WEBVTT - Smart Talks with IBM and Malcolm Gladwell - An Open Conversation about Open Innovation 0:00:03.160 --> 0:00:07.040 Hello, Hello. This is Smart Talks with IBM, a podcast 0:00:07.320 --> 0:00:11.680 from Pushkin Industries, High Heart Media and IBM about what 0:00:11.720 --> 0:00:14.640 it means to look at today's most challenging problems in 0:00:14.680 --> 0:00:19.960 a new way. I'm Malcolm Gladwell. In this episode, I'm 0:00:20.000 --> 0:00:24.079 speaking with Jim Whitehurst, senior advisor at IBM. In his 0:00:24.160 --> 0:00:27.000 time with IBM, as both an advisor and former president, 0:00:27.360 --> 0:00:31.800 Jim was responsible for the IBM Cloud and cognitive software 0:00:31.880 --> 0:00:37.080 organization and corporate strategy. Jim is an expert in open innovation. 0:00:37.600 --> 0:00:41.120 During his time as president of IBM, Jim embedded his 0:00:41.159 --> 0:00:45.360 philosophy into the company, helping clients and partners on their 0:00:45.400 --> 0:00:50.080 own digital transformation journeys. Today, we'll be talking about the 0:00:50.080 --> 0:00:53.800 ways open culture companies can change the way we lead 0:00:54.120 --> 0:00:59.080 and work together. Realize, Hey, this isn't insanity or chaos. 0:00:59.440 --> 0:01:02.320 It's actually different way to run an organization is trying 0:01:02.360 --> 0:01:06.400 to seek its way into the future. Before coming to IBM, 0:01:06.600 --> 0:01:10.800 Jim was the president and CEO of Red Hat. Red 0:01:10.840 --> 0:01:13.760 Hat has been a leader in enterprise open source software 0:01:14.000 --> 0:01:17.759 and while CEO, Jim helped it become the first one 0:01:17.880 --> 0:01:33.400 billion revenue open source software company. In let's dive in Hi, Jim, Hey, 0:01:33.440 --> 0:01:37.320 how are you? I'm good. Thank you for joining me today. 0:01:37.840 --> 0:01:39.240 Let's do so many things I want to talk to 0:01:39.280 --> 0:01:43.160 you about. Whenever I read the resume of someone like you, 0:01:43.600 --> 0:01:49.400 I always wonder how did he get there? Like? What 0:01:49.760 --> 0:01:51.480 tell me? Can you give me a short version of 0:01:51.720 --> 0:01:55.640 how did you end up thinking about things like innovation 0:01:55.720 --> 0:01:59.160 and creating these kinds of receptive cultures. It's such a 0:01:59.240 --> 0:02:02.360 kind of there must be a million paths to that direction. 0:02:02.400 --> 0:02:05.080 I'm just curious about what your path was. You know, 0:02:05.200 --> 0:02:07.960 graduated from college, thought I wanted to be in technology, 0:02:08.680 --> 0:02:12.280 interviewed with the Boston consulting group, love client service. Never 0:02:12.320 --> 0:02:15.320 thought I would leave the craft of working with clients 0:02:15.320 --> 0:02:18.040 and working in small teams I loved. I didn't realize 0:02:18.080 --> 0:02:20.440 that was kind of the nub of how teams and 0:02:20.480 --> 0:02:23.000 innovation work. Uh and then a litterally I was a 0:02:23.040 --> 0:02:24.880 partner there. I never thought i'd leave it. Literally, at 0:02:24.919 --> 0:02:28.840 noon on nine eleven, the CEO of Delta called me 0:02:28.880 --> 0:02:30.919 and said, I need you now to be my treasure 0:02:31.440 --> 0:02:33.040 And I said, you know, you're out of your mind. 0:02:33.080 --> 0:02:36.239 I know nothing about being a treasurer. And he said, well, 0:02:36.320 --> 0:02:38.160 that's okay. Nobody in the right mind would loan his 0:02:38.280 --> 0:02:40.200 money right now. I just need kind of a creative 0:02:40.200 --> 0:02:43.240 strategic person. So I joined Delta literally at noon on 0:02:43.320 --> 0:02:46.960 nine eleven, and then kind of ran through the bankruptcy restructuring, 0:02:47.040 --> 0:02:50.960 and then was approached by Red Hat. And I had 0:02:51.000 --> 0:02:53.320 been a geek playing with Lennox in my spare time 0:02:53.360 --> 0:02:55.720 for a long time and I joined. I think that's 0:02:55.720 --> 0:02:59.120 where my interests really started. You know, Delta is considered 0:02:59.160 --> 0:03:01.880 a very low run company. It's always on the list 0:03:01.880 --> 0:03:04.239 of the most environant companies. And I got to Red 0:03:04.240 --> 0:03:07.520 Hat and I thought, okay, I know what leadership looks like. 0:03:07.919 --> 0:03:11.200 And I'd say in the first month, I thought this 0:03:11.240 --> 0:03:14.120 place is absolute chaos. I understand they brought me in 0:03:14.160 --> 0:03:17.080 here to clean it up, right. The problem at Delta 0:03:17.240 --> 0:03:22.320 is how do you run a tightly integrated has to 0:03:22.360 --> 0:03:26.200 be run with excellence operation Red hats all about innovation. 0:03:27.080 --> 0:03:30.560 You know, there isn't a leadership style that solves every problem. 0:03:30.600 --> 0:03:34.640 There's a leadership style for you know, driving efficiency and 0:03:34.760 --> 0:03:37.640 driving out variants in a static environment, which is what 0:03:37.720 --> 0:03:41.720 most leaders have been raised to do. And then there's 0:03:41.760 --> 0:03:45.200 a leadership style for trying to drive a faster pace 0:03:45.240 --> 0:03:49.920 of innovation, and those fundamentally look different. So wait, I'm 0:03:50.120 --> 0:03:52.760 I'm curious about this. So you go from Delta to 0:03:52.880 --> 0:03:56.440 Red Hat. So you couldn't if we were if we 0:03:56.560 --> 0:03:59.560 sat down Jim and tried to figure out tried to 0:03:59.680 --> 0:04:03.440 name two companies that were more different, Yeah, you couldn't 0:04:03.440 --> 0:04:07.240 do it. So now how long did it take you 0:04:07.280 --> 0:04:10.040 to come to the insight? You just spoke? So you 0:04:10.120 --> 0:04:15.440 go from A to Z and you say, WHOA, this 0:04:15.520 --> 0:04:18.479 place looks different because you could have gone the other way, right, 0:04:19.120 --> 0:04:21.960 you could have said I have to turn Red Hat 0:04:21.960 --> 0:04:25.200 into Delta, but you didn't. I'm guessing nine out of 0:04:25.240 --> 0:04:27.680 ten people would have tried to turn Red Hat into 0:04:27.680 --> 0:04:31.000 Delta and would have flamed out. But you didn't. Why Well, 0:04:31.040 --> 0:04:33.080 I do think a big part of it was I 0:04:33.120 --> 0:04:36.080 was also learning a new business, and so I literally 0:04:36.080 --> 0:04:39.320 spent the first six months on the road, traveling, seeing customers. 0:04:39.680 --> 0:04:41.960 And if that hadn't happened, I think you're exactly right. 0:04:41.960 --> 0:04:44.080 I would have said, no, my job is to bring 0:04:44.120 --> 0:04:48.120 in quote unquote professional management. But I was traveling enough 0:04:48.800 --> 0:04:53.080 that I didn't kind of focus on change. I was saying, 0:04:53.120 --> 0:04:55.920 let me learn the business understand our clients, etcetera, etcetera. 0:04:56.440 --> 0:04:58.599 In that period of time, I saw a couple of 0:04:58.720 --> 0:05:02.240 amazing things happened. My second week on the job, I 0:05:02.360 --> 0:05:05.640 was being briefed on this area called virtualization, and I'm 0:05:05.680 --> 0:05:08.039 getting briefed on the strategy and when we picked the 0:05:08.040 --> 0:05:11.800 technology we picked, and in the room was kind of 0:05:11.839 --> 0:05:14.760 the head of engineering, a couple of people who worked 0:05:14.760 --> 0:05:16.719 for him, but all the way down to some engineers 0:05:16.720 --> 0:05:19.200 working on virtualization there told me the strategy and why 0:05:19.240 --> 0:05:21.440 we picked the technology we did, and what are the 0:05:21.560 --> 0:05:24.280 engineers So that the most junior people in the room 0:05:24.400 --> 0:05:27.200 and the briefing said, yeah, this is what we're doing, 0:05:27.279 --> 0:05:30.360 but you know it's wrong. Fundamentally, we picked the wrong technology. 0:05:30.400 --> 0:05:33.040 There's this new technology that's emerged which is kind of 0:05:33.120 --> 0:05:35.040 upstream and Linux, and this is when we should pick 0:05:35.240 --> 0:05:37.960 And a huge argument erupts, No, no, no, we did this, 0:05:38.040 --> 0:05:40.039 And so I'm list of this back and forth, and 0:05:40.080 --> 0:05:41.800 I remember going home and telling my wife that night, 0:05:42.160 --> 0:05:45.400 I said, I am living in chaos. There's a briefing 0:05:45.400 --> 0:05:47.479 in front of the CEO where these people are just 0:05:47.560 --> 0:05:51.440 like literally food fight arguing this stuff out. Four months later, 0:05:51.760 --> 0:05:54.640 that same set team came in and said, you know what, 0:05:54.760 --> 0:05:57.520 we were wrong. We need to acquire the company behind 0:05:57.520 --> 0:06:00.600 the other technology, because that's the way to go. And 0:06:00.600 --> 0:06:05.080 what I realized is, you know what if they had 0:06:05.120 --> 0:06:06.760 just come in and given me a briefing on here's 0:06:06.800 --> 0:06:08.920 the technology, why we did it, and four months later 0:06:08.920 --> 0:06:10.960 and come in and said no, no, no, we want 0:06:10.960 --> 0:06:12.640 to buy this other I would just in a way, 0:06:12.680 --> 0:06:14.440 you gave me all the reasons why this is right 0:06:14.440 --> 0:06:16.320 and even infested in it. Why would I do that? 0:06:16.760 --> 0:06:19.000 But because I heard the arguments that it was a 0:06:19.040 --> 0:06:23.400 fifty five forty five decision and understood it wasn't clear cut, 0:06:23.880 --> 0:06:28.960 and that changed over time because of changing circumstances, it 0:06:29.120 --> 0:06:31.160 was much easier for me to go to the board 0:06:31.200 --> 0:06:33.120 and say, you know, let's spend hundreds of millions of 0:06:33.160 --> 0:06:36.040 dollars buying this other company because you know, I'm convinced, 0:06:36.040 --> 0:06:38.440 convinced it's right because I've heard both sides of the argument. 0:06:38.440 --> 0:06:40.960 I've seen how it's involved over time. So that was 0:06:41.440 --> 0:06:44.560 a time when I realized, like wow, this system that 0:06:44.640 --> 0:06:49.640 seemed like chaos was a way that we socialize, you know, 0:06:49.680 --> 0:06:52.400 the problems that we need to solve. An innovation and 0:06:52.440 --> 0:06:56.320 recognizing that circumstances changed and therefore our output can change 0:06:56.360 --> 0:06:59.400 all of sudden over elise like, No, that argument wasn't chaos. 0:06:59.839 --> 0:07:01.880 That was a great way to make sure that we 0:07:01.880 --> 0:07:04.880 were all on the same page on both the facts 0:07:04.920 --> 0:07:07.680 and where we felt we should act coming out of 0:07:07.680 --> 0:07:12.040 those facts. And then I realized, Hey, this isn't insanity 0:07:12.240 --> 0:07:14.840 or chaos. It's actually a different way to run an 0:07:14.920 --> 0:07:18.080 organization is trying to seek its way into the future. 0:07:18.920 --> 0:07:21.520 M M, Now, can you let's talk a little bit 0:07:21.560 --> 0:07:24.800 about that transit. You have these two modes, and you're 0:07:24.800 --> 0:07:31.080 not saying mode A the Delta mode isn't useful. You're 0:07:31.120 --> 0:07:33.720 saying it works if you're in an industry that is 0:07:34.240 --> 0:07:38.040 well established, where the technology is moving incrementally, where you're 0:07:38.200 --> 0:07:40.880 where it's about. It's where it's about. Delta has to 0:07:40.920 --> 0:07:45.840 execute perfectly, right. You do not want anyone experimenting with 0:07:45.880 --> 0:07:49.200 the safety procedures before she right. I mean that's a 0:07:49.920 --> 0:07:53.120 strong example now because most companies have some of both. 0:07:53.360 --> 0:07:57.720 You do want people tinkering with trying experimenting on you know, 0:07:57.840 --> 0:08:01.840 Delta's website, right or the mobile app, and so all 0:08:01.920 --> 0:08:05.640 companies have a degree of difference in the types of 0:08:05.640 --> 0:08:08.680 of of operations that they're running. Right. You know, Red 0:08:08.720 --> 0:08:11.360 Hat has financial accounting and you know, I go to 0:08:11.480 --> 0:08:14.120 jail if those UH numbers are wrong, so you want 0:08:14.160 --> 0:08:16.400 to make sure that those are locked down. The key 0:08:16.560 --> 0:08:21.640 is for executives to recognize there are different approaches to 0:08:21.760 --> 0:08:27.200 your organization, your leadership, your management processes, depending on which 0:08:28.080 --> 0:08:31.480 objective function you're trying. You're trying to drive variants out 0:08:31.520 --> 0:08:34.640 to drive standardization or you're trying to inject variants in 0:08:34.760 --> 0:08:37.880 to drive innovation, and you have to do a little 0:08:37.920 --> 0:08:41.160 bit of both and recognizing that there's a continuum around that. 0:08:41.600 --> 0:08:44.920 But importantly, more and more of the world is moving 0:08:44.960 --> 0:08:49.480 to you know, innovation is important, So walk me through. 0:08:49.559 --> 0:08:53.440 Let's let's break down all of the components of this 0:08:53.960 --> 0:08:57.880 open innovation model. What is it? What does it look like? 0:08:58.000 --> 0:09:01.160 Does it feel like? Does it you know, give me 0:09:01.200 --> 0:09:05.120 a kind of prepare me, So Malcolm's gonna move, Malcolm's 0:09:05.120 --> 0:09:08.080 gonna join to do this transition and enjoin. Prepare me 0:09:08.160 --> 0:09:12.360 for what it looks and feels like. Sure, so, first off, 0:09:12.480 --> 0:09:15.719 it is absolutely clear what the strategy of the company is. 0:09:16.040 --> 0:09:19.600 But your work steps are typically left somewhat ambiguous, so 0:09:19.720 --> 0:09:24.160 you can work to improve, trying new things, observe what's happening. 0:09:24.400 --> 0:09:27.800 So I think most large companies will say frontline really 0:09:27.840 --> 0:09:30.040 needs to understand the work task to get their job done, 0:09:30.040 --> 0:09:32.240 and let's make those efficient. They don't really need to 0:09:32.280 --> 0:09:35.160 know the corporate strategy. We would flip that around and 0:09:35.200 --> 0:09:37.960 say everybody needs to know the corporate strategy and exactly 0:09:37.960 --> 0:09:40.840 what we're doing and why we're gonna leave the worksteps 0:09:40.840 --> 0:09:43.559 blurry so you can work to figure it out. And 0:09:43.720 --> 0:09:45.600 the other thing I think people see out of it, 0:09:45.640 --> 0:09:50.120 at least certainly a red hat is everybody thinks are 0:09:50.120 --> 0:09:52.200 gonna come in and everybody's gonna be nice and holding 0:09:52.240 --> 0:09:54.600 hands and seeing in kubaya. And one of the first 0:09:54.600 --> 0:09:56.959 things they find out it's like, wow, it's kind of harsh. 0:09:57.040 --> 0:10:00.319 I throw up an idea and immediately people shoot it down. 0:10:01.000 --> 0:10:03.079 And one of the things that we've learned over time, 0:10:03.280 --> 0:10:06.080 and I do think this is beyond red. This is 0:10:06.160 --> 0:10:11.560 kind of a broad. Important point is that great ideas 0:10:11.720 --> 0:10:15.360 are fused together from many good ideas and people arguing 0:10:15.400 --> 0:10:17.559 and fighting it out and building on top of each other. 0:10:17.880 --> 0:10:20.640 Let me ask you a very random, odd question. I 0:10:20.679 --> 0:10:22.880 suppose I can do Jim and said I would like you. 0:10:23.840 --> 0:10:27.800 I'd like to bring you into my really good, you 0:10:27.840 --> 0:10:33.079 know school. Your job is to redesign the curriculum and 0:10:33.400 --> 0:10:37.320 pedagogy of this school to prepare our students for the 0:10:37.320 --> 0:10:42.520 world you just described. Yep, so look the broad way. 0:10:42.559 --> 0:10:44.600 I would say this is true for any organization. The 0:10:44.679 --> 0:10:50.800 traditional approach to thinking about solving the problem or leading 0:10:50.960 --> 0:10:55.360 is very simple is three big steps your plan, Right, 0:10:55.360 --> 0:10:59.040 You come up with a plan, You then prescribe the 0:10:59.120 --> 0:11:02.280 activities to whoever has to go executed, and then you 0:11:02.360 --> 0:11:06.320 execute and executes about driving compliance to that plan. You know, 0:11:06.440 --> 0:11:10.560 in university, what do you teach. You need to teach 0:11:10.640 --> 0:11:16.000 the a the capacity to be curious, to experiment, to try. Um, 0:11:16.040 --> 0:11:20.160 you need to teach the the comfort with ambiguity. And 0:11:20.160 --> 0:11:22.800 that's a tough thing to do. And so that's why 0:11:22.960 --> 0:11:25.960 I do think engineers in particular need to take more 0:11:26.040 --> 0:11:29.240 humanity right, you know, more open ivied, whether it's you know, 0:11:29.320 --> 0:11:32.559 philosophy or political science or sociology, where some of these 0:11:32.640 --> 0:11:36.840 questions don't have firm answers. I think it's really important 0:11:36.880 --> 0:11:41.440 for people to learn because comfort with ambiguity and recognizing 0:11:41.480 --> 0:11:43.560 that there are things that there is no firm, hard 0:11:43.600 --> 0:11:49.520 answer to combine with engineering skills or what enables great 0:11:49.600 --> 0:11:52.080 engineers to say, I'm gonna learn from others, I'm gonna 0:11:52.120 --> 0:11:54.320 try them an experiment, I'm gonna come up to an answer. 0:11:54.520 --> 0:11:57.920 There is no right answer to solving X, y Z innovation. 0:11:57.960 --> 0:12:00.680 There are multiple approaches and getting people comfortable with that, 0:12:00.960 --> 0:12:04.079 and those are key important points that I would advise 0:12:04.440 --> 0:12:07.800 anyone going to university or universities is thinking about curriculum. 0:12:07.800 --> 0:12:11.640 It's um, there are no right answers and innovation. They're 0:12:11.679 --> 0:12:14.440 different approaches, and we do spend a lot of time 0:12:14.520 --> 0:12:17.880 on right and wrong um, you know, versus kind of 0:12:17.920 --> 0:12:23.720 experiment in building and then the final thing's working together. Um. 0:12:23.840 --> 0:12:28.320 There's a lot of evidence that shows that teams come 0:12:28.400 --> 0:12:33.199 up with better UH answers than individuals. I always talked 0:12:33.200 --> 0:12:36.000 about your red hats known for open source, which is 0:12:36.120 --> 0:12:38.320 you know, thousands of people working together to build like 0:12:38.440 --> 0:12:41.640 Linux other software, and I always make sure people understand 0:12:42.240 --> 0:12:45.079 open source is not the same thing as crowdsource. Crowdsourcing 0:12:45.120 --> 0:12:47.319 should get a million people to throw an idea, and 0:12:47.360 --> 0:12:50.680 when I'm probably gonna be good, open source, or what 0:12:50.760 --> 0:12:52.920 I'm talking about with an open organization is how you 0:12:52.960 --> 0:12:55.800 get multiple people work together to give you better solutions 0:12:55.840 --> 0:12:58.440 than any one of those individuals could on their own. 0:12:58.920 --> 0:13:01.920 And so the social skills about how you get people 0:13:01.920 --> 0:13:05.320 to work together to get better solutions is important. But 0:13:05.760 --> 0:13:08.720 if I, if I look at just take high school 0:13:08.760 --> 0:13:12.720 and university education in this in this country, so little 0:13:12.840 --> 0:13:17.280 of learning is taking place in groups. We are sending 0:13:17.400 --> 0:13:22.200 kids off by themselves to tackle problems that have been 0:13:22.240 --> 0:13:26.280 handed to them, prescribed, planned and prescribed and asked them 0:13:26.320 --> 0:13:29.280 to execute the problem that we've given them on their 0:13:29.320 --> 0:13:31.600 own in large part and to the extent that they 0:13:31.640 --> 0:13:34.319 are part of a team, it's a very very informal team. 0:13:34.320 --> 0:13:36.760 But then we break them up again when we evaluate them. Right, 0:13:37.400 --> 0:13:42.640 I mean, there's a complete disconnect between the world you 0:13:42.679 --> 0:13:47.000 are describing right, which is responding to the technological challenges 0:13:47.040 --> 0:13:51.200 of the century, and the world we're preparing kids for. Well, 0:13:51.200 --> 0:13:53.480 this is the lag. This is so it's not only 0:13:53.800 --> 0:13:57.520 you know, the leaders who don't realize their management systems 0:13:57.520 --> 0:14:01.640 built for you know, the proto typical factory work, road task, 0:14:01.679 --> 0:14:05.840 static environment, etcetera. Education Lighting people up in rows individual 0:14:06.120 --> 0:14:08.360 you know, you make a mistake, that's you know, that's wrong, 0:14:08.480 --> 0:14:11.840 that's bad. Where we know experimentation is so important for 0:14:11.840 --> 0:14:14.720 for innovation. Yeah, we have an education system that is 0:14:16.080 --> 0:14:20.560 optimized for the industrial world that no longer exists, and 0:14:20.600 --> 0:14:22.400 there is a lag there that we have to fix 0:14:22.680 --> 0:14:25.760 and we really have. If anything, we're sliding backwards with 0:14:25.840 --> 0:14:28.560 social media and other things that gets kids even more 0:14:28.680 --> 0:14:32.640 isolated from each other, and that core insight that we know. 0:14:33.040 --> 0:14:36.400 There's tons of academic evidence, uh in research that says 0:14:36.480 --> 0:14:39.920 groups do better at solving problems than individuals. Yet somehow 0:14:39.960 --> 0:14:42.480 we then want to split people up. It's just I 0:14:42.520 --> 0:14:46.440 think it's a lag problem. It's a recognition problem. To 0:14:46.480 --> 0:14:49.120 take that all the way back, you know, Ronald Coast 0:14:49.400 --> 0:14:53.080 letting Nobel Prize for explaining why a company exists. You know, 0:14:53.120 --> 0:14:55.640 the whole idea was transaction costs. You know, so in 0:14:55.640 --> 0:14:58.920 other words, the question is why companies exist versus everybody's 0:14:58.960 --> 0:15:02.600 an individual actor and kind of coordinating. And his point was, well, 0:15:02.720 --> 0:15:06.800 when transaction costs are lower, um by coordinating inside a 0:15:06.800 --> 0:15:08.880 company than when a market cost would be old, people 0:15:08.880 --> 0:15:11.240 will get together and kind of create a company that 0:15:11.320 --> 0:15:15.120 all assumes interactions between people are cost which is true 0:15:15.320 --> 0:15:18.360 when you're trying to coordinate and you know, kind of 0:15:18.440 --> 0:15:21.480 drive building something scale. But when you're trying to innovate, 0:15:21.800 --> 0:15:24.800 we know interactions between people are in benefit because teams 0:15:24.840 --> 0:15:28.280 to are more innovative than individuals. So all of a sudden, 0:15:28.520 --> 0:15:31.600 we built the corporate entities and how we put them together, 0:15:31.680 --> 0:15:35.520 how we educate people. It's all about minimizing transaction costs 0:15:35.560 --> 0:15:40.640 and optimizing you know, the individual output and assuming that 0:15:40.720 --> 0:15:45.280 there's some greater way of you know, some scientists somewhere, 0:15:45.280 --> 0:15:47.880 he's gonna plug all that together. Yet it is the 0:15:47.880 --> 0:15:50.680 interactions where you know, the magic happens when you're trying 0:15:50.720 --> 0:15:54.960 to innovate. Yeah, this reminds me I. In my podcast 0:15:55.000 --> 0:15:58.560 Revisions History, the one of the last episodes this season 0:15:58.640 --> 0:16:01.880 is all about war games and basically asked the question 0:16:02.720 --> 0:16:05.640 why does the military play war games? They play a 0:16:05.680 --> 0:16:09.480 lot of war games, and one of the reasons is 0:16:09.560 --> 0:16:13.160 exactly the one you articulated, which is that you can 0:16:13.160 --> 0:16:15.920 do all the plans formal planning and prediction. You can 0:16:15.960 --> 0:16:18.320 send your experts off to come back with reports and 0:16:18.360 --> 0:16:20.640 you will learn and get a certain kind of insight 0:16:20.680 --> 0:16:23.800 from that. With another way, more valuable insight that will 0:16:23.880 --> 0:16:27.480 only come if you bring a group of people together 0:16:27.560 --> 0:16:30.840 and have them interact over a problem. Every one of 0:16:30.840 --> 0:16:33.520 the war gaming world quotes this line from Thomas Shelling, 0:16:33.560 --> 0:16:36.880 which is something to the effect of even the smartest 0:16:36.920 --> 0:16:39.080 man in the world cannot make a list of the 0:16:39.160 --> 0:16:42.640 things that haven't occurred to him, right, which is so lovely. 0:16:44.680 --> 0:16:47.640 And that's the point, right, that you only learn about 0:16:47.640 --> 0:16:50.000 the things that haven't occurred to you when you are 0:16:50.120 --> 0:16:55.160 in this kind of free flowing, interactive social environment. That's 0:16:55.200 --> 0:16:58.960 the point. That's why we throw people together in these 0:16:59.080 --> 0:17:01.840 in the end create the kind of chaos you're talking about, 0:17:02.480 --> 0:17:05.280 because it's going to force you off the narrow path 0:17:05.359 --> 0:17:09.040 that you put yourself on. Yeah, speaking of the military, 0:17:09.080 --> 0:17:11.640 one of my favorite kind of pieces to read on leadership, 0:17:11.680 --> 0:17:15.880 it's uh commander's intent. And the whole point is intent 0:17:16.119 --> 0:17:18.800 is so important for you know, others in the field 0:17:18.800 --> 0:17:21.680 to understand because you can get separated, frankly, commander to 0:17:21.840 --> 0:17:25.040 get killed, and understanding the intent and the objective is 0:17:25.080 --> 0:17:28.320 so much more important than understanding the kind of the 0:17:28.480 --> 0:17:31.640 specifics that go around that because as soon as you're 0:17:31.640 --> 0:17:34.720 on a battle field, things changed by definition, and so 0:17:35.000 --> 0:17:37.320 if you you need to really understand intent and how 0:17:37.320 --> 0:17:40.199 do you convey that as a leader? It's uh, I 0:17:40.240 --> 0:17:43.440 do think those are critical in an ambiguous environment? Yeah, 0:17:44.080 --> 0:17:47.120 do you? Is there a way to adopt the war 0:17:47.200 --> 0:17:51.119 gaming model UM in the kind of more conventional corporate setting, 0:17:51.359 --> 0:17:58.040 and it was running simulations, real world social simulations of 0:17:58.640 --> 0:18:03.040 anticipated problem. Is that something that we that we're doing 0:18:03.280 --> 0:18:07.840 or at least doing enough. I think I remember talking 0:18:07.840 --> 0:18:10.800 to to the CEO of one of the major global 0:18:10.840 --> 0:18:13.679 banks and they were saying, basically, hey, we got this 0:18:13.760 --> 0:18:18.240 issue with you know, uh, fin techs attacking us, and 0:18:18.280 --> 0:18:20.520 you know, I've asked my team, you know what's our 0:18:20.720 --> 0:18:23.320 you know, two big initiatives we're gonna go and attack 0:18:23.400 --> 0:18:27.600 this and and I basically told him, don't go out 0:18:27.680 --> 0:18:30.320 and say you have two initiatives to do this, because 0:18:30.440 --> 0:18:33.679 a an initiative fails, the person is probably gonna get fired. 0:18:33.720 --> 0:18:36.520 So how much is anybody really really really gonna go 0:18:36.560 --> 0:18:38.639 out and try something radical? So what you need to 0:18:38.640 --> 0:18:41.240 do is say, hey, I want to see our twenty 0:18:41.240 --> 0:18:44.719 five best ideas. You've got six months. Each one can 0:18:44.760 --> 0:18:47.480 have no more than you know, two hundred fifty dollars 0:18:47.720 --> 0:18:51.040 to experiment with. Let's come back in six months and say, 0:18:51.240 --> 0:18:53.480 let's see where those are, and we're gonna maybe kill 0:18:53.560 --> 0:18:55.919 all of them and talk about the lessons learn, or 0:18:56.000 --> 0:18:58.359 we're gonna take two and then we're gonna take the 0:18:58.440 --> 0:19:01.400 lessons learn and launch another twenty five and we're gonna 0:19:01.480 --> 0:19:03.720 keep doing that until we feel the right things emerge 0:19:03.760 --> 0:19:05.240 and those are the ones that we're gonna go do. 0:19:05.840 --> 0:19:09.000 That's a management approach that says, let's experiment and try 0:19:09.040 --> 0:19:12.080 and learn and kind of quickly modify around that. As 0:19:12.119 --> 0:19:16.080 soon as you launch these big, big, big initiatives, by definition, 0:19:16.160 --> 0:19:18.560 you're not doing much experimentation in it because you've already 0:19:18.560 --> 0:19:21.040 put dollars behind it with a you know, with an 0:19:21.119 --> 0:19:25.560 outcome predefined. And that's the problem in general with so 0:19:25.600 --> 0:19:28.400 many of the existing management process It's uh, I call 0:19:28.440 --> 0:19:31.960 it's drive a future state. When the words I'll use 0:19:32.080 --> 0:19:34.879 with with leaders as seek a future state. How do 0:19:34.920 --> 0:19:38.040 you build an organization that can seek a future optimal state? 0:19:38.359 --> 0:19:41.800 You know? That's so we went backwards and talked about 0:19:42.680 --> 0:19:45.720 high school and college education. Let's now go forward, Let's 0:19:45.760 --> 0:19:48.560 go beyond the corporation. I understand now that a lot 0:19:48.600 --> 0:19:53.360 of your focus is on UM philanthropic stuff, climate change, 0:19:53.359 --> 0:19:57.760 you know, larger kind of society wide issues. Let's apply 0:19:58.040 --> 0:20:01.679 that that model to s of those. How would you 0:20:01.720 --> 0:20:04.439 guide us in the way that we think an attack 0:20:04.480 --> 0:20:08.360 a problem, like, for example, climate change. Well I'll come 0:20:08.359 --> 0:20:13.280 back to that model of instead of plan, prescribe, execute, configure, enable, 0:20:13.320 --> 0:20:16.320 and gave so much of what we're talking about is like, 0:20:16.359 --> 0:20:20.240 what are the big ways we're gonna go elect electrify 0:20:20.520 --> 0:20:23.879 UM the country and you know, put stations around for 0:20:23.920 --> 0:20:27.160 autonomous driving, etcetera, etcetera, etcetera. And how do we preplan 0:20:27.240 --> 0:20:30.800 all that out? My census? We need to configure for success. 0:20:30.800 --> 0:20:33.240 And what I mean by that is if all of 0:20:33.240 --> 0:20:35.919 a sudden, battery technology takes a leap forward and we 0:20:35.960 --> 0:20:39.320 get triple the density UM in a car battery that 0:20:39.359 --> 0:20:42.800 we have today, well guess what the number of stations 0:20:42.840 --> 0:20:46.320 recharging stations probably drops by half. I don't know the 0:20:46.520 --> 0:20:49.960 asthemtopicy that maybe by four x with the three X battery. 0:20:49.960 --> 0:20:52.040 IM not sure how that math works, but somebody I'm 0:20:52.080 --> 0:20:54.560 sure would figure that out. Which means the number stations 0:20:54.600 --> 0:20:56.280 you need, which means the number of like colides you 0:20:56.320 --> 0:20:59.320 need are all going to change. And what I know 0:21:00.080 --> 0:21:03.359 is that no one knows what the innovation curve of 0:21:03.440 --> 0:21:06.080 batteries look like. We can model things, but nobody knows, 0:21:06.160 --> 0:21:09.960 and innovation is discontinuous often, so we need to set 0:21:10.040 --> 0:21:12.440 context for that to happen. So what does that mean? 0:21:12.680 --> 0:21:15.800 I would argue, And I know IBM does advocate for 0:21:16.160 --> 0:21:19.480 a price on carbon because if you know what carbon costs, 0:21:19.480 --> 0:21:23.640 that you have a carbon tax associated with it. Now, innovators, entrepreneurs, 0:21:24.080 --> 0:21:28.040 well everybody, large companies know here's the cost and therefore, 0:21:28.520 --> 0:21:32.520 what am I willing to invest in the literally millions 0:21:32.520 --> 0:21:34.560 of decisions to get made in the economy, Whether that's 0:21:34.600 --> 0:21:36.560 for an innovator to invest in the technology to try 0:21:36.600 --> 0:21:39.200 to make a batter battery, or whether that's companies and 0:21:39.240 --> 0:21:41.840 how they think about fleets and what they're doing. Um, 0:21:41.880 --> 0:21:43.840 that's what I mean by configuring. Now do you think 0:21:43.880 --> 0:21:47.199 every could play a role in you know, substantial investments 0:21:47.200 --> 0:21:50.040 and fundamental research at the right sets of universities or 0:21:50.119 --> 0:21:53.199 partnerships with companies. That again is configuring. So it's not 0:21:53.280 --> 0:21:56.120 saying here's the specific steps and pathway to get there, 0:21:56.160 --> 0:21:58.920 because in the context of innovation, you know you're gonna 0:21:59.040 --> 0:22:01.640 be wrong, and that's how you build a bridge to nowhere. 0:22:01.880 --> 0:22:04.360 The dollars were there, but you didn't realize, well, that 0:22:04.400 --> 0:22:09.480 no longer makes sense. So setting up the context is critical. 0:22:09.800 --> 0:22:13.680 And I will say I'm very encouraged by what we're 0:22:13.720 --> 0:22:17.080 seeing happening around the world in terms of interest on 0:22:17.160 --> 0:22:19.400 climate change. But I do think there's a knee jerk 0:22:19.440 --> 0:22:23.160 reaction from governments in particular to say, Okay, what are 0:22:23.160 --> 0:22:27.200 the multi hundred billion dollar, massive twenty year initiatives when 0:22:27.520 --> 0:22:30.879 almost for sure those are gonna be wrong because you 0:22:30.960 --> 0:22:35.160 need to take a more nimble, agile approach that as 0:22:35.200 --> 0:22:37.360 we learn, you know, how do you kind of move 0:22:37.400 --> 0:22:38.760 I'm not saying we don't want to spend hundreds of 0:22:38.800 --> 0:22:41.040 billions of dollars on them. We do, but the approach 0:22:41.119 --> 0:22:43.480 for how we do it can't be these multi year 0:22:43.520 --> 0:22:45.600