Ep. 1 Systems Leadership, Robert Siegel, Stanford

Join Suzan and Stanford's Robert Siegel as they discuss his latest book, The Brains and Brawn Company: How Leading Organizations Blend the Best of Digital and Physical, and how to be successful in a world that blends the digital and the physical.


January 2023
ExecU Podcast
Episode 1: System Leadership with Robert Siegel, Stanford University

BRIEF SUMMARY OF EPISODE

Robert Siegel is a tech executive, venture investor, author, and lecturer in Management at the Stanford Graduate School of Business. He has taught courses ranging from Financial Management for Entrepreneurs to The Industrialist’s Dilemma, and he has led research and written cases on companies including Google, Charles Schwab, and many others. He is also a General Partner at XSeed Capital and Venture Partner at Piva, and he sits on the boards of various enterprises.

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KEY TAKEAWAY

Robert: "Disruptors are not ordained, and incumbents are not doomed. It's really going to be the leaders who are going to make it happen and can really bring in the competencies and best practices from both. That's what's going to be successful over the next couple of decades."

ADDITIONAL LINKS

Share the podcast:
https://execupodcast.buzzsprout.com/share

Robert's Book:
https://www.gsb.stanford.edu/faculty-research/books/brains-brawn-company-how-leading-organizations-blend-best-digital-physical

Robert’s Website:
https://robertesiegel.com/

Take a Course from Robert:
https://systemsleadership.io/ 

Sponsored by Viv Higher Ed: 

https://vivhied.com/

Transcript

Rob 0:00

disruptors are, not ordained and incumbents are not doomed. It's really gonna be the leaders who are gonna make it happen and can really bring in the competencies and best practices from both. That's what's gonna be successful over the next couple of decades.

0:13

welcome to Executive the podcast, bringing you actionable insights from faculty at the world's top business schools. I'm your host, Suzanne Brinker. Today I'm excited to share a conversation with Robert Siegel. He's at the Sanford Graduate School of Business, and we'll be talking about system leadership.

Suzan 0:30

Rob. Hi. Good to have you on the show.

Rob 0:32

Thank you. It's a pleasure to be here.

Suzan 0:35

So we're really lucky that you, were willing to meet and talk about your research and your book Brains and Brawn. Really excited to dive in. Before we go there, can you just give us an outline of sort of your journey to your position that you have at Stanford today and everything you've done. In your career?

Rob 0:52

It was a long and winding road. I started my career in the software industry. Worked for a company that back in the day wrote software originally for Commodore 60 fours and one 20 eights because I am that old. Eventually we took that company public in the mid nineties. It was called Geo Work. So we did operating systems for PCs and mobile phones. Then. Did my graduate work at Stanford when I was at Stanford. Was lucky enough to be taught by Andy Grove and Robert Bergman. Andy Grove, the former CEO of Intel. I went to work for Intel and then left Intel after four years and started my first company. So I was an entrepreneur. That made the world's first digital picture frames and that company got acquired by Kodak, then worked for a company, spun out of the engineering school here at Stanford that made image sensors and image processors. And that company got bought by Sony. And, then I actually went to work for ge and ran a division of GE in GE Security. And then I became a slimy scum sucking venture capitalist, and did that for about 15 years and have been involved in a variety of firms there. And then I started teaching at Stanford. In about 2003, I was working with Robert Bergman, who was one of my mentors. And we wrote a few cases together and that had a couple of papers published. In 2011, I was given a Dean's appointment as a lecturer. And, over the last, 11 years, my career here has just kind of grown. And last year I taught six different courses. And so my career now is a combination of investing, teaching as well as just, sometimes doing some public speaking and work with largely global Fortune 50 companies on strategic issues around digitization, blending, digital and physical, sometimes even investing in transformation. So it's been a long and winding road, and I'm grateful for everything that I've had the privilege of doing.

Suzan 2:34

Wow. It sounds like. All the things that people might be the most intimidated by you have done, right. Starting companies that went public, leading large divisions at, you know, leading firms, uh, globally, and then also also becoming an author and, a professor. It's really cool to hear that whole,

Rob 2:54

It sounds cooler than it is, right? If you ask my wife and children, I'm the most boring man alive. And I like to say, and there's a reason I'm bald and my beard is gray from all the mistakes I've made over the years, I'm lucky that. I've worked with great people and in great organizations. I think

Suzan 3:08

our children aren't supposed to be impressed with us. I think it's supposed to be the other way around.

Rob 3:12

Then I have succeeded. Cuz my kids are like, yeah dad. It's usually with an eye roll.

Suzan 3:18

I think you're not the only one there. Many people will relate. But you wrote this book, brains Andron, and it's based on a framework that you develop that you teach to business leaders all over the world. Can you talk about what this Brains and Bran framework.

Rob 3:32

Absolutely. So one of the courses I started seven, almost eight years ago at this point was called the Industrialist Dilemma, and I was lucky enough to collaborate with Aaron Levy, the CEO of Box and Max Vessel, who's currently the chief Learning Officer at SAP and was previously the Chief Innovation Officer. and we were looking at exploring, Silicon Valley was going into all of these traditional industries, whether it was healthcare or mobility or financial services. There really wasn't an industry where suddenly you saw the digitization capabilities coming into these industries and we saw. The Silicon Valley firms were trying to come in and large incumbents were trying to, figure out how to respond and bring new, competencies in house. And originally our thesis was that, Silicon Valley's gonna take over and crush these companies and we could not have been more wrong. We brought in, over the seven years of variety of organizations from all over the world, incumbents that we're dealing with, the transformation disruptors who were trying to go after them. And what we found was, Incumbents were not doomed, and disruptors were not ordained, and that the winning companies, the ones that were doing the best, were ones that had really learned how to take the best practices and mindsets of both. And so the idea behind the Brains and Bra company was to create a framework to allow organizations. To evaluate how they were doing on five digital attributes, or the brainy attributes and five physical attributes or the brawny attributes. And we look at ways that products are developed, we looked at ways that organizations are structured and how that's had to change. And so we came up with these. 10 criteria, five digital, five physical, and then we do the analysis in the book looking at, what are some best practices and are things to learn. Everything from how to use analytics like the left hemisphere of our brain, how to harness creativity, the right hemisphere of our brain, how we tap into the power of empathy, our amygdala. The prefrontal cortex for how we manage risk. And finally, like the inner ear for how we balance ownership and partnership. And then on the physical side, on the brawny side, we look at like the spine. How do we manage logistics inside of an organization? Hands the craft of making things in manufacturing and how that's changing muscles, how we operate at size and scale on a global basis. And we can use digital to reach people, globally in ways that we couldn't before. And hand eye coordination. Which is really about how you shape and drive an ecosystem. And then finally stamina. How do you survive over the long run and over decades and decades? And so the goal of the framework is to allow organizations to learn best practices in each of these 10 areas and actually rate their company and figure out like what works, what doesn't work, where are they excelling, where they struggling, and hopefully be able to make improvements in those areas where they need. The whole thing about what makes the body work and that's really where we think the great organizations in the future are gonna excel is when they really understand how to do both. Again, I'll come back to that notion that. Disruptors are not ordained and incumbents are not doomed. It's really gonna be the leaders who are gonna make it happen and can really bring in the competencies and best practices from both. That's what's gonna be successful over the next couple of decades.

Suzan 6:41

So it's not as much about the circumstance of an organization in terms of whether they've been around for a long time or if they're ready to innovate because they're new, but it's about the people who are leading them and their ability to bring it all together in a, in a way. Matches what the market demands at the time. Would that be

Rob 7:00

accurate? You've nailed it. The last chapter in the book talks about this idea of systems leadership which is actually a course that I co-teach with Jeff Emel, my old boss and the former CEO of ge. And with that chapter, we really try to focus on the attributes of leadership that are require. For someone to be successful in a world that blends digital and physical. So the first part of the book, the brains and broad framework sets up what is the digital and physical dynamic and what do you have to do from products and organizations. And then I finished the book with trying to understand that leadership side and how are competencies gonna be different. For example, it's not just necessarily that the youngsters are gonna be able to take over the world just cuz they're young. And again, that the dinosaurs, the old people are gonna die. It's gonna be the leaders who actually. Figure out how to blend the best of both that are actually gonna, I think, help drive their organizations a success over the next couple of decades.

Suzan 7:50

Yeah. You shared that chapter with me and I really enjoyed reading it. In the beginning of that chapter, you outlined four key questions that Lidos should ask themselves. Do you mind going over those?

Rob 8:02

Sure. you know, When I work with companies and people, I ask, you know, I go through all the stuff that I've learned in these amazing companies that I've studied and had the privilege and good fortune to learn from. And what'll happen is someone will look at me and say, okay, Rob, what do I do now? and I start with the first question, which is, What do the changes of digital and physical mean for your customers? Especially in larger organizations, we spend all of our time talking internally to ourselves. This happens even at universities, right? So the first question I try to ask people is, what's going on in this blending of digital and physical? To your customers, what does it mean for them? In a world where everything's connected, your customer's life has changed, and so can you really understand what's going on in their world and in their head. The second question that I'll often ask people is, what is your company's unfair competitive advantage, to make it very colloquial, if you don't want to throw out the baby with the bath. What is your baby Like? What's the thing? In a world of disruption, in a world of transformation, what's something your company does right now that you don't wanna lose? Cuz it's gonna matter. Go for on a go forward basis and your company is great at it. The third question that I'll ask people is, what is your company not doing today that it needs to be doing? And I usually add parenthetically, and everybody knows it, like oftentimes like a company knows what it needs to be doing, but they just, oh, we tried and it didn't work, or, we don't know how to do that. Or, we will never be able to compete against this other company on this. And said that no one does it. And then the fourth and final question as I ask is, how can individuals change their behaviors? As a systems leader, what are one or two things that they can do differently? So as one reads the book and you double click on, on each of these things, I try to, drive people towards taking specific and concrete actions based on what we've learned in all the great, companies and leaders that we studied.

Suzan 9:46

I especially love the question around what does everyone know needs to happen, but hasn't happened yet. That seems very applicable to many different organizational cultures.

Rob 9:56

Yeah. Yeah. It's and the thing is, people, it's not that they don't do it because they're not smart. On the contrary, they're very smart. But it's like, it's kinda like, why are we not doing this and why are we not making this happen? And it's too easy to get comfortable, you know, if you think about it, my colleague Robert Berg. Here on the faculty, we'll often talk about. The men and women who run large companies aren't dumb, and on the contrary, they're quite smart. They figured out how to be successful and build and run a company at scale, which is really hard to do. And they got rewarded for it. They got promoted, they got pay raises, and now all of a sudden the world's changing. And so it's like all of a sudden we're asking people like, you have to give up everything that made you successful in the past in order to be successful in the future. That's hard. That's really hard for people. So you kind of have to figure out, okay, like what are we not doing that we need to be doing and what's stopping us? And oftentimes what's stopping us as the person in the mirror.

Suzan 10:49

It even means that when I think back to a lot of young professionals I've worked with who have been successful because in school they were rewarded for studying hard and following the assignments and not thinking too critically about what the assignment actually is. And then they come into the working world and they're supposed to kind of flip that on its head and and be the ones who are in charge of the questions and the assignments. That's a really tricky transition. And then throughout their careers, having to continue making transitions like that is more and more challenging, kind of the more stuck they get in their habits, perhaps.

Rob 11:27

Yeah. It's funny I like to joke around as a father of three Gen Zers, and I'm Gen X, I think we completely destroyed a generation of, of children. And you've read about this, if you're, you know, the coddling of the American mind and the lack of unstructured play time for kids and you see it in the race to get into universities. I Even here at Stanford, it's the same thing and the pressure to get into top universities. And kids spend all their time, they do homework, they're in organized sports, they're doing volunteer work and like you have that race and how do. Our, the younger generation to figure out that not the universe is not prescriptive. Right? And if the pandemic taught us anything for the whole planet, which is like we're 8 billion people on a rock hurdling through space, like the universe is just laughing at us when we think that we can be prescriptive and control everything. And so how do we adapt to these disruptive times? And that's really a lot of what Brains and Bran is about. And we're going through, I believe one of the biggest changes. We're in a world where everyth. Is connected. Every product that we build is connected, and the way we sell and communicate with our customers is different. And so how do we use that capabilities to serve them better? Digitization is often about cost reduction, taking analog processes inside of an organization and making them digital for cost efficiencies. Digitalization is about serving your customers better, and so how do we create that mindset? We have to be open to new and constant change. And by the way, humans hate change, but it's only gonna speed up on a go forward basis. And leaders are gonna have to be know how to manage their teams and their companies and their customers through these very uncertain times.

13:04

executive. The podcast is sponsored by ViiV Higher Education, a full service marketing agency and enrollment strategy consulting firm for colleges and universities. ViiV is passionate about executive education and lifelong learning. Today's episode is brought to you in collaboration with the Stanford Graduate School of Business.

Suzan 13:23

So in the same chapter two, you write that trying to play it safe and stick to the status quo can lead to disaster. Mm-hmm. why do you say that?

Rob 13:32

Human beings don't live forever. and plants and animals don't live forever. And there's nothing that says the companies need to live forever. If we go back to 1970, Alvin Toler wrote the book Future Shock, which is if you go back and read this book, it's terrifying. Just this guy saw the future. He talked about experiences, the rise of cities. He talked about fast fashion, like all these things that he saw, and one of the things that he talked about, he coined the phrase information overload, which. Technology is changing so quickly that we as humans have only evolved so much and we're having a hard time processing all of the changes in society and the speed with which those changes are happening. And the thing of it is like technology's not slowing down. And so the impact of artificial intelligence, machine learning, things like additive manufacturing, sometimes called 3D printing. There are so many things that are impacting who we are as a species in our society that like if you still, you're gonna get owed over, right? Cuz the world is changing and the speed of change is only increasing. We may not like it, but it's like you can't fight it. So leaders are gonna have to kind of get in front of that if their job, if you're a steward of the organization and your goal is to leave it better when you exit than it was when you came in. You can't do nothing. Like you can't just do nothing. You actually have to actually, take a, drive your organization. Towards the future. And so that's why I kind of talk about it'll be a disaster if you stand still. We used to have a joke when I was at Intel that our strategy was to maintain the present as long as possible. Now, this was the mid nineties when we were like the most, the highly valued company in the world. And by the way, those were awesome times. But it's like, that's not a strategy, like that's just not a strategy. And so leaders today need to be driving that change and driving the disruption because like it's gonna come, they're gonna come after. I love that.

Suzan 15:20

Make the present last as long as possible. You also include a really compelling formula, which is truth equals facts plus context.

Rob 15:30

So this was taught to me by Jeff Ald and and we talked about that in our systems leadership class. Context is the basis by which we as humans understand things and process things. And how an individual defines truth isn't just facts, it's the context within which we understand them. Sometimes it's called our lived experiences. Sometimes it's from the information of ways that people present information to us. So the facts, people can say facts are facts, but that's not how humans work. And so the idea of a systems leader is you have to define. For your employees, for your teammates, and for your customers. By helping them understand that truth is facts plus context. The facts, you're gonna get them out, but how do we think about it and understand it? Is really an interesting and an important way to look at things. I found that great systems leaders are wonderful storytellers. One of the best systems leaders I ever met was Brian Cornell, who's the CEO of Target. And Brian would talk about like, when he would talk with the students about what was their experience as a target. Like he would ask them questions about, what did you go, why did you go, last time you were in a. What was the experience like? And then he would try to say, ah, when you bought that table, and you had the little children, we were trying to make a, b and C happen. Was that what your experience was like? And he was genuinely interested in what the students or the people in the room had to say, but he was also getting his narrative out about what was the experience that Target was trying to create for their customers. And that's like that truth equals facts plus context. It's not that it's. It can be if done poorly, but more importantly, in a time of incredible uncertainty and a in a time of incredible change, people are looking to make sense of what's going on, and great systems leaders help to put these things in context for those around them.

Suzan 17:20

You also write that a risk on mindset tends to contradict the typical mindset of a traditional leader, especially during times of volatility and uncertainty. Risk on mindset. That's a new term to me.

Rob 17:35

Okay. My teammates here on the faculty in the finance department teach us that in times of great volatility, you want to go risk off. Meaning if you're going through a recession, there's bad things going on. Invest in safe assets and you go risk on in times of stability. That's when you wanna invest in venture capital and riskier assets. Okay. It, I'm gonna argue it's the exact. And what I mean by that is when you're going through a time of disruption, we have no idea what's on the other side. But I do know this, whatever's on the other side will not look like it did in the past. What's out The front windshield of the car will not be what's in the rear view mirror and leaders. Have to go risk on in these times of volatility where like, you know, your answer might be, oh, you know, times are bad. We need to lay people off and cut marketing and everything else. It's true. You need to be prudent with your expenditures. But Andy Grove used to teach us you can't save your way out of a recession. You actually have to lean into it. Or what I, what I like to say is you have to run towards the. A, it's like a firefighter, a firefighters are amazing humans. Like at a time when things are like dangerous and buildings are burning down, our instinct as humans is to run away from the danger. They have to do the exact opposite. They have to run into the danger. And so this notion of going risk on is that leaders in today's world in particular, you can't run away from the danger. You actually have to lean in and run towards it. And that's what I mean about going risk on.

Suzan 19:02

I can imagine that maybe millennial leaders who are just stepping into their leadership career in a big way, right? They've come through the Great Recession, they've come through the pandemic, they're now looking towards a new recession of a different kind. They can probably remember the anxiety they've felt at the beginning of the disruption and the change that they've experienced, but also they. Anticipate the anxiety that they're going to feel in the future, and it can be quite overwhelming. Why is it so important for leaders as you write, to learn how to manage their own anxiety and that of their teams?

Rob 19:38

When you become more senior in an organization, your team is watching. Where you spend your time, what you work on is a signal to everybody else as to what you think is important. And even though you will be feeling anxiety, you cannot let that kind of show like you need to keep your emotions in control and. Especially when times are tough. Everybody's watching you to figure out how to take their cue. And so if your emotions aren't in control, if you are volatile, your team will be volatile. And by the way, that's one of the hardest lessons that I've had to learn in my career. There was a great expression that I remember learning in one of the executive education programs when I was at ge. And that phrase was, leadership is the, To constrain a response to a given stimulus and it was, it's just I love that. I know, right? And for me, One of the things I like to talk about as leader know thyself. We all have strengths and we all have development needs. And in my case, my greatest strength is also my greatest development Need. My passion is my greatest strength. If we were in the classroom together, I'm running up and down the aisles, I'm cracking jokes with the students, I'm pushing them, I'm getting in their face, I'm having, I love being in the classroom, like I love this. And my passion comes through. My passion is also my greatest development. And that used to manifest itself. When I was younger in my career, I used to write the most amazing flame emails that you could possibly imagine. Like I would get an email that would just infuriate me and like I would hit reply all, and in fact I'd probably add a few other people on it. And I'd start typing and I would just get going and going. And I would write these emails that they were caustic, they were sarcastic, they were accurate, and they were always ine. They were always ineffective. And I would spend days cleaning up my mess, like just days cleaning up my mess. And the thing of it is, I'm not as good as I need to be now, but I'm, at least I'm aware of it, I'm better. And I'm like all humans, I'm on my journey and trying to get better. And back to the point on this is like controlling your emotions. And these times if you're feeling afraid, if you're feeling you know, unsure, you're feeling scared, you're feeling uncertain. And by the way that happens in times of disruption, you need to keep that to some level. Shield it from your team. Like you need to be that, that guiding hand with them. We talk about being vulnerable and being vulnerable can be good. On the other hand, people need to know that in these times of uncertainty we're all gonna get through this together and you're gonna work through it. If you need people that you can vent to privately, That's good. It's not always good to do that to your team. You don't wanna be inauthentic because people can tell when people are being authentic and not authentic. But on the other hand, like you gotta have kind of a gravitas, but how you conduct yourself, and that's really hard to do into hard times and in disruptive times.

Suzan 22:32

you also wrote that, most system leaders share an appealing blend of self-confidence and self-awareness. It sounds like that's kind of what you're getting at.

Rob 22:41

Yeah, I I the confidence, like you have to be confidence. One of my favorite. movie scenes for the listeners. If anybody's a Star Wars fan. And I'm a big Star Wars fan cuz I'm that age, but there's a scene in one of the movies where one of the characters Han Solo is flying his ship through an asteroid field and C three p the robot looks at him and says something like, the probability of successfully navigating an asteroid field is 3,250 to one. And Han Solo turns to C three po and says, never tell me the. Right. It's kind of one of those things where you gotta have that confidence of, we're gonna get through this. On the other hand, it's like you gotta be aware, like we're all human, like we're all broken and we're all in our own journeys and none of us are perfect. And by the way, that. That self-awareness, that ability to be a bit vulnerable, you know, it's like that can be very appealing, but that doesn't mean that you're not gonna go in and figure it out. I, I mean, I remember when I had the, some of the great leaders that I've worked for and things that they've taught me. It's not just when they're talking about telling their story and how great it is, but it's also when they're talking about, yeah, I'm wrestling with this hard issue, or I'm wrestling with that hard issue, and they're trying to figure it out. They don't pretend to have all the answers, but they're trying to actually get to a great place like Anne would just ski at 23 and me. It was a great leader who would always, you could have very open conversations about what's working and not working in the company. What's, what she's wrestling with, et cetera. I find that to be very compelling and Anne's one of the most, compelling, strong leaders that I've ever met. You

Suzan 24:08

also included a case study along the same lines of examples of leaders who have kind of nailed this balance of self-awareness and confidence. You talk about Stitch Fix and its founder and chairperson, Katrina Larke and you write that when they launched their, this mail order clothing service in 2011, their business model. Seem to defy conventional wisdom, but you also say they possessed a combination of scale and intimacy that was very hard to mimic, even in the face of really fierce competition in the industry. What happened there that made this company so successful in spite of. the odds that were stacked

Rob 24:46

against fit. If you think about retail, right? The way Stitch fits works is you tell'em what you like and then they're gonna put it in the mail. And I don't know about you, but when I like, wanna see if clothes fit me, I have to put'em on the store. And it's do I like it? Do I not like it? Sometimes I like something on a rack and I put it on and I go, Ew. And sometimes I'll put something on and I wanna go, maybe it doesn't do it, but I'll try it on. It's oh, that looks better than I thought. They're gonna put that stuff in a box and nail it. And then they're gonna, assume that you'll mail it back. And so it's kinda it just it made no sense. If you think about this, we've been, we don't, people don't shop for clothes that way. All right, now, let's fast forward when you buy something from them. The box comes in with your fix and you try everything on and then you decide what you want to keep and what you don't want to keep. And that's based upon information you tell them of what you're looking for, what your style is, and they can continue with their data analytics to continue to figure out the types of things that work for you, that don't work for you. You can give them information when you wanna try a new look, but they'll also get inform. That like a retail store or even a manufacturer won't get if I try on a pair of pants or trousers that they send to me, and maybe it doesn't fit well because the way it's cut on my body, maybe the back pocket doesn't sit, you know exactly where I want it to be. On my backside, it's like halfway down, my thigh. I can give them that information by saying, yeah, this is why I didn't buy this product. They actually, if are gonna get much better data than you're gonna get from a retailer or you're gonna get from a manufacturer, cuz they, those companies don't get the information directly from the consumer. And so that was an example of where, you know, they really kind of understood the system where they had to figure out as a distribution channel, how could they actually have a competitive advantage and use that competitive advantage. to drive better information to serve customers better so that they could then get them kind of purchasing more products.

Suzan 26:34

You also say that system leaders can never declare a permanent victory.

Rob 26:41

We stop running when we're dead and so like I'll go back to future. Communication and collaboration tools are only gonna get more powerful and become more important parts of our lives on a go forward basis, like that's not gonna change. And so given that you've got to assume that you're always running. I remember when I, one time, one company I worked at where one of my boss looked at me as we were at, walking back from a meeting at a customer and we just got our butts kicked by this customer. The customers just beat the hell out of us. The. And he looked at me and says, when's that time, you know that we get to bring the oars in the boat and the current just carries the boat and like we get to make progress and go forward and we don't actually have to work that hard row in the boat. And I'm like, yeah, never And so that's kinda things you can't ever get comfortable. Oh, okay. I wish we could get comfortable, but yeah, that's not how the world.

Suzan 27:32

Along those lines, you include a story about Accenture and how they started challenging their, um, their employees to automate their own jobs, which sounds terrifying if I'm an employee. Mm-hmm. And I'm mm-hmm. working on basically replacing myself with machines and, and that they created sort of a gamified experience. What exactly did that look like and why was

Rob 27:53

it effecti? So Julie Sweet, who's the CEO of Accenture's, again, another one of these great leaders that I had the good fortune of being able to spend time with and what they realized at the time, a part of their business was, you know what I'll call backend IT automation, very kind of low level stuff that was being commoditized and they had to figure out how to move up the stack and. Certain parts of the things that they were doing were gonna become commoditized anyways. Whether or not they wanted to do that or not, and whether, and it was gonna be automated, whether they wanted it to happen or not. So Julie kind of said, we need to drive this change internally on ourselves before the market does it to us. So she kind of basically took the leadership and, the and worked their way down from the top throughout the company and. These things are gonna happen. Try to figure out how you can automate some, a lot of the things that you're doing right now, and then you can move up the stacks so that you can do higher level things. At the time, you know, they were getting more into cloud and cyber security and things that were higher level and more value added than the lower level things that they were doing. And what I loved about that story is Julie shared it. Is that, yes, they gamified it, but gamification is a tool to get people to do what you want them to do. Right? And I talk about that in my product management class. What's the role of gamification is you're trying to actually get people to, to perform a behavior, you're trying to elicit a behavior. And Julie's behavior that she was trying to get the team to do was to basically upskill themselves. And so not only did they do, those things where they forced people. Encourage people to upskill their capabilities, but also people were rewarded financially and promoted as they accomplished those tasks. So she was very clear as to what they, where they needed to take the company but they really needed to reinvent the organization so that as the world moved, Accenture was well positioned for the future.

Suzan 29:40

So they, the employees were actually not scared of the process, or would it still have been a little bit intimidating that you have to automate your own role? Did everybody, do you think everybody understood

Rob 29:51

Of course everybody didn't understand it's like, of course people are scared, like change sucks. Everyone says change is great. Change is constant. Race change. Who is hate? And by the way, that's the rule of a leader is to understand that that's what your people are going through. And so some of the people got there and some people didn't. One of my stories on that, so Beth Comstock, who was a former vice chair of GE, would come to my class and I remember one year, this was probably about eight years ago, one of the students asked her, they said, Beth, where do you spend your. And Beth's reply was mostly on culture, and this was when GE was trying to go through its digital transformation. And the student followed up and said how does the employees, react? And Beth said well, a third of them get it right away. A third of them we know are gonna get it. And a third of them are never gonna get it. The student then asks the follow up questions what do you do with that last third? And Beth says we have to coach them out and encourage them to go someplace where they can be more successful. And I turned to the students, I said, let me translate what Beth just said. She needs to lay off a hundred thousand people. All right. And that's a terrifying thought, right? Nobody, these are humans with families and mortgages and everything else. And so it's one of those things where like, At one level, as leaders, we need to encourage and coach and guide on the other side. As individuals, we need to own our careers. And so we can't hold on to what we have right now because like it's only gonna change more. And so like part of the things that I think we're gonna see happening, and I think this is important, is there was a gray article uh, recently that I read that said Education is the new. And I think you're gonna see companies increasingly have to invest in education and reskilling. Not just, people coming to universities to get it done, but I think you're gonna see a very tight collaboration between companies and universities and companies just investing in it. Amazon invests about 750 million a year training their labor force on AI and machine learning. And by the way, some of those people will leave them Go else. Some of them will stay at Amazon and help them be successful. Dan Schwartz is the dean of the graduate School of Education here at Stanford. He's a big believer that, that, you will see over time companies play an increased, increasingly active role in the education of the labor force. One final story on this, and there's a case, a very famous case I think it was written by Darden at the University of Virginia, where GE was trying to bring. Refrigerators manufacturing from Mexico back to Kentucky. They were trying toure jobs into the United States, and what they found was the biggest problem they had was that in the city of Louisville, like the high schools were not generating enough. Graduates that could, you know, work in these 70,$80,000 a year jobs in the factories cuz they hadn't been trained in fundamentals of kind of, you know, math and science. And so you know how we have to look at how kind of education, where it's working and where it's failing, not just at university levels, but in K through 12 and how that's gonna impact business leaders. I mean,

Suzan 32:47

as someone who is going to hopefully spend my life working in higher education, I'm excited to hear that you think that corporate and higher education are going to collaborate and need to collaborate a lot more. And that vision really excites me, which is why I'm doing this podcast, about executive education, which. It's rare that even if executives come to universities that there is not some element of a corporate, leader or a corporate case that informs that journey. To, to that end, what do you got at Stanford for people who are maybe not looking for an MBA right now, or, you know, a degree, but. Maybe an open enrollment program or a custom program for their organization that they could look into at Stanford to help them figure out how to better lead, how to integrate traditional and digital elements, how to become better system

Rob 33:35

leaders. We have a wide variety of courses that are built around topics for, people who are. There are companies and who aren't, maybe they're past the time that they're gonna get an mba or they're even, they don't wanna do a year off and do our one year MSX program and, our capstone. Executive education program is the Stanford Executive Program, which is a six week program in the summertime, which is just amazing. The men and women who are in that, that as the cohort of people that, that come to that are, world renowned leaders in companies and you get taught by our top faculty members. But there's also a series of one and two week programs that, that are avail made, available leading changes through, through organization renewal. There, there are issues around, and programs around product management and digitization programs for COOs. There's programs around kind of finance and accounting and just even learning some of the fundamentals of business that maybe people haven't had that formal training. So I think the good news is there are a lot of great ways that people can invest in themselves and invest in, and companies can invest in their people, either through, going to a place like Stanford for executive education. Or, even kind of building in their own learning departments and learning programs inside of their companies.

Suzan 34:48

Amazing. Speaking of learning, what is it for you that you still hope to learn or, or is there, you know, a research challenge that really still keeps you up at night that you still are looking to tackle?

Rob 34:59

I'm actually, as I think we have spoken about briefly I'm finishing my six month sabbatical which I can't believe it's already almost over, which is killing me cuz like this is the greatest thing ever. But one of the wonderful things about a sabbatical is, The time to get out of the tyranny of the urgent and to think about what am I interested in learning in new areas to explore? And I think the thing that's really been keeping me awake at night is when I think about the young men and women that we teach here at Stanford, and it's true all over the world in this, in a world that is changing, how do we give them the tools to be successful in ways that when I was in operating roles, Things that I didn't have to deal with. How do we give them ways to think about it? Some of the things that I've been thinking about is, many of the issues that business leaders need to confront today are very nuanced, and we live in a world without nuance. And how do leaders navigate? Customers and employees through some of these very difficult topics, whether it's, how a company should be organized, hybrid work, social issues, there are things that leaders are gonna have to deal with and they often don't get the time. To explain themselves and be thoughtful about it and how do they wrestle with issues of, if 20th century geopolitical conflict was shaped by what I would say political ideology, I think 21st century geopolitical conflict is being shaped by economic ideology, and business leaders are gonna be right at the center of that. How are they gonna navigate through all of these issues of crossing borders? Again, I'm gonna come back to communication and collaboration Tools are very different than they used to be. We running a large multinational, you cross borders. I had a day a few months ago. Where I started at 8:00 AM in my home office teaching a group of executives, Inman. I then drove to the campus here at Stanford and taught some MBAs for a couple of hours, had some meetings with some students. Went back to my house, my home office has become a television studio. Then taught a group of executives. Who were entrepreneurs in South Korea, had dinner with my family and then got back online and taught of a group of ex of executives in Quala Lumpur. So in that one day, one individual, I touched four continents. And so that's gonna happen. So like how do we get these leaders? The who are gonna be, running companies over the next couple of decades to navigate these very complex issues. How are they gonna work with governments, whether they want to work with governments or not? How are they gonna be dealing with, the, what they're gonna invest in, in the labor force or not? These are non-trivial issues, and I'm starting to explore kind of a, it's kind of systems leadership. I, if that's the construct, what do I think the. And the areas where that's gonna have to be applied and how can leaders think about, you know, applying systems leaderships to I think an eight or 10 very specific topics that I think are gonna be with us for the next 10 to 20 years.

Suzan 37:48

Yeah. One of the things that fascinates me about this nude world in which we work is when you meet someone for the first time on Zoom, let's say you, you usually ask, where are you? What time is it? You know, it's just a completely different world. It's exciting and terrifying at once, but when you figure all that out, we'll look forward to having your book, um, featured on

Rob 38:08

the show, Thank you. I would love the opportunity. I just gotta make sure that I have something. To say that hopefully people wanna read

Suzan 38:15

Sounds like really good questions that you're tackling and very timely. My last question is in a nutshell, what does leadership mean to you?

Rob 38:23

I think leadership has an attribute. What I'll call statesmanship or states woman ship, whatever is the appropriate gender. The way to describe it. And I think that leadership is the ability to bring forth a sense of responsibility. Sense of purpose. I think there's a moral aspect to it. There's a seriousness. I worry that, there's an un seriousness to the world through our politics and through our business leaders. And I think real leadership is about serving others. That doesn't mean individuals can't be ambitious. They can't have their own goals and aspirations, but I think that real leadership is about some, oftentimes seeing the bigger picture. And doing good and doing well. And I think that's something that's severely lacking in the world today. I think tremendous number of our business leaders and our political leaders are really unserious and they come across as unserious. And in a world where soundbites, you know, that's what it used to be when television became the medium. And now as social media becomes increasingly important it's just, we can all roll our eyes at what we're seeing, and I think that's hurt. And so I think that's missing. And so for me, leadership is the ability, like none of these leaders don't have to be perfect cuz none of us are, but they have to have a kind of a gravitas about how they carry themselves. It doesn't mean you can't be strong and kind at the same time, and so I think that there's almost this false choice. That, that leaders in our business and political world confront, they're either too squishy and soft, or they are so driven that they lose the human side. And I see very much less drive to serve right now.

Suzan 39:57

Thank you so much. That makes, a lot of sense and I think resonates with a lot of people. I especially love the part about not being so driven by your own goals, that you lose sight of the bigger picture and that goes along with this idea of service. And leadership. Thank you so much for your time, your insights. It was an incredibly engaging and inspiring conversation and I'm, I feel very fortunate that you were able to be here with us and share this with our audience.

Rob 40:25

Oh, thanks for having me. And I hope we'll be able to do this again in the future.

40:30

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