Author, executive advisor, and Managing Partner and Founder of Rossman Partners, John Rossman, rejoins the show to discuss “the innovator’s dilemma”, building foundations, chasing perfection, and making big bets, how to REALLY use metrics and make metrics a verb, 3 megatrends for the future of business, the role of business in democracy, and the #1 mistake leaders make.

Mentioned in this episode:

Download John’s free Business Manifesto and learn more at RossmanPartners.com.

Rossman Partners / John Rossman

Download John’s free Business Manifesto and learn more at RossmanPartners.com.

Rossman Partners / John Rossman

We are pleased to welcome back to the program John

Rossman, an author, executive advisor and keynote speaker on

digital transformation, leadership and business

reinvention. He was an early executive at Amazon and now

serves as the managing partner and founder of Rossman Partners,

and he was previously our guest on episode 433, of the Action

Catalyst. John, welcome back.

Great to be back.

A lot of your public work in the past has touched on your

time at Amazon; The Amazon Way, Think Like Amazon, that was sort

of the focus the last time we caught up. You've got a few new

works out now. But I want to start with the Rossman Business

The Pig, The Lipstick, and The Playbook of

Champions, This really sounds like you're taking the more

holistic ownership of all of your experience, bringing it

together. Who's the target audience for this manifesto, and

what's the specific problem it's addressing, and how did you come

to identify that problem?

So I get to do a lot of keynote speaking, and I

have some clients, and one of the interesting things I've seen

over the past year is most of my work has been about kind of

major transformation, innovation, but I've had a half

dozen keynotes where it's like, no, no, no, no, no. We want to

focus on our culture and execution and kind of like some

of the basics. And so that was like one clear signal, and the

other signal is last year we saw a number of just gold standard

brands. Ironically, a lot of them out of the Pacific

Northwest. Here, a number of gold standard brands who went

from being lauded in the pinnacle within their category

to like a substantial business challenge that they have, right?

So the brands I'm thinking about, think about this set of

gold standard brands, Starbucks, Boeing, Nike and Intel, right?

Very different sectors. All of them a different sort of

situation, but they clearly have suffered from a combination of

what I think are kind of two factors. One is they get kind of

trapped within their own business model, and they're just

incrementalizing themselves to the next thing. So that's kind

of the innovators dilemma. And the other is a cultural thing,

of like, what their expectations are in the business between

themselves, and that's kind of a culture of mediocrity that

hasn't become just accepted. It's actually become the

standard within a number of kind of healthy companies. And I

think that that combination is really the challenge that I

address in the pig, the lipstick in the playbook of champions, of

being both trapped from our own success and not seeking high

performance, both for our business and for the way that we

work. And so that's the specific problem. But I wanted to get it

out. It's a free resource ebook. It is a playbook. We outline

specific things to do that I think are both practical, but

they're underplayed. They're understated within most

organizations, but a couple that I think are super powerful and

simple. So there's three sections of the book, building

the foundation, chasing perfection, taking big bets

under building the foundation, one of the key plays is about

people, and I think everybody starts with the wrong place when

they think about getting the right people in the

organization, helping them be successful. Because everybody

thinks it's about like the person, and I disagree. I think

it's about a thoughtful design of the organization and what the

job is that needs to be needed. And so many companies haven't

really thought through, you know, for this role, for this

team, for this core capability, or a company, what's the job

that's needed now and going forward. How would we define it?

What do we think kind of the consistent goals are going to

be? What's the decision making criteria and scope of this? What

are the key metrics that we imagine this role having? And

what do we think the the non obvious skills and background

and actions? Attributes that would help somebody be

successful, even if you have somebody in the role today and

you want to help take their performance from good to world

class, rethinking what the job is, is a super powerful way to

help that person achieve those goals. But it goes so

underplayed in companies, and this is not a big exercise to

do, you know, and everything, but companies don't do it. So

that's an example. Here's another one, and it's kind of

from the chasing perfection section of the book, which is

all about, like, how do we run a great business today, and how

companies design and use metrics to actually get the signal of

where aren't we good enough from a customer experience or from an

operational standpoint. Today, I was a partner at Arthur

Andersen. I was a green belt. I'm an industrial engineer by

education. I thought I knew how to use metrics for impact, and I

learned a whole graduate level course at Amazon, and it's been

kind of one of the consistent things I work with clients in my

keynotes on since then, is like metrics and how we use them. And

there's two parts that I'll talk about here today. One is like,

just how you design metrics, and it always has to be a balanced

scorecard of metrics, right? You can't have just like one metric.

You need efficiency, you need quality, you need cost metrics,

right? And it's the design relative to those. But then the

second part is like, what do you do with those metrics, right?

And so I always talk about, make metrics a verb, right? They're

not a thing, they're not static, they're a verb. And the and the

action that we take is, how do we discover the signal, not to

pat ourselves on the back, but to see where there's opportunity

to chase perfection? And that was, I think, the design of kind

of the metrics meetings, and the tone and the tempo and the

purpose of those meetings is an absolute game changer for teams

and companies that can turn metrics into the fuel that a

improve the business for today, but it also it's like going to

the gym. If you do this all the time, you're going to get the

idea that fuels the next section of the playbook, which is big

bets, like, how do you actually innovate and transform?

You've mentioned part three as big bets, and you've

already alluded to your other work, which is Big Bet

Leadership, Your Transformation Playbook for Winning in the

Hyper Digital Era. But we've all heard about the digital era.

We've been in it for a while now, but before we dive deeper,

just give us the definition of what the hyper digital era is.

Exactly what's that distinction?

We know we're not good at making change happen,

right? Like, if you look at the history of time, like the

competitive advantage and life of companies tends to be pretty

short. And if you think the past 2530 years of digital

transformation and digital disruption has been something,

the next 25 is going to make that pale in comparison, right?

Like we are heading to an era, and it's not just because of

technology. I outlined kind of three mega forces with kind of a

fuse tying them together. And the three mega forces are a

disruptive technology, which is, by itself, a highly disruptive

factor. But the second one is just as disruptive, which is the

aging of our population, the ability to attract, retain and

get better leverage out of out of our skills and out of our

people, is going to be a core competitive advantage. Because

if you are just going to try to, like, continually hire and

compete, you're going to be at a competitive disadvantage. So

that's the second major, major force. Mega trend is, you know,

the aging of a population and how scarce skilled talents can

be. And the third is the overall indebtedness of our country to

entitlement programs and to surfacing our debt, and that's

going to create downward pressure for capital, so you're

going to have to be both efficient for your capital, but

it's also a calling, which is for our country to win, we have

to innovate, and that innovation comes from all of our companies.

It doesn't come from somebody else's place. It comes from our

place. And so those three mega forces together are going to

create a vortex that creates both an opportunity and a

challenge, and there's going to be a bunch of new winners.

There's going to be a bunch of new losers in what I call the

hyper digital era. And we you can't wait until you go, Oh, now

I get it. Now I really need to change. You need back to kind of

the athletic metaphor, like you need to get good at how you go.

About innovating and transforming. It is an

organizational capability. And so the best attribute you can

always have is some patience right time to do these things.

And so if you wait until you see the signals of kind of slowing

growth, customers who don't love us, competition, that's that's

kicking us in the rear. Now you're under pressure. Do it

from a position of strength and growth. That's the time to build

the capability of like, building the next businesses, innovating

better, delighting customers better. That's the championship

way.

To point number three about debts and entitlements.

We're now at the beginning of a new government administration

looking to make a lot of changes to business and regulations and

other things. Do you see a big impact there?

Yeah, well, a couple of things. I think that

these changes were going to take place regardless of

administrations. And I would say I'm hopeful and supportive of

any administration that would seek to both serve our citizens

better and do it more effectively. And I think that

that is what every company needs to do, and all of our federal,

state local government should serve you. Do it better, do it

more efficiently. The government is here for the people, not the

other way around. It's We the People, right? We the People

grant the government these powers. It's not the other way

around, right? That's why it's an important call to action to

me, if our plan is to wait for the government to address and

fix the situation, I'm not optimistic about that. That's

why I think, especially small, mid sized, large companies, they

need to see it as part of the mission of like, our company

needs to play a role in how America is more competitive and

more innovative, because that's how we keep our great democracy

going. And so don't wait for the government to fix it. That's

never a great idea. I think that, you know, I'm optimistic

that they're going to start tackling some of this. But

that's not the whole playbook. The playbook is our businesses

need to play a role in this. One of the phrases I'm fond of is

that complaining is not a strategy, right? And so what do

we do with these observations today, in our business, in our

team, in my life, that's what I'm always interested in, is action.

Well, that's perfect for our podcast, right?

Exactly, The Action Catalyst!

You make a pretty bold claim. You say that there are

countless books making the case for digital transformation,

innovation and reinvention, but they're not sufficient. But what

are they lacking that Big Bet brings to the table?

Wow. You really did read it. I love it. I love

it. So here's what's insufficient. What's easy to do

is to talk to senior leaders, and it's like, Oh, I know I need

to transform. I know I need to innovate. I know I need to

leverage technology. I know I need to delight my customers

better. I know I need to evolve my my operating model. I know I

need to understand kind of this, this trial and error,

experimentation mindset, but there's very little that

actually for senior leadership and the teams that serve senior

leaders. There's very little that actually says here's things

that you the senior leadership team need to do different and

the team that's driving this transformation. And so there's a

lot written for kind of the individual contributor and the

team leader around agile methodologies experimentation,

but we couldn't find anything Kevin McCaffrey, I'm referring

to and myself. We couldn't find anything that's like, here's

what senior leaders need to do. Kevin ran new business

incubation for T Mobile. I got to be the senior innovation

advisor, working with them for three years. This is what we had

to do AT T Mobile. Was our challenge. Wasn't like this

tactical process of like, how do we explore, you know, new

business models for T Mobile. It was helping the senior

leadership understand how they needed to adjust or recalibrate,

how they make decisions, how they allocate resources, how

they spend time on these businesses and opportunities of

the future versus their operating expertise in running

today's business. And the biggest mistake that senior

leaders make is they think that because they're really good

operators and they understand, they've heard these concepts of

innovation and experimentation, and so like, okay, I can do

that. It starts from a belief system and an understanding

fundamentally of what that is about and how to go about it,

and if you apply the same tactics, the same belief

systems, the same things that made you a great operator into

this playbook of experimentation and major transformation, you

will fail at it. And that's why we wrote the book. Big bet

leadership is to for senior leaders and the teams. Serve

senior leaders to really point out to them, these are things

that you need to do different. Again, it's a very action

oriented book, not theoretical. And that's what is missing in

most books about innovation and transformation, is it's like,

yeah, no duh, I need to change and I need to be competitive,

but tell me what I need to do differently today as a senior

leader to help make that happen. That's what we tried to answer

in this book.

But as a companion to that book, you've got a lot of tools

available on your website for taking this big bet theme

further, but one of the most intriguing to us was Big Bet

GPT. Can you explain what that is?

Yeah, so, you know, we kept the book very

readable, right? It's, it's 45,000 words. It's a great

narrative. It's a great audio book. And so we offloaded from a

lot of the templates and tools and, you know, checklists and

things to do. And so one of the things we did with, with all of

that, was we created a purpose built GPT, and we have a prompt

sheet that goes with it that can help you do these exercises of

kind of developing the what sucks, memo of really thinking

through your three futures. Exercise of putting these

practices into place, it won't think for you. It won't do the

work for you, but it is an incredible companion to help you

see different framing, different phrasing, different options that

you have out there. And so it really is a kind of a turbo

button to help you speed your way through thinking this

playbook through for yourself. I think there's more for us to do

there too.

Well. I'm glad you said that. So what's next, and where

can people find you?

Yeah, so people can find me on LinkedIn. John

Rossman, that's really simple, or bigbetleadership.com is where

all the resources and everything is, and that's also at

rossmanpartners.com. What's next? Like, that's what I'm

thinking about right now, and I think it's something that is a

combination of for senior leaders and team leaders. How do

I actually address these two core challenges that we identify

in this business manifesto, which is a kind of being trapped

by our success, that's the innovator's dilemma, and B, kind

of suffering from accepting mediocrity, but leveraging AI to

help you do that better. And how do I incorporate AI into

everything that I do within an organization? That's what being

an AI first company is about, and I think it's both kind of

small tactics that you take, but it's also about re envisioning

and leveraging AI. And so I think it's a combination of kind

of business strategy leadership, but leveraging these very real

and dynamic, fast changing capabilities that generative AI

and other technologies bring to us. Because it's like a new

internet. It's like, oh, now we have electricity. Like, it truly

is a fundamental capability shift and again. Like, don't

wait until it's too late. You gotta get comfortable, both

individually and as a company, in how you leverage these things

to make change happen.

John, thanks for being here once more.

I love it. Thanks for having me.