WEBVTT - Kegan: Fail frequently, fail forward, fail fast

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<v Speaker 1>Global business news twenty four hours a day at Bloomberg

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<v Speaker 1>dot com, the Radio plus mobile last, and on your radio.

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<v Speaker 1>This is a Bloomberg Business Flash, and I'm Karen Moscow.

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<v Speaker 1>This update is brought to you by National Realty Returns

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<v Speaker 1>on cash and rented real estate find them at n

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<v Speaker 1>r i A dot net. U s stocks are falling

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<v Speaker 1>as commodity shares the climb, with the s n P

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<v Speaker 1>five hundred slipping from a ten month high amid speculation

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<v Speaker 1>equities may have run too far, too fast given the

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<v Speaker 1>lackluster prospects for global growth. We check the markets every

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<v Speaker 1>fifteen minutes throughout the trading day on Bloomberg, and the

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<v Speaker 1>SNP five hundred is down four tenths per cent or

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<v Speaker 1>nine points to one ten. Dow Jones Industrial Average down

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<v Speaker 1>three tenths per cent or sixty points is seventeen thousand,

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<v Speaker 1>nine hundred forty four. Then as d ACT down four

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<v Speaker 1>tenths per cent or eighteen points to fifty five. Ten

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<v Speaker 1>year Treasury up ten thirty seconds, the yield one point

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<v Speaker 1>six six percent. The yield on the two year point

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<v Speaker 1>seven six percent. Now I'm excrude oil down one point

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<v Speaker 1>four per cent or seventy two cents to fifty dollars

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<v Speaker 1>fifty two cents of barrel comes. Gold is up three

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<v Speaker 1>tenths per cent or four dollars ten cents to twelve

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<v Speaker 1>sixty six forty ounce the euro a dollar thirteen twenty

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<v Speaker 1>six the yen at one oh six point for eight.

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<v Speaker 1>Household confidence increased for a second week, reaching the highest

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<v Speaker 1>level since early April, as Americans felt better about the

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<v Speaker 1>economy and the buying climate. According to the weekly Bloomberg

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<v Speaker 1>Consumer Comfort Index, consumer comfort gage rose to forty three

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<v Speaker 1>point five at the period ending June five, from forty

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<v Speaker 1>three point two in the prior week, and Restoration Hardware

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<v Speaker 1>Holdings is down nine this morning after the Upscale furniture

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<v Speaker 1>chain posted a surprise loss and cut its annual earnings forecast.

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<v Speaker 1>That's a Bloomberg business flash. Tom and Mike Karen, thanks

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<v Speaker 1>so much. Michael. We're talking with David Wilson earlier about

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<v Speaker 1>jam Smucker they make. It is just you know, we

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<v Speaker 1>know the jams they make. Jiff peanut butter founded in

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<v Speaker 1>nineteen fifty eight. They acquired it in two thousand two,

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<v Speaker 1>what is it, fourteen years ago. They do car Nation,

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<v Speaker 1>They do Smuckers. Of course our W Knudson, do you

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<v Speaker 1>want to make fifteen percent per year total return for

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<v Speaker 1>the last decade with a stunning Dana her like persistency

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<v Speaker 1>that is JM. Smucker and you and you're earning stick

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<v Speaker 1>to ther and yes. And I would suggest that it

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<v Speaker 1>is out of Ohio a culture that that we should

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<v Speaker 1>not make light of. A culture of a company matters, right. Uh,

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<v Speaker 1>speaking of that, there's a good sigui, as you like

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<v Speaker 1>to say to our next guest. Um, I don't know

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<v Speaker 1>what you're You're performance review is always upstandingly exceptional. But um,

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<v Speaker 1>there is a school of thought that seems to be

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<v Speaker 1>growing these days. G one of the the companies that is

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<v Speaker 1>looking at scrapping traditional performance reviews and finding ways of

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<v Speaker 1>doing things. Um, we called it everyone culture becoming a

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<v Speaker 1>deliberately developmental organization looks at this. It's written by Howard's

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<v Speaker 1>Robert Keegan and Lisa Lascout Leahy, and we welcome Professor

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<v Speaker 1>Keegan to the program. And I want to get to this.

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<v Speaker 1>There's a The book is case study, no surprise from

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<v Speaker 1>but I want and I want to get to one

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<v Speaker 1>particular case. But first let me ask you to define

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<v Speaker 1>a deliberately developmental organization and what kind of change you're

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<v Speaker 1>suggesting might be useful, Sure, the good morning. A deliberately

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<v Speaker 1>developmental organization, which is kind of a mouthful, so we

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<v Speaker 1>call it a d d O is a company that

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<v Speaker 1>has a culture. If you so valued developing the capabilities

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<v Speaker 1>of your people that you would want to create a

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<v Speaker 1>culture that would be the world's greatest incubator for developing talent,

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<v Speaker 1>that's what a d d O is. We think it's

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<v Speaker 1>a kind of a company that can form to what

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<v Speaker 1>we've learned at the end of the twentieth in the

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<v Speaker 1>beginning of the twenty first century about adult development. So

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<v Speaker 1>a DdO first of all, recognizes it. In a normal organization,

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<v Speaker 1>everyone is doing a second job that nobody's paying them for,

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<v Speaker 1>and that second job is basically covering their rear ends,

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<v Speaker 1>looking good, managing other people's favorable impressions of them. And

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<v Speaker 1>we think this is an enormous waste of energy everybody's

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<v Speaker 1>doing getting paid full time money for doing part time work.

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<v Speaker 1>Imagine if you could recapture some of that energy, bring

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<v Speaker 1>it right into the company itself. Imagine if you were

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<v Speaker 1>expected to manifest your strengths but also manifest your weaknesses,

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<v Speaker 1>bring them out into the light of day so that

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<v Speaker 1>we can build supports around you so that you can

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<v Speaker 1>overcome them. That's a deliberately developmental organization. Well, one of

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<v Speaker 1>the companies that you choose to study embraces that wholeheartedly

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<v Speaker 1>and has for years. Our good friend Ray Dalio and

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<v Speaker 1>the folks at Bridgewater. What did you find when you

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<v Speaker 1>look at them? I mean, everybody knows that public criticism

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<v Speaker 1>of others work is part of the culture there. Yeah, well,

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<v Speaker 1>I think I think Bridgewater and the other companies that

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<v Speaker 1>Decuri in the next jump that we study in the

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<v Speaker 1>book and everyone culture are just some of the most

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<v Speaker 1>interesting companies on Earth. I mean, if you look at

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<v Speaker 1>recent studies about millennials who will soon be the majority

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<v Speaker 1>of the workforce, one of the things they most want,

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<v Speaker 1>you know, is more frequent feedback. At Bridgewater, if you

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<v Speaker 1>have three or more people in a meeting, uh, they're

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<v Speaker 1>all plugged into their iPads and they're not just evaluating

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<v Speaker 1>each other at the end of the meeting, they are

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<v Speaker 1>giving each other a doct as it is, like votes

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<v Speaker 1>on a one to ten scale kind of how you're doing.

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<v Speaker 1>And the feedback is coming in continuously. And when people

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<v Speaker 1>first hear this, they think, well, this would be kind

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<v Speaker 1>of overwhelming and intimidating. But the key thing these people

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<v Speaker 1>are onto is that most people are taking a kind

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<v Speaker 1>of performance attitude toward work. So it's a performance and

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<v Speaker 1>you get you're getting a review, you're holding your breath

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<v Speaker 1>and you're hoping you don't fail. But these companies shifted

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<v Speaker 1>all to a kind of a practice orientation. We hired

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<v Speaker 1>you not because you're perfect, but because we think you're good,

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<v Speaker 1>and we think you know, you can learn kind of

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<v Speaker 1>fail frequently, fail forward, fail fast, and that's how you'll learn. Um,

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<v Speaker 1>I don't tell m wants to jump in, but let

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<v Speaker 1>me just ask one more question about that. How do

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<v Speaker 1>you tie the success and of Bridgewater, and of course

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<v Speaker 1>it's pretty much the most successful hedge fund out there

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<v Speaker 1>to this kind of organizational culture and separate out the

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<v Speaker 1>fact that maybe Ray Dalio is just a really good

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<v Speaker 1>stock pick. Yeah, this is our our interest to I mean,

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<v Speaker 1>clearly they're successful, but we wanted to know, you know,

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<v Speaker 1>is your success in your culture just coincident? You know?

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<v Speaker 1>And every one of these companies interestingly made the case

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<v Speaker 1>that they thought their culture was these single greatest contributor

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<v Speaker 1>you know, to their success. So you know, you ask Bridgewater,

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<v Speaker 1>why were you one of the few organizations on Earth,

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<v Speaker 1>you know that anticipated the financial crisis? And it's it's

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<v Speaker 1>to us. It became a pretty convincing argument that when

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<v Speaker 1>you're continuously kind of holding things in doubt, asking hard questions,

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<v Speaker 1>seeking out weaknesses, not to you know, humiliate people, but

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<v Speaker 1>to help people be stronger and help your analyzes be stronger,

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<v Speaker 1>anticipating all the different possibilities, even the things that would

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<v Speaker 1>be most inconvenient. This is a kind of way of

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<v Speaker 1>thinking that makes you not just help people develop, but

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<v Speaker 1>it makes the company smarter and more effective. Don Barton

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<v Speaker 1>gives you a rave review. He talked to a lot

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<v Speaker 1>of big publicly traded companies. Can your model, Mr Dalios model?

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<v Speaker 1>If you will? Can it be transferred over to General Electric?

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<v Speaker 1>And Jeff Emil get anything out of your book? And

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<v Speaker 1>everyone culture well, we think so, I mean we we

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<v Speaker 1>we can't. It's true that all three companies are you know,

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<v Speaker 1>between the two hundred and maybe fifteen people, can it be?

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<v Speaker 1>Can it be transferred over to JP Morgan? Yes? We

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<v Speaker 1>think The answer is yes, we we are working actually

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<v Speaker 1>right now with a hundred thousand person uh company. We're

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<v Speaker 1>using the new technologies to spread a lot of these practices.

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<v Speaker 1>I think it's a matter you know. It starts at

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<v Speaker 1>the top. Just like everything else. The leader has to

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<v Speaker 1>be willing to be vulnerable, has to be a mistake

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<v Speaker 1>maker too frequently when I when I look at this

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<v Speaker 1>in the number one thing I see generationally as a

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<v Speaker 1>young kids today are acutely aware within any system of labor.

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<v Speaker 1>By young kids folks, I mean somebody under forty, they're

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<v Speaker 1>they're acutely aware of labor misallocation, which is people at

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<v Speaker 1>whatever level in the hierarchy aren't getting it done or

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<v Speaker 1>are in the long job. Can you help a company

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<v Speaker 1>on labor misallocation. It's interesting because they have a totally

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<v Speaker 1>different view of what is a good job fit between

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<v Speaker 1>a person and a role in a d d O.

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<v Speaker 1>If you already have all the capabilities to fulfill the job,

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<v Speaker 1>it's the wrong job for you because it has no

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<v Speaker 1>stretch in it. A job should be like a tow

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<v Speaker 1>rope in these companies, so you should be a bit

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<v Speaker 1>over your head. There should be a little bit of

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<v Speaker 1>this allocation at the beginning and then there should be

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<v Speaker 1>supports built around you so that you can actually grow

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<v Speaker 1>into the job. How do you respond? And I've seen

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<v Speaker 1>this folks with various and Sunday offspring, where a younger

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<v Speaker 1>employee is so valuable they can't move on to the

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<v Speaker 1>next constructive challenge because they can't figure out who to

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<v Speaker 1>replace that employee with. Yeah, I've seen in these organizations,

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<v Speaker 1>you know where they will actually face in some cases

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<v Speaker 1>that that's the case, and they will help that person

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<v Speaker 1>get a job in another company. But you know, if

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<v Speaker 1>if you go ahead you want no, I know, I

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<v Speaker 1>just find that to be bordering on fantasy among the

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<v Speaker 1>experience of various and Sundery offspring. I mean, I am

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<v Speaker 1>the behavior I would suggest a professor, the behavior of

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<v Speaker 1>many corporations is far away from an everyone culture. Do

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<v Speaker 1>you agree or absolutely? I think a normal company is

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<v Speaker 1>like I have a picture in my office I'm looking

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<v Speaker 1>at right now. It's a nineteenth century surgical room. You

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<v Speaker 1>got three doctors, you know, working very hard. They might

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<v Speaker 1>even have the right diagnosis, but half the patients died.

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<v Speaker 1>Why because they didn't have a germ theory. They didn't

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<v Speaker 1>have any notion of infection. And I think today, the

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<v Speaker 1>company is the normal company is operating, you know, like

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<v Speaker 1>a nineteenth century surgery room. It isn't taking account of

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<v Speaker 1>the of the germ theory, that is theory of the

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<v Speaker 1>mind and adult development Professor Thank You, sou Robert Keagan,

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<v Speaker 1>Lisa Lesca, Lady and everyone Culture. Don Barton suggests it

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<v Speaker 1>is a must read. Shake up corporate foundations. Stocks negative

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<v Speaker 1>forty four, the vics fourteen point six seven. Markets on

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<v Speaker 1>the Move stayed with Bloomberg Radio throughout the day with

0:11:07.840 --> 0:11:10.319
<v Speaker 1>more data checks Bloomberg Surveillance