Systems. Your all-terrain vehicle when everyone else is on foot.
Monday third of August 1998. The day I started my business career. I am temporarily living at my grandma’s place in Sydney, having moved from my home on the Central Coast. Sydney is in the middle of a cryptosporidium outbreak. For some strange reason, on that very morning, the hot water wouldn’t work. I struggled my way through a cold shower, towelled myself dry and put on my business clothes, still shivering.
Even though my new workplace is only several minutes drive away, I discovered the joys of sitting in traffic. For a boy from the Central Coast, traffic is something that I needed to become used to. I saw the humour in sitting in gridlock traffic, with the office in clear sight. I remarked whether I could get out of my car and go to the office. I fantasised about leaving my briefcase in the office yet still having time to get back to my car without the traffic actually moving.
The fascinating world of work beckoned — meetings sounded important and exciting, and climbing the ladder sounded like a fun and lucrative challenge. In the final semester of my Bachelor of Business degree, I would finish the last three units full-time with full-time work. This would turn out to be arduous work, but staying at my grandma’s place would give me nothing but time to focus on this.
Over 23 years later, I realised that I learned a fundamental lesson in business: one that would stay with me throughout my career.
What is this lesson? Systems are gold. Systems are your friend.
I had subscribed to the print copy of the Business Review Weekly (“the BRW”), an Australian business magazine. I tried to find old articles from the BRW then and had no luck. I learnt that the print version of the BRW was cancelled in 2013. Yep, I’m feeling old now!
In my final year of the Bachelor of Business back in 1998, one print edition of the BRW stuck with me. This edition looked at five companies that produced a disproportionate amount of CEOs. Back then, I had a thing for being a CEO. The mega-bucks this lot earned seemed head-spinning. Many CEOs I read about seemed larger-than-life, charismatic and almost super-human. Give me credit; I was 20 years old and had no idea.
I also liked the sense of authorship that being the CEO seemed to give. I saw the world back then from my textbook perspective of marketing and my basic accounting knowledge. Being accountable for product lines, architecting marketing decisions and having profit and loss responsibility sounded awesome.
Actually, now that I think about it-it still does. The energetic, idealistic 20-year-old self is gone. But I like my slower, less ambitious, but wiser 43-year-old self. My ideal week involves quality time with my son and wife. I can’t be bothered doing all the political stuff in some little hierarchy to get there. I know from experience that when there is no clear leader, I have no trouble stepping up. But I don’t seek leadership for its own sake (yawn).
Early in my career, I felt that most of the political stuff was a bit of a waste of time for someone like me. I’m hardly what you would call a “pack animal”, and my fear would be the inefficiency of investing in games. Especially contrived and elaborate games with high risk and effort / low reward.
Later in my career, I started studying psychology and came across people like Dr Robert Hogan. His no-nonsense account of leadership and organisational dynamics stuck with me. What he had to say-based on decades of data-driven work with leadership- confirmed my intuition.
90% of the people who are doing a good job in their current job will fail when they get promoted. So the first mistake they make is confusing present performance with the potential for future performance. It’s just, that’s a big one, then the second, then the big one. My biggest thing is is that this is just internal politics. There’s a guy here, he looks at this guy here, he says, ‘Hmm, if he got promoted that’d be good for my career — I think he’s high potential’. So, lots and lots of people get designated high potential because senior management has an agenda, I would say, in many many cases, 70% of cases people get designated as high potential.
- Dr. Robert Hogan, Organisational Psychologist (and founder of one of the world’s largest leadership consultancies)
My takeaway in the above statement? Perhaps in 70% of cases, people are designated as high potential for political reasons rather than true leadership potential.
His take on leadership is different from the warm, touchy-feely takes on leadership that we are constantly bombarded with. But could it be that leadership in large organisations is based on one simple, pragmatic reality?
Who’s in charge? How do people get in charge? By surviving a political process. The political process inside each organization is inherently different unique. What it takes to get to the top of General Mills is different to General Electric, or Ferrari — or what it takes to get the top of Prudential… the only thing you can say that these guys have in common is they survived a local political process.
Could it be that leaders at the top of any given organisation have gotten there purely by surviving a political process? It’s not to say that all leaders are undeserving of their position, and equally so, I’m not saying that organisations have a flawed leadership selection process.
…what was the problem that leadership evolved to solve? It’s a purely functional position. Warfare was the principal factor driving human evolution. It’s responsible for everything. It’s where engineering came from — better defenses, better weapons. It’s where medicine came from- trying to fix people with wounds. It’s where finance came from what we get the money to invade those guys. Every important characteristic of human culture was driven by warfare.
Going back to what I was talking about earlier — systems — Dr Hogan’s points about leadership showed that even leadership is part of a system. An astounding point that he made was that warfare was the principal factor for driving human evolution. To me, systems are the spearhead for enabling our evolution.
The BRW article back in 1998, which struck me, looked at five companies, including McDonald’s and Citibank. Back then, these companies yielded disproportionate numbers of leaders, and these leaders would go on to become CEOs in various companies.
What was the secret sauce?
(I’m trying to link a pun to McDonald’s here!)
Systems. These companies had excellent systems and training to reinforce the use of these systems. For McDonald’s, where else could you motivate and equip a 19-year-old to be in charge of a multi-million dollar business? One of my fellow students in my Bachelors had been a McDonald’s manager during our studies. She emerged from her degree with serious business management experience, and I emerged with student debt and a tiny fraction of her enormous leadership experience. The system she underwent strengthened her.
Systems are your all-terrain vehicle, sitting there waiting for you to take you to your destination when everyone else is on foot.
Years later, I am in a bookstore reading various business books. I started to read one book about McDonald’s systems. An older man is reading books next to me, then suddenly stops, closes his book and looks at me. He goes: “Sorry to bother you, but what business do you think McDonald’s is in?”
“Err, the hamburger business?”
“No. Real estate.”
It turns out this guy was a business professor, and we had a good long chat. McDonald’s systems didn’t only apply to leadership or franchise models. Their systematic thinking led them to buy undervalued real estate and turn it into a cash machine.
Over time, thinking of the world as a system became a valuable ethos for me. I became interested in ecosystems such as permaculture. This ethos meant that if I could build useful systems, I could write my own ticket.
Inherit and fix messes. For example, when leading a small team of analysts, we desperately needed a system that performed a valuable accounting function. This function was done by hand, and the IT team was way too busy to help us. It was time for me to step well outside my comfort zone and build this thing by myself. So that’s exactly what I did. I gained an intimate understanding of the data layer of my system. Afterwards, I taught myself how to build the user interface and database tables linked in the background.
Go small to go big. During my career, I took pains to gain cross-functional and multi-sector experience, giving me a well-rounded business perspective. My intentional decision to gain a hodge-podge of business experience was in itself a system, and this system was evident when applying for the next position.
Gaining trans-disciplinary experience was equally as important. I moved from my career as an analyst, going back in pay to become an IT trainer. While an IT trainer role needs a bit of a techie orientation, I never thought I would need my analytical skills ever again. Completely wrong. When the change management field became a clearly emerging profession, I didn’t immediately see how my collective skills fit. At the time, I thought you needed an HR background to become a change manager. It turned out that analytics and training were unique yet complementary disciplines to change management.
I took this a step further and strengthened my own organisational change management “system”. In looking for the best ideas from advertising, psychology and management consulting, it dawned on me. Systems need to be anti-fragile, and in creating anti-fragile systems, it is worth adopting what works elsewhere.
Take a leap. It definitely gets stronger from taking on challenges well outside your comfort zone. Stepping up when a leader leaves and taking over their role in a harsh, exacting environment. Or jumping into a new industry, taking your existing skillset but absorbing new ways of doing business. Designing a side-hustle. Volunteering to present to your professional peers. Writing a book. Stepping away from a comfortable, lucrative environment to keep learning and growing.
Systems tend to atrophy when comfortable, and growth (or hypertrophy) happens when your “system” is soundly tested. Like growing in physical strength, pushing yourself to the point of muscular failure (or weakness) is paradoxical. By pushing yourself to the point of weakness, you become stronger after a brief time to rest and reflect.
Know who you are. One of the first articles I wrote provided you with a range of inexpensive online tools. These tools are valuable despite being free or low-cost, and each helps you understand your personality traits and personal strengths.
In D.A. Benton’s book, “How to think like a CEO: The 22 vital traits you need to be the person at the top”, the 22 vital traits are indeed systems of their own. There is one idea that stuck with me.
The idea is that you may either be an entrepreneurial manager… or a professional manager. Know which one you are, then build your systems around this persona. Your system is your experience, the way you show up to the world.
Here is a profile of the “professional manager”:
The professional manager is to be an executor of well thought out plans. His purposeful. Deliberate. And most important, he knows to work within hierarchies despite the excess time it consumes. The professional frequently calculates risk against his employment contract. Power is very important. Big professionally managed companies often aren’t as focused on results as rhetorical suggests. They are more focused on power.
- D.A. Benton
In contrast, the “entrepreneurial manager”:
Entrepreneurs are not made, they are born. You can’t take “Entrepreneur 101”. They are a sum total of their life experiences from childhood on… Entrepreneurs have a fire in the belly. A company started by an entrepreneur often turns to a professional manager once the ship has been built. The entrepreneur gets to (and often has to) rely on himself in his own judgement.
- D.A. Benton
Susan Oh is a brilliant example of the entrepreneurial manager — here is her inspiring TedX talk:
So… who are you? Once you know the answer, what systems can you build to become stronger?