 Hello, everyone, and welcome to a discussion of the future of the workplace with Rajiv Peshwaria and Dave Ulrich. I'm Courtney Fisher, the Associate Director of Marketing at McGraw-Hill. I'd like to start with a brief introduction of our thought leaders. Rajiv Peshwaria is the CEO of the iCliff Leadership and Governance Center and a business leadership and strategy consultant who works with Fortune 500 companies, government agencies, and nonprofit organizations. He served as Chief Learning Officer at Coca-Cola and Morgan Stanley and held senior positions at American Express, HSBC, and Goldman Sachs where he helped the firm found its Leadership Academy, Pine Street. His book Open Source Leadership came out earlier this year. Dave Ulrich's latest book also came out earlier this year called Victory Through Organization. Dave is the Rensis Leichert Professor of Business at Roth School of the University of Michigan and a partner at the RBL Group, a consulting firm focused on helping organizations and leaders deliver value. He studies how organizations build leadership, talent, and culture through leveraging human resources. He has helped generate award-winning databases that assess alignment between external business conditions, strategies, organization capabilities, HR practices, competencies, and customer and investor results. Before we begin discussing the evolution of leadership and the workplace, could you briefly describe the central philosophy behind your latest book? Rajiv, let's start with you and open source leadership. Okay, thank you, Courtney. I'll try to make this quick in four points. I'll try to summarize the book. The first is the 21st century is defined by two mega trends, Uber connectivity and Uber population. So Uber connectivity obliterates traditional business models at lightning speed while at the same time enables new ones in which there are hardly any frictions and where marginal costs tend toward zero. Uber population, on the other hand, creates exciting business opportunities. We are going from the current 7.5 billion people to 10 billion people by 2060, giving us that many more consumers and customers to take care of. But also it creates daunting and unprecedented challenges for planet Earth in terms of food and water shortages, the gap between the rich and the poor, and geopolitical conflict to name just a few. So in light of this background, the key conclusions the book makes based on an extensive global study are, first of all, given the challenges that the world is facing, leadership needs to be redefined as a burning desire to create a better future and finding long lasting energy to keep going despite formidable resistance. Just showing up to work and executing tasks is not enough anymore. Second, and this may be surprising, that positive autocracy must replace democratic leadership if companies are to succeed in the open source era of breakneck speed. Third, crowdsourcing both internally and externally is the answer to accelerating both innovation and leadership development. And finally, setting employees free to do as little as they want will actually increase overall productivity and organizational success. In short, leadership and management practices need a complete overhaul. Thank you, Rajiv. Dave, can you give us a little bit of your central philosophy? We are interested in how do organizations create value, and we think values defined by the receiver more than the giver. So in any relationship it's not what I do, it's what somebody gets from what I do. We've studied that over the last number of years, and we've tried to identify how does an organization create value not only for the employees inside, but also the customers, investors, and communities outside. And we've collected a lot of data, and this is a book with data from about 32,000 people and 1,200 businesses. We're trying to say, what is it that happens that creates value for the person inside and for the customer investor outside? And what we found that was really fascinating is that the quality of organization versus the quality of the individual talent. So does value get more created when you have great people, the war for talent, or does value get created when you have a great organization, and the set of capabilities? And because we had a big data set, we were able to parse out the differences. We found that organization had four times the impact, that the war for talent can be fought, but if you're going to win the war, you've got to get a great organization. And so the title is Victory Through Organization, and how do you create great organizations that help people win? And then the next step we did in the book is we said, so what does that mean for the skill set of HR people? So if HR people deliver great talent, great leadership, and great organization, what do they need to know and do to make it happen? That's what the book's about. Thank you, Dave. Now to set the tone, can you describe your general philosophies around the changing workplace and the factors that are responsible for it? Rajiv, if you'd like to go first? So, you know, thanks to Uber connectivity, which I just spoke about, there are three things that are affecting the workplace. One is that ordinary employees, junior people, are more empowered than ever before. Everybody today has a supercomputer in their pocket. You can call that a weapon of mass construction, or a weapon of mass destruction, depending on how you use it. But leaders, on the other hand, are completely exposed, completely out in the open to the extent of being naked. And the third is there is a massive shift away from full-time employment towards free agency. By some estimates, about 40% of the U.S. workforce is already a free agent. So these three things, ordinary people more empowered than ever before, leaders completely exposed and naked, and a huge shift towards free agency. I think that's what's shaping the workforce. Very interesting. Dave, your take? It's always hard to answer a simple question that has a complex answer. But in the strategy world, Mike Porter and others have said there's five forces for strategy. When we look at the world, and everybody's trying to do the future of work and what's the next stage in work, as we looked through a lot of that, we found there were four forces. And so force number one is the context. And the context for us includes what Rajiv just talked about brilliantly around connectivity. That's the digital world. It's the global world. It's the millennial world with demographics. It's the political world. It's the social world. It's the environmental responsibility world. But that's the context of business. And those things are clearly evolving. We talk about those in some very specific ways. But that's one of the forces, is the context of business is changing. And the pace of that context is going faster. This is the volatility and certainty. Just the pace, the half-life of knowledge is getting shorter. So in all of those contextual factors it's shorter. Number three, we found that we find that boundaries are being removed among stakeholders. That what you do with an employee or a leader shows up in how a customer responds to the company. For example, we found that 30% of an investor valuation of a firm is tied to the quality of leadership in a firm. So we see stakeholders getting boundary lists. And the fourth one that Rajiv alluded to is really interesting. It's around what's happening with individuals. And we had five or six things, but I'll just capture one of them. We had four forces, again, context, pace of change, stakeholders. And the fourth is individuals. One of the most fascinating things we ran across is when we looked at the cause of death and what causes people to die, is it smoking, obesity, depression, or social isolation? And what we found is that it wasn't smoking or drinking or obesity. The number one thing that people have studied is social isolation. And so one of the things we're finding at the individual level is that employees, both at work and not at work, are becoming increasingly socially isolated. And I just saw a study this week that was done that the average person, 12 to 24 in the U.S., is spending five to six hours in front of a screen. And a group did a study that I saw reported. I didn't see the research. The more somebody spends on cell phones, and they're looking specifically at that technology, the more socially isolated they are. And so the technology is that should be connecting us or isolating us. And it's really interesting. Okay, so four forces. The business, context, political or social, technical, economic, political, environmental, demographic changes that are happening. We know that. Two, they're happening fast. Three, they're changing the way we think about stakeholders. And four, they're changing the way we have to think about people, that people are feeling socially isolated. And it's a bigger cause of mortality. And a final quick story. I shared that with one of my academic colleagues. And he said, well, what's the cause and what's the effect? And I said, you know, when the outcome is mortality, it's hard to get cause and effect unless you have a theology view and somebody can come back from death and tell you what cause and effect is. But I think those four are fascinating. And a final one on social isolation, which is the individual one. And I was thinking about it and tripped over it in my thinking. But my wife and I were in Australia in August, and we found a book by a wonderful sociologist who studied teenage girls. And one of the problems of the Internet is that when they're on the Internet a lot and they post on Instagram or they post on Snapchat, one of the things that does is it leads to suicide. And I kind of alluded to that, so I'll finish that thought. Because when people post, they always post great pictures. I'm assuming, Courtney, the last time you posted, you did not post a picture of you in depression. You called me out, Dave, yes. Well, I looked you up. I did not stalk you. You do not go there. I'm not stalking you at all. But we post happy pictures in happy places. And the woman who did the research said, a lot of the teenagers are going, I'm not that happy. And so we've got to find a way to manage this transparency world that helps us find organizations that give people a sense of meaning. Okay, but there are four forces. I'll say them for the fourth time and maybe they'll resume. Context, pace of change, stakeholders, and then individuation. Thank you, Dave. That's fascinating. On that same subject, do you think we should be scared of the future and where it's headed? Dave, sorry. Oh, is that for me? Oh, sorry, Dave. Yeah, it was just going on your last thought. Yes and no. I mean, am I excited about the future? I think we have to live in the future. Well, one of the things we found, let me try to link it to some of the research we did. When we're trying to find, you know, it'll be fun to see how Regis research relates to this because he's trying to redefine leadership. One of the things we found in this big study we did is what is it leaders seem to know and do that helps create value? So it's not about the competence. It's not can you set a vision? Can you engage employees? But what set of skills deliver value? And so, and most folks haven't done that. But the thing that had the most impact on business value, so does your business have success? Is the ability to navigate paradox? Paradox is a fascinating issue. And navigate not solve. Everybody says, oh, manage the paradox, fix it. One of the paradoxes is what you just said. Do I live in the past or do I create the future? And our answer would be yes. There is something in the past that you should, as a leader, build on. But you have to create a future for what's next. And it's navigating that inherent tension. And one of the things we found, especially with staff, HR people, those that were good at navigating paradox helped the business be more successful. Got it. They were also not very popular. Because when you navigate a paradox, you have to raise difficult issues. For example, if your business is too consensual. We all walk alike, think alike. You've got to raise the issue of diversity. If your business is too diverse and everybody gets to do their own thing all the time, you've got to raise the issue of consensus. Well, raising the alternatives so that you have paradox and tension does not make you popular. In fact, what we found in our work is that sometimes leaders and staff who navigate paradox are not seen in a very positive way personally. And yet that ability to navigate tension helps their business be successful. So my answer to you is, am I excited about the future? Of course I am. It's always what's next. I always hope the next step is better. But I don't want to leave the past behind, because the past is a prelude to what that future can become. Thank you, Dave. Rajiv, can you talk to us about the future of the workplace and some approaches for dealing with it? Yes, I think the future, it will be a mix of full-time employees and free agents with the latter gaining in number over the former as we go along. I think full-time employers, those who employ traditional full-time employees will have no choice but to give as much freedom to employees as free agents have. That means that employees, full-time employees will have the option to choose where they want to be on the typical 2060-20 performance bell curve, where 20% are high-performance, 60 are average, 20 are bottom. In today's world, free agents have so much freedom, and we have to give that same freedom to full-time employees. If somebody says, I want to only work at the minimum possible level, that should be okay by the employer as long as the person agrees that you will also be paid at the minimum level, and you risk being fired if you fall below the minimum. So the entire employee-employer relationship will become more honest because once employees are free to choose how much, when, and how they want to work, they will also accept responsibility to be compensated, rewarded, or even punished accordingly. The good news is, by doing this, organizational performance will be enhanced rather than reduced because, you know, thanks to the 80-20 rule, the Pareto principle, 20% of the workforce will produce 80% of the results anyway. So instead of trying to motivate everyone to work equally hard, leaders can be free to coach and mentor those that really want to work hard. Not everybody comes to work with work being their only purpose. So if we take the stigma away from saying, look, I only came here to work to pay the bills, but my real love is theater, what's wrong with that conversation if the manager says, look, that's okay by me, but remember that you will also be paid at the minimum or average level. Or a woman says, look, I was on the fast lane, I was working really hard, I was in the top 20, but for the next three years, I want to be in the average 16 because I want to take care of my kids, but boss, I will come back in three years' time and get on the fast lane again. You pay me average bonuses for the next three years, that's okay, but I'll do a great job at the average level. What's wrong with that conversation? So I think those are the two things. A, much more freedom to choose how much rent and how to work, and secondly, free agents, full-time employees, and overseas partners of all kinds are going to have to work together. Kind of how Dave was talking about earlier about the future of the organization. Very interesting. Thank you, Rajiv. Steve, do you have anything else you'd want to add? Yeah, well, first of all, I'd love, Courtney, also, to get your opinion. I mean, you have a unique perch where you get to see a lot of authors doing books and ideas, and you kind of live in an idea space, and it would be fun to hear your thoughts about that as well. But I'm not quite as strong as Rajiv is about free agents. We just did some work on that, and we saw that at least in most of the U.S. firms, it was 20% to 40%, and a contingent workforce is not dramatically new. I mean, this was what the Japanese did in the 70s, where they had buffer workforce in order to manage it. And so I don't think the whole world is going to go free agent. I think we're still going to have traditional employees and employee relationships. Where I strongly agree with Rajiv is that agency and the employee making a choice about how they work becomes a key. For example, what we see and have seen in our work is as you want to engage employees to give their best, to give their best effort, there seem to have been three steps. Step one is satisfaction. And what we found is, again, in our work, it's never the item, it's the outcome. Satisfaction, do you like your job? Do you like your pay? Do you like your working conditions? Doesn't seem to correlate with business performance or personal well-being over time. It's just I'm happy being here at work. So people went to an engagement idea, and it's does your boss give you the skills to do your job? Are you part of the flow of work? Are you engaged in work? Are you committed to work? And the correlations go up with outcomes. Engaged employees lead to more engaged customers. Where we're seeing the next step from satisfaction to engagement or experience is the concept of meaning. And meaning is not when you just have an experience at work, but you have an experience at work that ties in with your personal values and sense of meaning or what we've called contribution. And what we're finding is when employees have a sense of meaning from the work setting, it's not the experience of work that matters. It's the meaning they get from the experience. So is your boss a meaning maker? Does he or she help you find meaning from your work? Now where does that meaning come from? And I think Reggie really said it brilliantly. A lot of that meaning comes from autonomy and agency. When I have autonomy and agency to make my choice, so what Marshall Goldsmith has brilliantly suggested is that a firm take their employee engagement survey and in front of every item put the stem, to what extent did I do my best to work with my boss? To what extent did I do my best to have a friend at work? To what extent did I do my best to earn my pay, to build good working conditions? And when the question is to what extent did I do my best, the responsibility for the employee's meaning shifts from the company to help you get it to the employee to discover it. And so it's from satisfaction to engagement to meaning where I think we're going to begin to see the employees, whether they're full-time or part-time. They've got to be able to find that sense of meaning from their experience at work. And so final comment, there's a big move in HR right now, oh, build the employee experience. Well, that's not new. We did that with Theory X, Theory Y. The issue is not the experience. It's the meaning that you find from the experience you might have at work. Thank you, Dave. This conversation is really fascinating. And I think I really like the conversation, putting the onus on people to own their jobs and their responsibilities. And I think that's something that we've seen in the workplace changing in the past few years, and I think it's an important conversation to keep going. So, can I just go ahead with you? You know, Dave talked about autonomy and talked about employee engagement. It turns out, you know, we all know that the global employee engagement levels, when you look at all the surveys, are pathetically low, right? Take any survey, and overall it's pretty low. Some countries lower than others. But there was a recent study where they looked at job satisfaction of Uber drivers. And their job satisfaction is 78% globally. Why? Because of the point that Dave made, autonomy. I decide when I want to work. I decide when I don't want to work. And you don't need to tell me that if I don't work hard, I don't succeed. I already know that I am an aware worker in the open source economy. I just thought I'd add that. No, that's very interesting. And it kind of makes you take a step back and think about, you know, your personal decisions at life and wherever you are in the workplace and where you aim to go. You got it. So Courtney, as of the three of us, with a really full-time job, because even I kind of float in and out of this, what gives you meaning from the work you do at McGraw Hill? I think the meaning comes from working with authors, specifically, you know, getting to know each of you and working in the different spaces really brings that meaning to the workplace. I think at McGraw Hill we are kind of looking into these different aspects of, you know, people working from home sometimes and maybe working different hours. And I think that's something that you see. I think Brigitte, you made the point earlier, is when people can make those decisions, they seem to work harder and bring more success to the team. And that's something that I've started to notice as well over the past few years, I would say, you know, there's a slight change in the workplace. So these are all issues that I'd like to continue to, you know, be a part of and see happen. And especially as I know someone had mentioned, you know, working mothers, and I just came back from maternity leave a little while ago, and that's something that, you know, I hadn't thought about until it affected me and to look at, you know, companies in the way they respect that decision and the different things that women do. Nice. You know, we struggled with that. And one of the things, we did a book with McGraw Hill called Why of Work? And we identified seven things that give people a sense of meaning from their work. And over the last five or six years since that book came out, I've been really thinking about that. So as I listen to Courtney, to you, it's a lot around the relationships we have. It's around the autonomy we have. It's around the identity of the work. And when we can help business leaders for both full-time or part-time, it doesn't matter if they're where they are. How do they find meaning from their transaction or interaction with the work setting? And I think that's a remarkable question that I think we're still exploring. I don't have a great answer to it because I think it also varies by person and by time. When I was 25 years old, meaning was getting a paycheck so I could support my family. Now, a few decades past that, meaning is less the day-to-day substance and it's more the probing ideas that will have impact over time. So I just think, Courtney, you've just laid out a really nice set of ideas. Thank you. Thank you both. Okay, just moving on, and this is a topic that we've slightly touched upon, but Rajiv, if you want to give us your thoughts on the impact and contributions of the individual versus the organization. Sure. Well, I don't believe it's a question of individual versus the organization. I think it is and. And in the open-source era, which I described earlier, we need to recognize that thanks to the democratization and to 24-7 connectivity, individual work choices and motivations are changing. We've talked a lot about that today. And organizations, as we know it today, will also become much more open-source. You know, it's all about speed these days. And if you look at movements, you know, where instant organizations are formed for a cause just within minutes or in a very short period of time, thanks to social media or any other ways, we're going to see more open-source organizations with free agents and cross-border partners. I think far surpassing full-time employees. Some people are even predicting the death of the organization in about 20 years. I don't go that far. But I do think that the organization, as we know it today, is going to change considerably given that there's going to be three distinct parties involved, free agents, cross-border partners and full-time employees, with the third getting smaller and smaller. That's just my opinion. Thank you. Dave, your thoughts? And again, if we knew the future, we would be investing perfectly. I'm not sure I know the future. We did the research and it was just for us breathtaking and fascinating that when you look at individual skills and because we have 32,000 people across 1,200 businesses, we could get the skill set of the individuals. And then when you looked at the 1,200 businesses, the capabilities they had as an organization, speed is one of those capabilities. We found there were actually four or five that were critical. The number one was external sensing, the ability to understand external data and bring it inside to the company. It was the number one predictor of business performance, managing a culture, managing speed, managing customer. And we did the partition, which one has the biggest impact on business results, both short-term and long-term. And we found that it was four to one organization. And then we started looking at sports teams. How often is the leading player on the team that wins the championship? And in basketball, the team sport, it was 20% of the time. The leading score is on the team that wins the championship. In soccer, 20% of the time, the person who wins the Golden Boot in the World Cup is on the team that wins the championship. We found it in movies. 20% of the time, the winner of the leading actor, actress, Academy Award is in the movie that wins the movie of the year. Our sense is that individuals matter. You've got to have good people. But organization matters more. And how do you create the right organization, which it has to do with the capabilities like culture, speed, collaboration, innovation, customer centricity, that allow that organization to become more than the individual parts. And that's the work we've done. What's really interesting, the economist named Oliver Williamson, who won the Economics Nobel Prize, he said you have markets, which are basically organizations comprised of free agents. And he talks about market failures if you go too far down that path for a couple of reasons. Then you have bureaucracies, which are hierarchies governed by rules. And then you have clans, which are organizations governed by shared values. And his view is that markets are very helpful in some circumstances. And then clans over time become an organizational form that seems to win in evolving markets. I just threw out too much stuff. But we found, and again, I think it's fascinating, in sports, in movies, the individuals matter. But it's the collective team that matters even more. Yes, that's a very good point too. Thank you. Just to add, I completely agree with you that the organization is going to be important. In fact, if anything, it's going to be even more important going forward. The point that I was making is that the organization, as we've known it today, we've known it in the past, that's got to change. For example, you said culture is going to be extremely important because without the right culture you can't innovate, you can't do anything. How do you create a culture in a company like Uber or Lyft where these people are not even your employees? That's the kind of question that the organization is going to have to answer. That's the point I'm making. I think they're in violent agreement. Thank you, Rajiv. How can companies encourage and speed up the rate of innovation? Rajiv, do you want to take that one? Yes. This is, of course, in the age of speed, if you don't innovate fast enough and more frequently you're dead. I love the recent case of GE aviation. They wanted to redesign the brackets on which the engines are mounted so that the aircraft could fly more, be more fuel efficient. Instead of telling their R&D department here's $2 billion and here's a year's time, go ahead and design a new bracket that is 30% lighter, they set out a challenge to the whole world, 7.5 billion people and said, submit a winning design and make it 30% lighter and you'll get a prize money of 20 grand. That's it, 20K. Within three months they get a new design which is about 80% lighter without compromising the integrity of the aircraft and guess which part of the world it came from? It came from a small town in Indonesia. This is how Uber connectivity works. An aviation giant in Cincinnati, Ohio is able to find talent and find innovation in small town Indonesia at a cost of 20 grand only. My point in telling this story, you want to speed up the rate of innovation? Crowd source, crowd source, crowd source both internally but more importantly, externally. And to crowd source externally you have to have a very secure and different form of leadership. Only people who are secure in their skin can do so. Thank you, Rajiv. Dave, your thoughts? I totally agree. The place we ran into that about 10 years ago was at Eli Lilly. They had a site called innocent.com where they would put out a lot of content depending on the complexity of the problem. Crowd source the solution. I think it's a great idea. Now the question is how do you scale that? How do you build that in so that that co-creation exists over time? And we see organizations learning how to remove boundaries or create boundary-less organizations to begin to make that happen. So I think that's absolutely critical. The issue though is not how do you turn inside the company so that innovation is not this program or that program but it becomes essentially the DNA that everybody is connected to that innovation process. And I think Rajiv's example I hadn't heard the GE example. It's a great example of that same kind of let's get anybody to innovate. Now how do you institutionalize that so that that occurs without being as in a session yesterday where we were talking about management of risk and senior folks was telling me one of the things he said when we open the kimono that's a bad metaphor when we open the door to untethered risk we also have to put guardrails on it so that the risk is not reckless because we don't want to spend too much of our time on reckless stuff and I'm trying to sort through that. How do you get great innovation? And we're in a company Final Caviar that was doing that well and here was their four-step mantra think big get everybody to think big with customers, customer solutions test small, go do early pilots like the GE story that I hadn't heard what a great idea think big, test small, fail fast most innovations won't work so find out what's not working and then learn always think big, test small, fail fast, learn always I found that a nice kind of mantra for encouraging an innovation DNA in the company and to add to that there are two things that we've been talking about the book talks about that quite a bit as well based on research two things that aid innovation in addition to crowdsourcing is building a culture of empathy and forgiveness why empathy? unless you can put yourself in the shoes of the customer and articulate their unmet and unarticulated needs and you can only do that with deep empathy that's why we did this customer doesn't even know that right now and the second is forgiveness unless you allow people to fail and fail fast how are you going to allow them to take risks if you don't allow them to fail and if forgiveness is not part of the culture nobody is going to take risks and if there's nobody taking risks then there's no innovation so in addition to crowdsourcing those two things is part of the culture great thank you Rajiv engagement companies not only attracting but retaining and growing the talent they already have Dave do you want to start with that I already started some of that saying I think there's three steps in that employee sentiment I'm going to use that word because it's broader of a firm one is satisfaction do I like my job two is engagement am I engaged in my job I end the flow in the experience and three is meaning and I think those three activity what we do experience how we do it and meaning why we do it I think if we shift to that why it affects all parts of life in fact I just did a LinkedIn piece that I'm going to post in a week on that that it affects food so activity I eat food experience I have a great meal meaning I have a meal with my family on a holiday or on a weekend celebration or car I buy a cool car experience I have a great driving experience every commercial for cars you're driving in the trees up and down hills meaning I was with somebody I made it I bought this car and it shows that I've made it in life in positive psychology they talk excuse me Marty Seligman and chicks at my he talks about pleasure I had pleasure of an activity and it was it was helpful for me I got lost in the flow of the activity that's the experience but ultimately it's the meaning that comes from the flow and I think that's where the employee engagement is headed and and how do you measure it I mean we can do surveys that are we sneak in and sneak out we can do retention of best people retention is actually a bad number unless you look at retention of your good people because you don't want to retain your not so good people we can look at productivity indices that the demonstrate output for unit of employee frankly I think one of the ways to measure that sense of meaning is you'll know it when you see it I know that's really soft from somebody who tries to do more science but I can walk into a hotel or a restaurant and I can usually discern within moments are these employees not just showing up that satisfaction at some level not just engage doing their job but they're finding a passion and purpose in their job well I can sense that and so I found four measures the surveys that are being changed the way I talked about with Marshall Goldsmith so cleverly some kind of retention of the right people some kind of productivity and then some kind of personal sensing where you accept being that that observer of what's going on that's a good point Davia you can sense those things when you walk into the workplace I think so I mean so if I were to walk into McGraw Hill today before I sense how people are experiencing work is that their activity they're showing up they're there today is that the experience well this is pretty cool you've got autonomy you've got flexibility I can wear different clothes I can set my own hours but are they finding a sense of passion and purpose from perhaps working with authors perhaps doing webinars with authors perhaps having peers they enjoy being with wow it's really cool today perhaps learning ideas of the future around bitcoins around employee co-ops around start-up conversations around diversity what is it that's getting those employees at McGraw Hill really excited personally about what they're experiencing at work and I think we can see that I did a piece recently called Leader Should Become Anthropologist and in the world we live in a lot of data is out there big data sets and Rajiv talks about that brilliantly we're connected through lots of data we have unlimited data in the cloud but I think 80% of the data from the people that I work with who are data analysts is not in statistics it's not in spreadsheets it's in observations it's in feelings and I think we should allow leaders to become those anthropologists who can observe that in a more thoughtful way. Rajiv your thoughts yeah you know employee engagement is a big big big topic so allow me to make two points here and they might sound strange initially what I'm about to say but let it think in the first is my strong belief based on years of looking at this topic is that nobody can motivate another person this idea that management manager or organization has the onus or the burden to motivate and engage employees I think is something that we really need to understand because everybody is already pre-motivated by their passion and as Dave said their purpose their sense of meaning so rather than trying to say how can we engage and motivate our people managers need to understand what each person is already motivated by and put that meaning or sense of meaning or sense of passion to work and to the extent that there is an alignment and there isn't then you've got to find a benefit so that's point number one the way employee engagement surveys are done today I believe is counterproductive to say the least the best of my knowledge the Pareto principle which was discovered in 1906 the 80-20 rule which says that 20% of the people produce 80% of the results and it's true in agriculture and true in science and true in every walk of life to the best of my knowledge it hasn't been debunked until now right so when you do a typical employee engagement survey in this company you send out the survey to 100,000 employees and then you average out the data of every item and then you have the top 10 items and the bottom 10 items and management and HR have a meeting saying what can we do to prop up the bottom 10 numbers next year and we come up with all one size fit all initiatives to say let's do this let's do Tuesday pizzas let's do Friday casuals let's do Hawaiian shirt bays and what have you and that'll prop up engagement and I'm exaggerating a little bit of course but my question is what happens to the voice of your most important 20% when you average the data it drowns under the voice of the remaining 80 and I'm not saying the remaining 80 are not good people they are just choosing to do what they want to do with full honesty so this is not an dispersion on the rest I'm saying but the top 20% who produce 80% of the results their voice gets drowned in the remaining 80 and then by taking action on this averaged data if you will organizations end up promoting mediocrity instead of excellence I have no idea why in 50 years nobody has pointed out the simple mathematical fallacy with engagement surveys so I think employee engagement surveys really need to be thought of all over again anyway that's my 2 cents no that's very interesting I don't mean to put you on the spot but do you have any ideas as to if you changes to make to them to make it be more productive I strongly recommend to our clients that don't do employee engagement surveys the way they are done right now instead build a culture of belonging a strong culture where people can as Dave was saying find meaning and to measure whether people are feeling that sense of belonging it's better to do a values based 360 than to do an employee engagement survey but if you must do an employee engagement survey then at least do it collect the data in a segmented way Dave mentioned that we live in the age of big data right so HR already has the data as to who are the top performers who are the middle 60 who are the bottom 20 ask all three segments separately the same questions because the needs of all three segments are different and you need to meet them you still need to meet the needs of the middle 60 and the bottom 20 because they are important as well ask them separately by averaging it you're killing it for everybody no sorry just asking another question do you think if there isn't if the individuals don't feel that culture of belonging that it's on the individuals to make the change or is it on the company to notice that and work from that so again as I said earlier it's and it's not either or the organization has to do it's bit and the individual has to do it but you're right at the end of the day I get asked a lot because I talk a lot about values and purpose at the inner sources of leadership energy so a question I get asked a lot by people which surprises me every time it's asked is because the answer is so simple is what if my personal values don't align with the corporate values my answer usually is well how big is the discord is it small things that you know you wish that things were different from a corporate values perspective and culture perspective and you can you live with it you're happy with your job then continue to do so and try to make a difference but if it's so bad that you can't sleep at night then you know the answer you got to quit you got to go somewhere else Dave what do you think I'd agree with that completely I said there are four ways to track employee engagement there's probably seven or ten one is retention of your best people another is the productivity that's going to be productive surveys are a piece my sense is what we're seeing is more pulse checks not big annual surveys I like Raji's Pareto analysis 20% of the questions explain 80% of the results so why are we asking 80 item surveys why not ask 12 item surveys that explain most the results short questions done quickly I've never seen a company make a pricing decision on short term quick fixes how the market I think we should be making employee engagement decisions on the same kind of short term kind of quick indices and then the survey questions is what I said Marshall Goldsmith doing and it's back to who's responsible to what extent do I do my best and I think the responsibility ultimately is shared between the organization and the person but ultimately at the University of Michigan I'm responsible for my commitment the chief says this about five times and he says it brilliantly I'm responsible for what I do at work now the organization needs to get out of my way and give me that autonomy and give me flexibility so I could maybe do a trip once a year to KL and see the beautiful country and sweat a little bit but I should be the one responsible for my skills and I think good organizations are starting to get there that's the clan kind of system I have a question for Rajiv you have been around Pine Street you've been around all these great companies that have invested in leadership and you run a leadership institute in one of the most exciting parts of the world not just KL but in Asia what are some things leaders need to if you were building a I'm not saying this very well but if a company were investing in building better leaders at all levels of the company this isn't the senior executive but all the way through what are a couple of things you've learned over the years that would help build better leadership within a company and again you've seen the institutional effort that Pine Street did with people like Steve Kern you who are just brilliant folks you've also seen other companies you've been in a lot of companies what can be done to help build this leadership requirement that a company has Courtney I just wiped you out on a question that is quite alright Dave that's where we were going Rajiv has such a great background I wish I could be an observer of his history so I'm trying to do that what would you learn you're too kind Dave first of all we really need to look at what the word leadership means we need to stop confusing it with followership you mean by confusing leadership and followership because the two are totally opposite but get this as parents don't we love our children when they listen to us and obey and don't we sort of discipline them when they don't similarly teachers those that follow the instructions most closely and then in the boardroom when a CEO presents a brand new vision and strategy saying the world is changing we need to change all the research the first question the board asks is where is the McKinsey report that shows that 10 best practice companies have already done it if they've done it you can have your investment so all of these parents teachers boardrooms they are encouraging followership in the name of leadership best practice is not leadership you know whacking a child into submission and then giving him candy is not leadership teachers rewarding pets who are following most closely is followership so the first thing is stop confusing leadership with followership and that's the biggest cancer in this whole leadership development industry second we need to understand excuse me that leadership is not a position or title that enables you to get work done through others you know the moment somebody wins an election we call them the leader of the country the moment somebody is appointed CEO we call them the leader of the company now is leadership a verb or is leadership an adjective leadership is not a title leadership is what you do excuse me and so once we get clear that it's not these things what is leadership leadership is a burning desire to create a better future you don't have to be a big senior person to be a leader you have to close your eyes and imagine the better future that you want to create in whatever little circle of influence that you have that's leadership the problem and this is the last point I'll make the problem is the moment you see life that way that I want to create a better future you get resistance as soon as you get started from all corners of the world and so the main ingredient of leadership is not some on the surface skills like emotional intelligence or strategic thinking the main ingredient of leadership is finding inner strength which prevents you from giving up in the face of resistance how did Nelson Mandela go on for 27 years in prison and still not give up where did he get that inner strength from and that inner strength comes from two things what are my deeply held values that I will never compromise even if it hurts Mandela gave up his own family because he forgave the nation but his wife and daughter left him it hurt him a lot but he stood by his values what are those values that I will never compromise and secondly what is my values based purpose you've talked about that a lot Dave today about meaning and purpose what is my value to the extent that your purpose comes from your values you will become fearless and that's the kind of leadership energy that goes on for 27 years so I think the whole notion of the way we develop leaders through competency based assessments or personality tests etc needs to give way to finding helping people uncover one thing and that is their leadership energy which comes from being absolutely honest about what are your values and what is your values based purpose sorry I went on a bit on that no thank you for sharing that was wonderful I took notes thank you Dave did you have anything you wanted to add regarding the future of leadership no the reason I asked is we have been writing a lot about leadership is not about the leader it's about the value the leader creates in others which is the same kind of idea in fact we've been saying that leadership authenticity if it doesn't help somebody else get better is not really good leadership and so we've written a lot about who are the people or stakeholders from whom you as the leader create value and so it's the value of values that you do need this core set of unspeakable rooted values but the value of those values is that they help somebody else that's Liz Wiseman's book the multiplier effect and so how do you get leaders to not think about themselves as much as the value they're trying to create for other people and so we do leadership brand the leaders create value for the customers they serve and so when we build a leader when we go into companies to build leadership competence models we don't start with competencies we start with customer promises and so my friends was going a couple weeks ago to ad agencies there are a couple of big ad agencies in New York and firms like Nike or Apple are doing a $10 million ad buy and we're getting him to pitch them if you're going to do a $10 million ad buy where you position Nike or McDonald's or somebody or General Motors or Ford why don't you add $500,000 to that buy and whatever the ad agency chooses however the ad agency chooses to position the firm in the marketplace that external branding that $500,000 should be around leadership competence so if we're running Pine Street we should be training our leaders in Pine Street to behave against the promises we make our customers I think that's for leadership brand we've done leadership capital with investors the same kind of thing are we building leaders that our investors will have confidence in is this is showing up in the work on social consciousness that investors long-term investors not short-term day traders long-term investors want to build a relationship and leaders who have underlying values so I'm agreeing around the values are so critical and then it's the value of those values as we try to go the next step thank you both so much we've received a few questions so in the next few minutes hope we can answer a few the first one is if 40% of the workplace are going freelance is that where employees should be looking in order to advance their careers Rajiv do you want to take that one sure well it depends on it depends on what you want to do the key thing is to reflect on who you are why am I here who am I what do I really want to do talking about where is my leadership energy coming from what are my values what is my purpose and then think about what the vehicle of delivering that is Satya Nadella the CEO of Microsoft recently said very beautifully people say that I come to work for Microsoft he says what if he could change that equation to say Microsoft works for us can people come to Microsoft and use Microsoft as a platform to deliver their passion to the world and make the world a better place using Microsoft as a platform so that question comes second the agent of whether we want to work for a full-time company the more important thing is what are my values that I will never compromise and what is my purpose and then choose your vehicle great Dave I would totally agree with that I think and we've said it in different ways and I think the accountability for somebody's life starts with the individual and that's a philosophical point of view but I am to what extent do I do my best to shape ideas to what extent do I take ownership for my development and I think when we become dependent on a company we become enfeebled not empowered and we totally agree with that very true why do organizations struggle to transition to employee autonomy Dave do you want to go first that's a good question I think Rajiv used a great example of parents I'll use it that I parent the way my parents parented me and what's really scary now is I'm old enough that I see my kids parenting the way we parented them which is unfortunate we learn things from our personal experience to become our past experience to become our present I think leaders often lead the way they were led and I think we've got to recognize that I can't parent my kids the way my parents parented me there's some really tough personal examples of that in the okay I'm willing to step into this one my parents could not have with me discussions about sex because it was a time in life well today you gotta have them because you open a paper just read what's going on around intimacy and sex and it's in the newspaper it's on the news it's everyday well you gotta be able to talk to your kids about that because the world has changed and I think sometimes in organizations leaders got into the positions they were in because they're following what their leaders gave them and yet that doesn't work we have to lead for the future not for the past I shouldn't have used the sex example I'm really sorry but well it's almost awkward to talk to my 10 year old 8 year old granddaughter when she looks at the news and says grandpa what's this about these Hollywood men well I can't do what my father did 40 years ago 30 years ago with me we've got to have a different conversation and I think we've got to help leaders recognize the way you were led does not mean the way you need to lead today it's a very good example Rajeev do you have anything to add to that yeah you know the whole idea was that in the past organizations were built for control so from the Frederick Taylor time to Henry Ford the idea was to control workers as much as possible to get desired outcomes because of that theory X and theory Y that Dave talked about earlier and the more you control the more standardized output you got from the organization and from the people well those days are over and we are in the open source era which is all about empowerment and freedom today control doesn't even work even if you wanted to the 2011 Arab Spring is a great reminder that force and control don't even work anymore so if organizations continue to try to exercise control guess what that 40% is going to become 80% people are going to say heck with it I'm firing my boss before I figure out what next I'm going to do I'm going to do Uber driving I'm going to do Instacart shopping I'm going to do Airbnb hosting for a while and then I'll figure it out but certainly I don't want a boss so the open source era is literally going to force organizations to learn how to be comfortable but my research is telling me the more successful the organization is going to be but as Dave said you got to be comfortable about opening up the whole kimono because it's a whole different bulging very true thank you I think we have time for one more question what parts of your philosophy do people tend to find the most uncomfortable or challenging to the status quo Dave do you want to go first or Rajeev are you still on the line yeah I'm here I think we might have lost Dave for a second I'm here did you ask me to go first I thought you said Rajeev oh sorry I had said Dave oh I'm sorry I heard wrong I didn't hear I'm going to go back to where I started I mean we all have our pet peeves and hobby horses mine is the values defined by the receiver and so I hope that people are able somebody Ron Heifetz Harvard said be on a balcony watching yourself you know so when I as a leader or an employee do something am I aware and getting rid of the unconscious bias which is a big topic today am I aware of my biases so I see how my behavior might be impacting others am I getting out of my choices the outcomes that matter most to me am I aware of the value I'm creating for other people who are they what do they want and I won't do this long because we're out of time but Rajeev has used the word culture about seven or eight times today which I love but I think most of our definitions of culture are very internally focused I think culture is the identity of the firm in the mind of our key customers and when you define culture from the outside in Apple wants to be known as an innovator in its space Google is an innovator Amazon is an efficient distributor and its identity brought inside the company is the value of the values and it's value defined by the receiver and can we get our heads around that that's where I would really encourage people to think thank you Dave Rajeev do you have anything to add yes the most controversial part of my research is the fact that autocratic leadership ought to replace democratic leadership if we want to succeed in today's day and age and before people jump on that you know people in 28 countries across the world and from east to west we took 28 countries with a statistically relevant sample in every country and the data clearly says that people prefer autocratic leadership to democratic leadership and in the age of speed that's what's required I don't think we have time to go into what that really means because we are almost out of time but to get to deeper into that I think you'll have to read the book for my research great thank you thank you to you both this was a very interesting conversation and I think Rajeev to your point we might have to have a follow up to keep this conversation going and thank you to everyone for attending the future of work webinar be sure to pick up your copies of open source leadership by Rajeev Peshwarya and victory through organization by Dave Ulrich and be sure to tune in next time for the next installation of the McGraw Hill Work Smarter Webinar in the New Year thank you all very much thank you