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Ep54 Vilfredo Pareto and the Importance of Systems Thinking to Solve Complex Problems
Episode 5426th August 2020 • Inside: Sales Enablement • Scott Santucci, Brian Lambert
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Welcome to the Inside: Sales Enablement Podcast Episode 54

System thinking is a disciplined way of understanding dynamic relationships. It's an approach that enables you to make better choices and avoid unintended consequences. In this episode, we talk with Dr. Jerry Brightman, who teaches courses on systems thinking at Harvard University.

The guys talk with Jerry to unpack a real-world example to understand the components and repeatable approaches to viewing the commercial system as an integrated system of people, processes, technology, and capabilities.

In this episode:

  • The definition of systems thinking
  • The difference between managing and leadership
  • The pros and cons of systems thinking
  • The importance of short-term wins in service of the broader solution
  • The best way to prioritize action in the day-to-day

EPISODE TRANSCRIPT:

Intro 00:02  

Welcome to the inside sales enablement podcast. Where has the profession been? Where is it now? And where is it heading? What does it mean to you, your company, other functions? The market? Find out here. Join the founding father of the sales enablement profession Scott Santucci and Trailblazer Brian Lambert, as they take you behind the scenes of the birth of an industry, the inside sales enablement podcast starts now.


Scott Santucci 00:33  

I'm Scott Santucci.


Brian Lambert 00:35  

I'm Brian Lambert and we are the sales enablement insiders. Our podcast is for sales enablement leaders looking to elevate their function, expand their sphere of influence, and increase the span of control within their companies.


Scott Santucci 00:48  

Together, Brian, I've worked on over 100 different kinds of sales and they were knishes analysts, consultants or practitioners. We learned the hard day our way not hard day saved. This is all part of the process. We have a hard way what works and perhaps what's most importantly, what doesn't.


Brian Lambert 01:08  

And our focus here on this podcast inside sales enablement is on you as a sales enablement leader and orchestrator, as you know, sales enablement orchestrators has very specific characteristics, and I'm going to share those with you. Now, first of all, your mission and goal focused, you've prioritize the right goals at the right moments. You guide the narrative by confronting reality to get the right stuff done. You drive results by design, not by effort, you unlock energy to create momentum and catalyze change through collaboration. Those are the six attributes of an orchestrator. And you can find out more about that on an earlier episode on orchestrators as we usually do, we're going to start with a centering story on this particular episode. So Scott, what kind of centering story do you have for our audience today?


Scott Santucci 01:56  

Well, I've got a great one. So I first want us to dwell on how cool This name is okay. And how awesome the Italians are at naming people.


Brian Lambert 02:07  

Go figure says the Italian


Scott Santucci 02:09  

is well, I don't have to Scott isn't an Italian name like I just have to laugh. I'm half right. But listen to this name vilfredo Pareto. Oh, nice Hellenic in it.


Brian Lambert 02:24  

Yeah, it's very nice to have properly dwelled on that so let's move on. It's very elegant.


Scott Santucci 02:30  

So who is this person? And why are we talking about about him. But as you as you many of you may know, you might know this idea of the 8020 rule. And the 8020 rule is also called peredo analysis or peredo distribution or he's got a lot of other other things and as many people call him, the father of micro economics. So if you look at economic theory, like Adam Smith, and you've Read it, it sounds like oh, this is a like a sociology book. And then when you look at our Philip philosophic, philosophical book, when you look at parados works, it looks more modern. He's got tons and tons of tables and statistics and things in there. And one of the things that he really observed is, in trying to figure out distribution of power and distribute, you know, where power really resides. He was caught up in a lot of the revolutions in in Europe during the during time, so let's let's frame it out. He was born in 1848 and died in 1923. As you can imagine, there's a lot of turmoil and he's Italian.

So if you know about Italian history, they didn't. They started the process of revolutions after the Civil War, the United States so the 1860s and and on, and making these observations about getting in big problems and arguments with With the governments, the local governments about what things need to do, because he was a very, very much a laissez faire or classic liberal in those senses, not not what we would call today a liberal. Definitely, if we call them today, he probably be very conservative or probably a libertarian. But the key observation that he made that was so groundbreaking was that he found that 80% of the wealth or not so much the wealth, but 80% of the land owned in Italy, was owned by 20% of the population. And he had to keep double checking that and what he found is that pattern, that pattern is a reoccurring pattern. And you've heard us talk about that pattern before in some of the other podcasts that we've done, because we found that pattern exists with salespeople, about 20% of salespeople are generating 80% of the new growth, about 20% of your customers are generating 80% of your profits. All of these things work and that we Have vilfredo Pareto, again, the poetic name to Frank. Thank you mentoring story.


Brian Lambert 05:09  

Thank you. vilfredo Pareto, I just wanted to say that I'm on


Scott Santucci 05:14  

peredo fan club.


Brian Lambert 05:17  

So I got to ask that and our listeners do too. So what? So this has to do with sales enablement.


Scott Santucci 05:27  

So what this has to do with sales enablement, and our topic today is that there's a one of the things that we tend to do, and drive a lot of cost is we do a lot of activity. We do lots and lots and lots of stuff, but a lot of stuff. Are we doing the right things? And how do we figure out there's a there's always a mathematical element, if we embrace it, most of us don't embrace these things because they you know, it's just far too easy to say, well, let's go fix the sales force. Instead of saying let's find the 20% of the sales force to improve What can we do? And really what we're talking about here is the introduction of systems thinking. And when we talk about that, as you all on our on our show have have adopted that you want to be orchestrators, part of what we're trying to do is highlight the business value of being an orchestrator the business problems that we're looking to solve. So that's why this matters so much the centering story and the topic that we're going to do is so what is systems thinking? Is it some new age idea that we have to have a crystal and you know, hug trees over? Or is it something real and something tangible?


Brian Lambert 06:37  

Yeah, I love that. And to help us with this today, we've got a, an expert in the space joining us. His name is Jerry Brightman. He is a bright man, so we're gonna help us on this topic. Yeah, you've got him. I do too. And Jerry is a great guy. I've learned I've learned a lot from him over the last 20 years. I met him when I was first coming out of the military and he was in program project management. He's done some great fascinating work in industry. All over the world. He's been to 100 different countries. But right now in his phase of what he's doing, he's he's a professor at Tufts and at Harvard. And Jerry, one of the things that I was reconnecting with year round was I saw on LinkedIn, you had posted this really cool post about teaching this really interesting class, to folks at Harvard. And that class was on systems thinking. So I reached out and I said, Hey, our listeners are asking about this. They're also you know, quite frankly, pushing back on Scott and I a little bit around some of the topics and wrestling with them. So let's get Jerry on. And let's ask him some questions that perhaps our listeners might have, and explore this topic of, of systems thinking. So Jerry Brightman, thanks so much for joining us here on insider nation.


Unknown Speaker 07:50  

My pleasure. Thank you very much for having me.


Brian Lambert 07:52  

You bet. Can you share a little bit about your background that maybe I've missed?


Unknown Speaker 07:57  

Well, it's um, it's a it's a very diverse background but it does. It does have a way of connecting dots. I started out as a very young guy went to school seemingly forever getting an undergraduate, an MBA, and then even a DBA doctor Business Administration. And then guess what? teaching at a university, and out in Western Michigan University in the wilds of Kalamazoo, Michigan. And I was asked to teach an off campus course in Grand Rapids to a real live working business people in that area. And it was very quickly known to me and the moment that I was a fake. The only advantage I had over these people who were working all day and going from an MBA an evening was they were actually doing business and I had an advantage of being one chapter ahead in the book. And I realized that I love the teaching. I really loved being in front of students, graduate students, real practitioners of business every day. But if I was going to be helpful to them, I had to quit teaching and get into the business world. And I was very, very fortunate to join a global chemical company for about a dozen years, that wound up being the very first company ever to do business in the People's Republic of China. And during that period of time, I was very lucky along with my CEO to be pioneers in the trade with China being the very first to go to China. And without any knowledge of the of the country, of its history of its culture of its ways of negotiating even its currency and contracts. we wind up doing a billion dollars worth of two way trade with China, a country we didn't know at all. And so what were the tools of our trade? And one of one big one was was thinking more systemically about the work we were doing.


Scott Santucci 09:45  

Excellent. So to kick us off what I'm going to ask you two pretty basic straightforward questions. And I'd like some, you know, basic, straightforward answers from Jerry. So the first question I want to ask is to systems thinking, is that a thing?


Unknown Speaker 10:03  

I wish it were more of a thing. I think that real leaders around the world would would benefit systems thinking as an addition to their toolkit, especially in the areas of decision making and seeing the the broader interrelationships. And interconnections have their, their own work staff, and their own people, and the people that they try to do business with. So it's very real. It's just not seen by many people quite honestly.


Scott Santucci 10:30  

interested. So what I'm hearing you say is that it's a very real thing. Just a lot of it a lot of people aren't taking advantage of it.


Unknown Speaker 10:39  

And frankly speaking, it's not unlike the quality movement years ago, which was a real thing and and However, people pick the low hanging fruit expected great results, and didn't do the work behind it to make it real so


Scott Santucci 10:53  

well. And also to wasn't that wasn't that true that it was a real thing in Japan, and it wasn't a real thing in the United States and Our car, our automatic fractured covers got slaughtered, and then they adopted it.


Unknown Speaker 11:05  

Well, Dr. Deming was was preaching loud and clearly in the United States and people didn't listen to him. So he said, bear with you guys, I'm off to Japan. And those folks loved it, embrace it. And that's why the Japanese carmakers for over a decade was such a fierce competitor to the United States. And, but we expect quick results. We're a country that wants quick results. And I think systems thinking similar to the quality movement is somewhat counterintuitive. It takes time to implement, it takes time to understand it. And it does work miracles, in our sense of we ignorant people going to China for the first time knowing nothing, doing a billion dollars were the two way trade in a wide range of areas, and even even developing our own consulting firm that helped American and European firms understand what the China business was all about. I'd love that. So that gives me my second sort of blunt instrument question. My second question is,


Scott Santucci 12:05  

so if systems thinking is a thing, what is that? What is it? What is this stuff? What is systems thinking?


Unknown Speaker 12:14  

Yeah, there's a very great quote by Albert Einstein. So I want to bring in Einstein to prove that I'm a professor, right? You can't do better than quoting Albert Einstein, right? And I assigned says that the problems we face today cannot be solved with the same level of thinking that existed when the problem began. Time is time is gone very quickly from the start of that problem, to the present time. So what he's what Einstein is saying pretty simple and down to earth, is we've got to change the level of thinking that we have today to deal with that older chronic issue. And systems thinking is a wonderful, wonderful way to do that. The big thing that executives have to do is they have to change their thinking. That's To change where they're coming from changes the level of thinking, just like they had to do with the quality boom. And, you know, let's face it, habits are hard to break. I've got young kids who still have habits that they started when they were four years old, three years old. So habits are tough to break, if they can break the habits and open up their minds and new ways of thinking systems thinking will be a valuable tool to build leadership, guaranteed.


Scott Santucci 13:24  

So are you saying systems thinking is like a mindset thing? What Why don't I do yoga? or Why don't I do meditation? What do you what do you mean, man?


Unknown Speaker 13:33  

Here's what I know. I'm not going to quote Einstein anymore. But my buddies at a corporation that I worked for, for a number of years had a very interesting word called metanoia. Which, which is the definition of metanoia is shift of mind. So yeah, I they don't necessarily have to do yoga, but I you know, you won't believe this, but I start all my Harvard classes. With the required reading, called the miracle of mindfulness by teknon, hot, who was a Vietnamese monk nominated for the Nobel Peace Prize, then by Martin Luther King. And mindfulness is just understanding the world around you and being truly present. It's not a way out. It's just a consciousness of what's happening around you. And for some reason, and I usually get classes of 30 people from 18 to 20 countries, ranging from Europe and the former Eastern Europe, to China and Asia, to Latin America. And it seems to be a common thread, it attracts them to the idea of systems thinking, they have to be present in which they are both in the class and when they leave me. I keep in touch with them for many years. It connects the diversity of people to a common way of thinking which is systems thinking that we do in our class.


Scott Santucci 14:53  

So I'm gonna ask or challenge a little bit here. I'm trying to change Some of our maybe more traditional thinkers, thinkers in our audience, and putting myself in the situation advocating for systems thinking. I would get say, it's just crystals and healing. That's what all Yoga is. How would we describe it to be more concrete? And what maybe what do you teach? teach your students in your class like in your class that you go through? I love that you're starting out with, Hey, you got to be more open minded to be able to embrace some of these concepts. And I like that you brought up counterintuitive, but what's the meat on the other side of all the counter intuition, a lot of people just don't like all that anxiety or ambiguity of getting getting to the point.


Unknown Speaker 15:45  

But what they don't like more than that are the chronic issues that they face in their everyday business world. And when I say chronic problems, I mean problems that they thought they had solutions for that six months later, come back And rear their ugly head. And the reason for that is the busy pace of business today. And it's going to be even busier tomorrow is executives think like managers, they have to do lists. And the greatest achievement of their day is knocking off their to do list, right and go to tomorrow. So quick fix becomes a very valuable rep a tool in their repertoire. However, and actually quick fix has a good place in systems thinking. However, it doesn't get to the root of the problems and that's why six months later, these chronic problems, come back and bite them in the leg and they're stuck why we had a great solution for it. Well, you didn't have a great solution you had a quick fix that knocked it off your to do list. And now you got to come back to it. So take it down the can't kick the can down the road. Again down the road. So the so the attraction to not only my students but my clients is. So you're going to tell me you're going to send me a bill of goods maybe Alright, let's be setting Next year, you're going to sell me a bill of goods that's going to get my chronic problems off. So it stays sold. And I look him straight in the eye. Maybe from the back of a snake oil


Scott Santucci 17:11  

wagon. I don't know. You got it? Yeah, I think we should adopt, like at the yoga studio, you're in the back of a yoga studio teaching me how


Unknown Speaker 17:19  

to, like, know exactly. Who Kumbaya, you're gonna make me stretch. It ain't but but, but it's gonna make your problem chronic problem go away. And so here's, here's the deal. here's, here's the way your audience is working today around the world, no matter who your clients are. They're working at three levels. One is at an event level. And so if you picture a an iceberg, okay, so picture an iceberg in your mind. the very tip of the iceberg is working in an event level. So I asked my clients and my students, how many of you are problem solvers or put out fires and 90% Have a hit 90% of the hands go up. And they say 90% of their time is occupied, putting out fires and solving problems. So I, of course, play a jerk in the room, right? And I say, so let me get this straight. You're sitting in your office, twiddling your thumbs, waiting for the phone to ring with a problem. And then you can jump in and be that problem solved. Or you have your fire extinguisher ready to go and put out the fire. And by the way, one of my friends once...