Ron and Ed welcome back Dr. Jules Goddard, author of Uncommon Sense, Common Nonsense: Why some organizations consistently outperform others (co-authored with Tony Eccles). His brilliant observation that "Strategy is the rare and precious skill of staying one step ahead of the need to be efficient," continues to inspire us. We will continue to unpack this statement and more.
A Bit More About Dr. Goddard:
Dr. Jules Goddard earned his MA at Oxford, an MBA from Wharton, and his PhD from London Business School. He's a Guest Lecturer at INSEA and formerly Gresham Professor of Commerce and Mercers School Memorial Professor at The City University. He is currently Research Associate of the Management Lab MLab at London Business School. He's a teacher, writer and consultant in the areas of business creativity, strategic thinking, leadership and corporate transformation.
Ron’s Questions: Segment One
Jules, you were on back in January of 2015 (Episode #27). It seems like eons ago. How have you and yours been holding up under COVID this year?
That's excellent. How about teaching, you said you were still teaching, would that be remote or live?
That's interesting. You know, you wrote in Uncommon Sense, Common nonsense: Why Some Organizations Consistently Outperform Others, your book from 2013, which Ed and I just absolutely loved. You said in that book, “We believe that most enterprises today are insufficiently entrepreneurial.” Do you think COVID might be changing that?
I love that point, and it anticipates my next question. And I know this is incredibly subjective, and very anecdotal. But have you seen innovations, or new ventures, or just new ways of doing things? Like maybe knocking out some of this bureaucracy or these old management ideas that have impressed you?
Well, we're Austrian economists, Jules, we have to be optimist by definition. I think back to the Great Depression, and just the flowering of innovation that took place in that horrific decade was kind of amazing when you go back and look at it.
I'm sure you've read Matt Ridley's book, How Innovation Works. That was just a great tour of how innovation works. And what a surprise it always is, and we can't plan it. It's an act of creativity.
Jules Goddard: Have you had Matt on your show yet?
Ron Baker : No. I would love to get Matt on the show. We've had Dan Ariely on the show, too. And I remember, I think Tim's got some debates with Dan on YouTube, he challenges on certain things, and I just found that really refreshing as well. Brilliant guy. You wrote something in the book, too, that I just think is profound. You said “Businesses decline as the production of new insights dries up. A theory of business, therefore cannot be a substitute for insight.”
I think you quoted Russell Ackoff, who said, “The future is best dealt with using assumptions rather than forecasts.”
Great point, I mean, could this be why, despite all this move to remote work—because we have to—but if you listen to outfits like Apple and Google, they want people in the office to bang together and talk and meet in the hallway, because they think that's where innovation comes from. They're not big fans of remote work.
We've been saying since this COVID crisis, with people predicting the decline of cities, and we've been trying to make the point for the last few months on this show that says are you kidding, cities outlast governments.
Ed’s Questions: Segment Two
Our guest today on The Soul of Enterprise is Dr. Jules Goddard from London Business School. And Jules, I wanted to ask you a little bit about a session that I saw you deliver, I guess it was remotely since it was during COVID, a xmonks. The title of your talk was about the 4D model of Leadership. And you talk about destiny, drama, deliberation, and development. Can you expand on that if you would?
So true. In the book, The Coddling of the American Mind, one of the things that the authors point out in that book is that in a lot of ways we're doing a lot of harm to society, to ourselves, by coddling people, and I think we've seen a shift in leadership from command and control. But then over to this, what I'll call the white knight leader, the one who comes in and saves everyone. And that's, I think, just as damaging. Because it's just you fixing the problem for people, they're not able to fix it for themselves and be able to get out of the situation.
You know, during World War II, they didn't say you must go into the tubes, right? That was not a mandate. What I think is so interesting is that we have folks telling us that what came out of the College in London, that 2 million were going to die because of this model. And I see so much of this happening, this is this what's happening in governments, but I equate it to businesses as well. They're obsessed with this model. Ron says, I love this quote, he says, “All models are wrong, some are helpful.”
Wow. One of the things I talk to my mentor an awful lot about is this concept of leadership, where what we're concerned with is regulating the level of anxiety in ourselves and also in society. Anxiety and creativity are always inversely proportional to each other, right? The more anxious you are, the less creative you can be. And we can't turn on creativity, right? We have to do is as how do we lower our anxiety level? What's happened with leaders, not just in business but also in government, is they're feeding this anxiety. They're stepping up the level of anxiety like a transformer does with electricity. And I just don't think it's healthy for us as individuals nor for society. I mean, our response has been positively medieval to this COVID situation.
Yes, that's a great question. He [Rockefeller] didn't have access to antibiotics either. So, you know, we're talking about a vaccine for COVID being tested in less than a year since the disease has been identified. That is absolutely amazing.
Yeah, I think it is going to be incredible. As Ron said the innovation that came out of the Great Depression, I think we're going to find is the innovation that comes out especially in medical and healthcare, not dealing with vaccines per se, but out of healthcare, because of the research that was around it, we're not going to see it for another two, three, or five years, but it's going to be intense.
Ron’s Questions: Segment Three
Welcome back, everybody. We're back with Dr. Jules Goddard and Jules I wanted to ask you because I also just love this line. I know I'm throwing lines at you from your book from ten years ago. You say, “Beliefs and assumptions, rather than goals or values, separate winners from losers. Markets are battles between belief systems.” I don't know who said this, it's usually attributed to some Nazi, “That whenever I hear the word culture, I reach for my revolver.” But, how does one work on a culture? I mean, this seems to be the current buzzword, and culture is the sum of beliefs, assumptions, how we do things, our worldview? Is it really possible to change? I know it's possible to change a culture but that doesn't give me insight on how to do it?
There's a saying here that politics is downstream of culture. That it's culture, the mass media, Hollywood, that type of thing, but I think it does work in some ways, because you're right, I think a president, somebody like Ronald Reagan, can definitely affect the culture.
I think it's one of his best speeches.
I would agree. I'm glad you say that. I'm always interested to hear what outsiders think, peering into America, or listening to immigrants who seem to have a real deep appreciation because they know the other side. Jules, I hate to do this, because this is such a lofty conversation. But I’ve got to ask you about this because it's one of Ed and my pet peeves. We just despise the annual performance review process. We think it's Kabuki theater on steroids; it's the most ridiculous thing we subject ourselves to in these organizations. And you even pointed out in your book that the average European company spends 25,000 person days on planning and performance per 1$ billion of turnover. We try to keep a list of all the companies that have moved away from this: Accenture, Deloitte, Medtronic, Microsoft, Netflix. It's now estimated over 10% of Fortune 500 don’t do them or they've gotten rid of them. Do you see that trend in your work?
Ed likes to equate it to the self-criticism sessions that you had in the old Soviet Union and at present in North Korea. You probably saw it, but there's a wonderful episode of The Office, the British version, the actual funny one, not the one that we ripped off from you. It's called Appraisal Day. And every time we show that to HR people it just hysterical laughter. One girl actually said, “I peed my pants I laughed so hard.” Yes, we say that laughter is confession. We know this is a ridiculous process. And we still keep it around. It amazes me. So I just wanted to get your take on that.
And it wasn't a year after you did the deed. As we said before we went live, we did have Gary Hamel on two weeks ago [Episode #313]. And of course we did talk to him about Humanocracy, a book that Ed and I just both love. What your take on it?
I just the love the idea. It's even in the subtitle, “Creating Organizations as Amazing as the People Inside Them.” It's such a great insight.
He's right. When you look at bureaucracy in these organizations, it's just takes over, it is insidious. And like he says, it grows faster than the organization is growing. Well, Jules, this has been great. Ed is going to take you home, but I just wanted to say thank you so much for coming back on the show. We will definitely have you back on, if you're willing. We love talking with you. This has just been so enriching. So thank you.
Ed’s Questions: Fourth Segment
It is our joy to present to our listening audience our second conversation with Dr. Jules Goddard. We so enjoy our conversations and time with him is flying by, but I want to jump right back into it Jules. In the presentation I saw you give you reference a quote by Tim Ambler from 2003. This is his quote: “On average, boards devote nine times more attention to spending and counting cash flow, then to wondering where it comes from, and how it should be increased.” I can't get through the quote without laughing because of the absurdity of it. But yet that's the case, isn't it?
Yes, there was another moment in that presentation where you say zero out of 25,000 companies could point to cost cutting as the reason for driving profitability. Zero of 25,000!
At best, he said it was it was two of them. One of the things that Ron and I have been talking a lot about on our show the last couple of months, even over a year now, is subscription pricing. We think that is such a huge innovation because it does exactly what you just talked about. It forces the company to come up with new and better products every single year. Take Netflix, for example, they don't increase the price when the new season of Ozark drops. They constantly have to refresh their product in order to keep the keep the customer happy. So just some of your initial thoughts on that type of thinking.
I appreciate that. Because while certainly it's a noble thing to have a local source, the great thing is that the extra 20% can still be kiwi fruit from the global market. And it is amazing to me, and I try to point this out to my kids when we walk into a Target store, we should be amazed every single time. The fact that we were short on toilet paper when COVID first happened, alright, that's still a minor inconvenience compared to all of the things that we still have. And it's the marketplace that got us there.
With perhaps with different belief systems, different religions, all of these people somehow figured out a way to cooperate with one another.
Yes, well, let's hope that we can begin to get back to this kind of thinking and maybe COVID, as you said earlier, will spur us on to new and better things within our society. What are you working on? We have about a minute left? What are you working on?
I'm going to make a note of that and expect the email. Thank you so much, Jules. Ron, what do we have coming up next week?
Ron Baker : Ed, I'm so excited. We have one of my favorite writers from National Review, Jay Nordlinger who wrote a great book called Children of Monsters, which I can't wait to talk to him about so I'm really looking forward to it.
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