Episode Transcript
[00:00:00] Hey everybody, today I want to go in a slightly different direction and talk about some leadership traits and characteristics.
[00:00:09] And I think the theme will be arrogance versus humility.
[00:00:13] The reason that this topic is so interesting to me right this minute is because we see so much arrogance in the public sphere and in the private sector around many, many things going on in the economic environment.
[00:00:28] I was listening to a really amazing set of interviews that Andrew Ross Sorokin did from the New York Times. And I'll send you links to these. Alex Karp from Palantir, Governor Newsom from California, Dario Amadai from Anthropic and a bunch of others. And as I was listening to them, particularly Alex Karp, I was really thinking about the dimension of arrogance and the impact of arrogance versus humility.
[00:00:58] And so while I was sort of mulling that over, the U.S. national Security Strategy document was released yesterday and I read that and I again was reminded of this issue. You know, that document has some sort of astounding discussion items in it. It's worth reading if you're interested in national strategy. So I wanted to reflect on it. And you know, I have been doing research on corporate HR and leadership and business for about 25 years, almost 30 and 20 years before that worked in business doing other things. And I've observed this and what you see is that there's a dichotomy between arrogance and humility that actually flips back and forth organizationally over time. When you're highly successful, when you're dominant market share leader, when your products are really selling like hotcakes, when everybody thinks you're the smartest person in the world world, you do tend to become arrogant. It's almost probably a normal human thing. You become self confident, you don't listen to criticism, you blame people for problems because you believe that it's them, not you.
[00:02:11] And you start to make sometimes poor decisions. And either you become humble or you don't and you deny the mistakes. And then you're usually taken out of your job by somebody or some organization. And so you, you know, Bill Gates was arrogant early in the days of Microsoft, so was Steve Ballmer. Satya Nadella, however, to me is very different. He's very humble and he's a learner and he's very smart, very intelligent and actually, you know, doing amazing things at Microsoft. In a totally different theme, Howard Schultz at Starbucks was a humble leader for many years, became arrogant later as the company thrived. And I think he learned a lot during his testimony in Congress about that. The Boeing guys, the Intel Guys. In fact, Intel's an interesting company. When I was a engineer, many of my computer science friends wanted to work for Intel. Intel was the Google of its day. Very ambitious, very competitive company. Andy Grove was running it at the time. Only the paranoid survive and so forth. And they became so dominant in the semiconductor industry for CPUs that they became arrogant and missed the wave to graphics and AI entirely. And it's been quite a cultural adaptation for them to reinvent themselves. And you know, these are on and on and on. They go on. Many, many stories. Xerox, Nokia, you know, there are companies that become very dominant in their market. You know, even the BlackBerry, and there's a wonderful movie about BlackBerry where you can witness this, that to some degree your success becomes your failure because you become so successful that you don't see the blind spots you have. And you know, I think if I think about Tim Cook and the Persona that he displays, I've obviously never met him. He seems to have a humility that allows Apple to evolve and grow and deal with its mistakes. An example, here's another example of arrogance I think is worth pointing out. I read yesterday that the Metaverse investment by Meta Company was a $70 billion write off. $70 billion is equivalent to $450 for every working person in the United States.
[00:04:26] Now, you know, I don't know Mark Zuckerberg. He appears to be a very self confident, ambitious guy and he owns enough of Meta that he probably doesn't care because the company's worth a trillion or so. So 70 billion isn't that much really. But you know, there was a certain arrogance there that they're now recovering from. And you know, I give them a lot of credit for recognizing that the big market might be eyeglasses. By the way, the eyeglass market, according to the research I just did the other day, is a hundred and some odd billion market. So you know, you get into eyeglasses and you could double the revenue of Meta if you think about it. That's why I think Apple kind of missed that one. Maybe they'll get back into it.
[00:05:09] So this, this issue comes up a lot and some of it is personal.
[00:05:14] You know, some people are born or they go through a period of upbringing where they become arrogant for various reasons or they're very insecure and they become arrogant because they're insecure and they don't want to admit that they're not perfect. Others, it's episodic. And I think most of us go through cycles of being highly successful and self confident and then realizing we made a mistake, we hurt somebody, we made a career blunder, and we suddenly realize maybe we need to be a little more humble again. It really comes down to your values as a person, your values as an individual, your values of your career. But in this particular day and age of AI, there's a lot of arrogance taking place. I think it's also fear. If you. By the way, let me take a little diversion here, and I'll go back to that topic. In January, we're going to launch the 26th year of my predictions, but it's going to be called imperatives for 2026. And I've written 13,000 words. It's a pretty, I think, really very powerful document that'll teach you a lot.
[00:06:17] And what we're going to do when we launch it in January is we're going to do something very new. You're going to have to license Galileo to get it. You can license Galileo for a month for $79. You don't have to spend a huge amount of money. But the document itself not only is filled with 12 imperatives, but it will have links to Galileo. So it will teach you things about hr, business, technology, AI, the market, vendors, and so forth that you can explore in Galileo. So we're going to do some really creative ways of publishing going forward where all of our research will have links with predefined prompts into Galileo. So you'll be able to read or explore a topic, learn from our models or our research or our case studies, and then go into Galileo and do a lot more. So I've got some really cool things to tell you about there in a few minutes. But going back to this topic of humility, if you think about where we are relative to AI, somewhere around a trillion to $2 trillion. I don't know the real number. I mean, it seems to vary, but it's around a trillion plus has been invested in capital into data centers to support AI. And so all of the big vendors, Microsoft, Google, Nvidia, Anthropic, OpenAI. Yeah, I assume Perplexity has the same issue.
[00:07:37] Have invested in these big, big, big data centers and chips. And now there's a big debate about the depreciation schedule of this stuff and the longevity of this investment. If I Look at the US GDP, we are about a $30 trillion economy, 27 $28 trillion economy in the United States. So you take a trillion or a trillion and a half or 2 trillion, and it's a significant amount. It might be 1% of the economy.
[00:08:08] And that could be the investment that has prevented us from having a recession this year from the tariffs. So there's a lot of distortion going on in our economic world from this massive shift taking place.
[00:08:21] And the people that are responsible for this investment have this arrogance versus humble problem.
[00:08:27] When you listen to Dario Amadai and I really recommend you listen to a couple of these audios or videos from Andrew Ross Sorkin, he's very measured in his strategy and he's very aware of the risk of over investing in tech platforms for Anthropic.
[00:08:45] And so I, I kind of came out of that call listening to him thinking, you know, these guys are going to be a solid company because he's being realistic about it. But then when you listen to Alex Karp from Palantir, it's a little bit different. And I don't want to make any personal comments about him, but it's a totally different situation. And you know, I, I think you know you to the interviews and these are just this week, so it's very, very modern. And you can see this challenge these people have with their own senses of self confidence and in, in the reality and what risks they're taking. And arrogance is sometimes good. If you're starting a new business and you're competing against a bunch of other companies and you're trying to break into a new market, you have to have a certain amount of blinders on to march ahead and ignore what's going on around you. Of course, the interesting thing about the business world that I love, the reason I enjoy being a business person so much is it is so dynamic and so competitive that as soon as you come up with a good idea and maybe you're somewhat successful with it, you're going to get copies, you're going to get people competing with you, people are going to deposition you, they're going to sell against you, whatever. And that's going to force you to be maybe more arrogant or more humble, depending on your personality or situation. At the time when I wrote Irresistible and the many years I worked on all the research before that, I ended up thinking about this in a, the context of what I call an enduring company. Now some people build a company and they sell it and they're really excited about the fact that they flipped it. I think that, I think when you sell a company, it's a little bit of a capitulation that maybe you couldn't take it to the level you wanted to take it, or maybe you got tired or you just got fed up and wanted to move on with your life. But if you want a company to last a long period of time and add value over a long period of time, you go through cycles. The early cycles are that of delighting customers and growing and being very innovative and first to market and new. And you try to get big fast, as they say in Silicon Valley, and sort of dominate some part of the customer demand. And then you realize that there's constraints in your execution, there's constraints in your capital, there's constraints in your infrastructure or your investors, and you try to overcome those. And maybe you overbuild. You build too many stores, too many factories, hire too many salespeople, spend too much on marketing, spend too much on advertising, and you suddenly realize, whoa, we got ahead of our skis here, and we need to be a little more humble. So this arrogance, humility cycle comes back and forth. It might happen over a period of years, might happen over a period of decades. I think Starbucks didn't really have a tumble for many years. They were very successful for a long time. Howard Schultz was actually a very humble leader for a long time. But they became overly confident. So did Boeing, so did Microsoft at one period of time, so did IBM and many other companies.
[00:11:41] So there's a cycle of business endurance that rewards humility at some points and rewards arrogance at other points. In the political realm, I think the same thing's happening. I think the arrogance that I read into the National Security Strategy is a potential downfall for the United States over time, and we'll see where it goes. You know, I don't want to get too involved in politics on this podcast, but from as a lesson for us in the business world, in the HR world, we need to spot this stuff out. And if you're a leadership coach or leadership development person, or an L and D person, or a business partner, an HR executive, I think one of the responsibilities that I think you have and we have is to point out when we're not listening to the market, we're not paying attention to realities, and we are perhaps being overly arrogant or ignoring people, individuals, ideas, or problems that we don't want to see. You know, some of it's human nature, some of it's the way you were raised. You know, many of the most successful business leaders had very difficult childhoods and families. And to some degree, that challenge created a sense of energy in them that allowed them to persevere. My particular family was very humble. My father was a humble scientist type. So I think I tend to be a little more on that side. And so I'm more of a learning person than an aggressive, arrogant person, I think. But you guys tell me if I'm wrong. And we all have these personality traits. And for those of us in hr, since most of you are, you get to observe this and think about it and coach people on it.
[00:13:24] Now let me shift gears a little bit and talk about something interesting that we're working on.
[00:13:29] We have been doing some of the most fascinating research that I've ever been involved in here. You'll see a lot of this in the imperatives. We're building the blueprint of AI for hr, systemic hr, massive amounts of research on frontline work, talent density, which is a massive topic that touches everything in talent management, revolution of L and D, which is huge.
[00:13:53] Revolution of talent acquisition, which is huge. The HR tech market, the new world of leadership development.
[00:14:00] And then of course, the skills and upskilling and capability model of hr. And one of the things that the reason I decided to talk about this on the podcast today is we're going to spend a lot of time next year on leadership for two reasons. One is leadership models are changing because of AI.
[00:14:16] We actually have to be more humble and more experimental because AI is so disruptive and so new and so powerful.
[00:14:24] So we're working on a certification and whole leadership academy that'll come out in Q1 or Q2 next year. We're looking for pilots. If you are working on your leadership program or would like some help, now is a really good time to talk to us because we're in the middle of putting this together. And in Q1 we'll have a pilot and then we'll launch it probably around the middle of the year, probably at our conference. And we did an experiment, I want to mention to you, with Galileo that's really going to blow your mind. We took three developmental conversations. Three conversations.
[00:14:58] One was a developmental conversation with somebody that wanted to be promoted. The other one was a performance conversation. And the third was a conversation with a sort of a disciplinary conversation for somebody that wasn't performing well or behaving correctly. And we, they're each, you know, ten 15 minute conversations and we put them into Galileo and we built a complex prompt in Galileo to ask Galileo to assess the manager and the subordinate and the risk of this conversation and create developmental suggestions for both parties on what they could do better to improve their performance in their career and their relationships with each other and their communication styles. And it was, it did a spectacular job. I mean, way better than I had ever expected.
[00:15:47] I was Listening to it yesterday and we were talking about it, and I realized what we basically have done here, this was not the LLM. This is the corpus. This is the knowledge base paying off in many, many new things.
[00:16:00] And so we're going to give you some tools, this conversation analyzer or conversational coach, and some other things in the new version of Galileo that are going to give you leadership development and leadership tools that are really going to be spectacular. By the way, there's two flavors of Galileo. There's Galileo for HR and there's Galileo for managers. So more and more of you are now turning over Galileo to your managers. And our vision for it is that it will become a super duper HR business partner, coach, manager, agent, as well as an HR expert and an HR guru for HR people. And because Galileo can be embedded into other LLMs, you can add it to the agents that you have. If you have the Microsoft Copilot or If you have ServiceNow. ServiceNow is now using it internally. If you're using Joule or you're building your own agent, Valeo can be connected to your agent and make your agent turn your agent into a management guru and an HR guru. And that's a really interesting opportunity for all of you. So we're going to spend a lot of time on that next year.
[00:17:12] The other thing we're doing that's to me very interesting and kind of moves our business into a new dimension is in the imperatives report.
[00:17:23] You're, as I think I mentioned, you're going to have to get Galileo, license it to get the report, and then there will be links in the report. And you don't have to pay for Galileo for 10 years. You could buy it for a month and turn it off if you didn't want it. But, but you'll have it and you'll be able to go through the report. And there will be places in the report where you can click and go into Galileo and it'll prompt and open up a dialogue on the topic. So if you're reading a part of the report, the report's pretty long, but it's not that long. And you want to really understand this new imperative relative to your company. Galileo will just open up and have a conversation with you and you can, you know, explore, upload your own stuff, talk to it, ask it questions, challenge it, ask it to evaluate you, ask it to assess your maturity, and you'll have it connected to the imperatives. So you're going to have 12 imperatives and enormous amounts of conversational power. To learn more about all those 12 things and apply them to your company. And then we're going to do that for all of our research going forward. So this is going to be really, really fun.
[00:18:26] So this. Anyway, getting back to this idea of arrogance, you know, I don't want to put a value judgment on it. I think some people by nature are more arrogant than others and they tend to use it in different ways. I personally find it unattractive. But I think if you're an investor, you might like it. I mean, you might invest in Tesla or Palantir or, you know, whatever company you particularly like. And maybe, maybe the arrogant management style appeals to you because it's a very competitive style. But I'll tell you, based on the research I've done, it's a cycle. And every arrogant CEO eventually flies too close to the sun and realizes that there's a blind spot that is created from this over self confidence that doesn't pay off. And the reason that happens is you do tend to label people incorrectly when you're arrogant. I have learned in my business experience never to underestimate anybody. Everybody out there in your company, in your competitor, in your customer base, is capable of much more than you may realize. And under the right conditions, whether it be stress or opportunity, they will respond.
[00:19:43] So if you are the leader in segment X or product Y or wherever it may be, and you suddenly feel that, you know, you have God's given right to own this space or be the number one or whatever, I warn you that that's not really true. We're all God's given creatures. We all have genetic learning capabilities, we all have emotions, we all have ambitions, we all have desires. And people do amazing things when the environment is right. And that's really the theme of a lot of our research, is this never ending growth potential of humans. This is why I, by the way, I just am completely against this idea of artificial superintelligence. I do not believe that these AIs will ever even come close to the genetic intelligence we have as humans, even though they are very, very good at many, many things that we need. So your personality type or your arrogance versus your humility is something to be aware of. And I think we all have periods of time when we experience this and wake up one day and realize, you know, maybe I wasn't looking at this correctly. The only reason I really decided to do this podcast was because of the interviews from Andrew Ross Sorkin. So I encourage you to listen to them, come to your own conclusions. I don't want to tell you what to think.
[00:21:02] Look at the national Security strategy and consider it given this dialogue. And even more importantly, think about it in your own life, in your own HR department, in your own career. By the way, HR is a business within your business.
[00:21:18] If you aren't delivering value, if you aren't delivering directly contributing to the top and bottom line of your company, then you're an expense center. And if you're an expense center, you're going to be measured by the quality of your services and the level of cost you create and you're going to be shrunk. I talked to a big company yesterday. One of the executives is leaving and he told me that they're going to lay off half the people in hr.
[00:21:46] Now that obviously does happen and for a whole bunch of reasons. Sometimes lack of confidence, sometimes financial reasons. But let me make a comment on that particular issue during and this is all discussed in the imperatives. During the last decade, hr, two decades, HR has grown a lot. And you'll see the numbers in the report. And in some companies, HR is about three quarters of a percent of revenue. Some companies is up to one to one and a half percent of revenue. The HR department, not all the payroll, spending and benefits. So it's a relatively small number. It's not zero, but it's not that big.
[00:22:23] So if you are sitting around in HR under delivering because you're overly arrogant or overly self confident or and by the way, most of the HR people I talk to aren't arrogant at all. Most of you are very humble and very supportive and always trying to do a better job. So I'm really not criticizing at all if you feel that, or your CEO or CFO feels that the purpose of AI is to cut the cost of hr. I just want to warn you, and this is discussed in this report in January, that is a really bad position to be in and probably the wrong way to think about AI.
[00:22:57] Yes, AI will reduce costs. Yes, AI will improve productivity to some degree, but that's not really the benefit. The benefit 100 times higher is in scale.
[00:23:09] Quality, growth, agility, better information, better decisions, faster opportunity to exploit business opportunities in front of you, higher quality hiring, higher quality development, more timely access to information, et cetera. Those benefits are 100 times or a thousand times higher than cutting 20% of the HR department.
[00:23:37] So even though I know there's a lot of that going on and there is a new operating model and we're going to show you a new operating model next year that you'll all Be able to take advantage of and learn from. That's not really where we're going. The purpose of the new operating model is to add more value, not to reduce costs. To get out of this service delivery mindset, make it easier for employees to get the information and tools and guidance and development and information data they need and then focus on using your technical and professional skills to scale the company.
[00:24:11] One of the chros I talked to this week is a new chro. It's a very big company, 40, 000 person company, and they're in a very interesting business with a lot of contract labor. I asked her, you know, she was asking me for some guidance on what, you know, she should think about as a new cho. And I said, well, what's on the CEO's agenda? What's the number one thing going on at the sea level from the standpoint of the growth strategy of the company? She said, well, we're trying to redo our sales model because our operating model works very, very well. We're very productive, we're very efficient, we have great quality services, but we think we could sell better and get better deals and be closer to our clients in different industries if we had a better sales organization, a better sales strategy. So we have a new focus on hiring more salespeople. And I said, well, what is your role in that? And she said, well, we're obviously a part of it. I said, well, maybe what should be doing is flipping around the whole HR function and create a dedicated team of recruiters, pay business partners, whatever the right combination is, and tell the head of sales or the CEO that you're going to create a pod of experts to take all of the skills we have in HR and optimize this new sales model and don't just offer them training. That's a very small part of it. It's much bigger than that.
[00:25:30] And you know, those are the kinds of things that we should be doing in hr as opposed to waiting for employees to take surveys and then, you know, find there's a little glitch over here, a glitch over there, and adding a benefit or something like that. Those are, those are things you have to do too, of course, but those value creation things are really where you should be spending your time. And getting back to the beginning here. Your humility and constant striving to add value is what's going to get you through this next big wave.
[00:26:02] Let me conclude you with one more thought that's going to be coming out in January.
[00:26:06] I really think in 2026, and this has been happening this year, too.
[00:26:12] You are sitting on the most fascinating, transformational experience in your career. We're not going to see something like this for a long time in the future. Again, this AI thing, this technology, this capability, these tools, this market that's emerging is going to allow us to completely reinvent and rewire our companies and our HR functions and most of our operations. And as you'll read about in the report in January, this is the opportunity of your lifetime.
[00:26:47] I don't want you to be afraid of it. I don't want you to be intimidated by it. I don't want you to worry about it because it's going to play to your strengths.
[00:26:56] So think about that. Over the next couple of weeks. I will be around if any of you are working on planning for next year or have some big issues you'd like to discuss. We're going to take a couple weeks off here and so I will be home, though. So if anybody wants to chat, you know, reach out to me and stay tuned for a really exciting year ahead.
[00:27:16] I'll be continuing to produce a few more interesting podcasts that will be coming out over the next couple of weeks, so there's going to be more of this to come. And think about this issue of humility versus arrogance in your own life, in your own business, in your own company. And I hope this is at least a little bit of food for thought over the weekend. Thanks a lot.
