Latest / The Human Factor: Exploring the Intersection of Humanity, Technology, and Transformation / S2 Episode 11|024 The Growth Trap - What Scaling Reveals About the Human Side of Transformation

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S2 Episode 11|024 The Growth Trap - What Scaling Reveals About the Human Side of Transformation · The Human Factor: Exploring the Intersection of Humanity, Technology, and Transformation

• 0:05
  Something that most transformation conversations get
• 0:08
  fundamentally wrong. They assume the transformation
• 0:13
  is something that organizations do when they're struggling, when
• 0:17
  the market shifts, when the numbers decline, when the board
• 0:21
  starts asking uncomfortable questions.
• 0:26
  But there's a form of transformation that is far more
• 0:29
  psychologically complex than a turn around, and it happens
• 0:34
  inside organizations that are succeeding.
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  It's the transformation the growth itself demands, because
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  growth does not just change the numbers, it changes the identity
• 0:48
  of the organization. It changes what people were
• 0:52
  hired to do. It changes the implicit promises
• 0:57
  that were made about what working year would feel like.
• 1:02
  It changes the decision making speed that the cultural can
• 1:06
  tolerate. And it changes the relationship
• 1:10
  between the people who built the thing and the thing that it's
• 1:13
  becoming. Every stage of growth creates a
• 1:17
  new crisis that can't be solved with the approach that produced
• 1:22
  the original growth. And yet, well, the instinct of
• 1:26
  every leader inside that growth is to do more of what is
• 1:30
  working. Well, I'm not recognizing that
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  what has and is working is about to become the biggest
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  constraint. I'm Kevin Novak, CEO of 2040,
• 1:43
  digital professor at the University of Maryland and
• 1:46
  author of the book The Truth about Transformation, Leading in
• 1:50
  the Age of AI, Uncertainty and Human Complexity, along with the
• 1:56
  Ideas and Innovations Weekly newsletter.
• 1:59
  Welcome to the Human Factor podcast, the show that explores
• 2:03
  the intersection of humanity, technology, and transformation,
• 2:08
  along with the psychology behind transformation success.
• 2:13
  This is season 2. Today's guest.
• 2:16
  Well, you spent 20 years inside the pressures of scaling
• 2:21
  organizations, not theorizing about it, not consulting on it
• 2:27
  from the outside, actually building and operating inside
• 2:32
  organizations during the most intense periods of growth.
• 2:37
  From a startup that achieved 16 times top line growth before
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  being acquired by Three M to the international expansion strategy
• 2:46
  that contributed directly to a $1.2 billion acquisition.
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  He has been the person in the room when growth outpaces the
• 2:55
  organization's capacity to absorb it, when the culture that
• 3:00
  attracted early employees starts to fracture under the weight of
• 3:05
  new arrivals, and when the systems that produce success at
• 3:09
  one stage become the obstacles at the next.
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  Mike Peroni is a revenue and go to market leader who is operated
• 3:19
  across startup, growth and enterprise contacts.
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  He has served as Chief Operating Officer at Hypervent Systems.
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  He then served the COO at Content Raven during the early
• 3:32
  stage startup phase. And most recently, he built ETQ
• 3:37
  first indirect sales channel and international expansion as VP of
• 3:43
  EMEA Sales work that contributed to Hexagon's $1.2 billion
• 3:49
  acquisition of the organization. Not bad.
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  What makes Mike's perspective uniquely valuable for this
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  conversation is not just the growth that he's driven.
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  It is the pattern recognition that comes from having been
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  inside the human dynamics of scaling across multiple
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  organizations at different stages.
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  He is seeing what breaks when an organization scales faster than
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  its people can adapt. He has seen how early traction
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  gets misread, how organizational identity cracks under the
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  pressure of success, and how the very capabilities that create
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  growth become the constraints that prevent the next stage of
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  evolution. And, well, he has recently been
• 4:42
  articulating those patterns publicly.
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  He's been arguing that in the AI era, feature based
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  differentiation is dead in that the only defensible advantage is
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  proprietary insight data or execution velocity that
• 4:59
  compounds over time. Those are human systems.
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  Mike, welcome to the Human Factor podcast.
• 5:07
  Pleasure to be here, thanks for having me.
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  There I want to start with something that most growth stage
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  leaders never see coming because research predicts it.
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  But the experience of being inside the growth makes it
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  nearly invisible. In 1972, Larry Greiner published
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  a paper in Harvard Business Review called Evolution and
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  Revolution as Organizations Grow.
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  It's one of the most cited papers in organizational
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  development research. Greiner demonstrated that
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  organizations don't grow smoothly.
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  They pass through distinct stages, and each stage ends not
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  with a gradual transition, but with a crisis.
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  A crisis of leadership, a crisis of autonomy, a crisis of
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  control, a crisis of red tape. The critical insight is that
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  each crisis is produced by the success of the previous stage.
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  The management approach that created the growth is the same
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  approach that creates the current crisis.
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  The founders vision that launched the organization
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  becomes the bottleneck when it needs delegation, the delegation
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  that freed the organization. This scale creates coordination
• 6:28
  problems that demand completely new systems.
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  The systems that created the order become bureaucracy that
• 6:37
  stifles innovation. You have been through multiple
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  stages of this cycle, Mike, across Hypervent content, Raven,
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  and ETQ. Where have you seen human
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  dynamics of growth surprise leaders the most?
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  Not the strategic challenges, but the people dynamics, the
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  moments when the organization that the people joined is no
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  longer the organization they are inside and the approach that got
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  them there stops working. Like most things, Kevin, there's
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  good and bad, right, positive and negative that comes from
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  these situations. If we shift our focus to the
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  challenges, there's a ton of standard human behavior that you
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  can almost predict in terms of what you'll get for resistance
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  or, you know, the challenges in organizing a group of people
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  towards change to some sort of destination.
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  And so, you know, when I am in an organization where my job is
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  to effect and lead through change, I'm very quickly try and
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  understand where the resistance is.
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  There's always this kind of resistance.
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  And sometimes it can be disbelief, right?
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  I, I don't believe we can get where we're going.
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  I don't believe these actions will get us there, right?
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  People have opinions and beliefs.
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  And so I, I first try to understand where people's belief
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  systems are. That's the most challenging,
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  right? And I think you even see it in
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  today's, let's call it political climate where there's this bias
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  towards confirmation. And so when people have a
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  belief, they tend to go look for things that support that and
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  they reject things that are contrary to that.
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  So I generally put a big spotlight on that and it becomes
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  really clear where that resistance lies, where where
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  there is disbelief. Maybe it varies from person to
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  person, but generally speaking, if you go through a process of
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  understanding and getting them to admit a lot what their
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  beliefs or disbeliefs are, but then you can better align the
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  the collective objective you have to their personal
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  objectives. That's where I see beliefs start
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  to change, right? Where you can actually penetrate
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  that shield of this is my belief system, and therefore I'm going
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  to do everything consistent with that and nothing inconsistent
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  with that. So how have you seen like how
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  have you seen leaders handle that situation?
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  So are there so and it's actually got 2 questions there.
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  So are there different techniques that you use to help
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  break down that resistance to better understand from people
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  what that resistance? Is yeah, great question.
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  I think the very first thing that I've seen effective leaders
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  do is work really hard, but also patiently to ensure the vision,
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  right? The so-called destination is
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  crystal clear to a person. And then once that is clear, and
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  you will, I've seen them ask and I've done this myself, start to
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  solicit help, right? So here's the vision.
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  Here's what I think we should do.
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  First, you bring everyone together and you lead the
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  discussion towards how we're going to do this, right?
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  Both being a bit of authoritative, right?
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  I'm, I'm kind of the final judge and jury here, but also being
• 10:30
  very open to hear, hearing different ideas and leveraging
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  different perspectives among your team, right?
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  And I think that that does set the right tone with everyone.
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  One, we're doing this. Two, we do need to be very
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  pragmatic about it. It's not about wild swings or
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  big strategies, which you know, frankly, some people like to do.
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  So bringing them down to a more grounded approach and then
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  listening to the ideas and not necessarily quickly accepting or
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  shutting them down, but to foster discussion.
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  And I think a really strong leader is going to be very aware
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  of where the room is emotionally, right?
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  Is this scary? Is this exciting?
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  Is it a mix of both? And then start to lead everyone
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  towards that kind of set of actions you think is going to
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  make the the group successful. And you know, you'll, you'll
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  start to hear where there is, there are perhaps better ideas
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  people are leaning in to actually focus on the problem
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  creatively. You'll also recognize where
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  people seem to be leaning in through hard questions and
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  challenges, but based on how effective those questions are,
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  you'll know if they're resistant or not, right.
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  So I I've seen that as the really good start, right?
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  It's to establish that framework.
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  Here's how we're going to have the discussion.
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  Here's what's non negotiable. One, we're doing it to the
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  vision. If you want to make it better,
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  go forward and open to ideas, but the visions, the vision.
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  So let's rally behind that. And then, you know, of course,
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  ensure it's grounded in a strong why for the business and you
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  know, perhaps start to tie that to some professional growth that
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  everyone that everyone can, you know, experience.
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  Well, yeah, 'cause a couple episodes ago with Ryan Vet
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  talking about Gen. Z particularly, one of their
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  biggest needs is to understand the why.
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  So they're good with authority, but they also need to, they feel
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  that they need to understand the why so they themselves can rally
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  behind it and better understand it.
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  So that's that's always an important point.
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  Yeah, for for sure. I mean, I think, I think it's
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  important to find your motivator to do anything right.
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  And so as a leader, it is important that you head down
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  that path to help people find their motivation.
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  Why is the best place to start? And then I think people will
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  naturally start to apply that to their own personal why?
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  How do these things align? And I, I do find that breaking
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  off into more individual conversations after that is
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  important because you can help people that maybe there is a gap
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  between, you know, the kind of group why and the personal why.
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  It also helps you know what one of the outcomes of this kind of
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  early step, Kevin, is that you, you start to, you start to find
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  that small group of champions, right of of the core group that
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  wants to propel this forward. And you may have people on the
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  periphery that are going to either resist or be slow to
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  join. But establishing that core group
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  and letting it come up naturally who it works for in terms of
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  motivation, who it works for in times of where they are in life,
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  But just let that happen naturally.
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  That group is a tide that lifts all ships.
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  And so you can double down on that small, that segment of the
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  group to help them connect that to their, you know, kind of
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  personal motivators, personal lies early on.
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  And that really does kind of take on a life of itself.
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  So like, you know, to, to the resistance.
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  So one of the things that I, I talk a lot about, I write a lot
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  about is Denise Rousseau's research on the psychological
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  contract of employment. And so, you know, just as some
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  information here, every employment relationship contains
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  an unwritten set of mutual expectations, and that goes far
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  beyond the job description of the compensation package.
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  People then join and then back to the comment about even Gen.
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  Z, they join because they're trying.
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  They're seeking some alignment to the organization and the
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  value that are aligned with their own values as an
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  individual. So they join with implicit
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  beliefs about what the culture will feel like, how decisions
• 15:22
  will be made, what the role will mean, and what growth looks like
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  for them personally. So when an organization scales
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  rapidly and A and a go to market transformation change, those
• 15:34
  implicit contracts are violated constantly.
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  Like not through anyone's attention, but through the
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  structural reality that the organization is changing faster
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  than the promises that made can be maintained.
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  So someone who has lived through this several times across your
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  career, how have you navigated the dynamic inside organizations
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  that you've scaled? Yeah, great.
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  Great question. Fundamentally, I think it's
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  built on culture, right? And I don't mean kind of fluffy
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  culture, I mean very specific. Here's what we believe are the
• 16:15
  behaviors that will lead us as a group to success, right.
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  And then ensuring that and holding accountable the team to
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  those behaviors, but also giving them making sure they have the
• 16:29
  tools and the access that they need to execute on that.
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  And I think once it, it does eliminate a lot of the ambiguity
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  that can exist in these unwritten contracts.
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  And I, and I do, I, I, I find that happens a lot in personal
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  relationships, not just business relationships.
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  So it's a, it's a very helpful skill to have, but being able to
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  communicate the behaviors that make and tying it directly to
• 16:57
  success, right. So, you know, I, I come from a
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  go to market world. I, I've done operations before,
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  but generally very revenue oriented.
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  And so the cultures I've built to have been in maybe almost
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  all, but you know, there's probably a few outliers in
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  almost all circumstances. Like I'm trying to build a
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  culture of performance, right? And then obviously performance
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  then allows people to take the success at work and then apply
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  it in some way appropriate to them into their personal life,
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  right? Success should be, should be
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  personal. It shouldn't be an obligation
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  that you work for company. You're doing it, of course that
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  is true. But you know what?
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  When the team starts to see the performance as a benefit to
• 17:54
  their personal lives or whether it's to care for your family or
• 17:59
  to travel or whatever it means to you.
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  Once you tie that together, which you know, often the the
• 18:09
  group will start to do on their own, a culture emerges.
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  And as a leader, it's important to find ways to make that
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  attainable. You know this call it SMART
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  goals, right? It's got to be specific.
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  You you've got to be able to like know if you're doing it or
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  not. It should be kind of time based,
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  but there's also a set of behaviors that I usually call
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  non negotiables, right? We, this isn't me being
• 18:38
  authoritative. This is saying this is what we
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  believe is a group are the behaviors that will lead to
• 18:44
  success. Therefore, we're going to hold
• 18:46
  ourselves accountable. So, so Mike, to the question
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  around that and you know, as you're coming in and helping a
• 18:57
  company grow, right? And, and to earlier point that I
• 19:03
  made where an organization is what it is related to its
• 19:09
  processes and so forth. And all of that is why they got
• 19:14
  to where they're at. But now they, they want to
• 19:17
  excel. So the, the wheels may fall off
• 19:20
  the car because new wheels need to be put on to go faster or to,
• 19:25
  you know, be more more adept. So how, how do you manage the
• 19:31
  changes related to what that performance was versus what the
• 19:37
  expectations of performance now are?
• 19:39
  Yeah, I've starts with transparency and documenting it.
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  And usually what you'll find is once you establish what good
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  looks like, or perhaps in this case what the new good looks
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  like, that's change. Period.
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  And change for many is very difficult.
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  And so I think being very transparent about what the
• 20:14
  opportunity is that's based in realism, what the, what the
• 20:18
  challenges and risks are, but also to start to separate what
• 20:23
  we have control over, IE we should focus on from what we
• 20:29
  don't have control over. So let's not spend time there.
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  So I, I, I have found as a tactic, separating signal from
• 20:39
  noise is an area people need help in, but also in, in that
• 20:45
  clarity of direction does minimize the, let's call it the
• 20:50
  internal turbulence that one can experience, right?
• 20:54
  So that that's kind of how I approach that, right?
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  Very transparent about what the current state is, very, very
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  transparent about the challenges and sometimes the risks that
• 21:05
  stand between US and that that success that we all want to
• 21:10
  achieve. And then you know that that can
• 21:14
  be serve as an onslaught of things we should do and being
• 21:19
  able to prioritize those and do it with the team so they have a
• 21:22
  sense of ownership is how I manage those situations where we
• 21:28
  are setting new performance goals, we are setting new
• 21:32
  activity expectations that we believe will lead to those.
• 21:35
  We are setting behavior standards that we are going to
• 21:39
  be disciplined and accountable to to a person including myself.
• 21:44
  And so that layer of transparency helps you achieve
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  and clarity help you achieve that.
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  But people also take personal responsibility for it.
• 21:54
  You don't want to manage through these periods.
• 21:56
  You want to lead and of course it some management is required.
• 22:01
  But when you give people the the tools to be self-directed in
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  concert with the goals and in concert with all of these
• 22:12
  standard operating behaviors that that we've I agreed to
• 22:18
  people to can then stop worrying about that.
• 22:22
  And then they put their focus on what they're perhaps uniquely
• 22:25
  qualified for. And so now they're accretive to
• 22:29
  the process versus being more of a drag where you're trying to
• 22:33
  pull them with you. And so that's, you know, that I
• 22:36
  mean just really, really good for Kevin.
• 22:40
  Do do you find that so is, is you're seeking the scale, right,
• 22:47
  seeking the scale companies and there's a lot of change and
• 22:50
  there's maybe often acceleration of those changes.
• 22:57
  Are are there people that get lost in that process?
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  Are there people that simply wind up unable to shift from
• 23:07
  that early stage in many ways mid stability to another round
• 23:13
  of growth that they're they sort of throw their hands up and
• 23:16
  like, OK, I'm done. Yeah, Pete, short answer is yes,
• 23:20
  people do get left behind. Unfortunately, sometimes that's
• 23:24
  a function of the change. There's no longer a fit, right?
• 23:29
  So you could take today's kind of AI context, the role roles
• 23:33
  are changing very rapidly. And so perhaps there isn't a new
• 23:38
  role for you in in an organization and you do get left
• 23:41
  behind despite your good intentions and attitudes.
• 23:45
  However, what I find is the people that get left behind are
• 23:50
  the ones that have some sort of fixed mindset.
• 23:55
  They're, they're not, they're trying to prevent the change or
• 23:59
  they're trying to hide from the change versus embracing it and
• 24:04
  then ultimately finding their way to influence it in an
• 24:07
  aligned way. Good for the company, good for
• 24:10
  my boss, good for my peers, and really good for me.
• 24:14
  And so now I'm going to push it in this direction.
• 24:16
  I mean, if you don't have, if you have a kind of fixed mindset
• 24:19
  on that, the chances of you getting left behind are are much
• 24:23
  higher. So let let me shift into
• 24:24
  something that I think Mike relates.
• 24:26
  So you've been writing publicly that it connects directly to to
• 24:32
  to identity that we talk a lot about.
• 24:36
  I talk on the show, I talk a lot about it in my writing.
• 24:40
  So you've argued that feature based differentiation is no
• 24:43
  longer a defensible mode in the AI era.
• 24:46
  Yeah. That capability, which once took
• 24:49
  months to build can now be replicated in days, and that
• 24:53
  only sustainable advantage is proprietary insight data or
• 24:57
  execution velocity that compounds over time.
• 25:01
  So that argument is presented as as a market strategy or
• 25:04
  obviously a go to market guy, but underneath it is one of the
• 25:08
  most profound organizational identity challenges any company
• 25:11
  can. Face.
• 25:12
  And Blayton Christensen's research on the Innovator's
• 25:16
  Dilemma demonstrated that organizations develop
• 25:19
  capabilities, processes, and values that define who they are,
• 25:24
  and those three elements become precisely what prevents them
• 25:27
  from adapting to disruptive change.
• 25:30
  Capabilities are embedded and what the organization knows how
• 25:33
  to do prior to your point, people become fixed mindset
• 25:38
  because they're so embedded in in those processes.
• 25:42
  And the values are embedded and what it decides it's worth
• 25:45
  doing. So when disruption arrives,
• 25:48
  you're, you come in as the go to market guy who's about the scale
• 25:51
  of the business. All three elements are
• 25:53
  conspiring to keep the organization doing what it's
• 25:56
  always done because that is what its identity is built around.
• 26:00
  So when you tell an organization that their product features are
• 26:03
  no longer their Moat, you're not just delivering A strategic
• 26:06
  insight, right? You're you're threatening their
• 26:09
  organizational identity. You're telling them that the
• 26:12
  thing they believe made them special no longer makes them
• 26:14
  special. So how have you seen
• 26:17
  organizations respond to that kind of identity thread and
• 26:21
  individuals as well? And and what does the response
• 26:24
  reveal about the relationship between identity and the
• 26:27
  capacity for for transformation? Yeah, great question.
• 26:32
  And let me preface it with we're in early days here as the
• 26:37
  software industry transforms in the error of AI.
• 26:41
  So I don't state these things as absolute conviction, rather the
• 26:46
  foundation from which we can all start to learn.
• 26:49
  So I, I think it's not a surprise to many organizations
• 26:54
  that differentiation is changing and that the software industry
• 27:00
  as a whole is changing. So we therefore must adapt.
• 27:03
  So a bit of a unique situation in this one, Kevin, because I
• 27:07
  think people are braced for it, right?
• 27:10
  However, I, I've been meeting with CEOs and founders from AI
• 27:16
  companies and SAS companies that are, you know, have now have
• 27:19
  agentic or some other type of AI capability, ML etcetera.
• 27:26
  And it's been a mix. But I, but I have recognized a
• 27:30
  little pattern as to their response and it's seems very
• 27:35
  correlated to the maturity of the company, right?
• 27:37
  So younger companies that are really the at the start of
• 27:42
  building their customer base, I think our they've already
• 27:46
  adopted this, this identity that, you know, we are going to
• 27:49
  differentiate differently. We're going to try to find a new
• 27:53
  way to solve an existing business problem that are
• 27:58
  faster, cheaper. And so a lot of ideas are and
• 28:02
  trends are emerging from that larger companies where they have
• 28:07
  a, an install base. And these are, you know, folks
• 28:11
  that I've I've spoken to, they're, they're, and these are
• 28:15
  leaders, right? So it's not necessarily the
• 28:17
  folks in the organization, but the leaders are a bit more
• 28:21
  cautious and questioning, rightfully so.
• 28:24
  And in fact, some of the best conversation that I've had have
• 28:28
  come out of that natural difference of opinion or, or the
• 28:32
  cautiousness that they're exploring and how incredulous
• 28:36
  they are about some of these outcomes that are, are
• 28:39
  predicted. And what I found is that every,
• 28:44
  every company is a bit different.
• 28:46
  And so as you start to drill into their specific world, their
• 28:52
  specific competitive landscape, their specific development and
• 28:59
  release pattern, and their specific ability to extract
• 29:05
  domain knowledge or innovation from its customer base.
• 29:10
  Once you drill drill into that level of specificity, there is
• 29:14
  usually some obvious low hanging fruit or concern that can get
• 29:19
  them started on that. And so instead of trying to gain
• 29:23
  belief in the bigger picture that yes, everything is changing
• 29:29
  about your organization, you can narrow it down to the 1-2 or
• 29:34
  three most obvious low hanging fruits of, you know, an
• 29:40
  organization. And that really just starts the
• 29:43
  ball moving. So they are starting to affect
• 29:45
  change. It's an obvious thing that let's
• 29:49
  just say everyone's going to agree needs to change.
• 29:52
  And then that will start to move you down the path where you've
• 29:56
  already loosened up that identity, right?
• 29:59
  Maybe with some more easy to implement high return
• 30:03
  situations. That's where I, you know, I do
• 30:05
  kind of a, a Gartner grid, like what's the, what's the top
• 30:08
  right? It's the most impactful and the
• 30:10
  easiest to, to execute on. Once you pick those, it just
• 30:15
  nudges the organization in that direction.
• 30:17
  And I and I do find that they typically start to lose that
• 30:20
  identity, you know, hold on identity.
• 30:24
  So something like a question. So a few weeks ago, I used Block
• 30:30
  and several other companies to bring up the, and actually many
• 30:37
  articles in the Wall Street Journal related to the AI hype
• 30:40
  in the market where companies, organizations are taking the
• 30:44
  opportunity to downsize and then using AI as an example, are our
• 30:49
  catalyst, right? And so are in your conversations
• 30:53
  that you're having with different CE OS, are you seeing
• 30:58
  that there's recognition that some people are taking or using
• 31:05
  AI as the opportunity and the the excuse opposed to the
• 31:09
  reality of what they may believe our company is able to
• 31:13
  transition to? Yeah.
• 31:16
  I think the answer to that lies fundamentally in the gap leaders
• 31:21
  are seeing between what the role is today and if we make that
• 31:30
  role, you know, 80% automated, how are we going to use 80% of
• 31:36
  their time? I don't know how to repurpose
• 31:39
  this resource. And so I haven't heard a lot of
• 31:44
  companies using it as an opportunity to call the herd, so
• 31:48
  to speak. I did speak to one resource
• 31:51
  margin constrained company that was going to take advantage of
• 31:56
  that, right. We're going to automate some
• 31:57
  stuff and then eliminate some headcount that'll bring our PNL
• 32:00
  back in line, at least conceptually.
• 32:03
  But more often I'm hearing from CEOs, they want to know how to
• 32:10
  how to gain competitive advantage from this, from this
• 32:13
  increased bandwidth. These are now available
• 32:16
  resources. And so they're not even sure
• 32:20
  really how to do that yet, let alone how to make the chain from
• 32:25
  this is our current set of roles and you know, our skills gap yet
• 32:30
  to where where we can start to add value.
• 32:32
  So we're we're really early in that from my conversations, but
• 32:38
  I think most people are just trying to figure out how to
• 32:40
  leverage it, not necessarily how to use it to, you know, create
• 32:43
  less expenses. So let let me put this forward
• 32:47
  to you. So because you hit on the signal
• 32:49
  thing earlier and so connects to something called week and and to
• 32:55
  my point earlier, right, we try to bring up the research on this
• 32:59
  kind of stuff. Any identified research on
• 33:02
  organizational sense making as to what you're saying, like
• 33:05
  directly speaks to that. So he demonstrated that leaders
• 33:08
  do not perceive reality and then respond to it objectively.
• 33:12
  They construct a version of reality through retrospective
• 33:14
  interpretation and then respond to the version that they
• 33:17
  constructed. Which means that when mark the
• 33:20
  market signals suggest that the old model is eroding, leaders
• 33:24
  inside that model released equipped to see it clearly
• 33:28
  because their sense making apparatus is built to confirm
• 33:31
  what they already believe. So you you've written about how
• 33:35
  early traction is often misread, that the gap between a promising
• 33:39
  market signal and a truly scalable business is where most
• 33:43
  companies quietly lose ground. So how does the psychology of
• 33:47
  early validation distort decision making inside growth
• 33:50
  organizations? And what does it take to
• 33:53
  maintain intellectual honesty when the pressure to believe
• 33:56
  your own story is enormous? Yeah, yeah, I I agree.
• 34:01
  The pressure is enormous and in the right in the right culture,
• 34:10
  it's a culture of fail fast. If you're if you're early stage
• 34:15
  and you are about to make long term investment decisions based
• 34:20
  on something, it is really prudent to to double click on
• 34:25
  that and actually try to break it right.
• 34:29
  However, that's not necessarily a muscle that many organizations
• 34:33
  have established organizations I you know, I've, I've, I've
• 34:38
  started companies, Co founded companies I've worked for some
• 34:42
  that were on the verge of product market fit, some that
• 34:45
  were post. The more mature the company is,
• 34:49
  the less I've seen an interest in trying new things.
• 34:56
  Understanding you're going to fail, but the outcome of is not
• 35:00
  the success. It's to take one step closer to
• 35:04
  how do we succeed. So I, I guess the first answer,
• 35:09
  part of the answer is it depends on the maturity of the company.
• 35:14
  Yeah. And then secondly, when you are
• 35:18
  in the midst of change, I think you need leaders that understand
• 35:21
  change. And for those that try to
• 35:25
  repurpose existing leadership that don't have a muscle for
• 35:30
  change, they're more of the here's how we operate with
• 35:33
  discipline. You really need leaders need me
• 35:35
  to take a step back and say, do I have the right team?
• 35:39
  And if if I don't, how do I augment them?
• 35:42
  That's a hard question because I don't think the answer is so
• 35:45
  black and white. I think it's muddled in Gray.
• 35:49
  So Mike, do you think the so as the with the sense making right.
• 35:52
  So they're they're getting they're taking action on what
• 35:57
  they believe the reality is. And that's often historical,
• 36:00
  that's often experiential. Have you seen any leaders being
• 36:06
  successful with, with putting that aside to realign what the
• 36:12
  the reality is in in reality? Yeah, currently, I mean, the
• 36:17
  market is dynamically changing, right?
• 36:20
  We can even use tariff as an example.
• 36:22
  Tariffs were in place. Now some tariffs aren't and and
• 36:26
  companies are trying to make an assessment of what reality is.
• 36:31
  And some of them haven't been here before, right.
• 36:34
  So that reality that they're pulling from is a isn't a match.
• 36:39
  Yeah, yeah, I've seen it both ways.
• 36:44
  I'll give you an example. I spoke to one CEO.
• 36:51
  They're a platform that leverages machine learning and
• 36:57
  IT they sell to pharmaceutical manufacturers so heavily,
• 37:02
  heavily regulated. And he was of the belief that
• 37:06
  agentic AI and probabilistic in general, AI does not work, is
• 37:12
  not, does not, is not compliant in this heavily regulated space.
• 37:18
  And therefore they went down a machine learning path which is
• 37:21
  deterministic. And so they're able to remain in
• 37:24
  compliance while still giving its customers added horsepower
• 37:28
  around, you know, this new capability.
• 37:30
  I think he's dead on and being really realistic about it.
• 37:34
  And he's not getting overly excited about how to use agent
• 37:38
  to capabilities because he knows that space, that space isn't
• 37:42
  going to change. I think that's a really good
• 37:45
  constraint that he's put put on the the organization and it
• 37:50
  makes a lot of sense for the the market they serve.
• 37:53
  Conversely, I spoke to Aceo of a platform that works in basically
• 38:01
  retail space and how to maximize, you know, retail real
• 38:05
  estate meaning like planograms and and such.
• 38:08
  It was a kind of an integrated retail real estate management.
• 38:15
  And by real estate, I mean shelves, not, not buildings.
• 38:21
  And so, you know, they've got a a decent customer base and as
• 38:27
  expected, this CEO is very cautious about where where
• 38:32
  they're headed. However, I did kind of get the
• 38:35
  sense he was downplaying how disruptive new agenta
• 38:41
  capabilities could be and hadn't really been following some of
• 38:45
  the trends of the bigger software companies like, you
• 38:48
  know, say, Salesforce, who's trying to protect their base by
• 38:53
  becoming something else, right they.
• 38:54
  Were. An application layer, we know
• 38:58
  application layer is, is becoming a bit commoditized, but
• 39:02
  they do have this, you know what, what Salesforce does
• 39:05
  really well is this kind of integrated full workflow.
• 39:09
  And so workflows and data are critical to organizations,
• 39:14
  especially in pillar systems like ERP or CRM, etcetera.
• 39:19
  And he was, you know, this CEO of this technology wasn't
• 39:22
  aligned to where these bigger software vendors were going to
• 39:25
  think differently about it. And you know, it was a lot of
• 39:31
  the conversation was referencing a lot to what he knew, IE his
• 39:36
  customer base and what they do, right.
• 39:39
  But the question that hadn't been asked or answered is, well,
• 39:43
  how are they thinking differently?
• 39:46
  How's the customer thinking differently?
• 39:49
  And so that was my ultimate recommendation was that you go
• 39:52
  outside of your own 4 walls to to understand where your
• 39:55
  customers at. Well, and let me let me build on
• 39:58
  that because you hit on something exactly I want to ask
• 40:01
  you about. So there there's something that
• 40:04
  you said in describing your work at ETQ that that I want to
• 40:07
  explore because the challenge is one of the most deeply held
• 40:10
  assumptions and organizational leadership.
• 40:13
  You took strategic positioning directly into a live customer
• 40:16
  environment rather than validating it theoretically.
• 40:20
  And you said the biggest value didn't come from confirming the
• 40:23
  proposition, but from what you discovered in the field.
• 40:28
  And so that insight that is the most powerful value or the way
• 40:32
  that the most powerful value propositions, right?
• 40:35
  They're forced in the field opposed to being designed in the
• 40:39
  boardroom. And it's a direct challenge to
• 40:43
  what we see with many organizations, particularly from
• 40:47
  a board perspective, where they know the organization, they have
• 40:50
  such deeply rooted beliefs about it.
• 40:54
  And, and it relates to Chris, our, our glisses, who has spent
• 40:58
  decades studying the gap between what he called a spouse theory
• 41:02
  and theory and use. So the theory and use is what
• 41:05
  their behavior actually reveals about what they believe, right?
• 41:09
  And So what is it about the distance between leadership's
• 41:13
  understanding of their market and what the field actually
• 41:16
  reveals that consistently produces misalignment?
• 41:20
  And in your experience building go to market systems across
• 41:24
  multiple organizations, where does that misalignment create
• 41:28
  the most damage? The misalignment between what
• 41:31
  leaders believe is reality versus what is your customer
• 41:34
  saying. Well, what, what they, what they
• 41:36
  believe the value when they become so deeply committed to
• 41:42
  what they believe the value proposition is opposed to
• 41:47
  understanding what that value proposition is from a customer
• 41:52
  perspective. So in the field, yeah.
• 41:54
  How did they, how did they become so misaligned?
• 41:57
  Yeah. I mean, that's a, that's a great
• 41:59
  question. In my experience, including at
• 42:02
  ETQ, what I was doing was I was an entrepreneur, I was a startup
• 42:07
  guy within an established environment.
• 42:10
  And so naturally there is a different mindset there.
• 42:14
  And so but I, I don't know that it's necessarily a mindset
• 42:17
  problem. In my experience, I think people
• 42:20
  have objectives and they're busy and they're constantly trying to
• 42:26
  prioritize and they're constantly being asked for stuff
• 42:29
  from other parts of the organization.
• 42:31
  And so that was my that was my experience.
• 42:33
  And so at the at the leadership level at the time, this was pre
• 42:37
  acquisition, but the, the board directive was to have the
• 42:41
  company meet the company metrics that they knew would get the
• 42:44
  valuation they wanted, right. And so there's this maniacal
• 42:49
  focus on that. And so when you introduce a new
• 42:54
  idea that is incremental to what exists, there was a lot of
• 43:00
  resistance and rightfully so. I didn't necessarily take it
• 43:04
  personal, but there's a lot of resistance because it was add,
• 43:09
  it was additional to what we were already trying to do and
• 43:13
  people are really busy. So to start to explore this it,
• 43:18
  it really took me a while to get the executive backing from the
• 43:22
  various functions that I needed. The CEO was totally on board
• 43:26
  because he was starting to have acquisition talks.
• 43:29
  He understood the value of defining this.
• 43:33
  But when I went to my marketing leader at the time was also, she
• 43:37
  was great. She was also very amenable to
• 43:39
  it. She also had a kind of penchant
• 43:41
  for it. She liked she liked doing this
• 43:42
  stuff, but when we got into the kind of past the go to market
• 43:46
  teams to the delivery customer teams, that's when they've got a
• 43:50
  really heavy workload and for me to get some resources to
• 43:53
  actually execute on this test, right.
• 43:57
  So I here I am, I'm asking to disrupt things that are creating
• 44:02
  utilization, build hours, customer satisfaction numbers.
• 44:06
  These are the things that I, I could tend to threaten by asking
• 44:10
  for, for help. So I did have to negotiate that.
• 44:15
  So what I, what I do find is that leaders that have that
• 44:20
  tremendous pressure to produce the results they want, a
• 44:23
  deviation from standard is very threatening.
• 44:27
  It's threatening to their, to their ability to hit numbers.
• 44:30
  So what I, what I did do is negotiate that, that and the
• 44:35
  first thing I, I had to do was to eliminate black and white.
• 44:40
  We're doing it, we're doing it my way or we're not doing it at
• 44:42
  all. That's, that wasn't going to
• 44:44
  succeed. But instead I tried to
• 44:47
  articulate the value to the company to them and then
• 44:50
  obviously tie it to them, right. And these are all, these are all
• 44:53
  shareholding executives. The outcome of an acquisition
• 44:57
  should be really important to them.
• 44:59
  And so when I was able to kind of articulate why it was
• 45:02
  important to the company and how it could directly affect them, I
• 45:06
  then open the door to say, OK, if you can't give me what I'm
• 45:10
  asking for, please help me solve the problem that exists.
• 45:15
  And through that, I was able to find various pockets of
• 45:18
  interest. Probably could not never have
• 45:19
  predicted that, but that's where I think that's where I think
• 45:23
  leaders have this big gap is if it's working, why fix it?
• 45:29
  And so when you can surface above that noise and actually
• 45:33
  have a real reason for the change, then people will start
• 45:38
  to so. But like what if in in the
• 45:43
  perspective of velocity, right? So you're you're affecting
• 45:47
  change and even in the startup mode and where most founders are
• 45:52
  so committed to what they perceive the product and the
• 45:57
  value of that product is. And to my earlier point about
• 46:03
  the, the market dynamics changing so quickly when there's
• 46:09
  information coming from the field that may change what that
• 46:15
  value proposition is, How, how, how did the the founders, how
• 46:20
  did the leadership handle that perception shift?
• 46:25
  I mean, it's it rattles what they believe versus what the
• 46:29
  market is actually saying the value is.
• 46:32
  Yeah, great question. So I do find founders are
• 46:37
  typically far more flexible. They don't care about anything
• 46:41
  except succeeding. And whether that's a financial
• 46:44
  position or whether it's because they have a mission, they're
• 46:47
  trying to help people or companies, whatever their their
• 46:52
  belief system is there. They're also highly adaptable in
• 46:55
  the ways you can get there. And I want if my mission
• 46:58
  statement is to, you know, make the lives of 100,000 people
• 47:02
  better, I don't care how it gets done, right?
• 47:05
  My idea of get the way to get that done, I don't have, I don't
• 47:10
  have so much stock in that. What I do have a lot of stock in
• 47:13
  is the is the outcome. So founders aren't the greatest
• 47:17
  example of where that resistance is.
• 47:20
  What I do find is when leaders come from one environment that's
• 47:24
  a bit more fixed. And frankly, his or her job has
• 47:29
  been keeping people on that track to not let them deviate
• 47:33
  left to right. That's the muscle that they have
• 47:36
  and they will try to, they will exercise that or flex that
• 47:39
  muscle instinctually. So does have a lot to do with
• 47:43
  the leader and and the mindset. So if you are trying to affect
• 47:47
  change and you know, and I've seen leaders do this that are
• 47:52
  trying to affect change, which brings other leaders with them,
• 47:57
  you know, there's certain tactics you can do.
• 47:59
  Have you ever read the book Switch?
• 48:02
  It's by like Heath or Heal Brothers or something.
• 48:05
  Like that? Yeah, yeah.
• 48:06
  Yeah, right. And so they have a couple
• 48:07
  concepts in there that I've I've put into practice, but I've seen
• 48:10
  also by others put into practice right in in the 11 of the
• 48:15
  principles there is to shrink the change, right.
• 48:19
  What is the smallest possible change you can make that will
• 48:23
  have a measurable outcome in the quickest amount of time, right.
• 48:28
  And so I think when you make the change not so dramatic and it's
• 48:35
  just small shifts everyday, that's where I see leaders
• 48:38
  actually start to embrace it a lot more if they don't come from
• 48:42
  that kind of change management back.
• 48:44
  Yeah, man, I mean, that's actually something that I have
• 48:47
  practiced over the years. And it was a lesson I learned in
• 48:51
  practice and working with, with very large complex
• 48:55
  organizations. And, and like you being the
• 48:58
  entrepreneurial guy that was brought into effect major, major
• 49:03
  transformation. And, and I learned that it was
• 49:09
  better and more productive to release things slowly.
• 49:14
  And even though the vision would be in my mind that I couldn't
• 49:18
  share that vision in its entirety.
• 49:21
  I couldn't even share the the end result of where we were
• 49:24
  going and when or periods where I had done that.
• 49:28
  There was significant resistance because they went from zero to
• 49:33
  90 very quickly mentally, but they couldn't see going from one
• 49:38
  mile an hour to 89. It was there was no in between
• 49:43
  on OK, this is how we got there. Despite explaining it right, it
• 49:47
  was it was almost more than than what they could handle.
• 49:51
  Yeah. Yeah.
• 49:53
  Kevin, you're making me think of another thing that I think is
• 49:56
  really important in the midst of change.
• 49:58
  And this can help leadership or could be strong leadership kind
• 50:02
  of pushing it down. But you have to promote
• 50:05
  successes within an organization so others start to gain that
• 50:09
  belief we were talking about earlier, right.
• 50:11
  And so if you have a leadership gap where they're looking at
• 50:16
  things through their own lens, not through objective reality,
• 50:21
  but through their own lens, and they're not seeking out contrary
• 50:27
  opinions to test, they're not actively trying to test and
• 50:30
  challenge it, right? In other words, they're looking
• 50:33
  for people to agree with them. Success stories for those that
• 50:37
  are affecting change do help move that needle to start to
• 50:42
  break down that resistance and that disbelief.
• 50:45
  So like you've argued that continuous automation should be
• 50:49
  operationalized as a core organizational capacity rather
• 50:54
  than treat it as a one time transformation initiative that
• 50:58
  requires new roles, new structures and teams embedded
• 51:01
  close to revenue and customer workflows.
• 51:04
  So what have you learned about how organizations build the kind
• 51:08
  of adaptive culture, because you spoke about culture before,
• 51:11
  where field intelligence actually reaches the people who
• 51:14
  need it? And where does that resistance
• 51:17
  to that kind of transparency come from?
• 51:21
  You got to have a communication strategy and a cadence in an
• 51:24
  organization. And fundamentally that's where I
• 51:28
  go first to inject any change that we that needs to happen.
• 51:33
  So in times of high change, that cadence will be more frequent.
• 51:38
  And what I, what I've personally done in the past is, you know,
• 51:44
  obviously to communicate what's changing this week, what do we
• 51:48
  need to do differently this week?
• 51:51
  And also what have we been changing over the last two
• 51:55
  weeks? Therefore, we can come back and
• 51:57
  say, is the change sticking? Is it working?
• 52:00
  Sometimes you can accelerate that because of the change you
• 52:02
  wanted had like immediate positive results and people just
• 52:06
  start, you know, eating it up and they run with it.
• 52:09
  In other, in other cases, you need to like, OK, I can't
• 52:13
  introduce something new today because this one didn't stick,
• 52:16
  but you are looking for like right on that edge where it's
• 52:19
  like, it's almost too much, but it can be swallowed.
• 52:24
  So creating that pace. And I think when people start to
• 52:26
  embrace that pace, you're you're going to see change be adopted,
• 52:30
  adapted and adopted really much sooner.
• 52:34
  So do you see a? Change Mike in.
• 52:38
  So part of the question was really around the those people
• 52:42
  that are more in line with engaging with the customer.
• 52:47
  But you know, one of I like to ask because I always ask 2
• 52:53
  questions that are too complex. But so talking about
• 52:57
  millennials, a lot of the research now shows that
• 53:01
  millennials are the ones who are leading most AI implementations
• 53:06
  because they're in that middle management layer that is just
• 53:10
  trying to help their team along and then meet the demands that
• 53:14
  are coming from above them for that change and transformation,
• 53:18
  that adaptation to a new technology.
• 53:23
  Are you, in your experience, do you see that?
• 53:26
  Are there differences in that communication with how those
• 53:30
  things are being received depending on where you are
• 53:33
  within an organization? In terms of what your title or
• 53:37
  seniority is and. Yeah.
• 53:39
  Like if you're more, you're more adapted, so you're hearing the
• 53:43
  customer complaints, you're hearing the potentially customer
• 53:46
  accolades every day and they likely because they're having
• 53:51
  that experience, maybe more open to change.
• 53:56
  Or in the middle management, upper management layers, you
• 54:00
  have people who are more aligned to this is how I run my
• 54:03
  department, this is how I run my team.
• 54:06
  Do you see differences in the necessity for communication?
• 54:11
  Yeah, absolutely. And it look, so let me let me
• 54:15
  preface it with this. If you are a leader and you are
• 54:20
  not acknowledging that we're in a period of tremendous change,
• 54:24
  right? Not to hype it up, but we are
• 54:27
  going through tremendous change and a lot of answers, a lot of
• 54:30
  questions are left unanswered at the moment.
• 54:33
  That's the reality. So not I, I don't really know
• 54:37
  how to help people that can at minimum acknowledge that we're
• 54:41
  in a period of tremendous change, right?
• 54:43
  And I and with, with whatever level of hype that you want to
• 54:49
  apply to it from zero to Andred, go for it.
• 54:51
  But we are in the period, we are in the midst of change.
• 54:55
  So I'll start with that. So let's assume that we're
• 54:58
  talking only about people that at least recognize we're in a
• 55:01
  period of change, that dynamic between let's call it
• 55:04
  generations and perhaps it's not a general generational thing.
• 55:08
  It's where you sit in the organization and what you, you,
• 55:11
  your perceived, your perceived role.
• 55:15
  It's right. We all, I, I think a leader who
• 55:21
  is not as technology sound as perhaps the generation after him
• 55:26
  or her, there is still the need for strong business acumen and
• 55:32
  fundamentals. And so if someone is exploring
• 55:34
  innovation and has a knack for that, they're going to tend to
• 55:38
  be very creative. And that's important.
• 55:41
  And I, if I, if I had someone working for me that was in
• 55:45
  charge of an AI implementation and let's just call him or her a
• 55:49
  millennial, it doesn't, it doesn't, I don't think it's
• 55:51
  necessary a generational thing. I think it, it, it, it's a where
• 55:55
  you are in your career thing, which obviously correlate on,
• 56:01
  I'm giving that person more rope because they're on, they've
• 56:07
  maybe grown up in an environment where that stuff's just more
• 56:10
  native to them. Whereas I'm trying to like
• 56:13
  process it through my Gen. X brain to give them that
• 56:16
  freedom. But I would be the steward of
• 56:19
  outcomes. So that is the that is the way
• 56:23
  that I could coach and mentor a person that has a stronger
• 56:27
  technical capability than I do is to still bring them back to
• 56:31
  what is the outcomes and then test their, their resolve and
• 56:35
  their belief to achieve those outcomes with what they're
• 56:38
  saying. And obviously that create that
• 56:41
  that gives them a lot of freedom and creativity.
• 56:45
  So they're going to dive deep into that knowing that I'm I
• 56:48
  couldn't match their skills there yet.
• 56:50
  They will also respect and appreciate when I bring them
• 56:53
  back to what is success look like and how are we going to
• 56:57
  achieve that? Because at the end of the day, a
• 56:59
  fun project that doesn't have outcomes isn't going to be good
• 57:02
  for them. And so they they tend to really
• 57:05
  start to appreciate that I'm looking out for our mutual
• 57:08
  successful. So Mike, I wanted this the last
• 57:11
  question. So I want to close with the
• 57:13
  question that I ask every guest and I want to frame it
• 57:16
  specifically around your unique vantage point.
• 57:19
  You've been inside the pressures of scaling at hypervent, a
• 57:23
  content Raven during chaos of the startup phase and an ETQ
• 57:28
  during international expansion. Each of these contexts demands
• 57:31
  fundamentally different human operating systems, different
• 57:35
  decision making cadences, different relationships between
• 57:38
  leaders and teams, different tolerances for ambiguity and
• 57:41
  speed and the ambiguity you just spoke to.
• 57:45
  So after 20 years of building inside those distinct pressure
• 57:48
  situations, what have you learned about organizational
• 57:52
  change that surprises people? And then what do leaders
• 57:55
  consistently underestimate about the human side of growth and
• 57:59
  transformation? And more complexly, what would
• 58:03
  you tell a founder or CEO who's about to take their organization
• 58:07
  through a period of rapid scaling?
• 58:10
  Yeah, great questions. All right.
• 58:12
  So oddly, it still surprises leaders as to the resistance.
• 58:17
  They'll get it. Just somehow they go into it
• 58:22
  with this vision, they stand behind it, they start kind of
• 58:30
  mandating we head in this direction.
• 58:33
  And that obviously does not push down responsibility and
• 58:37
  accountability to be in ownership, really ownership to
• 58:40
  the to the organization. So that's one thing that I think
• 58:44
  surprises is that the importance of driving ownership down down
• 58:51
  to the team rather than trying to architect it and then dictate
• 58:57
  what people will do and then holding them accountable to some
• 59:01
  level of activity that they haven't really signed up for or
• 59:04
  that they don't believe it. So that that's always surprises
• 59:07
  me. And it's not, it's not that they
• 59:10
  can't handle it because they once they recognize that that's
• 59:13
  the case, they usually course correct.
• 59:15
  But I just don't see it as the starting point for many leaders.
• 59:20
  So that's that's a little surprising.
• 59:24
  So to just to just to build on that mic.
• 59:26
  So have you seen let me ask it this way to your point, if
• 59:34
  they're somewhat unprepared to recognize that what they're
• 59:38
  putting forward is resulting in resistance and with the
• 59:45
  assumption that most leaders of mature organizations are coming
• 59:50
  with 1020 thirty years of experience.
• 59:54
  Is there something now environmentally or from the
• 59:58
  market perspective that has dismissed or had them dismissed
• 1:00:04
  their own experience and and feeling resistance and, and and
• 1:00:08
  other situations? It's a good question.
• 1:00:11
  I mean, I it, it, it'd be speculative because I, I haven't
• 1:00:15
  necessarily asked that question. All of the leaders where I saw
• 1:00:19
  them surprised that there was resistance.
• 1:00:23
  If I had a guess, there's there's a human element where
• 1:00:29
  you've got a vision and you're so excited to share that with
• 1:00:33
  everybody and you've got what you think is the path to do it.
• 1:00:38
  But turns out it's just a bunch of ideas, some are goods and
• 1:00:41
  bad. And you're so excited to get
• 1:00:45
  going and you're so impatient to start that journey that you that
• 1:00:50
  they often will skip this early step to say, how do I architect
• 1:00:55
  a dialogue? Not a statement, right?
• 1:00:59
  And that dialogue is going to result in something better than
• 1:01:03
  I can come up with myself. So I don't know if it's
• 1:01:06
  excitement, I don't know, maybe it's maybe that's the pattern.
• 1:01:10
  But the root cause is is different for leaders.
• 1:01:13
  Some are maybe ego driven, right, which you got to kind of
• 1:01:17
  tone that down. Some is passion.
• 1:01:19
  Just you're so excited about it and like you want, you just
• 1:01:23
  assume everyone's there a lot of times.
• 1:01:28
  And I've made, I make this mistake often and I have to
• 1:01:31
  constantly be on the lookout for it, but I assume people where I
• 1:01:35
  am. I make this assumption that
• 1:01:39
  informationally and emotionally, people are already where I am.
• 1:01:44
  And so when people are here and you're starting here and you
• 1:01:48
  just go, you, you've never connected with anyone.
• 1:01:52
  You, they're still here at the bottom because you started a
• 1:01:55
  place they weren't. So I, I think that's an, another
• 1:01:58
  reason is, is people just internalize their own experience
• 1:02:03
  and then project that onto to everyone else.
• 1:02:06
  And that's such a human motion that it's hard to miss.
• 1:02:13
  So that that would be my speculation of of where it is
• 1:02:16
  and also my personal experience where I've I've met challenges
• 1:02:21
  in the midst of change. Yeah, it's just a just a
• 1:02:25
  building that I have written so often over the years about
• 1:02:30
  active listening. And it confounds me sometimes
• 1:02:35
  where we it, when we all do it, we all don't do it, I should
• 1:02:40
  say, right. We we got very excited about
• 1:02:43
  something. We make assumptions and
• 1:02:45
  sometimes it's hard to take a pause.
• 1:02:48
  And I've seen leaders not do this, read the room, right, of
• 1:02:55
  not taking a step back and saying, OK, is what I'm saying
• 1:02:59
  really resonating here? Are am I watching a bunch of
• 1:03:03
  head nods? Am I bunching a bunch of classy
• 1:03:05
  eyed people? Or am I watching facial
• 1:03:09
  expressions that are are begetting fear or even anger out
• 1:03:15
  of it? And there are people who just
• 1:03:17
  don't have that emotional intelligence to to recognize
• 1:03:22
  that. Yeah, yeah.
• 1:03:25
  You know, I, I think the challenge there and this is, you
• 1:03:27
  know, something I, I've experienced myself is that it's
• 1:03:30
  sometimes really hard to remember that not everyone feels
• 1:03:35
  the way you do and interprets the, the world the way you do.
• 1:03:39
  It's really hard, right? And I, I go back to my earlier
• 1:03:42
  my career, and this is always enough of a reminder for me to
• 1:03:47
  take a step back and understand people.
• 1:03:50
  But there is a point in my career where I avoided feedback
• 1:03:55
  because it felt like criticism. It just felt like criticism.
• 1:03:59
  And I had this like overwhelming expectation of myself that I was
• 1:04:04
  going to be the solution for everything that I was
• 1:04:07
  responsible for. Versus my job is to shepherd
• 1:04:12
  this towards success and leverage my own skills when
• 1:04:15
  appropriate. But then like fill in your gaps
• 1:04:20
  when you have, when you have gaps in your skill set, fill
• 1:04:23
  them in. And that's actually, you know,
• 1:04:25
  until that started to feel like I was doing something unique and
• 1:04:29
  good, like, Oh, I'm, I'm actually recognizing where I'm,
• 1:04:32
  where I'm weak and I'm planning to help.
• 1:04:35
  That felt terrible in the beginning, right.
• 1:04:38
  So that personal experience of where it's like, shit, I used
• 1:04:42
  to, I used to avoid feedback because it felt so much like
• 1:04:46
  criticism. Now I've retrained my brain to,
• 1:04:51
  I feel naked without feedback. And that was really important in
• 1:04:56
  a, in a startup culture. And, and, you know, kind of what
• 1:04:58
  we were speaking about earlier, where it's like, well, how, how
• 1:05:00
  do you actually get to a point where you're like trying to
• 1:05:03
  prove yourself wrong versus the opposite, prove yourself right?
• 1:05:07
  And so that is my personal kind of lighthouse that I will always
• 1:05:12
  refer back to in these circumstances to remember.
• 1:05:15
  I felt very differently about something that is somewhat of a
• 1:05:19
  superpower now. And that's, that's actually true
• 1:05:21
  for active listening as well. So I, I'm a, you know, I've got
• 1:05:26
  a, I'm a, I'm a DDA massive ADD. So like my brain goes so fast
• 1:05:31
  and it it serves me really well in some circumstances and really
• 1:05:36
  poorly in others. And I've mentioned one, which is
• 1:05:39
  where my brains here and the group is They didn't, I haven't
• 1:05:42
  even introduced the subject yet. And I'm like already taking off
• 1:05:45
  with all the things in, in my all the ideas and the work work
• 1:05:49
  streams that are in my head. And certainly, you know, I think
• 1:05:53
  the criticism piece falls into that.
• 1:05:57
  But fundamentally that that's what I think it is really
• 1:06:00
  important is to realize that you've got a variety of states
• 1:06:05
  people are in and really take take that step back and
• 1:06:10
  recognize, go into the conversation knowing some people
• 1:06:14
  are feeling very unclear. Some people are worried about
• 1:06:18
  their job. Some people are like overly
• 1:06:21
  excited about this and about to spend 39 of their 40 hour work
• 1:06:25
  week doing stuff that doesn't matter because they're too
• 1:06:27
  excited about it. So you just have to recognize
• 1:06:30
  that everybody's there and more systematically introduce the
• 1:06:34
  ideas and the change, and then you start getting that snowball.
• 1:06:39
  Mike, that's all the questions I have.
• 1:06:41
  So it was just wanted to thank you for being on the Human
• 1:06:44
  Factor podcast. Yeah, brother, this was a lot of
• 1:06:46
  fun. I really appreciate it.
• 1:06:47
  Want to close? By connecting when Mike has
• 1:06:49
  shared to the broader arc of the season, every guess we have had
• 1:06:54
  has illuminated a different dimension of why transformation
• 1:06:58
  fails at the human level. We have examined the
• 1:07:02
  organization immune system, the psychological contracts that
• 1:07:06
  bind people to the status quo, the governance structures that
• 1:07:10
  neutralize change, the structural silence that prevents
• 1:07:15
  leadership from hearing what it most needs to hear, and the
• 1:07:20
  patterns that repeat across organizations regardless of size
• 1:07:25
  or industry focus. What Mike has shown us today is
• 1:07:30
  something different. He has shown us what happens
• 1:07:33
  when transformation is not impulsed from outside by crisis
• 1:07:37
  or decline, the transformation demanded from inside by prior.
• 1:07:43
  In the current success, growth itself is a transformation
• 1:07:48
  engine, and it creates human dynamics that are among the most
• 1:07:52
  intense and least understood in organizational life.
• 1:07:57
  The psychological contracts that break when the organization
• 1:08:00
  outgrows what it promised. The identity crisis that occurs
• 1:08:05
  when the thing that made the organization special stops being
• 1:08:09
  so special. The cognitive biases that
• 1:08:13
  distort how leaders read their own success, and the structural
• 1:08:18
  distance between the field and the boardroom that ensures the
• 1:08:22
  information leadership most need is the information is less
• 1:08:27
  likely to receive if your organization is growing.
• 1:08:31
  These dynamics are active right now.
• 1:08:35
  The question is not whether they exist.
• 1:08:37
  The question is whether you can see them before they become the
• 1:08:41
  constraints that prevent your next.
• 1:08:44
  Stage of evolution. If you found today's episode
• 1:08:47
  valuable, subscribe to the Human Factor Podcast.
• 1:08:51
  Wherever you watch or listen to podcast, leave a rating and a
• 1:08:55
  comment and share this episode with your leadership team.
• 1:08:59
  Subscribe to the Ideas and Innovations newsletter at 2040
• 1:09:03
  digital.com or on Sub Stack for weekly frameworks and research
• 1:09:07
  on why change succeeds or fails. Connect with me on LinkedIn
• 1:09:13
  where I post regularly. About the Psychology of.
• 1:09:16
  Transformation. Until then, remember,
• 1:09:20
  transformation doesn't fail because of the technology,
• 1:09:23
  strategy or the market conditions.
• 1:09:27
  It fails because of people. And the more deeply you
• 1:09:31
  understand the human factor, the more likely your change of
• 1:09:34
  transformation is to succeed. I'm Kevin Novak, thanks for
• 1:09:39
  watching or listening.