From Disfunction to Transformation

Jose Leal:

Hello there and welcome to the Radical World podcast. I'm Jose Leal with my partner Matt Perez. And today we've got Paul McCarthy all the way from the UK. We typed him in over the interwebs, and here he is. Paul, welcome. Nice to have you.

Paul McCarthy:

Thank you. It was really, really good to see you, Jose and Matt, and yeah, appreciate, appreciate the opportunity to be here and talk about the work that we're doing. So really looking forward to where this goes.

Jose Leal:

Absolutely. So mutual friend said you should be talked to. So obviously you're doing some interesting things you're thinking some interesting things. So tell us about what are those interesting things that you've been thinking and doing, and, and how did you start thinking about them?

Paul McCarthy:

Yeah, yeah. Good, good question. Just take it straight to the jugular as we get into this. Well, I'm thinking that we need a different kind of leader to navigate disruption successfully for the future and prepare our organizations to be future ready. And I'm thinking that the way that we identify, recruit, onboard, and develop leaders today doesn't work. It's ineffective and it's costing a lot of money, a lot of resource, a lot of time, and very few people have been talking about this. And I came along as an accidental thought leader to talk about future of leadership. Didn't know it at the time, but I would be kind of having conversations over the last five, six years to really try and understand what wasn't working in the way that we were doing leadership today. And, you know, I said to you backstage that, you know, the learning and development industry wanted my head on a spike for about five years because my, my ideas, my thinking was upsetting the status quo. And I, you know, my, my experience as a leader brought me to this point because I, I essentially, I was fired four times from executive leadership roles for demonstrating the qualities that I was hired for. And I went through, as you guys and your listeners will know, very expensive time consuming processes to get me on board as a leader, demonstrating my leadership skills, demonstrating how I would lead. And ultimately when I joined, I would get my hand slapped. You know, ironically, I, I was hired to challenge the status quo. And when I did that, I got in trouble. I was hired to make things better. And when I did that, I got in trouble. And I got fired four times from, from different roles for exactly the same thing. And by the way, the irony is not lost on me that my, my expertise as a consultant was developing leaders. So part of my role was to also understand the future of work, the future of leadership, and what leaders needed for the future. And so I came up with this idea one day, and this was towards the end of 2018. What if we are firing the very leaders who have the leadership qualities that we need to successfully navigate ongoing disruption? And that was, at the time when Frederick BeLou's work around reinventing organizations and self management and all that kind of stuff was, was surfacing. And I started coming up and asking these really uncomfortable questions. So that's what I've been thinking I've been doing for the last five, six years, and slowly gaining traction and bringing this out into the world because it's time to have different conversations about the future of leadership. That's really, I think, why I'm here and why my, why our mutual friend would've connected us.

Jose Leal:

So leadership, I have a, a tough time with leadership as a word because there's the definition that most people know, which is somebody in power, right? Somebody who's the leading a company, leading a government, leading an organization of some form or another.

Matt Perez:

The boss, the boss.

Jose Leal:

And then there's leadership, which is, you know, a couple of the folks that we've, we've interviewed have said, I think leadership is the person who picks up the garbage when they are walking across the company parking lot. And or does the things that need to be done simply because they need to be done, not because they're being told. So what's your definition of leadership? And, and when you talk about leadership changing do you think that what's changing starts and stops with leadership or it's just everything around it?

Paul McCarthy:

Yeah. Oh, well, I think there's a lot in there. And I think straight off the bat, my what surfaces for me about leadership and a great leader is someone who creates the conditions for others to be better than them in their roles. And so I agree with what you said about picking up the rub the garbage can. Because in my, my first book that talks about leadership in the future leadership, I used some case studies and anecdotal case studies from my own experience as a leader as well as case studies, as well as research and statistics. And I, I talk quite candidly in the book amongst other things about what it means to be a leader. And to be a leader means you don't need the title. Why do we still even have titles for leaders? It's, it's an act. It, it's, the idea of being a leader is your behavior. It's the behavior that you demonstrate when no one else is looking, you're leaving the office at whatever time at night, and someone's still working there in a cubicle and crying because they haven't seen their family for, you know, days on end because they're working overtime to, to, to meet your deliverable. Well, the leader is the person that goes and spends time with that person and talks to them and understands why they're in the situation they're in. So for me, I, and I write about that more extensively in my book, but to me, I think there's so much noise out there about what leadership is, what it isn't. And we are forgetting the very concept that, you know, to be a leader. And in fact, I think anyone could be a leader, but to be a leader in a corporate environment, which I also think to, to connect your, your other question, you know, we are, we're still, we're still leading and working within organizations that, that are characterized by outdated structures. You know, I'm a big proponent of self-management. I'm a big proponent of teal based organizations and flat structures. In fact, I remember talking to some c-suite clients a few years ago when I was in consulting. And I said, you know, imagine five years from now, all you leaders are sitting around a table setting your own remuneration. You're setting your remuneration together. You, you don't have walls or silos. You don't have titles and your performance managing each other. And I got laughed out of a room, you know, and that was a major client that I worked with. Five years later, the world is shifting. And so I think people like you guys, people like me and the guests that you've got, you know, we're somehow, we are ahead of the conversation and we get kind of vilified. And kind of, as I said, my head one was wanting on a spike by quite a lot of leadership consulting firms. Cause I was talking about things that were uncomfortable. And part of that is also a very fact that trillions of dollars have been made by organizations spouting different leadership philosophies. And ideas and solutions. And it upsets the economy if we have these conversations and ask two deep questions. Right? So yeah, I, I mean, I'm with you. I think we need to redefine reclassify and recalibrate really what, what it means to be a great leader. And to me it's, it at the core of it is being selfless and driven by something bigger and greater than yourself.

Matt Perez:

Okay, I got to jump in here. We're not going to change human nature, at least we're not going to change your, so you're still selfless leader, and that sounds to me like a saint or something, you know? I got a much simpler definition of who leader is, and that is the one who speaks up And there's, there's, there could be a leader on making coffee. There could be a leader on taking pictures, you know, and it doesn't have to be the same leader. It could be three people that bounce back and forth and stuff like that. So, so my question to you is, does this fit, or am I totally crazy or.

Paul McCarthy:

Well, the, the one, the one thing that I would say straight away from, from your comment there, Matt, was around the speak up culture that, you know, I, I'm very familiar with a lot of the work in this area. And the one thing I would say is that in order, in order for have to have that as a reality, you need to create the conditions in the organization for that to be the norm. Yes. So, you know, there's no, it's no accident that this episode was called, you know from disruption sorry, disruption to transformation. And, and I'm on a mission with my work to, to address. And what I mean by that is, will become clear in a minute that we, we wanted a completely different approach to the leadership of the future. In fact, I argue through my research and my work that we'll need leaders who have more disruptive leadership capabilities. But those leadership capabilities right now are marginalized and discredited, and people are fearful of truly speaking up because the disruptive leader does speak up. But what this kind of leader does is, is rubs up against the current organizational structure and the challenges that characterize that structure. So I'm on a mission to reframe how we see disruptive leadership capabilities to say, instead of normalizing dysfunction, let's normalize disruption. And a key part of that is to be able to have the honest conversations in an organization about why can't we speak up? So you are all familiar with Amy Edmondson's work, right? Psychological safety and talking about that. I've challenged people like Amy and others publicly to a ask the question that no one has answered so far. Why do we need to talk about psychological safety if we have trust in organizations?

Matt Perez:

And how do you accomplish trust?

Paul McCarthy:

By, by creating the conditions to speak up and to have honest conversations. But very few people are doing that in organizations. I mean, there's all the, you know, the swag and the one page laminate menus that, that dawn the walls that I'm sure we've all developed. I know I've certainly developed and been paid a handsome fee from consultant firms I've worked for only to find.

Matt Perez:

They never developed one of those.

Jose Leal:

Unfortunately.

Paul McCarthy:

Yeah. But we all know Jose, that that the moment we, we finish developing them and they go on the wall, we see a complete incongruence in the way that, that people turn up and those statements on the wall. So my work comes along and I say, why aren't we talking about that? Why aren't we creating the conditions to speak up and have those conversations?

Jose Leal:

Paul, I, I would disagree with you. I think we know that they're incongruent the second we go on that three day offsite to make it, and no one, but the leadership team is on, on that three day offsite.

Paul McCarthy:

We know. So, so do we know as the people developing those, those statements, or do we have hope that this time an organization will truly walk the talk? Because I do, every time I work with a client, I'm, I'm hopeful that there's a congruence between the philosophies that are espoused and the artifacts that are developed and what we leave them with. But unfortunately we leave them with, with more fuel for the fodder that, that kind of just further generates the toxic cultures that characterize the modern workforce.

Jose Leal:

I don't have that much experience. I've only experienced one corporation. Myself and that was more than, more than enough for me. But my experience, my sense based on having been there 10 years, was that it's not so much that people don't want to walk the talk, it's that those things are attempts at putting our fingers in the of the corporate structure of, of the reality that they exist in. And we know it's leaky and we know it's going to flood, and we know it's just a mess, but we don't know how to just change the whole thing. So everybody goes, Hey, maybe we get a, somebody to come in and do our mission statement. Hey, maybe we get somebody to help us with and somebody to help us with that, and somebody to help us with that, and our people aren't happy. Let's get, get a survey and let's get somebody to help us with that. And we're always trying to just put our fingers in that hole in the rather than rethinking the whole thing. Right. A first principle understanding of what an organization can and should be today.

Paul McCarthy:

So one of the things, and it seems relevant to, to point it out, I just wrote this down, put the finger in the, so I'm going to use that. But in, in the book that I wrote, I actually talk about this whole concept and, and make it around the idea of politics, organizational politics. So for me, many people have called me naive, optimistic you know, zealots, I don't care. I I really don't care the monikers they give me, because I'm driven by one thing. And one thing only is to create the environment and the conditions for people in organizations to have honest conversations. And so for me, politics is a great example of this. You know, I've, I've worked with over a hundred client organizations as a consultant. I've worked with about 12 consulting firms in my career. And every single one of them is characterized by politics. Right? But the other thing they're characterized by is a disdain for politics. So I come along as a 50-year-old naive person who thinks that, you know, we can shift, we can change the narrative because act our, our, our actions lead to other actions which lead to other actions. So like, you brush your teeth in the morning, when you wake up in the morning, you have a choice, do I brush my teeth or not? Yes or no. It's a simple yes or no answer the same way you go to work. Do I play the political game today or not? Yes or no? Well, I've got mortgage to pay, I've got kids to feed, I've got a promotion that I want. I got to get this. I understand all those trappings and all those issues, but I still come back to the fact that more people are leaving organizations today than ever before. Whether you want to call it quiet, quitting, whether you want to call it the great awakening, the great resignation, I don't care what people call it, what I, what I'm happy is that the largest global human capital experiment in history, COVID has enabled us if we're brave enough to open our eyes to the dysfunction that characterizes where and how we work. So we still come back to, and even HBR write about this, that, that they try to say that politics is a good thing. I, I don't see it as a good thing, especially when you look at the mental health issues that are caused by it, the disengagement, the turnover, the, the, the lack of productivity and morale dipping in organizations. We can choose every single moment in an organization whether we play that game or not. And I don't personally care if people think I'm naive or overly optimistic because I've seen it done, because I've behaved that way myself. And so has it got me into trouble? Yes, it has. It's got me fired four times. And you know what, being fired four times is probably the best thing that ever happened to my career. So, you know, again, there's another taboo subject isn't there about being fired. No one talks about it. Right. We keep it under the scale.

Jose Leal:

Failure. Failure, failure. And that's what we're afraid of, right? That's why we don't step up. That's why we don't speak up. That's why we don't do the things that we feel and sense need to be done.

Paul McCarthy:

And yet organizations that move, move in the space of being self-managed and, you know, even principles of holacracy and sociocracy, they espouse a different way of working, which is characterized by courage, bravery. And to your point, Matt speaking up. Right? So, so is it human nature that prevents us from truly speaking up? Or is it the structures that we work in today? And, and I would say it's the latter

Matt Perez:

And, and we agree. We live in the system. A lot of people don't like that. And a lot of people say, well, I don't live in a system. I, I'm independent of the world. And but we live in a system, it's what you call the structure business, stuff like that. And we started going down this road and eventually it came to the point, let me back off. I founded an organization that grew up to be 900 people or something. And that was self organized. We had no management, none whatsoever. But we didn't have philosophy. We didn't have anything to, to anchor ourselves. So and so people could operate quite well. And people yell at me and they yelled back and it was fine. It, so I understand the thing about the conditions for, for making this possible and stuff like that. But I don't know how we get to the point where ownership is a problem. Fiat, okay, so we call that system, system we live in today. And, and nobody knows any other system. We call it fiat and we call what we're doing radical, but it's an alternative. Not the only one. It is just one alternative. We got to ownership, I don't remember how it went, but we got to ownership and there's fiat ownership where the boss or the board tells the boss, and the boss tells you whatever imposes can impose his own rules. So in, for example, in the book that Lou wrote, there were I think seven companies and of the seven, I know three that had gone back because the leader, you know, the, the grant leader went away or he died, or I don't know what happened to a third one. But there were ways, in one case, by his son and his son, the first thing he did is put in the ment and said, there's no more, you can't, you got, you got to put locks on the door and stuff like that. And, and, and the, so, so the problem is ownership and the ability to do all those things, to take things away, to put things back to, to tell people how to do things. And that, that I think is a problem. So, well, we think it's a problem.

Jose Leal:

Well, it's two things, right? It's, it's, if I may Matt just jump in because what I, what I think what you're saying here is the leadership problem in part comes from the, the fact that we have a structure of the organization and that structure, which is a hierarchy, is, is an issue. So how do we do co-management, we call it, right? Right. And, and the other aspect is once we talk about co-management, we still have a structure of ownership that in, in self-management typically is left alone. We still have that overarching ownership structure. And very often to Matt's point, what happens is we deal with everything from ownership down and we say people need to behave this way in order to, to be more free and, and have more self-management and so on and so forth. But we'd leave the ownership model in place, which ultimately is still being driven by the same mindset that was driving the hierarchy in the first place.

Paul McCarthy:

Yeah. And, and I talk about this quite a bit in my, my work as well. And, and, and that's one of my, I'm quite vocal critic of, of Frederick Lilu. I like a lot of his work. But one thing that he doesn't do is he doesn't talk about how to create sustainable leadership as a philosophy and a mindset and a set of practices, right? In a world of self-management. And lots of people jump on the bandwagon about teal and, you know, what's coming after teal and all this. Okay, that's great. That's a lot of noise because for me, it, it, the question I have hasn't been answered, which is like the hire group, the, the CEO of the hire group in China was a good attempt at this to show how you can imbue the philosophy and mindset and approach and also decentralize them and push, push that push the idea of sustainable behavioral practice down so that it's not dependent on one charismatic figure. And so I see there's a gap in, in a lot, lot of the work that has come up over the last 10 years in self-management to discuss that very concept. And you know, the one, the one thing that I you know, I don’t know if you're familiar with an author, his I think his name's Eric Wahl, WAHL, he wrote a book called unthink. And the concept is that introducing the idea of child, like behaving like children and thinking like children back into the boardroom to introduce a different way of thinking. Now my work is all about introducing a different way of thinking and leading. And, and that work talks about how can we put in a different set of philosophies and mindsets to, to be more creative and to drive more sustainable solutions. But it, it takes, again, it takes the, the ability to speak up. It takes the ability to create a culture that exists long after you are gone. And that's hard to do. Right? And I, I talk about this 'cause I, I, I talk about what I call the three data points, and you know, I, we've already talked about the first one. So that's like when you go down the corridors of power and organizations leadership, you see the statements on the wall, you know, we lead with integrity, we trust each other, you know, all that stuff, right? That's the first data point. Second data point. You go into the office of, of the leadership teams and you see all the books that they read on leadership, right?

Matt Perez:

Well, third element the shelf.

Paul McCarthy:

Exactly. There you go. So now, now Matt, we're getting to the third data point, which is now you see the way that they lead. Now my work is not a critique of leaders and people individually. It's a critique of the system. So the three data points and the incongruence between the three of them are the things that I talk about quite publicly, which make a lot of people uncomfortable. But they are conversations that we need to have if we are to cement different and better ways of doing things for the future. But we are shying away from it. So what we're really doing, we are, we are putting a different shade of lipstick on the same pig and we're calling it something else. So for me, it's not about blowing up the structures, it's not about, you know, throwing a grenade in the middle of the room and, and getting everybody to, to just, you know, start again. It's about again, creating that environment to have honest conversations and dialogue that result in accountability and shared ownership as well as individual ownership. Because again, I think it was EY Ernst and Young, they did some research before the pandemic about purpose. And they, they found quite unequivocally that if your purpose individually did not align with the organization's purpose, and you would, you would not, you would neither join the firm or stay at the firm for more than 12 months. And the, I think the server went up to quite a few thousand people. And so I think it was 96% of people said they wouldn't stay or join an organization where the purposes didn't align to theirs. Now, you and I, we all, we, we all know that since Covid and, and the future of work and new ways of working a dime a dozen, there's so many people that are, that are saying this stuff, but it's much harder to put into practice over the long term unless you are identifying the right behaviors and measuring those behaviors over time. And so that's what, you know, in this conversation we're having about ownership and sustainable leadership in a new world, that's what fascinates me is how can we put that into practice? How can we make that part of our culture.

Matt Perez:

It's going to be difficult to put it into practice because people want to interpret what comes out of mouth, our mouth in fiat terms. So they, they, they hear something, they go, oh, you, you make less and you do more. You know, it is, it's like that. The, by the way, the radical in our, in our name is Jose Su is going back to the root, you know, radical and s and, and going back to the root, it's not the radical of the Black Panther party and, and called and killing people and stuff like that. Not, well, they kill people. But so, so here's the thing. You, you, you mentioned the board. You assume the board, the board continues to exist. We make it simpler. We don't, we didn't try to express that in, in terms of in fiat terms. Okay. We try to get to the root of the problem. And the root of the problem is organizations, fiat organizations, the company that I had, and the, the all that is about making money about making profits. So we can sell the company, get $10,000 or whatever, a lot of money and buy house. Okay? that's from whereas the, the, the organization that we envision is driven by contributions. So capital and contribution get together. We get a lot of capital. We get, I give so much money. You say, oh, that's 10%, that's 50%, that's 40%. For the fiat system. And I don't want to throw grenade in the, in the, in the fiat room, so to speak. I'm, I'm by the way, so I know, but the revolutions and like that, and I don't, I don't want that. It's going to take a long time. It's going to develop and stuff like that. But so long as we let, so long as we have an organization whose main purpose, the board's main purpose, purpose is to make money, to make capital, to make whatever you want to call it. Then we had the same problem. It eventually, you know, that the, the current CEO dies you were talking about, about making Senate and the current CEO, CEO dies or runs away with the secretary or whatever they do. And and the next guy they bring in, the first thing he's going to say is, well, I can make it more money because we can move this over here and that over there, but I can make you more money. Make money, you're hired. So the fee system will always gravitate to defend of by absorbing everything that that goes against, goes against it. And we have to serve, we have to serve from a blank sheet of paper and build something and see how much is compatible with FIAs. And one thing that we came to, to the opinion of is that not much is going to change in, in the, the outside world, the, the results of products and stuff like that. Not much is going to change for a long time, but what's going to change is that it's people with the contributions running the company and somebody says, oh, the stump this in the river. Somebody's going to say sorry, I lived down street from the river, river and I drink that water, so let's not do that. Okay. And it's a, he says, same as you. So that's I think is the problem with the current system is ownership.

Paul McCarthy:

But I think, I think the other thing, and I, and I, and I have to respectfully disagree that nothing will change. I believe things will change, and I see the change step by step incrementally. I don't think we're talking about a seismic paradigm shift overnight. I think we're chipping away at something to change a paradigm. You know, and I, I, one of the people who endorsed my book was Gary Ridge. Gary Ridge was the former CEO of WD 40 for 35 years, and was one of the fi the first kind of pioneers, even though this term is quite overused now as well, but was one of the first pioneers of servant-based leadership, and showed the board that you could not only make money, but you could make money and be nice and care for your people. And I, I, I'm quite entrenched in the whole world of compassionate leadership as well. And so I, I think there, from the evidence that I'm seeing, the research, the sources, the conversations I'm having, there is a step change happening, Matt, which is saying, we know the old system doesn't work. We think we have to be complacent or complicit and buy into the old outdated system. But the next generation, this is where the research comes in, says the next generation of leaders don't want the way that we've had it now. So we are right at the precipice, a turning point if we choose that way to say, the next generation of leaders coming into the workforce will want to be identified, recruited, onboarded, and developed differently. So we've got to have faith that they'll want to lead differently. So Jose.

Jose Leal:

I was just going to say, I wanted that as the next generation of, of leadership when I joined the company that I did, I agree that the next generation always wants something better and different, but very often they get sucked back in to the exact same system, and they have been for many generations. So the the question then I would ask is, and I agree with you, Paul, so I'm, I'm not disagreeing with you. Yes. Things are changing. They're changing slowly in the mainstream, and I think they're changing more rapidly on the fringes. And, and ultimately there will be a, a fringe growth, hopefully, and a, you know, changing within the mainstream as well. Okay. But the mainstream isn't where we're going to see the major changes. That's going to be a very small, slow, steady change. My theory is there was a lot more energy about a different way of doing things back in the sixties. And that didn't add up to anything. Every single time I run into people my age, somebody says, oh, I used to be a hippie. Right. I used to think that there was a better way to do things. Right. but then, you know, I needed a job and I needed a house, and I needed a car, and I needed a job, and therefore that was the way I did it. So if, go ahead.

Paul McCarthy:

If you buy into, sorry. If you buy into outdated structures and philosophies and, and so chain, you know, I, I've taken the approach that I have with my work deliberately five to six years, not trying to sell or commercialize because I wanted to drip feed ideas that would get people to think differently. Now, I know at the end of the day, if you've got three kids and you can't pay the mortgage, and you are, you're working over time and you're worried about losing out on that promotion, I know that you are not going to be thinking about changing the world. Right. You're just trying to keep food on the table. I get it. Right. Right. Yeah. But, but, but what we can do, and we are responsible for, and I will never lose sight of, is step by step piecemeal change. We can change one step at a time. So when I started this path, I've taken very much philosophically the Trojan horse approach, which is changing the system from within one, one conversation at a time. And I know if Matt's shaking his head, but I tell you what, it's been much more effective so far doing that than being seen by chief people, officers, VPs of HR boards, CEOs, as throwing a grenade into the middle of their room. Because I bet you dollars to donuts, the more that you speak the language of the outdated organization, the more you'll lit, you'll get the ears of the outdated executives. So you can start to put your ideas slowly through the channels. It doesn't happen overnight, to your point, Jose, but it does start to affect change because we all believe the world was flat one day. Right. And if, if we still believe the world was flat, we wouldn't have achieved half of what we've achieved in humanity up until this point. So respectfully, I'm, I'm of the, the camp that says, you know what? There is a different way of doing it and there's a better way of doing it. Will I be vilified and put on a, a cross? I don't know, but will I stop doing it? No.

Jose Leal:

Well, don't, don't get us wrong, Paul, because I think both of us agree that there is a much better way to do it. There are there, there has to be a change. First thing, there must be a change. The, the level of this function that we have is only going to grow if we don't do make a change. Yeah. So that's a, that's a given. And that I think that dysfunction contributes not only to our dissatisfaction and wellbeing as a society, it's also contributing to the level of destruction that we're doing to our, to our ecology. They're, they're hand in hand. If, if, if we have a dysfunctional organization, then that organization can do harmful things pretty easily. Yeah. Because there's no one, no human is attending to what's happening. They're just simply robotically doing whatever it is that the organization wants, wants done and.

Matt Perez:

Making money.

Jose Leal:

Making money.

Paul McCarthy:

And the irony though is that we talk a lot in organizations and at leadership level and thought leaders talk about this as well, and practitioners by the books of people who write like us about this concept. So I, I guess it comes down for me to a simple human question. And we touched upon it earlier, Matt, when, you know, are, are we selfish, selfish or selfless as human beings? And I, I take it one step further, which is, you know, your whole attitude of and outlook on life, is it pessimistic or optimistic? And the moment you answer that question will determine how you see the future. And so for me, I, I'm someone that thinks you can change one conversation at a time, and you can still play the game of an outdated system. But when you get groundswell and groundswell leads to PE talent, either not joining or leaving your organization, that's going to hit the bottom line, which is going to speak the language of the old world, that's when the conversations get interesting. And that's that bleed you talked about Jose, which is how do you, how do you start a small change from within when it hurts you, basically with the old world when it hurts you? And unfortunately hurting the old, old world is hit, is hurting the shareholder price. But that at least creates the conditions for people like us who serve as custodians to a different way of doing something to say, how can we help guide these conversations as we evolve? Because if I didn't have hope or faith, I would be doing this work. Of course. You know, I wouldn't, I I wouldn't be doing it.

Jose Leal:

So, but, but I think, I think there's two streams of, of transformation that we're talking about, right? The dysfunction we agree on. I think the two streams of transformation, one of which is what you've just described, Paul, which is transformation from within slow, steady generational. I think all of those fit and, and what you've described, yes. And then there is what I would call fringe approach, which is creating new organizations. At the bottom. There are millions of organizations being created every month around this world, and every single one of them knows one model to do it. Right.

Paul McCarthy:

And there's the opportunity to create a new blueprint.

Jose Leal:

There's the opportunity to create a new blueprint. And that blueprint, what we call a radical organization , is to, to, to not start, let's stop starting new organizations that are modeled on the old one that we can do easy. Much easier than to change behemoths. So, so that second stream of of work is, is what we are proposing is how do we, how do we create new organizations that are of this new structure, of this new mindset, of this new way of seeing the world much more consistent with human nature, because nobody likes to be told what to do. But everybody's capable of negotiating what needs to be done.

Paul McCarthy:

Agreed. And, and in, in, in those two models that you've outlined, one is transforming the system from within. And that relies on, on, on speaking the language of the current system.

Jose Leal:

Yes.

Paul McCarthy:

Which is the majority at the moment in power. Yes. The second, which you are describing, creating the new blueprint with a new organizational structure, I'm completely in support of, and in fact, a lot of my work is based upon that, that ideology, that opportunity to do that. I think in the short term, and it's interesting, maybe just to put this over to you, because in the short term, we need a balance of both. We know that, we know that today's leaders are on the way out, right? Yes. And there's a, there's a, a surplus to replace them. So we've got an opportunity to transform from within the new leaders, and we've got an opportunity to drip feed a new organizational blueprint for those new, new talent, new leaders. But I ask myself, and I probably ask you, which is, are we in this for the long game or are we in this for the short termism thinking? Because, you know, the, the, the two questions are, are quite interesting to me because we have the opportunity right now to, to shape the future of the way the workforce turns up. We know it's a long term pledge, yet we have to start from the short termism thinking as well to say, how can we get pilot cohorts along the way?

Jose Leal:

So this morning I'm reading the news and there's news that in Germany, they're thinking of closing two plans for the first time in the history of Volkswagen. They're thinking of closing two plants in Germany, Volkswagen and I, I look at them as a model of a corporation, not never mind the car business. I'm just thinking about how they think once they're in power. Right? they become very static. So they've allowed themselves to not be as dynamic as they were because they were making so much money selling in China and selling in other countries at the rates that they have been for the last 20, 30 years. I think the same thing with, with corporations, it's hard for them to change because they've been successful financially. Excuse the balloons, they've been successful at, at driving revenues and driving profits. And so that's success in the current model. And what happens is it's a very slow thing to do. I worked in the newspaper industry, they had 25 to 30% gross profits. Okay. It's crazy to think that you're going to give up that business and that that income because you want to change to a digital organization. That was my role within the organization.

Matt Perez:

No, but what Paul is saying is you're not going to give that up somehow. You're going to get better and because of the people involved you want to do a harmful thing.

Jose Leal:

I'm not arguing that it's not going to happen. What I'm arguing is that it's going to be a slow process. Very slow. Yeah. Very slow process. And I think that the other stream, whilst that's happening, let's say that takes 20 years, 30 years, let's say one full generation, right? 25 years, let's say, of of of that work, the work that you're doing, which is thankless work, by the way. And thank you for doing it because Yes. We need it. Right. So my argument isn't you shouldn't be doing what you're doing. Not at all. I'm just saying that it is a piece of the puzzle. And the other piece of the puzzle, if we start now in 25 years, we might have millions of companies that are already in the new blueprint, and you won't have to work on them too.

Paul McCarthy:

Yeah. But by the way, I, I have a foot in both camps, so I'm also very much entwined in, in working in, in the startup community that that helps to create organizations that are starting from the outset, a different mode, a different model. So besides this conversation, it would be good to talk with you about that work and what you are doing as well. But no, I I, I'm very much, I'm not taking one approach over the other. I'm saying both are needed and one it, one is, the current decision makers of today tend to be those that are still stuck in the matrix in the old world. But we still need to speak their language and slowly use techniques to, to kind of bring them forth in. As I said at the beginning of our conversation about five years ago, I, I sat around with a bunch of c-suites with a client, and I was having conversations about future trends on the horizons where I said to them, you know, performance management, RIP, you know that that'll be dead. The competency model of develop developing leaders will be gone soon. You'll all be setting each other's salaries. And they laughed at me and I, and five years later, those three things that I just mentioned, they are happening. So I'm under no illusion that that that true transformative sustainable change takes time. But you've got to start with the mindset for what the future holds. Now to drip feed, which I've been doing from within, saying, you know, you do have a choice here. You, you can play the game or not. But we know that all these trends coming will at some point be alongside the current model that isn't working. We know that talent will leave this organization that has outdated systems. For, for this one that provides flexibility and autonomy. And we also know from what I said earlier, that that will hurt the bottom line, the p and l of that company because the talent's left. And guess what happens with the talent goes morale dips with the current team that's left clients leave and where the client's going to go and

Jose Leal:

Profits off profit, most importantly.

Paul McCarthy:

And the profits then go with them. Right. So, so maybe it's, is it a carrot or a stick? I don't know. But, but using the language of, of today, I believe helps to sow the seeds for tomorrow. And if we can, we, we can use decision makers today in a way that that helps and guides them to see the benefits of a new system. I'm not saying throw out the current system completely. Right. But we're saying this, this is the future which can augment the current way of doing things. And that's what I, I sit between that, you know, I kind of, I'm at that intersection point with those two models that we talked about.

Jose Leal:

Yeah. And I think, you know, and we need to wrap it up. 'cause Our half hour conversation has turned into a 50 minute conversation. But it's been a pleasure. Thank you Paul, for, for engaging in this. I think that at some point they feed each other that the inside out type of work that you're primarily describing will benefit greatly from having examples of our operational organizations that are startups that are doing different things. Yeah. And what you just said about people leaving to go to those organizations will happen, but they need to exist. And so that cycle of, of new types of organizations that are from the ground up and existing organizations that are slowly transforming themselves, they need that pressure. They need the pressure of that new organization in order to be able to, to sense the need for that change. Otherwise, yeah. They stay stuck in their world. It's enough, it's not enough to have the dysfunction. We've had dysfunction at work for decades. Right. It's, it's not enough to have that dysfunction.

Matt Perez:

Centuries.

Jose Leal:

Yeah. Centuries. Thank you.

Paul McCarthy:

But that's where, so there's, there's only two ways that the human and humans comprise organizations. So there's only two ways humans will change. One is if it's forced upon them or the second it's by choice. So a cataclysmic event has to happen for a human to change now in the language of the corporation. Quite simply, that means your shareholder return plummets. Your, your p and l isn't looking too healthy. You can't attract or keep the right talent. Your competitors are, are taking all your clients. If one of those levers is pulled in the traditional structure, they have to address it. And that's where I think the intersection with, with what you are suggesting with the second model can come in as well. But I, I think there's a way to for both to operate in parallel. So I think.

Jose Leal:

Absolutely. Absolutely. I think that one feeds the other genuinely or in a, in a cyclical way. And I think that's how change has happened before. Right. It, it, we're not inventing anything new, it's just the dynamics of change. Yeah. That, that something new has to emerge to place pressure on the old and something new has to emerge for the old to know what to mimic.

Matt Perez:

And, and that just to accept exert pressure. But just to be available right now, right? You start corporation, you start, you know, three or four friends or in this, you start playing a run with something and you build something and then you go look for money and that's when the whole thing starts. There's only that model look for money. And there are people said, we can't do this. We don't have $10 million. Do you need the million? Those right now? No. But the way we see it is we're going to need $10 million. That's the only model. There is. And we're trying to, is create another model with some sample companies to and not to, not to appeal to big corporations and guys that are going to lose their house and stuff like that. But rather people don't have anything. They're building something and they're saying, we need this. And saying, well, these are two models. Pick. And and, and the model is simple enough that you can do all kinds of thing. The radical model is you can do all cancer of thing with that, because we don't believe in the holacracy 17 page constitution crap. I'm more enamored with, with sociocracy and because it is very, very flexible and, and but it's not, it's got to be this way. And you got to kneel and you got to ring the bell. I don't know if you're Catholic, but, but those of us Catholics are laughing. And and, and, and that's the thing. We're trying to create a model that people can say this or that, let's try this for a while, is what we've been doing. Oh, let's go intend to succeed, one out of 10 to succeed. And, and when you have enough of those around, you can say whether they're sad, there's that, there's that. And they can say, but they, small companies, they won't, they won't make a difference. Okay.

Paul McCarthy:

Okay. And it, and it is proof of concept. It's, it's very much Absolutely. Yeah. That proof of concept, that's a vi that has a viral effect. And then all of a sudden now, now you're competing at a different level. So Yeah. No, I, I, I fully agreement in agreement with the model. And I, and I, you know, I'm left asking questions, which I'd love to, to pursue with you at some other stage about, you know, approaches to leadership within that model and what that looks like, and how do you prepare leaders for the future in that kind of model. Because that, I think there'd be an interesting conversation that we have.

Matt Perez:

The leaders in the future for the future is every one of us. Yeah. Now we, we've learned to be competitive, to be abusive, to be all those things. And because you are co-owners, somebody can say you're being abusive. And that person could say, no, I'm not being abusive. I just want to kill you. And, and we can have the, that conversation separately if you want to. But this, there's going to be evil around that. We'll sense thing. Jose told me the other day, he said, I have different sensitivities. Sensitivities they knew. And I went, what do you mean? And then I went, yeah, of course. It's a human being. I'm a human being. We go to the bathroom at different times, and we have differences. Of course.

Jose Leal:

Well, I think we're finding out that it's time to wrap it up.

Paul McCarthy:

We've been on for 56 minutes, so it's quite a, is that a record for you guys?

Jose Leal:

Yeah. It is a record. Paul, thank you so much. It's been a pleasure. I've really enjoyed the conversation. It was I'm glad that we ended up where we did, because I think that's a, a good place to, to carry on the conversation amongst ourselves offline, but maybe in the future, bringing you back and talking a little bit more about yeah, both aspects. 'cause I think we kind of looked at things in a big, you know, this function to transformation at a big picture. Yeah. Let's talk maybe details another time. A real pleasure. Thank you for, for joining us. Thank you for for being open and again, for doing this work. Cause It's, it is valuable, valuable work. And it's not easy, we know.

Paul McCarthy:

No, it's not. Thank you, Jose.

Jose Leal:

It's a pleasure.

Paul McCarthy:

Yeah, no, I appreciate your time. Looking forward to continuing the conversations.

Jose Leal:

So I just want to announce that on September 2nd, we've got a full month ahead here on September 2nd. We've got Robert Snyder from founder at Innovation Elegance. And and then on September 18th, we've got Tim Inger Tim is partner at ey the IT services and has been around this space for quite a long time. And then in, on September 20th 25th we have Jevon McCormick a member of the Conscious Capitalism group. And we've had some colleagues over at Conscious Capitalism. So I'm looking forward to that because it, it's an opportunity to really explore where they've gone over the last couple of years. So again, thank you Paul. And we look forward to our, to our guests in the next three weeks. And it's a wrap for today. What do you guys think?

Paul McCarthy:

Wonderful. Thank you. A good, good platform. Really appreciate

Matt Perez:

Don't go, don't go away.

Paul McCarthy:

Okay. Thank you.