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Talking transformation

BEHNAM TABRIZI

Behnam Tabrizi is a world-renowned expert and champion of organizational and personal transformation. He has been teaching Leading Organizational Transformation at Stanford University’s Department of Management Science and Engineering and executive programs for more than 25 years. He is the author of six books, including Rapid Transformation (HBR Press, 2007) for companies and The Inside-Out Effect (Evolve Publishing, 2015) for leaders. He talks perpetual transformation with Thinkers50 cofounder, Stuart Crainer.

Stuart Crainer: One striking thing about you Behnam is that you not only talk about and research transformation, but your life is actually a story of successfully dealing with and living through transformation.

Behnam Tabrizi: Yes, my life has been a series of perpetual transformation and disruptions. I was born in Iran, and during the Iranian Revolution we had to leave the country immediately. My mom worked at the U.S. Embassy. She was teaching Farsi to the attaché and the ambassador. My dad was a Harvard MBA with scholarship graduate. And so neither of them were really wanted in the country, and their lives were in danger so we left very rapidly with an empty suitcase.

We came to the U.S. and were on food stamps living in drug-infested projects. And then I had to be the head of my family right after college, taking care of my really young brother who was seven years old and my sister who was 15 as well as my ill dad. So, there was a huge level of disruption.

Stuart: For you, like so many others from immigrant families, education was the way forward.

Behnam: Yes, I studied computer science and then worked as a scientist at IBM Research. Later I became tired of the technical world and went to Stanford Business School. They were interested in people with a technology and science background. My thesis was about prototyping. So I did a large-scale study of the global computer industry, and in the early 1990s found that the more you prototyped in uncertain environments, the faster you got to market and the more successful you were likely to be. This was the research foundation for design thinking and agile development.

I was doing well at Stanford. The advisor for my thesis was Kathy Eisenhardt. Then, in 2001, I had another disruption when I went through a complete spiritual breakdown. So I decided I wanted to have my life be about service. I made a goal of transforming the lives of 100 million people before I die. Since then I’ve been focused on transformation.

Stuart: And this work has brought you into contact with some great leadership figures.

Behnam: After my doctoral work, I trained 7,000 people at Intel and worked with Andy Grove. I also worked with Steve Jobs at NeXT during his hiatus from Apple. And then I had the privilege of working as an advisor on transformation with President Obama and Pope Francis. I’d been working with the Vatican on their transformation.

Stuart: And this led to your book Rapid Transformation?

Behnam: Yes, it was a large-scale study of transformations that led to counterintuitive results. Next, given my own personal experience and working with leaders, I realized the key to transformation is not just organizational transformation, but personal transformation. That’s why I wrote the book on 2015 on the inside-out effect, which I’m really proud of. The marriage of psychology and sociology has helped a lot in terms of being able to really make a difference and coach companies.

Also, two years ago, I decided to partner with the Project Management Institute (PMI) because they have two million members and I wanted the work to be in front of as many people as possible.

Stuart: All the research suggests that companies are still very bad at achieving change. Something like 80 percent of change programs fail, but what you’re talking about, transformation, is much more demanding and far reaching. So realistically only a small number of organizations are going to get anywhere near mastering it.

Behnam: Yes. To be a master, you can go from a white belt to a green belt, to a brown belt. It’s a journey, a mountain with no top. Consultants love the linear change model because it takes four or five years. They can transform the supply chain, then marketing and so on. Just imagine how many billable hours that is! With my approach, basically you have a coach or two, you don’t have an army of consultants. The people inside author the change. It’s much more sustainable, and it moves rapidly.

Stuart: This has led to your most recent research into perpetual transformation.

Behnam: I have completed a deep, deep study of 22 organization — including Amazon, Apple, Netflix, Tesla, Haier, Intel, KBank in Thailand, Starbucks, Zara, and Santa Clara County. I have also looked at Blockbuster, Kodak and Nokia, among others, which failed to transform.

The starting point for those which succeed is what I call meta-agile leadership — meta means being able to zoom out, and agile is about pivoting and moving quickly. This is the antidote to organization stasis and mediocrity.

I found in all these successful organizations that they have controlled chaos. So from the outside while they look amazing, inside it’s chaotic.

Stuart: One of the companies you feature in this research is the Chinese company Haier. It is a company I know well, and I’m always amazed by the level of ambiguity and chaos within the organization, and they’re comfortable with that.

Behnam: The Chinese can handle ambiguity better than any Asian country, maybe better than anyone else in the world. So they’re very comfortable with that chaos because in their DNA I feel the sense of entrepreneurship — something you can see at Haier.

Stuart: You also bring an existential understanding of what is actually going on in such organizations.

Behnam: From a meta point of view, what has really fascinated me in the past 10 years or more is why people are willing to die for a cause, but work for money? And that cause is what I am really interested in. The inside out effect is about having the personal compass. It’s about a model where you can have meaning and also happiness and take advantage of all the strengths you have and be able to have that sweet spot in terms of your personal compass.

Microsoft has done this with every employee in the organization. In the military, the marines and special forces are amazing at this. KBank in Thailand has done it. Google has done quite a bit of this. Amazon is adopting this. There is this evangelism that exists in these successful companies that is just truly amazing. One of my favorite mentors at Stanford was Jim March. Jim pointed to Don Quixote as a great example of existentialism. He does not accept reality, but imposes his imagination, commitment and joy on it. This produces a life of beauty and meaning. I see a lot of that in successful organizations.

Stuart: So, a starting point is the organizational culture?

Behnam: Their organizational DNA is to see their work as life or death. That is what Andy Grove used to talk about, a feeling of paranoia. As one leader told me it’s like piloting a plane and facing a mountain and trying to make a right angled turn. They always create a sense of life and death urgency. It feels like a cult, a religion. Think of Tesla or Amazon. These are not cults in the extremist sense — such cults disenfranchise people and people often cannot escape. Apple and other organizations bring the best of people out by connecting to who they are as an individuals.

Stuart: If that sort of commitment is the starting point what follows next?

Behnam: Tempo. There is an agility, a kinetic energy that the leaders bring in to increase the velocity. From a tempo point of view, there’s also a meta part, which is the cadence. And the cadence is also very, very quick. Look at the Amazon-S team. It’s the senior team, but also they bring in people and meet sometimes weekly. They talk about lots and lots of detail. HR is involved, finance is involved. They talk about big ideas. Everybody gets that tempo and the urgency. And they go several layers deep in Amazon, the six-page narrative — another way to create tempo — because when you put a six-page narrative together in meetings, people don’t ask you a lot of questions that might show up in PowerPoint slides. They have read this and they have much more depth and much higher meta-temporal-type questions. The bottom line on tempo is that there’s room in organizations to boost performance by ramping up pace. We have a lot of slack in companies. Leadership needs to take the slack and turn it into great results.

Stuart: Another aspect of this is the ability to combine exploitation and exploration. Can you tell me about that?

Behnam: What I realized at Intel was that it was great at exploitation. In fact, some of their ideas — such as on constructive conflict — are now being taught at Google, Amazon and Facebook. In my doctoral thesis, I talk about a bimodal approach to running an organization. One is what I call compression, which is about exploitation. And it’s about really squeezing the steps, it’s about moving things closer together — lots of parallel steps. And the other model was experiential, which is exploration, which has lots of iteration, powerful leaders and so forth.

Intel people did not have a lot of patience for exploration. But Amazon, Apple and Tesla do it really, really well. The mindset is long term. It’s about experiments and failures. I love Jeff Bezos’ personal motto — Gradatim Ferociter — step ferociously. It is stitched into his cowboy boots and is also the motto for his next Blue Origin venture. He argues that you cannot skip steps. Things take time. There are no shortcuts, but you want to do those steps with passion and ferocity. In every new business at Amazon, we see that.

Apple is the same. They take their time when they need to, and they move fast when they need to, especially when it relates to exploration. They’re not into quick profit-making. At Tesla, you hear the word ‘scrappy’ all the time. They are never satisfied, always pushing back to improve things. These successful organizations are bimodal. For example, Amazon is religious about lowering costs, frugality and improving the customer experience.

Stuart: The organizations and leaders you talk about, from Andy Grove to Zhang Ruimin at Haier, are not really into comfort zones and status quo. But aren’t they always fighting human nature?

Behnam: You’re 100 percent correct. These are tough environments, but they also help you become the best version of yourself. It’s a liberating experience. So while you’re in it, it’s crazy, but the number of wins you have, the things you learn, it’s really accelerated learning.

Stuart: The language you use is completely different from the language which has been traditionally used about change. You’re talking about existentialism, and the meta- and agile-led leadership, it’s very different from the linear approach. So are you saying that the linear approach is dead?

Behnam: Yes. It was good for its time, but given the new reality, you really need this agile, rapid, concurrent transformation.

Stuart: The relationship between personal transformation and organizational transformation is an interesting one because in a company like Amazon, it is still very personal to Jeff Bezos, isn’t it?

Behnam: People like Jeff Bezos are Pygmalion to organizational Galatea. That’s the X factor. Pygmalion dedicated himself to his work and created Galatea, his sculpture. It’s a beautiful statue of a woman, made with a lot of affection. Finally Aphrodite took pity on the young man, brought the statue to life, and they became lovers and lived happily ever after. So people like Bezos bring the best version of themselves in the organization. They also inculcate the seeds of their values into them. And to me, that is a liberating experience to be trained under Jeff Bezos, Tim Cook, Elon Musk, or Zhang Ruimin.

Stuart: What is also clear from your work is that all of this is based on an obsession with customers.

Behnam: Haier has thousands of microenterprises. Their guiding light is what they call zero distance between employees and customers. Likewise, Amazon, obsessively focus on the customer experience — selection, ease of use, low prices, more information. Zara is another great example. Or think of Steve Jobs: he encouraged all his people, all the experts, because Apple is a company of experts, to become experts in the field, to have their own experience and bring them in to produce products that customers could not even imagine. You don’t want your customer to like you, you want them to love you. This is what customer obsession is.

Stuart: Again, it has to come from the top.

Behnam: One of my favorite movies is Braveheart. At some point in that movie Mel Gibson talks to the would-be king and the would-be king wants to play safe because he is worried about the likely reaction from his noblemen. He says, “Just remember, people don’t follow titles, they follow courage.” These leaders, whether it’s Haier, Amazon, Apple, Tesla, have a lot of courage. Not only do they disrupt their business continuously, they also disrupt themselves. If you look at Steve Jobs’ personal transformation from Apple 1 to Apple 2, it is night and day.

When Apple wanted to get into the retail business, I thought they’re not going to be successful, because I was thinking about Gateway and other models. These guys are not like that. They think meta. They see this as a challenge. Think of Amazon with the Kindle. People told Bezos, Sony has tried it, so have others, and it didn’t work.

Stuart: What do you say to organizations when they say, well, what can we do tomorrow? What’s the first step in this path?

Behnam: Well, I would say starting tomorrow, let’s get some of your best thought leaders and let’s get out of our current environment. Let’s just go somewhere. The CEO has to come and ask people what would you do if you were the CEO? What would you do differently? That sort of open conversation creates a sense of urgency. Openness is key as personal transformation needs to be aligned with where the organization goes. So we have to show vulnerability, we need to talk about our stories. We need to show a different face to each other, because we’re going to go through choppy waters so we need to understand each other.

Once people melt their egos, we get them to talk about their environment and five to seven things that potentially could be a huge lever of change. It could be about the culture, but I’ve never been to a transformation that didn’t have innovation. So we come up with seven bullet points and then we say, how do we engage the rest of the organization? This is the rapid track task formation thinking. How do you get your thought leaders to author a future so that they feel like it’s their baby and not yours. Then we go a few layers down. We get these people together in a flat organization, we rapidly do a pre-transformation and in a period of about 90 days to 120 days, we come up with a blueprint for a major transformation and innovation in terms of culture and so forth.

We recognize there is a matrix in this organization, it’s like a movie matrix, and we take people out of this matrix so that they feel like they matter, that the organization brings their best out. The best ideas are discussed to create a blueprint of the future. You change the culture outside of this matrix, and then you transpose it back to the organization. You have to be bold and courageous. Then I would also personally coach the CEO. Even CEOs have blind sides. You have to have their trust. They have to feel like they can open up to you, but you must identify their blindside and you’ve got to tell them if you don’t change, if you’re not willing to change, nothing is going to happen. So that also is a part of this whole process of perpetual transformation.