WEBVTT - Elk on New Book

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<v Speaker 1>This is Bloomberg Business Week with Carol Masser and Jason

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<v Speaker 1>Kelly on Bloomberg Radio. Well, one thing the last sixteen

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<v Speaker 1>or a week dealing with the shutdown of our economy

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<v Speaker 1>because of the virus has taught us all is that

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<v Speaker 1>we are learning that we need to be nimble and

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<v Speaker 1>adapt to the problems that confront us. And Jason, we

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<v Speaker 1>know from many industries it means transforming their businesses, and

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<v Speaker 1>our next guest deals with that on a pretty regular basis.

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<v Speaker 1>She does. Indeed, Sarah Elca's partner at baine In Company,

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<v Speaker 1>heard of it. She's also the co author of a

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<v Speaker 1>new book called Doing Agile Right and so Understanding sort

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<v Speaker 1>of the economy, Understanding how businesses work because it is

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<v Speaker 1>a time of unbelievable disruption, to say the least. Sarah

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<v Speaker 1>Jose is on the phone from Chicago. Sarah, first of all,

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<v Speaker 1>how are you? How are is everything going in this

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<v Speaker 1>sort of topsy turvy world for you? I'm good. Thanks

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<v Speaker 1>for having me. It's definitely a topsy turvy world. I

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<v Speaker 1>think has promised to bring lots of chaos. Yeah, well timed,

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<v Speaker 1>well timed, to say the least. So I mean, give

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<v Speaker 1>us of the sort of lead up to this book, Um,

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<v Speaker 1>and what made you want to dig into this particular issue. Absolutely, so,

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<v Speaker 1>we started at about eighteen months ago, and you know,

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<v Speaker 1>with everything that's going on in the book, actually couldn't

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<v Speaker 1>be better times. But the impetus for the book was

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<v Speaker 1>actually conversations that we had been having with executives around

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<v Speaker 1>how to drive more adaptability in the business. You know, historically,

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<v Speaker 1>with traditional hierarchy and bureaucracy, we've gotten really good at

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<v Speaker 1>running our business, but we haven't done as well in

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<v Speaker 1>terms of balancing towards changing our business. And obviously that

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<v Speaker 1>will vary by by industry and specific company strategy, but

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<v Speaker 1>it was really this recognition that we need to help

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<v Speaker 1>companies figure out how to both run and change their

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<v Speaker 1>business and then harmonize both of those without destroying either one.

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<v Speaker 1>It's not easy, and I feel like this goes to

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<v Speaker 1>some extent, Um, Sarah conversation Jason I had with the

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<v Speaker 1>former Honeywell UH CEO David Cody about this managing of

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<v Speaker 1>kind of law in short term aspects of running a

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<v Speaker 1>company in a business, right, because they both have different parameters,

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<v Speaker 1>they both have different demands and needs, and yet you

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<v Speaker 1>kind of got to do both at the same time, right,

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<v Speaker 1>you know, short term long term is certainly one aspect

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<v Speaker 1>of it, but another aspect would be just variability itself.

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<v Speaker 1>You know, if if we're trying to run our business,

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<v Speaker 1>we're looking at routine operations, we're looking at repeatability, quality, efficiency.

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<v Speaker 1>You know, we're trying to drive out variation. But if

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<v Speaker 1>we want to grow and drive revenue and innovate, we're

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<v Speaker 1>actually trying to increase variation. And so how do I

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<v Speaker 1>allow my company to do both of those things at

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<v Speaker 1>the same time? And there's there's really an art and

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<v Speaker 1>a science to that. So what was the biggest I

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<v Speaker 1>always ask people who wrote who have written books that

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<v Speaker 1>what was the biggest surprise along the way? Because you

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<v Speaker 1>did so much research, you talked to so many people.

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<v Speaker 1>I mean, is there a conversation or a data point

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<v Speaker 1>or something that you and your co authors came across

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<v Speaker 1>where you thought, Wow, I did not see that coming.

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<v Speaker 1>You know. A funny one is that the book publishing

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<v Speaker 1>process is decidedly not agile. It is the worst. That's

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<v Speaker 1>the worst, I will say it. And it's even stronger

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<v Speaker 1>than you like. It is the most antiquated backwards like

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<v Speaker 1>mind bending like you just can't even get your head

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<v Speaker 1>around it, and you you're talking to people and you're like,

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<v Speaker 1>are you serious right now? It's amazing And I have

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<v Speaker 1>to say sorry, Jason will do it because he's pretty humble,

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<v Speaker 1>but he's written two books, so he knows his firsthand

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<v Speaker 1>as well. Yeah, so you absolutely know that. I would

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<v Speaker 1>say from an insight standpoint, one of the interesting things

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<v Speaker 1>is that the companies that are actually further along on

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<v Speaker 1>this journey and have really mastered how to drive adaptability

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<v Speaker 1>with speed are also really strong learning organizations. They're very

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<v Speaker 1>customer centric, and they would say that they're still on

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<v Speaker 1>the journey. So no one is declaring victory. And the

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<v Speaker 1>companies that are actually more in that direction would say

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<v Speaker 1>they just see so much more, much much more further

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<v Speaker 1>that they have to go um and so it's just

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<v Speaker 1>interesting that they would declare themselves as not in the

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<v Speaker 1>lead because they see the potential. So, Sarah, as Carol

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<v Speaker 1>pointed out, you have a lot of experience in retail.

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<v Speaker 1>Retail has been unbelievably disrupted here. What happens next? Yeah,

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<v Speaker 1>it's a great question. Fortunately I don't have a crystal ball,

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<v Speaker 1>but what I can tell you is the disruption that

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<v Speaker 1>we're experiencing is a lot of acceleration of what we've

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<v Speaker 1>already been seeing in retail, those store closures, bankruptcies, you know,

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<v Speaker 1>the increase in e commerce and the need to you know,

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<v Speaker 1>transform their business pretty much top to bottom. Uh. You know,

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<v Speaker 1>what we saw with COVID is probably a two to

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<v Speaker 1>three year acceleration in in e commerce penetration curves. Uh.

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<v Speaker 1>What we're also seeing that's different with COVID is a heightened, uh,

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<v Speaker 1>sense of focus on customer experience. We know that when

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<v Speaker 1>we're in a time of recovery, customers pay more attention

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<v Speaker 1>to where their dollars go, and you end up seeing

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<v Speaker 1>greater share shift and so the winners win more and

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<v Speaker 1>the losers lose more. You know. It's just such an

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<v Speaker 1>interesting time. UM. And I know you guys in this book,

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<v Speaker 1>you know, just look at a lot of different worlds

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<v Speaker 1>and have talked to a lot of different leaders. I

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<v Speaker 1>do wonder a lot more to about the retail environment,

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<v Speaker 1>which is an area that you've worked within. I mean,

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<v Speaker 1>what do you expect, like, what does retail look like?

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<v Speaker 1>I don't know is it I don't even know what

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<v Speaker 1>the time frame is because I know it's continuing to evolve,

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<v Speaker 1>but it just feels like we're seeing a lot of

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<v Speaker 1>fallout because of the shutdown, like those that were the

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<v Speaker 1>most vulnerable. But what do you think it looks like,

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<v Speaker 1>Sarah in a few years. I think we'll continue to

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<v Speaker 1>see some fallout. There will be companies that are able

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<v Speaker 1>to make the transformation journey that they have the resources

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<v Speaker 1>in order to be able to invest in. There are

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<v Speaker 1>companies that won't make it. And I think the key

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<v Speaker 1>difference is going to be adaptability. Uh. And so you know,

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<v Speaker 1>back to agile and how do you build this agile

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<v Speaker 1>business stone. You need to be able to have a leadership,

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<v Speaker 1>mindset and focus that puts the customer first and really

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<v Speaker 1>drives home that customer centricity that focuses on prototyping solutions

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<v Speaker 1>with strong feedback loops and being able to scale those

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<v Speaker 1>and and roll those out to meet customer needs. So, Sarah,

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<v Speaker 1>as you talked to CEOs as they're going through this

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<v Speaker 1>right now, I mean, we talked to so many CEOs

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<v Speaker 1>all the time, and it does feel like something different

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<v Speaker 1>is going on in board rooms and something transformational is happening.

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<v Speaker 1>There's a huge amount of self reflection the pandemic obviously

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<v Speaker 1>has made us all a bit more self reflective. And

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<v Speaker 1>I think especially those of us who were fortunate too,

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<v Speaker 1>and we say this all the time, fortunate to have jobs,

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<v Speaker 1>fortunate to you know, be in a position where we

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<v Speaker 1>can work from home, where we have childcare in many cases,

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<v Speaker 1>and we have the ability to to to take the

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<v Speaker 1>time to to self reflect. Is that happening to the

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<v Speaker 1>extent that we hope it is in in boardrooms or

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<v Speaker 1>are too many ceo is just saying we just got

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<v Speaker 1>to get through this. No, I think it's starting to

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<v Speaker 1>happen in terms of the reflection. We're shifting from sort

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<v Speaker 1>of this uh need to act and respond, almost in

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<v Speaker 1>crisis mode too. Now how do we retool our business?

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<v Speaker 1>And so what we're seeing is this shift from what

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<v Speaker 1>I'll call sporadic agile into systematic agile, meaning how do

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<v Speaker 1>I build that into my company for the long term.

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<v Speaker 1>Because CEOs are reflecting and and a lot of them

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<v Speaker 1>are saying that they've never been more proud of their people,

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<v Speaker 1>you know, They've they focus on specific missions in response

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<v Speaker 1>to the crisis, They've come together in new ways, often

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<v Speaker 1>cross functionally. They're working together differently and they've achieved great things.

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<v Speaker 1>Now how do we do that again and again and again. Yeah,

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<v Speaker 1>I mean that's the thing, you know, in terms of

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<v Speaker 1>I also do wonder too when you say that how

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<v Speaker 1>many companies will be because of the pressures that are

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<v Speaker 1>going to be on them, that they're going to have to,

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<v Speaker 1>once again, like coming off the financial crisis, have to

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<v Speaker 1>do more with less, and what pressures that put on

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<v Speaker 1>workers as they're trying to potentially transform their companies. Yeah,

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<v Speaker 1>I mean, certainly you're going to have to have an

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<v Speaker 1>investment capacity in order to you know, fund technology and data. Uh,

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<v Speaker 1>you know, make the investments that you need. You know,

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<v Speaker 1>at Banning Company, we spent a lot of time looking

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<v Speaker 1>at recovering retooling, and you know, those that invest through

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<v Speaker 1>the recovery often, uh, you know, have strategic advantage coming

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<v Speaker 1>out of the recovery. You know, now is the time

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<v Speaker 1>to invest, Now is the time to be customer centric

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<v Speaker 1>and and that adaptability for those for those companies that

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<v Speaker 1>do that, you know they will be the ones to win.

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<v Speaker 1>All right. Sarah Elk, thank you so much. Congrats on

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<v Speaker 1>the book Doing Agile Right. She's a partner at Banning Company.

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<v Speaker 1>Join us on the phone from Chicago