We will cover the following key takeaways:
- Sometimes we need to be willing to accept 90% failure to get 10% of transformational successes.
- If we want a certain type of person in our organization that’s going to represent the culture we want, we should absolutely hire for it.
- We have to constantly adapt, change, and reinvent ourselves if we want to stay ahead.
The Ego Trap
To avoid the ego trap, we should seek to try new things and accept failure as part of the process.
Jeff Bezos, the founder of Amazon, really encouraged experimentation. He talked about the importance of failure and experiments in their company. He said, “If the size of your failures isn’t growing, you’re not going to be inventing at a size that can actually move the needle.” While avoiding the ego trap, Bezos helped Amazon grow exponentially to become one of the most successful businesses in the world, with a net income of over $21 billion (Source: Statista).
Another great example of a company that avoids the ego trap is Google. As part of their job assignment for their employees, they had them focus 20% of their time on projects they are passionate about. From this system, they created Gmail and Google Earth.
“What these companies realized is that to get the best out of their people, . . . you need to allow people to experiment, allow people to try new things, allow them to pursue their passions,” David said. “There’s a way to align that with the organization to where those passions can also align with the organization’s goals and strategy.”
Not only did that 20% focus of time give Google home runs like Gmail, but I bet 90% of those projects were failures. I bet many of those didn’t provide any kind of meaningful, sustainable long term benefit for Google, but because they were willing to have 90% failures, they got the 10% home runs. It took being willing to accept 90% failure to get 10% of transformational successes.
The Settling Trap
How many of us settle in our job or our work? To avoid the settling trap, we should seek to find passion and inspiration in our jobs. We should also help our employees feel passionate about their jobs. When you go work for a company, you should expect to be paid fairly, but you should also expect to be excited about your purpose and the larger mission.
Southwest Airlines does a really great job at putting their employees first. They have three stakeholders and the first is their employees, second is customers, and third is financial stakeholders. Herb Kelleher, the co-founder of Southwest, believed that if you treat your employees fair and treat them well, they will treat your customers really well. This company saw amazing financial results from this attitude.
When Kelleher first started, he also let many people go. He wanted to find the best employees that agreed with their company values and goals. Instead of trying to train people to be what we need, why don’t we find the right people that already what we need?
“If you want a certain profile or type of person in your organization that’s going to represent the culture that you want, you should absolutely hire for it,” David said. By finding employees who will be passionate about their work, we avoid falling into the settling trap where people often become less efficient and motivated.
The Procrastination Trap
To avoid the procrastination trap, we have to constantly adapt, change, and reinvent ourselves. If we don’t do this, we will likely fall behind.
If you look at the fortune 500 companies 20 years ago, 67% of these companies are no longer on the list today. Most of the companies that were there 20 years ago are gone. This is likely because they were unable to adapt with the changing marketplace. They were happy with where they were, and decided not to reinvent themselves to get better. Because of this, they have fallen off the list.
“You have to constantly be re-educating yourself . . . because what you knew five years ago is now obsolete,” David said.
Lego is a great example of a company that constantly reinvents themselves. They have built Lego theme parks and developed sustainable bricks. Their products have not stayed the same over the last 20 years. They could rest on their laurels, but they didn’t. They are evolving and reinventing themselves so they can stay ahead.
You hear of companies who say, “This is how we’ve done it for the last 20 years and so that’s how we’re going to keep doing it.” They had success 20 years ago, and they’re trying to preserve that success by doing the same things, but that’s almost a guaranteed recipe for failure.
Think of Blockbuster and Netflix for example. Blockbuster went out of business because they couldn’t adapt to the shift of streaming services while Netflix, a company that did adapt, is now a billion dollar company.
There are these tectonic shifts that are constantly changing the business landscape. If we don’t leverage these shifts and adapt, we are almost guaranteed to fail. The only way to stay on that fortune 500 list is to be like an Amazon and find those tectonic shifts and leverage them. Amazon had no business beating Sears. Sears had all the resources, had all the money, the products, etc. They had everything they needed to win in the world of e-commerce, but they didn’t leverage those tectonic shifts and Amazon won.
The biggest tectonic shift David sees today is the shift of power from large companies to individuals. It is so much easier to create your own brand and your own identity than it was before. We can create our own platform and be anywhere in the world. The barrier to entry is so low because of social media and digital platforms.
“Individuals are able to access and wield this power and create their own platform without the expense and the cost and the barriers, like what used to exist,” David said. As we learn to leverage and adapt to these shifts, we will find success much faster and easier than those businesses that don’t.
Connect with David
Thank you so much David for sharing your stories and insights with us today. To learn more about or connect with David: