Leadership Greatness

Jose Leal (00:02):

Welcome to rHatchery.live Well, if you've been around the future of work for more than an hour or two, you've heard about this man. Doug Kirkpatrick is one of the originals. He's been around as long as anybody can remember as far as going back to the early days of the future of work. Welcome, Doug. I've been looking forward to this for some time.

Doug Kirkpatrick (00:29):

Thank you so much, Jose. It's great to see you again. It's been a while. Look forward to it.

Jose Leal (00:36):

So, Doug, for those who may not have heard of you can you tell us a little bit about what it is that you've been up to the last few years?

Doug Kirkpatrick (00:45):

Well, the last few years kind of kept an adventure that started back in the eighties and nineties. Joined an entrepreneur named Chris Roofer and helped start two companies. The second one's called Morningstar. I was in the core team of Morningstar and we adopted, an organizational system called Self-Management. And using that system grew from zero to a billion-dollar company today where there are no human bosses no managers of other people no titles no command authority and no authority to tell people to stop doing X and start doing Y. Everything is based on request and response, and we called it self-management. In 2011, Gary Hamel came out and toured with us and wrote an article. We were featured on the cover of the Harvard Business Review. It was 2011. And ever since then, the world's been trying to figure out what Morningstar does to create an environment where people manage themselves absent force and coercion. About that time, we started the Morningstar Self-Management Institute to promote these principles and practices with other companies as well as within Morningstar. And that led to me going out as a consultant into the world on my own in the early two thousand and just kind of trying to take these ideas and principles all across the US and all around the world. And so that's what I do. That's my mission. That's my passion. That's what I do in life. That's what I love to do, and I'm still doing it today.

Jose Leal (02:49):

And you've also written a few books about the topic.

Doug Kirkpatrick (02:53):

Yeah. Yeah. So the first book was called Beyond Empowerment, the Age of the Self-Managed Organization. That came out in 2011. That was the first edition. The second edition came out with some additional case studies in 2017. And now we've been published in German, Italian, Spanish, and Chinese, and soon to be in French as well, and most likely, Portuguese. Portuguese, which I'm sure will be good for your folks in Portugal Jose, so yeah, it's been quite a ride. The second book was called The No Limits Enterprise with Forbes Books. And that was a more personal story of observations and insights collected over the years and bringing us up to the present.

Jose Leal (03:50):

So, I know that you and Carlos had a conversation around a topic that you wanted to discuss. And I've got my own questions for you that have been burning for some time. We've had lots of conversations in the past, not so much as of late, but, you know, that I look personally at the big picture of this work, right? Like, how do we understand what it is that's happening and why is it happening? And so I wonder, did you and Chris and your team early on have sort of a clear understanding of why you were doing what you were doing.

Doug Kirkpatrick (04:41):

Well say this Jose, it was a very idealistic approach. And even today we recognize it as a very idealistic approach. And so the story is we were building the first factory, Morningstar, it was the spring of 1990. And our founders suggested that we have a team meeting of our core team and discuss how to organize. And so basically one March evening, the 24 of us got together in a dusty construction trailer. And Chris passed out a document called the Morningstar Team Principles and proposed organizing around two simple principles. First, one being people shouldn't use force against other people. The second being people should do what they say they're going to do. And so it was basically a two-hour, two-and-a-half-hour discussion and debate and dialogue with the 24 of us in that room sitting around in a circle facing each other and talking about, you know, does this make sense in a business context? And essentially, at the end of the evening, we kind of looked at each other and said, we don't have any arguments against these principles. Why? Because they're self-evident principles, they're clear principles. They're the foundation of all law everywhere in the world. And so, we just said, well, yeah, we have no objection, so let's go forward. And so, we did. And we walked out of the trailer as a self-managed organization. So, it wasn't like an 18-month transformation project. We went into a trailer, had a discussion about very idealistic principles, walked out of the trailer as a self-managed organization, and then we had a ton of work to do because we had to build a factory in the next three months. So we worked furiously to build that factory for very long hours. And finally, we turned it on in July of that year. And so, the story went on from there to become the largest tomato processor in the world with multiple factories and a global reach. And everybody in North America has eaten Morningstar products because goes into everything you can think of in the grocery store that has any kind of tomato flavor whatsoever. So it's been it was quite a ride and quite an adventure and it was quite idealistic.

Jose Leal (07:22):

And what do you think was behind that? I mean, it sounds like Chris sort of came up with those concepts. Where did you and Chris have conversations around sort of what he was working against, what he saw the problem was?

Doug Kirkpatrick (07:45):

Well, I think that the basic impetus there was simple idealism. I mean, the idea is this is how the world could work. This is how a perfect world should work. He is very into the book Jonathan Livingston Siegel which is kind of an idea of pursuing perfection. The very name Morning Star is named for the last sentence in throes Walden Pond, which says, “the sun is about a morning star, which again, is a vision of perfect results”. So how do you achieve perfection? Well, if you think about the two principles, imagine a world where everyone, every single person abandoned the use of force. We wouldn't need armies or navies or police or locks on our doors. And of course, we understand that's not reality. We know that's not realistic, but that's not really the point. The point is, the closer we approach that ideal state the better off we are as human beings, and the more space we open for happiness, harmony, prosperity, innovation, and all the good things of life. And similarly, imagine a world where every single person did what they said they were going to do. What an amazing world that would be. And of course, again, that's not reality, but that's not really the point. The point is, the closer we get to that idealistic state, the better off we are as human beings, and the more space we open up for human vibrancy and flourishing. So that was the impetus. It was just this idealism based on a vision of perfect results and communicating that as a leader to a team, a very small team a very dedicated and passionate team, and letting them run with it to create this company that now dominates this industry.

Jose Leal (09:56):

And obviously, you've worked a lot with this now, and you've seen a lot of other models of self-management. I mean, there's probably a couple of dozen out there that you've come across. What do you think is missing, not from anyone specific but what's missing as a big picture? You talked about leadership, and again, the topic of leadership greatness. Do you think that it is the leadership that's missing? Is it the models that are missing? Is it the principles that are missing? What do you see as the state of the future of work right now?

Doug Kirkpatrick (10:45):

Well, the state is a state of flux, to put it quite simply studies show that one out of three public companies will not exist in their current form in the next five years. And that rate of churn where companies are going to be liquidated or required or merged or otherwise disappeared. That rate is six times faster than it was when Morningstar started. So that reality is not going away and is in fact accelerating. We look at the pace of technology change and just quick, you know, spin around the landscape. You know, we've got beyond AI and virtual reality, we've got robotics, nanotech genetic engineering, but now we've got 4D printing among other things. So most executives doubt their own ability to manage the pace of change. IBM studies showed that a few years ago that was not necessarily a healthy place to be. Companies need to be adaptive resilient and able to reinvent themselves on a regular basis. The ability to reinvent is going to be a core competency of all leaders going forward. So what's missing? We've got a lot of models and I've got an interactive periodic table of the future of work that lists a number of them and more popping up every week it seems like. What's missing I think is very fundamental and it's leadership courage. It's leadership courage because leadership is the governor or the cap beyond which organizations cannot accelerate and grow. And so bold leaders brave leaders with a vision of some great desired future state into which they can invite, not coerce people is a huge, huge deal. So we need to cultivate leaders that have great courage and a willingness to go where a few other leaders are willing to go. And so if we can get enough leaders to do that and reach a critical mass, I think we can make major progress in creating a great future of work for people.

Jose Leal (13:36):

I couldn't agree more. As far as transformations are concerned, do you think, or do you see that there's also an opportunity for the emergence of new types of organizations that aren't a transformation from an existing organization but that are emerging with these new principles in mind? With these new models as a way of working?

Doug Kirkpatrick (14:03):

Yeah, there's always room for innovation. I think innovation and organizational structure and design is really a huge frontier that's largely unexplored. But we have some concepts that I think can inform this journey toward the future of work. One is the idea of the network. So, networks are really powered by a function called Metcalf's Law, which has the power of a network equals to the square of the number of nodes in the network. It's not an exact mathematical formula, but it's reasonably close. And so networks everyone is smarter than any single person in an organization. So to the degree that we can design organizations that tap into the collective intelligence of the hive of everyone in that particular org we can make great progress toward, you know, kind of unleashing the voices of everyone in that network harvesting their intelligence, making better decisions perhaps faster decisions, perhaps not, but it also gets very close to the engagement question. So the interesting phenomenon there is to the degree people own decisions they start to feel like owners and they become very engaged, very fast. And you can change an organization extremely fast in a couple of days just by distributing decision-making to places where it didn't exist before.

Jose Leal (15:53):

You opened the door on this question, cause I was wondering if I should ask it or not, do you think that the future of work is going to keep requiring a single owner or single owners? Or do you think it's going to be distributed ownership?

Doug Kirkpatrick (16:16):

Well, I think it, you know, for the near term it's going to be a mix. So, the opportunity here for distributed ownership whether it's ESOPs or other forms of collective ownership, the opening here, the opportunity is huge and the sky's the limit. So, I'd encourage people like yourself and Matt Perez, and others to promote that as widely and as far as possible and create new models of organizations that work, and the success of those organizations will attract new contributors and new participants. And that's, I think that's the path to growth of that kind of an idea.

Jose Leal (17:04):

And that leads me to wonder because you opened a conversation about the state of organizations and their failure rate and disappearance increasing. Do you think of it from the employee's perspective as well? What they're going through, what employees are going through, and if so, what does that look like to you? You obviously have been listening to a lot of people around the world talk about the state of work from a non-company perspective, what is working, looking like, for people?

Doug Kirkpatrick (17:44):

Yeah, so actually I try to avoid using the word employee or employees as much as possible. Part of the challenge in building a bridge to a better future workplace is language and the limits of our thinking are based on language. And so, the whole terminology surrounding human resources is in some respects quite dehumanizing. You know, we talk about headcount as if people don't have bodies. We talk about man hours as if women don't exist. We talk about well, human resources, the term itself Mintzberg says, I'm not a resource, I'm a human being. So there are lots of ways to think about people and work beyond the traditional employee-employer relationship. In fact, the dictionary definition of employee is someone who works for another person for pay, which I suspect would be quite not enthusing to a millennial or someone generation Z. So yeah, we have to think about people, human beings, and their needs. And I know, Jose, you've done a lot of regret work and research on that. And then what does that mean in terms of work? There are some people who are looking far into the future and to technologies like blockchain and theorizing that traditional employment might become completely superseded at some point where people will simply contract via the blockchain for the delivery of services on some agreed upon terms and conditions, and then just move on to the next area of contribution and opportunity and sharing their expertise as needed with the rest of the world. So transcending employment altogether. So there are lots of different thoughts around the subject. But I would think about starting with changing some of the languages, and we've done it before, right? We used to have personnel offices until the 1970s and then they changed the term to human resources offices because if you think of people as resources, it's much easier to lay them off as it was during the re-engineering movement in the 1980s. So we have to reclaim the language and then get back to basics and how we treat people like human beings.

Jose Leal (20:37):

And from a human perspective, I mean, we talk about organizations suffering from a disengaged workforce that is suffering.

Doug Kirkpatrick (20:55):

Absolutely.

Jose Leal (20:56):

So, there are two sides to that coin. And very often we are trying to improve work from the perspective of the organization and don't see that the other side of that coin is suffering as much or more than the ones we're looking at.

Doug Kirkpatrick (21:22):

Oh, that's so true. Go ahead.

Jose Leal (21:24):

No, I was just going to say we've got another 10 minutes or so here, and I want to basically, I want to pretend that nobody else is listening and I want to hear what are you doing now? I know you've started up a couple of new things. I know that you're excited about some new stuff. So tell me what it is that's keeping Doug Kirkpatrick awake at night these days.

Doug Kirkpatrick (21:50):

Thank you. So, first of all, I've been working with three remarkable women Brooke Arrow, Jasmine, and Andrea Rob on an initiative called Vibrancy. And the idea is to help organizations theorize and execute a transformation from traditional command and control to a self-managed leaderful state. So working very rigorously on that for the last few months. And as well as been involved in starting up a new software company, which I can't divulge much about today. But that's been an interesting initiative as well, and I think will help facilitate a better workplace in the future. In addition to that some speaking and consulting. So was in Omaha recently with the culture Ambassadors Group Jerry Wagner, and had a great time there with a speaking engagement and a couple of days of a conference with that group. Got some other upcoming speaking events that teal around the world in 2023 and some others. And so podcast interviews like this and just general consulting. And I'm supposed to write an article for the business Agility Institute before the end of this year. And so got some book translations that have come out recently. My first book is now in Spanish, and it's soon to be in French, so I've got my hands full.

Jose Leal (23:44):

A little bit on the burner there. What's the juicy thing? I mean, I'm sure you're like me. There are times where a certain thing is on your mind and then something else captivates you. What's captivating you as of late?

Doug Kirkpatrick (24:04):

Well, I'm very invested in a very good friendship with my dearest friend Peter Kestenbaum. For those who don't know or who have not heard of him, he is probably the world's premier philosopher in leadership and work. He's the one that taught me about the theme of today's interview, which is Leadership Greatness. And he developed an incredible model called the Custom Bomb Leadership Diamond which is promulgated around the world. Today he's got the Custom Bomb Institute in Stockholm, Sweden among other advocates. And the diamond is really about leadership greatness. And it fits quite well with self-management. Peter's a friend of Morningstar and the Morningstar Self-Management Institute, and he became one of my dearest friends. He wrote a great book called Freedom and Accountability at Work with Peter Block. He's got a new book coming out in February if you can believe that. Peter is 95 years old. He is an amazing, amazing individual. And so his new book is called Confronting Our Freedom with Peter Block. So I call him and we talk just about every week or every other week at the most. And he gives me reading assignments, he was the subject of a very influential fast company article in early 2000 called, do You Have the Will to Lead? And leadership is really about courage. So that's where my first comment in this interview came from. We need more courage and leaders willing to think big and bold and invite people into journeys of adventure and boldness. Balanced of course with ethics caring about other people, compassion, empathy, nurturing, and consideration, and carefully balanced with a deep sense of reality but envisioning a big, bold adventure toward a better future state. Peter interestingly says that the fuel for courage is anxiety. So while IBM and other studies show that most leaders suffer from acute anxiety about the pace of technological change and other things, they can channel that anxiety into the attribute of courage, which Aristotle says is the attribute that makes all other leadership attributes possible. So that's the starting point. And then understanding that people are walking, talking freedoms, people have free will, so they're free to choose. They're free to choose their approach to life and the principles under which they operate where they work, how they work, who they relate to, and everything else. And respecting the free will of each and every person is a critical element of leadership as well as managing polarity balancing the short-term, long-term objective, subjective and all the innovation versus execution, all the dilemmas in the leaders face in the 21st century. So Peter Kastenbaum is a big part of what I do as well.

Jose Leal (27:46):

Yeah, it sounds like it. And you've mentioned that to me before. It sounds like it's, he's even become more so as of late. I love the idea of the book freedom. So I'm looking forward to that. I saw it on LinkedIn and I will definitely get my hands on it. So how do we incite that in leaders because that's, I think that's what's necessary, but what do we do to incite that? Because it seems that we're all, as you know, we look at leaders in our space officially here in the valley. Everybody's doing the Me Too thing. And we're not seeing either political leaders or leaders of the industry really taking up that banner of courage.

Doug Kirkpatrick (28:49):

Yeah. It's very sad and tragic in some respects. And I think to incite it we have to invite people, invite leaders to learn these concepts because it's really about getting out of that mindset of let's look at best practices. We'll do a survey, we'll compile a list of best practices, and then we'll adopt some. And that's how we move forward. We have to go deeper. We have to dive into best principles and not just best practices. Best practices are just copying what other people have done and which may or may not work in a particular context, but let's dive deeper into best principles because principles are universal, and principles of human interaction are just as fundamental and just as and work just as importantly and crucially as principles of physics, like gravity or anything else. And so if we can get people to adopt and think about and internalize best principles and not so much focus on best practices, I think that's the way to make progress with leaders.

Jose Leal (30:08):

Yeah. And do you think I'll just wrap up with this and then if you have anything else you'd like to say, but do you see, obviously you've done work in Asia, you've done work in Europe, South America. Do you see a difference in leadership in North America versus those other continents?

Doug Kirkpatrick (30:35):

That's hard to say, Jose. You know, I hate to generalize among continents or geographic regions, because there are examples and exceptions in every part of the world. If you go to India, you can see Jaipur rugs and Nan Kishore chowder is called the Gandhi of the textile industry for his self-management of 40,000 carpet weavers from the untouchable class across small villages throughout India. You go to China, and you can see Jean Ramin and is transformed the higher organization into [...] organization, which is amazing. And I think would be very hard for a traditional command and control appliance maker to compete with. So we have Ricardo Semler in Brazil, so and Semco. So we've got amazing examples and prototypes every, in every part of the world. And I just think we need to look at those vanguard companies and Vanguard leaders who have achieved leadership greatness, and what can we learn from them. And I think one of the most important lessons is the idea of principles and really embedding principles deeply in the organization.

Jose Leal (32:06):

That's a perfect place to end. Doug, thank you so much for joining us today and for I think going to the place that I had hoped maybe we would, which is where do we start? And we start with things that are, as you put it, as foundational, as physics, rather than starting with the ideas and the models that we're hoping to perpetuate. So thank you very, very much for joining us today.

Doug Kirkpatrick (32:43):

My pleasure, Jose. Thank you.

Jose Leal (32:45):

See you soon. Thank you.