April 7, 2022

133 Jonathan Brill: How to Design Your Organization For a Predictably Disruptive World?


Jonathan Brill prepares leaders to profit from radical change. He speaks and advises on resilient growth strategy and innovation under uncertainty. He is the author of Rogue Waves, Future-Proof Your Business to Survive and Profit from Radical Change (McGraw-Hill). Adam Grant called it, "An actionable framework for driving change instead of being blindsided by it."

Deloitte called Brill, "America's foremost disruption strategist" for his advisory work. Oxford University Press said, “he’s not Nostradamus, but for the world’s top business and government leaders, he’s the next best thingof his work as the Global Futurist at HP (Hewlett-Packard) and board advisor at Frost & Sullivan. Inc. called him, "a silicon valley legend" because his innovation consultancies developed over 350 products ranging from theme park rides to World's Fair Pavilions, to AI, search engines, metaverse technologies and even one of the best selling fast foods in the United States for clients like Samsung, Microsoft, Verizon, PepsiCo and the US government.

He is an in demand thought leader, speaker and contributor to organizations like HBR, Global Peter Drucker Forum, SCMP, SXSW, J.P. Morgan, Singularity, Forbes, Korn Ferry, TED, Stanford University and Thinkers50.

He holds a degree in industrial design from Pratt Institute, spent years as a research consultant to the MIT Media Lab and in management training at the Stanford University Graduate School of Business.

 

We discussed:

  • 🔥(14:57) What happens when we tie ourselves to a set of assumptions which are no longer relevant or true
  • 🔥(7:40)How to use mental models to navigate a very complex world When you expect disruption in your lifetime, how will you design your organization?
  • 🔥(33:03)How to train yourself to have the maximum optionality like Elon Musk and Peter Thiel do?
  • 🔥(51:58)How he learned to manage complex processes in a Michelin star restaurant?
  • 🔥(62:29)How to properly engineer a company culture to motivate and reward people to experiment and innovate?

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Please enjoy my conversation with Jonathan Brill

 

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Transcript

CK: [00:00:00] Welcome to Nobel warrior. My name is CK Lin. 

Noble Warrior is where I interview leaders, entrepreneurs about their journey from the first mountain of achievement to the second mountain of purpose so you can go on and navigate your own journey from the first mountain to the second. 

If you have any friends who are on this journey, who could use more inspiration to take that leap of faith. Go ahead and share this episode with them. They'll thank you for it. 

My next guest is Jonathan Brill. He's a former global futurist.

I heal a packer. He has published thought leadership articles for Ted Bloomberg, fast company, MIT and Harvard business review. 

Today. He prepares businesses to profit from radical change. 

He's also the author of Rogue Waves: future proof your business to survive and profit from radical change.

We talked about a number of topics: we're beginning to have better tools, better technologies, and better data to be able to predict [00:01:00] probabilities of what's coming. 

So what happens when we tied ourselves to a set of assumptions, which are no longer relevant or true? 

How do you use mental models to navigate a very complex world? 

When you expect disruptionin your lifetime, how will you design your company or organization? 

How to train yourself to have maximum optionality, like, you know, Musk or Peter Thiel?

How he learned to manage complex processes in the Michelin star restaurant? 

Finally how to properly engineer company culture, to motivate and reward people to experiment and to innovate?

Please enjoy my conversation with Jonathan Brill.

Jonathan: Thank you so much. It's great to be here. 

CK: So first let me just start off by saying from one systems thinker to another.

Let me just acknowledge you for presenting a beautiful frameworks and examples to [00:02:00] make this book as relevant and as practical and valuable as possible. Um, for those of you who are watching the recording, if you're a systems thinker, and if your builder go get this book, you won't regret it. 

Jonathan: Thanks so much CK.

It's wonderful. I appreciate that.

CK: So let me ask you to read a passage, the conclusion of the book. So maybe that would frame this conversation a bit, and then we can go into more details of, you know, what it is that you are trying to communicate the true captains of modern business.

See a more complete reality. They look outward as well as being work. They listen broadly and they read more than recent history. They constantly look to coordinate and they're intensely skeptical. Anytime someone says this has never happened before often they've had some training in an academic discipline, that balance abstract thinking with finding objective.

So she was applied [00:03:00] mathematics, physics, computer science, economics, and so forth. They also tend to be comfortable with ambiguity, can base decisions on stock up probabilities when, you know, what's most likely, and what's less likely, but also plausible. You can plan for a range of possible futures and invest in making your preferred outcome more likely.

So I really loved the way that you frame this on the, from the title point of view, it sounds a little bit of an alarmist, but talking to you and reading the book and really get to know you more, you're actually not alarmist. Are you okay? 

Jonathan: I don't think so. I mean, I, I have a belief that, you know, what's really going on in the world right now, uh, is we have more trillion dollar problems than ever before, but that also means that we have more trillion dollar opportunities.

And so. I feel an [00:04:00] urgency for the future and urgency for change, but that's because there's more possibility today than there ever has been before. And it's our responsibility, our generation's responsibility to make sure that we move humanity. We move civilization forward from where we have been to, to where we're going.

I mean, when, when you think about this moment in time, we're at liftoff, we're at liftoff for the next generation of the human species. And what do we mean by that? It's not just that you have new technologies. It's not just that we have globalization. It's not that by 2035, another billion people will earn the local equivalent of the U S middle class on the planet.

It's not just that it's that we're at a moment. Where things like artificial [00:05:00] intelligence and explosion of sensing and communication technologies, statistical skills are making it possible for the first time to see the future. Now I don't mean that we can tell you exactly what the world's going to look like 50 years from now.

But what I'm telling you is this is the first time that we've had any ability to use things like climate modeling, to see what that might be and to use economic data to in a real way, start to imagine what that might mean in your community, in your town, for your. And that's not just true in, in climate change.

That's just the, one of the exciting things right now because of the big climate conference coming up at the end of the month, it's happening in healthcare, it's happening in, uh, uh, urban systems and urban design it's happening in the way we, [00:06:00] we create businesses, right? All of the things that you see, companies like Google, the things that you see, companies like Facebook doing with being predictive about what you might want and what you might need, those skills, those technologies, those competencies, they're commoditizing.

And that means that in the next three, five years, these are things that you'll be doing for yourself in your daily life. And what does that mean? It means that we have the, the, the tools of the most powerful organizations on earth. Coming into our hands and we have more than an opportunity. We have a responsibility to use that, to climb the next.

CK: No, I appreciate that. Thank you for the call back. Thank you. So the, I mean, one systems thinker into another, I think about the world systems and processes. So I love that the way that you think, right. 

So why don't we start from the personal [00:07:00] before we go into the global cause that way it's a little bit easier to more, make it more relevant to the individual listeners.

So I'm curious to know I've had been accused of, Hey CK, you're, you're making this way too complicated, your mental model. You're making things complicated, but I say to them, no, it's a the complex world. Yes. I can not determine, let me get a deterministic model what's to predict the future, but I can make it probabilistic.

So at least things make sense to me. So then I can apply source view forward. Right? So I'm curious for you, Jonathan. Um, how do you use your own framework to navigate your own journey from the first mountain to the second mountain in pursuing different opportunities that's available to you because the whole world is the playground for you, right?

So how do you navigate that using your mental models? 

Jonathan: So there's the world's [00:08:00] complex and that's a complex question. Um, the first thing I would say is the goal that you should always be looking toward, no matter what happens in the future is how do you increase your optionality, right? How, how do you increase the number of options and how do you increase your potential when those options become available?

And that should always be the thing that we're looking at. Whether we're, we're programmed managing and we got to get to the end of the project, uh, or whether we're looking at our careers in our lives, what's the broad range of things that are possible. Uh, and how do we take advantage of all of them is should they occur?

I think about when I was, uh, 18, I was trying to think about my life and my career and where I wanted to go. And I had such clarity about what would happen. And I sat down and I talked with, uh, [00:09:00] my uncle who was 95 at the time. And, you know, he was a little big used and he says here, I finally figured it out.

It's been almost a hundred years, but I finally figured it out. Here's how life works. Uh, you do one thing and then you look around and you decide what you do next. And then you do that. And that's all there is. His point was, you can't actually know exactly what the future will be. You might have a kid you didn't expect, you might, uh, develop Alzheimer's.

You might have absence, epilepsy. There might be a car crash. Uh, your business might implode, uh, a technology that you thought was really going to grow. Your business might become irrelevant. Uh, tomorrow, you know, I spent so much time learning how to type right, and learning cursive. Yeah. Technologies that in the [00:10:00] F there, they're still kind of important, right.

Knowing how to write and, and knowing how to use the keyboard, but in a world of increasing voice command and voice control and, and verbal virtual assistance. And, and, uh, auto-fill in many ways, so many of those skills are no longer relevant. And yet I thought they would be central to my success when I was eight.

And so we've got to be looking not just at what we think the future is, but if that is untrue, how do we make sure that we're still setting ourselves up for success? And that's, I think what the book's about. And that's kind of what I think about is how do you give yourself the best bet. How do you make sure you understand what's happening today?

How do you understand that range of possibilities? How do you then make decisions that allow you to uncouple the downsides? Make sure that no matter how bad things get, [00:11:00] they don't kill you. How do you make sure that you're setting yourself up for the upsides? How do you just kind of work through decisions and often change small things about how you time sequence and in hedge bets or investments.

So that, that happens for you and it's very much possible, but it requires a level of rigor and a comfort with complexity and ambiguity that, uh, that is trained. I mean, you've got to spend time there. You've gotta be willing to spend time there. And you've got to understand that the way to approach an ambiguous and increasingly volatile future isn't to have one plan it's to be running a series of experiments, some, you know, high potential, some kind of sustaining, keeping the business going and some insurance experiments.

So some things just to make sure that no matter what goes wrong, you know, you you've got that foundation that you need. Yeah. Most companies, most [00:12:00] people, they don't think that way. Um, but when you take a look at something like the pharmaceutical industry, you know, they, they do this very much. So they'll look at like a hundred molecules and run them in a horse race so that they can reliably have they're doing enough experiments and that they can reliably have the combination of outcomes that they need when they need them.

We see this in the stock market, right? You would never invest in one stock, just invest in Amazon and hope or invest in Bitcoin and hope like maybe you're going to strike at super rich, but you're setting yourself up for volatility that you can't control, right. That you did that, you know, it increases your potential when it goes up, but it, but it eliminates your potential when it goes down.

And so the thing is in most businesses, most planning, you know, we kind of think about compound growth, this idea that, um, we'll do better and better and better and better and better and better. Right. But we forget that in a [00:13:00] volatile world, you also have compound volatility, right. That the market or whatever, trying to get into the camera here, you know, 

CK: that's what the book is about.

Right. That's 

Jonathan: what the book's about is that compound volatility. What happens when these individually manageable changes, collide to become unmanageable? And how do you make sure that you've maximized your potential in your optionality? When that yeah. 

CK: Yeah. Um, so there's a few things. So by the way, this is noble warrior.

So on this podcast, we talk, you know, I have a scientific background, so on this pockets would talk a lot about life as an infinite game, right? You played a game in so that you can continue to play the game. It's not a finite game, right? So that's one, two, the warrior, we use the dojo analogy quite a lot, right?

It's not about, you know, mastering a move and I'm done. And let me, you know, I can declare myself, Blackbelt is actually going out [00:14:00] onto the mat and continue to practice some fundamental skills. So then you can skill stack your way to unpredictable scenarios when a situation calls for it. It's, uh, you don't need to like, oh my God, what do I do?

It's like, oh, muscle memory. Then I can actually react with more grace and finesse and dignity that. Yeah. Oh, so I would just want to bring some of the parallels of something that you'd be saying. One thing you didn't say is implicitly is what is the game that you're playing? What are you optimizing for?

Right. So understanding the why you do certain things. So then you can think about the atomic level skills that you want to stock and practice, and we are masked for that. So we can move towards your goals. Anything you want to say about the importance of having clarity of the direction of you heading towards.

Jonathan: So I think [00:15:00] understanding,

having some understanding of why you're doing what you're doing is incredibly important. You know, I think it's really easy if you get too focused on the why to miss. That the world's changed and not talking about personal growth work. I'm talking about in business. That is really easy to say, you know, here's my definition of success.

We're going to be the number one widget maker in the world, and then you get there. And no one cares about widgets. Like I spent, uh, uh, up until I was about 40 trying to do things to please my dad trying to have the skills that when my dad was 40, he wanted me to have, I was 10 guess what it takes about 30 years.

Um, so I turned 40 and I got there and I had most of those skills, the last major [00:16:00] thing I needed to do, um, probably like in terms of my life goals was write a book which I have now done.

My point is I sat down with my dad and I'm like, what do I do next? And he's like, I don't know. Why did you do. that my point is I thought I was achieving something my dad cared about. And by the time I got there, maybe, maybe 30 years ago, he did, but by the time I got there, he didn't care anymore. And so I think we've always got to understand when the environment's changing and when we've tied ourselves to a set of assumptions that are no longer relevant or no longer.

True. Um, and I think that's kind of the, the great skill, you know, is having the tenacity to get there, but also understanding when there has changed. 

CK: So one thing that I want to say in the quote that I read a little while ago, you said that, [00:17:00] um, I'm paraphrasing strong business leader, excellent business leader on both internally aware and externally aware.

So I want to, uh, maybe I'm projecting my words into your mouth, so to speak. You're not saying just like, Hey, pay attention to the external world. Yes. You were saying that. And also you're also saying, be cognizant about your internal goal. Like who, why are you doing this for yes, no. Maybe if you're 

Jonathan: chasing someone else's cheese, like, why are you doing that?

You know, like, why are you chasing another masses cheese? Like it's a developmental path. You know, you talk about the first mountain and the second mountain, right? It's a developmental paths often for, for me, it was or has been, or is. Yeah, you get to the top of the first mountain, you know, and that's really, for me in a lot of ways, chasing what my father wanted, what he couldn't accomplish for personal reasons, you know, [00:18:00] and, and like my own flavor of it.

But it was really chasing someone else's goals and then getting there and realizing, oh, wow, I've actually done it all now. Now what are my goals? What do I want to be in the world? And like you said, it's that for me right now. It's about that journey of self-awareness about understanding my relationship to everyone else, as opposed to everyone else's relationship to me.

CK: So, if you don't mind, can we drill in a little bit more on the personal okay. I'll thank you for that. So, so most people don't have to work with all of the mental tools and metacognition, right? The frameworks and mental models that the vast experience that you've have had. Um, so my encouragement typically for them is, Hey, let's build some mental models for you.

So at least you have some simple tools to help you make decisions straight that's aligned with your soul, so to speak, right? Yeah. But in your case you have plenty of tools, uh, [00:19:00] does it make it easier or is it S is it, or does it make it harder to find that intrinsic whisper of an inspiration of what you were really about?

Jonathan: I think there are two.

Answers to the question. Um, what am I really about? What is, what is my egocentric goal in the world? It's it's to explore as much as I can to see as much as I can to know as much about everything as I can. It turns out that's not a goal that most people have. Like most people don't wake up on Tuesdays and think, you know, gosh, I want to read this book.

Um, or, or think if I'm not doing hardcore learning several hours a [00:20:00] day, I'm not feeling alive. That's took me a long time to realize that's not most people's path. Right. 

CK: I relate. 

Jonathan: I relate. It's it's my path. It's a weird path. Um, uh, and so I'm really clear on that part of me. The new question. The new whisper for me is about what's my relationship to others, right?

As they start to move from being the student to being, this is not quite right, but it's my Mr. Miyagi moment or something, you know, from being the student to being the teacher, right. Or the students being the master to now be HR. And how do I move from that? Uh, uh, kind of shift from being the rock star, to being the host and to being the, the, the person [00:21:00] who creates the space for everyone else.

And it's a different place for me, at least to be in, in the planet. I really enjoying being there and trying to figure out what it means. Um, you know, and, and, uh, from a, from a financial view, Uh, and from a success metric viewpoint, right. What, what does success at doing this mean for me? Um, so that's kind of the new, the new whisper.

Cool. And I try and try to turn up the volume on that, right? 

CK: No, I'm beautiful. Well, uh, that's something I'm deeply passionate about. How do you essentially, so one, one secret passion I'll make it public. What the heck, uh, is I believe so there's different trends, right? Uh, [00:22:00] populations, aging, uh, uh, automations coming online, therefore, and then people don't have enough to retire.

So therefore the aging population, there's a huge need to continue to be back in the, in the workforce. But right now it's actually cheaper to say, you know, Hey, thank you for your service. You're out right. Kind of, it's cheaper for companies to do that. So, so there is an ONTAP, um, workforce, right. Talent pool that wanting to continue to engage and be relevant.

So then how can we create the bridge so that they can continue to contribute, right. To make a living, to, to find significance in their work, to, to have relevance to the career and so forth, bigger question, um, that I'm exploring. And this is something that I'm deeply passionate about. And for me, I think the answer, Eliza things, um, courses, [00:23:00] I believe there's a lot of wisdom and, um, an experience that, yeah.

These people can turn into products, right. Courses, and then to really benefit a lot of people. And I've seen just a lot of different successes, a monster, even my friends. So this is an area that I'm really kind of thinking about. 

Jonathan: So my, my question, and I think what you're suggesting is kind of online courses, but my question is, you know, how quickly does that commoditize, right?

There's there's only going to be one. Uh, when I was teaching, I used to like to teach illustration skills for, uh, for architects and interior designers. And, um, what I rapidly realized was there's this guy named Ryan Church. He did a lot of the concept art for the second round of star wars [00:24:00] movies. And he was a much better teacher and illustrator than I ever was.

And he put out DVDs as like, But I'm not ever going to be a better teacher of that skill than he is, but what I can do, you know, is start to look at what are the things students aren't getting, right? What are the aspects of what he's teaching? So I play the videos during my class, and then I go around and work with the students individually on, on, on the little blocking and tackling issues.

And, and that gave, created the best of both worlds, where you had a really differentiated product in terms of what I was able to teach. And you had like a best in class product in terms of this DVD. Um, and so I think that we're going to have to figure out not just how do you put LinkedIn learning courses on video?

I mean, that's all important, but how do you do the second [00:25:00] piece of. 

CK: I am. Yeah, I'm a huge geek around transformative transformational learning. So it's not just content dump on someone and then say your job is done. Rather. It is actually delivering the benefit of, Hey, here's where I was before. Here's what I want to go after, but a whole different conversation, a different rabbit hole.

I want to focus on your book. So wherever we going to talk about that offline, um, uh, let's see. So, one thing that one key, big ideas that you have is, Hey, history repeats itself. Look at the past, look at the present and look at them systematically as a way to anticipate and predict the future Allah being the dojo.

So then when, you know, unpredictable, black Swan event happens, you're ready to go. That I capture the big ideas correctly. Is there anything you wanted to qualify? What I just said? 

Jonathan: Yeah, I'd put a little more, a little more specificity on it. Uh, [00:26:00] my argument is that if you look at a longer historical period, a lot of things have happened before the outcomes might've been different.

Um, but we can actually see, you know, there was a day in 1927 when the Mississippi was 80 miles wide back then it, uh, it displays 600,000 people today. It'd be 16 million people. Right. So we can look at these things. We can look at 1918, uh, and, and probably in some of the, the first world war, um, you know, we, we see the Spanish flu breaking out and we see the economic impact.

We see the actions that were taken. We see the dominoes that fall afterward. And so we can know a lot, not just about.

What has happened, but the follow on impact afterward. And I think that's what we need to be looking at. [00:27:00] Um, the second piece is, you know, we talk about black Swan events. Uh, these individuals, these, these, these incalculable risks that fall out and out of the sky. Um, the reality is those are much more rare than you might imagine.

The guy who coined that term, a guy named Nicholas to lab, uh, you know, he said, COVID, wasn't a black Swan event. That 2008, wasn't a black Swan event. Uh, you know, September 11th. Well, we didn't know the day, like the fact that there was going to be a. Terrorist attack on the United States, uh, by Al-Qaeda like that was a radically increasing probability.

And so when we take a look at these things, you know, the issue isn't like, what day do they happen? It's how likely are they to happen? And I think that's what we fail to, uh, to calculate was, was pandemics, [00:28:00] uh, were radically increasing probabilities, zoonotic, uh, things that move from animals to humans, uh, seems to be, uh, an increasing probability.

Um, and what we missed because we've gotten better at containing them over the last couple of decades, was that eventually, you know, eventually the, the, the dike, you know, the water was going to go over the dike. You know, this is the thing we perpetually medicine, Louisiana, right? I don't know it's at the head of the Mississippi.

Eventually the water is going to go over the Dyke. Eventually mother, nature's going to win the question. Isn't what, how often that occurs. That's not what we should be paying attention to. What's what's the following impact when that occurs, are you ready to take advantage of that change? So, so here's, the challenge is going to be, they're trying to bail out your, your, your shift.

CK: I'm sorry. I keep interrupting, but, but here's the challenge, [00:29:00] Jonathan, that nobody likes to buy insurance, right? The question isn't isn't if a disaster or hit you in your lifetime, the question is always win, right? So that's why you buy insurance, but no, but the reality is nobody likes to be reminded of their mortality, of the fragility of lives.

Nobody likes to buy insurance. So then this is how do you position, right? The, the, the marketing aspect of it. So then they. What by insurance, so to speak. 

Jonathan: Yeah. Well it, and I think the, the reality that we miss at least in business is that, uh, during the 20th century there were about four major business shocks a year.

Right? Whether it was a legal thing, like civil rights law, or the foundation of the creation of new regulatory agencies or world war, whatever it was, um, [00:30:00] things like that happened about four times a year. And so the question isn't, how do you create insurance it's w how does your life change? How does your planning change when you expect to be disrupted, as opposed to, when you try to avoid.

When you expect to be disrupted, you design your organizations, you design your life very differently. Like we can try and kind of build an armor, our ship, build an aircraft carrier, or we can try and be a kayak that might tip a little more, but when it gets flipped, it responds faster. When you take a look at a business market, at least, uh, what you see is that most strategy assumes that the playing field will be even right.

That it'll, that, that, that it won't change. And so what you want to do is build a strategy, assuming that, you know, the rules will stay [00:31:00] the same. Well, that never seems to work. What you need to do is build a strategy that assumes the rules will change and figure out how to take advantage of that. It's a harder question for sure.

CK: Got it. So, okay. So my insurance metaphor is wrong because ultimately you're saying it's not about recovering the downside rather it's how do you become anti-fragile so to speak, how do you be recovering faster, but also stronger and grow from it? Yeah, absolutely. 

Jonathan: Absolutely. Yeah. And I think, I think, yeah, Nicholas Nassim, Nicholas , he's very, who's the guy who coined that term antifragile as well as the black Swan.

He's really good at coining terms. Um, you know, he he's he's, um, he's a mathematical economist and a. Uh, who played in the stock market, ran enterprise risk types of things in stock market for a long time. So he's really good stuff, [00:32:00] you know, explaining statistics and the impact of statistics. What my book does, that's slightly different is it comes from the role of a practitioner who's been in business, right.

About like, okay, well, how do you actually apply this? Like, instead of saying, antifragile is an important thing, it's how do you become anti-fragile 

CK: right. Yeah. You're the sensei, right? You're the dojo master trying to teach other people how to think the way you think. So actually, let's, let's fast forward on that note just a bit, now that you have certain, um, mastery, right?

With these mental models and ways to think about things and then anticipate, you know, a fragile or fragility causing events, things like that. Can you paint us a picture, a movie of what's possible when you have that black belt level skills, what's lifelike was company collects. So that way people who don't have that white belt level can be like, oh, black [00:33:00] belt level.

Now I could see. Right. 

Jonathan: Um, yeah. So, I mean, Elon Musk is a great example of setting yourself up, uh, to do massive things. Um, he typically does things that are, you know, if you look forward into the future, these are things that should exist, uh, that the governments will support if they, uh, get to a certain scale and then falter, um, and that the current industrial structure makes them.

And so he looks for a thing in an environmental shift that will need to happen in the future. He looks at industries that are not able to make that shift. And then he figures out how he's going to have that backstop in 2008, right. Uh, space X almost went belly up and NASA had tobacco. And why did they do that?

It wasn't because they believed in space X, particularly it's that [00:34:00] they were tired of, of the, the Lockheeds and the Boeings of the world jacking up the price of space. And, and they, they saw this, this other, this third party that even if it wasn't successful, get forced down prices. And so he found, he found a way, he found a lever that was far bigger than him.

They could guarantee a success if he got to that certain, uh, to that certain place. Right. Whether that was intentional that time or not, it certainly become a part of his toolkit moving forward. And so when you look at someone like Peter teal, you look at someone like Elon Musk, they repeatedly use these tools to either think through which investments are smart investments or to operate companies that, uh, will benefit from change.

CK: Um, so essentially you didn't say this, this is my interpretation is, Hey, here's why I want to. Let me think about what other players, the secondary effects, right? [00:35:00] What, how this could change the dynamics of the game and then basically move to, uh, dynamics where they're incentivized to help you one, once you get to a certain size or some positioning, is that roughly correct?

Jonathan: Yeah. And let's get specific about what happened, uh, with Elon Musk and space X, because I think it's a good example. We look at this as an incredibly innovative company, it sure is, you know, but what really, what really happens there, uh, coming out of the cold war spending on, on space, uh, was dropping, you know, no one was buying, uh, R and D for new Intercontinental, ballistic missiles.

So on and so forth at the same time, uh, semiconductor technology, computer technologies were decreasing the size, uh, that satellites needed to be. Right. The space shuttle was designed basically. So you could release satellites, but by the time that it got built, [00:36:00] you know, satellites were smaller and then they dropped another, you know, category of size, uh, after that, by 2005, 2006.

And so Musk looked at this and he said, okay, uh, the, the Lockheeds the Boeings of the world they're designed to do what the government wants. The government no longer wants, um, Intercontinental, ballistic missile systems, uh, or whatever we were saying. We were doing with rockets for NASA. Um, but they no longer want those heavy lift systems.

Uh, and yet these companies are tied as prime contractors to the government to do things the government says. So if I do things the government doesn't care about, and these guys are stuck with their, their high costs, labor and their 50 year old PhDs and so on and so forth, because they've got to have them for defense reasons.

Um, Then I can get a long way before they even start competing. And that's exactly, exactly what he did. [00:37:00] The second thing that I think is really interesting about the early phases of space acts is the types of agile systems, the types of project management approaches they were using. Yes. They came out of PayPal.

Yes. They came out of Silicon valley, but these types of rapid iterative testing, putting your engineers closer to the factory, so on and so forth, these were things the Russians had done previously to catch up on ICBM, uh, R and D as well. And so this is, uh, these were approaches that had actually worked in this technology category in this product category and he just moved them into a different space.

So there wasn't as much innovation happening there initially, as you might think, but there was a bigger idea and there was, you know, obviously the mastery of showman. But a lot of what he was doing was traditional strategy of blocking and tackling and, and, and linking, you know, removing as many [00:38:00] unknowns from the system as possible, but doing it in a way where its competitors couldn't compete and where he'd have an edge and he'd have some backing, you know, if he ran into a wall because he was delivering price competition for the first time in decades in the market.

CK: Yeah. I really like the way that in your book, you may hear my case study of how he uses a single spreadsheet, right? Chunking down all of the costs, the raw material, labor, and all that stuff to say, all right, it takes about $200,000 to raw material to make a, a muscle, and then use that spreadsheet to launch a hundred myths, not missile rockets, right?

Yeah. 

Jonathan: So he goes down to he's very, you know, you kind of think about who he is, what's his background. So he has a degree in applied physics and he has a degree in an economics or statistically driven finance from, uh, from the Wharton school. So [00:39:00] what's this guy really good at he's good. At first principles thinking he thinks about what are the materials costs for this thing.

And then he thinks about things in this statistical models and kind of observing systems and what economists call stock flow models. That's his kind of natural way of thinking. Uh, and so when you take a look at. When you started taking a look at these systems, you said, okay, you know, the cost of a rocket, the materials cost the steel, the copper, the whatever.

It was about 2% of the cost of the actual rocket. Most of the rest of it is labor and overhead and tooling and all of this stuff. How can they remove all of those pieces? You know, can I take new Aero, Astro kids who don't have opportunities in Boeing? Cause those things are slowing down, give them opportunities, give them responsibilities.

Can I put them closer to the means of production so that they can figure out ways to cost, reduce or [00:40:00] remove, uh, external vendors from the system and all of those things that Congress loves, uh, but are good for a private business. Um, and so at one point, I think he's, he's trying to build shells for as, for as rockets.

Uh, and he's going to companies that make, uh, uh, canisters, large, large canisters for dairy. Right for, to hold milk. These giant, these giant, these giant cylinders to whole milk. Right? Kind of going to like whoever ball aerospace or whoever it is that does that for, for everyone else. I don't know if that solution worked, but the point was, he was, he was looking at where our adjacencies that I can take advantage of that removes tremendous amounts of costs from my system, uh, whether it's labor or whether it's other people who have the existing stool, tooling, and skillset, and a much lower margin business.

CK: Yeah. And I think one let's see the insight that he has, which [00:41:00] reduce a lot of costs was, Hey, let's make the body or whatever the thing is called reusable, boom. That insight. Right. But I think what makes it, 

Jonathan: so that was that it took almost 20 years to get there, by the way, like, it wasn't, it wasn't like that happened overnight, but that wasn't it.

That was early on a goal.

CK: So, so I guess I'm not yellow Musk, right? Don't plan to be don't, don't don't want his job at all, but I w I love, but I love the systematic way of thinking about things, right? So that way we can, I think in your book again, I'm paraphrasing is the reason why you want a systems. So that way you can duplicate, right, that this, this exploration of possibilities and then solutions, and really think it through versus just, you know, a serendipitous event, a divine insight, you know, you had a thing in a shower and that may or may not work, but that is [00:42:00] not antifragile.

So by having a system I love systems is as you can just feel my passion. That's the why. That's why I love talking to a fellow systems guy. So, okay. You 

Jonathan: can solve, you can solve different kinds of problems. I think that both of these things are true, right? That, that you need to get away. You need to take a shower, you need to overwhelm your senses so that you can have new kinds of thoughts.

I think that's important, but it really helps when those thoughts are occurring within a system and you know, where those ideas fit, as opposed to just kind of. 

CK: Yeah, so, okay. So let's, let's, let's help our listeners that's helped me, right? Let's say I want to help the, you know, the aging workforce problem, right.

So let's, let's go on and build, you know, a system that helps me systematically explore the problem space, right? Market risk technology risk, and then also the opportunities, [00:43:00] um, how, like just high level, I know you can go really geeky about the details high level, how would you help someone create their own system?

Jonathan: So I think the first thing is to understand what are the major. Uh, we talked about rogue waves and these kinds of undercurrents, these smaller waves that combined to create massive change. I think the first thing is understanding, you know, what those things are. Not that any one of those will be the seed of the massive change, but, you know, once that spark hits, they will drive the spread.

And in the, when I was at HP, we did several years of work on identifying what those major knowable trackable changes will be over the 2020s. And we talk about them in the book, obviously, uh, there's a whole chapter. Um, but the first thing is there is starting there, like, what are the major social trends?

Uh, what are the major economic trends? What [00:44:00] are the major technological trends that we see happening? Individually could have significant impact, but when they overlap could have massive impact. So you were talking about changing demographics, right? That we have this older population and you were talking earlier about artificial intelligence, right?

Can we start to use automation tools, uh, robots and so on and so forth to start to backfill, uh, labor shortages? Yeah, there's this, there's another thing to be thinking about here, which is, um, at least in the United States, the vast majority of our economy, uh, something like 67% is driven by consumption.

This is why in the face of COVID. When, when the economy shut down, we had all of the stimulus spending and we were just trying to, to keep the money rolling, uh, paychecks to people who were unemployed, you know, just so that there was, there was rapid spending in the economy to keep the, to keep the machine running.

As we get old. [00:45:00] Right. We're going to see people spending less. We're going to see people earning less, and we're going to see more pushes on the pressure on the social safety net. Right? When you take a look at, you know, uh, uh, healthcare spending, half of that is government, right? Whether it's whether it's, uh, uh, veterans or whether it's, you know, social security or Medicare, Medicaid spending, that's a huge issue when all of those things accelerate, coming out of Afghanistan, coming out of, um, you know, the middle east, these, these continuous wars, uh, that you have.

Uh, healthcare costs. And at the same time you have an explosion of individual healthcare costs. In fact, uh, you know, it's, it's, if you just follow a linear projections, I think it's well over a quarter of GDP of the global, uh, of the U S spent total economic spend, uh, by 2030. I mean, that's not viable to have [00:46:00] that kind of a drag on an economy and see growth, right?

Like that's, that's just, that just makes no sense. And so one of the places where you could really think about, uh,

you know, the, the, the social impact on this, right? So we talked about the economics, the changing demographics, the technology, the social impact, right. Is that Congress is going to have to do something, right. They're going to have to figure out how to constrain healthcare costs. And they're going to have to figure out how to decrease social security, Medicare, uh, payouts eventually, you know, and so what we've seen is that, you know, retirement age is, has gone up in the mass last number of years to try and, uh, deal with this.

We've seen, um, you know, you're seeing this discussion about, uh, Medicare and negotiating for, for, um, uh, pharma for, for pharma, for, for drugs, um, to try [00:47:00] and deal with this, but there's going to be increasing pressure, you know, in places like, uh, healthcare administration, which was one of the massively growing areas over the last 20 years and in healthcare costs, how do you just kind of bat down the, the cost of private administration?

Does it make sense for, you know, private insurers to, to be a part of the system? Um, does it make sense for, uh, you know, a lot of doctors are saying, Hey, we want. We won't work with Medicare and Medicaid, you know, can you know, it, should that be a free market? I think this is going to be a real discussion in the next decade of, you know, should, should, uh, should your hip replacement doctor be able to set their own price?

Yeah. Should your general practitioner be able to set their own price and most of the much of the world, um, that's not how it works. So I think my point is, if you have this larger [00:48:00] picture of what's going on around you and, and what could happen, if these issues start to overlap, you can start to prepare yourself to take advantage of them.

So one of the things we did at HP looking at those specific issues, right? That we're going to have these tools to automate, to improve diagnostics, so on and so forth. Uh, we're going to have an explosion of healthcare needs. We're going to have an explosion of, um, Uh, interest in, how do you decrease the cost of, of, of healthcare?

One of the key things is getting diagnosis earlier so that you can start to manage, uh, so that you can start to manage disease before it gets out of control. And so while we can't talk too much about it yet we've publicly announced or the company has publicly announced a smart diagnostics capability that they're rolling out.

And part of the goal of that was, you know, looking at these changing demographics, but we'd also said, Hey, you know, this [00:49:00] probability of a, um, of a pandemic is going up. Yeah. So, you know, how do we create a, the question was, how do we create a business that's going to be, has a chance of being successful no matter what, and it's going to have good compound growth, but at the same time, how do we create a business that, that takes advantage that takes advantage of, you know, that, sorry, camera's a little goofy, but it takes advantage of, of volatility that takes advantage of roadways.

And if you can do both of those things have a business, that's going to be pretty good. If the future doesn't happen and have a fit business, it's going to be great if it does. That's when you have a real win. So it's really about looking at that bigger picture. Not because you shouldn't be trying to hit the quarter or doing, you know, do projections or, you know, be a responsible product manager or meet shareholder responsibilities.

It's because if you have something that does both, you have the opportunity to have, you [00:50:00] know, what they call a zoom. Right. Whereas zoom walked into 2020 and they didn't expect to do 26 times growth, you know, or an Amazon moment where, you know, they walked into 2020 and they didn't think that, you know, in 90 days they were going to do 10 years of growth in their retail business and their, and their online retail store business like that wasn't on their, on their agenda.

But both companies were set up to take care of the scaling if it happened. And I think that's the real thing. They were able to absorb the growth when the, 

CK: yeah. Let's actually drill in on that and real quick. Again, let's bring back to the dojo analogy a bit. So it was a little bit more practical for someone who's not running zoom or on Amazon and so forth.

Right. For sure. The idea of dojo practices you want to practice daily, right. Or whenever you go on there. So then you're well versed. You're well prepared, you know, train the conscious competence skills into unconscious competence skills. So [00:51:00] when the time hits, you can react muscle memory style. Right. So the question, so now bring it to the idea of what we're talking about, the entire fragility training to resiliency training, right?

What is the, the motivation. To do that one, uh, two, how do you keep that positive mindset? Because let's say, if you look at just all the rising costs, you're like, oh my gosh, it's so overwhelming. Right. So how do you keep a positive mindset there?

And then three, how do you concretely, um, level up into, in your resiliency training? Like what is the frequency? The, the indicator that you're actually leveling up, because I assume if I throw you a difficult problem right now, you're calm as a cucumber because you've been doing this for awhile. Right. So what are some of the, I guess, as a multilayer question, pick whichever that you feel like answering first?

Jonathan: Yeah. [00:52:00] Um, I can answer how it's happened for me. Um, So I do a number of things in my life, um, that aren't comfortable. Uh, I constantly choose to learn skills that I suck at.

Uh, you know, and why do I do that? Uh, I do that too, not just to learn the skills, the skills are irrelevant. It's it's to practice being in that ambiguous space, being in that world of unknowns. Um, the result over time is that I'm highly skilled in this really broad range of things ranging from, you know, I cook it, uh, an incredibly, very, very high level to, uh, I'm comfortable dealing, you know, with economics issues too.

Um, I failed, [00:53:00] uh, algebra three times in the high school. Um, And yet I spent a lot of time learning about mathematics and mathematical concepts. So I'm very comfortable talking with statisticians, talking with economists about these issues, even if there are things that, that, for whatever neurological reasons I can't do.

Right. I understand how to talk about them and how to work with them. Uh, and I'm always going out and trying to touch those new spaces. Like I said, I'm, I'm a learner, right? That's my, my jam. So it's, it's, uh, that's one thing the second is being really clear about what your goal is about what you want to learn.

So when I was learning how to cook, um, you know, my goal was I'm a, I'm a really mediocre process manager, and I wanted to learn how to manage really complex processes in real [00:54:00] time. And so what it was learning how to cook, wasn't just out of. Yeah, the big it was. How, how do I cook a 12 or 20 course Michelin star meal?

Not because it's a good idea for me to be a Michelin star chef, but because if you're dealing with producing a hundred different components, putting them on the plate, feeding them to everybody at the right temperature. And you're doing that over a course of days. Yeah. Then you become a really good at process management.

Right? How, how does, how does, how to plan the thing, how to, how to organize the design of the meal, how to think through the recipes, how to think through the production processes, uh, and so on and so forth. And that hobby is actually at one point became a professional, um, part of my life. But at the same time, it taught all of these other skills they need.

No to [00:55:00] be an effective operator, especially dealing with new types of situations, you know, how to remove all of the unnecessary risk from a complex and, uh, kind of chaotic project. Mm 

CK: Hmm. I 

Jonathan: love it. So that's, that's kinda my, my recommendation. Find something fun. Uh, find something fun that you suck at, uh, that will teach you the skills that you need, uh, to do what you want to do.

You know, it's, uh, I don't recommend the, the Mr. Miyagi school where it's, where it's like, let's wax a bunch of cars. Like there are more fun things it probably do with your life. 

CK: Now. That's an interesting insight though. So. Bringing a mental model that a lot of people use, right? So there are four stages of learning, unconscious incompetence, right?

Conscious incompetence, conscious competence and unconscious competence, right? So as you move through the different stages, now, what you, what you were telling. So the second stage, the [00:56:00] conscious incompetence part is the most painful, right? So what implicit, you didn't say this, but you're implying that embrace the discomfort.

This part is the part where helps you to be more resilient and also other areas as well. And then also find a skill that you do desire to learn and embrace the, the, uh, uh, conscious incompetence part is. What do you say to that? 

Jonathan: I think that, I think that's true. I think there's, there, there is another piece within this, um, you know, Nolan Bushnell says something along the lines that the inventor of Atari, he says something along the lines of the most fun games are the ones that are easy to learn, but hard to master.

And, uh, within cooking for me, one of the most powerful things was learning how to break down the, the individual lessons so that they were easy to [00:57:00] learn, you know, but maybe a little hard to master. So if you want to learn how to use a stove top, for instance, like learn how to make a perfect French omelet like that.

If you, you will learn how to see the temperature of smell, the temperature of the oven, understand everything about that system, because if you're. Egg, you know, which is, you know, paper thin is off by half a degree, it will have temperature. It will change the, the texture of the omelet. And so you learn how to get really precise, just doing this one thing, making a hundred omelets, right?

And that one skill, that one, Mr. Miyagi skill of the wax on wax off from the karate kid, you know, it plays out in a hundred different applications, uh, in the kitchen. It was out in anything you could possibly cook, understanding, [00:58:00] uh, temperature in the kitchen and how to do it in an intuitive way. So it's not like I have to click the things in and have the thermometer going.

Like that's all important too, but those are training wheels that help you build the. 

CK: What, by the way, this is OSI. We can move on to another topic if you want. But since we're talking about a learning, are you more of a intense learner? Like I gotta hit a hundred, you know, omelets today kind of a thing, or are you more of a joyous learner?

I will cook as long as I feel I enjoy this process, then I'll stop. And so then that way I don't carry on the emotional energy of being too difficult. Like what style of learner are you? 

Jonathan: I'm an obsessive learner and service their herd style. 

CK: Explain what does that mean? Obsessive learner? 

Jonathan: You know, like, I, I think it's probably the a hundred omelets.

Like, [00:59:00] I, I, I, I know that for me, the way to my wife is different. She's kind of the, the joyous learner of I'll do it. Tell him board for me, you know, my work ethic is about. Knowing that I'm hitting my marks. It's not because they care about making lists or achieving lists or, or any of those things. They just want to know that they've gotten to, to a skill level so that when they come back, you know, I'm at that skill level and I'm not starting over again.

Um, so for a lot of those repetitive things, it's about that, but you can th the other thing about learning skills, like Wynton Marsalis, the, the Coronet trumpet player, I think I forget if he's a cornice or a trumpet player, but jazz, jazz musicians, you know, he talks about practice and he says, yo, at the beginning, I practiced eight hours a day because I didn't know what it was practicing [01:00:00] today.

I practice 15 minutes a day because I know exactly what I'm trying to learn. And I think there are different stages in learning any skill. Right. Like today, when I'm, when I'm learning, you know, when I'm learning something new in cooking, it's a very, very small thing. And I know exactly what I'm trying to accomplish.

And in most cases, I wouldn't say that 15 years ago, uh, I knew that I was just like, I went to this, uh, Michelin star restaurant and, and it was my first real experience with fine dining. And it was like, that was, that was unbelievable. I don't know how that happened. I don't know how food could have moved from what it always had to this entirely elevated level.

And it was about like learning and I couldn't have broken down the [01:01:00] individual steps, you know, 15 years ago I had to kind of go through that, that, that, uh, I'm not a good school learner. So I have to kind of go through that, that had beating process. Um, Uh, to figure out what those parts are. So I think it's kind of a combination.

The joyous learning is, has gotta be what happens when you're figuring out what the parts are. Like, you just gotta assume you're going to suck. Um, and then you can start to be a little more intentional maybe once, you know, what the, what the intention is. Yeah. 

CK: Yeah. It's a baby steps. I mean, dude, so many parallels about even like meditation or exercising or even psychedelics or book writing it's there are so many parallels there, but this is not about learning so much are gonna move on to your book.

So, so bringing in this framework for someone who you're teaching, you know, the anti-fragility, uh, the, the resilience training, the [01:02:00] looking out into the world really sort of, uh, far ahead, right? Seeing the rogue waves coming the undercurrent and then the rogue waves.

What specific skills in terms of which data to look at, what to look at, what do they track? So that way you can walk someone who is maybe, maybe a white belt in looking at this, to where you're at, right. Black belt. Like what skills would you say? 

Jonathan: So I think the first thing is really understanding, you know, three underlying principles, uh, of resilient.

What I call resilient growth. The first is awareness, right? If you're not aware of why you need to change or your people aren't aware of why they need to change because of things in the external environment, why would they, what they're doing has worked. [01:03:00] The second is around behavior, right? So if you see the rogue wave coming, if you see the tsunami on the beach, if you don't have the skills to get off the beach, to understand, to take advantage of and be resilient to change, then it doesn't matter that you see the wave coming.

And then the third, and this is perhaps the most important part is creating a culture that looks out, uh, onto the horizon, as well as looking inwardly and Mo many organizations, maybe even most know the focus is really on financial, uh, and operational efficiency. When we reel what we've realized between, uh, 1999 and 2019, is that three quarters of the causes of sustained decreases in business value.

Yeah. Our rogue waves. They're they're ex massive external changes. Are there massive failures and strategy [01:04:00] that, that rippled back into the company? And so what we need to be thinking, uh, about is how to create a culture, how to, how do create this hard and soft incentives, the communication structures in our companies, uh, in our lives that allow that looking out well, focusing on performance inside, kind of very much like you were saying about, uh, the point of mastery is understanding what's going out on the world, you know, in the hearts of others and then in your own heart.

Um, so I think those are the three major skills. So how do you start, right. It doesn't really matter where you start it's with any of these, but the place you can start today is reading the newspaper, ideally a better one, like the economist, or, you know, uh, I like the, uh, the Nikkei Asian review. Uh, and instead of looking at a [01:05:00] headline, look at all of the headlines and then like, maybe write a list, uh, go back three months, random day, write down all of the headlines from the different sections, and then look at what they mean together, right?

Not individually like China does this, the U S does this Modi in India, does this supply chain disruption over here? Like, look at them in aggregate, look at the whole newspaper instead of any individual headline and, and practice doing that practice, looking at what are the social, what are the economic worth technological changes that are going on, uh, around us.

And then asking if these overlapped, if these hit me simultaneously, what would they mean for me? Um, Right. How would they take advantage of them? Because the issue is never, or very rarely one thing, it's a combination of things. [01:06:00] When you take a look at the 2008 financial crash, right. What was really going on?

Uh, uh, construction labor is one of the major drivers of economic growth in the United States. Congress was trying to drive that, uh, one of the major causes of wealth growth in the United States is when families, uh, become homeowners so that they lock in their costs. Uh, the cost of housing, um, uh, we saw a shift in the way we were managing risks.

We were starting to use new statistical tools to build derivatives, to balance risk in really complex ways. Um, And what happened when the economy slowed down is all of that cascaded one into another, into another most people didn't see this coming. The ones that did, they did really, really, really well.

Right. The Ray Dalio's of the world did really, really, really well in that [01:07:00] situation. Not because they were smarter than you or than me or than anybody else it's because they took the time to look under the sheets since he, you know, uh, to see if there was anything. So, uh, so that's the real skill is like learning how to like look at the look, you know, stop reading the New York post and stop reading Facebook, get into harder heavier data, uh, look at it in aggregate instead of individually, and then ask what would happen if this collided, these things that might be happening in India or might be happening in Myanmar or Lagos' what would happen to me if they happened here?

CK: Yeah. I really appreciate that. By the way, I have been accused of being too much of a monk, too much of a geek because I like to just do, you know, re stuff in my cave, what I'm interested in. And I, the, my rationalization is that, Hey, is if [01:08:00] it's outside of my sphere of influence and it's not, you know, I can't do anything about it.

Yeah. It, it, um, Eh, amps up my nervous energy. So I'd rather not right. But in this conversation it helps me to like, okay, so there are tactical, um, skills I can learn to also practice the wide angle lens around the daily. And it's also see the relevance. So it's not just, it's not just, Hey, things are happening out there.

But now this practice, this, this, this, this specific practice helps me to think the relevance to my small world here on the, on the internet kind of a thing. So I really appreciate this. 

Jonathan: I, I appreciate that idea that I'm appreciating the dojo model more as we're talking. And that's exactly what it is, is how do I simulate?

Why do I simulate these things is to figure out how I can use the tools. That I have that. What is, what is in my sphere of [01:09:00] influence to take advantage of it? And if there are more, you kind of asked, what's the first step, right? The second step is figuring out, okay, what steps can I take to increase my optionality, right.

To increase, uh, uh, my potential, if those things happen to increase my sphere of influence if change occurs, because the one thing we know is that change is a constant w I happen to believe maybe you do that. The world is moving faster. I happen to believe that our data systems, our economic systems, our supply chains, uh, our politics are becoming more globally connected.

And that means that we're going to have more volatility, right? Uh, things are moving faster. There's more energy in the system. Things that used to happen over there. You know, it took 60 years for the, for the black plague to get from. Uh, from, from Asia to Europe, it took what, you know, a sneeze and a couple of days for it to get from UConn to the United States.

Right? Like [01:10:00] things that used to not matter. Cause they happened over there suddenly, suddenly matter cause they happen over here. So we've got to take this global perspective and we've got to think about the world, a world where volatility is the norm or changes the norm where rogue waves are the norm instead of the edge case.

CK: Yeah. So quick question there I'll use Bridgewater as an example, right? Daleo Bridgewater. They w they were able to benefit from their insight, right. Their discipline, right. Their mastery. Right. So part of, and I think it's, uh, well, they're, they're a hedge fund company, right. And individual contributors vote within their culture of what to invest.

And there is a direct incentive to perform at a high level, right. Seeing far ahead of seeing the risk and so forth. Um, not so obvious in other cases, per se, let's say in regular businesses, they don't [01:11:00] necessarily well, so a lot of backdrop, a little background, I was a chief culture officer for a startup of 250 people.

One insight that I got as during my tenure there is you get what you incentivize monetarily as well as social status. Right. So then, so, so, right. So then how do you create the incentive structure, monetary or social to look ahead for risk as well as opportunities like this, this would make what you were saying.

Even more concrete and topical for people run their organizations. 

Jonathan: So if you run the there's, I think there are two, there are three questions within this one. If you run the organization and you dominate the board, there's one set of answers to, if you're a middle manager in an organization where you don't do that, there's a second set of answers.

And third, if you're an employee, um, [01:12:00] uh, there's a third set of answers. So if you run the organization, you know, we talk a lot about how to insert in, in chapter eight of the book. Uh, we talk a lot about how to create processes and incentives that encourage people to look outside, uh, of the organization and to create, to create a driver, to drive innovation in the organizations.

Um, and it really comes down to, you know, love people for the quality of their experiments and the quality of their thinking, as opposed to the. Yeah, the second you start, you know, rewarding people for the quality of their results. They're going to do things that they know will be successful before they start lots of places where you want to do that.

But not when you're asking people to experiment and innovate, because by definition, if you're asking them to experiment and [01:13:00] innovate, you're in a situation where failure is also a known outcome and you don't want, you know, you don't want people to tell him telling you that you're, you know, uh, HIV negative when you're HIV positive, right?

Like you really want the right data and you really want the right experiments. So make sure that you're encouraging that. And you're paying people to do experiments as opposed to do experiments that have the results you want. Hold on. 

CK: Oh, hold on. So queen injection. So what I'm hearing you say is. Reward them for the rigor of their experiment, 

Jonathan: correct?

Yes. Rigorous the rigor of the experimental design, correct? Your breaker of running the experiments, uh, and the rigor of sort of the, the insight that leads the hypothesis that leads to the experiment. Right. That's [01:14:00] totally different from rewarding people for the outcome. 

CK: So if you don't mind, let's drill that drilling even further.

So reward means what, like, Hey, so sales is easy, right? You get percentage commission that's, that's easy. How do you reward rigor of an experimental design? Like it doesn't, it's not as a direct, you know, percentage of outcome of it. Yeah. 

Jonathan: No, it's, it's, it's harder for management. I'm not denying that, but, uh, we talk about five steps in this process and the book kind of, how do you assess the, the, the start point?

How do you look at where this experiment would exist within a system? Uh, how do you look at the range of possible outcomes? Uh, how do you uncouple threats and opportunities so that you're minimizing downside risk and maximizing opportunity. And how do you, in, in many research programs, it's not one experiments, it's a battery of [01:15:00] experiments.

And how do you make, how do you reward, uh, looking at the experiments as a portfolio, as opposed to individual experiments? Like what's the success of the portfolio, because you can statistic, if you do enough, Experiments statistically, they should add up to more than the sum of the parts. And so it's, it's really about that asking people to do that kind of metacognition, um, and framing up why they're doing what they're doing.

Not because they shouldn't be intuitive in what they're doing. Uh, and, and not because they know why they're doing it necessarily before they start, but at some point that should be a part of the process. Right. And, and that's what you want to be, uh, encouraging. Um, the second thing is that that, uh, I think is really interesting is rewarding people for cutting their own projects, right?

Like that's a really weird [01:16:00] idea, but why don't we do that? Like when someone says, Hey, we started off, we thought this was a good idea. It turns out that it was dumb. Uh, I'm going to cut it before anyone else can. We should reward that instead of what we, what I see in a lot of corporate cultures, which is hiding failure, right?

The second you hide failure, you remove the ability to learn from it. Uh, the third piece and, and I can feel what's going on in people's heads right now. So I want people to, just to take unlimited risks and fail a lot, but it doesn't seem like a good idea. Um, it's not, unless you talk to them in terms of risk bands, what's the most, and what's the least amount of risk that you'll tolerate from them.

Right. So are you rewarding them for a certain amount of fees? And you're rewarding them for a certain amount of success. And that should be different for different roles in different places, in, uh, [01:17:00] different people, uh, levels within your organization. But you've got to look at both sides of that coin. If you just, if you just say here's the maximum amount of risk I want you to take, you know, what you're doing is you're just incentivizing everybody to be sheep.

And that's not what any of us wants leaders. 

CK: Yeah. I appreciate that too. And then in my mind, what brings to mind is basically how to draw boundaries around it. Maybe a duration, maybe some amount of budget, maybe an amount of personnel, or perhaps even like reputational risk, things like that. So that way there's some boundaries around, Hey, you can roam inside of this.

Jonathan: I mean, I think, I think I w I want you to take this much X, a reputational risk. I think that's a powerful and saying it publicly, right? So you inoculate them again. Like, I think that's a really powerful way of potentially looking at these kinds of things, right? Like, I want you to fail 30% of [01:18:00] the time if you're not failing 30% of the time, I'm like, I don't want to hear from you.

Like, it's a weird, it's a weird idea, but how else do you, how else do you encourage it and give permission? 

CK: Um, lastly and I am watching a time man and an hour and a half go by quick. So you're the black belt, right? I'm curious to know if you have any plans right here. Here's an idea. What I desire. And you can do whatever you want with it is, Hey, I want to get better at this.

Okay. I want to study with Jonathan, right? Why, why doesn't Jonathan sorrow his own dojo. So that way people who are interested right in learning these resiliency skills and anti-fragile skills, and really thinking about things as a leader, as a contributor, as a manager, whatever level they're at as entrepreneur, is that like a Visionaire can say, all right, Jonathan has a framework.

And he has made, you know, some tools to [01:19:00] make it easier for people to grasp the, basically go from white belt to black belt. So, so the idea for you, whatever you want to do with it, it's up to you. 

Jonathan: I would, I would love to, uh, love to do that. We're in the process of building out training modules and, and all of those things right now.

Yeah. Going back to what you're saying, you know, I think a lot of this is experiential. You know, you can't, you can't, you can't read about, you know, uh, jujitsu,

you got, you gotta do it. And I'd love to, as things get a little better here, figure out how we can do some experiential training together. 

CK: Yeah. I think it was super worthwhile. I mean, especially right. The premise before you even begin all of this, whether you like it or not, the world is becoming more volatile, so to speak, right.

Things are coming online. Things are [01:20:00] changing quickly and politically or otherwise. There's a lot of moving parts. And, and from my perspective on the more spiritual, personal. Uh, control was an illusion anyway. So we'll say if that's the case, then might as well learn these key skills. So then you can navigate through a free agent and navigate thrive in this future that has more possibilities.

Jonathan: Well, this there's more potential and more options than ever, and they're popping up faster than they ever have before. And I think that's the thing that we forget. The reason the world is scary right now is we're starting to be able to see the future in a real way for the first time. And that means that you can see the future in a real way.

For the first time. This is your opportunity to change it, to shape it to, to, to surf the next wave. 

CK: I'm [01:21:00] excited. I love the idea of becoming a big wave surfer, right? Ride these hundred feet, you know, rogue waves. I don't, I don't swim, but I like the ideal of it. I'm very non-biased so really appreciate the way you showed up, Jonathan.

I really 

Jonathan: there's your next skill to learn. See cat. There you go. There 

CK: you go. From my life on the line. I moved back out there. Amen. Um, go get the book rogue waves. Future-proof your business to survive and profit from radical change. Thanks so much for being here 

Jonathan: and feel free to reach out to me either on my website, Jonathan brill.com or please follow me on LinkedIn.

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