What does your subconscious mind have to do with how

you run your business? Well, a lot more than you might

expect. We have an extra special show today.

Are you ready? Let's go.

This is the Modern Digital Business podcast, the technical

leaders guide to modernizing your applications and digital business.

Whether you're a business technology leader or a small business innovator,

keeping up with the digital business revolution is a must.

Here to help make it easier with actionable insights and recommendations,

as well as thoughtful interviews with industry experts. Lee Atchison.

My guest today is a great friend of mine. He's been a CEO,

a CPO, a CTO, and founder of his own

company that he successfully brought to an IPO.

I've worked with him for many years, and we've recently co authored

a book that talks specifically about building a better business.

He is one of my very best friends, Ken Gerardovich.

Ken. Welcome to modern digital business. Lee,

thanks for having me on. I'm really excited about our conversation and so

excited about our book. I'm so excited about this book as well, too.

So just to get everyone on the same page, ken and I

co wrote a book. It's been in the works for

about 1518 months now, and it's been

released just recently. I'm very proud to announce the

rival my latest book. Ken, your first book, business Breakthrough

3.0. Ken, how does it feel now to be a published

author? Well, it's exciting, and obviously,

I couldn't have done it without you, Lee. So it was really exciting to work

with somebody who's actually written books in the past and put

into place something that you and I have seen so

many times is companies are

really only a collection of people, and they have those entrenched patterns.

And if you can really think through those patterns, not only do you

build a highly profitable, fast moving organization, but I know

one of the key things. You and I were both excited. That's a win for

the company, but it's also a win for the employees,

because when you create that kind of dynamic organization,

customers love the business, and employees simply love their job.

Ken, when you and I first started working on the book, we focused

a lot on what we call the subconscious mentality and how

organizations have a subconscious mentality. When I think of

in our own subconscious minds, the thing that comes to mind the most is

when you see commercials for

restaurants showing you pictures of food that make you hungry,

and you're more likely to spend more money, the more,

the hungrier you are. I can actually say those words.

I really can. But the idea is, your subconscious is what's equating

the site of food with the actual increase

in hunger. It's not a real increase in hunger. It's a perceived subconscious

reaction to seeing the food. The same sort of

mentality applies to businesses as well.

Businesses have their own minds. Yeah. Well, let's go back

just to that part about us individually, because I've spent a lot of time

thinking about why I do the way things I do, why employees,

what's really the motivator? And I'm again, big believer,

aside from the business part, is we all have kind of got this subconscious

mind that's running us really based upon patterns that

are millions of years old.

We feel safety in numbers. Why? Because a long time ago, maybe a

dinosaur might have eaten us if we weren't safety in

numbers. You think about training like you've ever heard like NLP,

where our mirror matching, where if somebody has the same posture

as us, we feel more comfortable with that person. Well,

you think about businesses. Businesses are really just a collection

of people that believe in those same kind of patterns.

If you're not careful, could be running your business, could be poisoning

your business, or could be really helping your business scale. And I think that was

one of the things that we thought, like, there's something really here to uncover

because it's really the patterns of success. Yeah, that's absolutely right.

It's breaking old patterns, creation of new patterns that

make sense for your organization and rebuilding

your business essentially from the ground up. So we

talked a lot about the importance of culture and we both know that

culture is critical to every organization.

Ken, what do you think about that?

Well, I always think about we've talked about this and

worked with a lot of companies. A lot of companies. Like if you walk in

and you say, hey, culture is important, everybody will say Culture

is important. Every consultant will say, Culture is important. Every company

will say, yes, culture is important here. But what we talk about is

really being purposeful in your culture, defining it

and living it. Because again, a lot of times people have words.

But culture is really powerful because it encompasses

not only your mission, your vision, your set of core values,

but how you're living it. Like, for example, let's say that

your culture is no aholes here, just throwing it

out like raw. But you have a salesperson

or you have a leader who's fantastic at their job but treats

everybody like dirt. And leadership overlooks that

you're not living your culture. And that's like a poison in

the body, a poison in your company that just feeds in

and slowly all the people that showed up because of the culture

disappear. And usually those are your best people. And Leah,

obviously we don't name companies and all that kind of stuff, especially different experiences,

but we've seen companies where they have a culture that attracts

the best talent. Like people hear about it,

they come the top talent even if they're not getting top dollars,

join the company. And then suddenly they

don't announce that they've changed the culture, but they start to hire people that are

not aligned to that culture. And bad things happen.

Yeah. The mindset that we need to make

money or we need to solve this business problem and this person will

solve this business problem. I know they've got these

cultural issues. We'll just deal with those separately. In fact, the matter

is you don't deal with them separately and you can't deal with those

sorts of issues separately. They're part of your culture. And if you don't stay

aligned with your culture, your whole organization will fall apart.

Yeah. And that's where I like in our book, we really tried to

have actionable ideas. Like, we're talking about it here at the high level.

What is Mission Vision and how do you set about a

core values? But we also talk about how do you actually activate

that, how do you instill that in your organization?

And we talk about even some of the metrics I forgot the

exact metric. But if you think about employees that

say they're engaged, the quality of work

that they do, versus somebody who feels they're just a cog on the wheel,

they're just going through the motions. And the efficiencies are night and

day at all scales of organizations.

We know that culture is important. Yeah, that's so

true, Lee. And just think about it from a stats. I know one

of the things that really got us motivated is

this is crazy. Literally two thirds of

us. Employees are not actively engaged in work. That means

that they're going to work and they're not bringing their whole self.

Two thirds of the entire employee base

in the United States, according to one survey, are not actively

engaged. Not only is that a terrible way for them to

spend, the most important thing that they have on this planet

is their personal time. That's a waste. But that's a waste

of efficiency also for the company. So one of the things that I'm a big

believer of doing culture and some of the things that we share in the book

and doing it right is the impact it has not only

to get to the employees, but the companies. And what we're

seeing when people do it right and do some of the things we've talked about

as much as a 30% to 40% uplift

in the efficiency of the organization registered by multiple different

frameworks. But just as importantly,

I think, to both of us, is you see almost the

same amount of increase, sometimes 30, 40, 50,

60% of employees saying that they're

actively engaged in their job. In other words, they enjoy what

they're doing and they feel that they deliver value every day. So this is

a huge win, the things we're talking about. That's why I'm so excited again

to be on the podcast. And it's part of that subconscious

mindset that creates the organization. And that's

the data that makes this really a true statement.

Now we're talking about measuring here now

and the sorts of data that you can measure and should

measure in order to show that you're making improvements in the organization.

But what we're finding is that companies

often make one of three mistakes when they determine

what data they want to measure. They either measure not

enough data, they're insufficient in

determining what they're trying to measure within their organization,

or they measure too much data. They're gathering every little piece

of data and then they can't get value out of that quantity of data that's

available to them. Or they just measure the

wrong things. They're measuring something that is irrelevant

to what the real core problem is.

Ken, what's your thoughts on those three things? Well, I think we

point this out of the book. There's a couple of things I'm a big believer

is at the end of the day, people always do what

they're incentivized to do. So you got to be really careful as

a leader, as head of a company,

what you measure. And they always

say measure what matters. But I like to think about a different way.

And I think we hit this out in the book. I know you and I

are 100% aligned is outcomes over activity is

what are the key outcomes. And that goes kind of ties into some of the

frameworks, whether it be objective key results or different critical

thinking frameworks. But you need to measure the right

thing. You need to keep in mind be careful what you measure and

display. We also talk about showing it to employees. Like if you're measuring it at

the executive level and no one sees the data, you might as well not do

it. It's not going to drive any behaviors. What you want to do

is measure outcomes. So outcomes is what

you drive, not activity. Because think about how many

times we've seen a really big

400 million dollar It transformation.

Everybody has a bunch of activity. Checkmark the

project's on time, on plan, and then it fails on

delivering the outcomes. I think we

talked a little bit about this in the book. One Fortune

50 healthcare company that had done in this case a cloud

transformation, they failed and

spent I think 5100 million dollars. The first time they failed,

did 5000 million in both those times they were measuring

activity. We're going to go to the cloud and then we're going to

be more agile. Our teams are going to be more engaged,

we're going to be able to recruit better people. It wasn't until they

really focused on why are we going to the cloud, it's really to drive that

agility what are the outcomes we're trying to drive with this activity,

in this case moving to the cloud. And so I'm a big believer,

whatever it is, focus the teams. And again, I know we've got

this in the book, focus on those outcomes over activity

and then make it visible to the employees, share it with everybody so they know

how they're being measured, which is on outcomes. And teams can

pivot. I know we talk about autonomy with constraints in the book,

but if you've got your teams aligned with the outcome, then everybody's rowing in

the same direction. They're in different parts of your organization,

but they're no longer siloed. They're working together. And you give them

the autonomy because they can pivot on the strategy to get the

outcome as long as they achieve that outcome.

Yeah, that fits in really well into something that I don't think we

talk specifically about in the book, but I certainly talk a lot about.

And that's what I call the Valley of despair.

This is when you're going through a migration or a transformation project.

Inevitably, as you go through that project,

the disadvantages of the migration show up

before the advantages do. You have to put in effort.

You put in work. You're transforming your application. So your

application slows down before it speeds up. It gets more complex

before it becomes simplified. All of these sorts of things happen,

tend to happen, with the negatives starting to appear

in a large scale project before the positives do. And so

you see a dip in your application and whatever you

value within the organization before you

start seeing the ramp up at the end to the

real value you're looking for. And I call that the Valley of Despair.

That low point. I see so many companies forget

what they're striving for and why they entered this

project in the first place. When they're in this valley, all they're seeing is the

negatives. All they're seeing is the problems. Should we have started this cloud migration?

Things are more expensive now. Things are more complicated now.

Our application is slower. Why did we ever do this?

Well, we did it because of these sets of

objectives that we were trying to accomplish when we got to the cloud,

but we're not there yet. But so many companies will actually stop

right in the middle of that valley when things are worse than they

were before and won't finish their project or won't finish the

migration because they've lost track of what they really valued in the

migration and frankly, why they started doing it in the first place.

They're measuring the wrong things. They're evaluating the wrong things

they're achieving. They're focusing on the wrong objectives.

Leah I think that's so important. That valley just reminds

me going back to at the end of the day, companies are just

collection of people. And I don't know the right way to say I

think I always think about the Kubler Ross change curve. But if you

think about any type of transformation when

you're changing people because people like, we don't like change. Right.

It's uncomfortable at first. It's that shock

and denial, like, why are we even doing this? And then it's

kind of like, oh, disappointment. This isn't going to work. I don't know if this

is going to work. And then once they start to see it, then it's

that pivot, and then you've got that pivot up in acceleration.

And it's funny that you said that. Whether it be like an It project

or I've run marketing teams or sales

teams, you got to have the right strategy. And we talk a lot about in

the book is like, what are the tactical strategies to

succeed? So you have to have that, but you also have to communicate

that transformation you were just hitting is we've got a plan

in human nature. We're all going to have doubts,

but let's stay on the plan, let's focus on the outcomes,

and then we'll get past this dip and everybody will be excited. It's the

same thing. I go back to autonomy. When you first introduce

outcomes over activity into an organization,

at first it's like, wait, what? You're going to

let me make decisions? I'm going to have autonomy.

I don't know if I like that. I think I just like to do what

somebody else said or what's the boss's plan? Or oh, it's this new

transformation leader. I guess we'll do what they say and then

they flip it on you and they say, no, I want you to

drive these outcomes. And then suddenly you're sitting with it as

an individual contributor, as a manager, going through, okay, well,

wait, hold on, I'm responsible for those outcomes. So activity

is no longer success. I don't know if I feel comfortable. But then

going back to human nature, once you feel like now you're in charge of

your own destiny, you know what success is outcomes.

You've got alignment, you've been empowered to make the decisions,

then you start to get that excitement and happiness and you feel so

much more fulfilled in your job. So it's so funny how

whether it's an It project, whether it's a personal transformation,

whether it's a turnaround in the business or turnaround in a team or

new leader, it seems like we always go through that same pattern

of down, okay, is this really going to happen? And then assuming

you've got the right plan up into the right, it all.

Goes to show that a business and a human

being all have the same mentality model.

They have a mentality, they have a personality,

they have a culture that has

to be understood and has to be appreciated in order to

succeed. Yeah, I absolutely

agree. One of the other part I think that goes with that,

what's the other structures? I think we've hit on like company mission, vision,

core values, critical thinking frameworks,

what to measure. But I think the next part is really also as

far as a company and enterprise. And again, you and I

have done Fortune 50 to startups,

been all different sizes. You got to make sure

you have the organizational structure to drive successful

actions. Love to spend a few minutes on

that. Absolutely. That's the next of the

five main distinct processes we talked about. I think that's actually

number four, which is organizational structures

and how your organization

acts, the way it's structured. And if you want to have

your organization respond in a certain way, you want to

organize it in a way that allows that response to occur.

No, I totally agree. And one of the phrases a

mentor of mine used to use when he was thinking about organizational design

principles is I always like those simple phrases,

just think about this is you get what you design for.

And I've seen so many times where,

let's say one team that reports up under this person

and this leader and this other person reports under this leader

and they're not in the same page. And people lower in the organization have lots

of friction. There's just a disconnect. They're misaligned.

And people are like, why are these team members misaligned?

Well, they're doing exactly what the organization

was designed to do. If you have poor organizational

design, or again, be very intentional about

that, like sometimes from an organizational design you can create healthy

tension, which I think in many cases is good for an organization.

You've got some kind of checks and balances, but you can also,

through poor organizational design, have unhealthy friction.

And that's just where people get frustrated with each other. They're not

on the same page. So it's really important

to do that. And I know we go into some really detailed principles.

If people haven't heard of Federated direct

line reports center of Practice we go into a lot of

different people processes that you can set up from an organizational design

so that you get the outcomes that you're driving for because we can have

all the other things done right. But if you have poor organizational design you're

going to have poor results. I think back to a

rather small example, but I think a very pointed example. I think a

lot of us might relate to. My very first project out of

college. I was working at Hewlett Packard and had

a manager that there's this two person project.

There was a person who was writing the code and a person that was testing

the code. And my first job was to test this code.

I was straight out of college, wanted to do well in my job.

I wanted to know what are my requirements, what am I supposed to accomplish?

My manager said, Your job is to find as many bugs as you possibly

can. So I set out to find as many bugs as

I possibly can. And every time I found a bug, I said, I found another

one, here's another one. And I was so happy that I was doing

what I was supposed to be doing. And I was reporting to my manager saying,

look at all these bugs I found, look at all these bugs I found.

And everything was great till suddenly my coworker sat

me down one day and said, why are you celebrating so much

of the mistakes I'm making. And that's when

I realized that, no, that wasn't really what I should

have been trying to do. That's what I was directed to do. That's what I

was being rated on doing. That's what I was being graded

on doing. But that wasn't the goal. The goal was the both of us

was building something that was supposed to be high quality.

So we sat down, we figured out what we really should be judging each other

on, brought that back up to our manager, who totally

agreed and went with that. But it was just a simple example.

But that same sort of problem shows up in larger

organizations of different sizes of shapes, et cetera, is you

get what you organize for, you get what you value

within the organization. And that may be good,

that may be bad, but whatever it is that you're asking for is

what you're going to get. And that may not fit in well with the

rest of the organization and may not be actually what you're looking for. You have

to think more expansively about what you're trying to accomplish in

order to get the right goals for the organization rather than

the individual goals. No, I think that's so

spot on. Lee. And again, one of the things that I know we really try

to do in this book is really put a how to to do some of

these things because I've seen so many times where people just don't have

the experience. Or maybe not even the power to maybe they've got

the experience. But how to articulate that? Maybe to their

boss, their VP, their SVP, their CIO, their CTO, their CPO.

But these things show up repeatedly. And I'll give you just a couple

of examples. I think some of them we put in the book. There was

a company that I worked with again, private Fortune 50

company. And as part of like a cost move, they said,

you know, in Agile we don't need any project managers,

so we're going to get rid of all of them except

for this core team at the corporate location.

So we're going to take them all out of the business units immediately

because Agile is magic and you never need anybody to do any projects or coordinate

anything. And so they had this team and

these teams were assigned to

business units. So business units could say, hey, I'd like to

have this resource. But there was no

structural alignment. So they reported to somebody in kind of,

quote, corporate. And so what would happen is the

person at corporate would take people off those projects

because somebody else was louder at a different business unit.

So what happens? Again, you get what you design for.

So the business units, they had somebody that did this role. Now there's

somebody at corporate that could come or go at any time. They had no visibility.

So what did they do? They do what people naturally do. They created some

new title called something else that's not project manager that did all

of the exact same roles as before. And the inefficiency that the

organization was trying to solve for, they created even more because now they had this

central team that no one really trusted or did anything with plus

copies of all of that back in all the business units

versus and this is that term we used. Again, I know it's a lot for

those of us, maybe this is my too heavy lifting, but that term Federated or

Direct, like who's your customer? So if they would have been clear

that that central team lived to serve

the business units and were federated to the business

units leader, so who's the customer? Not that central

leader. That central leader was designed to serve the business units,

that structure would have given the company the savings they were looking for

and not have created that duplicate. So again,

super important. I just want to give one other example for the poor product

marketing people that are almost in any company I've seen this so many

times is product marketing reports to marketing

and then products frustrated with product marketing

because they're not communicating it the way the product leader sees

the vision. They're communicating it how the marketing team sees the vision.

Or if product marketing reports to product,

then marketing team is really frustrated because they're not getting all the

things that they need to share in the marketplace because

it's going according to what product thinks is important.

And in both cases, either one of those is simply

wrong. This is a really good example is you have to decide

where do you want to have the hard line report and you want to have

a dotted line. So product marketing should always have two bosses.

One, that's their HR report, which is who their

tightest aligned to, but they've got two bosses. They also have

either marketing or product. And when you do that, you not only set up

the company for success, you set up your product marketing

team for success. Otherwise it's like whack a mole with them. So for if you're

a product marketing or CPO or

a CMO, please make sure you have a Federated team be nice

to your product marketing members. That's absolutely great

advice. And whenever I've seen organizations that do

that effectively, it's been successful. And when it's

very clear when organizations aren't doing that successfully and the

walls that get created and the siloed

mentality that occurs when you do that.

Ken, this has been great. I really appreciate that. We've got a lot

more that's in the book. We haven't even begun to talk about marketing

strategies like product led growth, sales lead growth, et cetera, which we also talk

about in the book. I'll save that for maybe another

episode or for people to buy the book

and read up on it. The book again, is called

Business Breakthrough 3.0. It's written by Lee Atchison

and Ken Garadovich, and it's available on Amazon.com

and almost any other place that business or

technical books are available. It's available in a hardcover softcover

Kindle ebook version, as well as an Audible version on

Audible.com and other audiobook platforms.

Thanks, Ken. Thank you very much for coming on the Modern

Digital Business podcast. And once again, it's been

great working with you on this project and I hope we'll work on future projects

as well. Eli, if I could do just one more shout out to your audience.

I know this is important to both of us is if you take a

read through the book, it helps you, helps your team, helps your team love their

jobs more, helps your company move faster. Please send either

one of us a note. Just makes us feel great. One of the things we

both try to do is just make the world and business just a little bit

better. So send us a note and thanks, Lee.

Absolutely. And in the Show Notes, I'll make sure to have contact information,

of course, for my normal contact information, but I'll also have

Ken's contact information so you can reach out to him. And Ken,

you're available specifically for speaking engagements as well, is that correct?

What I really love doing is speaking at organizations and really helping companies

take some of the principles that we teach that we've learned

to transform their organization. So if you've got a speaking opportunity to

help your organization, please reach out. Love to talk.

Ken, thank you you so much for being on this episode.

Enjoyed it. Lee. Talk soon.

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