Latest / The Action Catalyst / REMASTERED: Radical Leadership, with David Burkus (Management, Communication, Trust, Business)

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REMASTERED: Radical Leadership, with David Burkus (Management, Communication, Trust, Business) · The Action Catalyst

• 0:25
  Host: David Burkus is the author of Under New Management. His
• 0:29
  work is basically talking about why so many of the common day
• 0:34
  business management principles have become outdated and they
• 0:38
  just, they just don't work anymore. And anyways, David,
• 0:40
  welcome to the show.
• 0:41
  David Burkus: Well, thank you. Thank you so much for having me.
• 0:43
  Host: So the whole under new management thing, like, where
• 0:47
  did that come from? Like, why? Why? Why this book? Why now?
• 0:51
  David Burkus: Yeah, I was an undergrad English major, of all
• 0:54
  things. But in college, I fell in love with social science and
• 0:57
  thought, like, okay, there's got to be a way to put these
• 0:59
  together, popularized insights from social science with good
• 1:01
  storytelling. And one of the phenomenon I found actually was
• 1:04
  was in the process of promoting my first book, The miss of
• 1:07
  creativity. You can't, you can't write a book about creativity
• 1:09
  innovation, and not be talking about your Googles and your
• 1:12
  three M's and all of these companies that have, you know, a
• 1:14
  little bit different workplace practices, a little bit
• 1:16
  different management practices. And those get a lot of questions
• 1:21
  from people. Well, should we do that? Should we do 20% time, or
• 1:23
  should we give everyone free food, or that kind of thing? And
• 1:25
  this is where the idea for under new management came from. Is
• 1:28
  okay, let's tackle those. Let's actually look at what are the
• 1:30
  things that a lot of newer companies and even older
• 1:33
  companies that are trying to be more creative or innovative,
• 1:35
  what are the things that they're doing that's different from
• 1:38
  business as usual? And is there an explanation for why it works?
• 1:41
  And so we started with probably 20 or 25 different leadership
• 1:45
  and management practices, and then narrowed it down to Okay,
• 1:49
  these are the ones that we can see through the lens of social
• 1:51
  science. Are actually a really good idea, and also maybe some
• 1:56
  ways that you can be in the spirit of those ideas without
• 1:58
  going full on Google and giving everybody 20% time and free
• 2:02
  food, right? You might actually be able to kind of tap into it
• 2:05
  without going the full way.
• 2:06
  Host: Can you explain? I don't think everybody knows what 20%
• 2:09
  time is.
• 2:10
  David Burkus: Oh I'm so sorry. So 20 Google, it actually
• 2:13
  started with 3m But Google kind of made it more famous. So it
• 2:15
  actually came from the senior leadership of 3m realizing that
• 2:19
  they were terrible at judging what ideas were going to be
• 2:21
  amazing products and which ones weren't. And so one of the
• 2:24
  things they said is, if you're an engineer with us and you're
• 2:26
  doing research and development, you can have 15% of your
• 2:29
  calendar every week to work on whatever project you want. If
• 2:32
  you think it's got potential, and we don't agree, you still
• 2:36
  have this protected space to work on those ideas. And Google
• 2:40
  picked it up when they started working, they actually increased
• 2:43
  it to 20% so now you could have essentially one day out of every
• 2:46
  week. Of course, some of the over tax engineers joke that it
• 2:49
  actually should be called 120% time, because it's sort of like
• 2:52
  you can do it, but you got to get everything else done. But
• 2:55
  the idea comes from exactly this, this realization that in
• 2:59
  senior leadership and in management, we might not have
• 3:01
  all of the information anymore, and it may be a better idea to
• 3:04
  give them some room to make decisions themselves, because
• 3:07
  they might have a better idea of what's going to work than we can
• 3:09
  tell from our Excel spreadsheet in the conference room, right?
• 3:13
  Host: So give me the goods. Like, what is the thing that
• 3:15
  like blew your mind that you said, Oh my gosh, I can't
• 3:17
  believe people are doing this and it actually works. Or what
• 3:20
  are some of those practices that are really radical?
• 3:22
  David Burkus: So I mean, I'll tell you two. I'll tell you the
• 3:25
  easier one that everybody says, like, I can't believe that that
• 3:27
  works well. And then I'll tell you the hill that I didn't think
• 3:29
  I was gonna die on, but I did, which is a big setup. I hope I
• 3:32
  can deliver on that. But one of the ones that immediately
• 3:34
  everybody started asking me about is, what about these
• 3:36
  companies that have unlimited vacation, right? What about
• 3:39
  these companies that just say, ah, you know, you can take off
• 3:41
  whenever you want. You know your work, etc. It seems like sort of
• 3:44
  a management nightmare, because you never know who's going to be
• 3:47
  at work when. But when we live in an age where most people are
• 3:50
  doing incredibly creative work or problem solving work, even
• 3:54
  you know everybody but accounting these days in a
• 3:56
  company is charged with doing creative work or solving
• 3:59
  problems or something like that. We still don't really like
• 4:01
  creative accounting, so that's, you know, that's okay, but so
• 4:05
  when we're doing that, what we need is a little bit more
• 4:07
  autonomy, a little bit more control. And what was happening
• 4:10
  at Netflix is probably the one that popularized us the most,
• 4:12
  because there was a feeling that you're not controlling what when
• 4:16
  I'm working and where I'm working when I'm on days, on why
• 4:19
  do you need to know and sort of nickel and dime and keep track
• 4:22
  of all of my days off. And the the senior leaders of Netflix
• 4:25
  said, you know, you're, you're exactly right, and that's they,
• 4:28
  they picked up on the fact that it was communicating sort of a
• 4:30
  distrust for employees that they wouldn't act in Netflix's best
• 4:34
  interest. So they said, so we'll, we'll just get rid of it.
• 4:36
  And you know how much time you need this year. You know your
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  family life and your home life. You know your objectives for the
• 4:40
  company get those done. And they're very, very true on that.
• 4:44
  But what I found most interesting is you dig into it,
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  and one of the biggest complaints is everyone's either
• 4:49
  going to take too much vacation or they're going to take not
• 4:51
  enough. And when you look at the data on how many vacation days
• 4:54
  companies that switch to this take, it's actually about the
• 4:57
  same as before. The difference is that the trust. Piece. The
• 5:00
  difference is the company saying to its employees, we trust you
• 5:03
  to act in our best interest with all this stuff, and we're going
• 5:05
  to put the ball in your court. And the power of sort of
• 5:08
  autonomy and responsibility that brings makes a much more
• 5:11
  motivating workplace. So it's not actually about the vacation
• 5:14
  days at all. It's about trust.
• 5:16
  Host: Amen, that one's really cool. Tell me about the other
• 5:18
  one.
• 5:18
  David Burkus: The hill I didn't expect to die on? Salary
• 5:21
  transparency, letting everybody know in the company what
• 5:24
  everybody else gets paid. I get it. I get people's fears at it.
• 5:26
  Because when I first started looking at this, I was sort of
• 5:28
  like, yeah, that makes me uncomfortable. I don't want
• 5:30
  people to know what I get paid, etc. But the truth is, I believe
• 5:34
  I'm an optimist. I believe that most companies are trying to
• 5:37
  find a way to pay all their people fairly and equitably and
• 5:40
  in relation to how much effort and value they're creating for
• 5:43
  the company. And if that's the case, then there's not much to
• 5:45
  lose by sharing it. The fear is, if we share it, everybody's
• 5:48
  gonna get all crazy. Well, the truth is, everybody's crazy when
• 5:51
  it's secret, because we're terrible judges of what each
• 5:54
  other get paid, right? We make, we make all these assumptions
• 5:57
  based on what car they drive. Well, they might, you know, have
• 5:59
  a really well earning spouse, and they don't make a lot of
• 6:02
  money, right? So we can't judge it by that or clothes or things
• 6:05
  like that. We're we're terrible when it's a secret at judging
• 6:07
  what people get paid, and as a result, we're more miserable,
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  because we're more likely to assume that somebody is overpaid
• 6:13
  or somebody else is underpaid, etc. But when you can point to
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  the system and go, here's how we determine everybody's salary,
• 6:19
  and you know, it's fair, and now you can trust us, there's
• 6:21
  actually a huge increase that happens in morale, because
• 6:24
  people believe that if they work hard and provide value, they'll
• 6:26
  get some of that value in return. Now they're directed at
• 6:29
  the formula or the algorithm we're using to determine pay,
• 6:31
  and not Larry, who's been here 10 years, but doesn't work as
• 6:34
  hard as I think I work, you know, on day one, etc. So now we
• 6:37
  can have a much more realistic conversation about, okay, well,
• 6:40
  we weighted experience at, let's say, 30% of the formula, and you
• 6:44
  think it should be weighted less, because you think if you
• 6:45
  bring them more, that's this is a conversation we can have now
• 6:48
  in a secrecy condition. You have no recourse. You might know that
• 6:51
  Larry gets paid more because he's been around 10 years, but
• 6:53
  you can't bring that up with anybody because you're not
• 6:55
  supposed to talk about it. So it might not make everybody happy,
• 6:58
  but at least we can have an open conversation, and we can make
• 7:01
  refinements to the system when there's a kind of a consensus
• 7:04
  that you're right. We overweighted something or
• 7:06
  underweighted something in our formula.
• 7:07
  Host: Do you put executives in the same category?
• 7:11
  David Burkus: So some of it is public. What's interesting is,
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  with stock options and things like that, it actually is a
• 7:15
  little more murky than it than it should be. And I think you
• 7:18
  know, the best way to answer that question is to say that I
• 7:20
  don't actually advocate that companies go from zero to full
• 7:23
  transparency right away. There's sort of a sliding scale, right?
• 7:26
  And so you might be in in total secrecy. And if you can take the
• 7:29
  step to going, well, here's how we determine how everyone gets
• 7:31
  paid, and we'll share the formula. And I mean, if you
• 7:34
  wanted to plug in the numbers and do the math, you could, but
• 7:36
  at least you know there is a uniform system. That's a pretty
• 7:39
  big improvement. And that's that's a lot to ask of people to
• 7:42
  adjust to in the course of a year or two years. So just take
• 7:44
  that first step, and then if you feel like you need more, take
• 7:47
  the next step very I don't think a lot of companies can manage
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  the transition to sort of full on transparency, especially for
• 7:53
  that reason, but I think everybody can take a step
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  towards it and benefit from it. The culture of sales is actually
• 7:58
  a really good example. There's sort of that friendly rivalry
• 8:01
  that goes on. You know that so and so got paid more than you,
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  but you also know that you can point to what they're getting
• 8:05
  commissioned on and that they produced more, and it creates
• 8:08
  kind of a friendly rivalry that I think is good. I think when
• 8:11
  it's not a friendly a rivalry is definitely a bad thing. But
• 8:13
  sales is a great example of it sort of working pretty well.
• 8:17
  Host: Are you finding that most companies are resistant to this
• 8:19
  stuff?
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  David Burkus: So there's 13 practices in the book, lucky
• 8:24
  number 13, which really came about from the process of
• 8:26
  elimination. That was definitely not a goal. And I've yet to find
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  a company that does all 13, some all out of New York City. Dane
• 8:35
  Atkinson is their founder and CEO. They do I think eight of
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  the 13 practices. And really that's because there's no I
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  would love to be that consultant that's got kind of the four box
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  model and the slide deck, and I can travel around and be like,
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  this is perfect. Every company is a little bit different,
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  right? So you've got to kind of tailor it. So, you know, I don't
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  say everybody should do all of these. The goal is to kind of
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  show, here's why it works in a very public, sort of famous
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  example, like in Netflix. Here's the science behind it. Here's a
• 9:01
  couple other smaller examples of companies that are in line with
• 9:04
  it. And if you feel like it's right for you, this would give
• 9:06
  you a place to sort of try it. The one thing I advocate almost
• 9:10
  every company begin to adopt is set limits on their email right
• 9:14
  there. We're in this 24/7 world, and I think it's killing us, so
• 9:18
  I think we need to either set limits on evenings and weekends,
• 9:22
  giving those back to people, or even setting hours in the day,
• 9:25
  like from 10 to two, we don't do internal email because that's
• 9:27
  when our people are focusing in on the work. I think that's one
• 9:30
  that almost any company should should really think about, is,
• 9:33
  are we overloading our people with too much communication
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  because of email? So a lot of it has to do with settings, right?
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  And one of the things I actually love about Slack is the very
• 9:42
  first time I ever used it, about two or three days in, it
• 9:45
  actually said you're getting too many notifications. So we're
• 9:48
  gonna scale it down a bit, which I love, right? Because it's,
• 9:51
  it's the anti email, right? And that's really, that's really the
• 9:54
  issue is, what are we gonna do to our settings? We switch it
• 9:56
  over to slack. That's great. We could keep it as email the
• 9:59
  different. Says we've got to, as a company and as a culture, kind
• 10:02
  of say, what are our communication times, and what
• 10:05
  are the times where we have off to focus on the, you know, as
• 10:07
  Cal Newport would say deep work, or what are the times we have to
• 10:10
  focus on friends and family, et cetera? So that's the biggest
• 10:13
  thing is, is making it a choice when people go to the well to
• 10:16
  drink and to communicate, but also setting limits on when, as
• 10:20
  a whole company, we decide these are off limits times.
• 10:23
  Host: Yeah, that's, I mean, that's pretty out there. So you
• 10:25
  mentioned there is a line, it's about the reinvention.
• 10:28
  David Burkus: Yeah, great, great leaders don't innovate the
• 10:30
  product, they innovate the factory.
• 10:32
  Host: Yes. So say the line again and then tell us what it means.
• 10:36
  David Burkus: So great, great leaders don't innovate the
• 10:37
  product, they innovate the factory. And yes, obviously
• 10:41
  great companies are built on innovative products and
• 10:43
  services, but those are the result of great leaders looking
• 10:47
  at, what are the ways that we're structuring our company, what
• 10:49
  are the ways that we're leading and managing our people? Our
• 10:52
  people are going to create the innovations. And so what we as
• 10:54
  leaders need to do is innovate the way that we're letting them
• 10:58
  work. You know, I opened the book, I opened under management,
• 11:00
  with the story of Frederick Taylor, who sort of invented the
• 11:02
  first management Bible, if you will. And really was that
• 11:07
  epitome of, kind of the micro managing manager got a lot of
• 11:10
  efficiency done, but kind of drained the soul of it. And ever
• 11:13
  since then, the great leaders have been finding ways to
• 11:15
  reinvent sort of his work for their specific company. And as
• 11:18
  we get to doing more creativity and innovative work. We need
• 11:22
  more and more people looking at what works and what doesn't work
• 11:25
  for management literature, and being willing to innovate their
• 11:27
  practices so that their people can be innovative. Okay, how do
• 11:30
  I innovate the factory? How do I know which one to tackle? I
• 11:33
  think leaders should be especially for large
• 11:35
  organizations and big bureaucratic organizations, but
• 11:38
  also entrepreneurs who are kind of using their old companies as
• 11:42
  a model for how to run their new company. Should be in the
• 11:44
  business of elimination. In other words, like the number one
• 11:47
  piece of advice I give to leaders and the managers is
• 11:49
  figure out what are the things that are blocking your people
• 11:52
  from doing best, their best work. It might be the vacation
• 11:55
  policy, it might be email, it might actually be the secrecy
• 11:58
  culture, whatever it is, and eliminate that. And so that's
• 12:01
  one of the reasons I say that it doesn't, not all of it works for
• 12:03
  everybody, because some companies didn't need to
• 12:05
  eliminate it in the first place. But that's really what I think
• 12:07
  leaders should be about, is what's keeping my people from
• 12:10
  doing their best work, and then how do I eliminate it or negate
• 12:12
  it?
• 12:13
  Host: I think one thing that every leader who's listening has
• 12:16
  to ask themselves is, what is leadership going to look like in
• 12:19
  the future? What do you think are some of the next big
• 12:21
  changes, and what would you tell leaders in terms of what they
• 12:25
  can be doing to prepare for what's coming? Because things
• 12:29
  are changing so so freaking fast?
• 12:31
  David Burkus: So there's a couple things to unpack there.
• 12:33
  So to kind of answer the second part of the question. First one
• 12:37
  of the things I wish I wrote, I wish great leaders don't
• 12:40
  innovate the product they innovate the factory was my
• 12:41
  idea, but it stains so stains. But one of the things I wish I'd
• 12:43
  thought of before the book was published is someone said it to
• 12:48
  me this way, that the future is already here. It's just not
• 12:50
  evenly dispersed. And that's really what a lot of these
• 12:53
  practices are. They are glimpses at this is where the future of
• 12:56
  work is headed, because it's being demonstrated by those
• 12:59
  companies. And so take a look at them, and you might want to sort
• 13:02
  of turn your nose and go, that would never work here. Well, it
• 13:05
  might, but no one may end up working here if we don't make
• 13:08
  some of these changes. The other question really speaks to clay
• 13:12
  Christensen's work on the innovators dilemma, the idea
• 13:14
  that companies like Netflix get big because they noticed a small
• 13:19
  part of the market that bigger company said, and it's not worth
• 13:22
  it, right? Netflix actually attempted to get bought by
• 13:25
  blockbuster, right? Attempted to say, like, We'll handle all of
• 13:28
  your what will be your online demand for movies and
• 13:30
  blockbusters like, that's not worth it, right? Now, we're
• 13:33
  making way too much money in these retail stores, so it
• 13:35
  wasn't worth them investing in. But to a small company, that
• 13:38
  little niche of the market is enough to sustain themselves,
• 13:41
  and then they use that niche to scale up and to and to move up
• 13:45
  market, as Clay Christensen would say. And so that's the
• 13:48
  biggest piece of advice for leaders in big established
• 13:50
  companies, is don't neglect those small things that might
• 13:53
  might look like they have a justifiable ROI if you can kind
• 13:57
  of break even on it, but still establish a foothold, you'll
• 13:59
  have a better sense of where the market is going, and you'll be
• 14:02
  able to sort of adjust with it. It's the companies that do that
• 14:05
  that's that have sort of Netflix insurance, right? Because they
• 14:08
  already do have a foothold in that area. So when the market
• 14:10
  shifts that way, they can make the pivot way easier than a
• 14:13
  company like Blockbuster that's just been ignoring it for
• 14:15
  decades.
• 14:16
  Host: So if there's one thing people could take action on,
• 14:18
  right? Action catalyst podcast is like, what is something that
• 14:23
  we can do now to prepare ourselves or to better ourselves
• 14:27
  as leaders? If there was, like, an idea or a practice or
• 14:31
  principle that we could we could do today to prepare for, you
• 14:34
  know, what may be a completely new set of management
• 14:37
  philosophies and beliefs coming out in the next few years, what
• 14:40
  would that be?
• 14:41
  David Burkus: So I'll give you a small scale one. I mean, the big
• 14:44
  one is great leaders don't innovate the product, they
• 14:46
  innovate the factory. But the small scale one that really sort
• 14:48
  of changed my life as we were talking about email and not
• 14:51
  being on all the time. And one of the things that I did was I
• 14:54
  developed a two device strategy, so I have an iPhone and I have
• 14:57
  an iPad Mini, and when I get home from work. I switched them
• 15:00
  out. And the difference is, the iPad Mini is just entertainment
• 15:04
  and friends social media. It's nothing work related. And it's
• 15:07
  been amazing. Just that ability, that physical routine of
• 15:10
  switching them out and telling myself I'm officially off for
• 15:12
  the next few hours and it's time with friends and family has been
• 15:15
  huge for resting and re energizing, so that the next
• 15:19
  day, when I wake up and I take my work one I'm far more focused
• 15:23
  and more able to get everything done which is, which is awesome.
• 15:26
  Been a huge decrease in stress, increase in productivity. And
• 15:29
  it's weird because it's sort of the anti tech solution. But I
• 15:32
  think the future of work is really having to figure that
• 15:34
  out. How do we not be always on so we can do that deep work that
• 15:37
  creates value?
• 15:38
  Host: Very cool. DavidBurkus.com, and David, we
• 15:42
  appreciate you pushing the envelope here.
• 15:44
  David Burkus: Love it. Love it. Thank you so much for having me.