 Hi, everyone. Welcome to today's Transformation Talk with Brightline. Every month we at Brightline strive to bring you face to face with a senior executive and thought leader to discuss transformation, to discuss leadership, and basically to make sure that we are discussing the latest and greatest in this field. Today, I am Yavnika and I bring to you Auti Watt, who is the chief, who has been the chief operating officer at ING and also a senior executive at BT. And he has 25 years of experience with the transformation and making changes at an organization level. So we are extremely pleased to have you, An, Auti and thanks to everyone who's joined in today from all over the globe. So let's get started, Auti. So when we are discussing about leadership and transformation, the first aspect is what is a good leader, right? And what's a good organization? And you see some challenges there, right? You see disengagement, you see a distrust, right? Of the authority, right? Of leadership itself. So yeah, like the floor is yours. Like feel free to recap it for our audience who's joined in. Okay. And apologies for the technical difficulties. It seems even two years into the pandemic, we haven't still sorted out all the networking challenges. So apologies. And thank you very much for all the listeners who chipped in and gave us some feedback. So I will briefly recap for the purpose of probably cutting out the first 15 minutes. So when we look at good organizations, as I mentioned, I find it sometimes easier to look at bad organizations these days, because a lot of the statistics that we are finding in kind of daily news and surveys are pointing towards the fact that something isn't quite working. And I'm always looking at two levels of statistics. One, our businesses as an economy, as a totality, what impact are we having? And secondly, inside our single organizations, what is going on? And at the first level, the most striking statistics is really that now more than 50% of global citizens believe that our capitalistic system is doing more harm than good. And behind that, 90% believe that actually the system doesn't fully benefit employers and other stakeholders beyond shareholders. That said, more than 70% of people want organizations to do good things inside society. But more than again, 50% of people that believe that managers are not entirely honest and actually are failing to pursue those greater aims of organizations. So at a societal level, the picture isn't pretty. Then if we turn inside the organization, as you already mentioned, I think most people are familiar with the engagement statistics. So some believe that more than $7 trillion a year wasted because employees are not engaged. But if you go a little bit further, it's very interesting to see, even within and outside the pandemic, what is now happening. Some statistics say that in the UK, more than 70% of people feel burnout. In Germany, it's even 80%. Jeff Pfeffer is suggesting that burnout is the number one, it's the fifth leading cause of death in the United States. And I've seen some statistics where still more than 50% of jobs are not perceived to be meaningful and offer development opportunities for people. And then that context, the most recent studies show this YOLO wave coming. And I found that surprising. So YOLO as in you only live once and more than 35% of people saying after this pandemic, I really need to do more with my life and my work and they're starting to look for new jobs. And I'm actually talking to people every day and they're confirming this trend that it's for some of the sectors very difficult to find employees. So I think we need to ask ourselves that question. So what is good work? What is a good organization? And this is where I think I cut out. So I was doing a little research and what you find is that work, the meaning of work has significantly changed during the last centuries. In the ancient days, manual works specifically was perceived as being something that shouldn't be done. So only the lower classes would have engaged in manual work. Then in the middle ages with the Benedictine monks and this prayer and work ethic, people started to perceive work as a means to self express, develop their own characters and do what God would want us to do to express the beauty of the world, so to speak. And then with the reformation and the Protestant work ethic coming in, work was even more upgraded. So work was becoming a means to display that you were a good person and not being, being idle became a sin. And then our current capitalistic system, it's on the other extreme. So from being almost not tolerated to becoming the identity of what we are. More than 70% of adult people today believe that their identity is their job. And in our current system, it's not that the work is there for us to self develop, but we are there to feed the machine, so to speak. And I think this is very important. And I came across a book by Manfred Kitts, the reason why he said meaning in life and work is the difference between making a living and making a life. So it's really trying to balance the needs to maintain ourselves and pay the bills, but at the same time, using those activities that we're carrying out at work for something that is more than just a job, so to speak. And this is really what got me thinking and is part of this project that we have embarked on together with a colleague from the University of St. Gallen to say, okay, if that is true, so work needs to serve life. How does that work? And at the end of the day, I'm quite convinced that organizations can become engines for aliveness, so to speak, at three different levels. One, in the way that they act inside the economy, inside the ecosystem. Two, in the way that they create almost a mini society, so a container for the individuals, the employees and communities that are impacted by organizations to create something together. And thirdly, as a breeding ground to enable the flourishing of the individual. And I think this then becomes a completely different viewpoint of an organization as a means to yes, do an activity that hopefully is productive and efficient, but at the same time is enabling this greater energy inside the system and this aliveness that is being expressed through essentially relationships within and beyond the organizational system. I think this is really where kind of we're starting to see organization with the different payoff eyes almost from this maximizing machine towards kind of a living body, which is energetic and is trying to make sure that we all contribute to something greater. Right. So, so, what you said is that you do see and you do observe that people are now getting more conscious about like, what is their purpose, right? And balancing that with like making a living or stay on an organizational level, making a profit. So, my question is how do leaders, you know, how should good leaders, right? How should they balance the dual purpose of being good and being profitable? Because it is sort of important to make profits to be sustainable, right? I mean, there are, as we see the limitation of the capitalistic world, but then how do you move beyond the expectation that, you know, profit? And that's it. Like, how do you solve the dilemma, right? From a leader's perspective. Very good question. And I'll go a step towards the organization again and then take your point on the leader. So, I think this balancing profit and purpose, which we are hearing everywhere, I think it's quite dangerous because I don't think that is really what we need. And I explain why. So, firstly, what is profit? Profit is the difference between revenue and cost, right? So, it's an every employee inside the system, every supplier and every customer is part of either revenue or cost. So, profit is uniquely to repay the shareholders, right? So, and of course, the idea is that the shareholders are the owners and they put the risk and therefore we have to repay them. But I think in a society or an economy where more than 80% of what is on the balance sheet is immaterial. And it's where funding is certainly in most cases, not the most problematic impact or let's say, ingredients to create creativity and value. I think this notion that we should focus all our activities on profit creation is rather something that we need to really look at. And I also don't believe that the shareholders are the owners arguably in an age where many of the shareholders are just investors who don't have any direct interest or understanding of what the organization does. We have now a great distance between shareholders and managers and employees, right? So, that arguably that idea that we need to be careful that managers don't abuse the money of the shareholders is actually opposite, right? The shareholders probably might abuse the organization if we're not careful to do things that uniquely are there to optimize short-term profits. So, I think also one, the notion of profit is probably not the best measure for value. And secondly, maximizing profit certainly is not what I believe needs to happen. Fair profit is probably something that we need to invest in. So, what is a fair profit? Rather than maximizing it, what is a good and appropriate repayment of all the different stakeholders who put their funding into the firm? But I think what this points to is that certainly an organization is created by public fiat, right? So, only because the state has some rules that can say now five people come together or so and you have an organization and it's a body in itself. Only by the public kind of laws is that possible. And I think with that comes the responsibility to say actually whatever organizations do, they need to sustain the society that allows us to create them. And therefore rather than balancing profit and purpose, I think it's about anchoring every activity that the organization does in a wider support for a good society and the commons, so the good life of all. And that is different to balancing. It's kind of saying the ultimate primate is to create a good life for all the citizens. Within that context, I have to be efficient and I have to repay people who give me capital, right? So, and I think that requires a change of the way that organizations are set up. We have B Corp movements. We have public benefit companies in the US. So, we have different legal vehicles. But I would suggest we need both for the governance accountability of boards as much as the way that we are actually creating organizations, different legal constraints for that. And the second point is again in order to be like a mini society. So, to enable employees and other stakeholders to flourish together, we need to create almost a container where people acknowledge certain norms and the interdependency that they have within each other and work towards that. So, being an employer is not only about having freedom to choose and participate, but it's also about acknowledging that there is a need to co-elevate, to all become better together by being in touch with each other. And that requires cultures that I think nurturing this. And that then becomes the question of the leader. So, how does a leader in this organization becoming a quite different animal, so to speak? How can they act appropriately? And here I think my first suggestion is always that leadership, even in the 25 years that I've been trying to become a better leader, has become a lot more difficult. Doing command and control in an organization that doesn't need to change every day is relatively, I mean, it's never simple, but it's easier, so to speak. Becoming a leader today, we're on the one hand, we have external complexity by faster changes, technology, regulation, customer requirements, continuously demanding our attention. And by the same token, having also this ambition to do things differently internally, I think leaders have to upgrade their skill sets. And it's quite funny that in the last 30 years, and Gary Hamill says this all the time, management science has not really moved. But we're still in business schools teaching very much the same stuff that I was being taught when I was doing my undergrad and then my MBA. And so, we haven't moved a lot. And I think free things are especially striking. So, the first is leaders, whether they like it or not, have to become politicians. And frankly, managerial activity has always been political. We have always been trying to stay away from politics, but being in an organizational compound is always political in its very nature. And now, I think, as we heard, 70% of people expect CEOs to play a role in wider politics. So, I would say philosophy and ethics seminars for leaders being able to play in that space. Secondly, in order to craft better organizations that are delivering this aliveness and the connectivity amongst people requires leaders to become, I always say like acupuncturists, they have to be able to sense complex adaptive complex developmental systems and understand not to intervene with the symptoms, but look at the under what is causing the patterns in organizations to occur. And how to create these flourishing, psychologically safe, embracing and kind of solidaristic systems that can nurture life in a way that it should. And finally, and most importantly, maybe, I think leaders have to let go of leadership. Ultimately, leadership has to become a capability that is shared throughout the organizational system. It's not one person. It's not a kind of whatever argued series of character traits or long lists of requirements and behaviors. It is the personal maturity to not lead with authority. Just stepping back from that command and control leadership style, so to speak, and becoming part of a nurturing, mutualistic system. And I think that requires a lot of courage and that requires also a lot of discipline to not step in and take away control and to constantly be able to use your own self as almost an antenna, a radio antenna to understand what's going on inside the system to capture this transference of what is happening around you. Right, right, Auti. So you mentioned, I mean, quite, I would say important statements, right? You said leaders are more like, say, you know, politicians or I would say like gardeners, you know, who are not like, you know, command and control now, they have to deal with a lot of complexity, given the structural changes, given what's happening outside amongst us, like that there is, there is more demands on the leader, right? So I see a related question and this is by Bertie. And he asks, like, so first of all, you discuss the role of companies, right? And that is profit making, right? And probably you hinted at job creation, right? What about wealth creators? And then in this system, how do you envisage the role of the government, right? So first of all, like, what is the role of the companies or the corporations? And then what is the role of the government in this kind of a system where, you know, it's much more political, it's much more contextual, it's much more, I would say, soft, right? Than, you know, just knowing technical skills, right? Or just knowing your stuff. I mean, and so one thing I want to say is that when I, I'm always say when I was young, I had all the answers. Now I'm old, I've got all the questions. So I think that I couldn't possibly pretend to have all the answers. But I certainly have reflected about some of these questions. And on the organizational side, as I said earlier, I think the organization has to become a responsible actor within a wider ecosystem and ecology. And I want to stress this ecosystem point, because kind of to a degree, philosophy as much as the economy have to suit the era, the environment that they face. And they're not just there kind of to adapt to it, but they're there to make it better. And in our day and age, an individual organization seldom can actually have positive impact on some of the big challenges of our days. And Colin Meyer once said that the purpose of our organization is to solve the planet's problems profitably. So in order to say, to solve something like global warming, at least at a sector level, different organizations have to come together. I would even say for leadership development and flourishing of the employees, different organizations should go together. Right? I was talking to an organization in oil and gas who faces extensive downtime during normal operations where people have less to do and are therefore kind of less busy, but also find it less exciting to be part of the company. So they're starting to create alliances with other organizations, even nonprofit, where employees can choose and kind of mix almost different experiences throughout their career development. And I find that is that is very interesting. So one becoming an actor within an ecosystem and taking accountability for the whole. And then from a political perspective, where of course I'm very little qualified to have an opinion, I would suggest there's two things. One, governments or public sector organizations are also organizations. So in that regard, I think they have to pursue the same kind of principles or work to the same principles as private sector organizations in regards to ultimately creating a society that is good. And then when it comes to the governmental kind of legislative activity, when it comes to laws and regulation, there I think certainly I believe creating too much regulation is problematic because it undermines the very sentiment that is at the basis of acting with virtue, acting with ethical accountability. And that is what I'm seeing in lots of organizations, right? Rather than trying to kind of not only do no harm but do good, people are becoming experts in compliance. So they do exactly what the minimum standards require. And by doing so, I think that there's someone who said managers are becoming morally mute. So they're withdrawn from the accountability to actually do their very best in supporting the ecosystem to just doing what is required by law. And that is a phenomenon that is I think very, very dangerous. So I don't care. I don't have a strong opinion whether regulation is good and bad or bad per se, but I think you cannot solve with rules and with laws what is the question of character. And I think, as Aristotle would say, we need to focus on the character building of modern organizations more even than on the culture building. So that's what I would say. And that aside, though, I do believe we need to probably have better disclosure requirements for organizations beyond profit. There are many initiatives like ESG and CSI and so on. I don't think we are at the optimum of what is there yet in order to make sure that we have the right level of requirements in regards to doing more than just financial returns. Right. And you talked about not doing the minimum. You talked about building character of the organization rather than focusing on the culture. And I think in the same line, Louisa has a comment and a question. So we have been talking about say upskilling of the workforce. And you're also talking about how do you upgrade the mindset of the leaders? And how do we make sure that they are also engaged and involved in the process of creating something, creating good relationships with their workforce, for example. So how do you tackle the, how do you start and where do you start? Like how do you make leaders aware that there is a new dawn, we have to step up and we have to be engaged leaders. How do you change that mindset and where do you begin? Again, a very, very good question and not one that is easy to answer. I think it was Louisa. Louisa, thank you very much. I think, so one, again, we need to in my mind enable organizations holistically and intentionally. So we should never just look at one piece of the puzzle. Skills might be one piece of the puzzle, but we shouldn't go to our old style talent management because as Dave Ulrich is always saying, the organizational capability is much more important than any individual that we can introduce. By the same token, however, having one asshole, so to speak, one wrong person can ruin a culture inside a wide kind of part of the organization. So I think there's a need to take a step back and go on the balcony and really look at, okay, how's the organizational system working? What are the symptoms? What are the causes and how can we intervene? Now, in that context, however, skill development, I would suggest, is not as important as what I call ego identity development. So if you look at what is called vertical leadership development, it resonates with some of the developmental psychology of the last century, where you see that people throughout their lifetime develop in stages. And I think really the important aspect of this is to combine the traditional, what I call horizontal skill development, so be that communication or presentation skills or anything like that. So or even technical skills with emotional intelligence. So all the ability to work with others and craft relationship inside the system, but ultimately also including an aspect of spiritual development or consciousness development, the ability to look at oneself as a leader inside the organization inside the system. And how am I interacting as a person through my being, through my acting, and therefore shaping the structures around me? And I think for me, this was the hardest, only when I became what is called a psycho dynamic coach. So someone who as an executive leadership coach is really starting to look at how am I as a person in the relation with the role that I have and how do I see the role vis-a-vis the other people in the system perceiving that role? And how does that role then play inside the wider organizational system? How are these links? And what does it all mean? Only when you have that ability to stay with the trouble in really looking at the emotional aspects of this and the relationships in a complex system, the relationships are almost more important than the nodes. And we need to be able to, as leaders, we need to be able to have that ability to step into the system in a very conscious fashion. So I would say vertically, development is tough. It needs to resonate with developmental psychology in terms of the ability to let go of your own conditioning and of the role that you have inherited inside a system and develop these abilities to look at yourself, look at the system and analyze it in a much more emotional and complete fashion than I think leaders are traditionally doing where we normally judge ourselves based on how good we are at executing or at the role and status we have in the system. So from VP to SVP to EVP and then we become a chief and then we must be good. Yeah, it's such a different aspect of looking at leadership and sort of unlearning. So it's really new for me how you give a different perspective to the aspect of how can leaders become more human instead of saying, okay, here is an organization. How do we change the structure? How do we change the culture? Like really sort of putting the onus on ourselves as leaders and seeing, okay, where do I need to unlearn and how am I connected to the enterprise or the organization because ultimately it is made of people. And so Alberto has a question in terms of organizations or people who are trying to search for meaning in their jobs. And he asks, do you think that ESG companies will have an advantage on attracting new employees looking for meaning in their work? So do you think there are certain kinds of companies maybe who are practicing ESG or CSR? Do you think they have an advantage over offering employees or offering their leadership greater meaning at work? Well, so I want to say two things because I'm a deep thinker, so to speak. So the first thing is I have my issues with ESG and CSR. So one is the details of those regulations. McKinney Zanini, who is a good friend and the author of Humanocracy, looked at ESG regulation in particular to find out how much of these people practices that we are talking about here is actually contained in ESG regulation. And based on his finding, the answer is very little. So you can and it's normally binary scoring. So kind of Amazon could score well on engagement practices as much as Southwest Airlines. And frankly, I think there's a big difference between the two. So I'm not so sure whether any of these free letter acronyms really make a company good. So that said, and I think it's the same with our CSR or SDG goals. Very often what we're still in the mindset of is kind of a deterministic linear sequential non-complex world where we can just create a big program. And here we are program managers. So we can create a big program, get resources behind it, plan milestones, KPIs and some sort of success indicators and then go after it. That's not how normally how behavioral change happens. So I would be warning against any of these if used as a method. You have to use them as a mindset and then they serve the purpose in that context. But you have to, I think again, step on the balcony and look at what am I doing? Who am I? And why am I here? What do I really desire? And how can I enable the organization to walk into the right direction? And this also goes with the notion of purpose. So in a traditional mindset, when you hear the word purpose, before you know it, you're creating mission statements, beautiful PowerPoints and yet again milestones to pursue. And I like what Meg Wheatley once suggested in terms of what real purpose is. And she said, real purpose means you're taking a step back. You're taking a deep breath. And then you ask yourself the question, what does the system? What does the constellation that I'm in require of me, call off me to contribute to its flourishing, to contribute and elevate its energy to a higher level? That's a completely different way to look at purpose, right? Rather kind of a new statement, which becomes just an objective to actually saying, let me become a vehicle, let me become a means to greater good. So I think we have to be careful with that. But that all sets. So if an organization is good by something that with the nice person who has asked the question, we could sit over a glass of wine and agree on, I absolutely do believe they will have an advantage. I mean, if you look at these yellow statistics, right, if 75, if 70% of people say they miss, they lack meaning in their current jobs, and 35% of them say, I will start looking for a new job after this pandemic. Well, I would say Mamma Mia, there should be companies who could offer them an advantage by being more connected to an important purpose than others. No, absolutely, Arti, they're such good questions. And I was thinking, actually, it's like, we see so many billionaires going into space, that maybe the point, that's their chance, right? And I'm thinking, well, there are so many problems, not there's anything wrong with that purpose. But I'm just saying, there are so many problems on planet Earth that we need to take care of and then step back and say, okay, how am I, as an individual, part of these, not only problems, but the solution. And then I look at my work and it is, there is such a big gap, I need to reduce the gap between what I think my purpose is and what exactly I'm doing. So I think these are really good questions that you presented in terms of shifting the mindset from saying, okay, how do I change the culture? Like, how do I change this person's behavior, right? Who's saying, how do I go back and start from myself and ask, like, what is the point, right? Like, really what you're saying. And what stance can I almost, what stance can I step into inside this system of connections, relationships, and so on to make a positive difference? Because I mean, our life is short, whether we like that or not, we can kind of rockets on the moons, we can do all these crazy things to avoid the final question, which is, what is the point of being here? And I think I happen to believe it's to make a small positive difference. And in that context, like you say, I think we, we should ask ourselves that question more often, we should go on to this balcony or look ourselves in the mirror a little bit more often, to make sure we're not missing a trick. We're becoming, and many people don't have the luxury to do that. So I think one aspect of the policy has to be to put everybody into a position where the basic needs are being catered for. So call that the basic income or so. I don't, I don't care, but I think we are rich enough as an organization. And I think it was Keynes who suggested by this time, in his wonderful, he wrote a little essay for the economy for my grandchildren. And he suggested that by 2030, we would only be working 15 hours a week. So I think we should be rich enough as a planet to give every child, every person the ability to have the minimum they need to not fear for their existence. And then above that, we should actually think more about how can we express that unique potential that is in us? How can we cherish life? And yes, we have, if we're in an organizational system, as you said, we have to be efficient, we're producing something. But even at that, right? So let's make sure we're not producing stuff that actually nobody should ever need. Let's make sure we're not producing stuff that is not creating harm to the economy or other people, or to the ecology or other people. Let's be a little bit more thoughtful in the way that we are, we are doing things. Because guess what, right? Just a massive material richness, riches is not going to save anyone. And like you say, I mean, yeah, let's solve the problems on earth before we go to bloody mass suggestion. Yeah, so I'm just thinking, what are the three top things that you would say to a leader who wants to begin? Like how do they start now? What after this presentation? What are the questions that you would request or say that everybody should ask themselves these three questions? I would love to know that. Three questions. So you're challenging me again, Javneka, on this call. So I think the first has to be like you suggested there. What is the purpose? And kind of almost do this in the good old style. I think Stephen Covey suggested, right? So kind of one candle, middle of a dark room, write your own eulogy. What would you want people to talk to? What would you want people to say when you're dead? So make it dramatic and think about, okay, what is the real purpose? Ask five times why, not just once, right? And figure out with and don't take any excuses that the world is big and you're small. That's fine. But that doesn't mean anything because you can make the world a better place in the relationships that you have. Right? So first thing, think about purpose and take the time and do it deeply. And I'm enjoying my executive sabbatical at the moment. I would almost say if you're a lead and have been in leadership roles for more than seven years, take a break and do it properly. Right? That's, I think, number one. I think the second is about look at the organization that you're in and think about within your remit, right? Within the things that you can influence because people often say, oh, I cannot influence the board or the things at the top. Okay, that's fine. Horizontally speaking, within your remit, think about what small things you can do and who you would need. Right? Keith Ferratzi always says, choose your team, not based on who your team is, but based on the objective, the purpose that you have. Find the players around you. Create that coalition and be a servant to that coalition to start to make things a little better around you. And again, I think how do you craft these organizations? We can look at structures. We want more self-management. There are lots of ideas out there, sociocracy, holacracy, rent and high. I'm a big fan of sociocracy, so learn about these things. But again, do it in a way that it's not you doing it, but you have to instill that knowledge and that ability to self-reflect inside the organization. Right? And just be a little kinder every day. I loved the ex CEO of Tupperware in a wonderful fireside chat with Rita McGrath. He showed to the audience that he had a little piece of paper that he always had with himself, with an acronym like three or four letters. And those were the virtues, the principles that he wanted to practice every day for every decision that he was making. Right? So what are your, what's your touchstone? What are your principles that you want to live up to when it gets difficult, right? When it gets heated, what are the things that you will stand up for and be courageous about as a leader? Maybe those things. So this one, maybe these are free things. So if the first one purpose, the second one, look at the organizational system, how can you serve that better? And who do you need around you to make it work? And thirdly, you as an individual, how can you become who you can be? And practice that. People are very often, I think, mistaken in terms of going on to endless retreats, meditating and yoga, classing themselves into thinking about who they are. I think we are a set of patterns, hence the way to change the way we interact is about creating new habits. And what are the principles? What are the virtues that you want to practice through decisions for actions? Be clear on those. Is it kindness? Is it love? Is it compassion? Is it bravery? What are the things that you want to be measured by, by yourself, not by others? Right? What are those things that you want to live up to? So those are hopefully free, interesting thoughts on the Tuesday night, CET time. Excellent, Arti. We heard so many thoughts and so many interrelated questions. I think the audience really participated and thanks for being so patient with us, audience, for the technical rate that we had. But I mean, everybody's been so wonderful and you've got a wonderful interaction going on, Arti. I really must thank you. It's been a pleasure and we learned a lot. I personally learned a lot and I'm sure this has been awesome. So I'm just like, there's so much to reflect right now. I just want to say thank you and have a great day, all of you around the world. And it's been a pleasure. Thank you so much. Likewise, make a difference wherever you are. It was a pleasure and thank you, Nika. Take good care. And we will share the recording for the session so everybody can look back at what we discussed and we'll have it up on our YouTube channel. So really looking forward to sharing that with all of you. Right? Thanks, Arti. Thanks, everyone. Take good care.