Handling Complexity with Professor Richard Jolly | London Business SchoolNov 22, 2021
yes, we care about the same things, so I'm looking forward to sharing some thoughts with you and engaging in dialogue with you. clusters, you have a really challenging job because we all know you know the power of people and learning how to create value in organizations is something that if done very well, as we hope we do here at London
school, if done well, so it can be transformative, but, um, you have the option of working with an organization that actually buys and invests in people, uh and learns, in which case, it's already working, you know, everything is working pretty well. ya or you work for an organization that doesn't buy it and you're always struggling to get resources and stuff either way you've got a pretty tough challenge so hopefully what we're focusing on here this morning is something that's relevant uh and uh something that is uh useful uh stimulating uh some thought for you and uh what you can do in your roles and uh really what I want to do is really build off of julian's session uh because uh julian comes from the strategy side Me It's amazing how many of the strategy teachers are focusing on this theme of purpose, uh, and that traditionally was an ob theme, uh and uh, so, you know, and within ob, this is absolutely something where there's a growing body of data to tell.
This is a very important topic so what I want to do is start from the same place Julian started with but then look at it from a different lens more like an ob lens if I can do that then where do I want to start ? here it is uh with something called dunbar's number are you familiar with are you familiar with dunbar's number um so robin dunbar is a famous anthropologist very famous if you're an anthropologist who is and he did an analysis of our brains uh looking at some thing called neocortex ratio and this is basically trying to figure out, uh, when you look at the structure of our brains, how many active and stable social relationships can the average human being manage and he came up with a pretty precise number 148. now academics, you know doing everything this sort of thing pretty accurate, yet another group of anthropologists did a completely different analysis, uh, they were looking at all the hunter-gatherer societies in the world today and apparently there are 19 of them and what they found, uh, they're looking at the average size of their communities and what they found is if they were some of the Eskimo tribes in the arctic circle until t aboriginal ribus in australia the average community size was exactly the same and had typically been so for thousands to tens of thousands of years, the average human community size 148.
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handling complexity with professor richard jolly london business school...
Now this may be a coincidence, of course, but there's something here and I think it's such a big thing because we humans have lived in communities of about 150 people for as long as we've been socialized animals and whether it's an African tribe or a European village it's stable yeah you know everyone , you know, who baked your bread, who who your vegetables who. you made your shoes and you have stable structures there you have no professional development you were born in a role it was the same role as your grandparents being the same as your grandchildren is stable for many hundreds and thousands of years and by the way uh linkedin facebook the average number of people uh that people are connected to is in both 150. however this is a social fabric the problem is that in the last hundred years organizations have clearly exploded after the birth of the industrial revolution the rise of these massive companies and julian mentioned this i think at the beginning of his session and now 150 people know how to make things happen now when henry ford was building the model he had over 300,000 people working in the same plant and within six years of founding the
businessproduced a quarter of a million cars a year, how do you organize three hundred thousand people?
Well, they gave me the answer. this book i would say and i think julian would agree is the most important and influential business book of the 20th century it was published in 1911 the principles of scientific management taylorism and what taylor said in this book he said in the past that man has been first in the future the system must be first and therefore scientific management huh by the way 1911 this is almost exactly the year harvard business
schoolwas founded yes and even today we call it an mba huh really no I think you Finding probably hasn't done for many decades a single MBA student who says I'm doing this degree because I want to be a business administrator, but a hundred years ago that's what we needed, we needed people to do scientific management. element with stopwatches and you know how to control everything and this has been the paradigm of the control processes of the 20th century and if you get on a plane you know that I can guarantee that this process is going to be quite standardized why because this is how we have people who fly around the world pretty low price and pretty secure so you know you're going in you'll have to do a chicken ticketing process security process passport control then you get on the plane they give you a security briefing it's going to be pretty standardized and that's how we live this is the world we live in today and it's the world that goes back to henry ford of mass standardization any color as long as it's black um fantastic uh it means we have great healthcare we get great travel great communication all the incredible economies of scale that come from this world but there is a problem here for me at least well i think its actually a bigger problem than fact was a problem eve n for henry ford uh, i don't know if you know this, but even during his lifetime, the ford motor company lost market leadership. that General Motors and you know they produced some really bad cars for many years and even though this guy Henry Ford was a genius he was able to conceive of this production line that no one had ever conceived of before and then he can design it and and control it and the reason why he went ahead i would say uh wrestled is that the rather magnificent alfred p sloane came along and i would consider sloan the father of modern management and as some of you may know we still have an msc program here uh still called the sloan program and sloane said the following he he said look there's something funny here we pay for their hands their physical labor we could get their heads for free 100 years later we have absolutely failed to get people please bring their heads in any kind of non-hierarchical way uh and uh you know there are examples of this you know that the data shows that you know that 90 of the good ideas don't come from the executive suite yes and yet we have this hierarchical model where the c Those things cascade down the hierarchy, it just doesn't work, you know, in this more complex modern world, it just doesn't work and then we have, as everyone is familiar with these employee engagement studies, now you know if people are engaged if they really they care about the organization, if they're going to go beyond the minimum required just to make things happen and yes, yes, yes, I'll show up when you say I'll tighten the screws and then I'll do it. get out on time pay me the money even today a hundred years later the vast majority of employees in their organizations don't give a damn how can we really get people at all levels of the hierarchy to really care about the organization to go above and beyond of the basics? least you know traditional models of you know hierarchical control although it has given us incredible efficiency okay we need all of these systems and processes but we also need something else and that's where I really want to start with this and the problem is that even in industrial age scientific management it didn't work but now if you call it the post industrial age we are starting to see massive cracks so bert one of the leading nurse sociologists said managers differ in their ability to survive and prosper, without bureaucracy, yes, scientific management. uh what's an opportunity for some managers is a heartbreak for many others it's nice to be in control especially when you're in the executive suite you've climbed the ladder year after year you have a great experience you know more about. it's more than anyone and now you've arrived and you want to be in control why because you know more there's um uh well I was going to say an Italian tire manufacturer but uh I think there's only one uh that one I've worked with um uh for uh for many years uh and the uh managing director is a guy named mr gorey and this guy is uh not pirelli here i dont wanna kid around uh this guy is uh famous within pirelli because uh he knows more about the maker of time than anyone in the company started when he was 16 and he is famous he will go to the factory and take off his jacket and say no he needs to recalibrate this brilliant machine and he knows he is a true expert he has that depth of experience the problem is again pirelli is perennial underperformer because everything comes from him, even today pirelli strategy is defined by mr gory and a few years ago the management team said could we do it? some of this kind of participatory management please and he said yes sure so what he did was he wrote the strategy and then he had a two hour session with his management team so they could ask questions about his strategy now this is not what is happening. in business, I would say they are going to be the dominant forces in the next generation and so what are they going to have right for me? and experience towards social capital, yeah, the ability to get things done through other people and, um, I think we're seeing a seismic shift here, the biggest challenge here is, uh, you know, the challenge between the generations because people at the top grow up in a world of control they have this human capital and yet they are being challenged you have to get better in relationships and in some of the industries and professions that you are a part of a lot of older people are better at human capital than social capital now if i can pause here for a minute and talk about millennials uh now uh for years i've had clients of mine you know hr l d people say oh millennials and line managers say oh these millennials are close Tmare I go you know right no they're not I mean the data here shows they want all this kind of extra stuff of course they have they've grown up in a bull market life has been good for it s, you know they grew up a little bit entitled maybe and they're young and young and all that and they've had choices, but I have to say about two three years ago I started bumping into them in a professional context and I was wrong.
I have to admit, uh, these guys are fundamentally different, uh, in their expectations, uh, and in what they want from their organizations from their bosses. something about it, uh, I think there's going to be some kind of massive reorganization here between companies that are able to adapt, not please them, but adapt because they're a nightmare, but they're also to me, you know, one of the most things exciting uh to happen for a l long time and i have to say i think that generation will do a better job running organizations when they get there than what we're currently doing if i may be a bit provocative so it's a nightmare but it's also a great opportunity and but the problem they have to do is how do we influence the hierarchy because we have these insights and they don't give them so this tension between human capital and social capital is to me what I see is the biggest kind of fundamental change in organizations it makes sense, yeah, so if that's the case, what it means is you have to deal with
complexity, because organizations are getting more complex and it's not just all do the kind of things, the trends that we all know about um is the fact that the most complex things you have to deal with are people, uh, there used to be an old thing that you know, uh, even in the MBA world , the hard skills and then the soft skills, yeah, you know the quants and the poets and all of this and um uh You know, I think the fact that the strategy teacher is now talking about the purpose of strategy used to be full of microeconomists.
Yes, I noticed that you know some very statistical things. the substantive things but the complex things uh are uh extremely uh important uh and um actually uh it used to be something called uh behavioral psychology uh that since 2002 when dan kahneman won the nobel prize in economics the first and probably the last psychologist to do so now they've called it behavioral economics, that's our thing, okay, you know, teaching is very important, even behavioral finance, and what we see here is this complex issue, the people issue is really what organizations have to be good I think this applies differently to different types of builds if you want within organizations so if we're going to handle
complexitywell the problem is that you're dealing with complex organizations in trade off lex environments and uh you know some biology there's something called um and this isn't particularly memorable it's called Ashby's principle of required variety and what Ashby says is that theThe complexity of any organism needs to reflect the complexity of its environment, so if you're in a simple environment like the ocean, then you might be a pretty simple organism, a jellyfish, an amoeba. whatever but that's not really the world we live in uh and russ akov uh that's a big problem in my world uh he died a couple of years ago he said the only problems that have simple solutions are simple problems uh and so you know if you are a senior with your human capital your depth of experience there is a risk that you will think oh this is a simple problem I have seen it before and always realized that if you are a senior and you think a simple problem has landed on your desk, you have a problem, uh, because either it's a simple problem with a simple solution, in which case, why the hell is it written in the hierarchy? the challenge here is uh to live in this world of vuca that is familiar with vuca yeah so this is uh uh something uh that i first encountered doing a job with an american company uh at west point the american military academy around uh five years ago and um uh ever since, i've done some work with the british army and exactly the same phenomenon here and what they're saying is that the army for many decades has been a very poor metaphor for organisations. macho rather masculine I think we can say rather you know you know how to kill the enemy you know war marketing I don't think this is very useful but actually today I want to argue that the military metaphor is perhaps one of the most relevant metaphors we could use for organizations huh so um what does vuca mean let's get through this volatility quickly uh just the speed of change yeah remember these things five year plans uh you know it's like when we used to have these strategic planning departments uh and uh henry mintzberg wrote this wonderful book you know the boom and the fall of strategic planning uh and uh so we just don't know what's going to happen all this uh uncertainty these black swan events so much speed and volatility and very difficult to predict what's going to happen uh complexity the multiple different forces affecting our business, so I work a lot with investment banks and you know almost every bank that I i work today uh it's just you know these internal regulatory things kind of changes um uh that they have to deal with if you're in professional services firms that have to deal with this uh kind of uh you know offshore outsourcing uh all this you know new uh kind of uh you know regulation or deregulation and uh it's just that there are so many different forces that we have to pay attention to and finally the ambiguity because reality is fuzzy and the military analogy they use here is fog of war a throughout history. and there has never really been a situation where the general was sitting on top of the horse uh on top of the hill looking down over the battlefield and saying okay let's raise the troops up a bit here hold them to the right never it has been that way and even today with wonderful technology this is not the world uh they have to fight in and this phrase the fog of war comes from the uh brilliant military theorist uh von von klausewitz which is still very much in vogue today and he used to write very poetically in the days of the 19th century when people wrote most poetically, he said that the great uncertainty of all data in war is a peculiar difficulty because all action must be planned to some extent in a mere twilight which, moreover, not infrequently, as the just effect of a fog or moonlight gives things exaggerated dimensions and an unnatural appearance and in organizations today, if you are the executive team vo and you think you know what the hell is going on and and you think you're in control you know you think you're Henry Ford you're in deep trouble and I think one of the biggest challenges we face given all this complexity around people in changing environments is that we're losing I would argue something that for me is a critical faculty because it is more difficult to think in complex environments and here we have, uh, the fantastic thomas watson senior who founded ibm in 1912 and ran it until his death in 1952 and is famous for putting the word think on top of your desk and even today those who know IBM will know you know thinking is in your DNA yes if you ever bought a computer from IBM it was probably called a ThinkPad and so you know this you know how do they work. you don't go and you didn't go to this guy's office and you said boss I have a problem what should I do but in 1952 this was pretty challenging today I would say it's almost impossible because a disease is spreading. through our organizations The disease, well let me share with you some of the typical symptoms of this disease, uh, it's what I call the rush disease, so some of these symptoms are from your personal life, some of your professional life, but the question for you is whether any of these feel better. family member number one if you're microwaving something for only 30 seconds you have to do something else while you wait for the microwave to ping number two you get excited just catching a plane or train so you rush to get on the train station jump into the train just as the doors are closing yeah that moment of personal triumph and as for the airport you are a master of airport management the quickest route to the airport huh you know all the guy how you pack what you carry huh guy which signal, You know that thing, oh my gosh, the person could have gotten that, um, have you ever seen that George Clooney movie on the air? on the phone hopefully you won't have breakfast put on makeup but you know something else while we're in the car uh you eat at your desk while you check your email sometimes on the phone at the same time you do something else while you're brushing your teeth, especially if those of you with an electric toothbrush if someone recently said Richard yes my electric toothbrush takes two minutes that's four minutes of valuable time a day he says so I have a reading part in the bathroom so I can optimize what Otherwise, it was a waste of time.
We occasionally have course participants here who are quite obsessive. Recent studies have said that the average executive checks his phone every seven to eight minutes on average. your computer, in fact, it's probably been a while since you last turned it off, you know about sleep mode, hibernation mode, whatever it's called, you find yourself wanting to interrupt other people frequently, now you can be the polite enough to contain yourself you're standing there thinking come on come on i got the point i got the point um you do something else on conference calls uh now if you have 20 people on a conference call you typically have 19 people one person talking and 19 people doing their email if they are at the office, that is, if they are at home, you probably don't want to know what they are doing, but there is one last symptom to know if you have this disease, which is when you get on an elevator. you have a favorite button and there are two words on that button that say door closed now you don't just press that button once right? because that's not how microprocessors work, you need to keep pushing that button because that's really going to make a difference to me Isn't that how many of you recognize some of these symptoms in yourselves?
My goodness, you are a very sick bunch of executives, in fact some of you may be so sick that you are sitting around thinking what is the problem, Richard I am achievement oriented. do a bunch of things well if you are so sick let me share with you why for me this is a dangerous disease and in fact there is a specific point about this door close button i worked for years with one of the elevator manufacturers one of the directors told me
richardsaid yes it's really frustrating because people push the button so often they are actually wearing out we have to replace them he said but the irony is what the people don't.
What I don't understand, Richard, is that more than half the door lock buttons in the world aren't connected to anything. It's a light bulb, that's all. It is push. Why it makes us feel like we are in control. a more fundamental challenge nge uh so that's it so the next time you hit that button i'm going to be there whispering in your ear what is the most fundamental problem is achievement orientation being busy doing things is directly contradictory to a learning orientation and that it's the reason you don't give a damn you care about helping people so i hope otherwise you're in the wrong place we care about helping people learn if you're pushing the close button you're not learning and they have a phrase they use in florida that to me is the crux of the problem they say when you fight alligators it's hard to remember that you were trying to drain the swamp this is great and for me if the strategic goal is to drain the swamp and here we are have a florida swamp the everglades the problem is that there are alligators there and an alligator attacks you you have to defend yourself the problem looks particularly fac illiterated by technology you can spend your entire career fig fighting alligators you are busy and accomplishing nothing of real lasting value to the organization why because fighting alligators feels good look how many emails i sent today how many meetings and conference calls do you know achievement orientation it feels good you know if we go back to our phone you know every time you check your phone i don't know if you know this they have done studies neurological studies where they actually find you get pleasure yes you actually get dopamine produced in your amygdala which you are chemically addicted to alligators uh and uh let me share with you some of the typical alligators.
I'll do this briefly because you know there are other things I want to cover but for me this is very important because you know learning is hard in organizations because of the fucking alligators huh so first huh something like two challenges here the first one is huh meetings um now a lot of you will spend a lot of your life in meetings and I think I could go into your meetings and using some standard facilitation techniques I could cut the duration of those meetings in half and double their effectiveness if someone here is going to challenge me and say no
richardcould you record our meetings in my organization my meetings and use them as an example of best practice here at
londonbusiness school anyone is difficult isn't they? let me share with you my favorite app is called meeting clock huh again this is not really i dont recommend you use this but its a nice tease so put the number of people who attended the meeting then you put the average annual salary number of hours that you work a week which gives you an hourly rate we all have an hourly rate you know direct course indirect course you know you could find out and then the start of the meeting, you press start and it tells you how much the meeting is costing the organization now, that's a way of, we should say, reframing what we're doing when, in fact, we're having a meeting. there is a danish company uh v lux where the ceo now wears this in their board meetings and if you are giving a presentation and you can see the danish krone going up uh you know a little bit of pressure because the ceo is pretty direct uh guy to be quite direct i think we can say uh and um uh and uh you know give you some feedback it just cost us you know 30 000 danish grower which was not a good use of our resources actually there is a company in silicon valley where everyone has swipe cards with a electronic barcode so the meeting knows uh the meeting room knows who's there and there's a digital clock on the wall that literally tells you the cost of that meeting to the organization and what they found is the average duration of the meetings just when they are sharing the information there are no consequences it's just information the average duration of the meetings was cut in half huh because in physics we have the law from boyle gases expand to fill available volume uh kind of uh ume in business parkinson's law work expands to fully available time uh so meetings are a problem uh the other problem is clearly email now uh we're not going to get into email that's not the focus of today but in my studies i have Over 95 percent of executives say email got out of control.
It is a nightmare in my life. Get started, you know some pretty good stuff. how most executives are struggling here this is so many alligators and so this ability to really stop and think is getting very rare philosopher bertrand russell said most people would rather die than thinking and most of it makes for me one of the challenges both of one thing l d and hopefully what we do as people when they come to courses here at school, we don't just go bang bang bang and all this kind of content and Tuesday today, so it must be economical. microphones and tomorrow it will be finance and then strategy, I think you know that really thelearning has to come from sort of slowing things down and creating a protected space to think uh and um uh someone used a metaphor for me recently where they said you meet richard in organizations it feels like you are uh water skiing , yeah you're holding on for dear life you're kind of bouncing on the waves like you're barely in control of what's happening if you make a mistake it's going to be really bad and you're kind of terrified but it's kind of exciting at the same time and um , that's what it feels like, I think that's the achievement orientation, yeah, I stayed up for five minutes without taking an enema, um, so that's hard, but the challenge from a learning standpoint is gentle. of slowing down and diving and hands have you ever dived enough divers here? i i love scuba diving and one of the reasons i love it is that it forces me to slow down yeah because you know if you are breathing fast too you run out of air in the blink of an eye 20 30 minutes you have to slow down speed you have to focus on yourself and this whole kind of concept of mindfulness which again I think is really very helpful for people to stop and think not just in their training courses but as part of our practices is one of the key challenges of really dealing with these complex organizations and having worked with many organizations that you know.
I've been in college here for 15 years and I have a small consulting business on the um side and I'm very impressed if we look at an organizational level here rather than the individual level there's something that the best organizations have in common very consistently any profession of the industry they're in in the best organizations feel the same way and it took me a while to figure out what the difference was and um the word I ended up with was trust if you're in a complex world it's very hard to have trust now it's very easy to go to one of two extremes here for example a little bit of overconfidence and we know what overconfidence looks like in organizations it's uh arrogance uh arrogance a grandiosity uh intimidation uh and um i think there's a little video here which perhaps illustrates uh quite well uh what i mean by this again this is the uss montana requesting that you immediately divert course 15 degrees north To avoid a collision, please divert your course 15 degrees south to avoid a collision, this is captain hancock, you will divert your course. on negative captain i will not move anything change course this is the uss montana the second largest ship in the north atlantic fleet will change course 15 degrees north where i will be forced to take steps to ensure the safety of this ship on this it's a lighthouse mate it's your decision in the words of mark twain it's not what you don't know that gets you in trouble it's what you know for sure it's just not so me You may be the second largest ship in the fleet of the North Atlantic.
You can even be the greatest. The problem is that there are rocks out there and overconfident organizations. They may enjoy their moment in the spotlight. triangulation here between psychology and economics about how organizations rise so consistently to a dominant position that they become arrogant, become complacent, and then die, and by the way, there was some really good data recently that shows that, um, they usually die. just when they've had their most profitable year i'm not sure if i would buy apple stock as a long term investment right now to use an analogy there and in psychology we call it the paradox of success uh which is uh do you know if we have a winning formula , we just continue with it even if people stop us absolutely uncontroversial evidence that it's the wrong strategy now we just don't change we keep pressing the same door close button and um so that's psychology economic economists have something called the principle loss of leaders because from an economic point of view we only see that market leaders are losing their dominant position faster and faster and sustaining that in a really dominant position even if you're the biggest vessel well it's getting harder so that's overconfidence now clearly there's a spectrum here and in a minute I'm going to ask you to reflect on where your organization is and maybe your role within this organization and so on. but clearly the other end of the spectrum is under confidence you may have found this also learned helplessness martin seligman brilliant research looking at how animals and humans if we don't already feel in control remember control scientific management feels good if we don't have that control we just give up why bother feeling like a victim of circumstance oh what can you do and not this regulation or all this red tape all these horrible things that happen and it's so easy to get into that victim mentality the bystander effect now there is a video that used to show a video of the bystander effect and there are many different stories here the original investigation was done based on this case in new york about kitty genovese the someone familiar with this the waitress who was killed and screamed and 38 people the they listened but they didn't help they didn't call the police huh and then you know this crazy guy came back um a ho Soon after and you know he killed her she was lying down covered in blood and no one came to help it was a huge protest at the time and there are many examples of this.
The video I used to show about this was based on China. A girl named Lulu was hit by a white van and on CCTV she was caught and he ran her over she looked out the window she saw he had hit her she looked around and there was no one there the only way to escape was to drive again and disappear like this who did that and then you know you see 17 people walk by looking at this girl there was a r year old girl lying in the gutter and finally someone says oh I saw your daughter in the gutter the mother comes huh and you know I have two daughters who are five and seven years old I can't show this anymore it just makes me cry and she goes away and she died and in China there was a huge protest we have lost our community values because in China there was this incredible sense of 148 people we take care of each other what went wrong in society and you know that from you who got involved in China you know these massive changes how do you really create a sense that people care?
We're not very good at it, so this is the bystander effect, and, um, Stanford's Jeff Pfeffer said it's easy and often comfortable. feeling powerless to say i don't know what to do i don't have the power to do it yes what can i do i told the ceo and also i can't stomach the struggle that may be involved it's easy and now quite common to say when faced with some mistake in your anization organization is not really my responsibility such a response excuses us from trying to do things and julian's provocation they go and are detrimental and i love this failure of fosberry you know that's a great analogy huh in not trying to overcome the opposition we will do we are less enemies and are less likely to be embarrassed and, in particular, working in professional service firms. um, meet the pros.
In my experience, what they hate more than anything else is looking stupid, so learning involves practicing things. when you pick up a violin you know it's not going to sound very good those of you with kids who are learning musical instruments right now you know I share your pain it's kind of hard so learning when you have this you know this human capital. the depth of experience is really very challenging however it is a recipe for both organizational and personal failure so this bystander effect to me is critically important and then there is the greatest story ever told in business school of London.
Have you come across the center of Calcutta versus the forest in front of your hands? If you're familiar with this, some apologies for showing it to you again. 11 years ago we had a teacher here named sumatra goshal who i would say is the best teacher we have had in our time in our time at school he was just one of those people who could see things more clearly than the rest of us couldn't seeing things further and had the privilege of working with him for five years he died tragically in 2005 long before his time his mantra was famous because he told almost every group he taught with the same story and it is a story that has resonated with executives over the years and in it he compares and contrasts two very different environments: downtown calcutta in the middle of the summer versus the forest of fontainebleau in the spring i think there's a business school somehow it's close to fontainebleau i can't remember his name, but that's where he worked before he came here.
Here is Sumantra sharing the story. crisis of some kind, but the bottom line again for us, maybe the key takeaway is that it's the wrong question to ask, revitalizing people has a lot less to do with changing people and a lot more to do with changing context that the companies that the top managers that the people in this room create around their people now context some manager called it the smell of the place is kind of hard to describe and then let me try to describe it the best way i experience it through my kind of personal experience if you want i i teach
londonbusiness school i live in london i have done it for the last year and a half before that i lived in fontainebleau in france for about eight years but one look at me and then another sound from me accent and you know i don't come from either of these two wonderful places in the world i come from india from the eastern part of india my hometown is calcutta city so every year i go to calcutta a in the month of july that is the only time my kids have summer vacations no calcutta is a wonderful city in winter fall and spring but but summer well the temperature is one hundred two hundred three uh the humidity is around 99 and i feel very tired most of my vacation i'm tired i'm indoors i lived in fontainebleau and this really dares you you go to the forest of fontainebleau and spring you go with a strong desire to take a quiet walk and you can't the moment you walk into the forest there there is something in the fresh air there is something in the smell of the trees in spring you want to jump you want to jog you want to catch abram for a run do something and i think that is the essence of the problem of most companies in particular the ones large companies have created the center of calcutta in summer within themselves and then complain they say you know you are lazy and do not take initiative and do not take cooperation you are not changing the company t-seri It's not about change I have a lot of energy in spring and fontainebleau and I'm a little tired in summer in Calcutta and that's the question of ultimately changing beyond all these process organization strategy abstractions in the end the question is how do we change the context, how do we create a fontan blue forest within companies?
Brilliant, that's it, how do we create this energized environment instead of people just jumping their hands? Yes, yes, yes, purpose, yes, just give me the fucking money. and nuts whatever and here we have fontainebleau woods in the spring and this is what it feels like to work for you that energized and confident organization where the people on sunday night is just another bottle of wine numb the pain on friday yeah yeah is this and by the way this is not to do with how you know it's hard on the bench it's hard awesome in some sectors particularly where it's really hard right now but that doesn't really mean we can't actually pass the time of our lives doing it again.
I'm not being naive here, but actually, very often, in retrospect, the times we learned the most, actually, even the times we had the most fun was when it's really hard, you know, Frederick Nietzsche is wonderful. quote what doesn't kill me makes me stronger that's when we really learn is when times are hard so um you know julian was referring to this quote above and i think american writer f scott fitzgerald said it very well he said the proof of a first-rate intelligence is really the ability to hold two opposing ideas in mind at the same time and still retain the ability to function, so there's this point here about what you know in a complex world that you know you know in a of the ways w Simplifying, we become overconfident or underconfident, uh, so really the trigger for you is that you know well, first of all, where your organization is.
I'll give you some time to discuss this in groups with the people around you and hopefully I'm sure you'll be open and honest with each other so the first thing is where my organization is and maybe even my role and all they have seen different organizations at different times in different spaces, they know if the challenge is really to stay on that center ground, the question is in their experience, what are the characteristics of secure organizations, now clearly, one of the points that we are highlighting this morning here isthe purpose, yeah, that's really one of the most powerful ways you can really get people. that's one of the things here but I really want to hear from you now we have a 10 minute discussion here you know what your experiences are of overconfidence underconfidence that's the point of group therapy and when you've seen that has this been done well what have been the key drivers that have created that trust in the organization ok it is clear enough ok 10 minute discussion and then we will get back to you ok if i can ask you you finish your conversations, so i'm curious what's coming up for you in terms of the topics what is it? there is no single score for the entire organization yes yes and so is some parts of the organization are consistently in different places or have different roots of different types yes yes yes it was true the question how You can try? create sort of a stable level of trust in the organization yes i think i really trust pardons yes say no more i think when you are a leader and you trust the people who work for you then it is easier for them be creative and they do their job yea thanks you haven't seen my site the question what do we want from our leaders cousins and posner who two know proper academics in this field did a study and asked me what to do? you want from and you know the right kind of uh investigation uh instead of knowing some kind of uh you know kind of a more journalistic approach and what they found is honesty uh more than anything else honesty uh now the next heist was with vision of future and having a plan huh so inspiring was only 65 and competent only 65 and that's my problem with human capital is your competition all these things you know is that's not the point so leaders need to build trust there are two academics in the 1970s um they did a fantastic series of studies where they went to a series of elementary schools and gave children a battery of different psychological tests, but they didn't tell the children the results, all that What they did was go to the teachers and tell them now you don't share this with the kids, but just so you know, we put the kids into two categories: the first is the high potential kids and then we have low potential kids, but don't share this with the kids the research Then the kids left and came back three or four months later to see how the kids were doing and, perhaps unsurprisingly, at each school, to high potential kids did well and low potential kids did worse every time there was a you.
You know a clear correlation, the problem is that the teachers were lied to, the kids had been randomly assigned to one group or the other, and yet their measurable performance in each class showed a clear divergence, and you know this is what you know. trust and confidence that's why to me this is so important because one way or another through your attitude your way of thinking you create a self fulfilling prophecy and there are some bosses that say i'm skeptical you have to earn my trust uh and um they they are always right the idiot screw up i told you what the hell are you doing ah and you know the problem is you give those same employees to a boss who can really build trust and even though the same employees will perform better its simple in a way that the other believes a self-financing prophecy uh and um i think particularly today in this kind of you know exactly as you're saying it's so hard to have trust so how leaders can build trust i think it's a critical challenge other other comments seems to be having rich discussions here so hopefully we can get a little better use of it if i work for a um company and i would say my counterparts version it's from the usa trust is what there is that british kind of thing uh it's not like that um ok if you say um british because most people uh struggle with comments because we don't like being criticized um uh and why usually not as simple as you I know you have done a bad job, so almost every country has a problem with negative feedback.
I think the British struggle even more with positive comments. it can be pretty calm It's shocking and I've done several exercises over the years where you have people say positive things to each other so this reflects better on yourself which some of you may be familiar with , which is very exciting as a way to get people to focus. on the positive and barbara frederickson with this wonderful book positivity uh it shows that you know from an academic point of view if you focus on the positive uh you perform better the problem is the way it is expressed is very context dependent isn't it ? the way you do that in the UK is to look very different from the way you do in the US, so these kinds of cultural tensions, uh, what confidence really looks like, is expressed in such a way different I think that's one of the challenges beyond borders I think that's a great point other other thoughts there is also a gender element yes absolutely uh I think there are also many studies that have shown that uh with relatively comparable behavior um a male boss I'm more likely to be classified as competent, uh, just getting the job done, whereas a female leader would tend to be classified as bossy or hormonal or this was this study on anger. it was like normally he was yes passionate the passion was probably yes yes so I'm sure I think the gender point is you know these cultural points of gender these are really important and I think it goes back to the fundamentals of personality we took the the big five uh personality traits so familiar with the five factor theory uh and um all of them uh you know so uh oops uh low high you know what we know is that people are normally distributed across e to the big five and there is no gender difference except for one of them where the gender difference is what we call kindness so if you are hiring be ok with this you care about parenting focus on the needs of the others, if it is low, it is selfish, competitive. not give a damn about other people you can probably figure out if gender bias is 60 of women will be high 60 of men will be low um but then if that's just the theory here let me talk about organizational settings here I I would say most large organizations have quite a masculine culture in this regard, yeah, somewhat hierarchical, sort of like you know, internal rivalries and competitiveness, and you know all of that rather individualistic stuff is fair, I don't think that's too controversial, No?
So let's say you're a female executive in that environment and your personality isn't, sorry it's not very well drawn, but you know it's not quite as extreme, but it turns out you're more likable. Now, what I would say is um, you have a real problem there, you say, okay, so, you know, we encourage people to be authentic, authentic leadership, one of our themes, we talk a lot around here, so that's okay, I need to be authentic here. so i'll be you know nurture and nurture and what are my male colleagues going to say about me if i do that yeah it's yourself whatever you're too weak too fluffy too soft for all sorts of things they might say so okay good , clearly that's authenticity through that window in this dimension here so I need to play the guys at their own game huh and you step into your role here ok what do the male execs say about you? um, we don't need to, uh, prepare, so I would say here that as a female executive anywhere in this dimension, wherever you step into your role, however, authentically in authenticity, you're screwed, uh, there's no right place , men will criticize you anywhere. you take everything you've got so you're confident as a woman i think like you said there's a whole host of studies even just asking for a raise now the ad the typical male approach is i'm awesome you should give me a raise and I've done it. i haven't done it yet but i should still get a raise give it to me now and the typical female executive is ok my boss will see i've done a good job and will want to reward me and wait for that to happen so you're right i think. the issue of trust here really has some very important dimensions here and um, but the one thing I would say is that when you look at studies of creativity and innovation, obviously there are overlapping themes and those who have done it first will be familiar with this um what you find is that linda gratton is a world authority on this is that the most creative teams tend to be 50 50 across genres huh and that's when that works well you get the creativity without fertility you could even say huh and huh so that's it it's critically important and to me that goes back to the point of social capital, because a lot of these older people aren't very good at dealing with people who are different from them and that relates to any aspect of diversity that relates to these . millennials that are down there go hey you know you know I'm not developing what's the problem you know development and by the way I don't want your job look at you you're divorced and out of shape and uh a little addicted to worked. that's not what I aspire to be, so I think these are challenges, but this is the challenge, how do you really engage with people in this way? and you know one of the simple points is just raising awareness and just the conversation here because it's one of the things that in my experience I was trained in as a psychotherapist and particularly in relation to family therapy, which ruins families. uh, it's not that there's a problem, it's that you know someone is having an affair or is an alcoholic or someone is a peptomaniac or has an eating disorder whatever it isn't that's not what screws up families that screws up to families it's when we can't talk about it yet that things get taboo it's the kind of jargon that's used there and that to me is probably the essence of what it means to build trust and build social capital they have to talk to each other and human capital is not about talking to all these little people because i'm henry ford i have a huge brain and few people they're just tightening the nuts and bolts um i was still running organizations in the ges type It's a science thing the Taylor way and it's very difficult and there's um a great company that we work with here at the school um uh that I've worked with now for God's sake ten years and uh, um they came to us and said richard uh, what? can you help, um, our senior executives to be more nimble, uh, as soon as I heard that, I thought we were screwed, absolutely screwed here, that's the uh, you know? the kind that I got to see the sharpen his knife kind of run, uh, like when we got involved in that show and, um, you know, because we sat there with them and said, hey, you should be more agile and they looked at us going , you know. uh you kind of know uh i've worked all this time to get to the top and now i'm here i want to be in control i want to be nimble and um uh it was traffic so my kind of position here was actually that was completely wrong what we should have done and Hopefully what we're doing now is not helping people become more agile, but helping them create the context in which other people can be more agile. other comments but thank you these are these are great uh great points um I want to end here with um uh a metaphor um because if you agree with me that you know that these fundamental seismic changes here in what we need is to know, to participate. our employees make things happen and it's not just about you being in control, it's really about creating this dialogue, this conversation, uh, so, uh, I think the final analogy for maybe, uh, ending this is, uh every time you try to make some change every time you try and do s something different maybe try to be a role model for things you think are important uh other people don't like it so the tease from julian, go out and be disruptive, it's like, come on, uh, you know you gotta be kidding, uh because um, you know, sociologists, a guy named robert jacqueline in particular, would argue that if you want to be successful in your career, you don't don't interrupt, don't take any personal risk, keep your head down, don't associate yourself with any projects individually and, uh, stay you know, keep, you know, minimize the risk and then eventually you'll rise to the top and there's a lot of truth to that, there's a lot of truth truth in that because yes You want to get promoted, you know what the data shows. is to ignore everything hr tells you sorry it's bad news but you know what hr tells you and just mimic the behaviors of people above you that's the rational thing to do and I love this quote here from the psychologist baldwin what s Helpful children have never been very good at listening to their elders but have never stopped imitating them now as parents this is scary and true and in organizational terms it is also true the way to get promoted is to imitate the behaviors . ofthe people above you because they're going to like now the mini me syndrome as we call it huh so it's kind of rational but we actually need to reframe this because there's some truth here that everyone makes you feel huh , that you're in a china shop, yeah, and you say well, hey, I got an idea how we can use our HR principles to help transform the organization they go to, okay, but don't. break anything ok if you want to do everything you know fluffy things ok but you better not affect profitability and then upset any of these people internally and externally you better not do this sir like this don't ruin it. you feel it's just a truth th about life so we're always made to feel like we're in a china shop but it's not true uh organizations aren't china shops i would say uh they're gardens you have an experience amazing that you have accumulated over many, many years you know uh what it is uh you have a point of view about what the organization should do differently based on all the things that you are passionate about that matter to you and that you have learned over the years years and there is a risk of well yes I would like to do this but hey actually organizations if they push the things that they have a purpose over the things that they are really passionate about believe in my prediction is that they will not kill the organization, It's very hard to kill an organization if you've, if you've ever done any gardening, it's very hard to kill a garden if you have serious, experienced, capable people saying this is what matters to me and I really do. they push uh thats what really happens in great organizations regardless of the level at hie rarchy they make things happen they think are right so my encouragement you take some risks but its very hard and my final slide here's a quote from mark twain 20 years from now he'll be more disappointed by the things you didn't do than the ones you did so throw away those uh bow lines sail away from safe harbor that would be my last uh comment to you and just closing here um uh the um we're just launching in a few weeks actually a new program and I'm kind of a co-head of it in the professional services firms the next generation of leadership there and the purpose that I have for this and my colleagues have agreed it's um you know we have a lot of experience and professional service companies here at the school and some of you know that you work for some of these companies and um and really we haven't captured this in an open program yet uh and our ambition is to make the harvard psf course look really dated there's a lot of change in these environments and but this is kind of a risk uh now you know what we're passionate about and you know that you take a risk and you take that risk, well you know we might fail but i'm sure what succeeds.
I just wanted to share with you a personal example of that, so I hope you guys know this morning from both a strategy standpoint and a complexity standpoint, I hope this is relevant to the things that you're involved with and my only encouragement is to take more risks to put your head above that parapet for the things you care passionately about that's what happens in big organizations thank you very much thank you richard and while you're at lunch we'll be posting a copy of the latest richard's article what is the paradox of indispensability firms tend to fall in value once again richard
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