I had the pleasure of interviewing Malcolm Gladwell, in advance of a conference where he was a keynote speaker to manufacturing executives. This group of some 2500 executives was part of a cadre who are setting new standards and approaches to management in the global economy.
The audio podcast was used as a teaser in email marketing for the conference. This is the extended version.
HAMILTON: Hello Malcolm Gladwell, thanks for taking the time to talk with us today – in advance of the AME conference in Baltimore.
The organizers [of the conference] have set a theme. They are suggesting to the attendees that we need a reset in our thinking, that, following global recession, and, now, hopefully something of a recovery, there will be new thinking, new challenges, new methods that are required. Where would you start if you were drafting a new mindset for business?
GLADWELL: That’s a really interesting question. One of the things that the crisis we’ve been through ought to remind us is how poor our prediction skills are. Very few people saw this coming, and I think that’s not due to incompetence, or laziness, or what-have-you. I think that it’s due to the fact that we now live in a world where there is so much interconnectivity, and so much complexity, that you can’t really engage in effective prediction. What we really need to be thinking about is, can we be really good at being nimble in reacting, being intelligent and nimble at how we react to change, and being intelligent in how we prepare for the unexpected. [del:Those are two… ] That’s a very different kind of leadership style. It requires a certain degree of humility, in accepting that we don’t really know what’s going to happen next year, or the year after; and a certain amount of foresight, where your foresight goes from predicting the future to preparing for it, just being in a position where you can respond and react, and weather any kind of unexpected future event.
HAMILTON: You mention humility, which is an interesting non-coincidence. Two other keynote speakers who are speaking on the topic of leadership, and who are leaders in their own right, have used the word humility in my interviews with them. Why is it that leadership requires humility?
GLADWELL: This may well be what I talk about. It’s because the biggest disease of the expert is overconfidence. There is a set of problems associated with novices, and they have to do with their not knowing enough. And there is a set of problems connected with experts, the difficulties of those who know too much, or know more than enough run into, and there the class of problem that plagues the person who is an expert is overconfidence, this very human tendency to exaggerate how much one knows, even though one knows a lot, to think that makes one infallible, and the technical word for that is miscalibration. To become miscalibrated, a gap opens up between what you know, and what you think you know. A lot of what we saw in the last financial crisis was a miscalibration problem, it was due to people in incredibly complex worlds thinking they understood every dimension of the risks they took, when in fact they had only a partial understanding of that. That miscalibration of their understanding led them to make some catastrophic errors.
HAMILTON: In Blink, you tell the story of the US military commander Paul van Riper, who, in a war games exercise, managed to defeat the incredibly well informed, tactically and numerically superior, superior in firepower, theoretical US military fighting a small Middle Eastern state. It was a fascinating example of the underdog, and very motivating that way, but he did it by, if I understand correctly, moving intuitively, giving his troops the ability to make independent decisions on the ground. How does that give us a model for how companies need to organize themselves in the face of an enormous flow of information constantly streaming?
GLADWELL: First of all, one of the things that van Riper did very clearly was that he did not pretend that, as the leader of his team, he knew all the answers. He was very much a disciple of the “in command and out of control” philosophy of leadership. When you’re dealing with incredibly fast-moving, complex environments, you need to have an intensely decentralized and collaborative style of decision-making, because the world is too complex for one person to manage all by themselves. The other one is he trusted his instincts – instincts, I would point out, that were years in the making, he was a man of long experience. What he was saying was in highly complex environments, you have to, at some point, rely on your instincts, because not every question can be answered through formal, rational analysis. You simply don’t have all the information you need. You can’t access it, you can’t do a rigorous logical analysis of every eventuality, because in many cases the degree of uncertainty you’re facing is just too great. The only recourse we have in those situations is to rely on the kind of expertise of people who have deep experience in the field.
HAMILTON: What other shifts in our thinking would you advise to manufacturers who were looking to succeed in this increasingly complex and competitive world?
GLADWELL: I think that the willingness to experiment is really big, that in situations where you are uncertain about the future, and where there is a great deal of uncertainty, and the amount of information on the table is such that you can’t wrap your head around it, what you have to do, I think, is be much more committed to a much more experimental style of decision-making and leadership. Be willing to try things, and see if they work, and if they don’t, to try something else, and not to pretend that you can choose a single course of action in advance. That’s a fairly hard thing, I think, sometimes, for leaders to do. Again, it requires a certain degree of humility to just say, “I don’t know the answer” up front, “I’m going to have to try a number of paths to see which one is the most fruitful.”
HAMILTON: One of the leaders I was interviewing, a woman who heads up a cable, phone, and internet company that’s an underdog out west …Colleen Abdullah is the CEO, and she talked about humility, and that she would like to admit to her staff that she didn’t have an answer to that question yet, and she would really like some input from them. That might be an example of humility in operation. What are some of the other things about great leaders in creating these cultures where people are innovative, and engaged?
GLADWELL: To tie on to that bit I was talking about experiments, the thing about experimentation is that it implies a willingness to make mistakes, tolerate and even encourage mistakes, because if you look on a mistake as being as useful in figuring out the correct course of action as a success, that willingness to tolerate failure, so long as it’s productive failure, is really an interesting, again, difficult, but I think necessary [thing]. I’ve just been writing a long article about the pharmaceutical industry, and there’s a story about a drug, an experimental drug… I’ve always been struck by how, in the pharmaceutical industry, it is taken for granted that the best ideas, by definition, are going to fail the first couple of times out because they are so new, and so different, and so novel that you don’t know how to handle them and test them and cope with them until you’ve tried them in an experimental setting a couple of times. Sure enough, if you look at some of the most important new drugs in the last ten years, they all failed their first if not their second phase three trial. Hundreds of millions of dollars were spent on dead ends before they came to market. That’s a lesson that I wish that other… that I think that other disciplines, fields, need to learn.
HAMILTON: So, humility, the willingness to admit error, that certainly strikes a chord with many of the people on lean journeys, as they call them. In efforts to drive towards continuous improvement, getting people to admit that there’s a problem is the first thing to correcting deficiencies in a system, of course, to experiment over again. Does it also require patience?
GLADWELL: If you, to use an example from the world of drugs again, one of the most successful areas of cancer treatment is the treatment of childhood leukemia. Scientists first started seriously researching that problem in 1954. The first serious progress against it was made in 1964. Today, 50 years after that, or 45 years after that, we’re still working on the problem. In the sixties we were curing 15%, now we’re up to around 90%. We still have 10% of the patients to go. We’ve been doing this for 60 years. At no time did anyone in that field assume that the job was finished. They assumed that this was something that would go on past their own lifetime. The first generation of people who worked on childhood leukemia is all dead or retired. We’re on to the second generation of people tackling that problem. They’re dealing with an incredibly complex world, when are dealing with a world with that many unknowns, you have to have a commitment to real patience in looking for a solution.
HAMILTON: So, were there patterns or hallmarks of eventually successful drug trials or strategies in the science that was underpinning, that linked the successful efforts together? Were there any clues at when it was a dead end that goes nowhere, and it’s a dead end that needs to be burst through?
GLADWELL: In many cases you don’t fully understand how your drug is working. You have no choice but just to try it in a number of different contexts. Your only proof is empirical – if it doesn’t work, it doesn’t work. But slowly, as you learn, more of those tests you do, the more you understand your drug, and the better, the smarter your choices become in what the next experiment ought to be. The point is, in the course of trial and error, knowledge is accumulated that makes the next trial and the next error a little bit more intelligent. It’s very much a model of knowledge accumulating over time.
HAMILTON: That would certainly bode well for those companies with a substantial research and development arm where they’re supposed to get better and better, so that even if the tenth product they release is not a winner, they have acquired knowledge for the eleventh, the twelfth, the thirteenth. Think about how that certainly is a shift in which what often hear from business, even if a large company, is that you need to be nimble, to be quick. Smart, these days, is often associated with speed, and we’ve certainly ratcheted up the speed of technological innovation.
GLADWELL: You want to be lean and nimble, because that allows you to pack even more experiments into a given period of time, but I think you have to have an expectation when you dealing with the most complex areas, that not all problems can be solved overnight. The most important and the most meaningful problems can sometimes take the longest.
HAMILTON: Are there other lessons, perhaps, from the reading and work that you’ve been doing on pharmacy, on how those things get implemented, how the culture must change in order to be patient and to continuously work to crack these problems?
GLADWELL: Patience has to work on two levels. You have to be patient with projects and patient with people, and you really can’t do one without the other. You have to understand that part and parcel with this willingness to tolerate the right kind of failure, constructive failure, has to be a willingness to let people grow in the same way, to let them figure out what the right path is for them, or what the right kind of operation is, as opposed to assuming that they simply have that worked out the minute they walk in the door.
HAMILTON: Well, that matches to the question that came out of Outliers, where they have to have autonomy in order to find work meaningful. What are some of the other conditions for success in a culture?
GLADWELL: Along with autonomy, I talk about complexity, that is to say work must be challenging enough that it kind of captures the heart and mind of those who are doing it. Most importantly, there must be a connection between effort and reward. People happen to see a real link between the work they put in and what they get back. Where they can see that connection, where that loop is tight, they’re far more willing to invest their time and attention and creativity.
HAMILTON: That would provide a rationale for the style of management where the ‘why’ is explained, where the broad goals are outlined to encourage motivation, instead of a top-down, issue edicts management style.
GLADWELL: That’s really about feedback. It just says that human beings function best in feedback-rich environments. If they can learn right away what they’re doing right and what they’re doing wrong, and see as clearly as possible the outcomes of their efforts, then you’re going to have a more productive environment.
HAMILTON: One of the other goals of the conference is to encourage a culture where they don’t just tackle the themes of leadership and success for a week, but they try to network something beyond the exchange of business cards, but more about companies learning to benchmark against one another, and to borrow lessons, and share thinking over the course of a year. It strikes me that much of your work is so multidisciplinary. I’m wondering what you think some of the underlying drivers or conditions that help ideas to move from healthcare to manufacturing, or high tech innovation to steel production, or any other leap. What helps ideas and what makes collaborative cultures work?
GLADWELL: You mean, what helps ideas hop from one discipline to another?
GLADWELL: This is where conferences make a big difference. In other words, these kinds of connections are best made on the basis of personal relationships. Being able to hear personally from someone who is going through a similar experience to you – in some other field – listen to what they have to say, and believe and trust in what they’re saying, is, I think, the key step. When we’re having a discussion within our own world, in our own profession or discipline, it’s very easy for us to assess the trustworthiness or the credibility of what people are saying. When we’re talking to someone from outside of our world, we are understandably unsure, insecure about that – we don’t know how to evaluate. When someone talks to me about climate change, a topic I know nothing about, I have no idea whether they’re representing something that is careful and considered, or whether they’re talking out of their hat. When we ask people to step outside of their world, and listen to someone’s evidence from the outside, we need to provide them with some degree of security, and that’s where personal connections come in, that’s where you have to have people meet one on one, get to know people, so they can have a sense of the context in which they ought to be receiving the information. So, they know, “Oh, this experience from the world of healthcare actually does apply to my world.” and the person talking to me from healthcare is not someone who’s talking out of their hat, it’s someone who knows what they’re doing.
HAMILTON: When that works, when collaboration and networking work well, while that can be very exciting, which is also very motivating, how important are some of the soft characteristics to sharing of ideas, or even leadership? It seems that these are some of the things around how you approach when you meet, what is the conversation like, seem to underpin a lot of the kind of connections that you’ve articulated for success. Why is that?
GLADWELL: Particularly now, the position of generalists is becoming harder and harder to pull off, just because worlds are becoming so exclusive and specialized. You know, my father, who’s a mathematician, told me that by the end of his career he would go to conferences in his specialty, and not know what was going on in the room next door. That his specialty, of solid mechanics, in applied mathematics, had itself been divided up into these kinds of worlds that no longer really spoke to each other. In that kind of situation, we don’t have any of the traditional means of assessing the credibility of outsiders, so these soft characteristics matter a lot. You know how the TED conferences have become a big deal in America in the last decade or so, and these multi- interdisciplinary conferences with people from science and design and business all get together and talk. One of the reasons they are so powerful is people have a sense that the conference is being very carefully and intelligently curated. The people running it are choosing people who know what they’re talking about, who have credibility. In that trusted environment, you can let down your guard and be open to ideas knowing that you aren’t going to be led too far astray. That’s a soft characteristic, the curated role of the conference-holder is an example of an increasingly important element in successful networking and cross-pollination.
HAMILTON: It would certainly seem that some of the classic examples, Bill Gates being one example that you investigated in particular, those strike me as people with a gift for being generalists but with their hours put in in some area of specialty. What is it about leaders and generalists? How does that relationship work?
GLADWELL: The leader is someone who necessarily has to a have a foot in many different camps. That is one of the reasons I think that leadership has become so much more important, much more of a prized, rare trait these days, is that it’s hard to find people who have the kind of breadth of understanding it takes to lead a typical, modern, multidisciplinary, multifunctional corporate organization. I was reading some history of General Motors, and for the longest time General Motors used to go back and forth between a CEO who had a specialty in engineering, or a CEO who came out of the numbers side, the accounting side, and sometimes they would be marketing people. But I don’t think that you could pick and choose from one of those fields anymore and expect them to be an effective leader. I think in an organization like General Motors or Ford today you have to have someone who has a breadth of expertise, who isn’t someone who has a bias towards one area or another, but who can understand that to succeed, General Motors has to be world class in every one of those areas, not just one.
HAMILTON: What are some of the conditions that organizations can set within their culture so that the small ‘l’ leaders who have not 5,000 but 50 employees to lead can prosper. Are there ways the little guy can borrow from the big guy?
GLADWELL: I’d like to reverse that. I think the big guy should be borrowing from the little guys. The kind of intimacy, that scale of small organizations is so crucial to innovation and creativity that to me, the lesson is can large companies behave like small companies to the greatest degree possible. Is there a way to fashion cultures within large organizations that behave like entrepreneurial entities? Going back to the pharma example, almost all of the most important innovations in pharma did not come from the traditional pharma companies, they came from small biotech companies. Innovation has been almost completely outsourced to these smaller groups for this very reason, that there is something that they are capable of doing and it can’t be replicated at the larger level until those large organizations figure out a way to create their own entrepreneurial cultures within their broader organization.