Podcast: Play in new window | Download (Duration: 36:35 — 31.8MB)
Are there particular mindsets that make people more likely to succeed? Amy Wilkinson, author of The Creator’s Code: The Six Essential Skills of Extraordinary Entrepreneurs, interviewed several successful leaders in the US and discovered six mindsets or skills common to all of them. All people are capable of creating and developing a successful idea, but those with these mindsets are more likely to be successful. Find out what OODA stands for, why setting a failure ratio is important, and why we should never stop learning.
- “We can all create and scale our own ideas.” @amywilkinson #quotes #podcast
- “If you think you’re a complete expert at something, you’re no longer curious.” Find out why from @amywilkinson
Book: The Creator’s Code
Bio: Amy Wilkinson is a strategic adviser, entrepreneur, and lecturer at the Stanford Graduate School of Business. She frequently addresses corporate, association, and university audiences on entrepreneurial leadership. She also advises startups and large corporations on innovation and business strategy. Her career spans leadership roles with McKinsey & Company and JP Morgan and as founder of a small foreign-based export company. Wilkinson has served as a White House Fellow in the Office of the United States Trade Representative and as a senior fellow at the Harvard Kennedy School. Learn more about her work at AmyWilkinson.com.
Peter: Welcome to the Bregman Leadership Podcast. I’m Peter Bregman, your host and CEO of Bregman Partners. This podcast is part of my mission to help you get massive traction on the things that matter most.
Amy Wilkinson is with us today. She’s a strategic advisor, entrepreneur, lecturer at the Stanford Graduate School of Business. She’s written a global best-seller, the book, The Creators Code, The Six Essential Skills of Extraordinary Entrepreneurs. She is here to speak with us about the book today.
Amy, welcome to the Bregman Leadership Podcast.
Amy: Oh I’m delighted to be with you. Thanks very much.
Peter: Amy, this is a very deeply researched book, and I want to talk about the research in a moment, but before I do, let’s go through the six essential skills.
Amy: The big idea of the book is that we can all create and scale our own ideas. The book’s called, The Creators Code, and that’s because you can create your own company, the data set is the largest data set on high skill founders in the United States, but you don’t have to found a company that goes to a hundred million in revenue, which is the dataset. You can also start a small business, you can start a side project, you can be a creator inside of a corporation, you can start a non-profit, the skills, the code are the six skills, and we can talk about what those six are, but the big idea is that every single person is able to create and scale a new and innovative idea, and that if you do have these six skills that it will highly advantage you ability to do that.
Peter: When you say built to a hundred million, you interviewed and included in the data set only leaders who had built companies with a certain timeframe, that had built the companies to at least one hundred million in evaluation?
Amy: Yes. The dataset is backed by the Kauffman Foundation, which is the largest entrepreneur foundation in the US. I did five years of work at Harvard University, and now I was asked to teach, this will be the third year that I teach this material at Stanford Business School to second year students, and the dataset is based on 200 interviews, 10,000 pages of transcripts with the leading entrepreneurs in the US, so founders of companies that have gone to scale with a hundred million in annual revenue.
This is a look of cross sectors and across the US at what does it take to be a creator that can start kind of anywhere with any type of an idea and grow it very quickly.
Peter: That leads me to ask you some of the research questions before we go into the six. I was going to do it later, but since we’re on the research, let’s talk about that. I’ve always been curious about the research in this way, because the data is so valuable. To be able to talk to all of these people, around 200 people, and be able to then distill the smallest number of things that made the biggest different. One of my questions is the opposite of that, meaning could there be 200 failed entrepreneurs, all of whom had the six essential skills, so that the six essential skills aren’t, in effect, the determinant of success, but they’re they’re also there in people who haven’t succeeded? I don’t know that I’m asking my question in a very clean way, but it goes to how we know these are the six.
Amy: In academic speak, that’s called the pushback on this type of a dataset is sampling on a dependent variable. You could say that the methodology that’s used academically is called grounded theory method. It’s a qualitative research type of methodology. I’m trained as a sociologist, so you see this quite frequently in sociology, and psychology, and anthropology. This is the way that you can talk to people and get an informal large dataset. The question that you’re asking is a good one, and it is one that people ask, which is do failures have these same six skills?
I cannot tell you definitively, with a research based framework, that they do or do not, but what I can tell you is that I studied the Olympic athletes of entrepreneurship basically, and figured out what the top skills are of the very best, best performers. We do want to pattern after the very best performers. Would there be failures out there that also did some of these six skills? Maybe. Would there be failures out there that did all of these six skills? I think unlikely, but possible. I can’t completely eliminate that from the counterpoint of a dataset. So it’s the famous quote of “All happy families look the same, and all unhappy families are all unhappy in different ways.” There are 10,000 ways in which startups fail, and I did not go out and eliminate all of those things.
What I can tell you with very high degree of confidence and certainty in the largest dataset that we have in the US now from these top academic institutions, is that this is the pattern by which we know people succeed, and so that’s why we’re teaching Stanford MBAs these six skills, because we really do believe that it advantages people, but to your question, I cannot eliminate the idea that someone might do these things and still not succeed.
Peter: Thank you. I think execution is important. In other words, we may read the six and think, “Yes I agree they’re a good idea, but I’m not necessarily able to bridge the gap between knowing it’s a good idea and actually executing on them.” Was there anything that you saw in the people who were successful and who executed on these things, that predisposed them to execute on a good idea?
Amy: I think once we start talking about what the six are, they actually step right through spotting an opportunity, find the gap is number one, then driving for daylight is two, flying an OODA loop is a decision framework is three, so this is actually how you do execute. I actually think that question is answered by looking at the six skills themselves. A macro-concept, and this is a way to get into this conversation, is around curiosity. I do think finding a gap, which you have to spot an opportunity or find a gap in a marketplace to start, that has a lot to do with being curious.
There’s some great research right now at University of Chicago that’s saying, “You need to scratch the itch of curiosity. Meaning you have to know a little something in order to be curious and ask questions. You can’t be a completely blank slate. You can’t have no knowledge at all. You need a little bit of knowledge, and then you need to keep probing and asking and being childlike in the wonder of why something works, why it doesn’t, where’s the friction point, how do you solve a problem other people haven’t solved yet. You have to keep probing. The creators that can scale their ideas, they do that.
You also cannot believe you’re an expert. If you think you’re a complete expert at something, you’re no longer curious. This, in a business world, is a trap. In most of life it’s a trap. If you think you’re older and wiser, you’re experienced, you have the title, the savvy, the corner office, whatever it is, you’re the academic that knows the most about something, and you could eliminate any question. That is a real trap for a fast-moving economy. You want to scratch the itch of curiosity by continuing to probe and ask questions, and that is a universal thing. All six of these things are universal to the dataset, but I think as something that all of us experience in life all the time, we can be asking questions, and that’s just a good place to start.
Peter: I love the distinction that you make that being curious doesn’t mean not knowing stuff. That actually to be curious in a powerful, useful, valuable way requires that you know enough to be curious about what you don’t know. I talk about this as a combination of confidence and humility. You don’t often see it in people, but humility without confidence gets you nowhere, and confidence without humility is what you were just describing, where you’re an expert and you have nothing to learn. It sounds like you’re describing this combination, which is that you know enough and you’re still open and curious.
Amy: Yeah, that’s exactly right. One of the macro-ideas out of my research is that you have to be comfortable being uncomfortable. There’s another way to think about it. If you are really comfortable in your job, in your knowledge base, in your life in general, that often leads to complacency, and that’s the Achilles heel in a fast-changing world. You have to be willing to be uncomfortable, keep asking questions, say you don’t have the answer, be willing to look again, be willing to reach out and find allies, and partner in new and different, and maybe uncomfortable ways, and that that ability is what also drives you forward to success. There are different ways of thinking about it, but it is this constant learning, constant evolution, constant curiosity that drives the really most successful people.
Peter: In find the gap, you’re talking about spotting opportunities that others don’t see, and in the book, you talk about different ways of doing that: transplanting ideas from one place to another, merging ideas, bringing them together, and designing totally new ways of moving forward. It’s all ways of being creative. This idea of seeing the gap, and being creative at closing the gap. That brings us to number two, what you called drive for daylight.
Amy: Right. Drive for daylight, once you’ve spotted something in a marketplace, and just to stay on find the gap for a second, in the financial world or a financial marketplace, we talk about arbitrage. There are moments in a financial marketplace that are glitches, where you can see something, you can pounce on it. That is the same thing in an entrepreneurial landscape. You can see a problem that hasn’t been solved and go for that glitch, build something there. You can love something that other people don’t necessarily know about yet, and there’s a real opportunity, your passion. There’s entrepreneurial glitches, gaps, arbitrage. Once you’ve been able to see something, this skill too about driving for daylight, is that you have to take a long horizon view on that. There’s a moment in time that it’s a gap, and then you have to say, “Okay, let me grab ahold of that and believe that this can be built into something that is a long term purpose, a long term mission, and that I will drive towards a future that has this in it.
The analogy is that you have to manage speed like a race car driver. A driver of a fast moving car, and I actually enrolled myself into NASCAR driving school to test this analogy. You have to have your hands on the wheel, but you have to always look forward. Not the lines on the pavement, which would be the rules of traditional business, not the competitors, the cars next to you, or that would be benchmarking, to past performance, and certainly not looking back in a rear-view mirror, that would be previous success and business. You have to always be looking for the light on the horizon and what’s ahead. That’s the drive for daylight concept.
Peter: Can you share with us an example?
Amy: Sure. The SpaceX example, all of the examples, all of the founders in this book of creators, they all have each of the six skills. We can substitute any example for any of these skills. Airbnb does, I think, open that chapter. They’re a long horizon view on disrupting and changing the way people travel, disrupting traditional hotels, but SpaceX, as an example, is Elon Musk truly believing that life, as we know it, needs to be multi-planetary, as he says. When I first sat down to interview him, and I interviewed him a couple times for this book, he starts by saying, giving me an evolutionary history, so originally life is single cells, and then it’s multi cells, and then life goes from oceans to land, and it’s mammals and consciousness and humans as we know it, and the future is to live on multiple planets.
That is very long horizon problem to solve. Most of us are not thinking in evolutionary terms. Elon is, and believing that we do need to explore space, and so what he did originally is try to see if NASA would do this or try to reinvigorate the US space program. He wanted to do a little greenhouse. He was thinking that he would just fund, because he had already exited PayPal at the time, as a philanthropist he would try to get a greenhouse setup on planet Mars, and partner with NASA to do that. No one at the US space program was even talking about going to Mars or exploring that as a destination for landing aircraft. Then Elon went to the Russians and tried to figure out if Russia was doing it, and the Chinese, he was trying to figure out what government to partner with. No government was actually looking at doing it, so he said he would stand up his own company as a forcing function, to try to put some pressure on government programs to also look into this.
SpaceX is in Hawthorne, California. He has also thought that if you could make a reusable rocket, the price of building aircraft and exploring space would be significantly less. Right now, if we fly between San Francisco, where I live in London, we do not throw away the jet aircraft, or it would be very expensive to travel just from one continent to another. We have thrown away the rockets of any space exploration mission that we’ve done, so instead Elon is designing reusable rockets and we’ve seen this succeed. It’s taken years to land a reusable rocket on a platform out in the ocean, but SpaceX has done that over the summer in the last year, and the long horizon view is that we will have rockets blow up, as we’ve also seen, but that that will not deter this company, SpaceX and hopefully others from taking the mission of believing that we could colonize another planet at some point.
Elon and that company, SpaceX, they have taken over NASA’s contracts to resupply the international space station, they’re doing that, and they do that at 1/10th of price that NASA did, so this is proving out a business model and a case that you can build cheaper rockets, and private sector companies can resupply the international space station, and hopefully Elon’s idea is that within his lifetime, he’s in his mid forties now, he’s just hoping by the time he’s 80, that this problem has been solved and we somehow are able to support life on planet Mars, as a first step. That is very much a long horizon view, and that’s uncharacteristic to most businesses, but that’s sort of the mega example, I guess, of driving for daylight.
Peter: It is a mega example, for sure. Fly the OODA loop.
Amy: Yeah. OODA stands for observe, orient, decide, act. This is originally an air-force framework, fighter pilot framework for making fast decisions in combat and outmaneuvering a competitor. When you take this into the business marketplace, what it requires is to really be alert and observe things, and then orient as quickly as you can to them, again, by asking questions and using, in many cases, data analytics, being smart on how you evaluate things, and then making decisions quickly and taking actions quickly. When you can do that, you can outmaneuver, you can learn faster, you can get inside the loop of a competitors reacting to a decision that you made and they’re a split second behind. That’s the concept.
Peter: It’s the question I was asking earlier: How do you actually put this knowledge into practice.
Amy: Each one of these skills actually is pretty practical, where in this case it’s about making fast decisions, and knowing that you can make a decision and then you can make another decision, that you can keep making informed decisions and one good decision will lead to another good decision, and that it’s not a to be or not to be kind of land. Which is a lot of businesses been about thinking through things, and making strategic plans, and predicting a five year future, and doing all of those things, and as we’re more globally linked and technology accelerated, it’s about making fast decisions, and then knowing that you can continue to make more decisions and continue to navigate. That’s a very tactical and sort of practical framework to put into play.
Peter: The fourth one is fail wisely, and you talk about a ratio. How do you set the right ratio, because I imagine it’s different for every organization, the right ratio of failure. And how do you hone resilience? Teach us a little bit here about failing wisely and setting a failure ratio.
Amy: The in-going idea is that you will not be perfect, so the ratio is, for example, one in three things I try won’t work, and that’s what I want, and that’s what the Stella and Dot founder, Jessica Herrin, that’s her ratio, and she runs one of the fastest growing fashion businesses. It’s all through direct selling workforce of women stylists. They’re backed by Sequoia, one of the big venture backers out here, and what Jessica says in that fashion inventory line is, one in three things that they try as products won’t work, but she just wants her stylist workforce to say, “Love it or lose it” as fast as possible. Then they lose one third of the inventory quickly, they shed it, and the figure out a better style, a better fashion, something that’s better adapted in the marketplace.
You might have a one in ten ratio in going in a more capital intensive industry. Back to Elon Musk and Tesla Motors, you don’t actually probably want one in three things at Tesla to not work, because that’s a massive, when you’re manufacturing a car, that’s capital intensive, and that’s at a whole different level. There’s big inventory in there, and big factories, and everything else, but you also don’t want a zero tolerance for failure. Zero ratio would be a perfect record, and we know that’s not possible in today’s business landscape, so maybe at Tesla the ratio is one in ten things that they try won’t work. Google’s ratio is 70-20-10 for management time, 70% of time on core business, 20% of time on side business related to the core, and 10% of time on total moonshots, and that’s how they direct the business leadership team to direct their own time.
The point here is that we each can set our own ratio. Depending on what industry we’re in, depending on what station of life we’re in. If we have kids in college, and we’re paying big tuition, and risk tolerance is lower at that moment, that’s okay, but it just can’t be zero. The idea then on the flip-side of resilience is that you know you will get it wrong, and that’s what you want, because that means you’re learning, that means you’re innovating, that means you’re on this entrepreneurial curve. If you actually do have a perfect record, you haven’t tried anything new, so the way to think about failure is small bets, incremental failures to avoid catastrophic mistakes, and the fact that you’re getting it wrong sometimes is actually what you want, and that helps, I think.
Peter: The Google example is an interesting example, because it’s not a ratio, per se, it’s a timeframe. Spend 10% of your time on things that you can expect to fail, and hopefully some of them will succeed. It’s an interesting way to encourage people to take risks who are risk-averse. There’s something powerful in saying, “Out of the day, take 45 minutes and work on stuff you expect to fail.” It creates a very interesting space for failure that, for people who are risk-averse, may otherwise have a hard time kind of handling.
Amy: Yeah. I think that you have to build it in, and that’s the point about having a ratio at the outset, is that you don’t go back at the end. The real danger, and this is how, by the way, we’ve taught people across the world, and the US is the dataset, but we had told people in the education system, there is a right answer, and you can be a four point student, you can have a perfect SAT score, whatever it is, you can be a linear thinker, and you can come up with the right answer. In today’s world of work in the marketplace, we really don’t know what the right answers are.
The business landscape has shifted so much that in my father’s business career, you could think that you could take risk out of a system and scale a working idea, take a working idea global, but in today’s world, we don’t know where those ideas are coming from. They could come from anywhere. You can’t believe that you could have a zero failure outcome, or that you could take risk completely out of a system. Instead the set your own ratio, at the outset, basically frees you up to realize that the best possible outcome is to fail a little bit all the time so that you’re on the edge and you’re moving forward.
Peter: Let’s talk about network minds.
Amy: Networking minds is about harnessing the brain power of other people, and the idea here is that you really want cognitive diversity, you want to try to figure out the diverse mindsets, and the diverse skillsets, and the point of view that other people can bring to solving a problem. We talk about diversity, what people look like on the outside a lot, like race, gender, socioeconomic differences. That’s the visible diversity that we can see. My research set is saying, “No, that’s not actually what matters. The cognitive diversity that’s inside your mind and what brain power you bring, that’s what will solve problems that we haven’t solved in the past, so if you can network diverse types of brain power, and people may look similar or different, but you really want this diverse brain power to come together in on and offline forms to solve problems.
Peter: It’s a little bit synonymous with find the gap, where in finding the gap, you’re merging ideas, or you’re bringing diverse ideas together. Here you want diverse minds that are going to work on a problem and they’re going to see things that similarity might miss.
Amy: In find the gap, one of three ways of finding a gap is to be an integrator, as I’m calling it, so combined different ideas at an intersection, so Chipotle is an example where Steve Ells, the founder himself, is a classically trained chef, and then he has disdain for fast food, but he thinks to himself, “Ah, you could make fast food. You could combine fast with casual restaurants, and cook for the line. The longer the lineup of people is, the more you cook, the shorter the line, the less you cook,” and he creates fast casual as a whole category of restaurant, but that’s him spotting a gap as a classically trained chef.
This idea of networking minds is a little different, which is if you really want to solve something in your business that isn’t working, if you’ve bumped into something that is just not solvable by yourself alone, what you need to do is go, if you’re an extrovert, go find an introvert, and ask them how they would see something. If you’re trained as a computer scientist, go find a journalist. If you’re a mathematician, find an anthropologist and say, “Help me think about this to solve this problem,” and you can do that through online vehicles.
Surprise competition would be a way, post a prize and attract brain power that lives in Romania, or lives in China, or lives in who knows where, in Germany to help solve your problem, or in a real physical sense, not on a virtual platform, but write on a white board, write on a wall and get five other people in your physical office space to come over and look at what you’ve wrote and get those brains to help you brainstorm about it. That’s different than if you write on a sheet of paper by yourself, and you’re just using your own brain capability. If you put it up on a vertical surface and attract four other people to come over, in your defined office space, you’ve actually networked minds right there. That’s kind of a couple ways to do that.
Peter: Got it. Finally, gift small goods.
Amy: Yeah. Gifting small goods, that’s the last skill, and that’s about a small good is a small kindness, or something of value for someone else in the workplace. Gifting it forward is about being generous with your help, and the concept is that if you are collaborating and you’re helping in small ways, that other people, your reputation is very amplified. Other people will talk about that and because of transparent technology, will know about that. This is the basis of LinkedIn. We can find each other on LinkedIn. I can find information on Google, or Facebook, or Twitter, I could send a text, I could send an email. There’s very fast communication around are people good to work with, your reputation.
If you’re gifting small goods and helpful, information comes to you, people want to work with you, deal flow comes to you, you attract a lot that makes you more productive at work. The flip-side is also true. If you are not gifting small goods, but you’re cheating people or hoarding resources, that will also be transparently known increasingly with the technology and amplification of your reputation, and you will get cutout of networks. There’s a research study right now out of Harvard showing that, that in a real collaborative and collectively entrepreneurial economy, those who are not helpful to others, they do get cut out, people don’t want to work with them, they become isolated, and the interestingly, they don’t like being isolated, so they are two to three times more likely to collaborate in the future. So gifting small goods is just a way of watching out for other people, but it’s actually pretty productive for the person who is being helpful.
Peter: You call them the six essential skills, but they feel like even more than skills, they’re ways of being, and showing up, in the world that predispose people and organizations to success. How has doing this research impacted the way you lead, and the way you act?
Amy: I think it’s completely and fundamentally changed the way that I think of work. The act of writing a book is also very entrepreneurial. I’m a first time writer, and creating this content has been challenging in so many ways, I have stepped through those exact same skills I went out to identify, which is the big surprise to me. Yet to find a gap, I think that there was a gap in the marketplace for books talking about how to create and scale ideas across different domains. The drive for daylight thing, I’m very much a long horizon view. I hope that this is on the shelf and helping people for years to come. The decision loop, the OODA loop, yeah I had to observe, decide, act very quickly on who to interview, how to get them, what mattered, sift and sort and keep making decisions. The failing wisely, it’s very hard. There were lots of failed drafts and repeats and getting a book done as a first time writer is also a pretty painful experience. You have to be resilient to get that done.
The networking minds thing, I had to get help. I had to have editors help, I had to have friends read chapters, I had to have people who were inside my publisher [inaudible 00:34:37] and outside my publisher, and design a cover, and design a website, and do all of those things that I didn’t know how to do. In the gifting of small goods, I would say that I believe the success of this book will come because it helps other people. The emails that I gather, the people that I meet along the book tour and stuff, I feel most proud of that, is the single mothers that come up, or the students that come up, or the corporate executives that say, “Hey inside of our fortune 100 company, we’re trying to get people to do these skills.”
I’d say the process itself has changed the way I see work, and I believe it’s very available skillsets so that each one of us can do these things and accelerate whatever it is, whatever the dream is of the way that you would apply your time and your talent. I think it’s accessible, and that’s really a hopeful kind of message.
Peter: The book is The Creators Code, The Six Essential Skills of Extraordinary Entrepreneurs. Amy Wilkinson is the author. Amy, thank you so much for being on the Bregman Leadership Podcast.
Amy: Thank you. It’s a pleasure to be with you.
Peter: If you enjoyed this episode of the Bregman Leadership Podcast, please subscribe and leave a review on iTunes. For more information about the Bregman Leadership Intensive, as well as access to my articles, videos, and podcasts, visit peterbregman.com. Thank you to Clare Marshall for producing this episode, and to Brian Wood, who created our music. Thanks for listening, and stay tuned for the next great conversation.
Peter, you continue to bring us such great conversations! Thanks so much for the way you do that. I especially love it that you offer the transcript -brilliant. The move I liked the most in this convo was the moment you re-framed the ‘6 essential skills’ ways of being, ways of showing up. Spot on. thanks again, and to your amazing guests you go find.