 Thank you, Paul good. That's a great name by the way, Paul How many of you have ever been to Silicon Valley? How many know where Silicon Valley is Yeah, it's a beautiful place the weather is perfect. It's nestled right up against the San Francisco Bay and All over Silicon Valley in their garages creative people are birthing the computers of tomorrow and CEOs of tech companies are getting up in the morning and putting on their hoodies and getting their Teslas and driving to one of the many rows of shiny corporate campuses where the apps of the future are currently being developed and The devices that will Alternately either revolutionize our tomorrows or blow up in airplanes are being created It's a great place in this story. I'm going to tell you is not about Silicon Valley It's about Silicon Valley is lesser known and somewhat uglier cousin about a hundred miles away The San Joaquin Valley how many have been to the San Joaquin Valley? How many know where the San Joaquin Valley? There's like three people who raised their hand Everyone knows we're Silicon Valley is nobody knows we're San Joaquin Valley. That's okay. I Grew up in the San Joaquin Valley. There are no rows of gleaming corporate campuses Very few Teslas People There are rows of tomorrow, I'm supposed to say to motto I Say tomato and people stare at me blankly like I'm saying a foreign word rows of tomato field motto field and grapes and cantaloupes and almond trees and Farms and factories where food products are made and people put on their blue shirts and go work in the hot summer sun and factories and fields Making food products and other sort of things for the world It's a different world It's not the sort of world that that we think about Silicon Valley I grew up in one of these small farm towns in the San Joaquin Valley and at the age ripe age of 18 decided I want to get married and I Needed to earn some money. So I started looking for a job and Got a job with a tomato processor And and one of these Central Valley towns and it turns out this job changed my life and I think maybe changed the way I think about the world and perhaps changed the way you think about the world and organizations Even though you may not know it yet My first job was about as routine and mundane and boring and hard as you can imagine I was doing Actually, it was a seasonal job. I I got a temporary job for three months doing grunt work in a tomato Processing factory, you're gonna have to keep me honest on this and it's a motto processing factory and and This this company I've spent most of my career now in fact I think no matter where I go when I do I'll be inextricably intertwined with this organization It's it's become quite a quite a company. It's over the time that I've been there or that I've been acquainted with it it's grown to become a Vertically integrated agribusiness company big farming operation a harvesting a trucking operation And is actually the largest processor of tomatoes in the world And I think that's pretty cool But my guess is most of you have never heard of it and that's okay. That's okay with us. We don't have a consumer brand We don't have stuff on the shelves that you wouldn't know in fact all the stuff we produce is labeled with some other company's Brand and and you've probably eaten it many times And we're okay with that But I think it's interesting the reason I start with the idea of Silicon Valley is because I think the thing that is coolest and most interesting and probably the most interesting to you about Morningstar unless you have a deep interest in processed tomatoes in which case I'm happy to talk with you After the fact probably the things most interesting to you is the organizational philosophy That morning star adopted quite a long time ago and it has continued to build and develop And it's an organizational philosophy that I think many of us would expect and Not be surprised about hearing in a place like the Silicon Valley But it's a lot more startling when we hear about an organizational philosophy like this in the San Joaquin Valley Where again people put bump hats on and blue shirts and go to work doing the sort of routine work that we imagine being inherent to the industrial area and era Not exactly the creative economy It's an organization that as Paul mentioned has no structural hierarchy. There's no formal authority Structure, there's there are no promotions no job titles People have the autonomy and freedom to create their own jobs and to craft their own roles and to acquire the resources They need in order to achieve whatever it is they're there to achieve And I think this is all amazing and really good and hopefully a little bit inspiring to you but probably useless to you because those are just words and ideas and How in the world are you supposed to take and do something with that? And I think it's very tempting to because that's a real big scary Concept to most of us who've ever had a job to think well Yeah, that kind of works in some industries Hopefully I've just just just kind of proved that notion by by Establishing that this is a little bit of a different world than what you might expect Or maybe it just takes a certain type of people and if you have the right sort of people Which my organization doesn't? Then it'll work But I'm gonna ask you to bear with me for a second because I'm gonna try to get you to think about this a little differently and and to do that I want to I Want to start by asking how is it that an organization? Where people do this sort of work in these sort of places? Can operate with that sort of organizational philosophy and I think it starts with with one question maybe the the most important question and That is what is an organization? What is an organization? I think it's easy for us to think about an organization based on the characteristics of what an organization is intended to do it's about coordinating activities and getting people aligned toward a common specific purpose and Something about goal direction and all of that and I think those are all outcomes of good organizations But I'm not sure it answers the question of what is an organization at a fundamental level I think an organization is a social technology I think it's something that somebody devised at some point in times past for some specific purpose And the question is what is the purpose of that organization? I think at a general level. It's about improving people's lives And I think hopefully you all would nod and say yeah, but but not just at an abstract level and In fact, I think even if you're not in your head saying yeah, I think an organization is about improving people's lives The bigger question is whose life whose life And and this is I think if there's anything I want to say today the anything I hope you'll take home from what I have to talk about today. It's that I think our society Has operated under mistaken notion a mistaken notion About what the organization whose life the organization is intended or or should be Improving I think we have this sense that an organization is this utility this technology that a founder builds Founder has an idea an entrepreneur has this this vision and creates this organization and then brings people into this organization and employs these people as part of the technology on an or in order to fulfill the entrepreneur's Purpose and maybe at some level you can nod your head and say how that makes sense That seems to be what an organization is about and in fact I think most academics at some level think about an organization this way in fact There's this idea that individuals employees Because they are being employed As part of the technology it's necessary that they Give up a sense of their autonomy give up kind of what it is They want to do and subordinate their own personal drives and desires to whatever the purpose of the organization is How many of you are have been an employee How many of you ever joined the organization think thinking my goal here is to give up my subordinate my interests and desires Toward whatever purpose that is this organization is pursuing Two people thank you for your honesty I Don't think most people join an organization for that reason and here's the thing I think we all see the organization as a technology But all of us no matter what our role see the technology as being in service to us and what it is We're trying to achieve and do with our lives all of us Perspective of the whether you found it and built the organization or you just joined the organization We all look to employ the technology to serve us And so I think the the the first thing we have to start to think about is that this technology is if you can if you build an organization if you craft an organization and And you build it from the perspective of I want this organization to be a thing That serves everyone who and chooses to employ the organization as opposed to Everyone who the organization chooses to employ and I'm not talking about an illegalistic sense I know that we have to have employees from a legal standpoint and I want to get rid of all that right now I want I want us to think about the relationship individuals have with the organization They're a part of are they employed by or they employing the organization And I'm going to try to argue for the next few minutes that what great organizations do with the most innovative organizations Do it's not get rid of their managers It's not get rid of rules and hierarchy and all that sort of stuff In fact, all that's a byproduct of really the heart of the issue and the heart of the issue is creating an environment starting from a very philosophical and ideological perspective From the founder or the people who are responsible for crafting organization creating environment where people who join the organization See the organization of places where they can fulfill whatever it is They're trying to fulfill and in doing so I think you created an environment that leads to great individuals as Opposed to we need to find the right individuals so that we can have the sort of organization We want to have I'm going to talk up very quickly about four things Morningstar has done to try to facilitate this The first one is something called the clue colleague letter of understanding It's this this document. It's literally a letter It's now taking the form of a digital technology but literally a letter where individuals kind of craft their own role at an activity level in conjunction with the colleagues that depend on on Them for whatever it is they're going to do so I think there's a couple of things that come into play here It's tempting to think about this as an accountability mechanism as in if I don't do what I committed to do Then you can hold me accountable and therefore I feel this pressure There's probably some of that, but I think the real power of the clues farm Is quite a bit different from that I think at some level all of us want to have a certain type of relationship with other people we want to be cared for and and and Appreciated for who we are and what it is we bring to the table the ability to create a role that is uniquely suited to you Allows you to kind of bring the intrinsic drives and motivations that That are natural inherent to you to the workplace, and I know that sounds like lofty and and Really flowery sort of speech, but in practicality it actually works at a really high level even in roles like the roles that I showed you pictures of I can play to my strengths and the people around me can kind of compensate for my weaknesses But also and I think maybe this is the more important thing. There's something really powerful about making a commitment to somebody else The process it's not actually the clue itself. It's the process of making a clue the idea that I make a commitment to you I'm bound to that commitment to some at some level But I also feel a sense of purpose and meaning in what I do because I realize that I'm not just sitting here doing this routine task For the sake of doing a routine task, but there's a person with a real face who I've sat down and talked to who said I need you to do this for me. Can you do this for me? It imbues your work no matter how big or how small with a sense of meaning a Personal commercial mission part of this clue part of the clue is this idea of a personal mission a mission That's inherent to you what it is the purpose that you serve within this organization And it's intended to be a broad and apt and somewhat abstract statement that that should provide you a A sense of connection to the people who benefit from the work you do again and imbues your work with a sense of purpose and meaning Stepping stones from a from a social standpoint One of the things that we've always thought at Morningstar is is that If people are pursuing the things that are interesting and important and passion and they're passionate about We don't have to worry a lot about control systems in terms of people But what we do need to do is create a clear picture and portrait of what high levels of performance mean And so we don't have a budgeting process that where we allocate money We don't have a goal-setting process where we define arbitrary goals instead everything all performance measures that we can imagine And we can think of our frames from the in the in the frame of perfection. That is what is perfection for any golfers in the room What's a perfect score in golf anybody? So yeah, can you can you successfully you can stay home? I guess and get a zero I've done that The perfect score is 18, but we tend to think in terms of par Some arbitrary number that somebody has created and said this is a really good score for this course But the perfect score is 18 Maybe practically impossible but if you frame performance in in the from the frame of perfection, you don't have to worry a whole lot about Managing people on a day-to-day level and ensuring their performance at a high level as long as they're they're thinking about their performance and Their performance is being reported through the lens of perfect perfection Finally the idea of total responsibility Very briefly. I think this is one of the more powerful ideas I'm married as I've already mentioned and have a large family with a number of children and We have a couple of young children. So for this time in our lives My wife and I have kind of made the agreement that I'm kind of a go-to-work dad and my wife stays at home particularly with our younger children and We've got pretty clear roles and responsibilities that we didn't write out job descriptions, although maybe we should have But imagine so, you know, I go to work and I bring home a paycheck and do all the stuff that dads do when they go to work And my wife Is responsible for getting the kids off to school into gymnastics and swimming and all that sort of thing but imagine I come home from Brighton and I walk in the door tomorrow and The house is a disaster and the kids have not been fed and and or bathed and the baby's diaper has not been changed and there are clothes line all over the place and My kids meet me at the door and they're crying. They say daddy We're hungry and mommy hasn't fed us and She didn't take us to school and she hasn't changed the baby's diaper and can you feed us and bathe us and And imagine that my response to that was to look at them for a moment thoughtfully and say, you know what? I'm very sad about that, but unfortunately. It's not my job Now we think we so we've experienced this in our workplaces, right? We've all experienced this at some level either we were the person that said it was not our job and Bow your head shamefully if that was you or we've seen other people do this And we think well, that's an earmark of a good employee or not a not a good employee So let's look for the ladder Let's look for the former and not the ladder But I want to suggest that it's not that's actually not the product of a person being inherently good or bad It's a product of the environment we place people in I think we with good intention have thought well We can't hold people responsible for things that are outside of the paper that is their job description So you've got this job description and that's all you can be held responsible for So first of all, I think we can all agree that in a family situation. Nobody would want to live in that sort of You know my responsibility ends at the boundaries of my job description environment That's not fun and exciting and it feels very restraining But practically speaking the world is a better place if all of us feel a sense of when I walk in the door If things are kind of a disaster even if it's not on my job description, I feel like I have the Responsibility the obligation to step in and try to do something about it But not just the obligation the desire and drive and it turns out I think the desire and drive comes from the fact that I have the freedom to act Commensurate with this idea of total responsibility. So more you start we have the sense of total responsibility It's not so much. You were responsible It's that who could have done something about this when something goes wrong who had the knowledge who saw this Who could have done something about it? How can we avoid it in the future? And and we try to instill the idea that everyone has this responsibility, but everyone also has the freedom to get involved wherever they see See fit and so I want to close with this. I Know that was a real quick overview and and that there's a There's some systems here that I think are important But I think the fundamental question is not so much Can you duplicate clues and stepping stones and total responsibility all that but what is that? What is the underlying philosophy of your organization? What is the underlying philosophy of your organization? Is you're an organization that employs people? Or is you're an organization that when a person comes in for their interview the first question you ask him What is it? We want to do and how can this be a place where you're able to do that? Thank you so much for your time