IN THIS EPISODE:

Many times we get stuck in what’s called the “Tyranny of the OR”. This means that we are stuck thinking about a solution to a problem in a binary way. For example, feeling your company has to choose between a focus on profit or purpose is an example of “Tyranny of the OR”. Instead, we might think we can pursue a profit AND a purpose.

Another example might be someone saying we can’t grow both customers and margins. Under the right circumstances it’s the genius of the AND that can make a remarkable difference in your team.

This week we’ll discuss the Genius of the AND concept, provide several examples, and explain how you can use this idea with your team.

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EPISODE TRANSCRIPT

Please note that this episode was transcribed using an AI application and may not be 100% grammatically correct – but it will still allow you to scan the episode for key content.

Brad Giles  00:12

Hi there, welcome to the growth whispers where everything we talk about is building enduring great companies. My name is Brad Giles, and as always joined today by my co host, Kevin Lawrence, Kevin. Hello, and how are you doing today?

Kevin Lawrence  00:26

We’re doing great, Brad, it’s getting a little dark here, the nights coming to an end, the summer is starting to create shorter days as we move towards fall. But all is always good in this part of the world.

Brad Giles  00:39

The good thing is, as you go into shorter days, our days get a little bit longer and warmer known. So we’re quite pleased about that. As always, we’d like to kick it off with a word or phrase, would you like me to go first? That looks like a yes. I’m going to start with Are you proud of your firm’s profit? Now, that could be you as the founder. It could be you as a consultant, it could be you as an employee. Are you proud of it? Yeah, why was I Why? Because the profit is the net result. That’s pretty much it. Everything that we talk about, it should ultimately result in that. What’s yours, Kim? Mine is,

Kevin Lawrence  01:23

if I had a billion dollars, we have a band a Canadian band called The Barenaked Ladies, and they have a famous song knowing if I had a million dollars, you know, and that’s, you know, I buy me a coach, I, you know, have some Kraft Dinner, you know, they have all kinds of crazy things. But, um, it was interesting. And again, I mentioned in last episode, Greg Smith, the CEO of Thinkific mentioned a strategic question they use, which is, if I had a billion dollars, or if we had a billion dollars in the bank, what we do just to expand their thinking. And what they found, is it generated some spectacular ideas, none of which cost a billion dollars, most of them they could do now. So it’s a mind opening, like think real big, and what’s possible. And, and often it is so yeah, so are you proud of your billion dollars thinking is kind of what we’re, we’re setting the tone with here today, Brad, I like it.

Brad Giles  02:23

That’s a good way to start. That’s a good way to start today. What are we talking about?

Kevin Lawrence  02:29

we’re talking about something from the great thought leader, Jim Collins, and one of his principles, which he calls the genius of the end. And you know, and interestingly, you know, I have a good friend, and, you know, her whole philosophy and her work is around the end, right, not having to choose where you go, and where you can basically, you can feel proud and disappointed at the same time, or you can feel proud and almost self critical. At the same time, how you kind of fighting emotions happening, it’s really interesting concept. In for our firm, we talk about the end, which we’ve used for years, which is about being having success at work and living an amazing life. Right, not having to give up one for the other. And then the other end, Collins’s work, he found that a lot of people got stuck with the tyranny of the end, trying to do two things. And then it was a fight and basically almost making it an order or needing to choose a tyranny of the or pardon, yes,

Brad Giles  03:37

tyranny of the old

Kevin Lawrence  03:38

and having to choose between two options. And you know, when really the genius of the end is that how do you have both? And it takes more thinking sometimes or more strategy, but that’s really where dig into is the genius of the end? And are there ways that you can take thinking where you were trying to decide verse and actually try and say, well, we’re going to do both things? And how do we get a better impact or a better result by focusing on both

Brad Giles  04:08

and the tyranny of the or is really the foundation of this episode and, and the problem that people can get into when they think about any situation really, but what happens if you’re thinking about only being able to react in an or, or the tyranny of the or because what that can mean is you can think we must make profit, or we must be a purpose led organization, they don’t think about the possibility or the genius of we can, we can be a very highly profitable organization and can be a purpose led organization as a simple example. And then that, that tyranny can permeate so many parts of your decision making.

Kevin Lawrence  04:57

It’s very limited thinking So many ways that scarcity based or scarce thinking, and some would say that being purpose led should make you more profitable. You know, I see I see, um, inexperienced leaders and companies saying, Well, if we got to grow the volume, you know, we got to decrease the margin. Like why no, you can grow sales volume and increase gross margin as a percentage while you grow, you just got to be smarter about it, you know, and if you’re not, a lot of people will grow sales volume and drop margin, because then they’re just picking up the low hanging commodity type business. But his point is, you can and there’s lots of examples. And you know, as we’re thinking about this, for the show, profit and purpose is a great thing. But also, you can have a very caring culture, and a high performing organization. You know, some people see very caring and supportive cultures, closer to a government agency that’s full of love and wonderful things that, you know, doesn’t make a profit or isn’t high performing. But I’ve seen very caring organizations, but they are intense. And they work like crazy to get things done and have very, very high expectations as well.

Brad Giles  06:18

And Jim Collins talks about this concept of level five leaders as an example and level five leaders, they have the will, the will to build an enduring growth company, it’s an incredibly difficult, yes, equally. And they have the humility to make that company bigger than themselves or not only about themselves, so they think about they want to build, and they have the will to build a company that is larger than themselves, and is not all about them. And so that’s another example of the power of and

Kevin Lawrence  06:54

so we have one more of our clients who wants to more healing for five years, once the least five years, wants to build a $10 billion organization, that is his goal. And all the wonderful things that come with being a billionaire are part of his goals and his ambitions. And he is an absolute, he is the essence of a level five leader with incredible humility. So insane drive and massive goals. with humility, that is me. That’s the kind of person we want to work with all day long. Yeah, great, great people are sometimes people would think, well, if you’ve got that much ambition, you’re going to have the ego to go with it. Yeah. Right. And and and that is not the case. So tyranny I Oh, it is a Why do you think people get caught up in the tyranny of the order? And how do you shift to the tyranny of the end?

Brad Giles  07:52

So I’m going to get back to a quote a famous author called F. Scott Fitzgerald. Okay, you might have heard of him. His quote was the test of a first rate intelligence is the ability to hold two opposed ideas in the mind at the same time, and still retain the ability to function. This is exactly what visionary companies are able to do. He didn’t say last week, but that’s, that’s his quote. And, and so the, what we’re saying is that a goal of a leadership team within this context should be that we want to be able to be intelligent enough to know that a primary goal is to have the end is to say, it’s easy to a degree to say, we’re going to be a profit, first organization, everything falls into that, but it’s harder to hold that thought, and simultaneously, be able to function thinking and we need to be a purpose led organization.

Kevin Lawrence  08:59

Yep. So there’s lots of situations where you have debates, you know, and people get caught up into these or ways of thinking and it is easier to choose left or right, versus how do we do both. Another example I see is, you know, when people have goals, it’s, you know, we really want to reduce the cost. But we actually want to improve quality. Right now, sometimes you can be over committing when you pick these things, but it’s, well, how can we do both, and then you end up with a whole if you take the time to think and brainstorm about the ways to make it happen. Sometimes there are solutions that decrease cost and increase quality even though it seems like the repurposing, like there can be ways to simplify processes, or use a different vendor or do something dramatically different it the differences it creates, it takes a higher level of cognition to figure them out. Sometimes not always, but to figure them out and when you put yourself into those You know, those more creative boxes? Yeah.

Brad Giles  10:04

Yeah. So another good example is around healthcare. We know that with for many medical practitioners, they may take the Hippocratic oath. And as they should, you know, do no harm. Yes. The but I health practitioner equally must be profitable. Otherwise, if they are not profitable, then that money to pay the loss needs to come from somewhere. And so, understanding that the purpose of an organization is is not to make a profit. But beyond that the organization cannot exist without profit. So, we’ve got to be able to hold those things for the patient

Kevin Lawrence  10:54

and the profit of the organization. And there are ways to do that. Yes, some people default to just what’s right for the patient. Some people default to justice, right for the profit of the org or the org, and to try and think about are there ways and that’s the ultimate Win Win, right? And I remember a negotiating story about two kids fighting over an orange. Yeah. And the mom was smart enough to say to Johnny, Johnny, why do you want the orange? He goes, Well, I need the peel for my science experiment. And then Sally was Sally, what do you need for? Well, I’m hungry. So she’s like, Okay, great. Johnny takes the peel. Sally takes the inside of the orange, both kids are happy, right? That’s an end, right? Is there a way that they can do both. So it’s just, it’s, it’s it just requires more thinking. And that’s why people kind of have a hard time with it. So you’ll often in organizations we work with, we will say we need a higher quality of talent, we by default 90% a player’s as a goal, many organizations we have for their key key key seats or key roles. Yeah. And we want to speed up the hiring process. Or it’s 90% eight players and spend less total compensation as a percent of our gross margin. So our people cost less. And we have more of them being high performers. And it’s doable. We’ve done it lots of times, you know, another one is to relentlessly execute our systems, and innovate. So for example, one company that we work with, they have a separate and like many do separate innovation team with an innovation budget. And they’re always testing new things. So what they’ve done is, some of the innovation is pulled off and separated. Sometimes it gets to be too much. The core people that are driving every day of execution, stay focused on that. And then a few people focus on the innovation and how it can improve. And then you bring those in and incorporate them. So it’s both sometimes you just have to carve up responsibilities to allow some of these things to happen. But the organization can relentlessly execute the as is, while some other new organization are innovating at the same time.

Brad Giles  13:08

That’s a great example of what Jim Collins describes in if you can imagine the yin yang symbol, where on one side, he says stimulate progress. And then on the other, protect the core, so on protect the core that’s about core values and purpose. And the ideologies of the firm that should be enduring. They should be here for generations, with an Asterix, but then on the other side, we’ve got to have an engine that stimulates progress. And it is possible to do those both of those things, you do not need to reinvent the firm all the time when it comes to the ideologies.

Kevin Lawrence  13:50

Yep, absolutely. A great example that Jim has a shirt. Another one is, we’ve seen where we would reduce the size of teams, and expect more output of those teams. Yeah. Because what’s interesting, even in our world, when you create a team of 25 people trying to work on something, it actually gets bogged down and slow down. And there’s a raid size. You know, they often say over teams as to pizza teams, you know, whatever two pizzas can feed is probably the right size team member, which is, you know, five, six people. Yeah. And depending on their appetite, but it’s just that you can often speed things up and be more productive by having fewer people involved. That’s a real simple one. One of my favorites, and I wrote a blog on this years ago was called joy and pain. That’s like how the best leaders know how to celebrate and instill and create joy with it with their teams, and create a lot of pain or a lot of tension when things aren’t right. It’s in both. It’s like the parent that can be loving and supportive. And the parent that can really give you crap when you screw up. Yeah, and great, great leaders are able to do both the great leaders aren’t just nice guys are nice women, right? They have both sides of the coin, and they know how to use both. So it’s an and they can be tough. And they can be caring and supportive. And I’ve looked at some of the best CEOs and execs I’ve worked with, they have that that have hardest, and that and their heart.

Brad Giles  15:23

That’s the premise of great leadership, it’s lots of love, and lots of discipline, if you only had lots of lots of discipline, you’ve got a tyrant. And if you’ve only got lots of love, you’ve got someone who’s a walkover. So it’s the marriage of those two, within one leader that makes for greatness.

Kevin Lawrence  15:44

Yeah, and we could go on forever and ever and ever, but it’s, you know, increase profitability, and increase customer satisfaction, right? Increase output, and increase employee engagement. Right, increase employee engagement, and increase the percentage of a player’s, yeah, right, or, you know, you can pick any two variables, but the main thing is, is that you often end up with better ideas, because you’re putting more challenge into the system, you have to be more creative when you bring those two variables together. So that the recommendation we’d make is that look, when you’re, when you’re working on something really important in your business, you know, and if you’re really see that it should become an and, you know, the real challenge to bring those two variables together, because they’re both really critical, do a separate brainstorming on how we could do both, right and break the break up into three teams of, you know, five or six people get a list of a whole bunch of things that we could do ways that we could do both? print, bring those ideas together, have people present them, discuss them, prioritize them, get people to go back again, and say, Okay, let’s take the top four, were top three, because you have three groups, and brainstorm even further on those on how we could do that how I mean, really opening up people’s brains to possibilities, and then you can start to see ways that these things can happen. Versus that you know, the first look, you might just walk by and say, yeah, that’s gonna be too hard.

Brad Giles  17:20

That’s the point, right? Because if you were to say, here’s what we want to do, we want to grow our customer numbers by 10% per year, and we want to grow our customer profitability by 10% per year, it might the tyranny of the or might instantly kick in with the people that you’re talking about it to worry about. And they may say, Look, that’s too hard. We Why don’t we just focus on one? And then we can do that? Well, we can do both? Well, that is the point. It’s the genius of the end, what if we could do both, what will be the top three things that we needed to do to be able to do both because the compounding effect of that is remarkable.

Kevin Lawrence  18:02

Now, let’s be careful, I’ve got a client I nicknamed comma, because we say we’re going to have three to five objectives for a quarter. And he will put three to five in each of the three to five objectives. And we’ll put commas between them. So I got an A teacher with a big calm on it and gave him a hard time about it. This is the CEO. So now he doesn’t use commas anymore, he stacks them, he calls it a stack, because it sounds like a more sophisticated thing. The point is, you got to be careful not to use this to justify doing too many things. Now, we’re getting down to something that has massive value strategically or tactically, that it’s one thing that you’re trying to say, we kind of got to work both sides of the coin at the same time, versus using this technique as an excuse to clump together a whole bunch of ideas that are of low value or low impact to organization that just shouldn’t just be deferred, or left alone.

Brad Giles  19:03

Yeah, but yes, you’re right, full stop. What we’re saying is, there is a genius within the end. So try to look at it from both angles, and try to appreciate if you only say or, and you don’t say and in some circumstances, you could be missing out on quite a lot. Like it’s a kind of a closed mindset, perhaps

Kevin Lawrence  19:28

it absolutely is and just don’t use 10 ends all at once. We’re talking about one and between two variables. Miss Kirk, you know who you are. We’re not using this as an excuse to have 10 variables in one objective. Okay, awesome. So let’s kind of summarize that. So really, we’re talking about the genius of the end which is inspired by Jim Collins. His work he does some great restaurants and the tyranny of the or people get stuck and having to choose between two By the way, my favorite technique for the genius and we did it at the breakfast this morning went for brunch this morning. And there’s three amazing types of eggs benedict. So I got one, my partner got another and we shared sharing meals is a beautiful way. It’s a beautiful genius of the end, you don’t have to choose, you get to share. There’s nothing so Brian,

Brad Giles  20:22

that’s great. Why did we say that one in the beginning of the app? I know we should.

Kevin Lawrence  20:27

So it’s the solution to a Eggs Benedict, when you can’t decide or whatever it is sharing the genius of the end versus tyranny of the or as per Collins and they only talked about exactly the examples of profits and purpose and caring and high performance, increase sales and increase margin, you know, get higher portion, every team that’s high performers, and you hire them faster or higher percentage of your team is high performers and overall less total compensation dollars as related to margin. restlessly, relentlessly execute and innovate, reduce your team size and increase output, fewer customers and more sales, right? Really, really celebrate like crazy and create lots of tension when things don’t go right.

Brad Giles  21:18

And falling. Yeah, and we can you know, we can be and this was the first one you said. But we can be a purpose led organization or purpose focused organization. And we can be highly profitable. It just takes a deeper level of thinking like we don’t need to be only one of those two. What a good episode what episode so let’s move to close. This has been the growth whispers. My name is Brad Giles. And you can find me at evolution partners.com.au. And of course, Kevin, you can find at Lawrence and co.com. Of course there’s an end in there, the ampersand. And so also you can find us on YouTube. We’ve got some videos up there you may be interested in. So thank you for enjoying our episode. I hope today on the growth whispers and we look forward to chatting to you again next week. Enjoy your week.