#74 Jeff Hunter: Embracing Confusion

CEO of Talentism, Jeff Hunter, teaches how to rewrite damaging narratives that hold us back, how to give and receive helpful feedback, and why confusion can be a good thing. Go Premium: Members get early access, ad-free episodes, hand-edited transcripts, searchable transcripts, member-only episodes, and more. Sign up at: https://fs.blog/membership/ Every Sunday our newsletter shares timeless insights and ideas that you can use at work and home. Add it to your inbox: https://fs.blog/newsletter/ Follow Shane on Twitter at: https://twitter.com/ShaneAParrish Learn more about your ad choices. Visit megaphone.fm/adchoices

Speaker names marked ? are inferred from speaking time and the show’s known hosts — they are not voice-verified.

• 0:00Speaker 00

  We walk around and we have these sort of unchallenged beliefs about ourselves. A, that we're perceiving reality accurately. B, that our perception is not only accurate but valid. You know, C, that if it's obvious to us, it must be obvious to others. And all it takes is a moment of reflection to realize none of that's true.

• 0:27Shane Parrish?

  Hello and welcome. I'm Shane Parrish and you're listening to The Knowledge Project, a podcast dedicated to mastering the best of what other people have already figured out. I'm going to help you better understand yourself and the world around you by exploring the ideas, methods, and mental models from some of the most outstanding people in the world. Together, we'll extract the timeless lessons from their biggest successes as well as their hard times. The Knowledge Project is part of Farnham Street, a website dedicated to helping you think better and live better. Farnham Street puts together a free weekly newsletter that I think you'll love. It's called Brain Food and it comes out every Sunday. Our team scours the internet for the most mind-expanding books, articles, and resources so you can spend less time searching and more time learning.

• 1:10Shane Parrish?

  Discover what you're missing at fs.blog/newsletter. Today, I'm talking with Jeff Hunter. Jeff has been obsessed with unleashing human performance for over 35 years. He was the head of recruiting at Bridgewater before he branched out and started Talentism. This is an insightful and deep conversation. We're going to talk about the lessons of working at Bridgewater, how to teach people how to think, things we can do as individuals and managers to unleash not only our own potential but the potential of others, why hiring is so flawed, and what we can do about it, and so much more. It's time to listen and learn.

• 1:59Shane Parrish?

  You help organizations unleash human potential. What does that mean?

• 2:06Speaker 00

  Well, I'm just sort of a junkie for the concept of human potential and that most of us don't find their potential during their lifetimes. There's just therefore a huge untapped resource of potential excellence out there in the world. And most of that excellence can be found and grown inside of companies, inside of enterprises. And so, we, and we think that businesses have,

• 2:40Speaker 00

  have a big incentive to do that. Unlike a lot of other institutions, for-profit institutions have a big incentive to actually uncover potential and unleash that. And so, on the potential side, that's why, that's what we think about it. And that's why we think about or work with companies. But on the systematic side, we think that the reason most companies don't unleash the potential of their employees, the potential of their management, the potential of their leaders, is not because people don't have the right skills, or they don't have the right, they don't have the right knowledge. It's because the beliefs that underpin how we think about people and potential

• 3:24Speaker 00

  are broken. And it's a system of, it's a systemic failure. So, we talk both about the system that fails to unleash potential, and then work with our clients to actually implement stuff in their organizations, implement different methods, etc., in their organizations, so that they can unleash that potential, potential they're already paying for, but they're just not getting.

• 3:47Shane Parrish?

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

• 3:58Speaker 00

  Well, I think like most people who have a lifelong compulsion towards something or an obsession, it started pretty early. And I didn't have the words for it or anything, but probably in junior high, became obsessed with helping my mom run for, for office. It's something she'd always wanted to do. I'd heard her talk about it. And I just became something that was very, very important and meaningful to me. And from there have tried to spend a good portion of my life, you know, helping other people find their greatness. So I think if you want to be in this field or if you want to be in the field of like helping others become great, you have to start with a fundamental assumption that people have greatness within them.

• 4:42Speaker 00

  And there's no proof for that. It's a scientific hypothesis. It's just a belief that you have to understand and, and hold. And I think I held that belief really early in life. And then over time, you just get more practiced and hopefully masterful in how you help other people do it. But, you know, in our, in the way we think about things, we talk about finding meaning as a part of purpose. And the way we describe meaning is when you do something, when you achieve something, when you have an outcome, you feel a sense of pride and a sense of self in that outcome, the way you help that outcome come to fruition.

• 5:27Speaker 00

  And for me, when I feel that sense of pride, and for most of my life, when I felt that sense of pride, is when I see another person who I have helped in some way uncover something in themselves that they didn't realize they had. And it's hard to understand why that psychology exists in any particular person, but I've, I've had it from a very early age.

• 5:52Shane Parrish?

  What are some of the mistaken beliefs we hold about unlocking potential within ourselves as individuals and then maybe broader within the organization?

• 6:03Speaker 00

  Yeah, it's such a great question. So I think, you know, we can go back to the Enlightenment and the theory of human beings being rational creatures. You know, when Darwin was positing his theory of evolution, the elite within British society were incensed because he was saying that basically we were very similar to apes. And I think that that demonstrates how people actually think about themselves. We think about ourselves as sort of unique rational actors, making rational decisions, given logical and thoughtful, as Daniel Kahneman

• 6:43Speaker 00

  says, slow thinking processes. And then we, you know, pick targets about what we want to do, and then we build skills, and then we go achieve that thing. And it's just very, it's very ordered, it's very logical. And I think the way we think about education and the way we think about the way we order work and management leadership is all sort of has this underlying, this set of beliefs about us being unique rational actors, making rational decisions. But I think what you see in the world of economics with their moving away from, you know, the insufficiency of classical economic models to describe what

• 7:25Speaker 00

  happens, what actually happens in an economy, especially at the microeconomic level, I think the same thing needs to happen in the world of potential, in the world of talent. We aren't rational actors. We aren't making rational decisions. We aren't picking goals for ourselves based on the available information and sort of weighing that information impartially. That's just not reality. But it's very deeply embedded in how we think about ourselves and how we think about others. And so one of the outcomes of that is that when we see somebody else fail, you know, fail to achieve a goal, etc., we tend to describe that failure

• 8:08Speaker 00

  to ourselves in terms of failures of intelligence or character motivation.

• 8:14Speaker 00

  But from my perspective and spending decades, you know, working with other individuals in commercial environments and enterprises and trying to build big things and bring big things to market, that's not actually what happens. People aren't lazy, they aren't stupid, and they aren't bad. I mean, some human beings are, of course, but for the most part, that is an inaccurate description or diagnosis of when people are failing. And so this underlying belief of, you know, we're rational and we're doing this stuff, just like in economics, it really isn't describing our motivations, how we make sense of things, etc. And to go back to that Darwin example, you know, I think we're really fundamentally

• 8:58Speaker 00

  apes. We're fundamentally primates that have strong intuitive, instinctual, fast processing, fast processing, habit-oriented sort of thinking and behaviors. And then we've got this logical superpower that we can deploy, unlike our primate cousins, so that certainly distinguishes us. But most of the way we live our life is in that non-logical, non-rational sort of realm. We're making snap judgments, we have intuitions, we're taking in data and filtering it all the time without even knowing it. All these things are just, I

• 9:42Speaker 00

  think, scientifically validated reality of how the human mind works. And so if you're thinking about the potential of that kind of species and the potential of that kind of animal, then I don't think you're going to focus on the rational processes. You're going to focus on trying to discover what's in the mind that can't be tapped through rational reflection and through pure, and through pure reflection. And so I think that that's just the big underlying belief we have walking around, you know, as an outcome of that, as an example, we walk around and we have these sort of unchallenged beliefs

• 10:24Speaker 00

  about ourselves. A, that we're perceiving reality accurately. B, that our perception is not only accurate but valid. You know, C, that if it's obvious to us, it must be obvious to others. And all it takes is a moment of reflection to realize none of that's true. And none of that's really supported by science or even just critical thinking. And so then, how are you going to unleash potential when those things aren't true?

• 10:52Speaker 00

  So, so that's, that's how I would describe the underlying beliefs that I think are just insufficient to help us understand how to be our best.

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• 11:57Shane Parrish?

  So if it's not intelligence, character, or motivation, and we tend to default to our intuitive behavior, what are the processes or steps or things that we can do to not only recognize that intuitive behavior, ideally beforehand, but after, and then correct it or sort of like debug it, if you will?

• 12:17Speaker 00

  Yeah, so I don't think of it as good correction or debugging. I think of it as just an ongoing learning process. So we, we have these mental models and we're filtering the world and we're making decisions unconsciously and we're acting them out. And then we sort of have post hoc rationalizations of that. And so if you want to break that and you want to be, you want to, you know, think about how I can both learn about what my model is and in how I'm viewing the world as well as try to update or improve that or expand it. Then I think what you have to do is you have to you have to get beyond the rationalization to the physical experience.

• 13:02Speaker 00

  What I mean by that is when we are interacting with the world, we are having a sort of whole body experience with that interaction. We feel things. So when somebody yells at us, it's not just that we're having a thought pattern of, hey, what a jerk. We're also feeling tense. We may have butterflies in our stomach, our muscles may tighten, there are certain hormones get released into our system. And often what's happening is our intuition is a direct connection to that physical experience, much more so than the rational, the logical perception of what's going on.

• 13:45Speaker 00

  And so what you want to do is when you're having experiences, is you want to be checking in on how do you feel about those experiences? Do you feel engaged? Do you feel agitated? Do you feel under threat? Do you feel curious? These are feelings. These are expressions of feeling. These aren't just thoughts. And so those feelings become indications to you. They become almost like clues and evidence that you can use to decipher the puzzle of your brain. You can, you can, you know, put yourself consciously in different situations and see how that feels.

• 14:26Speaker 00

  And in that, you can start to decipher what your model is. So as an example, in many places I've been, we've hired individuals who have shown incredible amounts of courage in, say, the special forces of the US Armed Forces. And they are not only dutiful and honorable, but they are incredibly courageous.

• 14:55Speaker 00

  And you take that person who has unquestioned bravery and you put them in an unfamiliar situation, say presenting to a board or something, and it can be very disorienting. A place where I might feel very comfortable, but where they feel disoriented. Now, if you switch that situation and you put me under the live fire sort of situations that they've often had to live their life in, I would be a mess and they would be they would be valiant and distinguished. And so our mind is just trying to make sense unconsciously of the situation it's in. And it's sending us these signals about our level of comfort and how we're dealing with

• 15:36Speaker 00

  the situation, how we feel about the situation, and then we're operating within that feeling. So you want to you want to actually put yourself in different situations, see how you feel about it, and then start to decode the evidence of what you're really experiencing, owning that fully, before you start to down a path of the things you want to change or improve.

• 16:00Shane Parrish?

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

• 16:17Speaker 00

  So again, so let's use that work example. I think it's so it's so great. So we go to work and let's say we're driving into work in the morning and we're just we're excited to tackle a project or whatever it is. And we get into work and then all of a sudden the daily reality of our existence hits us. We got 100 emails in the inbox, you know, we got three inbound calls, somebody waiting outside our office, whatever it is. And pretty soon that that goal for that day just goes out the window. So what we believe is rather than adopting a new time, you know, I'm going to think about doing my creative work in the morning or whatever, all of which are great examples of stuff that people have come up with to try to improve the way you think at work, etc.

• 17:02Speaker 00

  We actually think that you should you should operate at the level of design. And and what we mean by that is, first of all, if your goal is to get better. So if if you want to unleash your potential, your goal has to be to get better. By definition, potential is unrealized. And so if you want to experience something or realize something that is unrealized, you actually have to improve something to get there. In order to get do that and and unleash your potential, you have to set as a primary goal that you want to productively put yourself in situations

• 17:42Speaker 00

  and figure out, as we just described, what you're, you know, what that means with regards to your talents and your purpose and those kinds of things. And so you design your workday as sort of a series of experiments. It's a conscious decision. You know, often you should do it, I think, outside the office, but it's a conscious decision. You could be working with a coach or whatever, but you're but you're trying to set a series of experiments to figure out where your greatness lies and how to unleash that. And if you think of your workday as a series of experiments, as opposed to a series of tasks or a series of projects or have tos or whatever,

• 18:25Speaker 00

  then you realize you orient, because of the very word and nature of the word experiment, you realize that you're there to learn. And that the problem you're facing, the you know, the thing that's sitting across the table from you that could be really seemingly daunting and intractable, is really a great learning opportunity. It's a great learning opportunity to figure out, like, what are you seeing? What do you think you're missing? You know, what what would be a great way to handle this? How are you handling this? What's the gap between those? It's just so much in every workday, so much information we can take from that about what we're really like and what we're really like in different contexts,

• 19:07Speaker 00

  which is a big sort of thing for for us. And the way we think about things is, you know, I'm this way at home, but I'm another way at work confronting very similar situations. Well, we are very context dependent, the way we think about things. So, Gil, put yourself in different meetings, try different meetings, try different, try different approaches, try different communication styles, but not as a means of like, hey, I'm just going to sort of scattershot stuff, but more as a means of trying experiments. And like any good experiment, you enter with a hypothesis, you see what happens, and then you make sense of what happens on the other side. And so if you go into a meeting and say, you know, I think if I speak last, this meeting will go better, speak last and see if the meeting goes better.

• 19:52Speaker 00

  And if the meeting goes better, go, oh, that's an interesting piece of data. So now, and what this does, this method does is it makes you conscious in the moment. Most of us are on autopilot all day long. We're just going from thing to thing to thing. Our intuitions, our habits can really help us, you know, can really help us achieve whatever we want during the day. So it's like when you climb in the car in the morning and you drive to work and you get to work and you realize, oh, oh, my gosh, I wasn't present for any of that. Like I, I remember getting in the car and I remember arriving at work, but everything in between was sort of a blur. That's because your mind is very effective at taking care of complex tasks without you paying attention.

• 20:33Speaker 00

  So this thing I'm talking about with with hypotheses and and thinking of your day as a series of experiments causes you to focus and pay attention to the experiences you're having as opposed to just be on autopilot to achieve a bunch of stuff and then leave.

• 20:51Shane Parrish?

  What are the types of questions we should ask ourselves maybe after a meeting to reflect on the meeting and our experiment? Like, how thoughtful should we be about the experiments? Here's what I, here's my hypotheses. Here's what I want to get out of it. And then just reflect, did that happen? Do I need to update my model of the world? Because I'm assuming that our behavior to some extent comes from our applied theories, even our habits, I would imagine, are just basically like our applied understanding of how we think the world works repeated.

• 21:22Speaker 00

  Yeah, exactly. Yeah. So we've got these mental models, they're unconscious. That frames what we believe the world is like and what it should do for us, right? And so as long as our experience basically matches up to that, to that mental model, we don't notice anything, like we're just going along. So the best thing that can happen, in my opinion, if you care about learning and again unleashing potential, is you wanna, you wanna get confused. Confusion is indicative of the fact that you are having an experience that's different than

• 22:01Speaker 00

  what you expected. And that confusion is necessary to start to make sense of the world, yourself, and the connection between the two. So we talk a lot about confusion. We think confusion is both a thing that can kill you and a thing that can actually propel you to greatness. It just depends on how you deal with it. But first going in, go into the meeting, you got your hypothesis, you have the meeting, you come out, and the first thing you're doing is you're checking in on the feelings you had in that meeting and the feelings where you felt tight, under threat, you get that, you know, maybe it's that steel or peanut butter taste in your mouth, whatever it is, you're having these negative physical reactions, those are indicative of threat.

• 22:43Speaker 00

  Those are indicative of you expected one thing to happen and another thing happened instead. And, and if you, again, care about this unleashing of potential, it's a beautiful moment when you see that, when you experience that, because it's telling you about the insufficiency of your model. It's not telling you how bad things are, how bad other people are, or whatever. It's telling you about the insufficiency of your model, of your applied beliefs. And so from that, you can say, that's interesting. I wonder what I actually expected, because the beliefs are unconscious, right? Right. You have to, you have to access them. And so you're like, you can say, I wonder

• 23:24Speaker 00

  what I expected instead. And through that, you learn about things like blind spots, which we all have. We all have them and they can kill us, right? It's so we're sitting in a meeting, we think one thing's happening and other thing's actually happening. We leave the meeting, we're all, you know, feeling happy about it. And all of a sudden, we think, you know, in this imaginary meeting I'm describing, we we believe that we just got in sync with somebody or in alignment with somebody about something to be done. And then all of a sudden, a day later, the person's doing something different and we're completely confused. And how the hell could you have thought I meant, you know, A when I meant B? And why did you go do that? Now we got lots of rework and all this stuff. Well, that's not because the other person was bad.

• 24:09Speaker 00

  That's because you were blind to what was actually going on in the room. And so owning, having a deep sense of personal responsibility for your own experience, looking for indications, those physical indications of confusion and making sense of them by saying, I expected one thing and I got another. And I wonder what it is in my model that I expected this thing. And what does that mean about how I view the world and how can I update that? That to me is how you can be conscious in the learning about the most important thing, which is your brain and how your brain works in different contexts, because that's the tool you're using to unleash your potential.

• 24:49Shane Parrish?

  The way that I like to think about that, I think, is that it might not be your fault, but it's your responsibility to do something about it.

• 24:56Speaker 00

  Yeah, that's awesome. Yeah. Yeah, I love that. Yeah. And the whole concept of fault, it's just not very productive. Yes, people fail and people struggle and all those things, but so much of what we do when we're confused is tell ourselves stories to make ourselves feel better. And that's one of the worst things we can do, but we all do it.

• 25:22Shane Parrish?

  The stories being like it's luck or the world's not fair or I could have tried, but I didn't, you know, or we blame others for not getting the promotion or.

• 25:35Speaker 00

  That's right. So if you're sitting there, what we we talk about something called the BSL narrative, bad, stupid, lazy. And most of the people we work with, including some incredible leaders, you know, who are very public and are doing big things. And I know thousands of people look at them and say, oh, they're amazing. But, you know, in our work with them, they're just human beings like everybody else. And they do this thing called BSL narrative. They get confused either about something that somebody else is doing or something they're doing or failing to do. And then they tell these stories about how bad, stupid or lazy either the other person is or how they are. And that BSL narrative is it's terrible. It obscures what's really happening.

• 26:21Speaker 00

  And it's based on this theory, like if I just tried harder, if I just been more determined, or if that person was just smarter, then this would have gone better. And that's a bad diagnosis often, not all the time, but often of what is really going on, which is two people who are blind and don't understand their blindness, had a bad communication or bad interaction. They didn't take the time. They weren't sensitive to the signals that it was going badly. They failed to like correct it in the moment and deal with it. They walked away with completely different assumptions about what just went on. They activated those assumptions and all of a sudden, everything's a mess. That's not about stupidity or, you know, lack of motivation

• 27:05Speaker 00

  or determination or a character flaw. That's just like what it is to be human, trying to do big things inside of a company. And so to me, it's, as you're saying, it's you can't get into these narratives about like, oh, I'm terrible, or that person sucks, or whatever. I mean, obviously, we're all going to get into them, but they're just not productive. They don't teach us anything.

• 27:30Shane Parrish?

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

• 27:48Speaker 00

  Well, you know, I think first of all, there's a, there's a question of culture, right? So every culture is different with regards to how it thinks about how we help another and how we take responsibility for ourselves, et cetera. And that's, you know, a culture inside of a company, culture in a, in a community. But the way I think is more productive, regardless of whatever the culture is you're in, is first you got to own your own experience. And, and I think a simple way to do that is Steve, Stephen Covey wrote the book Seven Habits of Highly Effective People many, many years ago. But you know, one of his seven habits is seek to understand before

• 28:28Speaker 00

  you're understood. And so the, the way it works is this, like, you sense yourself in confusion, you're attuned to that. You're like, huh, I'm confused. And then rather than going and saying, hey, listen, you're behaving this way, you're doing this. Maybe they are, maybe they aren't, maybe you're just confused. So what you do is you ask questions, get to clarity. Here's how, you say you own your experience, you say, I'm experiencing you doing this, doesn't mean you are, just like, that's how it feels to me. That's how, this is what I'm, what I'm seeing, or what I'm feeling. Can you help me understand? And in that way, you're not making an accusation. Again, it's the whole like outbound BSL sort of thing. You're not making an accusation against

• 29:12Speaker 00

  another. What you're doing is actually trying to be introspective about your experience and help you be productive in your sense making. So you can get the data that you're probably missing. And so I think that's a more effective way to engage in that kind of, kind of interaction. And, and the corollary of that is when somebody accuses you of something, probably important to understand that they're in confusion, right? Most accusations are not an act of clarity. Most accusations are an act of confusion. So if someone says, you know, you, you're always this way in meetings. All right. Well, hold on. Let's make sense of that. What are you saying? Can you help

• 29:55Speaker 00

  me understand that? Can you give me data? In this way, we can actually get out of the accusatory, either self accusatory or accusatory of others, sort of loop, and instead get the information we need to improve.

• 30:10Shane Parrish?

  So what sort of things can managers do to facilitate that and employees? I mean, a lot of that, what we've talked about so far is what you can do for yourself. And I think that there's a huge component to that responsibility. And that responsibility can never really rest with somebody else. However, if you're sort of a manager of people, what are the things that you can do aside from the self? Because now you're caring for other people and you're sort of setting at least a little bit of culture within a team of people. What are the things that you can do that would positively provide an environment for people where their potential can be realized?

• 30:48Speaker 00

  Yeah, it's such a great question. So cool. Yeah, so I completely agree with everything you just said. Ultimately, regardless of whether we're a manager or an executive, or we're just somebody working inside an organization, whatever we're doing, we have to own our own experience. But there's a difference between owning our own experience and taking responsibility for something. And managers, ultimately, the way we think about management or describe it is management is the act of achieving goals through the work of others. You know, managers are not people that actually are supposed to be doers. They're supposed to be designers and they're supposed to be clarifiers.

• 31:28Speaker 00

  And so, again, going back to this, like, in a rational, if human beings are rational and then when they fail, they're lazy or stupid. You know, there's a whole line of management thinking that goes back, it starts roughly 100 years ago, where people were making management, quote unquote, "scientific." And they were saying, "Hey, listen, you know, you gotta find the bad actors. You gotta weed them out. Management is a control function. It's a resource and information allocation function. Your job is to make sure that all these stupid, lazy human beings don't cause you a bunch of risk. And so that's what your job is." And by and large, that's most of, still, that, that sort of belief system still persists about management.

• 32:13Speaker 00

  You know, it's about control, it's about risk. And it's about protecting yourself from the human beings that you're working with. But, but what we now know, similar to how it's progressing from the cla- from classic economics to behavioral, what we now know is, again, that's just not true, right? So, human beings want to do good work, by and large. They want to feel valuable. They want, as Daniel Pink says, have a sense of purpose and autonomy. They want to build mastery. And so, um, so how do you, as a manager, do that? How do you do this practical thing of achieving goals? Because goals, achieving goals is important for the organization. It's also important for the individuals you manage. While at the same rec- same time recognizing you're not dealing with a bunch of rational actors making rational decisions.

• 32:58Speaker 00

  You're in the midst of a lot of complexity and complexity leads to confusion. Um, and so how do you manage that? And the first thing as a manager is you understand that your job is to be, uh, their first and job foremost is to focus on clarity, not control. Because when human beings are clear, when they have a sense of understanding of goals and measures or culture, those kinds of things, they'll tend to, um, want to achieve against those things. They'll tend to want to be good at those things. It's when you fail as a manager to actually clarify both your set of expectations and what these things mean and why they're important.

• 33:40Speaker 00

  When you fail to clarify that, you set up a condition for confusion. You literally prevent yourself from achieving your responsibility, which as a manager is to achieve, uh, you know, achieve goals through the work of others. So if you, if you take the time to create an environment where people, um, where there's design of the organization, how things work, um, what good looks like, what is our culture? How should we behave with each other? What are the standards of outcomes? Those kinds of things. If you can take the time to not only be clear about those things yourself, which is very difficult, uh, we don't train managers on how to think about those things. We just sort of put them in the firing line and tell them to go to it.

• 34:23Speaker 00

  But if first and foremost, to be clear about those things themselves, and then to actively, impurposely, and consistently spend time clarifying for the people who work for them. And if you do that, you will unleash their potential. Now, not everyone's going to be great in every situation, right? We say you got to find your home. And so some managers aren't going to be good for some people and they're going to be great for others. Some cultures aren't going to be good for some, but great for others. So you, as an individual, have to find the place where you can unleash your greatness and own that journey and own the experiences you're having. But as a manager, you have a responsibility to, you know,

• 35:06Speaker 00

  constantly be improving and getting better and getting this group of people to clarity and high productivity. So they feel great about their experience. Doesn't mean that they love every minute of it. There's challenge, there's struggle, but they see they can make sense of things productively and they can do great work. And the bar keeps going up because the competitive landscape keeps getting tougher. And that's a challenge they relish and they look forward to. And that's all happening because you're investing first in your own clarity as a manager and then consistently in a machine-like way, creating that clarity in the people who work for you.

• 35:44Shane Parrish?

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

• 35:56Speaker 00

  Yeah, so we've got this thing we call the enterprise clarity model. And what we mean by that is, in order for an individual inside a business, inside a commercial setting, to be as maximally productive as they can, you need to be clear on these elements. And so the first is goals.

• 36:20Speaker 00

  We work primarily with what we call big change companies, companies that are growing incredibly rapidly. They're in the midst of a lot of change themselves, or depending on change in the marketplace. They're sort of like both the victim of change as well as the perpetrators of change. And they're all the time in the midst of this confusing sort of confusing sort of movement towards trying to grab market share, make better products, or you know, hire more people or whatever it is. And in the midst of that, what we find is it's very common for people not to be explicit about their goals. It's very common for the executives not to be explicit about their goals, very common for the managers.

• 37:02Speaker 00

  Everybody just sort of shows up and works on the thing that's present and works on the thing that's right in front of them. And they don't step back and try to think, pick a point on the horizon they're going to, that all this work will add up to. So that's the first thing. You got to be really clear on where you're going. And then the second thing is you got to be clear on how you measure getting there. Because human beings don't just need a point on the horizon, they need to know whether they're actually making progress. A lot of times when we're picking goals, it takes a while to achieve those goals. It takes a while for us to actually reach that destination. And in the meantime, you got to measure whether you're getting there. You got to know whether things are working or not.

• 37:45Speaker 00

  So being clear on how progress is measured and being clear on on what those measurements mean is the next thing. Another thing would be what we call the diagnostic loop, feedback. Most organizations do not make a clear statement of what the employee can expect with regards to the quality and frequency of feedback and how it will be delivered. And yet, if you don't have a feedback loop, you cannot improve. You can't. The things we were talking about before where it's an internal feedback loop, where you're making sense of your experience and your confusion and you're trying

• 38:29Speaker 00

  to update your mental models as a result of that. But organizations need an external feedback loop as well because a business isn't just one person, it's a lot of people and they're having different experiences of their reality, different experiences of each other. And so you have to have a feedback loop that is good to get people information they need to make sense of where they are against those goals and where they are in respect to the culture and, you know, their ability to get in sync with others. Then there's a number within culture, like being specific and clear about the behaviors that

• 39:09Speaker 00

  are accepted and punished inside the organization. Most organizations put up these culture statements that are like, I think they're marketing statements in effect, like they care more about how it works in recruiting than they actually are using it as a way of managing the company. And so they put up these, you know, ambiguous high statements like we care about quality and nobody really cares what that means. And then they see lots of decisions that confuse them because there's a lot of just trying to get garbage out the door in order to make a deadline and how does that mean quality? It's just confusing as hell. And so what you need in it, you know, when you're describing norms is not, it's not like what we hoped we would be. It's like, what are we? Like, how do, how do we

• 39:53Speaker 00

  act around here? We need to be clear to people about, you know, if, if you shove garbage out the door, but you make your number, that's, that's good. We may not love it, but that's good. Like that'll get you a win here. And if you take the extra time to make something beautiful and miss the deadline, that's bad. Like that'll get you a loss here. Those kinds of things being explicit about those kinds of things. And there are others, but those are the big ones that, that we see are key elements of creating clarity inside an organization.

• 40:26Shane Parrish?

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

• 40:53Speaker 00

  Yeah, it's so true.

• 40:56Speaker 00

  Well, organizations are just a bunch of people working together to achieve a shared goal. Right? And so what are people like? You know, they're virtuous in church and they're sinners in the bar. People are very context sensitive. And so what you're trying to do is you're trying to step back. And you're saying, okay, first of all, an organization is a hierarchy. Most organizations are, right? There's a CEO and then there's, you know, SVPs. And it's just a hierarchy. And hierarchies have problems and advantages to them. But one thing for sure, you know, about a hierarchy is there's an implied higher fire authority embedded in that hierarchy. Right?

• 41:41Speaker 00

  And when somebody has higher fire authority over another human being or set of human beings or promote demote authority over those human beings, they are actually have the keys to that human being's psychological kingdom. And what that means is, as human beings, we're very social. We're very tribal. We're very connected into the people around us. We're spending a lot of time making sense, even unconsciously, about what's going on around us and then telling ourselves stories about why that's happening. And if a leader is just a human being and confused day in and day out, does something and isn't explicit about why they're doing something.

• 42:22Speaker 00

  Then it will become interpreted and probably interpreted based on the degree of trust in that leader, either overtly positive or overtly negative. Like there'll be a narrative that gets applied to the sense-making of that thing. So a leader makes a decision to acquire a company. What does that say with regards to, do they not have faith that we're going to grow organically or no, that's the right strategy? Everybody's telling themselves stories. And so leaders, like all human beings, they have aspirations, they have the people they want to be, and then in context, the people they are. And so sometimes they're awesome and sometimes they're struggling.

• 43:01Speaker 00

  And that's to be expected, but it's a, there's a pretty high price to not answer people's questions about why you're doing that thing, why you're behaving that way, why you're producing that outcome. And so with respect to your question, yes, we find that there's the, if there's the aspirational culture and the culture of reality, and the connection between those things can be tenuous at best. But that's just because there's a leader at the top who has higher fire authority and then a group of leaders under them who have both their aspirations and their reality and often the connection between those things is tenuous within them.

• 43:46Speaker 00

  They have the person they aspire to be and the person they are in context. And sometimes they're in church and sometimes they're at the bar. And the failure is not that they're not perfect as human beings. That's, we, I do not think it's wise for us to expect that of any human being, but especially a leader. But their failure is in help making sense of why they're doing what they're doing and communicating that sense-making to others and being open to the feedback of others about how it confuses them or diminishes their ability to do good work or to achieve their potential, the potential of the organization.

• 44:28Speaker 00

  So because that failure is pretty endemic in most organizations, leaders don't have that sense of clarity about why they're doing what they're doing. They don't help others make sense of it. They're moving fast, they're acting, they're assuming. You know, again, I said, like, we see reality clearly. It's valid and it makes sense to us. It's got to make sense to everybody else. Those classic cognitive blind spots we all have. When leaders have those, they're just moving. They're doing stuff. They're assuming it's pretty obvious why they're doing it. It's obvious to them. It's obvious to others. None of that's true. And then things start spinning out of control. People are interpreting their behaviors and that signal in different ways. And all of a sudden, you've got this culture of reality, which is the lowest common denominator

• 45:13Speaker 00

  of how you win and lose here. Like here are the behaviors that you never lose with as opposed to here are the behaviors you win with. And then you've got the leader at the top saying, no, no, we, we value these things. But, you know, the signal's pretty clear that they don't. And you end up with that bifurcation that you're talking about. So I, I absolutely agree that that's endemic. But I, I don't think it's just because, you know, we don't live up to our aspirations. It's because leaders are confused about the impact they have, given the position they hold.

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• 46:41Shane Parrish?

  The concept of feedback keeps coming up in your answers. What does good feedback look like? How do we receive it? And how do we give it?

• 46:49Speaker 00

  Yeah, so let's start with how we give it. So we all have these expectations. Most of the time, those expectations are unknown to us. We're not aware of them. They exist, we're just not aware we have them. Things happen, we perceive them, we get confused. That confusion leads to these internal narratives. Oh, that person's bad at their job or whatever. And then the feedback is either withheld because, you know, we don't like hurting others. Humans as a species are relatively conflict averse. Or we like blurred out this stuff like, you know, you screwed that up, you're bad. So both of those are terrible. Both of those are non, neither one of those is a feedback loop. Both of those are confusion inducing.

• 47:34Speaker 00

  Failure to actually work out your confusion. And so the way to do it is, you know, consistent with what we've said before. You have to work out your confusion first. So the way you do that is you say, listen, I want to be explicit about what I think good looks like. And I don't want to talk about outcomes right now. I just want to be explicit about what I think, you know, what's the goal or how should this work? And so you have that conversation, you get in sync with another person. Again, you're not, you're not talking to them about how they're bad or how they're good or whatever. You're just getting in sync on what's the standard. Then you complete that part of the conversation.

• 48:16Speaker 00

  You move to the next part of the conversation and say, now I want to talk about my experience. Again, you're not casting blame, you're not even diagnosing, you're just say, what I experienced is, you know, the project wasn't delivered on time. Or I was confused about why we waited so long to deliver this to the customer or whatever it is. And you're not seeking to get in sync with that. All you're seeking to do is to give them transparency into your confusion. And then what you're trying to do is figuring out what they experienced. Well, yeah, I delivered it late to the customer, but you know, it's not that big a deal.

• 48:56Speaker 00

  Oh, okay. So you actually knew that you were delivering late, but you just de-prioritized it. Now, what you do is the next stage is you look at the difference between the standard you read upon, what it looks like and what actually happened. And the gap between those two things is the gap of performance. It is the, it is the feedback you're trying to deliver. But you're delivering it in a way where you're first making sense of what the standard is, not assuming that it's, you know, that we're both aligned on that. The other person knows what you know. And second, you're getting in sync on what the reality was. And then third is you're providing, you're, you're looking at the gap between those two things

• 49:40Speaker 00

  and sort of looking at it together, right? We're not counterparties here. I'm not accusing you. I'm assuming the person you're sitting across from has signed this basic implied contract that, yeah, I want to unleash my potential. I want to be great. Not everybody signs that contract, by the way. A lot of people are like, yeah, I don't really care. And you got to know that. You got to know that you do care about unleashing potential and you want to hang out with other people who do. And then you actually have to be explicit about that expectation in the hiring process, et cetera.

• 50:11Speaker 00

  And so you're sitting across from this, you're sitting, you're having a conversation with this person about that you want to help them. And so you're really side by side, looking at this reality and saying, okay, are we in sync? Like, this is a bad outcome. Are we, you're not assigning blame here or anything. You're just saying, are we in sync? This is a bad outcome. And now let's figure out why that bad outcome happened. So this is a feedback method that we've taught to lots and lots of people. And when you do it and you're orienting to like, being explicit about the standard norms, whatever you're comparing to. Taking a look at your just your own confusion against that expectation and figuring

• 50:55Speaker 00

  out what the other person was experiencing and then move to the gap in performance and then figuring out together why it happened, then I think you're actually doing a couple of things. One, you're being very explicit about what you believe is something somebody else needs to know. Two is you're being open minded about what you could be missing. And three, you're conducting the feedback in a way that the person feels enlisted in the process because it's not an accusation, it's an attempt to discover what is true.

• 51:28Shane Parrish?

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

• 51:56Speaker 00

  So my grandparents grew up during the Great Depression and struggled. And even later in life, when they were fairly wealthy, my grandmother wouldn't throw anything away. And so we'd go over to their house and she'd have stale cereal and all this stuff. And it'd be sort of confusing to me as a kid, like, you live in this big house and we're, you know, saving the stale cereal. But they were very much a product of that experience of that hardship. They were very much a product of having grown up in the situation where, you know, existence was really a problem. It wasn't just about whether you're going to have a bigger house or faster cars, about whether you're going to be able to get on

• 52:38Speaker 00

  the right bread line. And of course, that shapes somebody, right? Those experiences shape people. And it gives you a set of mental models about how the world works and, you know, what risks exist, etc. So when I tell that story, most people are like, well, yeah, of course. But then, okay, great. Yeah, of course. But then that means that's the same for everybody. In other words, like millennials grew up in a particular point in time where there was, you know, different technologies and more wealth, more relative wealth, but more confusion and relative insecurity. They were growing up in a time that formed a lot of their beliefs about how the world works.

• 53:22Speaker 00

  And so, so the people who say there's no sort of generational, you know, that's all made up, that doesn't make sense to me. And I experienced different ways of thinking, sort of categorized by age groups. Having said that, I think most managers really struggle to be good at their jobs. To be a good clarity manager, really hard, especially amidst a lot of unpredictable change. And so when stuff starts going squarely on you, you're going to reach for any convenient narrative you can get your hands on to, you know, to make sense of like, why this is happening. And I think a lot of people have just bought into this narrative of,

• 54:07Speaker 00

  you know, if a millennial isn't working hard, it's because they don't care. Or, or, you know, they, they don't have the work ethic we had. And, you know, frankly, every generation does that to every other generation. Every generation thinks the generation that follows them, it doesn't have their work ethic or their drive or whatever. It's a convenient narrative we tell ourselves to try to make sense of, you know, why people are acting the way they're acting. And so I'm always suspicious when any manager gives me their narrative of millennials don't work hard. Maybe, or maybe you're not a good manager. Because if you were a good manager, if you had designed this thing well and hired well,

• 54:52Speaker 00

  probably those people would do incredible work. I have hired many young people in my life and they were extraordinary. And I've hired people who were, you know, part of the greatest generation and they didn't work out like. So I think that while you can say there's an overall generalization that might help you make sense, like people grow up in a particular time and share common experiences and that shapes them. I think it's probably not wise to deal in generalities about any type of group based on any characteristics, but instead deal with individuals and try to figure out how to create a system that, you know, identifies people are going to do well in that system

• 55:37Speaker 00

  and unleashes their potential.

• 55:38Shane Parrish?

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

• 55:51Speaker 00

  Yeah. So if you look at this, the various studies, and it's hard to be scientific about this, but as somebody who's run large recruiting organizations that have hired thousands and thousands of people, yeah, I would say that the chances that you're going to find somebody who's extraordinary in a position is about one in five. And those are really bad odds. And so why, so it's a great question. Why does that happen? Well, there's a couple of reasons. One is we're not good as a species at figuring out what problem we're going to solve. We're really good at figuring out what problem we've been trying to solve. And what that means is we're always sort of driving by looking in the rear

• 56:35Speaker 00

  view mirror. So when you go to hire somebody, typically you hire somebody because you have a need to fail or you're in pain in some way, like work is too much, this responsibility is untended. And that, you know, the thing we were talking about before, that physical discomfort, it's like this anxiety that I gotta get somebody into this job, starts to really pervade your thinking and how you're, you know, you're working through hiring process. And so you're really specifying for the past. You're really creating a specification of what you need in the job based on what's been happening. It's very rare that human beings step back and think, you know, it's going to take me three months to hire somebody. It's going to take them, once I hire somebody, it's going to take at least three months

• 57:20Speaker 00

  to onboard them, then take another three months for them to actually really get in the swing of things. So what's the job in nine months?

• 57:30Speaker 00

  And then what's the job a year after that? And a year after that? What do I imagine are the kinds of circumstances we as a company are experiencing? How fast are we growing? How big does this thing get? Because all those things are context, all those are are contexts that affect performance. So, so the first problem is we're really bad at imagining the future. And we don't even have to be especially accurate that imagination, just the act of imagining it will cause our cognition to sort of get into this future oriented state of picture, not getting hamstrung by the past, but imagining the future. That's one. Two, most human beings, when they're applying for jobs, actually don't know what they're good at.

• 58:15Speaker 00

  They know what skills they have, or at least people have told them they have, they know what jobs they've held. But they actually don't know what they're good at. Again, human beings are generally confused as a species. If you've ever watched American Idol or any show like that, you see a bunch of people show up. And then you can divide those people into three buckets, right? The people who think they're incredible singers who are terrible. The people who think they're terrible singers and they're incredible. And the people who think they're great singers and they're great. That last bucket is really small and the other two buckets are really big. Because we're just not very good at understanding what we're good at because it's different contexts, etc. And so, so you're, so even if you have this great specification, you're talking to people

• 58:58Speaker 00

  and trying to assess them when they often can't give you the information you need to know whether they'd meet that specification. And then the third problem is that we're actually very bad at assessing human beings for jobs. Actually worse than random in many cases. And I think there's a lot of really cool stuff that's been written about this. You know, if you read Blink and how they started to see more women in Philharmonics when they started auditioning them behind screens. All of the numerous and terrible unconscious biases and conscious biases that we have when we're assessing another.

• 59:37Speaker 00

  You know, there, there was this big thing for a while where you got to hire for culture fit. And now there's sort of this trend where you can't hire for culture fit. Because human beings just are actually talking about when they're hiring for culture fit, what they're really doing is giving them an excuse to hire somebody they want to go have a beer with.

• 59:55Speaker 00

  Well, I don't, I don't think that's true. I think culture fit's really important, but I agree that most human beings are actually just interviewing for somebody that they either find attractive or trustworthy. And neither of those in a one-hour interview are very good criteria for whether somebody's going to be good in a job. And so we're littered with biases, you know, well over a hundred sort of named biases and recency biases and all these kinds of things. And we're just doing that when we're talking to another human being in an interview. An interview is a terrible sort of circumstance to try to find out about somebody. Everybody's sort of doing Kabuki Theater.

• 1:00:36Speaker 00

  And so, so those three things together, it's really a terrible system and it's designed to get really bad outcomes. And yet, everybody doubles down on it and says, if we just did, if we just had more candidates, we'd get better hires. And of course, that's not true. But anyway, that's why we end up with so many bad hires.

• 1:00:59Shane Parrish?

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

• 1:01:18Speaker 00

  Well, statistically, you can't avoid the two in five. In other words, like, there's no perfect way to do this. I no longer do much computer. There was a period in time where I, I did a little bit of coding and everything. And like most people, I know just enough to be dangerous. But one of the things in one of the companies I co-founded, I co-founded with a guy, brilliant guy, and he told me, you know, Jeff, a lot of things are just a data problem.

• 1:01:51Speaker 00

  You can either say, I want the one perfect one. But then if you want the one perfect one, you have to know that you're leaving a lot of other really good ones out of your analysis. Or I want all the good ones, in which case you're going to get a lot of bad ones too. But those are the only two kinds of result. You can't define a set and say, this is the perfect set and I'm going to get every one of them. So we're constantly dealing with this problem like as a manager, I think you have to determine in effect what bet you're willing to take. And the bets you're willing to take will range from, it will be worth my time and effort

• 1:02:33Speaker 00

  to find somebody who could be the diamond in the rough. But I should prepare myself and set expectations that this person, they're going to not have the same resume as everybody else. They're going to have done different things. They're going to have sort of lateral or orthogonal skills, experiences. But that's a bet I'm willing to take because if that bet pays off, it pays off huge. You know, somebody being truly excellent in something is a is a change multiplier inside an organization. But it's always a bet. You cannot look at any higher and say, for sure, this person will be extraordinary. You can just state your belief that you think they will.

• 1:03:16Speaker 00

  And so A, you could, you got to be clear on that. And then, and then you just run your process consistent with that. You like, do you want to find somebody who is going to be in the two out of five? They're not going to be perfect, but they could be great over time. But you know, you don't know. Or do you want to find that like one in five? In which case you're probably going to be taking a bet.

• 1:03:41Shane Parrish?

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

• 1:04:02Speaker 00

  Yeah, it's such a good question. There's for many, many years, there's been a number of different tools we could use to try to make predictions. People use Myers-Briggs, or Workplace Inventory, or Predictive Index, or Hogan. There's lots of different assessments we could use. And each of those assessments will make claims about how predictive they are, and being able to tell you this person's going to work, or this person's not. And I think those sorts of assessments can yield lots of really interesting data. But the only two things I've ever seen

• 1:04:39Speaker 00

  that really substantially increase your confidence in hiring are two things. One is taking the extra time to, with the manager, to actually understand the specification, as we talked about. Huge amount of, it really is worth the extra effort to visualize that thing and imagine that thing out in the future, as opposed to just get stuck with the same old job description. You'll, you can make a really big dent in your hiring success with that, by doing that. And the second thing is, you got to understand how good the hiring manager is. The hiring manager, if you're a hiring manager, and you've never hired anybody before, you've never hired

• 1:05:22Speaker 00

  anybody of that particular responsibility, or, or role type, you're not going to do it well. You're not. You're going to be blind to all sorts of things. You don't have any sort of valid intuition about what's good and what's bad. You don't have enough information to be able to base your decision on. And so, be, understanding that, and depending on people who have been good at it to help you, is another big step we can take as hiring managers to try to overcome that. Most hiring managers don't understand that. They don't see that themselves. Like, I meet with somebody, I like them, that's good enough. I can't tell

• 1:06:03Speaker 00

  you how many CEOs I've worked with, who have hired, they tell me, they just hired their next great person because they met them at the gym. You know, and then, of course, you know, three months later, they're like, oh, this person's terrible. I'm like, Maybe, you know, the gym isn't the perfect context to get to know somebody when you're trying to make them your CFO or um. So there's this, you know, A is like being, taking the extra turn to be really good on the specification, future visualizing it. B is to understand whether you're going to be good at this or not. Um. And then in the assessment, I think what you have to do is you have to gather evidence about the kinds of uh decisions

• 1:06:48Speaker 00

  and behaviors people have made and exhibited in prior cir- circumstances that are similar to what you believe they'll be stepping into in your job. And, you know, that's hard to do, but there are methods you can use to do it. Um. And so you don't ask opinions, you don't ask question, you don't ask people in an interview for their opinion on things because opinions are often born of confusion. It'll sound, could sound great or sexy in the moment, but then, you know, wasn't really germane to like how they do their job day to day. I think what you want to look at is when a person, you ask a person like what was their greatest success and and they'll give you an answer. It'll be interesting

• 1:07:30Speaker 00

  what answer they gave you because many people have lots of successes. So why'd they pick that one? Um. And then you just sort of think of yourself like a detective, not an interviewer. And a detective won't sit there and go, well, you know, how did it feel to be at the scene of the crime? They're going to say, okay, what was the person wearing and what time of day was it? They're trying to get facts, right? And so similarly, as an interviewer, what you're doing is saying, okay, like, who, how big was the group? How big was the group when you started? How big group was the end when you ended? Um, you know, what is, what was your manager like? What was, describe a conflict you had with your manager?

• 1:08:09Speaker 00

  You're just asking very fundamental conver- uh, very fundamental questions about what you did, how you did it, why you did it, uh, so that then you can take that and pattern match it into that specification that you wrote in the first, uh, you know, the first step.

• 1:08:30Shane Parrish?

  Preferably not about the job that was being done, but about the job that you know is going to be needed in the future.

• 1:08:36Speaker 00

  That's right. And what evidence do you have that they actually have done that before? Or at least reasonably can be assumed to do that, to do that job in the future?

• 1:08:47Shane Parrish?

  And once we hire somebody, we onboard them. What are the common sort of things that we do wrong? Or that we can do better when we we onboard somebody to set them up for success? Right? Because I would imagine often those first few months will make a huge difference in that person's career and placement in the organization, their happiness.

• 1:09:09Speaker 00

  Yeah, so what you see a significant amount of time is a manager is in pain. They rush the hire. They, once the person's in place, it's a relief, like the pain is gone. Somebody's doing the job and the manager disappears. So that's a behavior pattern you most often see in fast growth environments. And so right at the very point when a person is entering a new environment, a new culture, new context, working with new people, the most important person to guide them through that, through that new terrain, through that new territory splits.

• 1:09:53Speaker 00

  And so I can't tell you how many times I've seen this. It's a common occurrence. So with regards to onboarding, my first piece of advice is don't do that.

• 1:10:05Speaker 00

  If you hire someone, you have to be by their side for a period of time. And by their side, I mean, you gotta pay attention. You gotta like be, you gotta be explicit about what you expect. You have to watch them make mistakes and then give them feedback in the way we just talked about. You have to help them make sense of their environment. You have to help them get to clarity. You gotta set the job up so there's, so they're moving into it a way where you're not just like drowning them with a fire hose and then, you know, surprised that they couldn't handle it.

• 1:10:44Speaker 00

  So my number one piece of advice there is human beings get confused in new environments. Your new hire is going to be confused. It's almost a guarantee. You as the manager are responsible for getting them to clarity. And you can't do that if you buy into your own confusion. The job is done because you hired someone. The job's just beginning. Hiring the person is actually, if you're thinking about the whole span of management, hiring the person was the easiest part. Managing is much harder than hiring. And it should be because it's a day in and day out thing of committing to somebody else's greatness and their potential. It's not a transaction.

• 1:11:28Speaker 00

  It's an ongoing relationship. So onboarding has to start with being by their side, asking good questions when you see them make mistakes, being explicit about standards, explicit about your vision of what good looks like and how things should work. Over indexing on the quality of feedback and communication, taking extra time to have good conversations, not assuming that a quick check in is sufficient. You're getting to know each other. So you got to take it. It's like, you know, in the beginning of any relationship, you got to spend extra time to actually make sure you're in sync and to make sure you're speaking about the same thing. So with onboarding, it all just starts with a like,

• 1:12:12Speaker 00

  don't give in to that desire on your part, that confusion as a manager to believe the job's done because you just hired someone. The job's just beginning.

• 1:12:23Shane Parrish?

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

• 1:12:30Speaker 00

  Culture is one of those elements that I believe you have to be explicit about. And when I, when I'm, so there's two elements to that explicitness. One is actually taking people through a culture statement. You know, per the prior part of our conversation, that culture statement, I think, has to be an authentic representation of what really happens around here. Not a, you know, not a aspiration or marketing document.

• 1:12:58Speaker 00

  More important than that, that's important, but more important than that is you you put somebody in the job and you watch them do stuff, right? They go do their job and you want them to do their job. You want them to actually start experiencing things. Like I said, you want to you want them to get into it and start to go, how does this feel? When a mistake is made, whatever that quote unquote mistake is, like you expected one thing and you got another, that confusion we talked about, you have to use culture as one of the lenses to diagnose or make sense of that. So let's say a person comes in and they've

• 1:13:39Speaker 00

  had a lifelong experience on Wall Street and they were a trader on Wall Street. And so they decide that they want to get into the, you know, therapeutic massage. And so that's the job. So they go into therapeutic massage. And the first time somebody gets on the table, the Wall Street trader says, you know, hey, listen, I'm not going to massage you because like you're gross. That's a culture, that's a culture problem, right? That's a behavior that is not what you expect inside that environment. So you have to be explicit in watching the outcomes of attaching a bad outcome to culture. And that's where the

• 1:14:24Speaker 00

  real learning happens. It's not just giving them the statement. And it's definitely not waiting for a year end performance review and saying, oh, by the way, you're not really a culture fit. It's it is a weekly sort of event where you're connecting confusion and mistakes and bad outcomes back to that culture statement and back to your beliefs about the behaviors and outcomes that will be rewarded, punished and accepted.

• 1:14:53Shane Parrish?

  One of the other sort of things that I have witnessed in organizations and had, you know, struggles with at various times in my life as well is sort of the lack of positive feedback. And just assuming that people just need correction when they're going astray. How do you, how do you help people give positive feedback? And what does exceptional positive feedback look like?

• 1:15:13Speaker 00

  Yes, most organizations either give no feedback or give negative feedback. And in giving the negative feedback, they they do it poorly in the way I described before. To use that American Idol example I used before,

• 1:15:31Speaker 00

  there's that bucket of people, there's a group of people who think they're terrible singers and they're actually great singers. They're confused, right? They expect, they believe about themselves that they're bad at something they're actually good at. I think most managers ignore the fact that a lot of us are in that bucket. A lot of us believe that we are bad at things that we're actually good at. And we as managers are depending on that person to find that greatness and unleash it in the service of achieving the goals that we all share. And so it becomes a sort of endemic blind spot in management that we think

• 1:16:12Speaker 00

  that because somebody's doing something well, they A, know that's what good looks like and B, or exceeds what good looks like, and B, the person knows they're good at it.

• 1:16:24Speaker 00

  And it's a terrible, a terrible blind spot. People don't actually often know what they're good at and they don't actually know how superior they are in it. So if you see your job as a manager to actually find and unleash a person's potential through clarity in the service of achieving, you know, our shared goals, then you want to spend a lot of time figuring out what people are good at and calling that out.

• 1:16:50Speaker 00

  Now, how do you do that? I believe the way you do that is very similar to the way you give quote unquote negative feedback. All you're trying to do is take confusion and turn it into clarity. So in the example we gave before, let's say somebody does something really great. Most managers will ignore it. That's terrible. Some managers will say, hey, that was a really good job and that's way better than ignoring it. But that's still not great. What great looks like is you'll sit down with a person and say, you know, here are my expectations. Here's what my standards were. Here's what I thought. Does that make sense? Yeah, that makes sense. Here's what I experienced. I just experienced you doing something far better than that in the following ways.

• 1:17:34Speaker 00

  I thought, you know, that the report would be here on Tuesday and you got it to us on Monday, which gave us an entire extra day. Like that specific, that 24 hour early delivery made a big difference to us. So you're explaining your experience to them.

• 1:17:53Speaker 00

  It's obviously easier because it's positive as opposed to negative, but you're being explicit about the standard and you're holding that experience up to them and you're helping them make sense of not only what they did that was great, but why it was great and why it mattered. And in that, that positive feedback starts to help people get clear as you form a pattern of those things over time, it helps them start to get clear about what they're, what they're good at, really good at. And in that, you're actually doing one of the most valuable things you can do, which is helping that person unleash their potential. So I think you give good feedback in the same way you give bad feedback, but the problem isn't that we don't

• 1:18:36Speaker 00

  know how to do that. The problem is that we just avoid, we just assume that people know they're good at stuff and, and they often don't.

• 1:18:44Shane Parrish?

  And is that how you sort of, you have three daughters, right? Is this how, is this an effective method of parenting and giving feedback to kids? Or do you do something different at home?

• 1:18:56Speaker 00

  Well, I have two daughters and a son.

• 1:18:59Shane Parrish?

  Yeah.

• 1:19:00Speaker 00

  That's fine. But in case my son, John, ever listens to this, I want to let him know I cleared the record up. Yeah. So, look, it's just a compulsion for me. And obviously, look, being a parent, my, I have three grown children and they're each, you know, adults out in the world, making their mark in the world, figuring things out. And anybody who gets through that process of, of bringing children to adulthood should be suitably humble because it's a really hard job. And so I cannot claim to be an expert in anything around

• 1:19:43Speaker 00

  parenting. What I can tell you is that the things I'm speaking to you about, I did try to do as a parent. I tried to help my kids when I was being a good parent and I was not always a good parent. But when I was being a good parent, I was trying to help them make sense of the world. And that takes different forms at different stages of their life, right? So when they're toddlers, the way you help make sense of the world is you keep them alive. Don't go in the street. You're not trying to like help them make sense of like physics and why cars are bad for you. You're just like, hey, you gotta stay out of the street. But as they get older, you're, you know, increasingly

• 1:20:28Speaker 00

  stepping into that sense maker role and helping them sort of put together the picture to so they can navigate, make sense of it themselves. But from the very, my, my kids and I, my kids still talk about this from a very, very early age. That when they were, I don't know, you know, preschool, I would tell them, you are not your mind. And of course, a parent saying that to somebody in preschool, they looked at me with blank stares. But it was something I repeated frequently throughout their life. And what I was trying to tell them is,

• 1:21:00Speaker 00

  like, you can have an objective sort of sense of your own reality. Don't get caught up in everything that's going on. Try to make sense of it. Try to see, look down upon yourself and see what you're going through and see how it feels. And try to make sense of that and get others to help you make sense of it. And so I'd say, you know, from that perspective, from very early age, I was a core part of, of how I talked to them as a parent, again, when I was being a good parent and I had plenty of times where I was just as confused and overwhelmed by trying to raise successful, happy, healthy and productive adults as any other human being on the face of the earth.

• 1:21:42Shane Parrish?

  I hear you, man. Sometimes I get them to bed and I think I deserve like an Olympic gold medal for that day, even though the house is a mess and you know, nothing's in order or ready for tomorrow and you just do the best you can.

• 1:21:53Speaker 00

  Oh, yeah. Oh, yeah. I feel that. Oh, man.

• 1:21:58Shane Parrish?

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

• 1:22:19Speaker 00

  Yeah, I think it's very, it's very difficult. So first of all, I just want to state that I, when I was a part of the recruiting organization at Electronic Arts and ran, you know, recruiting was part of my remit at Dolby, or I ran recruiting at Bridgewater. I, I sort of thought that being able to recruit people was something that we should be good at, and we shouldn't depend on people outside the organization. So the way I approach that is different than how a lot of people approach that. I would build those, what we called sourcing organizations inside the businesses.

• 1:23:02Speaker 00

  But that, not everybody can do that, not everybody wants to do that, and I understand that. Listen, I think that there are recruiters who like, think of it like hiring. There's people who you want to have a relationship with over an extended period of time, and you want to invest in them so that you can unleash their greatness and so they can get to know you. And I think all good vendor relationships, whatever they may be, have that quality. You're forming a partnership with that person over the long period, a long period of time. And that as that partnership is built and trust is built in that through, you know,

• 1:23:46Speaker 00

  watching, you know, putting a job into the queue and watching what happens and giving feedback and doing what I think all good, high-quality relationships and partnerships do, then the recruiter is going to get better and better. I think if you go out and just try to pick a recruiter and hope, and hope they're going to deliver value to you. You're gonna, it's again, like hiring, you one out of five chance it's gonna be great. Two out of five, it's gonna be, you're gonna need to work on it. And, you know, two out of five chance it's gonna be a disaster. And again, having hired lots and lots of recruiters and spent lots of money on outside agencies. I think those odds are roughly right.

• 1:24:30Speaker 00

  And so it's not much different than trying to hire a person. So a lot of the previous advice holds, like, are you clear on what you're hiring for? Are you clear that this person has been successful hiring that kind of person? Not just, you know, I see a whole bunch of mistakes made when managers say, oh, I gotta go hire a software engineer. So I'm gonna go to somebody who's hired software engineers. That's too general. Like, you're looking for specific skill classes, you're looking for different ranges of experiences. You're looking for something that's much more particular than just a software engineer.

• 1:25:12Speaker 00

  I think it's worth the extra time, both to visualize what that is more in depth, as well as when you're talking to recruiters to ask questions about whether they've actually, do they have evidence they've filled those jobs? That they did that in a timely and effective way? And can you talk to the hiring managers those recruiters have worked with? And see whether those employees, you know, were, they stuck, they were the one of, one of five or two of five.

• 1:25:42Speaker 00

  And so I think it's just that process. A lot of times, again, it's all just another one of those, as Ray Dalio would say. A lot of times, you know, we're confused about what we want. We sort of rush out and pick the first available thing. We're then disappointed in the results, but can't really get clear on where we failed in that. And we just keep cycling through. We're not clear on our goals, we're not clear on the measures, any of those things. So I think the best advice I have is you just have to take the extra cycles to really be specific about those things. Get into detail.

• 1:26:22Speaker 00

  Again, look for patterns and evidence of persons, the recruiters been successful hiring for that kind of position. Get as much evidence as you can about that. Make the match and then invest in the relationship to see if you guys can really become excellent together.

• 1:26:38Shane Parrish?

  So you're saying we can't just click on the top Google ad and it's gonna work out?

• 1:26:44Speaker 00

  Well, sure. No, you can. See, here's the thing about life. There is such a thing as luck. It just really screws us up because you go to the Google ad, you click on it, you find this great recruiter. You're like, oh, my gosh, this is like, no, you just got lucky, but you beat the odds.

• 1:26:59Shane Parrish?

  So much of what we're talking about today is actually just going a little slower in the short term, almost a first order negative, second order positive, in order to go further and faster. And slowing down and just getting clarity and slowing down and giving feedback because you're building something that's going to compound over time.

• 1:27:19Speaker 00

  Yeah, I love the way you're saying that. When I was, yeah, I don't know, maybe late 80s or something. I was talking to someone and at that period, at that point of time, Japanese car companies were just killing the American car companies. You remember the late 70s through the 80s, there was this whole problem where the the import cars were just so superior in terms of quality and efficiency. I talked to a professor who studied a lot of that. And they said, here's the secret. The Japanese companies release cars just as fast as the American companies do, but they release them at lower costs and higher quality. And the way they do that is they go really slow in the beginning

• 1:28:02Speaker 00

  so they can go really fast at the end. And American companies go really fast in the beginning and always have to go slow at the end. And I said, can you tell me what that means? He said, sure. So the Japanese companies will take a lot of extra time to talk about what really is the design and can you imagine the different ways this will go wrong? And can we improve that before we actually go to production? And how does this team work together? And what kinds of standards will we hold and all those kinds of things? And the American companies would be like, we got to get metal in the presses as fast as possible. And they do it. And then, of course, like there'd be all sorts of line quality problems or things that don't work. And, you know, the people are against each other. They're confused. They're not dealing with it.

• 1:28:45Speaker 00

  And so low quality cars went out the other side. And as a proud owner of an American car, I'll just say, I think they've solved those problems, talking about the 80s here. So I don't get angry letters from Ford.

• 1:28:57Shane Parrish?

  It's like we confuse speed and velocity, though, right? Velocity as a destination and we're sort of just focused on the speed and maybe more accurately, the appearance of speed.

• 1:29:08Speaker 00

  Yes. Yeah. So something I talk to people a lot about is don't confuse time on task with speed to goal. And what I mean by that is, let's say we sort of pick a goal out in the future, we get right to work, we're just working and we're doing stuff. And then we produce a few small wins, so we feel great about that. Well, the thing you're measuring against is how long does it take to get to the goal, which is, you know, many weeks or months in the future. It's not how long it took to get to the first win. You want to actually learn really well in the beginning, so you can go increasingly faster over time.

• 1:29:53Speaker 00

  And when people jump in and start doing stuff, and then they produce, they get lucky and they produce a few good outcomes, or they get unlucky and they start freaking out, they start moving faster, right? They make harebrained decisions, they start moving faster, there's no learning, there's no improving, as you said so correctly, there's no compounding of this, you're just active. And then if you achieve the goal at all, it's going to be late, because it's just so much waste, so much wasted effort. And as things go on, the waste and the confusion compounds and gets, it builds upon itself. What you

• 1:30:34Speaker 00

  want to do is be learning really well. You want to always be in a place where you are making sense of your confusion, figuring out what was insufficient in your model, what are you learning about, what could have gone better, redesigning and just turning that loop constantly. And if you do that well, and you compound that knowledge, you will achieve big goals in record time. And if you don't do that, and instead just jump into it and start flailing around, you'll either won't achieve the goal, or it'll take a lot more time, money and attention than you thought.

• 1:31:12Shane Parrish?

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

• 1:31:17Speaker 00

  Yeah, so Bridgewater was an incredible experience, and what I'm very grateful for.

• 1:31:24Speaker 00

  So the first, probably unsurprisingly consistent with what I've been saying, I learned so much about myself in that context and that environment. You've heard me use the word confusion of, you know, I don't know, 18 times so far in our conversation. That really struck me while I was at Bridgewater because I was confused about a lot of stuff. And when I realized that it was my confusion and, you know, it was the insufficiency of my model and how I was thinking about things, that was a really big breakthrough for me. And I don't think that could have, you know, different people have very different experiences

• 1:32:04Speaker 00

  there. But for me, I don't think that I could have achieved that without going through that experience. And the other thing is, I think Bridgewater is just a great place to learn how to think. Most of us just don't think that well. School does not teach us how to think. School teaches us how to take tests. And so, most of the times, we're confronted with, you know, the wrong data or too much data, or we don't know how to like, sort things out. We don't know how to describe things. All these, all these sort of cognitive thinking or critical thinking problems. And Bridgewater just invested a huge amount of time in, in helping me get better at that. And so, those are the two big things I learned

• 1:32:49Speaker 00

  and I'm grateful for both.

• 1:32:52Shane Parrish?

  If I was to give you some time and tell you to teach somebody how to think, where would you start?

• 1:33:00Speaker 00

  I think what school teaches us is the problem is out there. And the problem's not out there.

• 1:33:06Shane Parrish?

  It's inside you.

• 1:33:08Speaker 00

  Just the basic mechanics of cognition, as far as I understand it, is the world is just incredibly complex and our mind is filtering out tons of information all the time. And part of that is just literally the way their, you know, perceptions system is designed. And part of that is like, Yeah, you gotta take in gigabytes upon gigabytes of information per second and you can only process megabytes. And so a lot of it's going to go somewhere, but it ain't going to go into critical thinking. And so, so the first thing you really have to do is start with that reality

• 1:33:49Speaker 00

  of yourself. You are missing something. Every time you move forward in the world and try to take something, you're missing something. Absolutely positively. Whether the thing you're missing is going to be important to achieving your goal or unleashing your potential, that's a good question, but you're missing something. And so if you don't start from the perspective of the way I'm perceiving the world is a artifact of my, the way my mind works, it's not reality. I'm not perceiving reality, I'm perceiving what my mind lets me perceive, or sort of lets

• 1:34:30Speaker 00

  through the perceptual filters. And so the better I can build a sense of myself, why I react in certain ways and certain situations, what is the information I've missed in the past? How would missing that information apply to this situation? All elements of what I would broadly call personal mastery. A sense that I think have been celebrated in many cultures, in many disciplines, including martial arts and other things, about understanding that your mind is the ultimate tool you have to deploy in sharpening that tool, not through

• 1:35:11Speaker 00

  a skills perspective, but from a getting to know the tool and understanding what it's good at and what it's not good at, and what it misses and is insufficient for and it's sufficient for. It's sort of that, you know, experimental curiosity sort of way. That is the, to me, the root of all good critical thinking. And then the second step is, how do you deal with the biases that are inherent in that? You know, recency bias is one we deal with all the time. We, we coach a lot of people, a lot of executives, and What we found over time gathering lots and lots of data on this is that the problems

• 1:35:54Speaker 00

  that our clients bring to us in the, in the coaching session often is completely biased by recency. So something happens just before they enter the room and then that's what they want to talk about. It's an authentic problem. It's a, it's, you know, it's a real thing that they're dealing with, but often it's not the most important thing. So again, like, if you want to be involved in unleashing your potential, good critical judgment, good critical thinking, you have to be aware of things like, what is the most important thing to bring to this situation? Because it can't just be like the thing that happens two to three hours before I walk into the room. There's an entire week, you know, if

• 1:36:38Speaker 00

  there's a week between coaching sessions, there's an entire week of experience there. What is the most important thing that's happened that I could use this coaching session and this coach's expertise to help me get to, you know, turn that confusion into productive learning and clarity?

• 1:36:52Shane Parrish?

  That's so interesting to me because we're, it's like we're so interested in solving the problem that's right in front of us instead of solving the problem that created the problem that's right in front of us.

• 1:37:01Speaker 00

  Yes. Yeah. So that's another, it's a beautiful segue into the deeper thing, which is, and this is something, again, I'm grateful for Bridgewater because it's very much embedded in their thinking, is like, a lot of stuff is just a pattern that keeps emerging. Again, it's the same thing again and again, just taking different forms. And so where you really want to get is to the root of the thing that's driving those different bad outcomes. There's so, there's so many different examples of this, but if you, if you're in a situation where you're like, you know, I've talked to the, I keep talking to my employees and they

• 1:37:42Speaker 00

  keep not getting what I'm saying and they keep, you know, messing up and not delivering on time. A, that's not about them, that's about you. And B, that's not like a bunch of different instances, that's one instance repeating itself in many different ways.

• 1:37:58Shane Parrish?

  Right.

• 1:37:59Speaker 00

  And so getting to the root of like, what is it about the way I communicate that is ineffective? What is that thing? And, and,

• 1:38:09Speaker 00

  We aren't in that proposing like you learn the skill of effective communication, or you gotta do that. We're just saying like, just that's a reality. Given the goal you have, you don't do this well. And so now what can we do so we can go find strengths that you have that we can leverage so you can achieve the goal in a different way? But ignoring that, you know, that sort of underlying root cause of the ongoing dysfunction or the ongoing problem, I think is a path of, it's a path to failing to get better. The failing to unleash your potential, you just keep experiencing the same reality in different forms and being surprised that the same thing keeps happening to you. Well,

• 1:38:54Speaker 00

  that's a very different definition of being in stasis.

• 1:38:59Shane Parrish?

  A colleague of mine, this sort of brings this to memory, always used to be frantic and running around and correcting things. And I pointed out to him at one point that, you know, he said, this always happens to me. And I said, well, I think you're just trying to address the immediate, the immediate problem instead of actually addressing the root problem, which is you're communicating poorly. People don't understand what you're looking for. You're not putting in the work to make better decisions initially. So you're coming, you know, all of these byproducts of those poor initial decisions and poor communications are coming back to bite you. But they don't come back to bite you for a couple of days or weeks. So you don't see the immediate feedback to your decision.

• 1:39:40Speaker 00

  Yes. Yeah, that's such another cool point. There's this other cognitive, it's a little bit related to the recency thing, but the more distance there is between cause and effect, the worse we are at thinking about it. And you see this in big things like climate change, right? Where it's little things add up, a lot of little things add up to a big catastrophic change, or where I, you know, I buy my SUV today and it isn't, you know, 15 years until that's polluted enough to make me concerned. You see this all the time when people are trying to make sense of things that if there's a, if there's a gap between when they do something and the feedback they get

• 1:40:24Speaker 00

  on that, or the result they get on that, their mind wants to make excuses about why things happened. Because it can't make sense of like, okay, let's go back a couple of weeks when we did that. That's really what happened. Our mind is very bad at that. It's very good in the moment. It's very good. Like, oh, I'm experiencing this thing. You know, this must be why. So I think it's a really good point you're bringing up that the more time gap there gets between a cause and effect, the worse human beings are at diagnosing it.

• 1:40:58Shane Parrish?

  One final question before we go. We have a lot of investors who listen. I'm wondering if there's any tools, tricks, techniques. What have you learned about assessing a leadership team that you can do without directly talking to the management from just the communications or from anything from the outside looking in?

• 1:41:15Speaker 00

  Yeah, if I was looking at data externally, like not talking to people, what I would be looking for is patterns of leadership, A, taking responsibility for what's happening, and B, clarifying and using, you know, bad outcomes to drive future improvements. So I believe, and obviously I've worked in, you know, at least one world-class financial institution. We have a number of clients right now who are investors, private equity, venture capital, alternatives, and partners. And what I say is like, more so than anything

• 1:42:00Speaker 00

  else, any other business ever seen, you guys are trying to beat your own minds. Because your own minds are what lead you into bad investments, your own biases, et cetera. And so how can we use that to improve and get better at noticing our blind spots and designing effectively so that we can make ever better investment decisions? So practically, the way you'd see that is you'd see communications from the leader. You'd see somebody who is revered inside the organization, who is helping, is not hiding from mistakes, is bringing them to light, is engaging in feedback, the way that I talked

• 1:42:45Speaker 00

  about, and is helping people make sense of what this means and how they can get better in their investment and portfolio management decisions going forward. A team that's engaged in that work is just going to compound and get better over time. And I think a lot of people, as an example, look at Bridgewater and sort of walk away with a lot of things. But one of the things I can absolutely, I can verify is that when Ray goes out and talks about, you know, how critical the culture was to their success, I believe that is true. And I believe that the culture of recognizing problems and using them, using those lemons

• 1:43:30Speaker 00

  to make lemonade and help people get to clarity and constantly learning and compounding that learning, that's mostly a cultural attribute. It's a culture that gets demonstrated by the leader, that gets lived by the people, and that in absence of, in absent of that, you're, you know, I think you're basically banking on luck.

• 1:43:53Shane Parrish?

  I think that's a great place to end this conversation. Thank you so much, Jeff, for such a phenomenal time.

• 1:44:00Speaker 00

  Yeah, it was really my pleasure, Shane. I'm so grateful. Thank you very much.

• 1:44:10Shane Parrish?

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