The Exchanges

Q What does that clarity look like? Can you give me an example? Like, is it roles and responsibility? Is it incentives? Is it how we're going to talk and interact with each other and when we're going to do that? What does that look like?

A Yeah. Um, so we've got this thing we call the enterprise clarity model, and you know, what we mean by that is in order for an individual inside a, uh, a business, inside a commercial setting to be as maximally productive as they can, you need to be clear on these elements. And so the first is goals. Um, we work primarily with what we call big change companies, companies that are growing incredibly rapidly. They're in the midst of a lot of change themselves. They're depending on change in the marketplace. Um, they're sort of like both the victim of change as well as the perpetrators of change, and they're all the time in the midst of this confusing sort of, um, confusing sort of movement towards trying to grab market share, make better products, or You know, hire more people or whatever it is. And in the midst of that, what we find is it's very common for people not to be explicit about their goals. It's very common for the executives not to be explicit about their goals. It's very common for the managers. Everybody just sort of shows up and works on the thing that's present and works on the thing that's right in front of them. And they don't step back and try to think, pick a point on the horizon they're going to that all this work will add up to. Um, so that's the first thing. You gotta be really clear on where you're going. And then the second thing is you gotta be clear on h…

AI assessment note: “we've got this thing we call the enterprise clarity model... first is goals.”

Q I think there's a good segue into hiring. You've said when hiring one fifth of people are going to be successes, two fifths are going to be okay. And two fifths, you're going to have to do something about, why does that happen?

A Yeah, uh, so if you look at this, the various studies, and it's hard to be scientific about this, but as somebody who's run large recruiting organizations that have hired thousands and thousands of people, yeah, I, I would say that the chances that you're gonna find somebody who's extraordinary in a position is about one in five. And that's, those are really bad odds. Um, and so why, so it's a great question. Why does that happen? Well, there's a, there's a couple of reasons. One is, um, we're not good as a species at figuring out what problem we're going to solve. We're really good at figuring out what problem we've been trying to solve. And what that means is we're always sort of driving by looking in the rear view mirror. So when you go to hire somebody, typically you hire somebody because you have a need to fail or you're in pain in some way, like work is too much. This, this responsibility is untended. And that, uh, you know, the thing we were talking about before, that physical discomfort, it's like this anxiety, uh, that I gotta get somebody into this job starts to really pervade your thinking and how you're, you know, you're working through a hiring process. And so you're really specifying for the past. You're really creating a specification of what you need in a job based on what's been happening. It's very rare that human beings step back and think, you know, It's goi…

AI assessment note: “Why does that happen? Well, there's a, there's a couple of reasons.”

Q Where did that obsession come from? I want to get into some of these specifics about where our beliefs fall down or where they don't mop up to reality, but where, where does, where did your obsession with this field come from?

A Well, I think like most people who are, who have a lifelong compulsion towards something or an obsession, it started pretty early, and I didn't have the words for it or anything, but probably in junior high, became obsessed with helping my mom run for, for office. It's something she had always wanted to do. I had heard her talk about it, and I just, uh, became something that was very, very important and meaningful to me. Um, and from there have tried to spend a good portion of my life, um, you know, helping other people find their greatness. So I think if you want to be in this field or if you want to be in the field of like helping others become great, you have to start with a fundamental assumption that people have greatness within them. And there's no proof for that. It's not a scientific hypothesis. It's just a belief that you have to understand and, um, and hold. Uh, and I think I held that belief really early in life. Um, and then over time you just get more, um, practiced and hopefully masterful in how you help other people do it. But, uh, you know, in our, in the way we think about things, we talk about finding meaning as a part of purpose. And the way we describe meaning is when you do something, when you achieve something, when you have an outcome, you feel a sense of pride and a sense of self in that outcome, the way you help that outcome, um, come to fruition. And f…

AI assessment note: “probably in junior high, became obsessed with helping my mom run for, for office.”

Q We need to catch ourselves and sort of, um, recognize what's happening and then move beyond that. Is it our responsibility to call our colleagues on that at work? Do you think, hey, you're engaging in this behavior and that's not very, it's not going to get you where you want to go.

A Well, you know, I think that first of all, there's a, there's a question of culture, right? So every culture is different with regards to how it thinks about how we help another and how we take responsibility for ourselves, et cetera. And that's, you know, the culture inside of a company, culture in a, in a community. Um, but the way I think is more productive, regardless of whatever the culture is you're in, is, um, first you got to own your own experience. And, um, And, uh, I think a simple way to do that is, uh, Steve, Stephen Covey wrote the book Seven Habits of Highly Effective People many, many years ago, but, you know, one of his seven habits is seek to understand before you're understood. Um, and so the, the way it works is this, like you sense yourself in confusion. You're attuned to that. You're like, huh, I'm confused. And then rather than going and saying, Hey, listen, you're behaving this way. You're doing this. Maybe they are, maybe they aren't, maybe you're just confused. So what you do is you ask questions, get to clarity. You're so you say you own your experience. You say I'm experiencing you doing this doesn't mean you are just like That's how it feels to me. That's how this is what I'm, what I'm seeing or what I'm feeling. Um, can you help me understand? And in that way, you're not making an accusation. Again, it's the whole like outbound BSL sort of thing. Y…

AI assessment note: “rather than going and saying, Hey, listen, you're behaving this way... ask questions”

Q Should there be a conscious onboarding for culture too, or should that just be something that people learn or acquire?

A Culture is one of those elements that I believe you have to be explicit about. And when I, when I'm, so there's two elements to that explicitness. One is actually taking people through a culture statement You know, per the prior part of our conversation, that culture statement, I think, has to be an, uh, authentic representation of what really happens around here, not a, um, you know, not a aspiration or marketing document. Um, more important than that, that's important, but more important than that is you, you put somebody in the job and you watch them do stuff, right? They go do their job, and you want them to do their job. You want them to actually start experiencing things. Like I said, you want to, you want them to get into it and start to go, how does this feel? When a mistake is made, whatever that quote unquote mistake is, like you expected one thing and you got another, that confusion we talked about, you have to use culture as one of the lenses to diagnose or make sense of that. So let's say a person comes in, and they've had a, you know, lifelong experience on Wall Street, and they were a trader on Wall Street, and so they decide that they want to get into the, you know, um, therapeutic massage, and so that's the job. So they go into therapeutic massage, and the first time somebody gets on the table, uh, the Wall Street trader says, you know, hey, listen, um, I'm not…

AI assessment note: “Culture is one of those elements that I believe you have to be explicit about.”

Q the time, I think companies have two cultures, right? There's this stated culture. Here's what we value and what we stand for. And then there's this applied culture and rarely I think do those things overlap. Is that your experience as well? Or is it, is it aspirational as like, here's the values that we aspire to and our culture is different or how does that, how does that happen?

A Yeah, it's, it's so true. Um, Well, organizations are just a bunch of people working together to achieve a shared goal, right? And so you, what are people like? You know, they're, they're virtuous in church and they're sinners in the bar. People are very context sensitive and, um, and so, so what you're trying to do is you're trying to step back And you're saying, okay, first of all, an organization is a hierarchy. Most organizations are right. There's a CEO and then there's, you know, SVPs and they're, and it's just a hierarchy and hierarchies have, um, problems and advantages to them. But one thing for sure, you know, about a hierarchy is there's an implied higher fire authority embedded in that hierarchy. Right. And when somebody has higher fire authority, Over another human being or set of human beings or promote, demote authority over those human beings. They are actually have the keys to that human being psychological kingdom. Um, and what that means is as human beings, we're very social. We're very tribal. We're very connected into the people around us. We're spending a lot of time making sense even, you know, unconsciously about what's going on around us and then telling ourselves stories about why that's happening. And if a leader It was just a human being and confused day in and day out does something and isn't explicit about why they're doing something. Then it will …

AI assessment note: “Yeah, it's, it's so true. Um, Well, organizations are just a bunch of people”

Q What's the ideal process then for evaluating someone, um, and assessing talent and, and sort of match? And should we focus more on trying to find that one in five who are going to be exceptional or sort of trying to avoid the two in five that you're going to have to do something about?

A Well, statistically, you can't avoid the two in five. Um, in other words, like, there's no perfect way to do this. Um, I, I no longer do much computer, uh, there was a period in time where I, I did a little bit of coding and everything, and, and like most people, I, I know just enough to be dangerous, but one of the things, and one of the companies I co-founded, I co-founded with a guy, brilliant guy, and he told me, you know, Jeff, a lot of things are just a data problem. Um, you can either say, I want the one perfect one, but then if you want the one perfect one, you have to know that you're leaving a lot of other really good ones out of your analysis, or I want all the good ones, in which case you're going to get a lot of bad ones too. But those are the only two kinds of result. You can't define a set and say, this is the perfect set and I'm going to get every one of them. So we're constantly dealing with this problem. Like, Uh, as a manager, I think you have to determine in effect what bet you're willing to take and the bets you willing to take, um, will range from, it will be worth my time and effort to find somebody who could be the diamond in the rough, but I should prepare myself and set expectations that this person, they're going to not have the same resume as everybody else. They're gonna have done different things. They're gonna have sort of, you know, lateral or or…

AI assessment note: “statistically, you can't avoid the two in five.”

Q But what does that process look like? Like, is it interviews, simulations on the job testing, like data screen? Like, how do you assess a person for a job? Like, what are the, I guess those are sort of like the main tools available, but are some of the more successful predictors and others? Where do we go wrong in that, like, process?

A Yeah, it's such a good question. There's For many, many years, there's been a number of different tools we could use to try to make predictions. People use Myers-Briggs, or Workplace Inventory, or Predictive Index, or Hogan. There's lots of different assessments we could use. And each of those assessments will make claims about how predictive they are, and being able to tell you this person's going to work, or this person's not. Um, and I think those, those sorts of assessments can yield lots of really interesting data. But the only two things I've ever seen that really substantially increase your confidence in hiring are two things. Um, one is taking the extra time to, with the manager to actually understand the specification as we talked about. Huge amount of, it really is worth the extra effort to visualize that thing and imagine that thing out in the future, as opposed to just get stuck with the same old job description. You'll, you can make a really big dent in your hiring success with that, by doing that. And the second thing is, you got to understand how good the hiring manager is. The hiring manager, um, If you're a hiring manager and you've never hired anybody before, you've never hired anybody of that particular responsibility or, um, or role type, you're not going to do it well. You're not. You're going to be blind to all sorts of things. You don't have any sort of v…

AI assessment note: “the only two things I've ever seen that really substantially increase your confidence in hiring”

Q What are some of the lessons that you learned from working at Bridgewater?

A Yeah, so Bridgewater was an incredible experience, uh, and one I'm very grateful for. Um, so the first, probably unsurprisingly, consistent with what I've been saying, I learned so much about myself in that context, in that environment. You've heard me use the word confusion, uh, you know, umpteen times so far in our conversation. Um, that really struck Well, I was at Bridgewater because I was confused about a lot of stuff and, and, uh, and when I realized that it was my confusion and, and, and, uh, you know, it was the insufficiency of my model and, and how I was thinking about things, uh, that was a really big breakthrough for, for me. And, uh, I don't think that could have, you know, different people have very different experiences there. And, um, but for me, I don't think that I could have, um, Achieve that without going through that experience. And the other thing is, I think Bridgewater is just a great place to learn how to think. Most of us just don't think that well. School does not teach us how to think. School teaches us how to take tests. Um, and so most of the times we're confronted with, you know, the wrong data or too much data, or we don't know how to, like, sort things out. We don't know how to describe things. All these All these sort of cognitive thinking or critical thinking problems. Uh, and Bridgewater just invested a huge amount of time in, in helping me g…

AI assessment note: “those are the two big things I learned and I'm grateful for both.”

Q Um, switching gears a little bit. I mean, you've done a lot of recruiting. I'm curious what advice you would give people on how to pick a recruiter or a headhunter. What are sort of the variables that we need to think about? How do they play out and interact? And like, how do we go about asking the right questions to get answers that will help us?

A Yeah, I think it's very, it's very difficult. Um, so first of all, I just want to state that I, the, when I, uh, was a part of the recruiting organization at Electronic Arts and ran, you know, recruiting was part of my remit at Dolby, or I ran recruiting at Bridgewater. Um, I, I sort of thought that being able to recruit people was something that we should be good at, and we shouldn't depend on people outside the organization. So the way I approach that is different than how a lot of people approach that. I would build those, what we called sourcing organizations inside the businesses. But that not everybody can do that. Not everybody wants to do that. And I understand that. Uh, listen, I think that there are recruiters who like, think of it like hiring. There's people who you want to have a relationship with over an extended period of time, and you want to invest in them so that you can unleash their greatness and so they can get to know you. And I think all good vendor relationships, whatever they may be, have that quality. You're forming a partnership with that person over the long period, long period of time. Uh, and that as that partnership is built and trust is built in that through, you know, watching, you know, putting a job into the queue and watching what happens and, and giving feedback and, and doing what I think all good high quality relationships and partnerships …

AI assessment note: “think of it like hiring. There's people who you want to have a relationship with”

Q We're going to talk about the lessons of working at Bridgewater, how to teach people how to think, things we can do as individuals and managers to unleash not only our own potential, but the potential of others, why hiring is so flawed and what we can do about it, and so much more. It's time to listen and learn. You help organizations unleash human potential. What does that mean?

A Well, um, I, I'm just sort of a junkie for the concept of human potential and that most of us don't find their potential during their lifetimes. And there's just therefore a huge untapped resource of potential excellence out there in the world. And most of that excellence can, uh, be found and grown inside of companies, inside of enterprises. Uh, and so we, and we think that businesses have, um, have a big incentive to do that. Unlike a lot of other institutions, for profit institutions have a big incentive to actually, um, uh, uncover potential and unleash that. And so on the potential side, that's why, that's what we think about it. And that's why we think about, or work with companies. But on the systematic side, uh, we think that the reason most companies don't unleash the potential of their employees, the potential of their management, the potential of their leaders is not because people don't have the right skills or they don't have the right, um, they don't have the right knowledge. It's, uh, because the beliefs that underpin how we think about people and potential are, are broken. And it's a system of, it's a systemic failure. So we talk both about the system that, um, fails to unleash potential and then work with our clients to actually implement stuff in their organizations, implement different methods, et cetera, in their organizations so that they can unleash that p…

AI assessment note: “work with our clients to actually implement stuff in their organizations, implement different methods”

Q What are the main barriers to doing that? It's, it's probably not a motivation thing as you're saying that. I mean, it probably is intuitive to a lot of people and it sounds right. And it sounds like common sense, but then again, we get to work and we get busy and day-to-day life and, you How do we switch out of that?

A So again, so let's use that work example. I think it's so, that's so great. So we go to work and let's say we're driving into work in the morning and we're just, we're excited to tackle a project or whatever it is. And we get into work and then all of a sudden the daily reality of our existence hits us. We got a hundred emails in the inbox. Uh, you know, we got three inbound calls, somebody waiting outside our office, whatever it is. And pretty soon that, that goal for that day just goes out the window. So what we believe is rather than adopting a new time, you know, I'm going to think about doing my creative work in the morning or whatever, all of which are great examples of stuff that people have come up with to try to, um, improve the way you think at work, et cetera. We actually think that you should, um, you should operate at the level of design, and, and what we mean by that is, first of all, if your goal is to get better, so if, if you want to unleash your potential, your goal has to be to get better. By definition, potential is unrealized, and so if you want to experience something or realize something that is unrealized, you actually have to Improve something to get there. In order to get, do that and, and, uh, unleash your potential, you have to set as a primary goal that you want to productively put yourself in situations and figure out, as we just described, what yo…

AI assessment note: “you should operate at the level of design... design your workday as sort of in a series of experiments.”

Q That's brilliant. I like that a lot. We talk a lot, and just switching gears a little bit from that, we talk a lot in organizations about, um, Culturally, anyway, about different generations, and the expectations, and sort of the work ethic, and the beliefs that we project on other generations. In your work with organizations, do you see generational differences, and if so, what are those generational differences?

A So, my grandparents grew up during the Great Depression, and struggled, and, um, even later in life, when they were fairly wealthy, my grandmother wouldn't throw anything away. And so we'd go over to their house and she'd have stale cereal and all this stuff. And it'd be sort of confusing to me as a, as a kid, like you live in this big house and, and we're, you know, saving the stale cereal, but they were very much a product of that experience of that hardship. They were very much a product of having grown up in the situation where, you know, existence was really a problem. Uh, it wasn't just about whether you're going to have a bigger house or a faster car, it was about whether you're going to be able to get on the right breadline. And of course that shapes somebody, right? Those experiences shape people. And, um, it gives you a set of mental models about how the world works and, you know, what risks exist, et cetera. So when I tell that story, most people are like, well, yeah, of course. But then, okay, great. Yeah, of course. But then that means that's the same for everybody. In other words, like millennials grew up in a particular point in time, um, where there was, you know, different technologies and more wealth, more relative wealth, but more confusion and relative insecurity. They were growing up in a, in a time that formed a lot of their beliefs about how the world wor…

AI assessment note: “I experienced different ways of thinking sort of categorized by age groups.”

Q with somebody else. However, if you're sort of a manager of people, what are the things that you can do aside from the self? Because now you're caring for other people and you're sort of setting at least a little bit of culture within a team of people. What are the things that you can do that would positively provide an environment for people where their potential can be realized?

A Yeah, it's such a great question. So cool. Um, yeah, so I completely agree with everything you just said. Ultimately, regardless of whether we're a manager or an executive, or we're just somebody working inside an organization, whatever we're doing, we have to own our own experience. But, um, there's a difference between owning our own experience and taking responsibility for something. And managers, ultimately, the way we think about management or describe it, Is management is the act of achieving goals through the work of others. You know, managers are not people that actually are supposed to be doers. They're supposed to be designers and they're supposed to be clarifiers. And so again, going back to this, like in a rational, if human beings are rational and then when they fail, they're lazy or stupid, you know, there's a whole line of management thinking that goes back and starts Roughly a hundred years ago where people were making management quote unquote scientific, and they were saying, Hey, listen, you know, you gotta find the bad actors. You gotta weed them out. Management is a control function. It's a resource and information allocation function. Your job is to make sure that all these stupid, lazy human beings don't cause you a bunch of risk. Um, and so that's what your job is. And by and large, That's most of, still, that, that sort of belief system still persists ab…

AI assessment note: “managers are not people that actually are supposed to be doers. They're supposed to be designers”