Latest / The Action Catalyst / The Octopus Organization, with Phil Le-Brun | (Leadership, Teams, Technology, Strategy)

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The Octopus Organization, with Phil Le-Brun | (Leadership, Teams, Technology, Strategy) · The Action Catalyst

• 0:00
  Adam Outland: Today's guest is Phil Le-Brun, a former corporate VP and international CIO at McDonald's, leading the consolidation and modernization of technology across 38,000 restaurants in 120 countries. He's now an executive leader at Amazon Web Services, and his book, The Octopus Organization, is out now. Phil, welcome. And I always like to start a little bit early in life. I mean, when you were a young man, did you have inclination that you'd be in technology for a career?
• 0:31
  Phil Le-Brun: Yes and no. As a kid, as a 10 year old, my uncle taught me to program on a Sinclair ZX One, and that was fascinating. You're typing commands into a keyboard and suddenly magic happens on the screen, and I also go into electronics, mainly from I took everything to pieces in the house, which sort of annoyed my mother, but then I go into building staff. It was fun, so I thought I'd do electrical engineering as a bachelor's degree, and not realizing it was 90% maths and 10% management theory. Yeah, I think since I was 10, I've been fascinated with computers, building them, playing with them, programming, and such, like, you know, especially today, it's so easy to get into it, and, and we talk a lot about this in our day job, it's just like we often talk about the lack of imagination in businesses, but we create constructs which don't allow people to imagine you look at how a child pair plays, just like I did with a computer, and you can do anything now.
• 1:26
  Adam Outland: 100% rate, life starts out with a lot of curiosity, and sometimes that curiosity is dismantling toys and rebuilding them, but it can manifest in a lot of ways.
• 1:36
  Phil Le-Brun: Yeah, well, and it's one of the things we found while we were writing the book, is you know, curiosity is so key to businesses today, but you know, if you're a preschool edge child, you ask up to 107 questions an hour. When you're a young adult, it's two to three. We actually train people to have answers, not questions, in a world where a lot of the answers don't exist yet. So it's funny, you know, we talk about almost going back to your childhood and the things that you did as a child, you wanted to own stuff, you, you were curious about stuff, you wanted to know why something was important, a clarity, ownership, curiosity, they were all really important. We sort of lose that as we grow older.
• 2:11
  Adam Outland: Were there any light bulbs for you during your college experience that gave you more direction and clarity?
• 2:17
  Phil Le-Brun: Well, that did my MBA, which was actually really insightful. Is less, we find a lot of MBAs are teaching people to run 19th century factories. What was, and this is more common in the US, but what was interesting about the exec MBA here was it was based on action learning. So, yes, you learn stuff, but you learn to learn, so you're actually that's one of those skills which you're never going to not need in the future. What I found being a technologist was, you could be the best technologist in the world. It didn't matter if you can bring people along with you, and bringing people along with you, it's really, really hard, because you work in complex systems. So, that was really informative to me. It just changed my mindset about how to think about change. But I think the thing that permeates my career is just that curiosity is just, there's so much to learn. I mean, people should come into work excited all about all the opportunities they have to learn and to do
• 3:06
  some amazing things.
• 3:07
  Adam Outland: Well said. You've obviously written an outstanding book, The Octopus Organization, and it is chock full. I mean, every chapter has a pretty significant lesson or an anti-lesson. Tell me, how you came up with that.
• 3:21
  Phil Le-Brun: Anti-patterns are formulaic conditioned responses to a problem. For instance, a new CEO comes into a multinational company, and it seems perfectly logical to say, "Let's centralize everything, because it's going to be more efficient, and efficient is good. And yet, what happens is they create this massive bottleneck and pretend that every business unit is the same. So we started to write about it, and we came up with this metaphor of the Tin Man, representing older organizations, and the octopus being a sort of biological metaphor. You're very curious, two thirds of its neurons are in its arms, so it's decentralized. It's survived without any major structural change for over two 50 million years. I thought, actually, that's how we want our organizations to be. Some of this comes from my background. I spent 31 years at McDonald's Corporation, and when I started to work in the corporate organization, we had a CEO who kicked off a couple of initiatives
• 4:14
  with cool names, because every failure needs a cool name. So, one was called Store of the Future, the other was called Project Innovate. Yeah, there was an attempt across 120 countries in McDonald's to standardize stuff, and it's sort of, if you're in a restaurant, there's a way of cooking fries, you know, when you're cooking 70 million fries a day, you want that sort of manufacturing approach, but when you're running payroll, which varies across countries, or marketing campaigns, or even thinking about food and the food customers want to, it's very, very different. So, let's figure out what the countries had in common and build that, so they could really focus on what made them different and special. And you know, the term, and this, some of this came from the work I did with Open University. The term global purely means, look, this I. Argument about, do I decentralize or do I centralize? It's a binary conversation. The answer is you do both things, which are truly common,
• 5:09
  centralize those. Maybe you need specialist skills, which are expensive, maybe you get true economies of scale, but then the things which are different decentralize those, and it's hard because typically a corporate headquarters will look at an organization and say 90% of what we do is common. Well, if you're in a business unit, you'll say 90% of what we do is unique. So, a lot of this is about the conversation you have, but that global approach is really about finding the best of both worlds, between globalization for efficiency and scale, and in the case with McDonald's, things like brand imagery versus decentralization, which is really important when you want to be agile. I mean, if you take a country like France, believe it or not, France, McDonald's in France had some of the biggest spikes in demand around dinner and lunch. It was a cool place for kids to hang out, that all the sandals that wasn't a pattern you found in Germany. Even sort of consumer
• 6:00
  behavior differs, and it's easy to say all European countries are like this, or all all US states are like this, but the reality is it's actually quite hard work to figure out. Okay, where are the true commonalities, putting away, putting aside your biases from the seat you sit in.
• 6:16
  Adam Outland: So your career was actually at McDonald's, starting with the developing manager role, and then ending, I think, with...
• 6:22
  Phil Le-Brun: My last two roles, I was the international CIO, looking after 119 countries for technology, and then I led the supply chain, data innovation, and restaurant system. So it's still my claim to fame is, you can walk into any of the 40,000 restaurants around the world, you'll touch technology my team built. Little known fact, because it doesn't say this on my LinkedIn, is I was at McDonald's 31 years, and what the seven years aren't on there. When I was at school and university, I worked in the restaurants, which actually I say that because we spoke to a former CEO of PepsiCo, she's an Amazon board member now, and she talks about two attributes leaders need is the ability to story tell and to story tell you really have to understand your business and the other is curiosity what really happens in your business and she used to go out with truck drivers delivering Pepsi and such like to sort of ground herself in what worked and what didn't work and same policy at
• 7:17
  McDonald's we used to spend minimally a day a year in the stores, because you're sitting in your office, coming up with all these great ideas. Then you go and see what happens at the front line. I think didn't even know that happened, but just getting back to the front line of your own business. We don't see enough leaders do that. It is really hard in an organization that builds such deep psychological safety, particularly when you're near the top, where you can have candid conversations. I was lucky. I had a leadership team, which was pretty open, and the reason we could be open is because we're all aligned against the same mission. We all knew the opportunity ahead of us, personally and professionally, if we could pull off some of the things we did, and that really helped, because it wasn't about I need to prove myself versus you. It's about we've got a big challenge here. We're either going to do this together or we can't do it all. So that actually
• 8:08
  helped create some psychological safety and candor in the team.
• 8:11
  Adam Outland: Through your time at McDonald's, Amazon, what did you notice that so many other companies and organizations needed? I mean, if you took all of these anti patterns, and you had to reduce it to, like, here are a couple of the ones that are probably the most pertinent today.
• 8:29
  Phil Le-Brun: A lot of it starts with, with a couple of things. One is clarity, simply clarity, you know. Why are we here? If anyone's watched the film The Founder, about the founding of McDonald's, you know, generally it was accurate, and in one scene there, there was a lot of arguments going on about what was McDonald's, is it a franchise company, is it a real estate company, is it a food restaurant company, and it sounds trite because people from the outside would probably say, well, it's a restaurant company, well, really it's a franchise company, but we see a lot of organizations struggle with our identity unless there's complete clarity about why do we exist. What does good look like? What are the priorities? What are we really intently going to focus on, and what are we going to ignore? It's really hard to be successful. It's really hard to unify a leadership team. The second one is shadow of a leader. Leadership has never been more important. Leadership is different
• 9:23
  in many cases now, or needs to be different, but what you do and say as a leader are often at odds with each other, you know. If I say we're going to be a data-enabled organization, and then I immediately say, well, I've been here 20 years and I know what we need to do, I that doing saying gap just pretty much devastates your message, or if I don't ask questions, I'm sending a message that I know the answers. Curiosity isn't valued in this organization. So one of the things we were privileged to witness as we talked to people like Indra Bernardetto Vigna at Ferrari, the CEO of Ferrari, Dame Julia Hogger, the CEO of the London Stock Exchange, is. They all had some characteristics. They were humble. They had no pretense that they knew all of the answers. If you met them in the street and you didn't know who they were, you wouldn't believe they were CEOs of major organizations. They were hungry. They were never satisfied. They were always pushing to do
• 10:16
  better themselves and their organization, but they were also smart from an EQ perspective, they knew how to build teams. Dame Julia used to every Monday bring her leadership team together and go around the room, and she'd listen, you know, what's on people's minds, what's working, what isn't working, to stay grounded. But she did that in such a way that people wanted to share what wasn't working, because that's really hard, because you know we train a lot of leaders just to give all the good news, not the bad news.
• 10:45
  Adam Outland: Yeah. You talk about gaming budgets.
• 10:50
  Phil Le-Brun: Well, you know, it's easy, isn't it? I predict to spend $10.62 million this year, and I'll tell you that September last year, by the end of the year, I would have spent $10.62 million because if I spend too little, I'm not going to get as much money. If I spend too much, I'm going to get beaten up. And the irony is, we take budget decisions at the point of least information, and we also commit them to projects when we have the least amount of information at the start. So the interesting thing is, when we say this to executives, no one's kidding themselves. They know they do this. We learned something from Annie Duke, the one of the top female poker players in the world, Doctor of Decision Science, and she says, "You know, firstly, start talking in ranges, because as soon as I say 10.6 2 million, it's such conviction, it's a number with decimal points, I know it's going to be right. I sort of feel obligated to hit it, as opposed to, hey, I think I'm going to
• 11:46
  spend between 10 and $12 million but it's decisionable, you know. Six months into the year, I'm trending towards the 12 million, maybe I cut something if we need to save money, but just using ranges helps communicate the fact that, look, there is a degree of uncertainty in this. Secondly, you know, allocate small budgets to small initiatives, see if they get legs. So take a bit more of a venture capital, you know, series A, series B funding for an initiative. So rather than say, hey, we're going to commit $20 billion to a transformation over the next five years, it's like, well, let's think big, but what is the first big issue we need to tackle? Can we make progress there? So, rather than commit in concrete the figure, a long-term figure, just set an expectation that you are going to reallocate money, depending how things going, and that's not a bad thing. The problem, I think a lot leaders have is they build their sense of worth around their title, their budget, and
• 12:46
  the number of people, all brilliant predictors of absolutely nothing.
• 12:50
  Adam Outland: Nothing. You know, as you're saying that, I think of the difference between small and big business, and what you lose as you scale. So many companies lose that flexibility, and what I hear you saying is you find ways to remain flexible within your systems, so that you can act small, even if you're big.
• 13:11
  Phil Le-Brun: 100%. I mean, Amazon, we describe ourselves as the world's biggest startup, yet we try and act as if we're still a startup. We have our two pizza teams, small teams oriented towards business outcomes, a lot of decentralized decision making, and such like, but it takes effort. I mean, bureaucracy creeps into organizations, it's natural, it's just if you do nothing, bureaucracy will creep in, someone will have a bit of time on their hands, someone makes a mistake, that person with time on their hands will immediately put a process in place. We create this scar tissue in organizations, it, we 1% of the employees make a mistake, and we penalize the other 99% break some of that down, even asking questions about why does this process exist, and if you get the answer, well, we've always done it this way, that's not good enough, particularly in an agentic era, where rather than say, how can we make the 60 day expense approval process 10% more efficient, why don't
• 14:06
  we just automate it and make it a three minute expense process for 99% of our employees. So, a lot of this is about how do we reimagine what we do, how do we get back to some of those startup roots not become a startup, but some of the fact that startups don't have a lot of resource, they don't have a lot of time, money, energy in the subs, so that really, really focused on what matters. I think it was organizations become big, you set up a project management office, guess what, they do as much project management as they can, set up an IT function, they'll build as much technology as they can. They're not doing anything wrong. This is how we've set up these 19th century constructs in organizations, and we optimize them. Consequently, so we optimize within it and within PMO and with marketing, rather than looking at how value is really created in the organization.
• 14:56
  Adam Outland: In your journey, you talk about a little bit, like, what are some of the biggest mistakes leaders make in their journey of transformation, and I want to ask Phil, because so many people listen to folks that we interview, and they go, "this is the person that always got it right, and we all know that's not true intrinsically. It's like, you know, you had to progress through some risk and failure in order to succeed, and you know, the big lesson that we want our listeners to continue to hear in every interview is that failure is the opposite of a bad thing, as long as there's a lesson to it. So, for you, what were some of your, your failures, or what were some of the learning moments that you've experienced?
• 15:34
  Phil Le-Brun: I don't think I've ever failed at anything. I'm joking. Often we'll ask leaders, you know, how many of you got promoted for failing often, so failing isn't the outcome we're looking for. What we are looking for is how quickly do you learn, and when you learn, are you prepared to make a different decision as a consequence. And we talk about learning velocity in organizations. There's a really good health check about whether that company will be successful or not. And often what prevents us learning is all those dependencies and governance meetings, and the very diffused, diffuse accountability. Everyone's involved, but no one's accountable. Yeah, I've made a ton of mistakes when we started our digital acceleration at McDonald's. I mean, we, we ended on a high note at the start of the year. The CEO said he wanted 20,000 restaurants on e-commerce and mobile order, and pay 8000 restaurants with home delivery, 1000s of restaurants with a new service experience. And
• 16:28
  our reaction at the time, this is impossible. This is a company that takes 10 to 20 years to do this at scale, and with all the normal reasons, yeah, we're franchise at decision making slow, we don't have the money, but what was magic about that was the clarity of what was important that year, which is often really hard to find in organizations, but to do that, yeah, we had to embrace this, this mantra of progress over perfection, run this idea that we're going to spend the first two years come up with a project plan, we had to get on with it, so we knew we were going to make mistakes. I remember talking to my boss's boss and said, "Yeah, everything's going fine. It was a Sunday, just probably tells you about the McDonald's culture. He called me on a Sunday. Everything's going fine. 15 minutes later, the entire e-commerce infrastructure in the US collapsed, and it was just like, "Whoops. I had to explain this to the CEO, but it was actually a really good conversation, because
• 17:24
  look, we could spend 10 times as much at this early stage of e-commerce adoption, but one to two customers a day are using e-commerce in a restaurant, or we could say, look, these things are going to happen, let's move quickly, get the functionality right, and then scale the financials in line with demand, so what I learned from that was, firstly, how do you communicate to senior leaders about the options they have, which often they feel disempowered with technology. You give them options they can control. For me, it was about focus. I, after that, we put a lot more focus. We pulled in our 18 players. We have daily war rooms, it's often the hardest decision a leader can make is what are you going to stop doing, and if we're going to achieve these big goals, we have to stop a lot of other things, because we had to pull our best talent into, in the into these initiatives. We did a lot of amazing things, but it's I learned about the power of bringing people along on the
• 18:19
  journey. It feels slower, but every time I tried to move fast without doing that, people wouldn't follow you, you wouldn't be successful. So I could go on, and we could spend, you know, maybe there's a 10 part podcast you can do here with Phil's mistakes.
• 18:33
  Adam Outland: Well, you know, as you're speaking to that, I think of the speed of change. There is such a thing as change fatigue inside of an organization, too, right?
• 18:44
  Phil Le-Brun: Yeah, absolutely. It's we, we truly believe within Amazon, speed is one of the last competitive advantages. We even have leadership principles around it. So, one of our leadership principles, and leadership principles, we have 16 of them. They're not website decoration, we use them for hiring, promotions, they've become part of everyday language, so I could say, "Hey, Adam, thank you for your customer obsession leadership principle. Hey Adam, is this the most frugal thing we could be doing with our time leadership? It's a leadership principle. So the acid test for me with leadership principles is to have they permeated everyday language, one of those leadership principles is a bias fraction. So, we believe we should be making decisions when we have 70% of the information, not 90, because if you wait for 90, you're moving too slowly. But another leadership principle is leaders are right a lot, and what that actually means is we know we've taken decisions
• 19:39
  quickly. We will look for disconfirming information through an initiative, and if we find our decision was wrong, we will change our minds. So, by the end of an initiative, leaders are right a lot, but yeah, there's only so much you can pump through a system at any point in time. I think the job, in terms of how do you evolve an organization, is how do you make. Minimize all of the work that doesn't contribute to customer value. If I added one additional resource to my organization, how can I get that one resource to focus 99% of their job on delivering value, not 50% of their job doing business as usual, keeping the lights on type stuff. So there's always that push in Amazon to do more, but I think it's healthy because it forces us to get rid of that undifferentiated work, but what we find is probably 95% of decisions are made too high in the organization, and not only does that slow speed down, and speed means if you can do something fast, if I can get a product into the
• 20:36
  hands of a customer in days, I can figure out whether it's the right thing to do in days, I can then change my mind or scale it in days, as opposed to going through 48 governance meetings, but I think the other important thing, this idea of agency, if I've asked you to go and run a product, but every other decision you need to come to me, you don't feel any agency, you don't feel ownership, I'm basically telling you what to do and how to do it. What I should be doing as a leader is explaining why something's important, explaining the problem that needs to be solved, and then letting you get on with it. And to do that, I need to make sure you're equipped to make as many decisions as possible, knowing that within guardrails some of those decisions may be pretty significant, and other people need to weigh in, but if that's 50% of the decisions, then something's wrong with the team structure, or hiring, or the leader, or whatever.
• 21:30
  Adam Outland: You know, and I'm, I'm curious, you know, in your journey, what did you do to make sure that line of communication was was as honest as it could be about how you led?
• 21:40
  Phil Le-Brun: Yeah, I think, firstly, there's a lot of misconceptions about feedback. First, we do it badly in most organizations. Most feedback stored up for the annual performance review. It feels like a corporate colonoscopy. It's unpleasant. It happens once a year, and you just want to get it over with and forget about it. If you make it part of your everyday ritual, it's very different. Literally, you know, make it a habit, say every day, give someone feedback or ask for feedback. How you receive it's really important. I mean, the best way of receiving feedback is just simply to say thank you, or ask questions, just to better understand rather than get defensive. You can give anyone feedback anytime, but there's a right way, right place, and right time to do it, so it's also teaching people you're giving feedback, doesn't mean you've got a free for all to say anything, you know, it's not an excuse to be an idiot, but a lot of this is role modeling it, a lot of it is also
• 22:36
  getting people to understand why this is important, the fact that we know from studies in psychological safety that if you don't have psychological safety, which requires feedback, then you can't innovate effectively. You can't move fast, and the such like the other thing that really works is take the personality out of this, either attack a problem rather than each other, and or make it a little formal leg. Hey Adam, when you do this, this is how it makes me feel. Have you thought about doing this instead? When we do this, it's because we see the potential, the potential in each other, and we want each other to be a better version of ourselves. It's not about criticism, it's about the fact we care enough that we want to develop each other. So, even phrasing it like that, why am I giving this feedback? Because I believe in you. I know you've got more in you, and by the way, if someone doesn't point out some of these problems, you're probably blind to them.
• 23:32
  Adam Outland: You know, one of your anti-patterns that I, I wanted to touch on is ownership. It's something that that's been a big buzzword in, you know, extreme ownership, and you know the idea of getting ownership, and you know, I think there's some truth to every cliche or every pattern that's become popular. You mentioned this idea of granting artificial ownership, so talk about a little bit what that meant.
• 23:57
  Phil Le-Brun: So, Adam, I'm going to give you ownership of this initiative, just make sure you check in with me regularly. That decision you made last week on the product, I knew what the answer is, and you made a mistake. That's artificial ownership from a leader's perspective. I pretend that you have the agency to go and do something, but I criticize you for making decisions. I don't want you to make decisions. We encode it in the word empowerment. I'm going to lend you power, but at any point I can take it back again, which is why we tend to prefer the word agency. People want mastery of skills, they want the purpose, they want to know they're doing more than a job description, but they want the autonomy to practice their craft. They want, they don't want to be micromanaged, and especially knowledge work, I assume we hire intelligent people, so why do we put 42 levels of management on top of them to tell them how to do the job we hired them to do in the first place? You
• 24:52
  know, something's fundamentally wrong there, and by robbing people of agency, they don't feel a sense of ownership. You know, something goes wrong. Well, my boss told me to do this. If it's a wrong decision, it's not my decision. Decision, but you know, to give people this sense of ownership, not only do leaders need to let go, but people also need to be able to receive it too. So, it's not as simple as saying you've got ownership, go for it. It's, it's about helping them understand, you know, how do they embrace it, helping them make decisions. If they come to you and say, hey Adam, I've got a decision to make. What do you think I should do? You know, the right thing a leader should be doing is coaching. Is so, what have you thought about Phil? Yeah, what options have you gone through? Why did you eliminate some? So, and it feels sometimes a bit on leadership, because we talk a lot about mentoring. Yeah, I'm going to share my advice to you. The reality is,
• 25:47
  you know, especially in an era of agentic AI, and the such like, where we don't, we as leaders don't have the answers. A lot of this is helping your folks think through the problem themselves, and you turn them into the next generation of leaders. You ensure they keep that agency, you get them enthusiastic, you keep them enthusiastic, because they can see how what they do, what they own contributes to a bigger purpose. By telling them how to do it, you give them again no ownership, you deplete their curiosity, you shut down room for maybe there is a better way. And it's the old thing about if you want to prove you're an expert, teach. What does success look like? Why are we doing this? Who's the customer? What's been tried before? So it should also be a conversation around curiosity, asking questions about clarity, bringing clarity to what's trying to be achieved, and quite often we don't have all of those answers, so it actually requires a deeper level of
• 26:42
  introspection from the leader about, okay, what am I asking someone to take ownership of, but it's, it's, I find it fascinating how many people can't wait to get out of the office at 5o'clock and then they go home and they invest in a hobby, and that hobby doesn't typically earn the money, but there's a, there's a satisfaction they get from it, they put all of this time, which is valuable, into something because they feel that sense of ownership, they have clarity about what they're trying to do, and they're curious. This idea of building, I'm a builder, I like to build stuff. It's, it's not necessarily the end product, but it's that learning cycle you go through. Why can't we have that environment, the workplace can't just be a place to perform, it needs to be a place to learn. Otherwise, we're missing out on something incredible in all these individuals we have there.
• 27:32
  Adam Outland: Yeah, Phil, this has been a really eye-opening conversation for me, just to hear this in a different package, I think, in many ways from you, a young version of yourself, Phil. If you could go back in time and have a conversation, what kind of advice or reflection would you provide the young you?
• 27:51
  Phil Le-Brun: Things which I can share on a podcast, yeah....
• 27:55
  Adam Outland: Yeah, not so many pints, you know.
• 27:57
  Phil Le-Brun: Yeah, exactly. Don't smoke, and blah blah. I think it's just, and I was pretty good at this, but I think it's to say yes more. Most opportunity comes from saying yes. Risk is seen as negative now. Risk used to be seen as an opportunity, something in that risk was going to give us a new opportunity. So I'd say yes a lot more. I'd think a bit bigger too. I'm very proud of some of the incredible things I and my teams have done, but it's always a bit tentative, because you don't know how it's going to go down, so I would have thought bigger about the opportunities as well.
• 28:29
  Adam Outland: Well said, Phil. Thanks for giving us your time today. I could ask you a million other questions, but we'll pause here, and we'll do the 10 part series.
• 28:37
  Phil Le-Brun: Adam, thank you. It's been a pleasure talking to you. Can I invoice you now?
• 28:41
  Adam Outland: Yeah, exactly.