309 Big Bet Leadership to Win in the Hyper Digital Era with John Rossman | Partnering Leadership Global Thought Leader

[00:00:00] Mahan Tavakoli: John Rossman, welcome back to partnering leadership. I am thrilled to have you in this conversation with me.

[00:00:05] John Rossman: Mahan, thank you for welcoming me back. It's been so great to catch up with you and I look forward to the conversation. 

[00:00:12] Mahan Tavakoli: John, it's an absolute thrill because I don't think a single week goes by without me quoting something I have learned from you reading your books on the Amazon way and our conversation, episode one. 112. I would encourage the audience to listen to that. So many pearls of wisdom. But before we get to your newest book, , Big Bet Leadership, Your Transformation Playbook for Winning in the Hyperdigital Era, would love to know what you've been focusing your time on besides writing this book over the past three years since we talked about the Amazon series books.

[00:00:54] John Rossman: Well, over the past three years, we had this little thing called the pandemic go on and everything. I had my youngest son graduate from college. 

And so there's been some silver linings come out from that horrible situation and tragedy but what I continue to just double down on is. I work to help my clients solve problems really hard, what I call wicked problems in their business. These are not simple, trivial operational matters. Like these are hard problems. 

[00:01:25] Mahan Tavakoli: You are adding more value to your clients including through this book, now, there are a couple of elements of the title I want to touch on first, John, 

When you say big bet leadership, what do you mean?

[00:01:37] John Rossman: What a great first question. So both of those words are important, big and bet. So I'm going to start with a bet. So a bet is a concept, a strategy, a move that you are thinking of doing, but you inherently know It has the potential for great benefit, but, there's inherent risk to it, there's some type of either conceptual risk, adoption risk, technical risk, execution risk to it. It's a bet. A big bet is one that has. Oversized potential of ambition for your market. That's what a transformation really is. And so big bet are all of these things that go by digital transformations or AI strategy or growth strategy.

Mergers and acquisitions are oftentimes a big bet. Any of those things that have the potential should have dramatic impact for your business, that there's inherent risk. And I talk about the failure rates of all of those different types of bets and framing up in the book.

[00:02:45] Mahan Tavakoli: I know you've also been involved in a lot of strategic planning conversations, John. As have I. And in many instances when leadership teams and the CEOs are thinking through their strategy, many of them hesitate about thinking about it as a bet. Because every strategic plan seems like 100 percent bet in the minds of the leadership team as they pull it together. 

[00:03:08] John Rossman: There's a lot of dynamics in those conversations. There's a few books that have influenced me. Good strategy, bad strategy is an important one. Growth Beyond the Hockey Stick is another recent one and what those get to is that in general, these, purely mission driven. Five year plans that are just essentially a copyright escalate by 15 percent every year.

Those are not strategies. A strategy tackles a fundamental problem in the business. It suggests a strategy for overcoming it and then a set of tactics in order to execute that strategy. That is what good strategy does. I'm paraphrasing Richard Rumalt from good strategy, bad strategy when I talk about that.

So what we try to do in the book is to apply the substance of those principles into how do you actually develop good strategy when these are big bets? The dynamics in those meetings. Oftentimes really become budgeting roulette, which is if you aren't willing to commit to a big outcome you're not going to get the resources to pursue it.

And this is where the failure for these transformations begin. We commit early on to something that is fundamentally unproven, that fundamentally you cannot commit to because we have to in order to have the resources in order to do the experimentation. And then the 2nd, that's done the kind of 1000 cuts start happening relative to that.

So they commit big and early. We have to actually prove these things out before we know whether it's the right concept, what the rewards are going to be, is it worth it and everything. And so a much better way to do it is to have a portfolio of here's A problem or problems a portfolio of here's how we think these proceed.

Here's how we think we should experiment on them. Choose which ones you want to experiment on. And then in 3 months, do the next level of planning based on what you've actually. Figured out now you can do some envelope planning, which means directional resource planning and some commitments around that.

But leave open on these unproven things, not everything in business is unproven, but on these unproven concepts. leave open a lot of room relative to the changes that are going to happen. That's why I think the word bet is so important to include in the language that we use versus A project or, anything else because that word inherently signals to everybody we're working with.

I think this is a good idea, but I don't know. So what you're going to hear from me is an experimentation plan relative to that.

[00:06:05] Mahan Tavakoli: John, there is so much wisdom in what you just mentioned. When I was on the leadership team and we were discussing our strategies and then we budgeted accordingly , it wasn't the kind of thinking you are talking about. It was a budgeting exercise, right? And it was a budgeting exercise. filled with certainty, or at least in that moment in time filled with certainty, as opposed to this mindset of experimentation that you talk about in making these big bets now, part of.

The point that you also make the second part of your title is the importance of being able to do this in this hyper digital era. Why do you think this is even more important for organizations now? 

[00:06:56] John Rossman: So this is the preface in the framing of the book of why this is important and the quick. Summary on that is, that if you think the past 25 years of digital disruption, digital transformation, historically people tend to pick the August 8th, 1995 IPO of Netscape is okay, that's been, that was the start of the digital transformation. If you think that past 25, 28 years has created a lot of new winners, a lot of losers, a lot of disruption, a lot of positive change and a lot of challenges.

If you think that 25 years has been interesting this next 25 years is going to make that pale in comparison. And I think we are going to look back at the November 2022 release of chat. GPT as another one of Those starting points where oh, that's when things really started to change.

And so that's why I frame it as the hyper digital era. And the essential thing that's going to be different between these 2 eras is that. The first digital era did a ton of reinvention on customer experiences and new business models and things like that. But in general, the way that companies work, the efficiency, the cost model, the productivity, it's been a slow, mild change, but it really hasn't been disrupted.

That's going to change in the hyperdigital era. You are going to find companies. Getting 10 to 100x the leverage, the productivity from their cost model from their organization than they do today. And so that's going to change a whole lot of things you want to be early on those things, or you may potentially be a laggard and a victim relative to those things.

So that's the case for why bold moves are required, but the problem is we're horrible at them,  these things all tend to fail and to triple down on the complexity, they fail for lots of reasons. There's not okay, we need to be more experimental.

We need to, good leadership or whatever, generic thing. It's oh no like they fail for a lot of reasons. So my coauthor and I, Kevin McCaffrey. We studied the people that we know as truly transformational leaders. Some of which we've worked for directly, some of which we studied very intently.

So the four that we picked, they're not the only ones, but the four that we picked are Jeff Bezos, John Ledger, who was the CEO of T Mobile and led an incredible comeback at T Mobile satya Nadella from Microsoft and Elon Musk from every company out there, what we found is that they have three critical habits that are different than really good leaders, but non transformation leaders, and those three habits are they create clarity, they maintain velocity, and they accelerate risk and validation.

The book is then okay, how do I apply those three critical habits? Of big bet legends into what I do as a leader. And that's where the story unfolds. 

[00:10:10] Mahan Tavakoli: And what you mentioned is that part of the importance of this is learning from the best and then applying it in. Your own world.

Part of what I like about your book is that it's a playbook for implementation in our organizations of various sizes. So this is not necessarily what Bezos did in Amazon or whoever else is doing in their organization. It's a framework. Now, I want to understand These essential habits a little bit better.

You mentioned create clarity first. 

So what is the kind of clarity that you are saying these leaders create for their organizations? 

[00:10:53] John Rossman: Real simple example is just what we've been talking about, which is when you have a grand ambition, that it's inherently risky. Call it a bet that's clarity to signal to everybody.

Hey, here's a special thing. It's called a big bet. oh, okay. That's a different game that we're going to play versus our standard type of plan relative to application in the book. Too many of these transformations, they start with a very fuzzy understanding of what's the problem we're really trying to solve here, they have an even fuzzier or vague notion of what's the solution for this? 

Like, where are we going in this transformation? And so the problem starts. We don't really know what problem or problems we're solving. We don't really have a hypothesis. a guess, a highly educated guess about what's the specific thing we're going to do or create or provide that solves that problem.

And so you can't be efficient about going from point A to point B. So we call that creating the big bet vector, a vector is something that has a very specific starting point. That's the problem. Very specific. Ending point. That's our hypothesis about what the future killer feature is. And then you can truly be agile because you can make the distance between those two points as short as possible, knowing that what we're doing is we're testing the critical high risk elements of what that future status.

To make sure that it's worthwhile pursuing. So you have to make, the juice worth the effort of the squeeze here. And so oftentimes that's one of the key elements that gets left behind is the ambition part of this. You're doing this for an ambition. And it's not just to create a better customer experience or employee experience.

It's to do those things. And create a great business. And so many of these innovation programs have lost the focus on cost model innovation or creating sustainable business models and financial models so that's where we start in creating. Clarity is what problem, what's the future state and then notating that it's a educated guess.

It's a bet. 

[00:13:15] Mahan Tavakoli: A couple of thoughts about it before asking about that clarity and where it resides. One is it requires a different kind of thinking than I've seen in a lot of organizations. Whether it is in terms of budgeting or performance reviews and how people are looked at a lot of the traditional structures and systems that we operate in John don't lend themselves to that they lend themselves to protecting turf to controlling budget, so on and so forth.

[00:13:45] John Rossman: And platitudes. I would add it there on that list. 

[00:13:49] Mahan Tavakoli: Yes, absolutely. So there are cultural elements to shift. And there are systemic elements to shift with respect to this. With this clarity, who owns it? Is this purely something that the CEO of the organization initiates? Or is it something a team leader can initiate with their team?

Who owns this clarity? 

[00:14:11] John Rossman: At the end of the day, there is a leader who is trying to drive this change. Leadership is a skill and that skill is about guiding others. In the pursuit of a specific mission. That's what leadership is.

And so if the mission is some type of transformation or growth strategy or hard change that you have to do your job is to. lead others to that. And so by creating this clarity, that's the fundamental foundation that helps you do your job in communicating clearly and succinctly with clarity.

To others to guide them along in that. So one of the concepts that we have in the book, because communication is such a superpower is around becoming the chief repeating officer and again, depending upon the size of this transformation, it's the president or CEO, or it's the divisional GM, or it's, A leader that owns the accountability but at the end of the day, that person has the accountability for bringing a set of stakeholders along with it.

And we equip you to become that chief repeating officer 

[00:15:29] Mahan Tavakoli: And one of the things that You talk about you go through this in the book, in my mind, builds beautifully on Bob Johansson's work. He talks about the need. During times of uncertainty for clarity rather than certainty and then flexibility in achieving that clarity. 

[00:15:51] John Rossman: You've just given me some new words to use on that because that is exactly the point.

It's actually about being specific about the uncertainty. And what are we going to do to take the uncertainty out of the critical few things that we need to take the uncertainty out of in order to pursue the ongoing investment that these types of initiatives.

Take and that's really leans towards the third of those critical habits, which is accelerate risk and value validation. The hidden part of that critical habit is not only do you accelerate. The identification and testing of the critical things that have to be true for this idea to work, but then you really work hard at deferring.

Anything else that isn't tied to those that creates the real speed and affordability in our experimentation. Everybody talks about being agile. It's hogwash the way that we approach agile. It's not the tactics of agile, it's the spirit of agile, which is bring forward the things that we have uncertainty about, create more clarity on them.

But in order to do that, we have to work backwards. Sometimes and the things that we're suggesting are counterintuitive to how most of us plan and execute projects, and at times it actually may feel and is wasteful.

That's because we're prioritizing de risking these things before you commit to them, and most organizations go about it. Completely backwards. 

[00:17:20] Mahan Tavakoli: So in doing this, John, one of the questions or challenges I often run into is how you communicate this intention to others in the organization or other stakeholders.

I've had even CEOs of organizations where they say, I get this mindset of betting and experimentation. My board doesn't want that. They want us to deliver the results, say, this is what we're going to do. And we're going to succeed doing it. So how do you. nurture the kind of culture and environment where everyone understands this type of thinking rather than some being anchored in the old mindsets of certainty and control.

[00:18:06] John Rossman: There's a lot of moves to make to do that. Reading a good book, having a keynote speaker, those are some of the things that help. Bring along a stakeholder group into really understanding what I say uncertainty experimentation and that innovation starts with failure,

this is what I actually mean. So that learning journey is an important part of it. But the other move comes from Amazon and we adapted it to be much faster. better suited for most other organizations, which is this concept of memos. So writing things out super tight, super succinct with clarity then reading them and then debating them.

That's how you get across. really delicate differences and important aspects versus the typical approaches of PowerPoint presentation. That's all based on, personality and graphic art, and it's unrepeatable don't insult your audience. Assume that they are experts in their relative field.

You need to tell a succinct story in the memo and let them rock it. Let them understand it and then have the follow on conversation. So that's a tactical move to really communicate. This is what we understand. This is what we don't understand. This is how we propose going about it. Here's what you're going to hear next from us.

Those are some of the communication patterns that really good teams who bring along stakeholders like you're talking about. They do this is Amazon's famous kind of working backwards approach demystified and put into some really approachable approach. Templates and tools that you get when you purchase the book is a big bet journal a big bet GPT, a bunch of prompts and other things to help you build these memos and this approach of thinking through things clearly upfront.

It's 

[00:20:14] Mahan Tavakoli: a tactical move, but a lot of times tactical moves are essential for us to do the kind of thinking that 

[00:20:20] John Rossman: it's tactical moves on really important topics, and it doesn't have to be complex one of the ways, we highlight in the book is a flavor of scenario planning that actually delivers real value. And this is something, Kevin and I did at our client was a three futures memo. So oftentimes. Team's signal certainty by presenting here's the thing we are doing versus three minor variations of what that thing could be each of those has to be a real option and then asking your audience to actually read each and we suggest some questions to help frame better input. This is in a chapter called Canary in the Coal Mine, and it's about surfacing the toxic poisonous gases that are in all of our organizations where people hold back when a concept is being pitched. They have questions, they have concerns, they have a lack of understanding, but they hold back because, everybody's worked so hard on this presentation and you know everybody else seems to be going along with it and they aren't really asking me deep questions or giving me fine tuned material that I can react to so I go along knowing that down the road there's going to be a hammer to drop here.

And so this three futures exercises helps to surface really early. These different points of view and both bring your stakeholders along, but also surface from them. They're true expertise. on key topics that could impact this concept that you're proposing. 

[00:22:00] Mahan Tavakoli: I love the three features memo from a couple of different perspectives, John.

First and foremost is the recognition that there is no certainty that there could be different futures. There are so many strategic planning conversations where there is none of that. People know what they're going to do and where they're going to end up.

So with the three futures memo. It's betting, it's thinking what is possible, this is possible, and this is possible, and the other thing is possible. 

[00:22:29] John Rossman: And together, which one do we think is the one that we should go experiment on, so it also helps put skin in the game from everybody.

And being the directly responsible individual or the president or CEO of one of these big bets, there's opportunity and there's danger personally relative to that situation. And so This book these tools and these playbooks are written for that person to put to work.

And 

[00:22:55] Mahan Tavakoli: to put to work as a part of the cultural transformation and a group conversation. So part of what I see in reading the book, while there is a lot of value to the individual leader, I think there is a lot more value for the entire team. To read it and understand the thinking and framework. I don't necessarily think it's as powerful if one individual tries to guide the conversation or move the organization with the understandings that you share.

[00:23:23] John Rossman: I couldn't agree more. And one of the things I love to do, and I'll do this anytime, anywhere is. Hold a book club and a book club is when a group of people, a leadership team or any sort of team, a class reads the book and then I'll come on and do an author Q and a kind of like what we're doing here and everything, which is then the next step of adoption, and everything.

But I completely agree. That's our hope is that teams put these elements to work. And they're able to be both more ambitious and de risk the downside risks that are inherent to the uncertainty of the times and the concepts that we're talking about. 

[00:24:05] Mahan Tavakoli: You also mentioned in here, John, the value of writing, which is a lesson that I learned from you from your previous books and our previous conversation.

And I've gotten a couple of client organizations doing this. Cool. The reality is the people that have to do the thinking and the writing hate me for it because it takes a lot more work to think through rather than put bullet points on a PowerPoint and project it to everyone.

However, it leads to much better thinking and much more robust conversations as a result. Yeah, 

Yeah, 

[00:24:37] John Rossman: Bezos tackles this very topic and problem and upside benefit. In his 2015 Amazon shareholder letter, I think it is. And he talks about Hey, Amazon doesn't do PowerPoint. We strictly do these memos and we debate them and it's a skill. It takes time and he equates it to learning to do a perfect handstand. It takes six to nine months to learn how to do a perfect handstand you probably want to get a coach to help you out, but you can develop that and these writing and debating skills are hard, but completely feasible, but you do have to commit to it. You don't have to commit to it every time, like for this year's plan or for this exercise, we're going to go about this, but realize it's a journey. You're going to get better. Over time I wrote a book proposal one time, which used the title of perfect handstands that was specifically on this concept of adapting these types of skills and how they're hard to do, but it's a superpower.

Once you get it you never go back. And when you see presentations, the typical type of presentation, you just feel bad. You feel bloated, and everything goes Oh, this is just bad, cause something better is out there and it's completely attainable for any individual, for any team, for any organization.

[00:25:56] Mahan Tavakoli: Now, the other thing that you also mentioned in this book, you talk about being a day one company and day one mindset, what role does that play in this transformation that you talk about, John? 

[00:26:12] John Rossman: The day one concept is about being optimistic and aggressive and investing in the future and not trying to optimize.

For this year, but trying to optimize for the upside of long term enterprise value and durability in your business model. And if you adopt it, what it empowers you to do is to make some investments and to go on some journeys that otherwise you would never. Go on. I got to travel a few times with Bezos and he would always talk about, I believe in three durable things that a customer, always wants more selection.

They always want a lower price and they always want. Faster delivery, so that day one creates an optimistic viewpoint versus. What he frames as a day two, and I think it's limiting to have just day one and day two. I think there's multiple days. But as he frames that a day to organization is one that is more invested in maintaining the status quo is more invested on just optimizing for, today's business and isn't willing to go through day the failure that it takes in order to truly grow and innovate in a very durable, very financially viable way. What it results in over time, which is proven, is a company of stasis a company that at one point was really vibrant and really critical to their customers was the top performing company. And now they're just irrelevant and they suffer from average or less performance.

And one of the things I'll mention is. All of these failure statistics on all these transformations, those are the errors of commission, those are the things that we do that don't work out. I think it's the errors of omission, the things we don't do that should have been done, that are never counted and are actually really important.

Every time you see a company go from great to average. Or from average to stressed and into restructuring. Those are big bets that should have been taken. They weren't taken, and those are the errors that are much more important, but are never counted because, the event never happened.

And that's where I think the need for this being an active skeptic mindset. Active take action skeptic, prove it before you commit to it. Mindset is so critical for leaders, and we think we hope we've delivered a book and a set of tools services and solutions that help leaders embrace.

The journey of being an active skeptic, 

[00:28:58] Mahan Tavakoli: I couldn't agree with you more, John, the biggest challenge in my mind, is what I run into where in many instances, people don't see the need for them and, their organizations to change,

[00:29:10] John Rossman: I got. Some blurbs for the book and my favorite one is from a psychiatrist Mark Golston, who's, a negotiation expert has written, several great books talking to crazy is one of them, 

 He read the book and he goes, Oh, John. I know what this book is and who it's for. He goes, 90 percent of people talk about wanting to make change, but only 10 percent are actually willing to do it. And this book is for that 10%. And I think that's absolutely right as to your point, everybody talks about wanting to be innovative.

Everybody talks about, wanting to be a top performing organization and whatnot. Most teams aren't willing to put in the effort and the hard work to have the potential to become a champion, you don't get guarantees and becoming a championship team. I chose.

The words in this book and especially the title very carefully into one of those words is about winning right winning versus just surviving or sustaining well that's a very different game and so this book truly is for those leaders in those companies who want to win want to be a top performing durable.

beloved company over a long period of time. 

[00:30:19] Mahan Tavakoli: You share a lot of great practices, and In my view, John, in reading your book, I think it can be effectively implemented at any level of the organization.

If an entire team or an entire department reads it, understands it, and then goes through application of what you talk about. Now, you also have a lot of additional resources, including a big bed GPT that is going to be available.

How can people both find out more about the book, but tap into the resources that can help them guide their teams and organizations in this journey. Yeah, 

[00:30:59] John Rossman: so you'll go to big BET leadership.com, create an account, and you'll get a number of resources, a ton of which you get with reading the book, some of which will be on a paid or subscription basis.

But for free, you get a ton of things, including a big BET journal, which is a workbook that takes big BET leadership and kind of. Flattens it out, creates like a script for you and some memos and checklists for you to do. You'll get a set of prompts that help you accelerate and improve your thinking.

You'll get, as you mentioned, the BigBetGPT, which is BigBet leadership on ChatGPT and the ability to have this crazy bot partner that is like the best analyst team you could ever have to help you do that. So those are just some of the resources. We kept the book purposely it's only 45, 000 words.

So it. Doesn't suffer from too long, didn't read TLDR, we made it a story so that it hopefully pulls readers through it. It's a great listen. We've got a great audio book addition to it. It is a workbook, and so at the end of the day we have the tools to. Take the book, put it into action, drive it into impact.

[00:32:12] Mahan Tavakoli: I also love, the GPT that you have along with this. As a cognitive thought partner, in my mind, that's the power of AI. It's not putting your thoughts into big bed GPT and getting the answers. You ask it the questions you play around with it as you guide your team and organization forward. 

[00:32:37] John Rossman: Yeah. And so imagine combining the general powers of chat, GPT with the framework

and constraints from Big Bet leadership and a set of prompts that help you daisy chain along all the different steps that's 10 X acceleration in both. The critical thinking and then all the execution and communication steps that you need to do. 

[00:33:02] Mahan Tavakoli: I really appreciate John, the wisdom you have shared through your books and conversations, including your most recent Big Bet Leadership, your transformation playbook for winning in the hyper digital era.

Thank you so much for this conversation. John Rossman. 

[00:33:21] John Rossman: Mahan, your champ. Thank you very much.