The world is rapidly changing, and the corporate realm is right along with it. Every day, there are more and more reasons to question the status quo and break free from the norms that everyone is used to. Intrapreneur Greg Larkin shares the story of how he was able to foresee one of the most devastating financial crisis since the Great Depression and the backlash he received. With his book, This Might Get Me Fired, he imparts the ways a non-entrepreneur can be innovative within his or her organization.
Author and speaker Mike Evans discusses the importance of being open to other perspectives, the role of feedback in cultivating the ideal corporate culture, and the dangers of complacency, citing Blockbuster, Kodak, and Nokia as examples. Mike has developed a unique perspective from over twenty years of working alongside some star-studded list of world renowned thought leaders. A lot of his work ties into of engagement, accountability, perseverance, and alignment.
I’m glad you joined us because we have Greg Larkin and Mike Evans. Greg is the Cofounder of Recorp. He’s also the bestselling author of This Might Get Me Fired. He’s an expert in courage and a lot of other things. Mike Evans is an award-winning speaker. He’s the author of Achieve With Accountability and he is the world’s expert in accountability and other things as well. We’re going to talk to both Greg and Mike.
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Thriving As An Intrapreneur with Greg Larkin
I am here with Greg Larkin. He and Peter Crysdale are the Cofounders of Recorp. He began his product building life many years ago after nearly getting fired from an investment research startup for predicting that the booming housing market would collapse. I’m not even sure about the years because this might be a little older bio. Is that about what it is, Greg?
That happened in 2006.
I remember watching your video on it. It’s so nice to have you here.
Thank you so much.
You’re welcome. I found your video, I can’t remember who you were speaking to, but you were talking about banks threatening to sue you over your report. It was fascinating to me to listen to how you were on the cutting edge of figuring this out. I worked in lending in 2002 through 2004 so I got out before all the craziness happened, but I was in when the craziness was occurring. I’m interested in hearing that story but I also want to note that you’ve got a book and it’s doing very well. I’m very interested in talking about that. It’s called This Might Get Me Fired: A Manual for Thriving in the Corporate Entrepreneurial Underground. I love the title and I love it when I asked you to be on this show, you said whether you might be the best or the worst person. I want to know what you meant by that.
What I mean by that is I am unfortunately or fortunately incredibly blunt and very honest about what it takes to thrive as an entrepreneur in this huge company that isn’t inherently entrepreneurial. Some people hear that and they think, “That’s a little uncomfortable. I’d prefer to stay in the safe zone,” and other people hear it and they think, “Where have you been all my life? I’ve been waiting for someone to say exactly that,” and there are very few people that are somewhere in the middle.
I don’t like the safe zone. I talk a lot about getting away from status-quo thinking because I study curiosity. I love to talk about things that get you out of the safe zone. This is going to be fun. I want to get a background on you for those who may not know your history. Can you give us a little background? I know Google, Bloomberg and all this stuff you’ve done. I want to know what got you to that.
What got me to that was I started out as the head of product for an investment research startup and we did well. I was the first to build a model that predicted what became the 2008 financial crisis. Because that did so well, while the markets were spiraling out of control around us, we got acquired for almost $20 million. In the process of doing that, I had to make the transition from startup entrepreneur to corporate entrepreneur. I did that inside of the company that bought us, RiskMetrics who has been acquired by a company called MSCI. I also went from there to work on the innovation team at Bloomberg. Through it all, I had to realize that what makes an entrepreneur thrive is very different than what it takes to thrive as an entrepreneur.
It’s a fundamentally different set of skills and a different set of people you have to work with, but the necessity to do it right is as great. You’re constantly wrestling with inertia and the sum costs of building a system that may not be right for modernity. I had to make that transition. The big number that I always focus on is I’ve launched 34 products in the course of my career. When you add them all together, you have an average return on investment of 22X. That for me is the most important thing. When you’re innovating and you’re trying to catalyze innovation in a huge company, that’s not a worthless idea. It’s a number. It’s an outcome. It’s a way in which people are able to solve a problem with you that they were not able to solve with you beforehand. The obsession on that number in keeping the data alive has always enabled me to handle some of the tense politics about change and how to make people embrace change in a company that needs it but maybe doesn’t want it.
That’s such an interesting background and you were talking about building the financial model that you built. What’s your education? How do you build a financial model?
If I told you my education, you’d be like, “That’s not the education of someone who builds financial models.”
How did you get your knowledge to build this? That’s a hard thing to do. From the statistics training and everything I’ve had, it’s brutal.
It was a bear, especially at that time before we had giant databases to match data together. It’s a tough way to build. I went to McGill University in Montreal. That’s where I did my undergrad after traveling around Europe like a Gypsy before I went to college just running around. When I’d run out of money, I’d find a place to bartend. I was a nomad. I studied international relations in Italian for my undergraduate degree. I was a community organizer for the New York Blood Center, which was incredibly instrumental for building that model. After that, I did my Master’s degree in Economics and works for an international nonprofit organization running their microcredit portfolio. Microfinance is making very small loans to some of the poorest communities in the world, but their repayment rates in those loans are unbelievable. Some of the rates of growth in microfinance in communities that have gotten access to credit for the first time is unbelievable.
Through that, I had been building models a lot for microcredit portfolios about how much money can you lend to people who have never had access to credit before. How can you predict how many of them are going to pay you back? How can you predict the growth in their businesses that they’re investing in with your credit? How can you get a gross rate on something like that? What are the social terms of those loans that make sure that they do get repaid? I did have a good framework from that for evaluating how to lend money to poor people and how not to lend money to poor people, albeit through a completely different path than someone who has an MBA and an investment banking background.
When Innovest startup asked me to initiate coverage on the banking sector, I said very honestly that I don’t know how to analyze a bank. I do know how to analyze whether poor people or low-income people are borrowing more money than they can pay back. I know how to understand the economics of the underbanked, which is exactly what was happening at that moment in time in the subprime market. You had communities and demographics that have never historically had access to credit and people were lending money to them like never before. The model I built was simple to a point. There’s great data in the US economy about ZIP codes and counties and you can get information about how much has people’s credit shot up. It’s not credit scores but how much money they have borrowed. You can track the growth rates to an extremely granular level like on a ZIP code basis. You can also match that to real wage growth and you can track that. Right away you’re looking at how much have people borrowed and how much have they made or how much has their earnings changed on a month-to-month and quarter-to-quarter basis.
What we immediately saw was over a seven-year period, people’s credit had shot up by 72%, but their real wages had declined. Normally, those numbers historically go hand-in-hand. They track one another. We also had good data about who are the biggest lenders in each of these communities. From that, we were able to be very early and say Bear Stearns is in trouble, Lehman Brothers are in trouble. They just have posted record profits in their most recent quarter, but on the basis of people being able to pay them back over the long haul, that’s not a sustainable business model. No one who made the loans held on to them. They sold them off to investors. We’re able to track where all of those bubbles were and where that credit was winding up ultimately. I had no training to build that model.What makes an entrepreneur thrive is very different than what it takes to thrive as an entrepreneur. Click To Tweet
One of the things that I had to do as a community organizer, I was onstage in every neighborhood in Brooklyn every Sunday, Saturday and Friday going to mosques, churches and synagogues. I’m speaking to these communities and getting to know these communities and becoming accepted by them. Only at that point was it appropriate for me to ask them to donate blood. It was one of the most wonderful jobs I’ve ever had. It was such a blast getting to know my city in a way that I never knew that before. As this data is coming through, we’re like, “That’s crazy. Why is that such a valuable target for loans when their credit position is so precarious?” I’m like, “Let’s not think about this from the vantage point of an Excel spreadsheet. Let’s get in the car and go talk to people.”
That was instrumental in getting out there and speaking to people who were borrowing this money and saying like, “Who sold it to you? Why did you think it was a good idea? What did they tell you about this loan? What is your expectation of being able to pay it back in five or six years?” We got out of the building and were able to get into the head of the borrower and get into the heads of the loan officers who are issuing this credit. It only reinforced our hypothesis that this was unsustainable. That training was equally important in a very counterintuitive way.
It reminds me of when I was in the subprime business. I didn’t stay in it very long, I think a year. It didn’t make sense to me at the time that these people were coming to me wanting 100% stated income. They work the cash register and would state they made a ton more than they made. They want $1 million houses in Northern California. I’m thinking, “What?” This doesn’t make sense but so many people were doing it. They were trying to live together maybe and share. The thought process was that their credit was bad now and that the market will improve. In a couple of years, they get this subprime loan now but then they refinance it because everything is going to go up. The values and all the housing will go up. You refinance once you’ve fixed your credit in the next couple of years, you get a better rate and then you’re on the path like everybody else, but that didn’t happen. Did you foresee what was going to happen with the glut because of all these loans and all that? Did you take into account all of that?
One of the things that to this day I do whenever I launch a product is I always develop the pre–mortem. I did that back then in earnest for the first time and it was extremely helpful. In the event that what is currently being spoken about as a very small probability of that, meaning home prices go down, nobody can refinance, credit markets and secondary markets freeze. In the event that there’s this perfect storm, what’s the first domino to drop? How do we know this pre–mortem is starting or is happening? We were crushing it. For example, we knew that HSBC was going to fall first. HSBC is interesting because they don’t securitize their credit. At least they didn’t back then. I looked at the bank in ten years. They were an outlier in the banking industry because they have very little dependence on selling their mortgage exposure off.
Once HSBC wrote down their Household Finance or First Household or something. It was a subprime lender they bought. They had a massive write-down and everyone’s like, “That’s it. Something had to get a write-down and Bear Stearns, it’s unfortunate but we can live without it, but that’s okay. I think we’ve already seen everything.” We have done such a smart preparation but that was just the first shoe to drop. That’s how you knew that this huge megatrend where there are trillions of dollars of debt that cannot be back by wages is going to come due and not get paid. From that, we’re able to be pretty astute about who was going to get affected next. Throughout all of this, the house counsel at every bank we were talking about tried to have me fired on a regular basis.
Bear Stearns was not happy. None of them was happy with you. Your boss stood up for you as I recall in your talk that said, “Is this true? Are you sure about this?” How did it go?
I’m a former community organizer predicting that the largest banks in the United States are going to go through hell. I was 28 or something at the time. You have the hubris and cockiness of someone who’s never been sued by Lehman Brothers before when you’re that age. I’m like, “I must be the smartest guy in the room.” You have the house counsel saying, “Congratulations smart guy, you’ve been sued. We’re going to name you individually and who the hell do you think you are?” It was terrifying. I honestly point to that as the day my childhood ended. All the hubris and all the bravado that you bring to your first big breakthrough at your first big job, I had that for one day and then it’s like, “Party’s over, kid. Welcome to adulthood.” We’re talking about tens of millions of legal actions if we don’t play this right. I went from being the rock star at my startup to being the guy that was going to destroy my startup in a matter of hours. It was one of the scariest things I ever had gone through.
I called up Matthew, he was our CEO. Three of the biggest banks in the world have threatened to sue me. They have threatened to cancel our accounts. They’re our clients as well. “I’m sorry that I did this to you. If you need to fire me and do it loudly and make a point of it so that everyone on Wall Street knows that you fired someone who made their life difficult. I completely understand and I encourage it.” There’s a long pause and he says, “Were you wrong?” I said, “I don’t think so. I’ve gone through all the numbers. Thank you for asking.” I don’t think I was wrong. I think I was right. I think they’re uncomfortable with the conclusions and that they can’t disagree with the facts. He says, “Good. Let me tell you what I told them. If any of them comes after us and does what they said, we’re going to print a full-page ad on the back of the Wall Street Journal and the back of the Financial Times publishing your research and publishing their response. Keep going, people don’t fight you this hard when you’re wrong.”
You think about what is commonly said about what it takes to make innovation thrive. You need artificial intelligence, you need to be agile and you need design thinking and a guy running around in the hovercraft or whatever. We had none of those things. We had someone who had an enormous amount of courage to see that through. All the banks on Wall Street had all of those commonly thought of things that go into effective innovation. What they did not have was someone with the audacity to say, “Sorry, I’m going to fall back on the courage of my convictions. If it means I lose my job and destroy my company by doing what I think is right, that’s okay. I’m willing to live with that as the consequence of this.” That was the reason with none of the MBAs that they had access to, none of the technologies and certainly none of the money that they had access to. That’s the only reason we were right and they were wrong was because of that courage. I didn’t think of it as courage at the time and I don’t think Matthew did either. It was only once we were bought a few years later and I have a moment to reflect that I’m like, “That’s incredibly brave.” At the moment there was no Rocky music. It’s like, “What have we done to ourselves?” It felt like we were staring into the abyss with a destroyed startup.Success breeds arrogance and arrogance can lead to complacency. Click To Tweet
It’s got to feel good to be right though. If you had been wrong, how do you think you would have dealt with it?
What I eventually learned after we were acquired and the more I went from this island somewhere off the coast of Wall Street to be in the epicenter of Wall Street, none of them would have done what they said they were going to do. We were too small. They didn’t need to risk the budget of their house counsel. I think Matthew knew at the time that they were bluffing. He’d spent a ton of time on Wall Street. He knew when they were lying. He knew that they had already stepped over the Chinese wall that’s supposed to exist because they can’t cancel the client contract from the perspective of investor relations. Those two people are never supposed to speak to each other. They had already done a bunch of either ethical breaches or legal breaches that are never supposed to happen. I think he knew that and he’s like, “Let’s call them on their bluff because none of this is going to happen.” I didn’t know that at the time. My point being is I had been wrong a million times since then.
It had to set the stage for your book though, what you’ve learned about the difference between being entrepreneurial and intrapreneurial, the foundation behind courage and all these things. I want to get into your book. I love the title. Who is this book meant for and what is your main point in creating it?
This book is meant for anyone working in a huge company who feels like they are stifled. Their life has been consumed by the politics of trying to become a vice president, climbing the ladder, playing the game, playing the politics and watching eternity pass you by in the process of doing that. For anyone who feels like they have deferred their impactfulness in order to amplify their corporate status, this is exactly who the book is for. I wrote it while I was a senior in the innovation team of Bloomberg. On paper, it was the best job ever. In reality, I would come home at night and be like, “I am not solving a single problem that an actual human being has.” My days are consumed with BS of writing the right memo and crafting the right PowerPoint deck.
What I’m not doing is building solutions that solve problems that people can’t otherwise solve. Coming from an entrepreneur background, having launched so many products that had such a huge impact and having worked with people where there is this incredible feeling of solidarity between us while we were building what we built, that was extremely hard. It was one of the hardest things I ever experienced. The only thing when I’d wake up at 3:00 in the morning with what am I doing with my life’s angst, the only thing that can make me go back to sleep is if I started to write. What am I doing? What am I going through right now? How would I do this differently? Six iterations later, that’s what became the book. That’s how I knew I was onto something. The inside story of what it takes to be innovative in a company that is not innovative hasn’t been told, not from the perspective of someone who is the actual entrepreneur. That’s how the book began.
I know you’ve taught innovation at Columbia and you’re a senior advisor at Goldman Sachs, you had been off StreetLinks and you’ve done all these things. What I was thinking when you were saying that was it sounds great but you get a CEO whose culture is to surround himself or herself with yes-man or yes-women type of people. We know how hard it is to change the culture. How do you break that cycle and how do you get anybody to listen?
There always needs to be a higher cost of not innovating and that’s the most important thing there. There is no company in the world that doesn’t have a problem. Every company in the world has a problem they need to solve and can’t solve by doing what they’ve always done. That’s only becoming more pronounced in our time when startups with no capital, no expertise and no budget suddenly are eating into the market share of the biggest stalwarts in the economy. If you are an entrepreneur, you have to run into the burning building of that company’s business and use entrepreneurship to solve that mission-critical problem. That’s the most important thing. That’s the only time you will experience enough humility, willingness to change, eagerness to embrace new ideas and new thoughts and new levels of candor that hasn’t happened before.
All those layers of protection of sycophants telling you what you want to hear. They are the ones that got you into the crisis. It’s the only time where there’s a willingness to change course. That’s been my experience throughout and then the other thing is there are sycophants but in the executive echelons of every company, there is always someone who I would call the godfather. There’s always one executive who is determined to use their power to create an innovation inflection point inside of that company. They are eager to find someone who’s punk rock enough to build something new. Their biggest frustration at night is that they go home and they meet people that looked exactly like everyone else they’ve always met inside the company. They haven’t found someone totally different and outside of that company would be a startup founder.
I’ve experienced that many times and it’s this unknown secret society of the punks who are incredible entrepreneurs, who somehow find out the huge companies and the godfathers who have innovation religion and existential anxiety about what will happen to the organization if entrepreneurs cannot find their voice and cannot act as a source of power inside of that organization. Every company has it. The magic is when you get them to find one another and get them to take a stand together and fight for the new normal that they know needs to happen. That’s the hard part. That’s a lot harder than launching a new app that built something with artificial intelligence.One of the deepest cravings human beings have is the need to feel appreciated. Click To Tweet
You bring up many great points and I wish we had more time to go into more things. I was watching one of your videos of all the courage-based things that we need to do and principles of how to become more innovative and all these things that you touch on. It would be helpful for people to know how they can find your book and I’m sure if they want to hear you speak and all that stuff, is there a best way for them to get more information about this?
There are a few ways. You can go to my company’s website. My company is Recorp. You can go to Recorp.co. You can find me on LinkedIn. I’m Greg Larkin and I always respond to everyone who writes to me on LinkedIn. When I was at Bloomberg and I couldn’t sleep at night, it was one of the hardest times of my entire adult life. I wrote this book because it’s very lonely when you feel like you’re the only entrepreneur in this huge company. You’re not alone but it feels that way. It was only afterwards when I started to focus on not just building the products but building the process and building the groups of people that make those products come to life, that I started to realize that you feel like you’re alone but you’re not. It’s just very hard to emit the right sonar signals so that all the other entrepreneurs find you. My point being, I encourage people who are going through that to reach out and speak to me and send me a note on LinkedIn. I didn’t write this book for self-promotion. I wrote it to be of service. I’d be remiss if I didn’t put that out there.
There’s so much great information, Greg. Many people can use this and this is unique. There aren’t people who give advice on this. I hope everybody takes time to check out your site and your information and contact you. I appreciated having you on the show. Thank you so much.
Thank you for having me. It was a blast.
The Ideal Corporate Culture And Leaders We Need with Mike Evans
I am here with Mike Evans, who is an award-winning speaker and author. He’s developed a unique perspective from many years of working alongside some of the star-studded lists of world-renowned thought leaders, some of whom have been on my show like John Kotter. You’ve worked with Stephen Covey, Tom Peters, Jim Kouzes, the list goes on and on. You’ve also served in executive leadership consulting roles with Kotter International, which is huge. All of these are unbelievable. I’m very excited to have you here. Mike, welcome.
Thank you so much for having me. I appreciate the opportunity.The easiest and simplest definition of corporate culture is the way your people think, act, and behave. Click To Tweet
You’re welcome. I found a lot of your work fascinating because it ties into a lot of the things that I like to study and research. Your book ties into engagement, accountability, perseverance, alignment, change and all those things that I’m trying to work on too. I noticed that you’ve worked with a lot of clients, one of whom I worked with for many years, AstraZeneca. I worked there for a long time, but you’ve got the who’s who of the companies you’ve worked with, which is great. I want to get a little background. I did give some but how did you get to the point where you worked with this star-studded list? That takes a lot of work to get to that level.
That’s interesting because there was never a strategic plan to make that happen. It was serendipity. I started way back before FranklinCovey became FranklinCovey. It used to be called Franklin International Institute in the ‘80s, then it changed to Franklin Quest and then there was the merger with Covey and it became FranklinCovey. That’s where I started my career when FranklinCovey was known as Franklin International Institute and Hyrum Smith was the founder of that organization. Hyrum has done extensive work and there’s time management then life management. He was also friends with Stephen Covey and after several years of being involved with Franklin International Institute, the two firms merged and became what is known as FranklinCovey. That’s how I started in the industry.
After many years with that firm and that organization and helping organizations all over the globe implement much of Stephen and Hyrum’s thinking to how have it operationalized to help them achieve what matters most within their organizations, I was recruited by Tom Peters Company. I was always a big fan of Tom and the work that he did ever since his book, In Search of Excellence, back in the ‘80s. Tom has written probably twenty bestselling books since that time. Having the opportunity to go work with a person who I truly admired and I thought I was a leader in the industry, I could not say no. I am fortunate enough to have made that decision to make that jump into working with Tom. Jim Kouzes was part of our organization. He was helping Tom run the Tom Peters Company. Not only was I working with Tom but I was also working alongside Jim Kouzes who has done 30 years of research into what exemplary leaders do to get others to voluntarily choose to follow them.
I learned a lot from those people that led me to be recruited by John Kotter to help him in his organization launch his consulting practice to help organizations around the globe successfully lead transformational change efforts. John’s background is all on what does it take to successfully lead a large scale transformational change effort. His book from years ago, Leading Change, was a huge bestseller. After all of that, I was recruited back by Chris McChesney who’s the global leader and wrote the book, The 4 Disciplines of Execution to come back and help FranklinCovey with their execution practice. It evolved from there. Now, I’m out on my own using everything that I’ve learned to help my clients achieve what matters most.
That’s such a list of impressive people who have done some amazing things. You’ve got a lot of them that you’ve worked alongside. It’s so fascinating. Kotter, I was excited to have him on the show. I’ve taught more than 1,000 business courses and he’s probably cited in every single one of them. He’s such a huge name. Covey would have been somebody I would love to have known and work with. His The 7 Habits are still being used so much. How much did their work influence what you do now?
Prior to my joining that organization, Stephen’s book, The 7 Habits, changed my life. I was a young guy at the time but it was significant for me. I had a major epiphany when I read the book. You talked about perception and your interest in that area. In the book, one of the things that transformed my life and it’s this revelation that I had. If you recall early in the book, there’s a drawing of a woman. Half of the people that look at the drawing see it as an old lady, the other half see a young girl but it’s the same picture. The learning is that everybody sees the world differently. You need to be open to the perspectives of others and understand that because you may see things one way does not mean that others see it the same way.
If we’re open to the perspectives of others as Stephen Covey used to put it, “Seek to understand before trying to be understood.” It’s transformational. You no longer feel like you have to defend your position. You learn more by being open and learning what others see. When you can see more than what you can see on your own, your opportunities escalate. You see more, you see bigger realities, you see bigger opportunities and possibilities. You might see dangers that you may not have seen. For me, as a younger guy, that was transformational because a lot of people believe that whatever they see is what everybody else sees. That was such critical learning for me at a young age.
That’s so important. When I did my research for emotional intelligence, I learned so much about empathy. You’re talking about a lot of the things that are important to empathy and understanding other people. That’s a famous picture that you talk about with the woman of what you see or what you don’t see. I know right now, a lot of the brick wall with the cigar in it is going around. You look at it and you don’t see it. Sometimes there’s a cigar in it and once somebody tells you, you can’t see it. It reminds me of you don’t know what you don’t know until they tell you. It’s so hard not to focus. How many are walking around not knowing what we don’t know?
It limits our ability to operate at peak levels. If you only see things your way, you’re truly missing a lot. It’s a dangerous precedent. A single perspective is the enemy of reality because no one person can see all there is to see. You need to be open to the perspectives of others. You need to be open and candid in your communication. You need to be asking for offering feedback in a positive, forward-looking, upbeat manner. You need to be talking about the elephant in the room. If you’re not doing those things, you are missing out. If you’re only viewing the world based upon your own perspective. People that are highly effective, if you think about great leaders, exemplary leaders are always seeking perspectives of as many people as they possibly can from employees, peers, colleagues, vendors, partners and customers. It allows them to see a bigger reality, therefore, they can make better decisions. If you’re only making decisions based on what you see, you’re not making the best decision because you do not see all there is to see.
It ties into what I write about with curiosity because a lot of people are held back from seeking out information, which is so important. I see it as a spark to a lot of these things that lead to engagement and productivity. If we can work on asking questions, a lot of it we’re held back by our fear, the assumptions or the voice in our heads, technology and our environment from what we’ve experienced. Are you a curious person? If so, how did you overcome some of those issues?
I’m curious. It’s funny, I joke with people oftentimes. I said the only people that know everything was my two boys when they were sixteen and seventeen. As you get older, you realize you know less and less. It’s so important and you become more open to the perspectives of others. You start to realize if you communicate in a positive manner, if you can develop your interpersonal skills, if you have empathy, if you can give feedback in a positive forward-looking and engaging manner that doesn’t put people off, you begin to have these great conversations that open up Pandora’s box as far as opportunity and possibility.
You mentioned and you stated and used the word past experiences. What I have found oftentimes in organizations when we go into organizations and we talked about how important all those best practices of communication are seeking perspectives, being open and candid, asking for an offered feedback, talking about the elephant in the room. Oftentimes the reason those things don’t take place is because of the experiences people have had previously. We often go into organizations and we ask people, “What’s your perception of feedback in your organization?” Most often the response is something similar to, “We’re all so busy here that the only time we give feedback is after someone screws up.”
Think about that. That’s the only time you’re giving feedback. The belief people start to cultivate around feedback is that, “This is going to be negative.” If that’s your belief and we act on our beliefs, the action is, “I am going to avoid feedback.” If you do feedback differently and that’s something we help equip leaders, managers, supervisors and all employees at every level with a manner in which they can give feedback that is truly engaging. People like it, it’s upbeat, it’s forward-looking, it’s positive and it transforms the way that they communicate within organizations. It’s imperative that individuals, teams and organizations embrace feedback from as many people as they can. Get as much feedback and as many perspectives as possible. It helps you be significantly better than you are now.
I know that you have a lot of talk about how much feedback, the Millennials want to hear seven times a day, how they’re doing or all the different types of companies who maybe say, “We shouldn’t do appraisals anymore.” Some people that I have talked to say they got rid of appraisals and then people were going, “We want those back,” then they let them write what they’d like to see in appraisals. What’s your idea of the yearly appraisal or how often it should it be? Are they good or bad?A single perspective is the enemy of reality because no one person can see all there is to see. Click To Tweet
Every organization I have worked with does them differently and they’re all perceived differently based upon the skill sets of those that are either conducting them or have designed the process. I believe quarterly appraisals are fine but what I find that much more effective and supplements and enhances, it doesn’t have to replace any appraisal system that you may have in place, we talked about what I call AC-focused feedback. The A stands for appreciative and C stands for constructive. It’s feedback and it’s focused on desired behaviors that we know as an organization, if we see people doing these things more frequently, it will propel us to a better place in the future. When we talk with organizations and equip them with this new thinking, what we encourage them to do is get clear on the behaviors and actions that you want to see happen a lot. If people are doing these things, if they’re thinking these things, it will propel you to a better place than where you are now.
We encourage people to have feedback sessions. These don’t need to be formal feedback sessions. These could be 30 seconds conversations where I give you appreciative feedback based upon something I observed you do. We know it’s the desired behavior we want to see more of, then I’ll offer you some constructive feedback as well. I might say to you, “Diane, I appreciate the fact that within our organization, you are always seeking perspectives from that team over there. I think you can do even better by getting feedback and perspectives from this other team over here. Here’s what you’re doing well, keep doing that. Here’s what you can do to be even better.” It’s a very simple technique but it’s much different than what many people call constructive criticism, which I would say is an oxymoron. Constructive is to build up, to criticize is to tear down.
With that old constructive criticism model, it’s generally, “Diane, here’s what I think you’re doing well but,” and when people hear the word “but” they tune you out, they do not listen. We encourage you to look for people that are doing the right thing and then give the appreciative feedback. It draws attention to desired behaviors. When you give genuine and authentic appreciative feedback, people will display those behaviors even more often into a stronger degree. One of the deepest cravings human beings have is the need to feel appreciated. When you call attention to something they’ve done well, every time they see you, they’re going to think, “Diane likes when I do this,” and they’ll do it even more often.
A lot of leaders think that they’re rewarding certain behaviors. With curiosity, the majority by far is 85% or 95% of leaders thought they were rewarding for being curious, but only half of the employees felt they were being rewarded for that. How do you know if you’re rewarding these behaviors, if your employees see it as rewarding? What behaviors do you think are the most important?
It goes back to what we were talking about. If you wanted to know how effective you are in anything, you have to ask for feedback, otherwise it is what I would call a phantom reality. You may believe you’re doing something wonderfully well but on the other hand, those around you may not have that same perception. The only way to truly know how you’re doing as a leader, as a manager, as a supervisor, as a mother, as a father, as a friend, is you have to ask for feedback, otherwise you’re guessing. It’s critical to ask for feedback. The second part of your question is what the behaviors are? When we do work with a client, we always want to get crystal clear on what are the top two or three results that if your organization achieves will put you in a fundamentally better position than where you’re at now?
Let’s get clear on what’s critically most important. This is different than what we might call the whirlwind of daily activity of everything that you have to do to keep the lights on in an organization. In addition to that to avoid complacency, what are the two or three results that if you achieve those, helps you achieve better market share and makes you distinctive among your competition? What are those things? We get clear on those first. That’s the first step. What do you want to be? Where would you like to be? We look at that and say, “If that’s where you want to get to, what would your culture look like? How would people think? How would they act? How would they behave?” That’s is the easiest and simplest definition of the corporate culture. It’s simply the way your people think, act and behave.
That’s where we would come up with a list of the top seven to ten behaviors, actions and beliefs that if you saw these things happen more frequently, that’s going to ultimately cultivate your optimal culture. We equip managers, supervisors and leaders with some proven tools, fundamentals and principles that allow those beliefs, actions and behaviors to manifest in the way people do their work. It’s not complicated, complex or overwhelming. Individuals can incorporate this into what they’re already doing. They’re always astonished that when they start to do these things, they see change happen pretty quickly. We tried to keep everything we do very simple, memorable, pragmatic and it’s never overwhelming or complex because then it won’t be happening in your organization.
I’m curious if there are certain behaviors that you can’t live without no matter what company and situation.
I believe there are. We’ve pinpointed what we call twenty best practices of high performing and peak performing teams. We never forced any of that on any client but when a client struggles and wants to find out what is it that we should be focused on, then we’ll go to that list. We encourage clients to sit down and give some thought as to what they believe it would be. Often, what they come up with can be mapped directly to the twenty best practices that we’ve identified over 25 years.
I’m sure a lot of the seven habits fall in there. I was wondering with that background with FranklinCovey, did it kill you to get rid of Day–timer?
I am looking on my desk at my Franklin planner that I have had for many years. It’s sitting here. I will never ever get rid of it.
I think that they had a unique way to keep people on track. I was wondering if they transformed it into some other format but you can still get it that way.
I think FranklinCovey had to set down. They add up to 230 retail stores at one point but I think they’re down to two because things have changed and everything’s done online. You can still get the materials but for me, it’s not just about being organized. It’s about making sure that you’re focused on the things that matter to you professionally and personally and keeping you focused. Oftentimes, we can get distracted based upon the tsunami of things that we have to deal with on a daily basis. If you don’t have a plan every day, you can go way off track and not recover as quickly as you could if you had a plan. People often say, “That planning is too much,” not planning is even worse.
You can plan the plan to plan the plan and then never do the planning. Some people do that but I’m a planner and I love all the stuff like that where you can keep track. I love technology for that reason because I’m a Google Calendar girl. Every five seconds something is popping up. All of the things that you’ve worked on are fascinating to me because it ties in so much to the things that interest me. You talked about mindset. I was watching a lot of your talks. I like how you walked around through the crowds and you didn’t stay up on stage and you were accessible. You also mentioned a lot of things that I talked about with curiosity. You talked about talking to the elephant in the room and how people sometimes don’t say anything. We need to get people talking more about things and asking questions because we’re getting so much status quo thinking. With the technology changing, you can’t do things the way they did it in the past necessarily. Sometimes the Day–timer or whatever you want to call those now are different. How do we stay proactive and be aware of what’s coming next?Employees are so used to getting feedback only when they screw up that they mostly try to avoid it. Click To Tweet
That status-quo and complacency mindset is not relevant to what we’ve been talking about but every individual, every team and every organization needs to have a deep-seated mindset of what can we be doing to stay ahead. Things are changing rapidly that if you are even a little bit complacent as an individual, department, team or an organization, you will find that somebody’s going to leave you in the dust very quickly. Think about what happened to Blockbuster or Kodak or Nokia. They used to be leaders in their industries but they had this complacency mindset. They were very successful. Sometimes success breeds arrogance and arrogance can lead to complacency that nobody will touch us. The next thing you know somebody reinvents the industry.
For example Blockbuster, Netflix puts them out of business. Think about Kodak. They didn’t see the revolution in digital photography. The funny thing was in 1978, they had an employee named Steven Sasson who invented digital technology and they didn’t jump on it. Nokia used to be the world’s leader in cell phones and now they’re on the verge of extinction. They didn’t see the smartphone revolution. Complacency is extremely dangerous for individuals, teams and departments. Every single individual need to understand that what you were hired to do a year or two years ago, it’s going to change. You’re going to need to develop new skills and new competencies because technology is changing at an exponential rate. What you learned two or three years ago, it may be obsolete in two or three years. It’s important for everybody to understand that.
Marshall Goldsmith had been on the show. His book What Got You Here Won’t Get You There was such an important one because that’s what happens. We’ve got all of these examples of Kodaks of the world and it seems like they’re too big to ever go down but we’ve seen that they can. I’m trying to remember in your book because you were talking about how to recognize good performers and bad performers and different things. You talked about nevers and maybes. Can you touch on that?
This is not only in our research but it’s also backed up by what Gallup has pointed out to and looked into over the past two decades. In any given organization, whether it’s a team of 10, 100, 1,000 or 10,000 and all organizations are different but on average, the data revealed the old bell-shaped curve. The 20% of your organization or your team is what we call the models. They will walk on broken glass for you. They’ll do anything. They’re your top employees. The 60% are on the fence, we call them the maybes. There’s 20% who are on the left-hand of the bell curve. We call them the nevers, the no-noes, the naysayers. These are the people that will never ever help you achieve anything worthwhile. They’re bitter, cynical and they feel entitled. They want to be paid for showing up. They’re often recruiting the maybes to the dark side, “Over here, we don’t have to do anything.”
A lot of leaders, managers and supervisors mistakenly attempt to convert the nevers to the maybes or the models. Our advice is always don’t waste a brain cell trying to convert them because they’re not going to change. They will never ever change, that’s why we called them the nevers. You’ll do a lot of damage to your culture when you attempt to convert the nevers because the maybes and the models are watching you do that. They see you reward the nevers for their horrible behavior. All the leverage is with the maybes, the middle of the bell-shaped curve, 60%. If you can shift that five degrees to the right, to the model category, it has an exponential impact on how your organization can perform and the results you’ll achieve. One thing that struck me and this was years ago when I was with Tom Peters Company, the Gallup research said that 20% that we call the nevers, their number is 19% based on years of research. They call that group poison. They said, “You would be better off paying those people not to come to work.” That’s how much damage they do to your culture.
Everything that you write about ties into what I’ve found in my research. I love your book, Achieve With Accountability. A lot of people would be interested in finding out more about what you do, how you speak, get your book and all that thing. Can you share a link or somehow to reach you?
The work that I focus on is around culture shaping, change leadership, flawless execution, employee engagement, and this whole body of work that we’re now calling disruption in the new world of work. With everything that’s happening, what do individuals, teams and organizations need to do to embrace for this rough ride? It’s going to be a lot of turbulent water for years to come and it’s not going to calm down. We’ve developed what we believe is a toolkit that helps individuals, teams and organizations thrive and excel in this new world of work. My website is very simple, it’s RealMikeEvans.com and my direct number if anybody would like to chat or have some information sent along is (412) 334–8672.
Thank you so much, Mike. I enjoyed reading all of your stuff on your side. I hope people take some time to check it out. Thank you so much for being on the show.
Thanks for having me, Diane. I appreciate it.
I’d like to thank both Greg and Mike for being my guests. We get many great guests. If you’ve missed any past episodes, please go to DrDianeHamiltonRadio.com. I hope you join us for the next episode of Take The Lead Radio.
- This Might Get Me Fired: A Manual for Thriving in the Corporate Entrepreneurial Underground
- Greg Larkin on LinkedIn
- John Kotter – Previous episode
- Kotter International
- Tom Peters Company
- In Search of Excellence
- Jim Kouzes
- Leading Change
- The 4 Disciplines of Execution
- The 7 Habits
- Marshall Goldsmith – Previous episode
- What Got You Here Won’t Get You There
- Achieve With Accountability
About Greg Larkin
Greg Larkin has built some of the most transformative innovations of our time inside some of the biggest organizations on Earth. And he’s done it in record time. “Fast,” “transformative,” and “big company” are often incompatible. But after 33 products launched and a 22X return on investment Greg has demonstrated that speed and impactfulness are as possible in huge companies as in startups. At Google, Bloomberg, PWC, and across the Fortune 500 Greg has built astounding coalitions of entrepreneurs and empowered them to catalyze exponential growth. Greg is the best-selling author of This Might Get Me Fired, the co-founder of Recorp, the former director of new products at Bloomberg, and in 2006 was the first person to publicly predict the 2008 financial crisis. He is a lifelong New Yorker and still gets nostalgic for when the city was seedy and dangerous.
About Mike Evans