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Bonus Episode: The Employee Advantage, Featuring Stephan Meier · Humanity Working

• 0:07
  SPEAKER_03: Hi everybody.
• 0:08
  SPEAKER_03: Now, regular listeners to the pod will know that we're somewhat obsessed with the idea of what it takes to help people thrive at work and what it takes to create human-centric workplaces.
• 0:20
  SPEAKER_03: You know, we've we've had lots of great leaders, authors, and CEOs on the show who've given us real insights into aspects of this.
• 0:29
  SPEAKER_03: But no one, no one has ever attacked this topic completely from top to bottom until today.
• 0:36
  SPEAKER_03: There is a brilliant new book out on this topic, and I thoroughly recommend it.
• 0:41
  SPEAKER_03: Um, although I will admit I am jealous because I wish I'd written it.
• 0:44
  SPEAKER_03: Uh, it's called The Employee Advantage: How Putting Workers First Helps Businesses Thrive by Stefan Mayer, who is the James P.
• 0:54
  SPEAKER_03: Gorman Professor of Business Strategy and the chair of the management division at Columbia Business School.
• 0:59
  SPEAKER_03: And I am really thrilled to say that Stefan is with me to talk about these themes today.
• 1:05
  SPEAKER_03: So welcome to the podcast, Stefan.
• 1:07
  SPEAKER_02: Thank you so much, Paul.
• 1:09
  SPEAKER_02: I mean, those are like the nicest words I've ever heard about my book.
• 1:12
  SPEAKER_02: So I'll keep on saying those words.
• 1:14
  SPEAKER_02: So I really appreciate it, especially coming from you.
• 1:18
  SPEAKER_02: You know, actually knows the space really well.
• 1:20
  SPEAKER_02: So that means extra lot uh for me.
• 1:23
  SPEAKER_02: So thank you so much for having me and and for looking forward for a great conversation.
• 1:28
  SPEAKER_03: Yeah, I'm really looking forward to the discussion today.
• 1:30
  SPEAKER_03: But um, before we get started though, I want to be clear.
• 1:33
  SPEAKER_03: If you are a fan of this podcast, you will be a fan of Stefan's book.
• 1:37
  SPEAKER_03: So go ahead and buy that.
• 1:38
  SPEAKER_03: Um, I've been researching this field for years and I still learned a lot, particularly from a lot of the detailed examples.
• 1:46
  SPEAKER_03: So go buy that book and uh also subscribe to Stefan's monthly newsletter.
• 1:53
  SPEAKER_03: And when you do that, you'll be able to check out his really cool stop motion videos.
• 1:58
  SPEAKER_03: I've I've been binge watching a few of those, Stefan.
• 2:01
  SPEAKER_03: Uh, we'll put links to all of those things in the show notes.
• 2:03
  SPEAKER_03: All right, plugs, plugs done.
• 2:05
  SPEAKER_03: Let's let's let's let's get into things.
• 2:07
  SPEAKER_03: All right.
• 2:08
  SPEAKER_03: Um I want to start with something that's really, I think, fundamental here, which is the idea that employees are our most important asset, is something that leaders often say, but many times they don't mean.
• 2:23
  SPEAKER_03: Uh, we've observed this a lot in our own work.
• 2:26
  SPEAKER_03: Why do you think this is the case?
• 2:29
  SPEAKER_02: Yeah, I mean, first of all, we all I also observe it in my in my work.
• 2:34
  SPEAKER_02: You know, one is I actually looked at, you know, how executives talk about customers as another stakeholder and employees, and there is about the 10x difference in how often they talk about it, how the words you use, uh they use about customers and what they use about the employees.
• 2:51
  SPEAKER_02: Uh why that's the case, it's a little puzzling once you are a you know a fan of the idea.
• 2:59
  SPEAKER_02: But I think part of it it's uh it's it's probably not that easy to do.
• 3:03
  SPEAKER_02: You know, it as it is not as easy to be customer-centric, you know, to really put it off.
• 3:09
  SPEAKER_02: Uh, you you to pull it off, you have to be very dedicated about it.
• 3:13
  SPEAKER_02: And I think the same is true for employees.
• 3:16
  SPEAKER_02: It's not like you can just say it and then it happens.
• 3:19
  SPEAKER_02: Uh, it it can't just be, you know, you do an annual engagement survey and then stuff happens.
• 3:26
  SPEAKER_02: You have to be really obsessed about employee experience as we are about customer experience.
• 3:34
  SPEAKER_02: And I think we're still working on getting the word out.
• 3:37
  SPEAKER_02: I think you and me are trying uh really hard, and and it seems to be not so easy to do so.
• 3:45
  SPEAKER_03: Uh you know, that's so let's just start with that that stat that you just gave us because I do think that's fascinating.
• 3:52
  SPEAKER_03: And it's fairly early on in the book you talk about um the number of times that employees are mentioned in that context, in the context of earning call uh of earnings calls, for example, versus the number of times that the customers are mentioned.
• 4:11
  SPEAKER_03: And that sits alongside um the internal conversations that leaders have when they've got to stand up in front of their own employees, when often they are obviously talking to their employees and and telling them theoretically how important they are, but not necessarily living it.
• 4:28
  SPEAKER_03: It's so fascinating that you put those people in an external-facing context, and the employees become almost an an afterthought.
• 4:39
  SPEAKER_03: Um, and you mentioned in the book that this is this is partly kind of zero-sum game thinking, right?
• 4:47
  SPEAKER_03: So um go into that in a little bit of detail.
• 4:50
  SPEAKER_02: Yeah, I mean, I think like, you know, a lot of the analogies I use in the book is like, you know, employees are the new customers.
• 4:57
  SPEAKER_02: And I think it helps to think sometimes about like what happens with customer centricity or how did we get there, what makes it hard, and how to apply this to employee centricity.
• 5:08
  SPEAKER_02: And one is really this either-or thinking, you know.
• 5:11
  SPEAKER_02: Yeah, I mean, back in the days where we are actually investing in, you know, where companies like Amazon, who is not a particularly good example on employees, but when they employ when they invested in a customer experience, you know, analysts, investors were like, you know, where's the money that comes out of the margins?
• 5:29
  SPEAKER_02: Make more money and don't invest in that experience as much.
• 5:32
  SPEAKER_02: So this is either or thinking.
• 5:34
  SPEAKER_02: I think with employees, it's the same.
• 5:36
  SPEAKER_02: If you have a mindset of, you know, workers are only after money.
• 5:42
  SPEAKER_02: Uh, you know, that's why they work, and that's the only way we can make them do more if we pay them more.
• 5:50
  SPEAKER_02: That is kind of a zero-sum game.
• 5:53
  SPEAKER_02: That's a little bit like I have to pay you more in order to make you do more, and that comes out of my margin or my bottom line.
• 6:02
  SPEAKER_02: But that's not how human beings function.
• 6:05
  SPEAKER_02: You know, like m money is important, but there's other aspects that affect the employee experience.
• 6:11
  SPEAKER_02: The same as it would be the same if I would say, you know, customers only care about price.
• 6:15
  SPEAKER_02: And so the only way to get them is to lower the price.
• 6:19
  SPEAKER_02: That's of course not ideal because that would go into the margins that I'm having, but I can actually improve the experience of the customers and make more money in the same, in the same uh in this for the organization as well.
• 6:34
  SPEAKER_02: So it could be really win-win.
• 6:36
  SPEAKER_02: And I think the same is true for your employees.
• 6:39
  SPEAKER_02: And and I think that's the mindset shift that needs to happen in for executive to really realize that if you treat your employees better, if the experience of the employees improve, you know, it actually helps the organization as well.
• 6:55
  SPEAKER_02: So that's why the subtitle of the book is, you know, make your business thrive, you know, putting them first.
• 7:01
  SPEAKER_02: Uh, because it really is about win-win, but it needs a mindset shift in how they think how we think about work, how we think about motivation of workers, and how we think about business strategy, because part of it is actually to improving the experience, and then we we were going to make more money because turnover goes down, innovation goes up, and so on and so forth.
• 7:21
  SPEAKER_03: Well, and as you point out, the language is is is part of this issue.
• 7:26
  SPEAKER_03: I mean, employees, particularly in that context of earning calls, are often just referred to as costs.
• 7:32
  SPEAKER_03: Um, there might be a qualifier associated with the word cost, but basically costs, right?
• 7:38
  SPEAKER_03: Um and if you're thinking about your employees as if you like, financial instruments that you can that you can modify, it's going to change how you uh how you consider it.
• 7:50
  SPEAKER_03: Um and what I love is that you point out that you know we've shifted from a world where organizations, leading organizations, were not necessarily terribly customer-centric.
• 8:03
  SPEAKER_03: And many of those organizations made customer-centric decisions that on the surface might not uh might not seem to make sense financially, but obviously do lead to greater financial success.
• 8:17
  SPEAKER_03: You have your Zapos uh example.
• 8:20
  SPEAKER_03: Um and I think it it it feels like it's almost like a two-step dance, right?
• 8:24
  SPEAKER_03: You have to you have to demonstrate that the the decisions that organizations have made to be customer-centric to very great to very great success in many cases, can be mirrored by how they approach employee centricity.
• 8:41
  SPEAKER_03: Would you agree with that?
• 8:42
  SPEAKER_02: Yeah.
• 8:43
  SPEAKER_02: Yeah, absolutely.
• 8:44
  SPEAKER_02: You know, like when you like let me give you an example.
• 8:47
  SPEAKER_02: When you go to a marketing executive and say to him or her, you know, is it a good idea to ask your customer once a year how they're doing?
• 8:56
  SPEAKER_02: They would laugh their asses off.
• 8:57
  SPEAKER_02: They're like, no, of course not.
• 9:00
  SPEAKER_02: We need like customer insights, we need to listen what they need and constantly update.
• 9:05
  SPEAKER_02: We need ethnographies to figure out how they're doing.
• 9:09
  SPEAKER_02: Um, and listening and co-creating with the customer kind of that experience is a really important part of customer experience and customer centricity.
• 9:17
  SPEAKER_02: But a lot of organizations do exactly that when it comes to employees.
• 9:22
  SPEAKER_02: You know, they're not listening, they do like those annual engagement surveys, which everybody knows that it's being ignored, so nobody fills them out in the first place, and indeed they will be ignored.
• 9:34
  SPEAKER_02: And so I think that shift has to happen that we really care about the experience, listening and co-creating with our workforce to doing so.
• 9:44
  SPEAKER_02: And I'm sure, you know, in your work you see that constantly.
• 9:53
  SPEAKER_02: There is nobody who said, like, no, we should not.
• 9:55
  SPEAKER_02: But to actually do it and to actually care and to actually may have processes in place where we actually where we include um the employees, that's a very, very different uh step.
• 10:08
  SPEAKER_02: Uh where you know, I have like a bunch of uh executives that I have, they have like full staff meetings and like on-sites, and then there is the QA portion, and there is no queue uh in those QA portions.
• 10:23
  SPEAKER_02: Now, it there's two options for that.
• 10:25
  SPEAKER_02: Either there is really no question, or they they are not safe enough to ask a question, or think like it doesn't matter anyway, because it it will be ignored.
• 10:36
  SPEAKER_02: And in my experience, it's often the latter.
• 10:38
  SPEAKER_02: There are a lot of questions, that they are actually a lot of inputs that the employees in the workforce want to give, but it they're just not listened uh uh to because people are not actually serious when they say we should listen to our workforce to improve.
• 10:53
  SPEAKER_03: It's absolutely a leadership issue, and uh, we have a term that we use sometimes called Slino.
• 11:00
  SPEAKER_03: Uh and Slino stands for servant leader in name only, because it implies that they've they they know in some way, shape, or form that there needs to be some form of employee centricity.
• 11:12
  SPEAKER_03: They've read a book on servant leadership, maybe, or they've heard the term or something along those lines.
• 11:17
  SPEAKER_03: So they position themselves as one, but when it actually comes to decision making, they don't.
• 11:25
  SPEAKER_02: I so, Paul, I sometimes like the exercise of, you know, let's take a customer-centric sentence or an exchange customer with employees.
• 11:35
  SPEAKER_02: So let me give you an example.
• 11:36
  SPEAKER_02: So Bezos, uh Jeff Bezos once said, you know, what is great about my customers, they're very dissatisfied constantly.
• 11:45
  SPEAKER_02: Yes, even if they're happy.
• 11:47
  SPEAKER_02: Uh and because we can then change, you know, we can learn something new and can improve.
• 11:52
  SPEAKER_02: Now, exchange customer there, and as I like, you know, what is great about my employees is they're always dissatisfied, even if they seem to be happy.
• 12:00
  SPEAKER_02: Now, there is nobody who would say that, but that's exactly the notion you should have in place, where you think, like, no, I can all constantly learn how to do better uh on a small basis.
• 12:12
  SPEAKER_02: And we kind of knew that for a long time.
• 12:14
  SPEAKER_02: You know, the Toyota way of production was kind of that.
• 12:18
  SPEAKER_02: We listened to, or Toyota did, uh, you know, listen to the uh the frontline workers, you know, on those assembly lines.
• 12:26
  SPEAKER_02: And if they saw a small problem, they were they had the power to stop the assembly line, to fix the problem.
• 12:33
  SPEAKER_02: And uh, and we knew how that worked, you know, it worked like you pull that end-on court, uh, you stop the assembly line, and then we will fix it.
• 12:42
  SPEAKER_02: Now you can actually GM knew about this.
• 12:45
  SPEAKER_02: So Toyota taught them about this, and then they're like, oh, we should do that.
• 12:49
  SPEAKER_02: And they installed end-on cord on all the assembly lines, but nobody pulled the cord because you have to actually take it seriously.
• 12:56
  SPEAKER_02: You need to change how you approach this, you need to give people training about this, you need to be aware that it's a risky choice.
• 13:05
  SPEAKER_02: You know, stopping the assembly line is very costly.
• 13:08
  SPEAKER_02: So you need to also be forgiving if somebody pulls the and on cord and it was not worth stopping the assembly line.
• 13:16
  SPEAKER_02: But in the spirit, you want to get improvements from everybody in the organization independent of rank.
• 13:22
  SPEAKER_02: And and that's kind of what we should do with employees.
• 13:26
  SPEAKER_02: And I'm sure, you know, that's the a lot of the work you have to be doing.
• 13:30
  SPEAKER_02: Uh you're figuring out how to actually create, how to listen, how to implement, and how to change the experience as a result.
• 13:38
  SPEAKER_03: Well, Stefan, I love this because uh it actually points to a uh to an opportunity.
• 13:44
  SPEAKER_03: Um we often talk about the uh the Gallup figures around employee engagement that show sort of levels of around 30%.
• 13:52
  SPEAKER_03: You actually talk about how internationally some of the some of the figures are are even worse than in quotes worse than that.
• 13:59
  SPEAKER_03: But you give us an opportunity to rethink that, right?
• 14:04
  SPEAKER_03: We can if we adopt that lens that you were talking about, the the sort of Amazon lens but applied to the uh applied to the employee, think of the huge opportunity to bring uh employees into uh the picture of solving that problem, right?
• 14:24
  SPEAKER_03: How do we how do we collectively uh create an environment where employee engagement is higher and invite them to be part of the solution, not just not just articulating the problem once uh once a year in a survey that doesn't get listened to.
• 14:42
  SPEAKER_02: Yeah, absolutely.
• 14:43
  SPEAKER_02: But but I think like you know, to your very early question, what is so hard about this?
• 14:48
  SPEAKER_02: You know, everybody says what and I think there are a bunch of stuff that is hard about it.
• 14:52
  SPEAKER_02: Like one is the listening part, which is not so easy, you know, to actually actively listen, you really care about what they have to say, then it needs to change also others.
• 15:02
  SPEAKER_02: You have to be very transparent, also what happens in the organization.
• 15:06
  SPEAKER_02: You know, if you're like down in the organization and they ask you, you know, Paul, how should we change?
• 15:11
  SPEAKER_02: You need to have some transparency what's happening in the organization at large.
• 15:16
  SPEAKER_02: Uh, if you're secretive about the strategy and don't involve people in the first place, it's very difficult to come up with uh ideas that are meaningful.
• 15:25
  SPEAKER_02: Uh and then I think you need to change organizational structure, you know, flatten the organization to make sure that people feel psychologically safe to actually share those information, that it doesn't have any precaution, and so on and so forth.
• 15:40
  SPEAKER_02: Uh so I think we need to change a bunch of stuff in order to make sure that we not only listen, but like what we the feedback we're getting is actually being implemented in a way that really improves the employee experience.
• 15:52
  SPEAKER_03: Yeah, yeah, absolutely.
• 15:53
  SPEAKER_03: We'll get into some of the specifics of that um as we go through our discussion here.
• 15:58
  SPEAKER_03: But before we do, I want to kind of like as as I was reading the book, I was thinking about the three objections that we get from CEOs when we talk about this kind of work.
• 16:08
  SPEAKER_03: And we've already covered one of them, uh, two of them, I'd say.
• 16:10
  SPEAKER_03: So one of them is sort of like the zero-sum nature of the uh of this, right?
• 16:14
  SPEAKER_03: I can't be customer-centric and employee-centric.
• 16:18
  SPEAKER_03: And I think we both agree that that's absolutely not true and can give examples as to why.
• 16:22
  SPEAKER_03: The second is that it's hard, right?
• 16:25
  SPEAKER_03: And so we'll get into some of the uh to some of that as well.
• 16:28
  SPEAKER_03: But then the third objection that we hear quite a bit is this is a luxury I cannot afford.
• 16:37
  SPEAKER_03: Um, and in other words, it's all very well for companies that are doing really well to focus on this kind of stuff because they've got a lot of money and they can use it for uh for this purpose.
• 16:50
  SPEAKER_03: But that but I'm not doing really well and I'm worried about the future and all this kind of stuff.
• 16:54
  SPEAKER_03: That's why I love the Best Buy example.
• 16:58
  SPEAKER_03: Um so it's such a great it's such a great example of what of how you can actually use employee centricity to improve the fortunes of an organization that's not necessarily doing well, or at least where the outlook for that organization is not that strong.
• 17:12
  SPEAKER_03: Can you talk a little bit about that?
• 17:14
  SPEAKER_02: Yeah, so Best Buy is a is a really great example, and I think Hubert Chalhee, who was then the CEO at that point point to who who who led this turnover, turnaround, was really instrumental in doing so.
• 17:28
  SPEAKER_02: And he got the advice when he took over that that we often hear too often, you know, like, oh, if you really want to improve, you know, you have to improve the cost structure.
• 17:40
  SPEAKER_02: Now, how do you do that?
• 17:40
  SPEAKER_02: You fire people, you squeeze out more of your employees and whatever.
• 17:44
  SPEAKER_02: And he decided not to do that.
• 17:46
  SPEAKER_02: Now, you know, it was taking over Best Buy in that point was a risky proposition, you know, like all the other competitors, you know, Circus City and and all those went, you know, got killed by Amazon.
• 18:01
  SPEAKER_02: And we I think many expected the same happening for for Best Buy.
• 18:07
  SPEAKER_02: But he really doubled down on like being employee uh-centric.
• 18:11
  SPEAKER_02: You know, he did a couple of things in doing so.
• 18:14
  SPEAKER_02: So first he like actually did a listening tour.
• 18:17
  SPEAKER_02: Uh, you know, he worked in a store and then to try to understand what really goes wrong in the organization.
• 18:24
  SPEAKER_02: You know, what are like stupid rules, what are bureaucracies, what are what are benefits that got cut that are really beneficial to the to the employees.
• 18:34
  SPEAKER_02: Now, one benefit he saw that were cut is they actually had those uh uh uh opportunities for store employees to buy you know gadgets.
• 18:45
  SPEAKER_02: Now, if you think about what's the ideal employee who works in Best Buy, somebody who's crazy about gadgets.
• 18:52
  SPEAKER_02: Uh that's what you want for somebody to have, and they had those benefits for those to do that.
• 18:58
  SPEAKER_02: Uh and and so he reinstated them, he really helped his employee double down on the employee and and made an amazing turn turnaround, which also happened to be customer-centric.
• 19:08
  SPEAKER_02: You know, he also cared about like what the customer experience is and so and so forth.
• 19:13
  SPEAKER_02: And and I like this example as well, Paul, for the same reason I think that you do.
• 19:17
  SPEAKER_02: This is a company that struggles, the margins are relatively small.
• 19:21
  SPEAKER_02: This is not a tech company who like you know can throw money out the window uh and you know, build slides in the offices and give free snacks and whatever.
• 19:30
  SPEAKER_02: And there are a couple of other examples where this actually happened.
• 19:34
  SPEAKER_02: You know, a lot there's some retailers, you know, Costco being another example, the Texas Texan HEB is another one, which are like extremely employee-centric in an industry that is not like a high-margin business.
• 19:49
  SPEAKER_02: It's a relatively low margin business.
• 19:52
  SPEAKER_02: It's not like money, you know, or profits are growing on their trees within the country and uh in their company, and they're able to pull it off.
• 20:02
  SPEAKER_02: Um, and and I think that's important to realize.
• 20:05
  SPEAKER_02: It's really not about you can afford it, because that sounds a little bit like a perk that you're just throwing, you know, perks at your employees.
• 20:15
  SPEAKER_02: It's really how to improve the experience of your employees, and that doesn't isn't often not that you give them, you know, nap pots and free snacks and uh and free yoga classes, because nobody is being motivated by like, oh, there is free snack, let's work a little harder, or I'm not I'm not joining a company because they don't have a ping pong table.
• 20:42
  SPEAKER_02: And and I think it's very different aspects that actually improve the experiences.
• 20:48
  SPEAKER_02: Most need attention, but do they need a lot of money?
• 20:52
  SPEAKER_02: Not necessarily.
• 20:54
  SPEAKER_02: Um, because it's really about improving the experience that the employees have.
• 20:57
  SPEAKER_03: Yeah, the only bone I had to pick with you in the book is you seem to have it in for ping pong tables.
• 21:01
  SPEAKER_03: I love ping pong tables.
• 21:02
  SPEAKER_03: I love ping pong.
• 21:04
  SPEAKER_03: I know that's a personal thing.
• 21:06
  SPEAKER_02: I mean, no, Paul, I have nothing against ping pong tables, but like there is one thing you also said before, you know, like the second thing is like some executives don't want to do it because it's hard.
• 21:16
  SPEAKER_02: Yes.
• 21:17
  SPEAKER_02: Now, hard is actually important.
• 21:19
  SPEAKER_02: Hard is if it's easy, everybody would do it.
• 21:22
  SPEAKER_02: Yes, let's say ping pong.
• 21:24
  SPEAKER_02: Let's say ping pong table are really the kicker.
• 21:26
  SPEAKER_02: If you have a ping pong table, like your innovation goes through the roof.
• 21:30
  SPEAKER_02: Now, of course, everybody gets a ping pong table.
• 21:32
  SPEAKER_02: That's like an investment of like$500.
• 21:36
  SPEAKER_02: Uh if you have a like for$2,000, you get an amazing professional ping pong table.
• 21:41
  SPEAKER_02: But so there wouldn't be no differentiation whatsoever.
• 21:45
  SPEAKER_02: Now, I like ping pong tables as well, but I do think ping pong table in and in itself are not creating the employee experience.
• 21:54
  SPEAKER_02: You can have ping pong table and the terrible, terrible work culture.
• 21:59
  SPEAKER_02: Uh and And and the pingbull day is not gonna save nobody's gonna stay.
• 22:03
  SPEAKER_02: Oh, my boss is an asshole, but like we have a pingpo table.
• 22:08
  SPEAKER_01: And so that's not gonna work really.
• 22:11
  SPEAKER_01: So I think you have to shoot.
• 22:14
  SPEAKER_01: I think Paul, you're out of luck if you just if you think and I know you know better because I'm sure with your clients, you're not saying, look, if you get a pingpo table, you're all set.
• 22:24
  SPEAKER_01: Yeah.
• 22:25
  SPEAKER_03: That is correct.
• 22:26
  SPEAKER_03: That is correct.
• 22:28
  SPEAKER_03: All right.
• 22:29
  SPEAKER_03: Um, and actually let's let's use that as as an opportunity to delve into some of the more uh complicated aspects of this.
• 22:37
  SPEAKER_03: Um and I want to start here with um with the mission and the vision of the organization.
• 22:46
  SPEAKER_03: And I find this stuff fascinating for a couple of reasons.
• 22:51
  SPEAKER_03: And I'll just explain quickly what we what we've observed in in our work.
• 22:57
  SPEAKER_03: So we found that mission and vision can be very important.
• 23:02
  SPEAKER_03: Um and along the lines with what you've seen in your work, that it is really important if it is truly resonant.
• 23:14
  SPEAKER_03: And there's a second aspect to it as well though, which is that if you do that work in isolation, it might be more than just uh ineffective.
• 23:29
  SPEAKER_03: It might be counterproductive.
• 23:33
  SPEAKER_03: There's a lot of things that employ that that can cause employees to sour on companies.
• 23:39
  SPEAKER_03: Um you talk about fairness a lot.
• 23:41
  SPEAKER_03: Another thing that is kind of related to it is hypocrisy.
• 23:45
  SPEAKER_03: And so we see quite a lot inside some of the organizers, some of the organizations that we've we've consulted with, where the the perception of the employee is negatively impacted by their mission and vision because they see each day their managers not living up to that, or they see their colleagues not living up to that and there being no consequences, or they see even the the senior leadership inside the organization not living up to it.
• 24:14
  SPEAKER_03: So I'd love to get your take on that.
• 24:15
  SPEAKER_03: I'd love to I'd love to get your your point of view on what needs to happen that to ensure that the organization does A, have the mission and vision that resonates, and B, that they do the hard work to make sure that that is lived out in the decisions that are being made every day.
• 24:40
  SPEAKER_02: Yeah.
• 24:40
  SPEAKER_02: I mean, Paul, I couldn't agree more, Paul.
• 24:42
  SPEAKER_02: I mean, I call it in the book purpose washing.
• 24:45
  SPEAKER_02: Yes, I love that term.
• 24:47
  SPEAKER_02: Like, you know, in and it's similar to greenwashing, you know, where it borrows it.
• 24:52
  SPEAKER_02: And then greenwashing, you know, being I try, I I pretend to be green, um, but I'm not really.
• 24:58
  SPEAKER_02: And once the customer or the regulator find out, you know, there's really a backlash.
• 25:04
  SPEAKER_02: Now, within the organization, as you said, you know, employees know, you know, they live it every single day of inside information, whether the purpose is lived or not.
• 25:15
  SPEAKER_02: Now, I think Lee, you're absolutely right.
• 25:17
  SPEAKER_02: I think there are a couple of problems with purpose.
• 25:19
  SPEAKER_02: One is that sometimes we we mix it up with like, let's have just a statement that we can put in the break wall, uh break room on the wall.
• 25:31
  SPEAKER_02: And you know, it sounds kind of cool.
• 25:34
  SPEAKER_02: One of our brand consultants, whatever, came up with the term uh order and has no impact whatsoever.
• 25:41
  SPEAKER_02: Now, that of course is not you know motivating at all if I if I don't feel it in in my daily work and how how I uh doing it.
• 25:52
  SPEAKER_02: So the per the purpose might be too broad, um, the mission might be too vague, uh, it has nothing resembles to what we're actually doing.
• 26:01
  SPEAKER_02: The second problem is we might not live in it.
• 26:03
  SPEAKER_02: That's what you're talking about, purpose uh washing, you know, that we're saying we'll be we're whatever, we're very ethical and we're not, or we care about people and we're not, um, and so on, and people inside really feel it.
• 26:18
  SPEAKER_02: And I think the third problem is like sometimes it's too, you can only feel it if you actually feel it in your daily task.
• 26:25
  SPEAKER_02: You know, that's why I use in the book kind of that, you know, in NASA that that janitor says, I'm not mopping the floor, I bring a man to the moon.
• 26:34
  SPEAKER_02: Well, like he actually feels, you know, the purpose that bring a man to the moon at that point in in NASA while he's doing something which is, you know, somehow distant from that mission, but he feels uh that that he's really part of that organization.
• 26:52
  SPEAKER_02: And creating this is hard.
• 26:54
  SPEAKER_02: Again, you know, you have to have the right mission, you have to live the mission, and everybody on the organization needs to feel it um in their bones and when they're doing the lady tasks.
• 27:04
  SPEAKER_02: And that's something that is really hard to do and requires a very intentional work.
• 27:11
  SPEAKER_02: I'm guessing you're working on those with them to actually bring this to life, but it's it's really difficult.
• 27:17
  SPEAKER_02: Uh, I mean, we see it in our daily life, you know.
• 27:20
  SPEAKER_02: Like if I say, like, you know, Paul, you know, think about be grateful that, like, I don't know, that you can walk to work.
• 27:29
  SPEAKER_01: Yeah.
• 27:30
  SPEAKER_02: Now, you might be, but you need to feel it yourself.
• 27:32
  SPEAKER_02: I can't tell you what that is.
• 27:35
  SPEAKER_02: That might not be the one that you're grateful for.
• 27:37
  SPEAKER_02: You need to feel it yourself in your bone.
• 27:40
  SPEAKER_02: So that makes it hard, really difficult to do, and to make it make it really impactful.
• 27:45
  SPEAKER_02: But once you get it right, it can be something that is extremely motivating for people to do.
• 27:53
  SPEAKER_02: Um yeah.
• 27:55
  SPEAKER_02: You know, I sometimes make the example of like, you know, there is what is a good, what is an impressive if you think about myself, like what do I feel like is a good mission?
• 28:05
  SPEAKER_02: Like, you know, working in a children's hospital, it feels like something that is impactful.
• 28:11
  SPEAKER_02: Um, and I could see myself like joining an organization that, like, you know, we're helping children get healthier.
• 28:19
  SPEAKER_02: Now, it's possible that in the organization, on a daily basis, it sucks.
• 28:26
  SPEAKER_03: Yeah.
• 28:27
  SPEAKER_02: The organization might be very dysfunctional.
• 28:29
  SPEAKER_02: And then the purpose, you know, it still may then it sucks.
• 28:35
  SPEAKER_02: Well, I can care about the mission, I can understand that that's important, but like in a daily basis, you know, I deal with like bosses that are terrible.
• 28:45
  SPEAKER_02: I feel like that I'm not making progress in my career, and so on and so forth.
• 28:50
  SPEAKER_02: And and you have to kind of do a lot of those other aspects to make it work.
• 28:56
  SPEAKER_02: Uh, purpose in and in itself, even if you do it right, is probably not enough to get a motivated workforce.
• 29:04
  SPEAKER_02: Is that your experience as well?
• 29:06
  SPEAKER_02: Like how it is.
• 29:07
  SPEAKER_03: Um, I will say I'll say a couple of things on this.
• 29:10
  SPEAKER_03: One, we absolutely see that that there is a there's the theoretical idea of purpose, and it fails almost every time when it's been created by the marketing department, or it's been created with a view to minimizing risk, or it's been created with a with the sole view of how would I like my shareholders to perceive us, or the general public to perceive us, or our customers to perceive us, right?
• 29:46
  SPEAKER_03: When you do it that way, one of the most important motivating factors behind defining your purpose is to create some form of passion, and all that passion is lost, basically.
• 29:59
  SPEAKER_03: So the moon one was kind of like in a sense, right?
• 30:03
  SPEAKER_03: It was kind of easy for people who worked at NASA to get behind to get behind that as a purpose.
• 30:09
  SPEAKER_03: But you could imagine a scenario where even that had been framed in such a dry way that it didn't create that, right?
• 30:17
  SPEAKER_03: It could have been like, you know, we're going to uh it could have been very detail-driven.
• 30:22
  SPEAKER_03: It could have been like okay, we're gonna uh we're gonna send craft X number of miles further out from the earth or something along those lines, and then you would lose it all.
• 30:33
  SPEAKER_03: So there is that as that aspect.
• 30:37
  SPEAKER_03: Another aspect that we've seen associated with it though is that throughout the organization, you have to, to your point, have to people have to be able to connect it to what they do.
• 30:52
  SPEAKER_03: And if they can't connect it to what they do, then effectively the importance of it disappears.
• 31:00
  SPEAKER_03: And I've seen in organizations where it is on the wall, but even up to the highest level inside the organization, you don't hear the CEO talking about what the company does in terms of what the mission and the vision of the company is.
• 31:17
  SPEAKER_03: And in really well-run organizations it's used as almost like a decision, a thing that guides decisions.
• 31:24
  SPEAKER_03: You'll get the awkward question, maybe even in a shareholder call or something like that.
• 31:29
  SPEAKER_03: And the CEOs, no, we don't do that because it doesn't align with our mission and vision.
• 31:35
  SPEAKER_03: And so these things are are extremely important.
• 31:40
  SPEAKER_03: Um, and it is, it constitutes the the hard work that you're describing.
• 31:47
  SPEAKER_02: Yeah.
• 31:48
  SPEAKER_02: I like that as well that you said, Paul, you know, like that if it if it's a North Star, you know, it actually needs to be a guiding principle that creates what we what we do and what we don't do.
• 32:01
  SPEAKER_02: It's a little bit like strategy.
• 32:03
  SPEAKER_02: You know, if the strategy is we just want to grow, you know, that doesn't okay, then everything goes.
• 32:09
  SPEAKER_02: Uh but or we want to be, you know, the best company, whatever.
• 32:14
  SPEAKER_02: That doesn't do that, doesn't help us with the in the guiding principle, but it is actually is it creates exactly we're not doing that because it's not aligned, or we're only doing that because it's aligned with the mission and the purpose we're having.
• 32:28
  SPEAKER_02: And then it's a decision tool, uh, as much as like a purpose that helps to create meaning for everybody in the organization from the top to the very bottom.
• 32:38
  SPEAKER_03: Um, I'm well done.
• 32:41
  SPEAKER_03: It actually helps with another problem that you kind of isolate, um, which is the idea that I think I think of it almost as like your version of the good to great thing of get every get the right people on the bus.
• 32:54
  SPEAKER_03: You're getting the right people on the bus is sort of like everybody inside the organization.
• 32:59
  SPEAKER_03: But if you are really clear about how you define what the purpose of the company is, the people who want to who really strongly align with that will start to self-select into it, and people for whom that doesn't resonate will self-select out of that.
• 33:16
  SPEAKER_03: And that's what you want.
• 33:16
  SPEAKER_03: You want a group of employees who feel that the company is living and breathing its purpose and feel that they are aligned with uh with that purpose, and it's then used to help determine not just the quarterly discussion you have with your manager, but the prioritization decisions you're making on a day-to-day basis.
• 33:43
  SPEAKER_03: And a really healthy culture, the employee will say to their manager, should I do A or should I do B?
• 33:49
  SPEAKER_03: And the manager's like, Well, looks to me like B is more aligned to our purpose, so we should be doing so we should be doing that.
• 33:57
  SPEAKER_03: And it becomes super powerful as a result, right?
• 33:59
  SPEAKER_02: Yeah, yeah, yeah, yeah, absolutely.
• 34:01
  SPEAKER_02: No, I think like it's very and very important to have like some bytes in like you know, decisions, selection, uh, and then that creates kind of the alignment in activities, but also like the right cultural fit of the people who actually work there, and you have some people who don't work there, which is fine.
• 34:18
  SPEAKER_02: Uh, you know, that's the same with customers as well.
• 34:21
  SPEAKER_02: You know, you segment, you want certain customers, you don't, you know, you figure that out.
• 34:26
  SPEAKER_02: And I think the same is true for your employees.
• 34:29
  SPEAKER_02: And I think, you know, I there there is the story I tell in the book about KPMG, who did like the this this purpose.
• 34:38
  SPEAKER_02: Um, you know, this is the accounting firms.
• 34:41
  SPEAKER_02: And I'm not sure everybody would think about accounting first first, about like, you know, their amazing mission uh that that they're they're having.
• 34:49
  SPEAKER_02: So KPMG decided to have, they called it the 10,000 story challenge.
• 34:56
  SPEAKER_02: Uh and the idea was like, I think in June of that year, they decide, you know, if by Thanksgiving we have 10,000 stories of individuals, uh, employees, you know, tell what's the purpose, what are they doing that is beyond just doing the numbers?
• 35:11
  SPEAKER_02: They made an example, you know, one of example, like KPNG was involved in when uh apartheid uh ended in South Africa, and and they they helped with the election, or at least with the monitoring of the election that eventually led to uh President Mandela being being uh being elected.
• 35:32
  SPEAKER_02: And so they made a poster of that.
• 35:33
  SPEAKER_02: So they wanted like 10,000 of those stories.
• 35:36
  SPEAKER_02: By July, uh uh, and they gave an incentive.
• 35:39
  SPEAKER_02: So they're like, you know, if we get 10,000 by Thanksgiving, we everybody gets two days off.
• 35:45
  SPEAKER_02: Uh and that's really about everybody has to individually express what does it mean to them?
• 35:50
  SPEAKER_02: What's their purpose in life?
• 35:52
  SPEAKER_02: By July, they already had 10,000.
• 35:55
  SPEAKER_02: Um, so they started in June.
• 35:57
  SPEAKER_02: By Thanksgiving, they had 42,000 stories.
• 36:00
  SPEAKER_02: Uh and and it turns out then that led to an increase in engagement uh that they have.
• 36:08
  SPEAKER_02: They increased about 16 ranks in the best places to work uh aspect.
• 36:16
  SPEAKER_02: It has many, many aspects of motivation that improved and so on and so forth.
• 36:20
  SPEAKER_02: In particular when the managers actually talk to people about their purpose.
• 36:25
  SPEAKER_02: You know, when purpose became uh a discussion point where you, you know, as my manager would ask me, so Stefan, you know, what is your purpose?
• 36:34
  SPEAKER_02: What is your story?
• 36:35
  SPEAKER_02: How do you feel about that?
• 36:36
  SPEAKER_02: And that then created those discussions within the organization that brought the purpose really to life, made it very personal about themselves, and and created kind of that shared understanding of how we understand purpose, what what guiding principle is going to be for all the decisions that we're gonna make uh as employees of in that part and in that case KPMG.
• 36:58
  SPEAKER_03: Yeah, the example's great because it talks again about one of these companies where you wouldn't necessarily associate the organization with with an exciting purpose that could get people motivated.
• 37:08
  SPEAKER_03: But as you point out, right, it can it a really inspiring purpose can come from a bunch of interesting sources and a bunch of interesting organizations that don't look like they would have that on the surface.
• 37:22
  SPEAKER_03: Um, I'd encourage folks, if they haven't already, to go back and listen to my interview with Gary Ridge, um, which is a couple of uh episodes ago, I think, on the pod.
• 37:32
  SPEAKER_03: Um Gary's the chairman emeritus of W of the WD-40 company and was the CEO there for about a decade.
• 37:38
  SPEAKER_03: Very similar situation where they were collecting, you know, stories of people's experiences of using it.
• 37:44
  SPEAKER_03: And you start looking at that and you think, well, they just make lubricant.
• 37:48
  SPEAKER_03: What's that about?
• 37:49
  SPEAKER_03: You know, etc.
• 37:50
  SPEAKER_03: But you think about all of the memories that people create associated with it, and you create something that is very different and critically um becomes a driving force behind the activities that people perform in the company.
• 38:02
  SPEAKER_03: Now I'm gonna I'm gonna shift gears a bit.
• 38:06
  SPEAKER_03: It would be criminal, Stefan.
• 38:08
  SPEAKER_03: Criminal if I had one of the leading behavioral economists in the world here, and we didn't talk at all really about economics here.
• 38:16
  SPEAKER_03: So so I think what is uh really interesting is uh when you start to talk about the motivating factors that uh um employees that that that actually do keep employees engaged and are associated not just with them showing up for work each day, but improved, measurable, improved productivity.
• 38:46
  SPEAKER_03: And I think many people, probably not many people who listen to this podcast every week, but many but many people on this uh on the surface might think this is pretty simple, right?
• 38:58
  SPEAKER_03: We we do what Henry Ford did, we just pay people more.
• 39:02
  SPEAKER_03: Um, and or we do what Costco is doing, we just pay people more than than our competitors.
• 39:08
  SPEAKER_03: And you you point out that that there isn't that's an element, but it is not the full picture.
• 39:13
  SPEAKER_03: So throw your behavioral economists' hat on and convince us as to as to what else is important here.
• 39:20
  SPEAKER_02: Exactly.
• 39:21
  SPEAKER_02: It's uh it's a little harder initially because that's what I was trained for, you know.
• 39:25
  SPEAKER_02: Like in the models of economics, is like, oh, work sucks.
• 39:30
  SPEAKER_02: Uh, you know, it's a bat, so we're only doing it if we get compensated by money and or we get controlled, otherwise we would slack off and not do anything, don't show up uh for work.
• 39:43
  SPEAKER_02: Now that's a simple model, which is just unfortunately not true.
• 39:48
  SPEAKER_02: It would be much easier if it's all about, you know, if we just have to figure out the right in compensation plan and then we're good to go.
• 39:56
  SPEAKER_03: Yeah, you guys made you guys made economics really difficult.
• 39:59
  SPEAKER_02: Yeah, exactly.
• 40:00
  SPEAKER_02: So it becomes it was easy when he's like, you know, I have to control you and pay you right, and then you're done.
• 40:06
  SPEAKER_02: Um now it just turns out like obviously income matters uh for people, especially in the lower end of the income distribution.
• 40:14
  SPEAKER_02: You know, if you feel um, you know, not financially stable, if you're worried about making ends meet, you know, that's a killer to productivity because you can't be, you're not mentally there because you have to worry about like, oh, hopefully I can pay my kids' school fees uh or my dental um uh expenses and so on and so forth.
• 40:38
  SPEAKER_02: But once you reach a certain level of income, you know, money is just not a big driver of what motivates uh uh people.
• 40:47
  SPEAKER_02: Uh it's it's many more uh uh other aspects of work.
• 40:51
  SPEAKER_02: And there's study after study which is show the diminishing return on like making more money.
• 40:57
  SPEAKER_02: Now, you often hear, you know, I talk to his executive constantly, and they like, oh, I agree, but you know, I just had that one guy, or like those two guys, or like kids these days, or whatever the term is, where they say, like, but I just had one, he he literally or she quit the job for like five thousand dollars more.
• 41:17
  SPEAKER_02: Uh and uh and then I say to all of us, it's just the money, yeah, totally the money.
• 41:21
  SPEAKER_02: You know, we were like we're an amazing company.
• 41:24
  SPEAKER_02: I was like, and then if you drill a little deeper, turns out, you know, that there are other aspects that are were not as ideal.
• 41:32
  SPEAKER_02: You know, they didn't make any, you know, maybe their purpose wasn't that great, maybe they're they didn't learn something new, maybe their relation to culture was not as ideal.
• 41:42
  SPEAKER_02: Um, and study after study shows like people, there are very few who switch just for money.
• 41:47
  SPEAKER_02: Um, they stay uh if they're really happy and motivated.
• 41:51
  SPEAKER_02: And I think those are the factors where we really can make a difference.
• 41:55
  SPEAKER_02: Um I mean, paying money is also kind of a zero-sum game in competition, you know.
• 42:01
  SPEAKER_02: It's a little bit like again, going back to the customer.
• 42:04
  SPEAKER_02: You know, if it were all price, you know, we were just like lower price lower the prices one after another and we'll be a race to the bottom.
• 42:13
  SPEAKER_02: Uh if if it were just money, and and we know from customer they care about more stuff than price.
• 42:19
  SPEAKER_02: And I think that's the same for the employees.
• 42:22
  SPEAKER_02: And now, you know, the behavioral science and the behavioral economics tells us what people motivate are motivated beyond money.
• 42:31
  SPEAKER_03: And a big factor that we've seen in our own work is this strong correlation between employee engagement and their ability to learn and grow.
• 42:39
  SPEAKER_03: Um, you have the Richard Branson quote actually in your in your book specifically about that.
• 42:44
  SPEAKER_03: But um so, Stefan, in our work, we've seen a strong correlation between employee engagement and the ability to learn and grow.
• 43:00
  SPEAKER_03: Um, even in situations where um where organizations might not think it's necessarily that important, or they've just provided learning and development opportunities through course catalogs and things like that.
• 43:14
  SPEAKER_03: Um you talk about that that being a factor, right?
• 43:20
  SPEAKER_03: Um it's not so yes, there is the factor as to you know how are you in a toxic environment, are you in a healthy supportive environment, but also that there is importance for employees to be able to actually grow themselves while they're in their current job.
• 43:36
  SPEAKER_02: Yeah, I think like Paul, this is one of the more important ones.
• 43:40
  SPEAKER_02: I mean, they're all the four I talked about were important, but this is an important one.
• 43:43
  SPEAKER_02: I think the stats are about 40% of people say they're the number one reason why they quit is because they don't learn anything new.
• 43:52
  SPEAKER_01: Wow.
• 43:52
  SPEAKER_02: Uh and about only a quarter, I think, of employees uh report that they're encouraged to learn something new.
• 44:00
  SPEAKER_02: And that comes a little bit from the third stats that I'm going to say.
• 44:04
  SPEAKER_02: About 80% of employees report talent hoarding, meaning their manager, their boss, actually doesn't want them to learn something new because then they potentially leave.
• 44:16
  SPEAKER_02: You know, think about like I work for you, I'm really good at what you're doing.
• 44:20
  SPEAKER_02: And you're thinking, Paul thinks, like, you know, Stefan, like, I really like what he's doing in that particular job.
• 44:26
  SPEAKER_02: I don't want him to learn something new because otherwise he might leave.
• 44:30
  SPEAKER_02: Uh, and I don't want him to leave.
• 44:32
  SPEAKER_02: So you you you hoard the most important uh talent.
• 44:36
  SPEAKER_02: And I think it's a very, very important human motivators that we want our skills to be optimally utilized and constantly improve.
• 44:46
  SPEAKER_02: You know, it's like if we're if we have a job that is stupid, uh uh, you know, that's demotivating.
• 44:53
  SPEAKER_02: It's too easy.
• 44:54
  SPEAKER_02: I don't I do it like it's boring as hell.
• 44:57
  SPEAKER_02: Uh the same is true when we have a task that we're not properly trained or we don't have help and get don't get better in doing so.
• 45:05
  SPEAKER_02: That's also frustrating.
• 45:06
  SPEAKER_02: You know, it doesn't we don't feel good about this when I come when we constantly fail.
• 45:10
  SPEAKER_02: And and so we we want to learn something new and get better at it uh all the time.
• 45:16
  SPEAKER_02: Now there are those traditional like learning and development things, which I think are okay, but there is other aspects.
• 45:23
  SPEAKER_02: Uh you know, mentoring is one of them.
• 45:25
  SPEAKER_02: How do we actually learn from other people?
• 45:28
  SPEAKER_02: How do we learn as a group?
• 45:30
  SPEAKER_02: How do you help me getting better?
• 45:33
  SPEAKER_02: And it's important to facilitate an environment where those mentoring and learning, peer learning uh happens.
• 45:40
  SPEAKER_02: Uh now it's hard.
• 45:42
  SPEAKER_02: You know, I call this just right tasks uh in the book, where you have to just write tasks.
• 45:48
  SPEAKER_02: And and I sometimes talk to execut.
• 45:50
  SPEAKER_02: I mean, I just had a session on on this um this this afternoon, where I then told executive, you know, you just need to know for all your employees what's the just right tasks, what's the task that optimally stimulates them and match them to the right tasks and constantly update.
• 46:08
  SPEAKER_02: And then they look at me as if I have like seven heads.
• 46:12
  SPEAKER_02: It's like, you know how difficult that is.
• 46:14
  SPEAKER_02: I have like 50 employees or 20, even if you have only 10.
• 46:18
  SPEAKER_02: Yeah, that's hard to do.
• 46:20
  SPEAKER_02: But we need a mechanism in place.
• 46:21
  SPEAKER_02: Now, technology actually can help us do that better.
• 46:25
  SPEAKER_02: Uh, because it sounds a little bit like an AI task.
• 46:29
  SPEAKER_02: You know, it sounds a little bit like what Netflix is doing and figuring out.
• 46:33
  SPEAKER_02: So Paul really likes, let me look at your book.
• 46:37
  SPEAKER_02: He really likes like, you know, British crime, like Sherlock Holmes type of series.
• 46:43
  SPEAKER_02: So it shows Netflix, yeah.
• 46:46
  SPEAKER_02: Netflix shows you more of those crime dramas.
• 46:49
  SPEAKER_02: You know, it knows, oh, Paul really likes that.
• 46:51
  SPEAKER_02: I I'm more of a nature documentary kind of guy.
• 46:54
  SPEAKER_02: So it shows me more nature documentaries.
• 46:56
  SPEAKER_02: Now, eventually we'll be bored with all the British whatever, slow horses and like and and all that type of stuff.
• 47:03
  SPEAKER_02: So and Netflix can figure out, oh, Paul now really wants something else.
• 47:07
  SPEAKER_02: So shows you new stuff.
• 47:09
  SPEAKER_02: So that's what algorithms uh uh do.
• 47:12
  SPEAKER_02: And I think we can apply that now to those, you know, those learning opportunities.
• 47:17
  SPEAKER_02: And I think uh internal marketplaces, AI-powered internal marketplaces, actually do exactly that.
• 47:24
  SPEAKER_02: So MasterCard uh is an organization that I just wrote a case about that uses those internal marketplaces where like employees go to the platforms and yeah, I want to learn something new.
• 47:35
  SPEAKER_02: I want to do, I want to get a stretch assignment, as we called it in the past.
• 47:41
  SPEAKER_02: Uh, I want to work for a couple of times somewhere else.
• 47:44
  SPEAKER_02: And then it matches it to opportunities within MasterCard, where people then work, you know, beside their job on the side or a little bit on another project.
• 47:54
  SPEAKER_02: Uh the database now, the the data you know that it collects now gives me then better and better matches over time.
• 48:01
  SPEAKER_02: Uh, and as a result, people learn, get engaged, and they also don't leave the organization.
• 48:07
  SPEAKER_02: Uh, you know, they stay within MasterCard.
• 48:10
  SPEAKER_02: MasterCard did that, it started in during the pandemic, and they have now five years later, they're unlocked, that's the name of their platform, unlocked a million work hours.
• 48:22
  SPEAKER_02: Where like people, a million hours where people will work on those other projects.
• 48:27
  SPEAKER_02: And as a result, to your point about growing and learning, they learn, you know, they and they now applied this, they figured out, well, maybe that works with mentoring as well.
• 48:38
  SPEAKER_02: And yes, it does.
• 48:39
  SPEAKER_02: So they now use that platform also to match, you know, find the right mentor, mentee, uh, get the right match, constantly learn uh on the go as an algorithm.
• 48:50
  SPEAKER_02: So part of the learning is not only working on different projects, getting the right mentors, learning, peer, peer learning as well.
• 48:59
  SPEAKER_02: And so I think it's a powerful example where you can use AI and technology to actually enhance the motivators here, the you know, competence or the just right tasks that I call you.
• 49:12
  SPEAKER_02: And you're absolutely right.
• 49:13
  SPEAKER_02: It's a very, very important motivator uh that keeps people engaged, motivated, um, and productive in their job.
• 49:20
  SPEAKER_03: Yeah, and it's not just job-specific skills either.
• 49:24
  SPEAKER_03: I mean, some of these are intangible skills, like like even social skills.
• 49:30
  SPEAKER_03: I was fascinated by uh something you mentioned in the book about how um social skills and things that we often collect together under the banner EQ these days could actually make teams smarter.
• 49:49
  SPEAKER_03: So talk talk to people about that, right?
• 49:52
  SPEAKER_03: Like it's like you add up.
• 49:54
  SPEAKER_03: I mean, in theory, like in your head, you go, you just add up all the IQ points of all the individuals, and that's the IQ of the team, but you you point out something different, right?
• 50:03
  SPEAKER_02: So yeah, so it's like yeah, they call it their, you know, collective intelligence.
• 50:09
  SPEAKER_02: So if you think about IQ, which is you know an individual measure of like how smart we are, and and yeah, and you know, there it's like in a in an IQ test, I give you kind of a bunch of tasks uh and then see, oh, you're doing well on this one, you're doing a little less well on this one, but in the aggregate, you know, do you doing some are doing better uh than others?
• 50:29
  SPEAKER_02: So they did the same with with teams.
• 50:32
  SPEAKER_02: Uh and it turns out some teams are better than others.
• 50:35
  SPEAKER_02: So there is something like collective intelligence.
• 50:38
  SPEAKER_02: But then exactly to your point, then it's like, well, can we just add up how smart the individuals are?
• 50:44
  SPEAKER_02: And no, we cannot.
• 50:46
  SPEAKER_02: Uh, you know, there's something, a magic ingredient that makes certain teams better than others.
• 50:52
  SPEAKER_02: So the researchers then were like, what is it?
• 50:54
  SPEAKER_02: What is it that actually creates better, smarter, and less smart teams if it's not the IQs of the individual members?
• 51:02
  SPEAKER_02: Uh and it turns out like empathy, you know, or social skills is a really, really important part of what makes a group uh better, uh, better than the individual.
• 51:13
  SPEAKER_02: You know, it's a it's a little bit like when Michael Jordan said, you know, talent, you know, talent win games and teams, the right teams meet win trophies.
• 51:25
  SPEAKER_02: Yeah.
• 51:25
  SPEAKER_02: It's like, what is it that creates a great team?
• 51:28
  SPEAKER_02: And in in those research, they really showed that like social skills, empathy is a really, really important ingredient in making individuals that are smart even smarter collectively.
• 51:40
  SPEAKER_02: And uh I I love those studies as well, and it's really fascinating to think about, you know, how can we apply this to our work teams?
• 51:49
  SPEAKER_02: Because like we're often higher for like, you know, just individual skills.
• 51:54
  SPEAKER_02: You know, we are like, you know, you're smarter than the other applicants, so then I pick you.
• 52:00
  SPEAKER_02: Um but but we forget that there is another ingredient that actually makes in working together, uh, you know, makes working together really work.
• 52:09
  SPEAKER_02: Uh and it's and it's those social skills that create and from talent really teams that that do win trophies um or like our high performing teams in organizations.
• 52:22
  SPEAKER_03: All right, Steph and I, we could be talking about this stuff forever, but uh I mean, certainly certainly a few days, but our podcast has a time limit, so I'm gonna I'm gonna finish up here and uh I wanna I want to talk about this whole rise of AI and robotics and automation and how how this is changing attitudes and how uh potentially it should change attitudes.
• 52:54
  SPEAKER_03: Um I will tell you that in our work what we've seen is that uh there are kind of two things going on at the same time, right?
• 53:03
  SPEAKER_03: The the rise of of these capabilities, and particularly obviously the thing that people are most focused on because they most people see more of it on a day-to-day basis, is generative AI.
• 53:14
  SPEAKER_03: But this whole idea of like AI and robotics and automation.
• 53:18
  SPEAKER_03: Some people are excited about what it does for them on a day-to-day basis, but most people, once you dive a little deeper, have some level of fear associated with it, right?
• 53:26
  SPEAKER_03: Because I mean, frankly, it's probably logical to have an element, uh, an element of uh fear because there's a certain uh there's uncertainty in terms of the degree to which it's going to replace um some of the capabilities that we've spent years at honing.
• 53:42
  SPEAKER_03: Um but as it's creating that level of fear and uncertainty and doubt in employees, we found that it's also confusing many of the leaders that we speak to.
• 53:55
  SPEAKER_03: And I'll tell you that we've had conversations with CEOs who are hesitating to invest in employee centricity or employee-centric initiatives because um and I'll I'll quote I'll quote but won't name uh CEO who said they're not sure whether the employees are gonna be around to benefit in the investment that they're uh that they're making in them.
• 54:21
  SPEAKER_03: Now I'm guessing you think that's a mistake um in terms of the approach that that uh some of these leaders are are thinking of this as.
• 54:29
  SPEAKER_03: But do you think that creating great employee experience is still gonna be a significant differentiator as the rise of the machines occurs, as it were?
• 54:41
  SPEAKER_02: Yeah.
• 54:42
  SPEAKER_02: Yeah.
• 54:42
  SPEAKER_02: I mean, you're right in assuming that I would disagree with uh what those CEOs uh was saying.
• 54:49
  SPEAKER_02: In fact, I think it's the exactly the opposite, where like you actually have to be employee-centric to get the benefits of AI.
• 54:57
  SPEAKER_02: Uh let me give you a couple of uh thoughts about this.
• 55:00
  SPEAKER_02: So, one is I have a great quote from the head of AI at Morgan Stanley, who said um about my book, you know, it has nothing to do about AI, but it has everything to do with AI because the future of work is really about human-centric uh approach.
• 55:17
  SPEAKER_02: Now, why do I think that?
• 55:19
  SPEAKER_02: Uh I think like if you think about a couple of things, like one is adoption of AI.
• 55:24
  SPEAKER_02: In order to get um AI adopted, you have to be employee-centric.
• 55:28
  SPEAKER_02: I actually just finished a survey that is not in the book, but uh not yet, because I literally just finished it with uh with the Boston Consulting Group, where we measure AI centricity and uh employee centricity and AI adoption.
• 55:43
  SPEAKER_02: Um and it turns out there is like a huge positive correlation between employee centricity and AI adoption.
• 55:54
  SPEAKER_02: In fact, those companies who are employee-centric are seven times more likely to be AI mature in the adoption because you need the employees to actually get AI off the ground.
• 56:07
  SPEAKER_02: Uh, I'm very, very suspicious of like those, you know, we're gonna be organizations without any employees uh soon.
• 56:16
  SPEAKER_02: What I'm almost certain is that every human will work with a machine.
• 56:21
  SPEAKER_02: So human-machine interaction is gonna be really, really important.
• 56:25
  SPEAKER_02: But in order to do that, we need to understand what actually makes human tick.
• 56:29
  SPEAKER_02: Uh how can we augment human beings and how can we create more value with machines and humans uh together?
• 56:38
  SPEAKER_02: So I think it's critically important that we invest in employee centricity.
• 56:43
  SPEAKER_02: So let's think about one aspect of implicit.
• 56:47
  SPEAKER_02: We talked about listening at the very beginning.
• 56:50
  SPEAKER_02: Uh, you know, we started about like how to get inputs.
• 56:52
  SPEAKER_02: I think that's very, very important to get the AI systems the right in place, to make them adopt, to actually construct them in a way that are productive.
• 57:03
  SPEAKER_02: We need to understand what the employees, what the problem is that the employees are facing, and how can we use AI to support them.
• 57:12
  SPEAKER_02: And and I think without that listening aspect, you know, we are not getting it uh off the ground.
• 57:18
  SPEAKER_02: I mean, it's just very, very difficult.
• 57:20
  SPEAKER_02: So I think exactly the opposite.
• 57:23
  SPEAKER_02: Like we actually need to be employee-centric in order to um get the benefits of AI, get the adoption right, and get the human-machine interaction right.
• 57:33
  SPEAKER_02: So that same head of AI, uh Jeff McMillan at Morgan Stanley, said, uh, and I love this quote, and I say it every every every time somebody asks, he said, tech is easy.
• 57:46
  SPEAKER_02: Humans are hard.
• 57:47
  SPEAKER_01: Yeah.
• 57:48
  SPEAKER_02: You know, the tech part, I mean, that's actually not that hard, but the human beings are not that easy.
• 57:55
  SPEAKER_02: We need to understand how what motivates them, you know, what your work is all about, like figuring out like what makes them tick, how can we actually get them on board?
• 58:04
  SPEAKER_02: How can we get the benefit of the technology with the human beings uh together?
• 58:09
  SPEAKER_02: So, no, employee centricity is not going out of style.
• 58:13
  SPEAKER_02: In fact, quite the opposite.
• 58:14
  SPEAKER_02: I think we we need to be more employee-centric to get the benefit of the technology as well.
• 58:20
  SPEAKER_03: Wonderful.
• 58:21
  SPEAKER_03: We will uh leave it on that point of very strong agreement, Stefan.
• 58:25
  SPEAKER_03: And uh thank you so much for joining us today.
• 58:29
  SPEAKER_02: Thank you so much, Paul, for having me.
• 58:31
  SPEAKER_02: This was great, fantastic.
• 58:34
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• 58:37
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• 58:42
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• 58:44
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