Have you seen this done well at certain places where they've kind of broken the shackles, for lack of a better metaphor?

Yeah, we deliberately took metaphors of Tin Man and Octopus because we don't believe there's pure organizations and naming certain companies doesn't really work because some companies might be very, very octopus for a while, but then a leader leaves or you hire a lot of people as you grow and suddenly your culture gets diluted and the octopus-ness goes away.

And so we believe even in large companies, you might have some parts, some business units that are very octopus and some not so much.

So we'd rather kind of think about which parts of organizations are said done well.

And I work at Amazon right now, and there are many parts where it is done very well.

They're very small, independent teams that can operate together at speed.

We consider dependencies defects, so we try to get rid of them.

engine is and it's it's it's thinking for me now i find myself in and i see that with my kids as well like what do you think about the future of humanity maybe as it relates to the role of ai

But why octopus?

That's an awesome, it's actually a really awesome question.

We didn't want to go with the idea of there's this kind of organization or this name or this brand that we, that people should strive for because no organization I believe is perfect.

And even the ones that seem currently to do it well, once a leader changes or the environment changes or they grow or they change, the company itself will change.

So We wanted rather to leave people with a mental model or an idea of what they could think about.

And so we came up and looked at the octopus.

It's such an incredibly wonderful creature.

And so how do we get into that stage when even if you lose a talent, you're still at the center able to operate?

Right.

Yeah, it's really challenging.

And of course, as companies grow, you require some sort of structure.

And I work with startups really closely.

I've actually been in a startup and helped it scale and got sold to HP.

So I understand the spirit.

I love the founder spirit.

And can you give us a taste of a couple of them? Like what are some good juicy ones?

What, what's that gap?

The gap is first of all how you hire, and then how you make people successful.

We often treat hiring as an inconvenience, um, for our leaders.

Um, they have to write job descriptions, they do it side of desk, they do a bullet list of skills.

We sc- scan our CVs, usually now with AI, and if there's a keyword missing, that's not the perfect person.

We also try to hire unicorns that have 30 years of AI experience.

Nobody has.

Uh, talk me through, like, why don't organizations invest enough in their employees?

How do we cultivate, how do we cultivate an environment where people are willing to be curious, where people are willing to ask questions? What can we do as leaders to facilitate that?

We had the pleasure of speaking to Amy Edmondson.

She's the kind of mother of psychological safety.

And we all heard the word, like everyone has heard it, and people get almost tired of hearing it, but there's so much misunderstanding.

It's not something you can say as a leader, "It's a decree now.

We're all safe." It's something you feel in the moment.

So this idea of opening up, of giving space for half-formed and baked ideas, asking questions as a leader from a genuine place of curiosity, open questions rather than the type of questions where you know as an employee if you answer, it'll just be used against you.

Could you share that story and talk about how we as leaders can create an environment where people feel safe surfacing ideas from the edges, innovative ideas from the edges, rather than feeling like it has to be a centralized command and control situation?

Mm

... successful and therefore less fast because you do something that isn't effective and that doesn't stick.

What I do find is that it's harder to do in the beginning when you have to corral people.

You have to create a purpose that people really can buy into, and you have to have these conversations and take the patience and learn what's on people's minds.

But those leaders that do that well, that build these kind of coalitions and that create a vision and that, that drive the inner excitement of people and take the time to build trust, to bring them on board, to be vulnerable and acknowledge errors, they actually then drive more sustainable and also transformation that then can build and build and build instead of doing one thing fast and slowing down.

And-

Right.

And that's the difference between doing a task for a payout or owning a result for pride of the mission.

So How can we make sure we are, and then therefore we are also focused on value rather than just focused on activity?

You're so right.

A lot of the 10-man organizations are busy with themselves.

They create more involved inward focus, running the machinery.

They're starting to look at proxies instead of real customers, secondary reports.

I have completed a process.

I've designed a PowerPoint.

So what is the kind of leadership and what is the kind of leadership mindset that it would take to be able to operate in an octopus organization?

Why did it have that priority status? What's going on with clarity and particularly with jargon and why that's a worthy first target?

Yeah, absolutely.

We've bucketed the anti-patterns that we see, the mistakes companies make, those knee-jerk reactions that we all make as leaders or our go-to reflexes to deal with challenges.

We bucketed them and we're not creating enough clarity for decentralized action and context.

We're not pushing ownership far enough into the organization and we're not creating enough curiosity in the organization, especially nowadays where you have to operate differently and learn how to use AI.

And in Clarity, one that is just pervasive through many, many companies, and we certainly have done this.

We are guilty of all the sins.

So how do you help hierarchical organizations, which we're all very familiar with, begin to make the shift to distributed intelligence?

Why did it have that priority status? What, what's going on with clarity and particularly with jargon, and why that's a worthy first target?

Yeah, absolutely.

We, um, um, we've bucketed the anti-patterns that we see, the mistakes companies make, those knee-jerk reactions that we all make as leaders, or our go-to reflexes to deal with challenges.

We bucketed them, and we're not creating enough clarity for decentralized action and context.

We're not pushing ownership far enough into the organization, and we're not creating enough curiosity in the organization, especially nowadays where you have to operate differently and learn how to use AI.

And in clarity, one that is just pervasive through many, many companies, and we certainly have, have done this, we are, we're guilty of all the sins, um, is this use of what Scott Galloway calls yoga bubble, or we call corporatese.

So this idea of we are an, an AI-forward company that is data centric, customer focused, and, um, leverages its corporate synergies, blah, blah, blah.

The, so how do you help hierarchical organizations, which are all v- we're all very familiar with, make, begin to make the shift to distributed intelligence?

Why did it have that priority status? What's going on with clarity and particularly with jargon and why that's a worthy first target?

Yeah, absolutely.

We've bucketed the anti-patterns that we see, the mistakes companies make, those knee-jerk reactions that we all make as leaders or our go-to reflexes to deal with challenges.

We bucketed them and we're not creating enough clarity for decentralized action and context.

We're not pushing ownership far enough into the organization and we're not creating enough curiosity in the organization, especially nowadays where you have to operate differently and learn how to use AI.

And in Clarity, one that is just pervasive through many, many companies, and we certainly have done this.

We are guilty of all the sins.

So how do you help hierarchical organizations, which we're all very familiar with, begin to make the shift to distributed intelligence?

Why did it have that priority status? What's going on with clarity and particularly with jargon and why that's a worthy first target?

Yeah, absolutely.

We've bucketed the anti-patterns that we see, the mistakes companies make, those knee-jerk reactions that we all make as leaders or our go-to reflexes to deal with challenges.

We bucketed them and we're not creating enough clarity for decentralized action and context.

We're not pushing ownership far enough into the organization and we're not creating enough curiosity in the organization, especially nowadays where you have to operate differently and learn how to use AI.

And in Clarity, one that is just pervasive through many, many companies, and we certainly have done this.

We are guilty of all the sins.

So how do you help hierarchical organizations, which we're all very familiar with, begin to make the shift to distributed intelligence?

How have you seen organizations move successfully from Tin Men to Octopus organizations? And do you have any baby examples that you're able to share with listeners?

Yeah, we find that they switch from doing change to people where the power of the interpretation is in the hands of the few and they push the plans to actually doing change with people.

So creating the conditions for immersion solutions to arrive, to flourish people closest to the problems, to do that.

So they kind of cultivate the organization's innate capacity for change itself.

So they become leaders who help others change.

We spoke to...

I think it was a CEO of a South African stock exchange calling that lighting a thousand fires.

What does this all mean for leadership?

What are the things that, you know, are the commonalities between those that are far more rigid?

This is where we kind of noted a bunch of dysfunctions, more than 300, and we boiled them down to 36 anti-patterns.

And we've grouped them.

There's a group around lacking the ability to really create the clarity, the context in which people could take decentralized action.

It's not there.

There's vagueness of purpose.

There's jargony language that tells you some abstract.

I don't want them to be disheartened by the reality of their lack of control, right? That they just now have more responsibility.

What is sort of the most common anti-pattern you see most often?

Well, they're all common.

That's why we talk about them.

We have the silos where people work and operate in their silos.

We have decisions where you have 50 people that can say no.

And if only one of them says no, nothing is going to happen.

We have people that use jargon.

So it's not possible if years ago you were running like, you know, a steady sort of thin man, but now that's done.

It simply doesn't work.

We see that with AI, with the rise of AI technology, many of the foundations that we built our organizations on, that Phil just described, these tin man foundations, are being actually, um, taken out of, out of our org... out of our world in which we operate.

So for example, um, organizations were designed to lower cost because delivery was very expensive.

But now with AI, the cost of delivering change goes towards zero almost.

You can now decide, should I build one or another prototype? You just build both.

So this cost of execution has gone down, but the speed of change has gone up, and nobody has the answer anymore.

So these two fundamental things have changed the basis on which we build our organizations, and that then creates a lot of dysfunction.

If we hear a company announce an AI transformation, digital transformation, should our reaction as investors be to naturally be skeptical? What is your, your thought process on that?

Fair enough

... things like sales bonuses.

Um, um, they can, they can have the risk of feeling coercive.

They can promote short-termism.

They can even trigger unethical gaming.

You've all heard this idea Peter Drucker said, "When you give someone a target, they will achieve it even at the detriment of the company." Um, so, um, we love the idea of thinking more about something retrospective, like rewards.

They are trophies.

I mean, they're pretty apparent by their names, but, like, w- why should an organization, why should a leader be taking these on, and what does that do for them?

So what have you learned about helping them realize and how do you see that moment when people finally realize that, "Hey, m- wait, maybe the problem, it's me?" Question mark.

Yeah.

I, I actually have seen two sides which I found super interesting.

I have spoken to s- a CEO, for example, of a large investment company headquartered in London and he said, "Man, I have to sign off all the small stuff.

I don't even know why it's coming to me for sign-off." And the people working with him assume that he wants to sign it off, so [laughs] there's a total misunderstanding.

He doesn't want to, they don't want to, but the processes are in place, and of course we don't question the sacred processes.

So I've seen that side of the story where it's a matter of dismantling bureaucracy that has built up and that nobody questions anymore, and when one person has made a mistake, you've added a process that penalizes another 10,000 and it builds and builds.

So tell us a little bit more about that and the consequences to what it looks like transforming these organizations in practice.

How did that come about? How did you start writing for them?

That's absolutely awesome.

We had this mad idea for the book and met people who worked with Harvard before.

And at some point I met an incredible woman who's written these incredible books.

They now get turned into Netflix series and she's on the board of an incredible company.

And I put my big girl pants on and just walked up to her and said, we have this idea.

Would you listen to me for five minutes? And she was kind enough to listen.

What would be your advice to the young person who wants to have a fruitful career?

What do companies get wrong? And companies that are able to create that clarity at the scale of Netflix or McDonald's or Amazon, what do they do right?

Clarity.

Clarity is tricky.

It's often underestimated how to create it and how little there is an organization.

There's a lot of things that contribute to creating clarity.

It starts with a really strong purpose of the organization that's not so abstract, that it doesn't make any sense, that speaks to hearts and minds.

The famous one is where the janitor works in NASA and JFK asks him, what are you doing? And he says, I'm putting a man on the moon.

We did,

How do you make this really happen within organizations that have all of these embedded problems?

Yeah, we talk a lot about ownership culture and the challenge that a gatekeeper culture tends to create.

And, and, uh, we tell the joke of the pig and the chicken.

So, the pig and the chicken walk down the road, and the chicken says to the pig, "Uh, shall we open a restaurant together?" And the pig goes, "Yeah, sure.

What shall we serve?" And the chicken says, "Well, ham and eggs, of course." And suddenly the pig stops in his tracks and goes, "You realize I have to be much more committed to that than you." And sometimes it takes the audience a minute of why that is.

But basically, the point we're trying to make, there's a difference between those that contribute and those who are really committed and accountable.

And often in organizations, we have lots of chickens who lay their eggs.

You know, how do they focus then on what really can make a difference in terms of the kind of transformation you're describing?