Episode Transcript
[00:00:00] Good morning, everybody. I want to spend a little bit of time talking about July 4th, the American Earth Day, and talk about what we can learn in the business world from what we see and observe in the political and world of global politics and economics. So there's just an interesting flurry of articles and podcasts and videos from many, many journalists and magazines and thought leaders on the history of the United States, and movies on Netflix and others about Revolutionary War and the founders. And you can read them all. They're very interesting. There's lots and lots to think about. But what goes through my mind when I look at this is only a few fundamental principles have created this country. And many of us here, most of us here actually are immigrants, in fact, almost all of us, and they really come down to freedom. Freedom from a king, freedom from rule by others, and self determination, liberty, the opportunity to speak out, misbehave in a sense, pro protest, march, and things that have to do with challenging the authorities. And the third is what I would call a decentralized form of government, which is a little bit of a question at the moment. But the United States is a very large country in terms of people and geography, and we don't, or we haven't traditionally had a central control organization to run the country. It was run by state governments. And the Congress, which is the first branch of the Constitution, is intended to be a fully representative group of legislators that represent every human being in the United States equally. The Supreme Court and the Electoral College and the Senate are very different. They're very biased towards small states because of the way the system works. The large states or the large populations of people are not represented well in those bodies. And that was originally, at least if I interpret it correctly, set up that way to protect the slave owning states in the south which were trying to avoid small states or big states in the north taking over their power. So it's a decentralized government by nature run by the Congress, with the President originally appointed to be the chief administrator of the government, not the decision maker of the government. The decisions were supposed to be made in Congress. That's all been changing a lot over the years. And the current Supreme Court in the United States is pushing more and more power to the executive branch. And during the last administration we're in now, the Congress has been more or less ineffective and hardly done anything. So anyway, those are sort of the fundamentals. So you take those three ideas of freedom, liberty and decentralization and you think about what that means for all of us in our daily lives and forgetting about politics for a minute, let's just think about organizations. If I think about all of the companies that we've worked with over the years and the human capital decisions and priorities and topics and agendas that have come up. Diversity, inclusion, pay, equity, fair pay. There's. By the way, there's a bunch of new research that shows that one of the reasons we have income inequality in the United States is because of a lack of revising the minimum wage, which I'll talk about later. I'm not sure how true that is, but there's research that seems to show that labor unions either coming or going, and a sense of empowerment. And you think about what it means in a company or an organization or a startup or whatever organization you work with, it all applies.
[00:03:38] I've often said that everything that happens culturally and politically in the bigger world happens inside of a company. Companies are political animals. There are leaders who have certain amounts of power. CEOs have authorities a little bit like a president, sometimes more, sometimes less. And they have different philosophies depending on who they are and the situation the company's in. And what you see in businesses is during periods of rapid growth, growth and rapid instant decision making, whether it be crisis or growth, the CEO has a huge amount of power because decisions are being made so fast that he or she has to allocate resources quite quickly to take advantage of opportunities or solve problems. But then during periods of moderate growth or moderate change, the organizations can be much more decentralized. And that's oftentimes when bureaucracy sets in, because you end up with lots of business units and lots of functional areas that are operating in their own best interest, but maybe not as efficient as they would be for the whole. So, you know, one of the things we deal with in HR all the time, all for the 30 or so years I've been doing this, is this problem of central versus local control. Should an individual manager or an individual director or VP be able to make a lot of decisions on their own, or should it be managed and controlled at corporate? You know, the people in corporate would. Would say absolutely they should not. And there needs to be guardrails and rules and all sorts of policies around it. But history shows that's not necessarily true. Some of the most successful companies and countries are very decentralized. If I think about where I live in California, we're a big state, 40 million people, but we're oftentimes considered to be a land for experimentation on different things that the rest of the country is not Ready to try yet. Environmental regulation in the 1960s and 1970s, gay rights, things like that. And then the rest of the country says, oh, that's a good idea, or no, that's not a good idea. We don't like it, we're not going to do it. And so decentralization, because it empowers people to make decisions locally, is a really good thing. And what I've learned in my career and the companies that I've led and been involved in, is that the people in the central function or the top don't know what's going on at the ground level. They can't. They're not there. And there's a Japanese word called gemba, which refers to the problem or the discipline of getting out of your office and going to the front line. And the front line, not as a person giving a speech, but the front line as an observer and a participant in the frontline operations, teaches you things that you didn't know in your theoretical world, in the central part of the organization. So decentralization and liberty, freedom, those things that we talk about in the United States, are actually really strong principles for any organization, any company, any country, any nonprofit, because the reason the organization, organization exists is to solve problems for the constituents or the customers or the citizens. And that problem solving happens when you know what the problems are and the closer you are to the problems. If you're a nurse, if you're a salesperson, if you're a barista in a coffee shop, if you're a repairman fixing a power pole, you know what the problems are right in front of your eyes. And if the institutional stuff behind you is not helping you solve your problem, you know better than anybody else.
[00:07:09] So a lot of the principles in the July 4 discussions about the United States apply. They're just good lessons, I think maybe is the way to think of it in how we run our companies. And right now in 2026, because we have this very odd thing going on with all this money and energy and attention and press being devoted to AI and the oligarchs and the billionaires and the income inequality around technology, we have to remember that whatever we do in our human capital stuff, or leadership or recruiting or training or technology around HR has to be rooted in the operational needs of the frontline parts of our companies. Now, you know, frontline is a weird word because it sort of seems to segment workers into frontline and not frontline. But everybody's kind of frontline in their own way. Everybody has access to a constituents, a Citizen, a customer. From whatever role you're in and depending on, on how you see it in your role, you have different perspectives on what should be happening. So, you know, I think a lot of the ideas that the founders started thinking about in the United States were fundamentally human centered ideas. A lot of times what happens to me is I get wrapped up in all our HR stuff and I go back to this idea of human centered leadership. And I think there's sort of some basic human nature that affects both the politics and the organizational strategies of companies. One is that human beings are very self directed, learning, creative animals. We're basically creative animals. We're not the kind of animals that do what they're told. I mean, that's one of the reasons we've existed and grown and become the species that we are. The DNA and our cells, the way our brains work, the way our emotions work, have been formed through decades and hundreds of millions of years of survival from predators. And the intelligence that we have in the human side of us, not AI, is very savvy and sort of shrewd at finding ways to prevent extinction and to thrive. And that's what happens in at work and in society is people come up with new ideas. They have ambitions, they have fears, they have aspirations, they have perhaps family goals they've had passed down for generations. And they do cool things. They run a farm, they run a restaurant, they start a business laundry, they start a consulting firm, they go to work for an investment bank, we want to get promoted or we go work for a new company because we don't think we have the opportunity we had at the other one. That aspirational nature of human beings is innate. And when you see stories of people that came to the United States from other countries, it seems to me a lot of the theme of those stories is I was blocked, I was hurt, I was destroyed from the controlling experience I had in my other country or other company. And I wanted to be more free, so I came here. And by the way, that's what happens in at work. If you control, if you, if your company is very rigid and it's not flexible and it's not empowering and people don't feel that they can bring their personal aspirations and personal ideas to work. They might stay for a while and you know, if they're paid really well, they'll do what they need to do, but they'll leave. They'll leave their best ideas elsewhere and they won't bring them to you. So human centered leadership has a huge component of empowerment and liberty and freedom. The second thing that I thinks interesting about the United States relative to companies is this idea of empathy and forgiveness. You know, one of the debates that's going on in the US for those of you that aren't here, is are we a good country or a bad country? Was slavery a sin or just a mistake when we went into Vietnam and all these other things that you could now criticize? You know, why do we make all these horrible decisions? Should we be proud of ourselves for this or not? But I think the reality of, at least the way I see it is great institutions and organizations are honest about themselves and they learn from their mistakes and they learn from their sins, I guess you would say. And they learn and grow as a result. And they don't necessarily live in a world of blame. They move beyond that. I've worked for companies that are filled with blame and they don't do well. I won't mention which company, but one of the companies I worked for was a really well run company, but had a cultural problem of accountability and blame. And when things weren't going well, rather than grouping together and saying, what have we learned and what can we do to address these issues? There was a lot of blaming going on. And it has to do with the executive team at the time. And that company really had a lot of problems, eventually got acquired. So same thing's true in organizations and countries and politics. If we sit around blaming each other for things and trying to demonize each other, we're not going to solve any problems. I mean, we might raise some issues, but as you know, if you live here, the political arguing that goes on in the United States doesn't feel very helpful. We're all sort of stuck in this little trap. But ultimately, if you think about your family or your children or your spouse or the people in your personal life, when you forgive them and give them the opportunity to grow, it always works out better. Always. And that's the nature of us as people. And I think the founders of the United States kind of knew this in some sense. And even though there was a lot of warring going on and a lot of fighting and blaming and a lot of terrible things that happened to the Indians and others, there is a sense, or there should be, at least I believe, a sense of forgiveness. You think about how the German culture has reacted to World War II and how other countries that have learned from their mistakes. That's the other dimension to me of organizations and politics is, is do we have a society or a country or a company that is willing to admit mistakes and stop blaming each other and move forward and learn from that. The military operates this way very effectively because in the military if you make a mistake, people get killed. So they're very savvy about learning from mistakes. And I just wrote a long article about organizational learning and AI and I went back and I looked at some of our old research on learning culture, which we had done many years ago. And it turn out in this large study we did in the 2010, so it was about 10 years ago, 15 years ago, that of all of the principles of organizational learning and growth, the one that scored the highest in a very, very large study that was correlated and deterministic of business performance was learning from mistakes, talking about mistakes. And I think I talked about this at Shark Ninja. You can look at Boeing, you can look at Nike, you can look at intel, you can look at any organization that you follow that is going through a turnaround or trying to go through a turnaround is the first step in improving the performance of this entity or organization that you're a part of is honestly looking around and discussing what's not working and being realistic about it without blaming people. And there's a certain humility to that, you know, you may not consider to be a leadership trait. I do. I mean, it's the way way I'm wired. But not all do. I mean, I think a lot of leaders will never admit they make mistakes. I won't mention any names, but they, they know there are mistakes being made. Even Amazon makes all sorts of mistakes and kills a lot of products. Meta, Apple, I mean, it happens all over the place. So, you know, I'm sort of sitting here on July 3rd thinking about July 4th, which is mostly fireworks and thinking with all the discussion of the 250th anniversary here, can we sort of just think about it in the context of our daily lives, our organizations, our jobs, our careers and our countries and our politics? Because I think there's so much similarity between the decisions and strategies we make as citizens and political leaders and those we make as employees and managers and executives in the business world that we can learn from them and share them in our daily lives. So kind of a weird topic for today. I don't know if you find this interesting, but I felt that it was something that's been on my mind for a number of months and I wanted to just share with you and I hope you have a nice holiday, those of you in the US and we'll talk more next week. Bye for now.
