it. That's not a real test of character. It's only when the chips are down, the stakes are high, and you're called on to make a decision. And I come back to the chairman of JJ at the time, in 1982, was a guy called Jamba Burke. And he was celebrated for his leadership, integrity and moral courage, doing the right thing regardless of the consequences. It's when you're tested that it really matters.
- [24:45]
Melina Palmer
Absolutely. It spurred a memory for me from your book, which is not directly tied to this, but as it gets into some of the idea of complexity and simplicity and this idea of feeling like we need to be continually adding. Adding things in, and we never take anything away. And so I was just reflecting on. You talk about how, you know, when Steve Jobs came back to Apple and got rid of, you know, 70% of the products that they were selling to get to a core four, and obviously, you know, that went really well. But trying to reduce product lines can be a really difficult sell internally where, you know, we've invested so much in them and, you know, standing behind if there's a good reason for it and helping to, you know, rally the troops behind this type of idea can be really difficult if you're not focused enough on, you know, why that matters. Do you want to share a little bit more about this idea of, you know, the complexity, simplicity? Like I said, I know I jumped reasonably deep into the book to get to that point.
- [26:00]
Willie Peterson
You are, as part of leadership effectiveness is to, you know what? I frame it as a job of creating increasing simplicity from a world of increasing complexity. Complexity paralyzes an organization. If you flood it with too many activities or too many priorities, the organization gets lost. You know, there was a famous chef called Marco Pierre White. He was a British chef and one of the youngest ever to receive the Michelin. I think three stars is the maximum. And for a British chef to receive this accolade from a French organization at the time was regarded as being pretty unusual. I often think about it. His first name was Marco, which suggests he might have been Italian in his heritage. And Pierre sounds French enough. And so they got, you know, they forgave having a last name called White. He received this accolade as being one of the greatest chefs. And he bought a series of restaurants and found that running them was a very difficult thing to do because of the chaos back there in the kitchen and the integration and logistical elements needed to be created. Integrating and coordinating with the front staff who were serving customers, creating absolute consistency in what they did. People bringing guests. This is a great place I came before. And the next time around, it's different. It's like opening a can of beans from Heinz, and next time you open it, the beans are not brown anymore, but they purple or something. You say, well, hang on, you're not keeping your promise. And he realized that. And there were clashes of ego in the back kitchen between what needed to be done. So it's a giant process of coordination and simplifying processes. And he developed a little credo. And his credo said, okay, here's the truth of the matter. In terms of running an enterprise like a set of restaurants. Complexity creates confusion, confusion creates inconsistency, and inconsistency creates failure. And I think that's a very good recipe, if I can use that pun for running a commercial enterprise. It doesn't just apply to restaurants. I think this thing of being able to simplify a complex situation and simplify the processes of getting the job done, enhanced performance, no question about it. Then we have this issue of limited resources forcing us to make choices about how we will deploy our scarce resources to create competitive advantage. And there are always alternative uses for those scarce resources. And the misapplication of scarce resources can lead to failure. Now, under that same heading, but don't forget, resources are limited. If you try to do too many things, you're spreading your resources across a great deal of activities, and none of them is done in an excellent way. So having very few priorities, three maximum four, is what Nelson Cowan, the psychologist, found to be true. That's a crucial thing. And in making choices, there's a trap. What tends to happen is we make a choice about introducing a new product and we're at A versus B or a new activity, and we choose one. And then a little while later, we've got another choice. We choose one. Now we're piling it on, and we never step back and say we need to subtract because we've done too many things. Now, subtracting a product or an activity from a business is difficult. As you said, it's like interfering with a love affair because somebody who is in charge of that, believes in it passionately and feels a sense of loss and deprivation when you take it away. And you need to demonstrate that you're doing this in a fair way, not just in an ad hoc, instinctive way. Let's subtract this or subtract that. I give you a quick example from my own experience. When I joined Seagram USA as the CEO, the first thing I did was to ask the CFO at the time I called Joel to show me the trend over the past four years to see how the business had been doing. And interestingly enough, of course, it had declined over those four years. And I can't remember the exact numbers now, but I think point to point was a bit like 15% or something like that. And so we began to examine root causes. And what I discovered in that analysis, along with the team, is that we had in our portfolio a set of premium brands and a set of what we called secondary brands. And the secondary brands had a profit margin about 25% of what the premium brands did. And they had proliferated. They were easy to sell and not making really respectable returns. So I developed the idea that along with the team and discussions, that we really needed to subtract the secondary brands to allow the premium brands to flourish. Now, that was a big decision. And the big thing is what will happen if we don't do this. We always have to compare that with the alternative or continue to decline as we did. We did a lot of arithmetic, obviously, and the one piece of arithmetic that I think was most telling it was by how much do the premium brands need to grow in order to offset the loss of the secondary brands, because they were four times more profitable, and it was a very modest number. So we said, well, the main thing we need to do in this organization is to make the premium brand successful. We found a buyer for the secondary brands. There were a number of companies who just were occupying that segment of the market. So we lost nothing financially. Because when you sell something, as you know, you get the net present value of future cash flow. And so instead of the annuity, you get the lump sum. The lump sum goes on the balance sheet. The annuity used to go on the P and L, but you still have the money. So you lost nothing, but you've gained focus. And what happened in the next four years is. And these were 37 brands, by the way. I've got a considerable number of them. What happened in the next four years is the business grew by more than the 15%. I think it was about 30%, just from memory now, without the secondary brands, and showed something, I think pretty important. I think the lesson comes from nature. I like to use metaphors to illustrate a point. We live in New York City, my wife and I. I have a winter home in Florida. I'm in Florida right now to get out of the cold in the Northeast. But my wife is a writer. She has a home office and I have a home office. And we share an assistant, Amy, who helps us both. And I have a balcony off my office, and Laura has a balcony off her office as well. And we're on the 33rd floor overlooking Central Park. And on a nice day, you can see as far as New Jersey, on the other side of the Hudson River. I tease my colleagues from New Jersey to say, well, I can see New Jersey from my balcony, and that's actually my punishment. But I enjoy that joke very much. Anyway, to come back to the main story at a certain point, my wife was very creative. Laura. We were having lunch, and she said, I've got an idea. Whenever she says that, I get a little nervous, but I have an idea. And I said, okay, what is it? She said, let's beautify our balconies. And I said, what's that mean? Put fairy lights or something on the railings. She said, no, no, no. Let's plant geraniums around the railings. And then we'll have a kind of a garden atmosphere on the balcony and over Central Park. And it was a great idea. So we got the garden center to do this. Now, our balconies faced the same direction, therefore, the same weather, the same amount of sunshine. We watered them on the same day. And it was a very pleasant thing to have. I had a client come and visit me who was head of an insurance company, and he came quite often. And he'd used me as a sounding board to discuss his issues. And we'd often stand on the balcony and kind of looking outward, thinking about the greater meaning of life, so to speak, and talk about these things. So this is the first time he'd seen the geraniums. And he looked across from my balcony to my wife's balcony, and he said, gee, Willie, look at those lovely geraniums. And I said, yes, Tom, those are Lauras, and these are mine right here. And he looked at mine and he said, gee, I wonder why they're looking so sickly. And I looked at them, and he was right, narratively. They didn't look very healthy. So I said, tom, let's go inside and discuss business. I mean, he just insulted my geranium. Anyway, after he left, I said to Laura, what's going on here? I think you've been cheating. Because it's either miracle grow or cow manure or whatever it is you've been using. She said, no, I've done none of those things. I said, what have you done? Just pure luck. She said, no, it's called deadheading. She said, come here with me. She took a pair of scissors and a garbage bag, went to my geraniums and brutally assaulted them. We had a cut. I said, you're going berserk. I mean, you're destroying my garden. She said, no, I'm creating it. Wait seven days And I did, and I got beautiful geraniums. That was the only thing she had been quietly doing on her own. She was just doing the pruning, so to speak. Now, about a week later, we were having lunch and this was my turn to offer a new idea. And I said, I think I've just discovered and a law of the universe. And she said, oh, there you go again. I mean, what are you talking about? I said, this story about pruning away, deadheading the geraniums introduces a universal truth that is inescapable. And that is that whenever you remove the underperforming parts of any living system, all the remaining life forces of that system are dedicated to the few things that matter most. And that system will flourish whether it's your garden or your business. And I think that is a universal truth illustrated by nature. And I think we can apply it in business and we should do it more often. Now, GE unfortunately did not do that and became a more and more sprawling conglomerate over time. Addition, addition, addition, until the organization seemed to lose its way. It lost $500 billion in market value. I think the market was asking GE whether it was more valuable than the sum of its parts. I don't think GE answered that question in a convincing way. And the stock sat there at half its prior value. And then they began to subtract. Too little, too late. They were in business to consumer, business to business, business to government and banking. First thing they did is took away the business to consumer, concentrated on the industrial business. But that too was too broadly based ultimately. Now they've had to, as a kind of a life saving measure, subtract everything sold off and spun off into independent entities except only one product category, and that's aviation. So that conglomerate is dead. What remains is one single business unit is aviation. Now I think that's another lesson of how complexity can destroy your business model.
- [39:16]
Melina Palmer
Definitely. And thank you for. I love the geranium story. And it is amazing how pruning and deadheading, even if it just, it just looks better initially too, you know, even aside from giving things space to grow and shift those resources right, instead of them being kind of sucked into the abyss as it would be of a, you know, petals that are done right, that they've served their purpose.
- [39:44]
Willie Peterson
One thing to add now, I think Melina is the human factor again. I think if we do that based on pure logic, what it is, we have to do it and the common good, et cetera, et cetera, that's the logic. Get over it. That just doesn't cut it. Really have to be empathetic towards the people involved in it. We tried our best. We explained it all, et cetera. I think they understood it. We were very thankful. I mean, one person came into my office, I remember saying, by doing this, you're destroying our business. You came from the foods business. You don't understand this business. And he said, my father started this sales division that you're now wanting to eliminate. And a deeply, personally felt issue of loss here. And I found that speaking to them about it, candidly explaining it, and letting them know that we would either redeploy them in the organization to do other things, or, if that was impossible, to treat them with a great deal of understanding and generosity, that they had families that were depending on them, et cetera, et cetera. When we did that, we got a much greater level of acceptance.
- [41:04]
Melina Palmer
Right. Yeah. Taking that time to have that thoughtful conversation. Know that this is a human person on the other side. Right. That we can relate to and help to support that. That kind of helps things move along. Thank you for making that point there. I think that is really important. So knowing that we've talked about so many things that aren't in the book, which I always love, having these sort of side stories. We've talked about some things from the book. Of course, if you were going to sum up, you know, some of the. I had. I had told you I was going to ask you about. You have a section about different types of biases, confirmation bias and status quo bias, denial. And I think silo effects that were in there. I also really like how you talk about storytelling in the book. We talk about learning and unlearning. I always love to talk about questions and asking better questions. We, of course, don't have time for all the things. Is there anything that really stands out to you as you think about, you know, lessons in leadership and what most people maybe either get wrong or should definitely think about, or what you like to talk about the most.
- [42:10]
Willie Peterson
Yeah. I think when I put my finger on there, Molina, is that success as a leader is not bequeathed on us. We have to learn our way there. So successful leaders, for me are successful learners, lifelong learners. And learning doesn't just happen by itself. We need to be intentional about how we learn and the ability to monitor our own minds. As a philosopher loved to say, we have to cultivate our own garden in terms of furthering our own. It was Voltaire, I think, who said that, in terms of developing our own capacities as a leader. So how do we Learn, we need to monitor our own thinking. I think a great quote is that we learn through things that disturb our existing way of thinking. And inviting those disturbances in are very important. It was Margaret Wheatley who said, you cannot change a living thing from the outside. You can only disturb it so that it changes itself. And seeking out those disturbances, reading widely, having broad sets of conversations, having diverse organizations that bring different perspectives into play, challenging your own thinking, and under the heading of understanding how your mind works and how you learn, we need to be avoid of the traps that can lead us astray and distort our thinking. Now, as you say, we don't have time to go into these in detail, but essentially there are four I think are the most prominent ones. First is the confirmation bias. The second is denial. The third is siloed thinking. And I'm trying to remember the fourth one I think you had.
- [44:27]
Melina Palmer
Status quo bias.
- [44:28]
Willie Peterson
Status quo bias, exactly. Thanks for baiting me out on that one. So these are, you know, we tend to think when we think about biases. What we tend to think is that everybody else is biased except us. And that in itself is a bias. I mean, if we think about political parties, and there's a great deal of polarization now in the United States, both parties, the main parties, think the other side is biased. And they come to the table in discussions of preconceived idea. You're wrong and I'm right. And my job is to persuade you that I'm right and you're wrong. Have you ever seen a discussion like that where one of the parties jumps to the other side and says, oh, I get it now, I'm going to join you work like that. We've got these embedded ideas, these kinds of mental ruts Howard Gardner called engravings on the brain. We need mental bulldozers to get them out of the way. So first thing is to really understand these biases. Now I'll pick out. Well, the first one that we talked about is this preconceived ideas, confirmation bias. We're not born yesterday, as we say. We've got a worldview about how the world works. We tend to come to an issue with a preconceived idea of what's true and then selectively look for evidence to confirm what we already believe and reject any disconfirming evidence. Now, this is probably the most prominent bias of all. There's only one antidote to the biases that we talking about, and that is awareness. And then there's the intellectual humility to understand our own biases. And if we don't really monitor our own thinking and those of our teams, we're going to make terrible decisions. So the first thing we need to do as a decision maker is understand these biases. Now, confirmation bias is a very interesting thing. In Afghanistan, in the withdrawal that was very chaotic, a number of American troops were killed at the airport by a bomber. And it was. I can't remember how many of them. I think there were 13 soldiers that were killed in it. And there was a great outrage, sense of outrage that they weren't properly protected. And there was a thirst for vengeance. And at a certain point, the intelligence services picked up a van that was loading up some equipment that was ill defined and taking it from one place to another. And the more the van weaved its way through Baghdad. No, it wasn't Baghdad, it was in Afghanistan. And the more it weaved its way through the city there, the more they convinced themselves that this was a bomber taking explosive equipment to a particular destination. And he parked in a small square. And so they looked at it from a drone and drew the conclusion that this was dangerous and bombed it and killed, I think, seven children. In the result, the Inspector general literally, in examining this, said they were deceived by the confirmation bias. They believed what they wanted to believe and they were driven by a desire to demonstrate that they were going to retaliate against the wrong that had been delivered to them at the airport. The confirmation bias, official finding of how that happened. Now, the only other one I think that we've got time to mention is the status quo bias. It's an enormous magnet. We tend to seek the safety of the status quo. And in a changing world where we need to adapt in order to succeed and thrive in the future, this is a very dangerous thing to do. As Peter Drucker said, the trouble with disruption is not the disruption, it's acting with yesterday's logic. Now, the story here that is instructive is one of Kodak. Kodak was an icon, was a hugely successful company. 90% of the photographic film market, 85% of the camera market. At its height, it was the fifth most valuable brand in the entire world. And it was wiped off the map and became insolvent. And you say, well, if you told me that story 10 years before it happened, I would say, come on, that's not possible from this pinnacle of success. Well, it did happen. The question is, why did it happen? And the answer is, they were overtaken by digital photography. Well, who invented digital photography? Who was this evil person who invented it, well, was Kodak. Kodak was defeated by its own technology. It was an engineer in Kodak called Mike Sasson who invented digital photography. He was very excited by it. He presented it to the leadership team and said, here's the future. And he illustrated it well. The resolution was not as good at that stage as film. And he said, this I can fix very quickly, so don't be distracted by that, but I'm talking about the technology. And they said, but, Mike, if we introduced that, it would cannibalize our entire film and camera market. And he said, yes, but if we don't do it, somebody else could do it. They said, no, no, Mike, not if you don't tell them. He gave an interview to the New York Times, and I can quote it at the end of the meeting. The feedback to Mike from the leadership team was this. It's a cute idea, Mike, but don't tell anybody. He didn't tell anybody. And they went broke. It's a real story. Status quo bias was so strong. Fear of cannibalization was so strong. Clinging to what they had would work for the next month, would work for the next quarter, maybe even for the next year. But at the end of the day, it wiped them out.
- [51:06]
Melina Palmer
Definitely. Yeah. Thank you so much for sharing on those biases. They're definitely ones we've talked about here on the show a lot and glad to have those stories tied into them from very iconic brands. As we go to close out the conversation, I will, of course, have links to your book and more information in the show. Notes for everyone. And I would love. So you've quoted so many amazing people and minds and philosophers and things throughout our conversation today. In your book, you had a list of a few African proverbs that are your favorites. Do you have one that you would want to maybe share to bring, you know, honor to that heritage?
- [51:45]
Willie Peterson
There are two that kind of belong together in many ways. And the first of those is when something goes wrong, don't look where you fell, look where you slipped. Too often when things are going wrong, we say we just have to try harder. Well, maybe we're doing the wrong thing. Maybe we slipped earlier on when the choices that we made were wrong. So the recourse analysis, don't look where you fell, look where you slipped. The second one, that's a close cousin of this. When the music changes, so does the dance. And I think we constantly confronted with the changing music and the external environment without changing the internal dance. Those two stick out for me a great deal of wisdom. Passed down through word of mouth over centuries amongst the tribal African peoples. And back to the issue of our shared humanity. Desmond Tutu always used to quote the one I like perhaps the most, which is I am because you are wonderful.
- [52:56]
Melina Palmer
I love that. Great point to end on. Thank you for sharing those. And like I said, we'll have links for everyone who's looking to connect and learn more from you. What's their best place to go?
- [53:09]
Willie Peterson
Website probably my website, which is willypeterson.com Petersen is spelled P I E T E R S E n will be petersen.com and there you'll be able to see my blogs and information about my book and so on and the process of strategic learning that I advocate.
- [53:31]
Melina Palmer
Awesome. Well, thank you again Willi. It's been really delightful to chat with you today.
- [53:35]
Willie Peterson
Same here Melina. Thank you very much for having me on.
- [53:39]
Melina Palmer
Thank you again to Willie Peterson for joining me on the show today. What got your brain buzzing in today's conversation? For me, I enjoyed so many aspects of the conversation in the book, but one that stands out to me is the importance of both learning and unlearning and how that ties in with the natural human tendency to be loss averse and not want to give things up. Essentially why it can be really hard for us to unlearn and cut things out. Insights like this always remind me of Lydie Klotz, author of Subtract, who shared on the podcast that less is not a loss no matter how much your brain might want to make you think that it is. And I really love how deadheading the plants on the terrace showcased this point so well, knowing that both plants were getting the same light and watering and other exposure to the elements, but one looked amazing and the other looked not so amazing and to know that really the only difference was the pruning of things that were no longer serving the plant and this allowed for it to provide the right nutrients to the right areas and not waste energy on unnecessary stuff. As you go. To apply this into business, let's think about it with respect to all the projects that are unnecessary, outdated priorities, legacy meetings and old tasks that are sucking up all the energy nutrients of the team so they can't thrive. Pruning the old stuff to focus on the right priorities and less of those too. Remember, five is too many can help your business and the leaders within it to thrive wins all around. So how have you successfully implemented something like that into your leadership style? I'd love to hear about it, so please do come share it with me on social media, you'll find me as the Brainy Biz pretty much everywhere and as Melina Palmer on LinkedIn. There are links in the show notes to make it easy, along with links to my top related past episodes and books, including the inside story, ways to get in touch with Willie and myself and more. It's all waiting for you in the app you're listening to and atthe brainy business.com495 and thank you again to Willie Peterson for joining me on the show today. It was a delight to chat with and learn from you. Join me Tuesday for another Brainy episode of the Brainy Business Podcast. It's going to be a lot of fun. You don't want to miss it. Until then, thanks again for listening and learning with me and remember to be thoughtful.
- [56:09]
Thank you for listening to the Brainy Business Podcast. Melina offers virtual strategy sessions, workshops and other services to help businesses be more brain friendly. For more free resources visit thebrainybusiness.com.