How to Build a Scalable Strategy for Big Bets and Bold Moves with John Rossman

Speaker A: Foreign.

Speaker B: Welcome to the Lucent Perspective. I'm your host, Rebecca Hastings. I've spent over a decade working with executives in the tech sector and help successful companies build their leadership teams and scale. During my career, I've been lucky to have the privilege of learning from many exceptional leaders. In these conversations you'll get perspectives from peers, be inspired and learn what it takes to become. One of the best is your chance to listen to experts talking about the challenges, solutions and the vital insights they've gained in their careers to date.

Speaker A: What a really good leader does in a transformation. They talk about the specific problems, they talk about the hypothesis of what the future state is. And they talk about the journey of experimentation that we're going to go through. And then they repeat, repeat, repeat.

Speaker B: Today's guest is someone who's been in the room where bold, high stakes strategies are made and actually executed. John Rossman is the managing partner at, uh, Rossman Partners and he's also the author of Big Bet, Leadership, Think Like Amazon and the Amazon Way series. He was a key leader at Amazon where he helped launch and scale the Amazon marketplace. And since then he's advised leaders across industries on how to move faster, lead better, and build organizations that deliver. In today's episode, we're driving into what it really takes to lead transformation in the real world. We're going to explore this concept of making big bets. The kind of moves that can reshape companies and how to approach them with agility, clarity and the courage to act rather than just think of the ideas that you want. John has promised that he's going to share what it means to play chess checkers. Something that really stuck in my mind when I read his book, um, especially when you're um, indecisions trying to make decisions in environments where there's a lot of ambiguity, like many of us in AI and tech face. So we're going to talk about why speed matters, how to avoid getting trapped in endless analysis and obsessing over financial projections and how that can actually do more harm for you than good. So if you're operating a company where you or the people around you are struggling to make decisions, then this is the episode to tune into. Whether you're a founder, C level exec, or someone who's just shaping the future of your team. Team John's frameworks should help you lead with more clarity, confidence and velocity. So let's just drive straight into this just now. John, um, thanks for joining me.

Speaker A: Rebecca. Thank you for the introduction. I feel like I should just wrap up Right now and leave it at that. So thank you.

Speaker B: You're welcome. There's been so much uncertainty lately in the markets and tech and talent with layoffs, and there's been this huge wave of skills transformation triggered by AI. I certainly see that budgets are tighter, hiring is a lot slower, and I know that a lot of leaders are thinking, should I really be making a big bet right now? What would you say to them?

Speaker A: Well, first I would say this notion that now is more turbulent than either in the past or what the future is. I think that that is a false premise, you know, and everything. It's like, I think in any point in time you can go, wow, it's really turbulent right now. And I think it's just going to continue like that. So on one hand I go, uh, I think it's as stable as it is. And the trick is how to make opportunity out of the instability and also ask like, well, what isn't going to change? Like what are the things that are going to be constant, you know, throughout any change? Right. So I think that that's, that's one thing and I think the other is, is that um, this is not a game where you want to be the slowest to react. Like, there are situations like I want to, I want to, you know, let others lead the way. Um, and I want to be slow to react. The name of the book is Big Bet Leadership. The big is the size of the ambition. The bets are actually small and the whole goal is how do we think these through, test them out, decide which ones and how to proceed on it before we make big commitments. And so it really is about, you know, both future proofing your business, but doing it in a way that seeks out ambition but calibrates the actual risk taking that we're taking. So I think it is the way of actually making bold moves and, you know, incrementalism and short termism I think is as risky or more risky than being, than being, you know, flippant and um, unprepared and um, unresponsible in proceeding with innovation. I think both of those, um, are risks. And it's about kind of finding that fine fence post rail to follow in both being aggressive but, but proceeding with risks. Well understood.

Speaker B: I love that concept of big ambition and really calibrating the risk. Um, sounds super attractive to lots of people. Especially like just now I'm seeing a lot of companies are really getting stuck or they're stolen. They kind of know what they need to do, but they're finding it hard to Press the button on the next steps, even when the ambition is there. Why do you think that is?

Speaker A: Well, it can be for a lot of reasons, right? You know, like, that's part of the challenge of this, of this game is that, you know, we know, like whether it's transformations, AI strategies, M, um, market entry, M and A, they all of these things have an extraordinary failure rate, right? Like typically above 80%. If you look at large transformations and large projects, only one half of 1% deliver on time, on, on budget and deliver expected benefits, right? And it's always that expected benefits piece. People tend to go, well, I was on time on budget, but yeah, but was, you know, was the juice worth the squeeze? Right? Did we deliver an actual meaningful competitive advantage? Whatever, whatever that is. And, um, they fail for lots of reasons, right? Like they fail for lack of clarity. They fail because we proceed too slow. They fail because we approach it as a technology initiative when really it's a business and people change initiative. They fail because we don't address kind of secondary factors like incentive systems. They fail for. Because it doesn't initially go to plan. And we, um, fail to have the understanding of kind of the degree of patience that sometimes needed to incubate both customers and capabilities and get them to market. They fail for lots of reasons, right? And so if it was easy to diagnose, like, okay, here's the typical thing, then this would be a much simpler recipe book. But they fail for lots of reasons. But I'll start with the very first one, which is we fail. We lack clarity and clarity in both the problem we are trying to solve for and our, uh, hypothesis for what the future state is. I get invited into a lot of companies to pressure test or evaluate, you know, a, uh, current transformation that's going on. And there's, there's essentially three questions that I ask. Here's the first two of those questions and I ask individually. I'll interview, you know, 10 to 15 key people on an initiative. And here's the two questions asked. What's the, what's the problem you're solving? Second question, tell me what, what, what's it going to really feel like in the future state? And here's how the answers will go. One third won't even answer my question because they, they realize the trap that I've set for them, which is like, oh, I can't even answer these basic questions right? And then the other two thirds will answer the questions, but they won't give just variations of the same answers. They will give distinctly different answers. And that's why I interview them individually. Right. I don't do it as a group interview. And so the fact that the companies and executive teams proceed on a, uh, bold ambition, but they can't even answer what's the problem we are solving for and what's our hypothesis for the future state? It just means like they're going on a journey to nowhere. So that's why the first critical habit we have to create is the habit of clarity. And we put in place what's called the big bet vector, which is a vector has two points on it.

Speaker B: Right.

Speaker A: The problem, our, uh, hypothesis for the future state. And if you put that in place up front, then you have a chance of proceeding across the rest of the life cycle of kind of this transformation. Right. But that's the first thing that we need is clarity. The big bet vector on the problem we are solving and our hypothesis for the future state.

Speaker B: Absolutely. And those are questions that, you know, I ask people similar questions when it comes to hiring. A lot of people don't think that through. And I love that you ask people, like, what does it feel like in the future state? Because some of these things, it's not just like, what does it look like, um, what, what, what's on the balance sheet, what's, you know, what's the customer's metrics looking like? But it's like, how do you feel? Because that is a big part of it too.

Speaker A: Like I, I oftentimes describe it as I want to be able to feel it, touch it, smell it, like, pull me into the job that's being done. Right. And so if you're doing this for a customer or for an operator, like, no, like I want to feel it, you know, and everything. Right. And why is your future state going to be delightful for this, for this customer? Like, why am I going to be willing to, to switch products, services, companies in order to go to this? And what we know about switching costs is that they're significant. Right. And so especially if your proposal is somebody is going to do something different, they're going to buy something different, you have to start off with the mindset, like it has to be 10x better than their current alternative and everything.

Speaker B: Right.

Speaker A: Because they have competing priorities of things to get done. So don't tell me it's marginally better. No, tell me why it's a, uh, distinctly better experience and cost model. Right. So it has to be both a better experience and it has to have a fundamental economic advantage both to the, to the user and to your Organization. And that's why like, we have to really get down into what, you know, we frame in the book, the suck. Right. Like you have to really get into the problem space deeply.

Speaker B: Absolutely. And if you do not have clarity about the problem you're solving, you're just never going to hit anything effectively and you're going to end up with huge culture problems throughout your business. People are going to get so frustrated, they're going to get burnt out is you're going to waste a lot of money as well.

Speaker A: But it happens all the time. And we do it under the guise of we're agile, you know, and everything. Right. Like we have that agile transformation and the agile methodology, when used, appropriate, is fantastic. But what we don't, what you need to frame Agile in is with constraints. Right. And two of the constraints we're talking about here are like, get specific, do, do, do thought experiments up front. Get specific about the problem and the future state, and then do an agile approach to proving those things out. But if, if you start an agile transformation with just like, hey, just like go in that direction, well, they're gonna, they're gonna take this journey to nowhere, you know, through the desert. And that's where we all go to die on these transformations is because, uh, there's, there's no constraints on what that is.

Speaker B: Absolutely. So it's a slightly different kind of leader than a lot of people are maybe thinking of. You know, because we're talking about agile, but we're also talking about putting structure, frameworks, thought processes around it. Uh, what kind of person do you think thrives in that environment? Like what behaviors do you see that propel some people forward and others, you know, maybe are held back.

Speaker A: Yeah, you know, great, great question. Uh, I think somebody who is a critical thinker, I don't know how to describe it better than that, but they, they will not suffer from vagueness of perspective and they're, they test ideas both in breadth and in depth. Right. And so they have that ability of like, getting at the heart of the matter really quickly and they're willing to do the hard work of like, okay, we aren't at the right, um, critical thinking level. We have to get at the right critical thinking level, but they also don't get distracted by the, all the factors and topics that at some point in the future may be pertinent, but for today they aren't pertinent. Right. And so they don't get, uh, locked down into, you know, um, uh, analysis paralysis. Right. And, and so it's always this fine fence line that we're trying to find of like a. You gotta think deeply and critically but you have to do it at speed. Right. And you can't get lost in analysis paralysis. And so that kind of critical thinker who knows how to get at the heart of the issue and test things out quickly really with, with mental experiments. Right. That is. I don't know how to describe that type of leader. I think the other thing is that they um, design thinkers, um, uh, and system thinkers tend to do really well because they see, they don't see things as like an independent point or decision or problem. They see things as a system and being able to understand kind of forces, forces of change, forces of stagnation. That tends to be a really helpful type of problem solving technique. In problem of. In really what we call wicked problems, like really complex problems are always system design problems. They're never just like oh here's the problem, here's the solution. Those are simplistic problems, great. But complex problems design require systems thinking.

Speaker B: And so many of the problems that businesses are going through with transformation fit into that category of design and systems. You're looking at completely ripping up your target operating model. Sometimes when you're going through an AI

Speaker A: transformation, I hesitate to ever call something after a technology. Like I don't like the notion of a digital transformation or AI, uh, transformation. That's a tool, a technique that's trying to get you to solving a problem, solving a problem either for your customer, solving a problem for your channel, solving a problem for your business. We're using AI, but it's never just about the technology. Right. And that's one of the, I mentioned, like that's one of the mistakes that people make is like they'll say like we need these other things but at the end of the day they operate it like it is just a technology initiative. Uh, one of the heart of the problem is like we think that technology will solve it. It's like no, no, no, no, no. That now AI is a new superpower, right. But, but if you're really going to make game changing advantage out of it, like you need to rethink the system that you are operating within and you, and as you pointed out, you have to be willing to, to rip up everything from your operating model to your org chart to your incentive systems to you know, your fundamental business model and value proposition. Right. Like it can take on all of those things. If we're really going to rethink the proposal to our end user.

Speaker B: Definitely. And like the more I'm listening to you. The more I'm thinking you really do need to get that kind of like cross departmental collaboration to get, and you know, you can't actually get that collaboration effectively without, uh, the clarity that you've been discussing and talking about. So you're going to need to make sure that your team have time to develop that consensus.

Speaker A: You know, a specific story, you know, relative to that from, from the book is, you know, we all know that there's these kind of high stakes moments where we bring the executive team together and it's like, here's the proposal that I have, right? And what tends to happen is a high functioning leader brings forward this singular version of like, here's what, here's our digital transformation or here's our AI strategy. And we're asking the coo, uh, we're asking the cfo, we're asking the chief Commercial officer, we're asking these people like, what do you think? Well, we are giving them an impossible assignment. And so what they do with that impossible assignment is they, they, they nod their head at the table like, yeah, that's, that's, that's really interesting. They maybe have a hesitation or a question, but either they can't articulate it or they're, they're outmanned in this duel, right? Like, you've done all this preparation, I've kind of just been briefed on it and everything. So they shake their head noddingly, they go, we're all in. And some point in the future I'll bring my perspective forward. That's a toxic situation for the success of this initiative. The relationships may not be toxic, but it's a toxic situation. So a better thing to do is do what we call the three futures exercise, right? So the three futures exercise is instead of bringing one convincing sales pitch for your initiative, you bring forward three potential scenarios. We recommend writing them out as a memo. You might be able to do differently, but we think three two page memos, each scenario has to be distinctly different and real. But what that does is it brings contrast into the conversation. And it also says there can be more than one perspective on this, right? And the exercise you give the executives is a, you send them to, um, them beforehand and they go, you say, which one of these would you vote on and why and what would have to be true about the other two for you to vote for that particular scenario. Now what you're asking them to do is a legitimate assignment and you're giving them the tools to do it. What you want to pull out of executives is their concerns, their risks, their hesitancies. Because those things can, then we can put into our testing backlog. Right. We can, we can respond to them. So that's an example of setting up uh, an executive team. Well, for the job to be done at these high stakes moments, but where typical approaches completely create uh, uh, you know, kind of a trap that we all fall into.

Speaker B: I love that because that, that approach of, you know, everyone comes with their ideas so everyone's heard and then you. But you actually have to like think about what's wrong with something but in a very positive way, like what's going to be right for this to work. I think that's great for getting dialogue and some, you know, healthy debate going. If you're concerned about psychological safety in the room.

Speaker A: Yeah, I mean you can call it psychological safety. I call it just good business decision and having, having productive conversations about, you know, the most important decisions that senior leaders make is resource allocation decisions. Right. Do we invest in this or this or this? We always have a ton of ideas, a ton of things we could go do. We can only do a couple, a few, maybe one. Right. Uh, helping senior leaders make that decision, that's a high stakes decision. Helping them m make that decision. Right. And have the trust of having hard debate focused on a proposal and three potential versions of that proposal. Man, that, that just really equips our senior leaders to do their job really well. And to demonstrate why you are a senior leader.

Speaker B: If you're listening to the Lucent perspective, you'll understand that hiring AI talent is complex and the market is ever changing. That's why we release a series of guides throughout the year for the UK and the US markets. Reviewing technical and commercial talent trends in AI. Our guides go beyond salary lists and we share our top strategies for securing the best talent in each area, as well as insights into emerging market trends. If you'd like to register to receive our guides, please visit www.listensearch.com. staying up to date has never been more important. So check out our guides at www.listen-search.com salaryguide or click on the link in the description box. So let's talk a little bit more about what it really means to make big bets and do them well. You've given some great tips already there, but going back to uh, where the conversation started, there's a lot of caution about making bold moves or committing your investment into your one specific potentially and I see this in like startups as well as corporates, where they end up just like Almost like playing innovation theater or, you know, like, it's almost like cosplay, you know, being a business person sometimes, and they get overly cautious in their thinking. And I think you. But I think your concept takes things far deeper than that. So it would be good to get your sense about, you know, what it actually means to make that big bet and how it's different from just going through an innovation process.

Speaker A: Yeah, Uh, I mean, I've seen way too many. I've participated in way too many what, you know, Kevin McCaffrey, my co author and I call kind of all hat no cattle scenarios. Right. A distinctly Western, uh, uh, metaphor. Right. But it means somebody who like, talks a big game, but they actually, they don't even. It's not that they don't know how to innovate or how to deliver, it's that they're not really interested in, in change. Right. And they want to say we have an AI strategy or an innovation strategy or whatever. But, but like, they're more or less oriented towards maintaining the status quo and, and, and not really challenging the, the. And so, you know, there's, uh, this whole book is kind of oriented about, like, how to fight that kind of false, uh, pretense here. But the thing I would, you know, maybe lean into in this conversation is like, you know, I already mentioned, like, the challenge is you're having. It's not in having, uh, an idea, it's in evaluating the right idea. And so having a portfolio, uh, this was essentially the job Kevin and I did at T Mobile, was a portfolio of new businesses that T Mobile could enter into. And how do you apply the right amount of diligence and thinking against the set of portfolios? And then picking the couple that you maybe proceed into prototyping and market, and then picking like, the one that you decide to scale. Right. Like, that's what it, uh, an innovation funnel tends to look like, but starts with a portfolio. The portfolio has to have a set of themes, like things that we generally think represent the market, the future for us, like the guardrails. But then you have a set of ideas that fall within those themes. And then the, the, the job of setting up your executive leadership team is like, well, here's, here's the portfolio. Here's the ones that we think pass our litmus tests and why. And then, you know, proceeding down into that funnel. And so I think having that, that concept, but putting constraints against it, how long do we take kind of between our stage gates is always like, again, it's always fighting these like you have to have deep thinking but you can't get um, ensnared with, with analysis paralysis. Like that tends to be you know, kind of the core challenges that you're always battling against the dual evils that we're were fighting.

Speaker B: And how do you practically manage a portfolio of big bets? I mean I just sounds like so like such a big job, uh, and a big task, so many moving parts.

Speaker A: The simple answer to that is a small dedicated team is required. Right. Like, like the part time nature of people participating in something like that tends to be a real root cause of like well why didn't it work? Right. Because the, the challenges of my operating job always will win over like the priority. And it's also about the ability to focus like being deeply getting your mind and your brain fully focused on like this problem that I uh, that I'm targeting and everything. Right. So a small team led by a senior enough executive that they, they have decision making capability with within, within guardrails. Right. We talk about, about that kind of high velocity environment that's needed here. Uh, they, so they have good decision making, lateral capability and policies and they actually know how to get things done not just within the organization but across an ecosystem and everything. Right. I mentioned the three questions that I ask when I do like a pressure test or review of a, of a, of a transformation. The third question is tell me how senior is the most senior person who's fully focused on this initiative and what the answer is. Typically like well we have kind of this junior project manager who is full time focused on the initiative and it's like that person is great, that person is fantastic, but that person is not equipped to be the senior leader that leads this transformation. So you actually have to have you know, uh, at Amazon we called it a single threaded leader. Other companies call it a dri, Directly responsible individual. You have to have a DRI who is obsessed about this portfolio or big bet that we are making.

Speaker B: Absolutely. I think having focus makes a huge impact. How else are you going to know when things are going off track if you're only dipping in once a week?

Speaker A: And if your incentive systems are like like all geared around like delivering this quarter, you know and everything. Right. And, and that's one of the little levers that has to be played at a uh, senior level is you. If you really want to innovate, if you really want a portfolio of new business capabilities, the executive team has to be incentive to make that a priority. Right. Um, Roger Martin in his book A New Way to Think talks about this, uh, directly and everything. But if everybody's incentive system is geared around delivering to today's commitments and this quarterly's earnings, uh, no matter what you do, you're going to be pretty diluted in this effort. Pharmaceutical companies tend to do a good job at the, at the board and executive levels. Like they talk about vitality, right? A vitality index, which is a measure of how much of revenue comes from newer products versus old products. Having some sort of concept of a vitality index for your business can be a good way of getting alignment across the entire executive team and the board across, hey, this is what we have to be achieving. And then setting up the bold moves initiative, the new business incubation, the big bets team is then the complementary focus that you need to bring to it.

Speaker B: Especially when what somebody is working on may compete with their, uh, daily or you know, their day job effectively within an organization, they do need to be focused.

Speaker A: Yeah. So it's like your job is to both operate the business today, but then fundamentally reinvent it. Like how good do you think somebody can be at that job? For all types of reasons. Right. Like a, you're, you're encumbered with operating today. B is all of your biases, all of your, your orientation is like the here and now orientation versus the beginner's mindset. Right. Like, like we hear this concept, but here it is in play. The beginner's mindset of looking at it with independent eyes, with, with questioning, with not assuming things have to operate in this way. You can't ask one leader to do both of those jobs.

Speaker B: Definitely. And I guess that brings me to one of my next questions. Um, that I've been thinking about before we were speaking is in your book, you talk about playing chess, not checkers, relatively early on. And I think it really captures that shift from being short term and reactionary down to focusing that longer term. Strategic thinking and keeping people away from their day jobs is going to be vital for that. But if you're getting pulled in every direction and you're kind of like entrenched in that reacting or day to day, I must get things done. How do you help people to step away and play that long game and look at all the pieces on the board rather than just their area, That's a big question.

Speaker A: But specifically to the point of that chapter, chapter two, uh, play, play checkers, not chess. You know, I'm always about kind of principles with actions. Right. So the concept is like, how do we, as we're thinking through a uh, concept like hey, here's a problem, here's our hypothesis. How do we test that better, faster, earlier than the typical like build it, go to market, then we get feedback approach. So one of the things you can do, and this is kind of combining that systems thinking, um, mindset with history, right? Like how do you actually study other situations that maybe they're, they're an analogous um, company, maybe it's from a different industry, but that has done something that's relative to yours. But actually pressure test your idea against the learnings from that particular scenario. You have to have a good definition of your problem and your future state first. But then you can find like what's the flywheel, the systems thinking approach of like how do I approach this not just with a feature, but understanding the full ecosystem of change that I want to uh, change and how do I learn from others in a very specific way to pressure test my idea? That's the concept of playing uh, chess, not checkers. And so instead of thinking and just a single move and isolated vision of like, well here's my situation, how do I think in terms of systems thinking and learn from others, which is always the cheapest, best experience that you can gain.

Speaker B: Absolutely. And I like, you know, that brings us back to, you know, make sure you've got multiple options that you're considering because every option is going to end up informing the others or enhancing them or exposing a risk that you wouldn't have thought of without having that um, on the table for a debate. So one area that I frequently see businesses getting tripped up is the financial planning. You know, obviously, like, what do you expect this person to deliver for you this year? Or you know, where are they going to take the business like to, and where are you just now? And everyone suddenly has got a very specific number but, but they struggle to explain it to you like what that really looks like in terms of actions or how they're going to get there. They're just like, oh, it's going to be like 20 million RR by the state. For example. You take a slightly different approach where you're kind of identifying what's going to derail success. And I find that kind of really useful actually when thinking about a few things in my business and other businesses that I'm supporting, um, because those as you point out, like the detailed financial projections that we, we crave, we love the detail, we want that certainty, but it's false. Like it's, you know, quite often it can be quite misleading. So what should we be focusing on?

Speaker A: Well, two things that I'll, I'll focus on there. The first is that as operators, like what we've made our career on is seeing a situation, making a plan, delivering to that plan. That's how an operator, that's what a good operator does, but it drives very low risk perspectives because you have to have certainty in like, yep, I'm going to hit this outcome, this revenue, this target and everything. Right? Well, wandering is different, guided wandering is different. Right. Like, like we have to have a portfolio, an intuition of where we're going, but you don't know exactly what it's going to take, how long it's going to take to get there. That's why we have to size the investments appropriately to what we're learning in the market. So that's, that's one answer. The other answer is that so oftentimes in an innovation program or an innovation portfolio, uh, or an AI strategy is we tend to think of just like the user experience in it, super important. But the actual cost model to deliver is as important and as big an uh, opportunity to drive innovation as the user experience is. And so we recommend looking at, not just creating the business model, but actually dissecting and writing out identifying where is the cost model at highest risk, like what's our future cost model or P and L need to be. Where's the biggest unknown unknowns in that and how do we pull that into our testing backlog and thinking that through so that recognizes the inherent assumptions and guesswork that is always done upfront. We, we tend to then just think of it as like, yeah, that's the target and we'll take those planning assumptions as fact until the very end when we see like, oh, we're not hitting our target customer acquisition cost or target unit cost because we didn't recognize the inherent risks behind them and we didn't pull them into our testing log. So that's kind of the two, the two mindsets that's required to deliver an advantaged business model at the end of kind of this journey that we are going to be on.

Speaker B: Definitely. And you bring that to life with some examples that we'd all be familiar with. I think whatever your thoughts on them, Elon Musk is amazing at managing costs in businesses.

Speaker A: Well, he doesn't just manage costs in businesses, he uses that as his primary advantage in the market. If you think about either Tesla or SpaceX or the boring Company, all of those companies, their fundamental innovation is a dramatic is in 10-1000x per unit cost innovation relative to Kind of the status quo SpaceX as the best example of that astronomical cost per kilogram into orbit, um, mindset. And so you, yes, he, he, he is one of the big bet legends we talk about in the book. Politics aside, he understands that cost models are the way to create an advantaged business and why those companies have been so successful in very traditional high failure rate. Like there's no new entrants in any of those businesses. He's, he's made not just new entrants. Like he's reinvented the categories definitely.

Speaker B: And he's obviously someone that does that very well. But when you're seeing it not done as well, are there any common derailers that you see CEOs or founders miss when they are going through these big transformations? Is there anything that you're like one

Speaker A: of them is they focus on topics that don't really have juice in them. Right. And so that's why doing this portfolio and analysis and looking at the. Is the juice worth the squeeze? Is the financial outcome worth this? But it's amazing how many companies get distracted on transformations that at their best don't have the ambition, they don't really have the opportunity for providing game changing impact at the end of the day, but they get distracted by them and that dilutes your ability to go do something that is worthwhile. Right. And so that trap happens all the time in companies, uh, and especially like that's a telltale sign of a company that kind of just wants kind of innovation theater going on is they focus on low value topics.

Speaker B: That is a very good red flag to watch for and you may see that within your business in different areas. It's definitely thinking, you know, thinking in outcomes, uh, you know, will help really manage that. If you've got that written down, you're going to have something that you can go back to and refer to.

Speaker A: Funny enough, Thinking and Outcomes was the initial title for the book because I think that is such a critical way of problem solving and thinking. Uh, understand the problem, think in outcomes, don't worry about the journey like how to do it yet. Think about the problem, think about the outcome. We obviously refactored the title, but that is section one which is Thinking and Outcomes. And it is a different way of orienting the sequence in which we address work to be done.

Speaker B: Definitely. And I actually went onto your website and I saw that you have created a custom GPT. I know that people have to put their details in to get it, but I did play around with it and if you're unsure about how to come up with some of these statements. It does really work for giving quite compelling drafts. I put a couple of different things through it and was pleasantly surprised.

Speaker A: So to Super Juice, that suggestion that you just give use it's called the Big Bet GPT so you can find it on ChatGPT Big Bet GPT. But we have a set of free prompt sheets like well engineered prompts to do these exercises and, and that GPT with our prompts. It's like having a McKinsey team at your fingertips for free. That's what it's like.

Speaker B: Well we'll definitely put a link to the prompt and um, how people can access the GPT in the show notes for because if you're listening to this and you're thinking oh my God, this sounds like a lot of work, how do I come up with an outcome statement? And you just want to see what that would be for your business. You can do that within um, you can do that within minutes, have a draft. It's not going to be perfection but it will maybe um, maybe start to give you one of the three that you'll need.

Speaker A: This journey we're talking about, it's not simple but it doesn't have to be a mystery. That's really the goal of the book is to give very tangible things that you need to do in order to do this job of leading a uh, transformation. And so it's not simple but it doesn't have to be complex either.

Speaker B: And one of the other things, and this leads super nicely onto because we've been talking about how we can accelerate things there for everyone. You talk a bit about speed and I think that's especially relevant just now with um, working in the AI space a lot and working with businesses that are trying to get value from this. Things are moving fast and the companies that are going to win are the ones that do make the right decisions, high quality decisions quickly. But I see and I hear so many people just like stuck in research mode or they're blocked by legacy ways of working. And sometimes I'm speaking to senior leaders whose leadership teams just don't even um, like don't fully understand what needs to happen or the value of speed there. So what does speed really look like in this kind of high stakes high tech environment? Like from your experience, exposure.

Speaker A: You know we, we, we start the book of with you know there's three critical habits you have to have. We, we've talked about the first one extensively here which is create clarity. Now we're kind of talking about the second one which is maintain. Velocity. Right? Maintain is the key word. Like we all start off with enthusiasm and commitment of like we're going to make this a priority but it quickly just drags down to a normal run the business project or situation. So we already talked about one of the things you have to do which is you have to create a focused team and align executives around the incentives that this is going to work. Right. So that's, that's, that's one, two is you have to give them different rules, you have to give them different policies so that they don't get dragged down by the policies that are appropriate for your scaled operating business but will actually kill something that we're not optimizing for cost, we're optimizing for speed to learning. So speed to learning is my principle. Oh, well then we're going to give this team different policies on how they hire, how they can spend money, how they can, you know, uh, create a digital environment for testing their ideas. But if you don't put that team in a different context of how they operate, then they are going to slow down and that, that raises the risks for everybody. We experienced this pretty significantly AT T Mobile. So some of the lessons and stories and big bet leadership come from uh, our work AT T Mobile. And you know, these are lessons that we learned of like fighting the, the corporate procurement beast, you know, and everything. Right. Like you have to set up different policies for this team, how to get to the right degree of precision but uh, with the constraint of time. Right. So again it's always this like think it through but do it quickly. Think it through but do it quickly. That's the battle you're always facing.

Speaker B: Yes. I um, was always told when I was growing up, less haste, more speed.

Speaker A: There's a famous basketball coach, John Wooden who said move quickly but don't rush right into that same spirit of like you need to be quick but it needs to be at quality.

Speaker B: Definitely. And with all of this and thinking through what you're saying about speed, you can immediately see how, gosh, if you don't have senior leader on this full time that's enabled and empowered to make decisions and keep things moving, you are going to get stuck in the doldrums here. What else do companies do that really slows down things down? You touched on, you know, not enabling people. Is there anything else that you see culturally?

Speaker A: One of the things that companies uh, do is they force a transformation before you can get to the transformation. So here's an example of what I mean by that. Right. Is like, well, in order to test this concept, we have to put in place a complete like whatever technology platform you know, redo. In order to test that. Well, you know, that's an 18 to 24 month, you know, road to nowhere and everything. Right. So that's the sort of game that gets played that absolutely slows down this type of thing. So what you have to get at is very craftily, how do I create a separate technology environment that at least lets me test out this concept? Right. Before we, we cross the path of like, okay, we need to do a transformation. But what you'll oftentimes find by having that separate digital environment is like, you know, there's actually a way to continue to proceed without addressing this major platform transition that needs to happen. And, and you know, that's where concepts of like digital twins and you know, things like that can come into play. But you know, that, that's one of those cans I like to kick down the road is like, don't make me do a platform migration in order to test these ideas out.

Speaker B: Yeah. That is going to increase your costs significantly as well most of the time.

Speaker A: And it raise, it raises the risks. Right. So, you know, the third critical habit comes into play here. The third critical habit is you accelerate risk and value deferring commitment. And so what I'm talking about is how do I accelerate the risk and value testing of this concept and defer out some major cost item, whether it's a technology or an infrastructure or a, uh, logistics network thing. Defer that out until I really trust this concept. Then I'll decide how and when to invest in that. That's the third critical habit that has to be enacted here.

Speaker B: Don't over complicate things. And it's almost like you come up exciting ways to procrastinate and mask that procrastination.

Speaker A: Right. Or to, or to empire build, you know, and everything. Right?

Speaker B: Yeah, definitely. So one of the things that I discovered recently while doing research, um, I surveyed and spoke with over a hundred AI and data leaders globally and there is a lot of push on. Show me the roi. How are we measuring the like getting quick results and lots of projections. Some of what you're saying is counterintuitive to that because they are saying to me, this is actually slowing me down. Um, and you know, they've got an idea that things are, the needle is moving in the right direction, but it's kind of pointless because of the rate of change.

Speaker A: Yeah. So, you know, I do think like There are definitely short term moves that make a ton of sense to do and everything, right? Problem answer, do it, move quickly, have an roi, right. There's no problem with that. The question is, are you truly building competitive, sustainable competitive advantage by doing just those things? And so a good portfolio. Ah, you know, if you think of kind of uh, risk along the X axis, so low risk, high risk, and then benefit along the Y axis, marginal benefit, exponential benefit, you come up with a quadrant, right? So the high right quadrant is kind of that big bets quadrant, right? High risk, high reward. We're talking about the lower left hand quadrant, lower risk, lower reward. Avoid the lower right hand quadrant which is the high risk, low reward. We talked about that. And the goal of big bet leadership is to prove things out so that you actually take a concept and you move it into that high left hand quadrant. High, high opportunity, lower risk. And one of the mistakes that people make is they go, I have an idea. And it is high reward, low risk. Typically in established businesses those things don't exist. You would have done it, you know, and everything. Right? Yeah. Ah, and what they, what typically is happening is they, they fall in love with one idea, they decide to go big early before they've actually proven out or thought through what are the critical things that have to be true in order to achieve this, this, this big business that I'm imagining, right. So they have a big bet without recognizing that it's actually a big bet. So that's one of the mistakes. So this game is between the lower left hand quadrant and the upper right hand quadrant. Having short term moves is fantastic, but those aren't big bets, right. And, and they, they don't create sustainable competitive advantage. But you need to do them because partially because it just uh, like creates a uh, high execution environment, but it also helps fund the, the, the resources we need in order to create the businesses of tomorrow. And that's where kind of McKinsey's Horizon 1, Horizon 2 Horizon 3 models can be helpful for conceptualizing this portfolio and resource allocation.

Speaker B: That's very useful uh, to think about it in those terms because it's immediately something you can push back if you're being asked to do too much for something that is just going to have such a small reward. We're not focusing our energy on the right place for a start.

Speaker A: Tough to debate without a specific scenario in front of us. But all I would say is have a portfolio and if all, everything you're doing is that incremental move department, just, just do that with eyes wide Open, like just be cognizant that, like, hey, we don't have anything that is about future horizon businesses here that can be okay. But you, you, you want to be, you want to do that with eyes wide open.

Speaker B: Definitely. And uh, all of this takes a, uh, bit of time away from the day to day business to start with. And then obviously you're going to dedicate yourself to it if it's, what, if it's what you're doing. Um, I want to talk to you a little bit about leadership under pressure. Certainly a lot of people are overwhelmed, they're feeling quite stressed. But actually when things are happening in high stakes environments, that's where your strategy is going to live or die. And there's all these decisive moments that come up throughout the course of a project. And there's those meetings where as a leader you're going to have to say, say, um, we're going to kill this, we're going to pivot or we're going to push forward. People are a little bit scared sometimes to say that they're going to kill a project that like, that comes with its own set of challenges. Um, so how do you navigate those meetings without falling into group think or some kind of analysis paralysis?

Speaker A: Yeah, I mean that's why we dedicated a whole chapter just to these high stakes moments. And the, the, the title is uh, kill Pivot, continue or confusion. Right. And because there are these moments, whether we recognize them or not, where that's exactly the decision that is be they're either being deliberately made or, or um, is being made and we don't even recognize that we're making it. And oftentimes that's a decision to descope something. Right. We let go of the ambition all of a sudden. Right. That's, that's a decision point, a high stakes decision point. And so the advice is you have to have great hygiene around the moment. The decision, and that's what people don't do, is they don't recognize like, okay, now we're going to have one of these high stakes meetings. You have to prepare them well, you have to run them well and you have to debrief from them really well. That's why we give a very specific recipe on how to run these meetings. One of the mistakes that gets made in these meetings is they become meetings of accountability. Like, well, why didn't this work? Or why are we at uh, where we're at? That's a fair question to ask at the right moment, but that's not the job to be done. In this meeting. The job to be done in this meeting is we are where we are. Take in the new information, avoid all the pressures and biases that you're talking about, including chunk, cost, fallacy, and make the best decision on the thing we should do going forward. Kill, continue pivot scale. Just don't allow that last option, which is confusion, confusion about what decision we're actually making here. Right. So that's the advice is you have to recognize these for what they are and you have to run them the right way. You have to design the moment, you have to design the meeting.

Speaker B: So I'm going to design this meeting like and I'm going to run this high stakes meeting. What are your top tips that would help me spot lazy thinking around me and how do I do all of this prep and lead it and ultimately, you know, the buck might stop with me, but I don't want to micromanage everyone. So how do I do this effectively is kind of my big ask here.

Speaker A: A, you read big bad leadership like that, that's, that, that's because it's a lot of little things that add up to doing the right thing. But uh, I think at the end of the day preparing the people in the meeting, well for, hey, here's where we're at. And so you've done all the work through here, right? You've done all these thinking and outcome memos. Remind them on like here was the problem we are solving, here was the outcome we were targeting. Here was the experiments that we're running. Here's what we've learned. Give them uh, uh, your recommendation, here's what we believe should be done and why. Here's why I don't believe the other things are the right options. Write it out, give people an opportunity to read it. And then you come to the meeting with people prepared, informed past the initial shock and awe of where we're at and they're able to do their job, which is to have again a great debate and conversation about the most important decision that senior leaders make, which is resource allocation decisions. And so that's how you, you run this meeting super well.

Speaker B: Uh, yeah, tell people how they need to prepare as well. You know, nobody likes to be surprised. Like definitely.

Speaker A: And you know, one of the, the principles of my career and I talk about it in the, in the book is feature the bad news, right? Like, like if, if you make it easy for people to understand this is what hasn't worked, this is what is not working, this is why we are failing. Instead of featuring just the good news, which is what always happens, you know, and everything. Then again, you're preparing senior leaders to actually help the situation here and everything. Right. It's not a meeting of accountability. It's not, uh, uh, a review. It is, where are we and what are the challenges for where we're at?

Speaker B: Definitely. And I love that concept of like, you know, tell people, like, make sure it's okay. I always think, um, you know, it's like, you're always going to get much better feedback when you give permission for it to be bad feedback.

Speaker A: You want to talk about vulnerability? Vulnerability is saying, this is why this, the thing I'm leading hasn't gone to plan. Um, but that's what takes the right environment in the right context. And all of this sums up with a good leader being willing to do it because they know, like, if I executed well, even if the concept doesn't work, that was the job I had to do right now and everything. Right. And so that is a really hard culture to build, which is one that persecutes ideas but doesn't persecute the people when ideas fail and win. Because that's what ideas do.

Speaker B: Absolutely. Now, before we wrap up, I want to touch on communication. We've not really discussed it much, but we've talked a lot about outcomes, clarity. How do leaders get this over effectively to the people who are going to be delivering those goals? What are the best ways to communicate this rather than just, um, a memo?

Speaker A: Yeah. If we take this concept of leadership and we go, well, what is actually leadership? So leadership is the ability to guide and influence people for a specific mission. So if our job is to be a leader and our mission is to lead this bold moves, big bet concept, our ability to influence and guide is a critical, an absolute critical capability to being able to do that job that we have to do. So again, one of our chapters, it's about the fundamentals, right? And communication is one of those fundamentals. What most leaders do is they, they create kind of this burning platform concept of communication. Well, we have to re, uh, innovate for the business. We have to do better for our customers. We have to deliver better results. Right. That, that is just unhelpful communication. It's just, it's just, it's just talking around the problems, and then maybe they'll go, well, we're going to do this initiative. Again, not helpful because it doesn't tell me like, it doesn't describe what the future is. What a, uh, really good leader does in a transformation is they use the things we've been talking about. They talk about the specific problems, they talk about the hypothesis of what the future state is and they talk about the journey of experimentation that we're going to go through and then they repeat, repeat, repeat. So you have to be a chief repeating officer talking stories. Now we've set up stories, right, here's a customer, ah, a problem. Here's our hypothesis for the future state, why they're going to love it. Here's the journey that we are going on. People emotionally attached to it and they intellectually attach to it because they actually have something to grab onto that helps teams actually in their own way process what's going on. Whether I'm directly involved or I'm potentially impacted down the road, at least I'm having authentic communication, adult oriented, authentic communication about here's what we're doing and why and what it might mean that is

Speaker B: super helpful and very valuable. So one quick last question before we go. What's the biggest leadership behavior, just one of them that you're seeing slow companies down right now?

Speaker A: I think it's always the pressure of short term results that creates this incremental mindset and pulls us back from, from being bold. And that's why setting expectations, shareholder expectations, board expectations, executive team expectations is so critical that yes we are going to deliver this but we are also going to take some amount of time and resources to invest in the future business. Like why that clarity is super important but you know, the, the human biases of incrementalism and short termism which is really, you know, one way to describe, you know, the, the innovator's dilemma. That's the critical leadership bias and challenge of today.

Speaker B: Well John, thanks so much. This has been filled with useful tips and I know that there's stuff that I'm going to put into action and all, all of us can do. For anyone who's wanting to explore your frameworks or kind of like bring this thinking to their company more effectively and know how to kind of embe. Where should they go next?

Speaker A: Well bigbetleadership.com you can get all these free frameworks, tools, prompts, GPT and everything. Buy or listen to the book Amazon other other bookstores and you can find me on LinkedIn John Rossman.

Speaker B: We'll put those links down there um, in the show notes as discussed. Thank you so much for joining me. It's been really interesting and I'm um, looking forward to playing around with that GPT more later.

Speaker A: Perfect. Rebecca, thank you for your preparation.

Speaker B: It really showed thanks for listening to the Lucent Perspective I'm Rebecca Hastings, founder and Director at the Lucent Group, a tech sector executive search and talent consultancy. If you enjoyed this episode, please subscribe, share it with others, post about it on social media or leave a rating and review. If you're coming company looking to hire top technology leaders or you'd like to discuss your next move, please reach out to me on LinkedIn or send me an email to Rebecca the listen group.co.uk thanks again for listening today.