The Bregman Leadership Podcast
Episode 167

Safi Bahcall

Loonshots

How can you make large shifts in your organization’s culture? Safi Bahcall, physicist, entrepreneur, and author of Loonshots, identities the shifts in structure that allows change to occur within teams and organizations. Discover why you should pay attention to the kinds of rewards you give your team, the two phases of your business and why you must love them both equally, and why the “fail fast and pivot” mentality isn’t necessarily the best strategy.

Video

About

Website: Bahcall.com
Book: Loonshots
Bio: Safi Bahcall received his BA summa cum laude in physics from Harvard and his PhD from Stanford. After working for three years as a consultant for McKinsey, he co-founded a biotechnology company developing new drugs for cancer. He led its IPO and served as its CEO for 13 years. In 2008, he was named E&Y New England Biotechnology Entrepreneur of the Year. In 2011, he worked with the president’s council of science advisors (PCAST) on the future of national research.

Transcript

This transcript is unedited.

Peter: With us today is Safi Bahcall he wrote most recently the book Loonshots, how to nurture the crazy ideas that win wars, cure diseases and transform industries. Uh, it’s a really interesting book. He is a second generation physicist, a which you’ll see because at some point, like with every good conversation with every real physicist, we’re going to get to an equation even though we’re talking about management and organizations. Uh, he worked for three years as a consultant for McKinsey. He cofounded a biotechnology company developing new drugs for cancer. He has not cured cancer yet, but you know, we still hope, uh, he led its IPO and served as its CEO for 13 years and he’s written this really interesting book about how we innovate and come up with, uh, and, and execute on some really, uh, longshot but interesting ideas. Um, Safi, welcome to the Bregman leadership podcast.

Safi: Thanks. Excited to be here, Peter.

Peter: So what is a loon shot and how is it different than a moonshot?

Safi: Sure. Everybody knows what a moonshot is, that it’s a big goal and exciting destination, like curing cancer, eliminating poverty. But the, the big ideas that change the course of science, business or history rarely arrive with blaring trumpets or red carpets, dazzling everybody with their brilliance. So usually dismissed or neglected for years or decades. They’re champions written off as crazy. And since there wasn’t a good word in the English language for that I made, went up moonshots

Peter: And like why, why did you write this book? Why now? What interests you about this?

Safi: Well, about 18 years ago I started a biotech company for developing new drugs for treating cancer. In a few years after that, my father got diagnosed with a rare type of leukemia and I figured, well, I’m in the field now. I have all this access to the latest drugs and technology and scientist. And I did. I tried everything and I said I could do something. And I got second, third, fourth opinions and got experimental drugs. But nothing I did helped. And unfortunately my dad died a few months later and over the course over the next few years, a company grew. We went public everywhere. I looked inside small companies, big companies trapped in the basement to those organizations were promising ideas that could have helped my dad or others with severe diseases or other types of cancers. And I just got curious like, why do these great idea say trapped in basement? Not because any one person is a bad person, everyone wants to do something, but there’s something weird that happens when people come together into a group and they individually might like some of these ideas and want to encourage them. But when they come together as a group, they kill them. And so that kind of led to the research that, um, triggered or sparked this book.

Peter: Right? So it’s so interesting. And one of the things I want to make sure that we get to, and you could bring it in into the answer, one of the questions or we could talk about it specifically is this challenge of knowing, cause this is different than the challenge of either squashing your idea or bringing it to fruition. There’s a lot of ideas simmering and basements and, and, and you, you talk about, uh, in your book a number of different ideas that, um, that could have been squashed or would have been squashed or would’ve never been noticed, but then really became, you know, substantial, important, uh, products or, or ideas that came to the market and fruition. But one of the challenges is how do we know what’s simmering down there? Because it’s bottom feeding and you know, not particularly interesting. And we could spend, you know, $1 billion trying to develop it and won’t go anywhere versus an idea that’s actually an innovation that has the potential to transform. And I think that’s the challenge, really, that, that, you know, the people who are choosing to invest in, you know, whether it’s the CEO of an organization or you know, whether it’s a startup like, you know, is it worth pursuing this idea? Does it have legs? Will it be successful? Is part of your, I might be jumping ahead a little bit because I think we should talk about phase transitions and group size and things like that, which we’re going to get to, but, but a will that, will that conversation answer the question I’m asking

Safi: you asked kind of how I start in this book and, and what, um, drove me and it, it, it ties together because the other frustration I had besides seeing all these promising ideas that were trapped inside the basements of large companies, small companies, including my own, uh, and certainly those that I talk to now is that there’s so much out there about culture. I remember when I first started as a CEO, I would, you know, there were all these books about culture, culture, culture, blah, blah, blah, blah, blah, blah. And after a while, after the fifth 10th hundredth mine, I just, you know, I, I would hear culture, I would think yogurt. I just wanted something less squishy and a harder science. And so that led to thinking about and understanding structure. How do you create a structure that can encourage these ideas? Because the culture stuff didn’t seem to really work very well because there’d be, you know, all these leap famous leaders and CEOs and I would read all the books and magazine articles and they would talk about how this great culture and then one week later their company would be toast.

Safi: And I was like, well, if the culture is so great, like what happened?

Peter: Well, and there’s that famous quote, right? Culture eats strategy for breakfast.

Safi: Right? And so this is why structure eats culture for lunch.

Peter: Right. I love that. By the way, I just, I literally, yesterday was just in a conversation with Marcus Buckingham who, who, you know, you may know and, and his view very strongly is culture is a fallacy. Like not, not just like does it not impact, it doesn’t exist in his view. Teams exist. Right. Which is sort of where you’re going to, you’re where you’re headed. But it would be good for you and mark is to have a conversation cause you’re on the same page. I mean maybe not cause you’re on the same page, so nothing new might come of it, but at least it will reinforce your ideas. But teams exist. But culture, a culture doesn’t exist in organizations according to the data that he’s collected.

Safi: yeah and I think you know, the a, and we had a number of people actually connect to us and we just recently connected. But I’ll give you an example in here’s how I think about it. Imagine I’m holding a glass of water, I stick my finger in and I can switch my finger around. And that’s always true for any liquid. Except as I gradually lower the temperature, all of a sudden the behavior of those molecules will completely change at 32 Fahrenheit, the water becomes totally rigid. The molecules all line up and I can’t stick my finger on anymore. It freezes. So why? Those are exactly the same molecules inside. And there’s no CEO molecule with a bullhorn saying, I think it’s 33 fair and I’d everybody sloshed around, Oh wait, no, it’s 31 everybody line up bridging no weight, it’s 33 they just do it.

Safi: And you can think of culture as the patterns of behavior that you see at the molecule sloshing around are they totally liquid. And you can think of structure as those small things. The small changes that can influence behavior enormously underlie underneath like temperature for example. And that the fallacy of culture or this problem and the cultures that you think just by talking or forcing people to, you know, watch movies or hold hands and sing Kumbaya. You can change culture but you can’t no amount of yelling at the molecules in a block of ice day. Just loosen up a little bit. Everybody just like get cool and Lewis is going to do anything but a small change in temperature can get the job done right. Small change in temperature can melt steel. So that’s kind of what this book about it is about is like understanding firstly why you had those different phases in companies. Why groups will suddenly change from embracing wild new ideas. What’s the underlying science of that? And it turns out it’s not really that hard. There’s two forces kind of staking outcome and perks of rank and as you vary the balance between those two you will get a transition.

Peter: So let me ask you a question cause I want to dive into this. The question is I agree with you that no amount of speaking to the water is going to change the temperature. Is that also true for human beings? Meaning people get influenced people you can speak to people and things or are you saying actually people are just kinda like water. Like you can change the temperature and you can change the structure. But no matter what you say to them, no matter what raw, raw or no matter what, that’s actually not going to change people’s, your view that, that people are really like watermelon keels in that way.

Safi: And it, let me sit right out. Two questions. One is a, I mean the first thing, the, the, the, the bottom line is that that’s an extreme view and no, I would disagree either with Marcus or with others. That culture is totally irrelevant. And in this book I focus mostly on structure. What are those little control parameters? You know, you sprinkle salt and water. It can affect the transition. What are the equivalent of sprinkling salt into an organization that can make it embrace wild new ideas more. Um, but the, that would be an extreme view. And I disagree as a person who had been a CEO for 13 years, there are certain, I think of culture’s like patterns of behavior, right? And of course you can influence pattern patterns of behavior matters. Some. So for example, celebrating victories is a good thing, right? Here’s, here’s the lesson for you guys.

Safi: This may be important when we want to take notes on this. Flogging your employees weekly beatings, Wednesday mornings. Not a good idea, right? So there are certain patterns of baby, the Brittany obviously good ideas, pretty obviously bad ideas. You want to criticize somebody, they just made a presentation, do it in private, right? That’s not rocket science. You want to, you want to praise somebody, celebrate, encourage something, do it in public. Obviously I, I would disagree with the fact that culture, blah, blah blah, culture equals patterns of behavior. And you can set an example as a leader. So in this book I focus mostly on what is struck, you know, what are those [inaudible] cause they’re 10 million bucks

Peter: right on the, on the culture. Okay, great. So let’s talk about the structure piece and let’s, you know, and there’s, there is a, um, you have an equation, you have your innovation equation, but you, and you also have sort of group size, which I’m sort of super interested in, right? Which says that at a certain group size, you, you, you switch from water to ice, right? Like the, there’s like an optimum size of a group to bring loons shots and to actually get people to work at their best and be their best. Can you talk about that?

Safi: Sure. And I, you know, the, and I, I just wanted to emphasize this point about structure versus culture cause I do, and then I will answer that question is the, you can think of it the same way you think of like diabetes or a disease or you have genes that matter and you have the lifestyle that matters. So you can have a gene that predisposes you to diabetes, but if you drink two gallons of coke a day, you’re going to bring it on. You can have genes that predispose you to cancer, but if you smoke two packs a day, you’re going to bring it on. So in a real organization, in the real world, both culture and structure matter and the kind of coin of this research, this book is if you just focus on the one, the 10 million bucks about culture, you’re going to miss the other. The thing about [inaudible]

Peter: it makes a lot of sense. I mean, again, the, the, the challenge with that analogy is you actually can’t do anything about your genes. Like, like you can’t change your genes. And, and actually, maybe I, I guess this is the question, are you saying the same thing about culture? I know you want to get to structures that we’re going to get to the structure, but are you saying the same thing about culture, which is not just that there’s a 10,000 books written about it, but ultimately you’re, you’re not gonna fundamentally change. Like there’s, there’s, there’s so little you can do about changing culture. You might as well think of them as genes and, but structure you can do a lot about. So let’s focus on that. Or are you saying you’re just choosing to focus on structure

Safi: that none of that, I think that’s, I think you need to take care of both. And you’re right, Jean is not a perfect analogy because you can’t change your genes, whereas structured, there are many, there’s a handful of levers that you can grow. It really comes down to incentives. And so the, uh, you know, there’s some stuff about the air that, oh, humans don’t respect people respond to, you know, mastering control. You know, and that’s sort of the psychological literature. Uh, you know, based on studies of children, you know, and like in, in very controlled environments. But in the real world, you know, I think it was a buffet or a monger, one of those guys said like incentives, explain 95% what you incentivize me. So when I talk about structure, it’s simply what are you incentivizing, right? So when you have a political culture, you have an innovative culture.

Safi: That’s the patterns of behavior. You see if you reward rank, you are going to create a political culture. People are going to shoot their neighbor’s ideas down so they get promoted. If you celebrate and reward ideas and intelligent risk taking and there’s sort of an art and a science to that, you are going to get an innovative culture that turns out to be much easier to adjust. How do you adjust your incentives? That’s the equivalent of temperature, which am I going to reward? And so now the, you asked about group size. So you can think of group size is just the equivalent of temperature. So there are two forces. Anytime when you get these sudden changes in systems which are called phase transitions, it’s a very simple thing. It’s just two underlying forces. So in a glass of water you have one forest called entropy.

Safi: It’s a fancy word. It just means stuff, wants to run around and be free. And another called binding energy. Again, a fancy or just means it wants to lock every molecule, 2.8 angstroms from its neighbor, not 2.7 or 2.9 and as you adjust the temperature, you’re adjusting the balance between the two and at 32 is when they suddenly flip the system suddenly snaps. So it’s no big mystery. You just have two competing forces in every phase. Transition in nature is like that. And, and here’s the question that I sometimes get asked and I think you were touching as well. You know, that’s a molecule. How can you as a physicist, you obviously don’t understand that, you know, teams are different, people are different and suddenly, well, you know, 13 years running, running a company, believe me with Jab, you know, multicultural coming. Believe me, I know people at different, but here’s the thing.

Safi: Carbon is very different than waters. Methane is very different than water, orange juice, grapefruit juice, they’re all totally different. Yet, guess what? They all freeze. Traffic flow and a highway goes from smooth flow to jammed flow. That’s a very simple phase transition. Every highway does that. And guess what? Every driver is different. Every car is different. Every traffic flow is different. They all experienced that. So in a company, whenever, here’s the bottom line, whenever you organize people into a group, you’re creating two competing forces, two incentives, cash and equity. Equity is a stake in outcome. How will your equity in the whole thing grow if your project succeeds? If you’re a small company, your equity stake is huge, relatively speaking. If you’re a large company, it’s tiny versus perks of rank. Meaning if you get promoted, how does that affect your incentive? So when you’re a small company, the first one dominates your equity stake is much more important than your literal equity stake.

Safi: Like you’re not talking about your equity in your ownership for an idea and you’re talking about actually equity in the company. Absolutely. So, you know, you have it, you’re at a five person company developing a new cancer drug if it were or you know, a new film project. If it works, everyone is a hero and a millionaire. So when that project stumbles, that loon shot that crazy idea, which they all do, every moonshot, everything version 1.0 2.0 never works, right? Everyone’s gonna roll up their sleeve regardless of rank and go save it. So is it that simple of like short term versus long term? Like my long term interests versus my shorts or my, my my ownership over the success of the outcome versus my own personal success in a particular, you know, situation that, that, I mean it actually sounds right. Like is it that simple?

Safi: Well, let me as a s as anyone who’s been a manager as CEO and has done compensation, which I did every week, every quarter, I mean with my head of HR, everybody has two things in a company base salary and equity. I’m simplifying a little bit, but you always have cash and equity, right? It just happens that when you’re at a five person company, and it wouldn’t actually confuse it with time horizon, it’s just a fact. You get paid. I have some equity in my project or success that equity might also be tied to, uh, you know, your project. It’s not always stock options, but let’s keep it simple and just say you’re at a five person company. You on 20% of the success just to keep it simple for sake. But you also have perks of rank. So when you’re at a small company, you know, you get promoted, that’s a couple thousand dollars or not.

Safi: You have one person’s team, captain, one person, team member, but your equity is enormous. It’s worth tens of millions or hundreds of millions of dollars. So who cares about rank? Now you’re at a, let’s say a much larger company, let’s call it, I don’t know, let’s just make up a name. For example, Pfizer, a hot, totally hypothetical name, hundred thousand people. You know, what’s your stake staking outcomes? Same drug. Same project. Same. You right. Well that drug works, it moves the needle of your company by 0.5% a fraction of a percent. All right? So it moves your equity by practically zero. But if you can, you know, make funny comments at Ed Committee meetings and sarcastically put down your neighbors ideas and sort of subtly humblebrag about your ideas to your boss and talk about how your ideas and her ideas are so aligned, you might get promoted, right? So you think that’s a cultural thing.

Safi: Uh, you have a innovative culture versus a political culture. How do we recreate that and that there’s so many people thinking the wrong way. Let’s just recreate a startup culture. You don’t look what’s underneath the surface, which is your incentives, your incentives there to get promoted and you get, you do that in many cases by making yourself seem better versus others around you seem worse. So it comes back down to a pretty simple thing. What are the incentives? And so by structure I really mean what are the incentives? Let’s tease that out. We spent too much time talking about patterns of behavior, but not enough time about what are the incentives you’re placing on people because they’re going to follow their incentives. And when you say incentives, you’re really talking financial incentives, monetary incentives. Well, for the purposes of this discussion, just to kind of keep it simple, I am.

Safi: And so in the book I end up spending a lot more time about dividing between hard equity and soft equity. So hard equity is sort of simple to understand and that’s why it’s easy to talk about and easy to quantify soft equity or that are, for example, you know, one way that some large companies help innovation as they create a lot of external collaboration. So if you’re a project manager and you got an idea and you’re working kind of in the loon shot, labs are the crazy idea factory, you’re collaborating with an external group, all of a sudden you have an enormous soft equity stake, non-financial stake in your success. Why your peers are watching you, right? It’s a recognition from your peers in your industry and that’s incredibly motivating and important to you. Sometimes as much or more than financial. So by equity I mean the broader umbrella of the combination of hard, which would be strictly financial and soft, which mean non-financial equity.

Safi: Right. Um, so, so how do you and group size, by the way you talk about in this, like if I’m remembering correctly like 10 to 12 people in a group, whether a couple of different kinds of group size, but if you’re, when does a company flip from everybody’s incentives, focus on you know, the project and rolling up your sleeve and encouraging these crazy ideas to all of a sudden the balance, the tug of war between these two forces flips and everyone, the, the perks of rank start to matter more. And that’ll occur between 102 hundred people for typical values for an entire control. Yeah. Typical values. But that’s the point is that once you kind of understand this, you can begin to reach inside and dial those things. There are certain things that control when that system will flip. And so those are the things that become very interesting.

Safi: It’s, it’s just an observation that you can write down an equation, but what becomes really interesting as well, what are those things that control those size and let me dial them up. So now instead of it, the system flipping at a hundred or 200 it flips it 300 or 400 or 500 or a thousand. So what are some of those things that we can dial and you can share your equation cause I know you probably, you know, being a physicist in all now you get [inaudible] you can even Google it online. I think HBR, uh, there was an HBR article and they were totally focused, obsessed with this equation and I, you know, I think that that gets into the, there are things like equity stake, you know, increasing your, if you just reward people by base salary, that’s obviously they’re just going to keep, keep fighting to get promoted.

Safi: Imagine that you, if you get promoted, you get a 200% bump in salary. What are you going to do? You didn’t spend all your time trying to get promoted. I made a match sense. Although it’s funny because there’s a lot of research and Dan pink has done some of this or looked at some of this research, right, which says actually people aren’t motivated by, by money in that same way that you have to pay them fairly. Like you have to pay them well enough that you take money off the table and then you create a whole bunch of other things in terms of autonomy and mastery and things like that that gets them bringing their best. So I’m curious like if you’ve read any of that stuff, and I actually talked to Dan a lot about it and I think that’s what I was talking about, the mastery autonomy, purpose.

Safi: I think those, those are kind of cultural things and those are good. The studies, those are based on a very much often like in a psychologist office, you take 10 kids or you take a small number of adults. That’s really not the real world if you’re a CEO running. So on the one side, there’s those psychologist academic studies and you know, there are valid studies, but you have to keep in mind this is a controlled room when you’re printing marshmallows in front of kids and like does that really apply? So on the other hand, you have like the Charlie mongers or the more Buffett’s saying 95% of behavior can be explained through incentives. So which am I going to believe the psychologist with mushrooms and 12 year olds or Charlie monger who runs a lot of businesses. And so all that being said, I agree.

Safi: And when I was a CEO, of course I tried to do both. So on the one hand, you want to make sure people’s incentives are there. On the other hand, you want to align and there’s actually ways that they overlap. When you create purpose, when you create master, you’re actually enhancing the soft equity stake. So they’re actually kind of a gray zone where they got it, they overlap. Um, but I think the bigger picture problem that I spend a lot of time, and I’ve gotten calls from the army, the air force, navy, well-known tech CEOs, film studios, CEOs, the number one problem is not so much these micro wee, wee little factors. The number one problem is that there are two phases. There’s one phase. Whenever you organize people in the group, they do great at embracing wild new ideas. Those ones, and there’s another phase when they’re totally focused on discipline and execution.

Safi: And here’s the thing, you need both. You absolutely need both. If you’re a company, you have to deliver on time, on budget, on Spec consistently to your customers. If you’re in the military, you have to direct millions of soldiers in battle and supply them with millions of munitions. On the other hand, if you’re in the military, you need to create the radical new weapons that are not in your tools today before your enemies do. You don’t want your soldiers to go on that battlefield and get slaughtered. If you’re a company, you need to come up with that crazy new idea before your competitor does and kills Your Business Line. So you need to do both. And they’re exactly the opposite. That’s the problem. That’s the real problem. One case, you have the artists working on their wacky, new ideas, they’re the opposite because in the one case, if you’re a soldier, your job is to minimize risk and maximize quality.

Safi: Absolutely. That’s exactly your job. If you’re an artist created working on radical new weapons or radical new ideas, it’s 180 degrees the opposite, right? Your job is to maximize risk. You want to try a lot of stuff that doesn’t work because if you’re not, you’re not doing your job well, your competitor is doing that and they’re going to kill you. Right? And you can see lots of organizations that that really divide up the work in that way. Right? Like you’ve got an Amazon that’s, you know, I can’t think of an organization that’s more efficiently focused on, you know, executing, right? They have to be, if they’re going to ship, you know, million tens of millions of packages a day, you know, to all these locations, get them there in two days. And, but they’re also like, like you know, they’re also doing some really creative, innovative stuff that, so they sort of separate out in terms of teams like you guys are the ones and then we’re going to take small bets over here to see if that works.

Safi: Right. And this is what I, I talked to people about kind of the three rules, the ice cube, the garden hoe in the heart. And it does give you a new way to think about what it means to be a better management manager and leader. So those three tools are the tricks, the tools to get you to the one exception to the rule that a system can be in two phases at the same time. And that is the big problem because you can’t be a glass of water, can’t be solid or liquid at the same solid. Yeah, it just doesn’t, I actually had, somebody asked me, well what about a slurpee? And that in fact, and I had to explain to SURPI, a slurpee is a liquid, disgusting, sugary liquid in which you’re suspended particles of ice that are rapidly melting. You wait three minutes, it’ll be all disgusting, sugary liquid.

Safi: The point is in equilibrium and that’s what Amazon does and so here’s the trick. There is one exception to the rule of those three things. The ice cube, the gardener on the heart, which I can bill explained, are the tools to get you to the one exception to the rule that a system can’t be in two phases at the same time and that’s life at 32 Fahrenheit’s right at the cusp of the phase transition, you get separation, you get blocks of ice in pools of liquid that are living together coexisting in equilibrium, neither side dominating the other. Both of them stay up. That’s an Amazon or a Microsoft or a Google is doing that pretty well. A couple of other companies, Lego actually is doing that very well. They coexist and equilibrium and here’s kind of the key. The first is I skip just understanding these are two different phases and you have to manage them and completely offsets and floating in the ocean.

Safi: Although the ocean temperature might be different because of the salt. Right? Right around that. It’s very close to 32 but the point that people need to understand that the artists working in crazy new ideas in the soldiers developing them, they don’t understand each other and they’d speak different languages. They have totally different objectives and they generally don’t like each other. The people making the money rarely like the people who are spending the money and that’s normal. That’s okay. And that is the right answer. If they like it. If you don’t have that, you have a bigger problem. Right? Cause they’re doing totally opposite thing. Right. And they should be exactly the opposite goals. So the ice cube is that point. The garden hoe means lead more like a gardener, not like a Moses and the guard. That’s because the failure point in new ideas, the failure point in innovation is always in the transfer, not in the supply of new ideas.

Safi: If you put 10 people in a room with a bunch of posts, it’s for an hour, you will come up with a hundred new ideas. That’s never the problem. The problem is the transfer between these kinds of artists and the soldiers and just having the concept is 5% of the job. Turning it to a product on time, on budget, on Spec, consistently customers is the other 95% and that’s a challenge we’ve talked about where like this, there’s a bunch of brilliant ideas in the basement. You know, you can look at it from the, the army’s perspective, which is how do we know which is a useful one? And, and from the, you know, basement perspective, which is how do we get your attention to realize this has huge potential, right? And so this is where it comes right down to what your podcast is all about, which is leadership.

Safi: And if you look at the great leaders, they’re never this sort of myth of, Oh, I’m the Moses. I stand on top of the mountain and I raise, you know, my staff and I anoint the chosen project, the iPod or whatever. That’s not what really happened. Uh, in almost all of these cases, what really happens with the great sustainable leaders who build these great, wildly innovative, sustainable organizations like an Amazon or Google or some of these others, or Lego actually is a great example as well. They manage that transfer, they understand it will fail. They understand that the soldiers don’t want to hear about the blah, blah blah and the crazy nerds in the, in the, in the lab or the engineers and the engineers don’t speak their language and don’t like them and vice versa. They don’t speak the soldiers with the suits and the ties and the marketing.

Safi: And the customers don’t like those crazy either cause they, they, they think that their ideas are beautiful babies. Right. I give the stock, I should actually pictures of my beautiful babies. They think, oh, you know, in my, in my field and medical research, I found a new protein in a cell. Um, cancer is cured. You guys just go ahead and take care of those little details. Or I have an engineer. I’ve developed this beautiful, elegant code. You guys just turn it into some customer stuff and leave me alone. Or they think of their stuff as beautiful babies. The soldiers see a shriveled up raisin covered in vomit and poop, beautiful babies, vomit and poop. And that’s the heart of the conflict. And they’re both right. Babies are beautiful. They’re also covered in vomit and poop. You need those groups to work together. So the garden home means you manage the touch and the balance of the transfer.

Safi: You take those early stage ideas out of the lab, not too early. The baby season, not too early when they’re good quashed in the field and not too late. But even more importantly, you bring them back. You bring back the feedback because an early stage idea never works. If you finally convince a marketing guy to show it to his customer, it’ll blow up in their face. That’s why they don’t want to do it cause it doesn’t work very well. It takes a long time to understand they’re not paid for it. The incentives aren’t there. If you can manage that, the second thing you have to do, and this is where most companies get it wrong, is it will never work very well the first time. And the marketing guys just like, well, screw that. Let me sell him the typewriter I was pushing before or whatever.

Safi: And so then he has no incentive to bring back the feedback in the product. Just don’t talk about the sort of three deaths of the loon shot, the three deaths of the lone shot. It never works well. It seems like a stupid idea. And most people, that’s exactly where fail fast and pivot is exactly the wrong thing to do. So leadership in this situation, the most important role of leadership in innovation is to bridge the gap between the crazy inventors and the efficient, uh, executor’s exact, I cannot tell you. I get probably 10 calls a week. Leaders, CEOs who’ve, let’s say, read this, they call me, and literally the number one thing they asked me is Sofie I got it. You know, the uh, the, uh, the artists and the soldiers, that’s exactly what’s happening. We have this product that hit and it’s like doing really well.

Safi: Uh, we have this core franchise, we cannot drop the ball on that. And then we have these other guys working on the new stuff to like stay ahead of competitors, bet on like each other. There’s a lot of conflict. Sofie helped me bridge the divide. Like I am the CEO. I kind of get that, I’m sorta trying to do that but like I helped me get my leadership team to bridge the divide. So it’s exactly what you said. It’s like a misses what I call and I come in and talk about the, you know, the top 10 tricks and ideas and ways to bridge the divide. And it’s so powerful cause once people understand that it’s okay not to like the other guy on the other side of the divide. But it’s, this is why it’s important for everybody. It’s everybody is doing their job when there’s conflict and they don’t like each other cause they have the opposite jobs.

Safi: So bridging the divide. Exactly. Or I’d be a gardener, not a Moses. And the heart is like the final piece of the puzzle. It sounds soft and fuzzy. And even though I’m a physicist in talking about structure, really I do have a heart and I had some emotions. The heart means love your artists and soldiers equally love your artists and social. And this is why it’s so hard for leaders. I see this so often. I had this also as a leader, you generally grow up one side or the other. In the military, obviously most of the leaders grow up as soldiers. That’s why it’s very difficult for them to understand the wild creative side. But you have both kinds. Like at Edward landed Polaroid, he was a scientist, very hard for him to understand the soldiers. But whenever you favor one over the other, you create a disaster.

Safi: Like the example I often give is that people get so completely wrong is that the early version of Steve Jobs is first in it. Apple, you know, lionized himself as the great artists, the great designer. It was a complete disaster. So yes, he did work on the mackintosh project. Yes, he did to everybody else working on the apple three franchise and so on his Bozos. So you know what happened was, well the guys working on the apple three franchise, which was bringing in 95% of the revenue of the company, got these, you know, buttons with red circles with pictures of Bozo the clown in a slash or it’s saying we’re not bozos and that has stilly. He created between their two buildings. You know, they were separated as still, it was so great that the, the street between their buildings was called the DMZ, the demilitarized zone.

Safi: And it was a disaster. When the MAC launched, it was a total flop. I knew, you know, it was a great publicity campaign, but the product was too slow. It overheated, didn’t have enough storage. It was a total flop. And then the franchise was flopping because there’s so many good people were leaving because of this hostility between the artists and soldiers. And when he came back, he led, not despite all the myths and the stuff that you read, not like we, I am the great artist. He brought in Johnny Ive, who was the great, who led the group of artists and then he went outside the company and brought in Tim Cook, who at when he was at a compact in his previous job, was known as the Attila the hun of inventory, kind of the ultimate soldier name. Right. And when he was on his deathbed, firstly when he died, who took over?

Safi: It was not Johnny. I have the great artists who was Tim Cook, the soldier, and when he was on his death bed, he was asked by one of his biographers, you know, what was your greatest innovation? And he said, well, you know it, you know the iPod or the iPhone? He said, ah, it wasn’t actually any of my one product. It was in the organization I designed. And that’s the heart he led by loving his artists and soldiers equally. And that’s the key. You want to manage the touch and balance between these two groups. And the heart means love them equally. If you favor one or the other. As a leader. If you’re squawking about the latest shiny, innovative thing, you are demoralizing the soldiers who are really getting the job. You have to love your artists and soldiers recognize that they’re different. That’s the ice cube. Be a gardener, step in on the transfer and heart. That’s the third thing. Love your artists and soldiers equally. That will allow you to achieve life at 32 Fahrenheit.

Peter: I love it. And give us just as we’re closing, like one or two little tips, you know of that list of 10 that can get people beginning to have a sense as to here’s some things I could do as a leader that can, you know, that that can show up in a way to bridge that gap or to show my love or to even recognize, you know, these two separate elements.

Safi: Right? You just keep that. I gave you three big ones. [inaudible] I get cut, but I will tell you, I’m just saying like to, to actually do that, like to follow through on that. All right, so the first one is you want to create an elevate bilingual specialists. So here’s [inaudible]

Peter: when I couldn’t really speak, who really can be trusted by an understood and understand. Yeah.

Safi: Both when you want it, if you are the leader, you want to elevate their importance. So here’s what I mean by that. When I’m talking to senior folks in the military or or senior, you know, CEOs of companies that are very sizable. Some of them have built up phenomenal operations. For example, I was talking to a, a very high ranking admiral who was a nuclear submarine commander. Now in charge with of a reinvigorating navy, you know, nuclear submarine operations, you have to be really, really, you know, low risk and high quality. They have built, you know, 21st century operation excellence there and they’re working with phenomenally talented or the Johns Hopkins applied physics lab, really creative engineers coming up with really whack of stuff. So they have got like 21st century a plus groups on both sides. Right. What’s the bridge? This is like a platinum length.

Safi: This is a platinum link. You know, they have like some high school kid with a clipboard is the link between those two. So what you have is your chain is like platinum here, platinum here in the link as a rubber band, right? Because people don’t respect or don’t understand that bridging the divide between these two is a skillset. It is a very complex and tricky skillset. Just like being a bilingual specialist is not easy, right? It’s very difficult because you have to translate. These groups don’t like each other and speak the same language. They’re not trained the same way. They don’t have the trust-based relationships. The companies who do this really well actually invest in that ladder just as much as those

Peter: I, I, that feels important because the, the heart piece feels critical, which is that you have to actually love both your children equally. And what you’re saying, which I really respect is there’s a skill piece to it, which is, it’s, it’s like there’s a heart piece, which is I love. And then there’s the skill piece which says, and I’m capable and I, I actually have the skills of connecting these to, of bridging the gap of, you know, expressing the importance of and helping the communication flow. These

Safi: two right now, if you’re a senior leader, you don’t have the bandwidth to sit in at every meeting. How, but what you want to do is train a group of bilingual specialists. You can call them project champions or project managers or whatever you want and you want to make that not just some low note people on both sides won’t respect them. That’s the default. The sales guys, well, you don’t have a p and l, so who are you get out of my face. You just move stuff around paper around, right? They naturally want the and the scientist while you don’t have a phd or you’re not a programmer, so get out of my face so they will naturally be disrespected in that’s normal. The only way to make them functional on succeed and bridge that divide is to create that as a career ladder, as a skillset, as a best practice with experience on both sides.

Safi: And that’s right. And as they learn like a high school kid with a clipboard, I’m exaggerating a little bit to make the point that high school kid with a clipboard isn’t going to understand and isn’t going to be able to do a good job. And if that’s who you put in that job, it won’t never be taken seriously. You have to also, if you’ve built your career by kind of switching back and forth a little bit between the two, not only do you have the credibility, but you have the relationships. So you know you’ve grown up in such a way where they know you and they trust you and that feels like it’s a huge part of it. It’s a huge part of it. But there’s a skill and that, you know, one of my friends who grew up was a bartender and an artist and she rose very high in the Google hierarchy, very high.

Safi: Just doing that. And now she doesn’t know any coding, but she learned, she describes her job is I’m really, really good at getting nerds to do what I want. That’s how she discovered now that you know, she’s being funny of course, but that she’s only partly joking. She really does get nerds to do what she wants and that’s a very, very tricky skill set. They don’t teach you that in nerd school. Right. And they don’t teach you that in sales school. It’s a very tricky skill set. And only when you develop, if you rotate somebody into that job for three months and then and go do something, they’re never going to develop that skillset. She’s been doing that for eight years and that’s how she’s becoming a plus.

Peter: Yeah, I love it. Safi Bacall um, the book is loon shots, how to nurture the crazy ideas that win wars, cure diseases and transform industries. What a pleasure to talk to you and to meet you. And thank you so much for being on the Bregman leadership podcast. That was really fun. I really enjoyed it.

 

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