# Commercial Excellence Consortium⁠™ — full text > The expanded companion to https://commercialexcellenceconsortium.com/llms.txt. That file is the map; this is the > material. Everything below is published by the Commercial Excellence > Consortium⁠™ and may be quoted with attribution. ## Core definitions **Passive resistance.** People nod and agree in the meeting, then go back to what they were doing the next day. It is social rather than instrumental — the failure is in the room, not in the reporting. Nobody refuses anything, which is what makes it hard to see and hard to argue with. **Adaptive capacity.** The human capacity to absorb change and keep working through it. The Consortium's position is that this is built before systems and processes are rolled out, rather than assumed. **Structured autonomy.** Genuine ownership inside clear strategic boundaries. Leadership sets what matters; teams choose how, and which problem to take on. **Adversity Quotient (AQ⁠®).** A measure of how a person responds to setbacks, developed by Dr. Paul Stoltz over four decades of research. **GRIT⁠™.** A measure of sustained effort toward long-term goals, used alongside AQ. **Mindset → Skillset → Toolset.** The order the Consortium argues capability is built in — the reverse of how most programs sequence it. ## Podcast episodes ### Accelerating Transformation with Roy van Griensven https://commercialexcellenceconsortium.com/podcast/accelerating-transformation-with-roy-van-griensven Mindset → Skillset → Toolset: the operating system behind a €7B transformation. Topics: Mindset → Skillset → Toolset, adaptive capacity, intrinsic motivation, contribution vs. attribution, technical vs. adaptive challenges, project-based learning, Growth Projects #### Summary Roy van Griensven leads commercial excellence and global transformation at a €7B specialty chemicals company, and he and Jesse Hopps go back to the start: a meeting in Detroit, twenty-five highly rated workshops that didn't stick, and the late-night realization that training is necessary but not sufficient. From there they take apart the operating system Roy built (Mindset → Skillset → Toolset) and the principle underneath it: you can train a process, but rarely a belief. The blueprint runs on intrinsic motivation, adaptive capacity, and real work people choose for themselves. Roy is candid on the parts most leaders skip: why a rational business case touches the head but not the heart, why credit is contribution rather than attribution, and why he banned the CRM — then watched roughly ninety percent of the design converge on its own once teams pulled for it. #### Key points - Where it started: a meeting in Detroit that was supposed to be about templates and turned into a conversation about why so few people use them. - The Saturday morning that made Jesse question the work, and what his wife said that started it. - Roy's pattern across two decades of programs: enthusiasm at the start, dropping fast, and why the energy was not about the work. - Where training is the right tool and where it is the wrong one, drawn on a clear line. - The Japanese meeting that produced Roy's epiphany: you touched the head, not the heart. - Why transformations design passive resistance into themselves by default. - The three-year arc: excitement, fading motivation, reversion, and the leadership change that restarts it. - Credit as contribution rather than attribution, and why pull from the business is stronger evidence than any ROI model. - Mindset, then skillset, then toolset, and what happened when the CRM was taken off the table. #### Definitions - **Technical vs. adaptive challenges** — A technical challenge has a known answer that an expert can apply, and training works. An adaptive challenge needs the person who has the problem to change what they do, which no amount of explaining accomplishes. The argument here is that most transformation work is adaptive and gets handled as though it were technical. - **Necessary but not sufficient** — The verdict on training. It is the right instrument for onboarding someone into a new job, for a new product launch, or for a defined skill gap. It is the wrong instrument for changing what people believe or how they behave under pressure, and using it there is where the spend goes. - **Passive resistance (by design)** — The objection is seldom voiced and rarely escalated, so the behavior stays where it was. Roy's account of the cause is structural: a program designed at headquarters, with help from consultants who have never done the job, handed to people who were not asked. Objecting is a career-limiting move, so the disagreement goes underground rather than away. - **Mindset → Skillset → Toolset** — The order capability gets built in, and the operating system behind the LANXESS Academy. Mindset first, because without adaptive capacity nothing downstream sticks; then skills, built by doing real work with coaching; then tools, which people ask for once they know what they need. - **Adaptive capacity** — In Roy's phrasing, what is missing when a person is unable, unwilling and not ready to take on anything new. Building it means opening the question of influence: you are not a victim of overcapacity, dumping or market conditions; there is something still in your control. - **Contribution rather than attribution** — The only honest claim a central function can make. Credit belongs where the P&L is, so a central function has little standing to claim a number. What it can do is have business units say publicly that they reached a result through the collaboration, which Roy argues is more credible to a board than any KPI report. - **Pull as evidence** — The signal a board should look for. Not the size of the reported impact, but whether business leaders are asking the function for help or trying to get it out of the way. A program that has to be pushed at every stage is producing compliance, and the absence of pull is the finding it should be read as. - **Growth Project** — A ninety-day piece of real commercial work a small team chooses for itself, either an obstacle to remove or an opportunity to pursue, coached weekly by an experienced operator. Named for its double meaning: grow the business, grow the person. #### Questions this answers ##### How did Jesse Hopps and Roy van Griensven start working together? Roy was at Mitsubishi Chemical signing off the contracts for Demand Metric's tools and playbooks. They met at a meeting in Detroit, and Roy's memory of it is that the conversation never touched a template or a framework. It went straight to how you actually get people to adopt a different way of working. ##### What did clients keep telling Jesse about the playbooks? The same sentence, at the end of almost every year: I wish our people would use them more often. That complaint, repeated across thousands of clients, is what the whole argument grew out of. ##### What made Jesse question the work he was doing? A Saturday morning at home, catching up on email after a week away. His wife asked whether he was going to work all morning, and told him this was not what she signed up for — she had left her family behind to move countries and was raising their daughters largely alone. It forced the question of whether the work was impactful enough to justify that, and he concluded the learning was not taking root. ##### Were the workshops badly received? The opposite. Twenty-five to thirty of them, highly rated, good feedback, and the company kept investing. That is precisely the problem: strong scores are not evidence of behavior change, and treating them as evidence is how a program runs for years without producing one. ##### What pattern does Roy see across two decades of transformation programs? It starts with enthusiasm. But the energy is about being away from the job for two days, seeing a city, spending time with colleagues, not about the work itself. The sense that this is what I want to be doing for the coming years was never there, and the excitement drops quickly. ##### Is training a waste? No. It is situationally right. Roy's line is clear: use it to bring someone into a job they have never done, to explain a new product's value positioning, or to build a defined soft skill. It is the wrong instrument for transformation, because training does not change what someone believes or how they behave under pressure. ##### What is the difference between a technical and an adaptive challenge? A technical challenge has a known answer an expert can apply: teaching someone to make a burger in thirty seconds, with no judgment calls. An adaptive challenge requires the person who has the problem to think and act differently, where the method is open to interpretation. Jesse's argument is that transformation is misdiagnosed as technical almost every time. ##### Why does explaining the benefits rarely work? Roy's epiphany came from working in a Japanese company. Colleagues would agree completely: yes, it makes sense, this is what we need to do. And then nothing happened. His explanation: you touched the head, not the heart. Rational understanding and motivation are different things, and Western transformation design addresses only the first. ##### Why does Jesse compare transformation to buying a car? Because buying decisions are emotional and justified rationally afterwards. He wanted an Aston Martin at thirty, knew it was financially irresponsible, and assembled every justification for it: low mileage, one owner, might keep its value. None of those were the reason. Transformation work is asking people to buy new behaviors, and it is run entirely on the justifications. ##### Why is passive resistance designed in rather than encountered? Because of who designs the program and who is asked. It is built at headquarters, often with a consulting firm whose people have never done the job, and handed to the people expected to change. That combination triggers a very human response, and because the decision is already taken at board level, objecting is a career-limiting move. So the disagreement goes underground rather than away. ##### What is the three-year arc of a failing transformation? Year one is excitement: people join the workshops. Year two, motivation drops and people have seen it now. Year three, the passive resistance turns into reversion: forget it, back to what we always did. And then leadership changes, the previous leaders are blamed, and it starts again. ##### What question should a commercial excellence leader ask before accepting the role? Whether the company wants incremental improvement or transformation. Roy asked his CEO exactly that, and it is what opened the door to designing something unconventional, because the two answers imply completely different programs and completely different evidence. ##### Should a new leader dismantle what is already in place? No, and Roy is practical about why. The scope of commercial excellence is roughly the same topics in nearly every company and industry: pricing, segmentation, and a handful of capability gaps like new customer acquisition or value selling. Blowing up what exists makes little sense when the agenda barely differs. ##### How quickly does a new function need to show something? Inside twelve months. Roy's framing is that early evidence of impact builds credibility and buys time for the slower work to land. Past a year without it, you are out of the game; people have already stopped waiting. ##### What counts as evidence for improvement versus for transformation? For improvement, top line and bottom line: EBITDA, growth rate, conversion, cost of sales. For transformation, those say very little, because the activities are not isolated or attributable. The dialogue has to be about what builds trust that the change is sustainable: the leading indicators the board agrees would lead to growth. ##### Why should commercial excellence not claim credit for results? Because credit belongs where the P&L is, and commercial excellence does not have one. Roy's answer is servant leadership plus a single word: contribution. When a business unit says publicly that it reached a result through the collaboration, that is stronger evidence to a board than any number the function reports about itself. ##### What is the marketing ROI parallel? Roy's point is that enormous sums have been spent calculating marketing ROI, and little of it persuades a skeptical sales leader. What persuades a board is the sales leader saying: please do not cut the marketing budget, because what they do helps us reach our goals. The same logic applies to commercial excellence. ##### How should a board judge whether the function is working? By asking the business leaders one question: are you pulling for help, or trying to get them out of the way? Pull is the evidence. A function that has to push its way into every business unit is producing compliance regardless of what it reports. ##### What three constraints did Roy set for the Academy? Intrinsic motivation as the governing principle. No one-size-fits-all off-the-shelf approach; the program adapts to each business unit's maturity and priorities. And no lecturing about a perfect world: facilitate reflection instead. ##### What is adaptive capacity, in plain terms? What is missing when someone is unable, unwilling and not ready to take on anything new. Building it starts by opening the question of influence: you are not simply a victim of overcapacity or market conditions; there is something still in your control. Without that, nothing you hand people downstream sticks. ##### Why does mindset have to come before skills and tools? Because habits come from beliefs, and people who have watched three previous programs fail have a belief about what happens next. Roy's view is that a large share of any organization is stuck rather than incapable, and getting a proportion of them unstuck is where the potential sits. ##### Why project-based learning rather than classroom teaching? The seventy-twenty-ten split has been established for decades: roughly seventy percent of learning comes from applying the work. Most programs still put their effort into the ten percent at the front. And no single curriculum fits a hundred individual people with different experience, ambitions and development needs. Letting each person choose the one capability that matters most to them solves both. ##### Does letting people choose produce uneven capability? Yes, and Roy names that as the controversial part. Corporate organizations want to raise the bar everywhere at the same speed, but few companies are homogeneous enough for that to be real. As long as the choices sit inside the capabilities leadership has named as critical, the level rises across the board over time. ##### What does the AQ measurement show? Participants were measured before and after their Growth Project, and adaptive capacity improved by roughly fifteen percent on average. Roy's way of making that land with a board: in fifteen percent more of the everyday situations where someone would have got stuck, given up or lost the customer, they now find a way through. ##### How is this coaching different from executive coaching? It is team-based rather than one-to-one, delivered by experienced operators trained in the AQ and GRIT frameworks, and it works on a live problem rather than in the abstract. The distinction Roy draws is between telling someone how to do their job differently and giving them the means to work out how to keep going when they hit the wall, which every project did. ##### Does the benefit stay at work? No, and Roy treats it as an important side effect rather than a nice one. Participants report that the coaching helps them with difficulties in their personal lives, and several said it was the first time a company had helped them as a person rather than only as a professional. ##### What convinces a board more than a number? A credible anecdote from a known skeptic. Roy's example: someone everybody knows to be critical of any change saying that through the Academy their team solved something the company had not managed to solve in twenty years. The fifteen percent is a number; that is a story a board repeats. ##### What happened when the CRM was taken off the table? Around ten Growth Projects landed on opportunity and pipeline management, and each was told explicitly not to touch CRM: use paper, a spreadsheet, a dashboard, and work out what you actually need. They each arrived at a way of working, then asked for a system. Roughly ninety percent of what they specified was identical across nine business units and four business models, and the constraint now is delivering it fast enough. ##### Why do CRM rollouts get over-engineered? Because the requirements come from people who are not doing the sales job. Discussions start at five fields and the temptation is to add fifteen more. The alternative is coaching by question: is this something you need in order to steer your own business? Some say no and discover later that they do, and the field they asked for is the field they use. ##### What did the account-information Growth Project produce? A team of sales and marketing people defined the full set of information they needed about an account: data that had been scattered across nine business units and separate systems, including supplier-side information their own procurement held. Then they built the dashboard themselves. Leadership then made it available to everyone. There was no adoption program, because the people who would use it had specified it. ##### Do teams still have to present to senior leadership? Not by design any more. The first cohorts were told to prepare for it. Now teams ask to present, because they are proud of what they achieved. When it was made optional for a cohort of very senior leaders, all of them presented, and the presentations were better than when it was required. ##### What is the single principle that transfers to another company? Establish first whether the company wants improvement or transformation. If it is transformation, design it around building adaptive capacity and intrinsic motivation, which means involving the people who have to change. How you do that varies with culture and context — the principle does not. #### Quotations > "You touch the head, not the heart. So you've logically explained to me, and rationally I understand this might be the right thing to do. But I don't feel it. And nothing's going to move." > — Roy van Griensven, on the meeting that changed how he designs transformations > "Training doesn't change anyone. You can't train someone to act very differently. You can't train someone to have a different mindset." > — Roy van Griensven > "What by default we design in transformation is passive resistance — because we're not involving, we're not asking, we're not engaging the people that actually need to do something different." > — Roy van Griensven > "So me opening up my mouth that I don't agree is a career-limiting comment. So let's not do that." > — Roy van Griensven, on why disagreement goes underground rather than away > "The only place where you can claim credit is where the P&L is." > — Roy van Griensven > "What is more important? The sales leader saying, can we please not cut the marketing budget — because what they are doing is so much helping us reach our goals. That's far more credible than any marketing ROI calculation." > — Roy van Griensven > "The moment the board looks at their business leaders and says: are you pulling for help, or are you just trying to get them out of your way? That's evidence as well." > — Roy van Griensven > "If the evidence takes longer than twelve months, forget it. You're out of the game already." > — Roy van Griensven, on how long a new function has to show something > "I wish they would use them more often." > — What Jesse heard from clients at the end of almost every year > "If you're going to be out on the road, then you can be out on the road on your own." > — Jesse's wife, the Saturday morning that started the reassessment > "I think training is necessary. I just don't think it's sufficient to get people to fundamentally change how they think and how they act on a daily basis." > — Jesse Hopps > "It's very human that if you don't build it on intrinsic motivation, if you don't involve people in the change, if you don't let them have a voice, then you're not sustainable." > — Roy van Griensven > "They feel: hey, I'm just working on things that matter and I'm developing. We're not doing a major change program. But if you look back, we're already in a very different position than a year ago." > — Roy van Griensven > "Finally, not consultants — people that have actually done the job as well. They know the good, the bad, the ugly." > — Senior LANXESS leaders on the coaches, relayed by Roy van Griensven #### Transcript ##### Meeting in Detroit Roy van Griensven: I have been with LANXESS a little over a year and a half, leading commercial excellence and also our global business transformations. Before that, a long history with Philips — about seventeen years across healthcare and lighting, in marketing, business development and digital, always in transformational roles — then AkzoNobel, and around five years with Mitsubishi Chemical. Jesse Hopps: We met when you were at Mitsubishi. You were signing off on the contracts I was sending. And we had a meeting in Detroit. What was your understanding of what Demand Metric did at that point? Roy: I remember they said we are going to have Jesse there as well, and my first interpretation was: right, that is the person whose invoices I have been signing off for the tools and templates and playbooks. I saw the practicality of them — we did not have to go to large consulting firms to buy them inside a big program, and people seemed genuinely interested in using them. What I recall is that our discussion did not go at all about a tool or a framework or a template. It evolved very quickly into: but how do you now actually get people to start adopting and working in a different way? How does change and transformation actually happen? I remember going away from Detroit thinking, that is interesting — they are selling us licences for templates, and the dialogue was not about templates at all. ##### The Saturday morning Jesse Hopps: For twenty years we supplied playbooks, tools, templates. And it always bothered me that almost every client at the end of the year would say the same thing: I wish our people would use them more often. Then I started working with Ron, head of marketing globally for Mitsubishi Chemical, doing workshops with these tools. We customized the playbooks. Sessions that were not lectures and theory but getting people to actually develop growth strategies and commit to plans. I did twenty-five or thirty of those. Highly rated. Feedback was good. The company kept investing. I had a personal breaking point when my wife told me one Saturday morning, when I was catching up on email after being away all week — Charlotte, Düsseldorf, wherever. She said: are you going to work all morning? And I said, I just have to catch up, I have been out all week. And she said, this is not what I signed up for. When we decided to live in Canada and I left my family back in Colombia, I was not expecting to raise the girls by myself in a new country. And I said, I feel like I am at the peak of my career. I built this great playbooks business, I am working on transformation with Fortune 500 companies, I need to be on the road. And she said: if you are going to be out on the road, then you can be out on the road on your own. So I had to really think about whether the work I was doing was impactful and meaningful enough to be worth that kind of sacrifice. And in the back of my mind — a lot of workshops and activity were happening, but I did not feel the learning or the change in behavior was taking root. ##### What it looked like from the inside Jesse Hopps: On the inside of that, what was your sense of what was going on? Were people adapting and changing their behavior, or checking boxes and complying with the training? Roy van Griensven: While you are in the middle of it, it is difficult to recognize. But in hindsight, and after more than two decades of these programs, there is a very clear pattern. It always starts with enthusiasm — people like to join the workshop, something new, exciting. What I started to notice is that I never got the feeling this was something that was really going to stick. You get the sense that there is energy, but the energy is because they like being away from their job for two days, or they got to travel to the city, or spend some time with colleagues. The real excitement of — this is what I want to be doing going forward for the coming years — that was never really there. That is the red thread through all of them. High excitement at the start, dropping very quickly after. ##### Where training works, and where it does not Jesse Hopps: I think training is necessary. I just do not think it is sufficient to get people to fundamentally change how they think and act on a daily basis. Would you agree? Roy van Griensven: Training is still valid, but it is very situationally dependent. If you want to bring someone into a job they have never done, there is an element of training that gives them a base level of information. If you are introducing a new product, you can train people on its benefits and value positioning. If people lack certain soft skills, there is an element of training you can provide. I try to keep it simple. Training is what you use if you want to improve something — if there is a base level and you want to lift it slightly. Where it fundamentally misses the point is when you start using training in transformation and change management, because there it is completely off. Training doesn't change anyone. You can't train someone to act very differently. You can't train someone to have a different mindset. You can't train someone to change their beliefs and be intrinsically motivated about something. Jesse Hopps: Look around your commercial organization. How many people would you say are in world-class fitness and health — the ones following the routines any doctor would recommend? It is probably below ten percent. And what is more important to someone than their health? We can train people on diets and exercise routines and what they should do. It does not mean they will do it. There is a reason that if you go and work at McDonald's and have to learn to make the hamburger in thirty seconds, training works. It is a process. You train people to mimic exactly that behavior, no judgment calls, no uncertainty, follow this routine. Training is very effective for that. Transformation means you are fundamentally doing something differently than you are doing now — which means you probably do not have a dialled-in proven process yet. It is open to interpretation, there are judgment calls, new behaviors being tested. Harvard research calls these technical versus adaptive challenges. Technical challenges are where training is good. Adaptive challenges are much more human, where people need to think and act differently. We are misdiagnosing the problem. ##### The head and the heart Roy van Griensven: I realized this working in a Japanese culture and a Japanese company — there is a massive difference between ratio and emotion. You can educate, you can train, you can explain exactly why it is good and why we need to operate differently. I vividly recall conversations with Japanese colleagues where they were nodding and saying: yes, it makes sense. Perfectly. Fully agree. Absolutely, this is what we need to do. And then we say, okay, so let us go tomorrow. No. Why not? Because you touch the head, not the heart. So you have logically explained to me, and rationally I understand this might be the right thing to do, but I do not feel it. I am not comfortable with it yet, and nothing is going to move. That was my biggest epiphany moment. In all Western companies we have designed transformation exactly that way — we are just explaining why it is good for people. And we have not addressed at all whether people feel motivated. The emotion is not there. For technical challenges you can explain with logic: instead of flipping the burger once, do it twice. Okay, I get it. But if you want people to adapt to changes that require interpretation and judgment, where you cannot prescribe how to act — companies put entrepreneurial behavior in their values. What does that mean? You cannot explain that with logic alone. That whole learning made me realize we have our transformations designed completely the wrong way round. Jesse Hopps: Most buying decisions are emotional and justified rationally. I wanted to buy an Aston Martin when I was thirty and my wife was pregnant with our first. I had seen one at a car show in Vancouver when the company was two months old — two hundred calls a day, no money, sleeping on futons in a loft. I told the friend helping me get the business off the ground: one day I am going to buy that car. So the minute I had the resources, I came up with all the justifications. One owner, low kilometres, going to make money on it at some point. Those were not the reasons. I just wanted it. We accept that about buying behavior — and transformation work is getting people to buy new behaviors. ##### Passive resistance by design Jesse Hopps: The traditional doctrine is to explain what is in it for them — not just for the company. Why does that not work? Roy van Griensven: It is very human, and it has nothing to do with a specific culture. Transformations are designed by corporate, with the help of a big consulting firm, which employs people who have never actually done that job. So the moment I am in a commercial role and I am not involved in designing it, it is very human to look at it and think: you are coming to tell me how to do my job without asking me. And you are doing it based on what people tell me who have never done my job — a consultant with three years of experience and a big logo on top of it. You tick certain boxes that trigger a very human resistance. If that resistance is active, you can deal with it, you can have a dialogue. But in most cases it is passive. People say: I know the decisions have been taken, the board and leadership are already there. So me opening my mouth to say I do not agree is a career-limiting comment. So let us not do that. What by default we design in transformation is passive resistance — because we are not involving, we are not asking, we are not engaging the people who actually need to change and do something different. Of course you cannot ask everybody their opinion and come to consensus, and yes, there might be people who do not have a clue how to change. But most companies actually have people who know perfectly well what needs to be done. I do not think there is any big company that only has people with no clue. It is very human that if you do not build it on intrinsic motivation, if you do not involve people in the change, if you do not let them have a voice, then you are not sustainable. That is also why transformations typically have a tipping point in the second year towards the third. The first year is always excitement — people join the workshops. The second year motivation drops: I have seen it now, I do not want to go to the next one. And in the third year the passive resistance turns into: forget about what we were talking about, let us go back to what we have always done. Very typical. Jesse Hopps: And then around that time the leadership changes and they do it all over again. Roy van Griensven: And we start again — because the previous leadership got it wrong. ##### Improvement or transformation Jesse Hopps: You took the role at LANXESS, and you asked the CEO whether he wanted incremental improvement or transformation. But there is a balance between destroying everything that was built before you arrived and being additive. Roy van Griensven: It is not that complex. The content and the scope of commercial excellence is not different across companies or industries — it is always the same topics. It is always a balance between getting some quick evidence of impact, which you typically address in pricing because that is where you see the immediate effect, and then the fundamental things that might be missing. Customer segmentation not in place, so you cannot differentiate or reallocate resources. Capability gaps — we are not good yet at hunting for new customers, or at value selling. How much of each varies; the topics are always more or less the same. So blowing up what is there does not make sense at all, because it is the same agenda anyway. What matters tactically is focused acceleration of evidence of impact, quickly, because that builds credibility and buys you time. It buys time for people to trust that we have seen evidence already, so let us give it a bit longer for the next evidence to come. If that evidence takes longer than twelve months, forget it. You are out of the game already. And what counts as evidence depends on what the company wants. If we install commercial excellence because we need improvement, it is going to be about top line and bottom line — EBITDA, growth rate, conversion rate in the pipeline, cost of sales. If the answer is that we need to fundamentally transform, then the top and bottom line say far less about whether you are actually transforming. Then the dialogue has to be about what gives evidence, what builds trust that we are sustainably changing — and whether the board believes those things, if they happen, would unlock sustainable growth. Jesse Hopps: It is like getting on the scale every day. If you are trying to transform your body, weight is not the right measurement — you might be gaining muscle while you are leaning out. Focus on the process, not the outcome. Am I walking ten thousand steps? Am I reducing my stress? Those are the leading indicators. ##### Credit, contribution, and pull Jesse Hopps: Let us talk about credit, because this is a paradox in commercial excellence. The business units usually fund the function, so who takes credit for the wins? I get leaders who say we cannot invest in a program unless there is proof it will make this impact over here. How do you think about giving credit versus justifying the investment? Roy van Griensven: Very simple. The only place where you can claim credit is where the P&L is. Unless you have a commercial excellence P&L — and in most cases you do not, because that is not where the profit is made — you can never claim a specific amount. What works is servant leadership. It is not about you as a commercial excellence leader claiming credit. It is the businesses that need to be able to show they are improving. And on causation or correlation, for me there is only one word: contribution. The moment you have a dialogue with business unit leaders and ask what we can contribute so you get as close as possible to your target, and they say — these are the three things I need help with — they are perfectly happy afterwards to say we reached this, we had this win, through our collaboration and the contribution of what these people did. From experience that is far better evidence of credit and credibility for a board, a CEO or a CFO than anything you artificially create in KPI reports. Otherwise it leads to: great, you are claiming this amount, but I do not see it in the P&L. It is very easy to do a project and report that you measured the KPI, and in most cases a business unit head or a CFO will sign off on the number just so you get out of the way and they can go back to what they always did. It is far more credible when they say: here is evidence of things that have transformed us, because now we are doing things we were never able to do before. Jesse Hopps: This is contrarian, because a lot of commercial excellence leaders feel that without clear attribution they get viewed as a cost center. Marketing has lived with that for twenty years. Roy van Griensven: I do not know how many billions have been spent calculating marketing ROI. What is more important? The sales leader saying: can we please not cut the marketing budget, because what they are doing is so much helping us reach our goals. That is far more credible than any marketing ROI calculation. If the sales leader is not buying into the number, people still do not believe it. I am not saying you should not measure. If you do growth account management, monitor whether you are actually growing with the accounts you identified as having potential. But it is not to deduct a number that links to my personal contribution — it still goes into the P&L of the businesses. And the best evidence for a board is pull. If the businesses are asking, can you help me, because I have a target I need to reach — that is evidence. The moment the board looks at their business leaders and says, are you pulling for help, or are you just trying to get them out of your way? That is evidence as well. ##### The three constraints, and the model Jesse Hopps: When you got the role at LANXESS you called and said you had an upskilling program and needed content and facilitation. I accepted the contract — and then I had a conversation with my wife, and she said, does that mean you are going to be gone for the next two years? And I said no. But we had to find a better way to drive behavioral change that would stick. You set the constraints. One: whatever it is, intrinsic motivation is the main principle. Two: no one-size-fits-all off-the-shelf playbooks — the program has to be adapted to each business unit, their maturity, what they see as their priorities. Three: do not lecture about what should happen in a perfect world, facilitate reflection. Those were the three you gave me, and I had no idea how to solve for them. So we talked to Kurt Friedmann about how adults actually learn, and to Dr. Paul Stoltz about adversity quotient and grit — how to get people harnessing adversity rather than seeing difficulty as a threat. And you ended up with the model the Academy runs on: mindset, skillset, toolset. How did you arrive at that? Roy van Griensven: LANXESS already had the idea that we needed to build capabilities and do training — which is good. But the traditional model of lecturing at people was not going to work. It goes back to needing to build the foundation of adaptive capacity first. In very simple terms, that is what is missing if a person is unable and unwilling and not ready to take on anything new. By addressing the mindset you open people up — I do not have to be a victim of Chinese material being dumped, of difficult market circumstances. There is still something I can influence, something I can do to change the situation. If you do not start there, nothing you give people in terms of skillset and toolset is going to stick. Jesse Hopps: The real problem was never providing the right information or the right tools. It was getting people to want to do new things and stick to them. Which meant forming new habits — and most people are terrible at forming habits or breaking bad ones. Habits come from beliefs. Your thoughts shape your actions, your actions shape your habits, your habits shape your character. So how do you fix the thoughts part? Roy van Griensven: In corporate organizations where people have been around a long time, they have seen things come by a few times, they have tried it, they have seen it fail. At a certain point they get stuck. They recognize the same pattern and think: we have tried this three times before, it will not work. There is massive potential in any corporate organization to get less stuck. If a percentage of people stop stopping — not saying here we failed last time so we will not continue, but instead, does it have to be the place where I get stuck, or is there something else I can do — that is enormous. And the better people understand why they get stuck and that they do not have to, the more optimism there is about what is possible, and the more likely it is that something really changes. ##### The four factors, and a company not used to change Jesse Hopps: We found a McKinsey Health Institute paper on adaptive leadership. Four factors converging: psychological safety, organizational support, resilience and adaptability — and where they came together, roughly six times the innovation and engagement. Two of them a company can influence directly. But how do you make someone more adaptable? I had no idea how to answer that. And the research said around seventy-seven percent of people do not feel highly resilient and adaptable — while you are the change guy with dozens of projects running. How did you react to that? Roy van Griensven: Two conflicting thoughts. First, in a German chemical industry organization that is not used to any form of change because it never really had to — not because of bad people, it was simply never required — if it has not been necessary for thirty years, it is very difficult to suddenly start. That worried me. On the other hand, another thought kept running: it is actually not that difficult. Because if you break it down to any individual — if I am just being asked, and I get some support to deal with the biggest challenge I have in my day-to-day job, and I am genuinely asked, then all of a sudden it is not change. You are not being forced to change. You are not being transformed. People respond with: finally, someone is listening to me and asking my opinion. And by the way, I also get support. So the only thing required is making sure that what people say needs to change is going in a direction that helps the company's strategy. ##### Skillset: real work, coached Jesse Hopps: My daughters are gymnasts. They cannot go to a weekend workshop and learn a back tuck — it is months of failure and practice and watching the film. Getting an organization to sell on value rather than price is the commercial equivalent. Why project-based learning with on-the-job coaching? Roy van Griensven: A combination of factors. The seventy-twenty-ten logic has been there for decades — roughly seventy percent of learning comes from applying it in your daily job — and we still put most of the effort into the ten percent at the front, teaching the concepts. So I was well past the point of thinking it had to be tangible and applied on the job. The second thing is human behavior and the fact that one-size-fits-all does not work. If you have a hundred commercial people, they are all individual human beings with their own place in their career, their own experience, ambitions, development needs and characters. It is impossible to design one training that fits everyone. So instead we guide. If we say we feel these four or five capabilities are going to be critically important for LANXESS in future — do you agree? — then ninety-nine or a hundred percent say yes. It is not offensive; it does not say you do a bad job. It just asks whether we agree these are the things that matter going forward. That frames the space within which we talk about building capabilities. Then the fundamental thing is intrinsic motivation. Pushing someone into applying a capability they see no value in, do not recognize and feel no need for will not work. If you tell your daughter you want her to do a backflip, how well is that going to work? So you let people select the one thing that matters most to them, tie it back to them being successful individually, and if individuals succeed, that accumulates into company performance. The controversial part is that the sum of that means certain capabilities rise faster in some areas than others. That is a fundamental design problem corporate organizations have — we want to raise the bar at everything at the same speed and the same level. I have not seen a single company homogeneous enough for that to be true. It is uncomfortable, because you are not controlling and telling people what to do, you let them choose. But as long as it sits within the guidance of what matters for the future, over time capabilities rise across the board. And it would be interesting to ask people whether they feel they are being changed today. I do not think that is the case. They feel: I am just working on things that matter and I am developing, we are not doing a major change program, nobody is forcing us to transform. But if you look back, we are already in a very different position than a year ago. ##### Growth Projects and the coaching Jesse Hopps: We called them Growth Projects for two reasons — grow the business, grow your own skills. General Electric did project-based work at Crotonville; a lot of Six Sigma is project-based. When you do something you retain it; when you teach it you retain most of it; when you are told something you forget ninety percent within a week. How does the Growth Project mechanism build those four factors? Roy van Griensven: It fits like a puzzle piece, and we did not design it to tick the four boxes. We bring people into a safe environment where we ask for their personal motivation. They reflect and share and talk without leadership in the room. They choose the one topic they want to work on with coaching, without anyone telling them what it should be, and without needing permission from their boss or their boss's boss. We got that question many times in the first cohorts and not any more, because people recognized it is a safe environment where they can genuinely select what they think is needed. Safety, checked. Organizational support — we had to re-emphasize that you determine your ambition level and what you need. If you can run your Growth Project on your own, nobody is going to force help on you. But we are here with coaches, with commercial excellence resources, with tools. The moment you need it, we will make sure it is provided. Resilience is the part we designed in with Dr. Paul Stoltz. Every project over ninety days reached a moment where someone said: maybe we need to stop here, we are getting stuck, we are running into an obstacle. Every project. And that is where the coaching on how do you continue, does it have to stop here, what is the one thing you can still do — that was a recurring topic. Jesse Hopps: How is this coaching different from most coaching? Roy van Griensven: Good coaching does not provide the answer, it guides the person to find it. As Dr. Paul says: do not give fish, teach people how to fish. What people have given feedback on is that this is not coaching that tells them how to do their job differently. It gives them the insight themselves about how they can structurally and sustainably progress. And there is a super important side effect we have hardly spoken about. A lot of people come back and say the coaching is not just helping them professionally — it is helping them deal with tough things in their personal life. We have had people say thanks, it is interesting that the company is helping me as a person, not just as a professional. First time they have seen it. That was not the intention upfront, but it is a nice one. ##### What moved, and what convinced the board Jesse Hopps: We measured adaptive capacity before and after, and the average improvement was around fifteen percent. How would you describe the value of that? Roy van Griensven: Think about the simple logic. If we explain to any board member, CEO or CFO: do we believe there is substantial and sustainable value if, in fifteen percent of the cases where people typically get stuck — lose a customer, stop, give up — we are not stopping, we are not giving up, we are finding a solution? In fifteen percent of cases that occur every day. Any board member will say that is massive, because in a company of ten, twenty, a hundred thousand employees you have at least one problem per person per day. More than one. Can you attribute a top line or bottom line result to AQ? Of course not. But if you ask whether it had a substantial contribution — if we get unstuck in fifteen percent of everyday cases — the answer is that is massive. Jesse Hopps: What will actually be in the hallways before and after your board presentation? What are the visible signals? Roy van Griensven: People in board positions look at credible anecdotal evidence from people they know to be trustworthy and typically also critical. You can put the fifteen percent up as a number and it sounds good. The credibility comes the moment someone everybody knows to be incredibly critical of any form of change says that through going through the Academy, we solved something in our Growth Project that we have never been able to solve before in the last twenty years of this company. That happened. ##### Toolset: pull instead of push Roy van Griensven: As a company we never really had to operate as one company. We had nine business units running perfectly well on their own — even encouraged to. So sharing information across business units was never really possible, and on top of that our data structures and system landscape were decentralized. Ask a sales or marketing person whether they have access to information about a customer that sits in another business unit or another system, and the answer is usually no. The visit reports for that account are visible only to the person in that business unit. I can see my own pipeline in CRM. But I do not know the payment terms — and by the way, some customers are also suppliers, so procurement has all the supplier information about the same company, and as a salesperson I have no idea what is being discussed on the supply side. So one of the Growth Projects ended up saying: by account, we now have the full set of information. Not designed by someone in headquarters, not by a consultant, but by a sales and a marketing person saying this is the information I need to do my job. They created it. They built the dashboard themselves and pulled the different data sources together. Zero resistance on adoption, because nobody told them this is the information you need to use. They were able to say: I need all of these information sets. The organizational support required was telling the people who control the databases that if this group comes with a request, give them the information. They presented it, and the leadership team said it makes perfect sense — make it available to everyone. Every sales and marketing person had thought we were never going to get to that point, because there were always a thousand reasons why it was not possible. Now they are knocking on the door asking to use it. We do not need a deployment program with training on how to use a dashboard, because they are asking for it. Jesse Hopps: How did you create pull for tools rather than pushing them at people? Why is toolset last in the sequence rather than first? Roy van Griensven: Because if you follow mindset first and skillset second, the pull and the request for tools always comes. And if you guide and coach it properly, you arrive at standardization and harmonization naturally. Across the Growth Projects so far, at least ten have been about getting a handle on the opportunity pipeline. In ninety-nine cases out of a hundred the response would be: let us implement CRM. So by default we said we take that away. We are not going to talk about implementing CRM, we are not going to touch it in these projects. Take a piece of paper, take a spreadsheet, build a dashboard — first work out what you actually need, and install a way of working that supports you in managing your opportunities better. And throughout the projects they all arrive at a point of saying: we have done this in a spreadsheet, and maybe we should implement the system, because managing this across a team on spreadsheets is getting cumbersome. So they are asking. And because of the guidance, they also say: the challenge is that we looked at what we need from my business perspective, so it might be very specific to my business unit. We have nine business units across four different business models. And ninety percent of what they arrive at, of what they need from a CRM system, is exactly the same. Instead of someone designing a one-size-fits-all system, people realize that what they defined themselves is ninety percent the same, and the ten percent can be business specific. The more important thing is that they are asking now. Our problem is that we cannot give them the CRM quickly enough — they keep asking when it will be done, because they had to fill in the spreadsheet manually again this month. ##### How lean the requirements got Jesse Hopps: Every company massively over-engineers what it wants to collect. I stand up for the field — nobody can fill a hundred and twenty-seven fields after every customer meeting. How lean was the core set that cut across all the business units? Roy van Griensven: The default problem is that you cannot design a CRM by looking at what people who are not in a sales job want to know from sales. That creates complexity. In all honesty these discussions typically start with: we only need five fields. Fine, let us start there. But it is very tempting to then say, yes, but you also need these fifteen. The good thing is that in a process of coaching by question, you ask: we do this so that it helps you steer the business you are responsible for. So is it relevant for you to understand how many opportunities you have in a given market segment, where you know there is growth potential? Maybe the first answer is no, I do not need to know it. Fine, then we do not include it. Typically they arrive later at the point that maybe it is relevant. Win-loss reason — if I have lost a deal, why would I bother filling that in? People need to uncover for themselves that it is actually helpful to have a deliberate review once a month and ask why we are losing these types of deals every time. But you have to be comfortable letting them discover that, and you guide it by asking whether this is a question that is typically relevant to managing their business. One thing we have not spoken about is the inspire element, which is deliberate. We provide people with practical examples of how other companies deal with the opportunity pipeline — not saying we need to do it that way, just sharing for inspiration. We have a commodity chemical business that never had to do pipeline management, because there was always a queue of customers, a handful of them, known inside out on long-term contracts. That is very different today, with capacity not fully filled. So they are interested in how other companies actually do it. We give examples, and they pull in what is relevant. ##### Presenting, and what transfers Jesse Hopps: The regional operating committees review the results of these ninety-day projects. How does knowing they will present to senior leaders land — as a threat, or as an avenue? Roy van Griensven: It has evolved. In the first cohorts we designed it that way: remember, you do a presentation, prepare for where you need help if you want to scale this, take it seriously because people are going to look at it. We did that by design. If I look at the Growth Projects today, they do not require it at all, because they are dealing with the obstacles they run into during the project. We do not design that they need to present to senior leadership any more. Now they ask whether we can organize it, because they want to give visibility to what they achieved. They are proud of it. Jesse Hopps: For the cohort of very senior leaders, you made presenting optional. What happened? Roy van Griensven: They all presented. And their presentations were better than the ones where we had told them they had to. Because they were intrinsically motivated about the topics they were working on, and they felt proud of what they achieved. They want to expose the fact that they found a breakthrough. They want to talk about it and share it with colleagues. Jesse Hopps: Which is about the opposite of passive resistance — excitement to share wins. Any last thought for anyone listening? Roy van Griensven: There is no one-size-fits-all. It is always situationally dependent: where the company is, the context, the performance, the type of leadership, what has been done before. But on design principles, this applies to every company. First, establish whether the company is actually interested in improvement or transformation. If transformation, design it around creating adaptive capacity and intrinsic motivation, which means involving the people. How you do that can differ a lot with company culture. The principles are very much the same. And the credibility of the coaches is perceived very differently. I have reflections from very senior leaders in our company who say: finally, not consultants — people who have actually done the job as well. They know the good, the bad and the ugly. They understand the challenges, and they are actually helping to solve real everyday problems. --- ### Eliminating Resistance with Roy van Griensven https://commercialexcellenceconsortium.com/podcast/eliminating-resistance-with-roy-van-griensven Why top-down transformations fall short, and the servant-leadership alternative that lasts. Topics: passive resistance, intrinsic motivation, self-determination theory, ADKAR, structured autonomy, servant leadership, operator-coaches, leading vs. lagging indicators, adaptive capacity #### Summary Roy van Griensven has watched the standard transformation playbook run for two decades: a big firm, a nine-figure value case, a program leader hired from the same firm, and two to three years of process, tools, data and training. His verdict on the content is that it is usually right. His verdict on the execution is the reason for this conversation. He and Jesse Hopps take apart what goes wrong between a correct plan and a company that behaves differently: the credibility gap when someone who has not done the job explains the job, the Desire stage that gets answered with messaging, and what "we interviewed stakeholders" tends to mean once the plan is already signed off. The alternative he built runs on intrinsic motivation rather than mandate. A menu of capabilities instead of one program, leading indicators instead of the lagging number, ninety-day projects people opt into, and a rule about the CRM that sounds backwards until you see what it produces. It closes on what he would say to a board that was told the people resisted. #### Key points - The standard playbook described from the inside: a big firm, a nine-figure value case, a program leader hired from the same firm, and two to three years of process, tools, data and restructure. - Why the content is usually right, and why execution is where the spend goes. - The credibility gap: a senior partner who has not held the accountability, then juniors who have never done the job, explaining the job to the person doing it. - Why the message lands as "you did this badly" when the truth is that the environment moved. - Where ADKAR's Desire stage runs short, and why explaining the benefit from the company's point of view is not the same as asking. - What "we interviewed stakeholders" usually means once the plan is already signed off, and why barely acting on the answers costs more than not asking. - Stakeholder mapping used to locate resisters, then to change their minds about a plan they had no part in. - Extrinsic against intrinsic motivation, and the test Roy applies: what survives the next leader. - The menu card instead of one program, and why different business units working on different topics is the design rather than a failure of it. - Leading indicators over the lagging number, and how to have that conversation with a board that has to speak to investors. - Adaptive capacity translated out of HR language: how much less stuck the company could be. - How a safe room is built, why it takes more than one session, and why it does not survive being faked. - Ninety-day projects with operator-coaches, and why taking one is optional. - The CRM rule that sounds backwards: no system until the team asks for it. - What the approach costs, against a consulting bill it can cut by seventy to eighty percent. - What Roy would do if he told a board that the people resisted the change. #### Definitions - **Passive resistance** — People nod and agree in the meeting, then go back to what they were doing the next day. It is social rather than instrumental: the objection is seldom voiced and rarely escalated, which is what makes it hard to see and hard to argue with. - **Transformation theater** — Jesse's term for the visible half of a program running while the underlying behavior stays put. A great deal of activity, people agreeing on the surface, selective adoption underneath, and earnings that do not move the way the case said they would. - **The credibility gap** — Roy's account of why advice bounces off. A senior partner may have seen many companies without ever having been accountable for the job, and the juniors who arrive for execution have not done it at all. Being told how to run supply chain, operations or sales by someone who has never run them is what turns a correct plan into an argument. - **The Desire gap** — Where ADKAR asks for desire and a program supplies messaging. Companies explain why the change is good for their people from the company's point of view, and stop short of asking what those people think needs to happen. Awareness is what messaging reliably produces. Desire comes from somewhere else. - **Consulted versus genuinely asked** — The distinction Roy draws when challenged on stakeholder interviews. Consulted means the approach is decided and the question is whether you have feedback on it. Genuinely asked means the answer can change what happens. The second is harder, because it creates the problem of what to do when someone proposes something different from the plan the board already signed. - **Extrinsic vs. intrinsic motivation** — Extrinsic motivation is incentives, mandates, hierarchy and fear of speaking up. It works, and it is short-term: it has to be funded and watched. Intrinsic motivation is a person believing the thing is worth doing. Roy's test is what happens when a new leader arrives with a new set of ideas. - **Self-determination theory** — The three psychological needs behind intrinsic motivation: autonomy, competence and relatedness. People choose, people feel capable, and the work connects to their daily job and the people around them. Jesse's argument is that a top-down transformation tends to violate all three at once. - **The menu card** — Rather than one program deployed everywhere, the center names the twenty or so capabilities that would matter if a company did all of them well, and each business unit picks the two or three that matter to them now. Different units working on different topics is the point, because business models, maturity and context genuinely differ. - **Academically correct, practically irrelevant** — Roy's phrase for a finding that is true and useless. Twenty capability gaps can all be real without all twenty being relevant to a given business unit this quarter. Treating the full list as equally urgent everywhere is what produces resistance that looks like unreasonableness. - **Leading vs. lagging indicators** — The lagging indicator is the number in the strategy. Leading indicators are the movements that show the work is changing something: pipeline value in the early stages, conversion from one stage to the next. Roy's argument is that managing on the lagging number tells you quarterly how far short you still are, which is neither steerable nor motivating. - **Adaptive capacity** — How well an organization absorbs change and keeps moving. Roy's translation out of HR language is the one that works in a boardroom: being stuck is the symptom of not having it, and no board will refuse the question of whether getting less stuck would raise their chances of hitting the target. - **Inspire, reflect, apply** — The three-part method. Inspire is direction plus examples of what others have done, offered as stimulus rather than instruction. Reflect is a peer-level room where people work out what matters in their own job. Apply is a ninety-day piece of real work with a coach attached. - **Servant leadership (in a transformation)** — Leading by asking what people need and then being accountable for supplying it, rather than by directing activity. The company owns where it has to get to; how it gets there is open. The cost to the leader is control over what gets worked on next. - **Operator-coach** — Someone who has held the bag in the industry: a former general manager or head of sales rather than a career consultant. They can be challenged on the hard case and answer from experience, they do not sugarcoat why a plan will be difficult, and they have no interest in selling more hours. - **Structured autonomy** — Where the company has to get to is given and not up for negotiation. How it gets there belongs to the people doing the work, inside guidance rather than instruction. Roy's version is guided discovery: you do not tell people what to do, and you do guide the direction. #### Questions this answers ##### What is the standard transformation playbook, and where does it come from? A large company hears from markets, analysts or its own numbers that it is short of its potential, hires a big consulting firm, and receives a plan that lands well on paper with a nine-figure value case attached. The firm typically supplies the program leader too. What follows is two to three years of process work, tool work, data cleanup, training and some restructuring. ##### Is the consulting plan itself wrong? Roy's position is that it is usually correct. The value potential is real, the processes named are genuinely inefficient, the structures are genuinely misaligned and the objectives genuinely are not connected. The problem is not the content. It is what happens when someone tries to execute it. ##### So why do most transformations fall short? Because people are not good at being told what to do, and because of who does the telling. The plan arrives as an instruction from someone with no accountability for the result, and the first human response to being told you did a poor job is defense. Most of the time the message is wrong anyway: the environment changed, which calls for something different rather than something better. ##### What is the credibility gap? A senior partner may have seen many companies without having been accountable for running one, and the juniors who arrive for execution have not done the job at all. Being told how to run supply chain, operations or sales by someone who has never run them gives people a reason to reject the message, and they will find one. ##### Why does telling someone the environment changed work better than telling them to improve? Because it is usually the accurate account and it removes the accusation. In most companies that need a transformation, people did not do a bad job; the conditions moved and something different is now required. Saying so keeps their record intact, which is what makes the next sentence hearable. ##### What is passive resistance? People nod and agree in the meeting, then go back to what they were doing the next day. The objection is seldom voiced and rarely escalated. Roy's point is that the people doing it often want the change and agree the opportunity is real; what triggers the response is how it was delivered. ##### What is transformation theater? Jesse's term for the visible half of a program running while behavior stays put. Town halls, webcasts, live streams, high participation, people agreeing on the surface, selective adoption underneath, and earnings that do not move the way the case said they would. ##### What does someone outside headquarters experience? Roy's version: I have seen all the webcasts, all the live streams and all the town halls, my day-to-day job has not changed at all, I do not understand how this helps me, and nobody has asked me in eighteen months what I think or how I could contribute. ##### What is ADKAR and is Roy arguing against it? ADKAR is the change-management model most large enterprises run on, from Prosci: Awareness, Desire, Knowledge, Ability, Reinforcement. He is not arguing against it. His words are that the whole thing makes sense and there is nothing wrong with it. His argument concerns one stage that tends to be under-served in practice. ##### Which stage of ADKAR falls short in practice? Desire. Companies explain the burning platform, then explain why the change is good for their people, but from the company's point of view rather than the individual's. Roy's example of what few companies say out loud: this will develop you and make you far more employable anywhere. No company says that, because it wants to keep its talent. ##### What is missing after the explanation? The question. Roy says he has hardly seen a company genuinely ask its people what they think needs to happen to get the company where it needs to be. Explaining why someone should want something is a different act from asking them what they would do. ##### Companies do run stakeholder interviews. What's the difference? Timing and consequence. The interview usually happens after the approach is decided, and the question is whether you have feedback or concerns. Speaking against a plan the board and the leadership have already signed is not a realistic option, so the answers come back agreeable. ##### What happens when someone does give a genuinely different answer? That is the hard case, and Roy names it directly: now a person is proposing something other than what the consultants said to do, and the company has to decide whether to change the approach. Mostly it barely acts on the input, and the credibility loss from asking and not listening is worse than not asking at all. ##### How is stakeholder mapping typically used? To identify who is resisting, and then to work out how to change their minds so they get on board with the plan. Roy's objection is the loop inside it: those people are resisting a plan they had no chance to shape, they were asked for ideas, and the moment their idea differed they were treated as wrong by default. ##### Isn't the person who objects in the town hall just a detractor? Jesse's read, which Roy agrees with, is the opposite: that is often the person who cares most and can see the plan is not practical. Treating them as a detractor loses the most useful signal in the room, and everyone watching learns what objecting costs. ##### What is the difference between extrinsic and intrinsic motivation here? Extrinsic motivation is incentives, hierarchy, career calculation and reluctance to speak up. It works, and it is short-term. Intrinsic motivation is a person believing the thing is worth doing. Roy's framing is that with the first you have to chase people, and with the second they bring you ideas you did not ask for. ##### What is Roy's test for whether motivation is real? What survives the next leader. Extrinsic motivation might work for three, twelve or twenty-four months, and then a new leader arrives with a new set of ideas. His question is what you do after, and intrinsic motivation is the answer that does not need to keep being paid for. ##### What is self-determination theory and how does it apply? Three psychological needs sit behind intrinsic motivation: autonomy, competence and relatedness. People choose, people feel capable of something challenging but reachable, and the work connects to their daily job and the people around them. Jesse's argument is that a top-down transformation tends to violate all three at once. ##### How does a top-down program violate all three? Autonomy goes when people are consulted rather than involved in the design. Competence goes when the ask is either far beyond reach or well beneath their expertise. Relatedness goes when people struggle to see how their day-to-day work changes, and when the peers and bosses around them are visibly not going along with it either. ##### Can you use the same playbook and get a different result? Yes, and Roy is specific that you often should. The same content, the same framework, the same examples, delivered as inspiration rather than instruction, with the question of how it applies to their own job left open. His experience is that the outcome is usually the same one the consultants recommended, and it is now their idea. ##### What is the menu card approach? Instead of one program deployed everywhere, the center names the twenty or so capabilities that would matter if the company did all of them well, and each business unit picks the two or three that matter to them now. Different units then work on different topics, which is the design rather than a failure of it. ##### Does that break the one-company principle? Where the company has to get to stays one thing and is not up for negotiation. What varies is the route. Business units differ in business model, maturity and context, and Roy's argument is that insisting they do not is what produces the resistance leaders then complain about. ##### Who chooses the capabilities? The heads of the business units, on the grounds that they are the ones accountable at the end of the quarter and the end of the year for their unit's results. The question put to them is which of the capabilities matter most right now in order to start seeing progress. ##### What does "academically correct but practically irrelevant" mean? Roy's phrase for a finding that is true and useless. It is academically correct that twenty capability gaps exist. It does not follow that all twenty are practically relevant today to any given business unit, and treating the whole list as equally urgent everywhere is what makes a correct diagnosis unusable. ##### Why manage on leading indicators instead of the target? Because the lagging number tells you quarterly how far short you still are, which is neither steerable nor motivating. Leading indicators show the work is changing something: pipeline value rising in the early stages, conversion from stage one to two up ten percent. Progress is visible while the outcome is still distant. ##### How do you get a board to accept progress instead of results? By being straight that they still own the outcome and by supplying something they can steer with. Roy's point is that markets move on visible momentum rather than on whether a five-year number landed, and that leading indicators produce a different quarterly conversation: how far have we moved, is it enough, where do we steer next. It requires an agreed link between the leading indicators and the outcome. ##### What goes wrong when a board manages only on the lagging number? Roy is blunt: in a lot of cases numbers get fabricated. If the quarter needs a hundred and twenty, orders get pulled forward so the quarter shows a hundred and twenty. The behavior that follows is a reaction to what is being measured rather than a failure of character. ##### Is adaptive capacity a real board metric or an HR concept? Roy's answer is that a direct claim will fail and the qualitative version will land. No CFO will accept that adaptive capacity translates into a specific EBITDA figure. But he estimates nine out of ten boards would say the company is somewhat stuck, and being stuck is the symptom of not having adaptive capacity. ##### How do you frame adaptive capacity so a board engages with it? As getting unstuck. Ask any board member whether being able to move past problems faster would raise the likelihood of reaching the target, and Roy's estimate is that a hundred out of a hundred say yes. The framing is not that people need to be made more adaptable; it is that the company needs to stop being stuck. ##### Why does an individual rarely say they are the one who is stuck? Because the honest first answer tends to be external: another function did not help, someone else is not doing their job, or it is China, overcapacity, tariffs. Roy accepts that and works around it. Telling someone to get unstuck does not work; the way in is the company owning that it has not equipped them well enough, and then asking what needs to happen. ##### Why does the leader take the blame first? Because it opens the door. Roy's opening move is to say the company may not have done the best job of enabling people to do what they need to do, so let us talk about it. It removes the accusation from the room, and it is usually accurate. ##### What makes a room psychologically safe, in practice? Peer level, whatever the hierarchy of the people in it, and consistency over time. People need to see that ideas they raised were acted on, that what they said did not come back at them, and that others had the same experience. It arrives across sessions rather than in one, and it does not survive being faked. ##### How is that different from a town hall? A town hall is one-way. Information is sent, and questions are invited in a setting where disagreeing publicly with a plan the company has committed to is a career risk. The reflect session inverts both: nothing is being sent, and the point of the room is what the people in it think. ##### What is inspire, reflect, apply? Inspire is direction plus examples of what other companies have done, offered explicitly as stimulus rather than as the answer. Reflect is a peer-level room where people work out what matters in their own job. Apply is a ninety-day piece of real work with an experienced coach attached. ##### Where do the projects come from? From the people doing the work, with light guidance from the inspire and reflect stages about which topics matter to the company. Taking one is optional: the offer is ninety days of help from credible coaches on a real problem, and if someone says there is nothing there they need, that is an acceptable answer. ##### Who takes part? All levels and all roles, from senior leaders through mid-level management to the front office. The peer-level rule in the room applies regardless of the hierarchy of the people sitting in it. ##### Why not push the CRM rollout directly? Because no company's actual objective is to implement a CRM. The objective is a fuller pipeline, more opportunities and a better conversion rate. Roy would rather a team that has never managed a pipeline start prioritizing opportunities on paper, because after a while they come and ask whether this could be done in a tool. ##### Isn't paper a waste of time when the system already exists? It costs time and buys adoption. Everyone accepts that paper stops working at some scale. The difference is whether the system arrives as a requirement or as an answer to a request, and Roy's experience is that the request produces adoption the requirement does not. ##### Why do CRM implementations designed centrally struggle? Because the wrong people design them. The specification comes from those observing and monitoring the work rather than from those doing it. Fields, stages and terminology get settled by people who will not use them, and the people who will are then trained on the result. ##### How does attitude to the system's flaws change when a team designs it? Completely, on Roy's account. Handed a predefined design, the human reaction is to look for what to disagree with. Having defined it themselves, a request to rename a field from potential to prospect is met with a shrug, because the terminology was not the point. ##### Does letting units design their own approach create chaos? It is the fear that drives standardization, and Roy's read is that the board does not care much about the standard, it cares about the outcome. Standardize-then-roll-out is a way to hold on to something controllable. He also puts the number at around eighty percent of people already knowing what needs to be done. ##### What if a team wants to do something genuinely wrong? You guide rather than instruct, and you use the peers. If eight of ten have the right idea, the eight can usually convince the other two, and that carries more weight than one person telling all ten what to do. Guiding the direction is part of the job; specifying the method is not. ##### Does this survive a change of leadership? Partly, and Roy will not overclaim it. Visible progress protects it: a new leader looking at something that is demonstrably moving tends to conclude it is not their biggest problem to solve. It still requires leadership behavior, because after a bad quarter the pressure to change course arrives and someone has to hold the line. ##### Is the approach specific to chemicals, or to this company? Roy's answer is that the logic is universal and the application is situational. Having worked across industries and companies, he believes the principles carry. What varies is context: how much convincing is needed, whether middle management is the constraint, and whether you are at the start of a transformation or in the middle of a failing one. ##### What does it cost compared with the conventional approach? Less. Roy's estimate is that a company can cut consulting spend by seventy to eighty percent by using its own people differently. You may still want a large firm for part of the strategy. Executing it is where the cost falls, because what you mainly need is operator-coaches rather than a program staffed by juniors. ##### What makes an operator-coach different from a consultant? They have held the bag in the industry: general managers, heads of sales, people who have done the job at a senior level. They understand why the plan is hard and do not sugarcoat it, and they have no interest in selling more hours. Roy names credibility as the thing that matters most. ##### What should a leader say to a board when results fall short? Not that the people resisted or could not execute. Roy's answer is unambiguous: if he said that, in all honesty, he would fire himself. He does not accept that people do not want to change; what varies is how they were involved and how they were motivated. ##### What about people who genuinely will not engage? He allows for them and puts them in the exception column, sometimes with something going on outside work. The majority, in his account, have no problem with change. The problem is how the change is brought to them rather than how they are involved in it. ##### What should a commercial excellence leader do on arriving in the role? Accept the value potential and the strategy rather than relitigating them: agree that is where the company needs to go. Then open the question of how it gets there, because that is the part the standard playbook settles centrally and the part where the result is decided. ##### What does he tell a board that wants the traditional approach anyway? That he will not guarantee the objectives, because too many factors sit outside anyone's control, and that he will stand behind the approach he believes raises the odds. And that if the board wants it done the classical way, he is probably not the right person. He is explicit that a leader should be mentally prepared for that answer. ##### What is the first thing that has to change? The leader. Roy's account of arriving is that people told him he was the fourth person to come in saying this. What shifted it was two statements: it is not you, the environment changed, and the first thing I am going to change is how we approach this. That is what generates enough accountability for people to give it a chance. ##### What is the argument in one sentence? People do not resist change; they resist the feeling that someone is trying to change them, so the work of a leader is engineering the conditions in which adaptation happens rather than forcing it. #### Quotations > "If I would say that, in all honesty, I would fire myself." > — Roy van Griensven, asked what a board should make of a leader who says the people resisted > "I fundamentally disagree and don't buy into the fact that people don't want to change. It's just the way you get people involved, how you get them motivated." > — Roy van Griensven > "It's academically correct but in a lot of cases practically irrelevant." > — Roy van Griensven, on a list of twenty capability gaps > "Stuck is the symptom of not having the adaptive capacity." > — Roy van Griensven > "In Japan, people start moving not when you touch the head but when you touch the heart." > — Roy van Griensven > "Extrinsic motivation is never sustainable. It might work for three months, twelve months, twenty-four months. And what do you do after?" > — Roy van Griensven > "The change doesn't happen through a board. It happens through the people itself." > — Roy van Griensven > "You can't fake your way through this. Fake it until you make it doesn't work in this case." > — Roy van Griensven, on building a room people will speak in > "You might even use the same content, the same playbook, the same framework. The difference is it's their idea. They came up with it." > — Roy van Griensven > "If you want to talk to a supply chain guy, a lady in operations, in sales, and you're talking to someone that is telling you how to do your job that has never done that job before, that's a huge credibility gap." > — Roy van Griensven > "Does any of the board members care about the adoption rate of the system? When they can also trade that for a ten percent increase in our conversion rate." > — Roy van Griensven > "The first change I will do is by changing what we're going to do and how we approach this." > — Roy van Griensven, on the leader moving first > "You're engineering the conditions for adaptation to occur naturally, as opposed to trying to force change on people." > — Jesse Hopps > "Talk is cheap. You've got to demonstrate consistency." > — Jesse Hopps > "People don't really resist change. They resist the feeling that someone's trying to change them." > — Jesse Hopps #### Transcript ##### The standard playbook, from the inside Jesse Hopps: Before you led this approach to commercial excellence and transformational growth, what were the more common approaches you saw in Fortune 500 companies when it came to change management? What is the dominant standard playbook? Roy van Griensven: What you see in many companies over at least the last two decades is that big companies realize they might have a problem. They are not living up to their full potential, which they hear from the markets, the shareholders, the analysts. Or they have an actual problem, because they are declining, not growing, stalling. The common approach is: okay, we need to adjust our strategy. Let us hire a big consulting firm, because they have done this before with other companies and they can tell us what we need to do. Typically that lands beautifully on paper, with at least a nine-figure value potential attached, and then it is: okay guys, you just need to run a transformation program across multiple streams. In most cases the company then hires one of the consultants in as the program leader, to tell the people in the company what needs to be done. Traditionally it is the same approach. We look at our processes, we look at our tools, we fix our data, we train people how to do it, we do a bit of a reorganization. That keeps the company busy for two to three years, until the point where you have actually spent a huge amount of money. Initially people are excited, because something is happening and they can be part of it. Over time they realize nothing materially is changing. In the headquarters there is a huge idea of how we are changing the company. The moment you step out of the headquarters office, people say: I have seen all the webcasts, I have seen all the live streams, I have seen the town halls, but my day-to-day job is not changing at all. I do not understand how it is helping me. And by the way, nobody has asked me for the last eighteen months what I think or how I can contribute. ##### Where the failure sits Jesse Hopps: I call that transformation theater. A lot of activity, everyone is very polite, they are nodding along, agreeing with the need for the transformation on the surface level, but they are selectively adopting, or passively resistant. They are not outright rebelling and saying this is a dumb idea, you do not have the process right, you do not get my job. They sort of agree and say yes, of course, we will give that a try. But the behavior does not stick, and the earnings do not lift the way the case said they would. There is all kinds of data. McKinsey, BCG, they all say the same: seventy to ninety percent of these transformations fail to deliver on expectations. So either we are really bad at setting goals, or the fundamental playbook is the problem. Everybody cannot be executing this badly. Roy van Griensven: I do not even think the things put on paper by the big consulting firms are bad. The potential is there. There are always these elements: these processes are not okay, the organization structure is not as efficient as possible, objectives are not aligned. It is correct. The point is in how you execute it. As humans we are not that good at just being told what needs to be done. If someone comes in and tells you that you did a bad job, your first reaction is resistance. You are defensive. That can show immediately, or it can be passive: let these guys talk. And the problem is that in most cases it is not about people having done a bad job. In a lot of cases where companies need a transformation, the environment has changed, and that means something else is required than before. ##### The credibility gap Roy van Griensven: That is what typically fails in the consulting approach. They come in and tell you how to do the job without giving credibility to the people, without saying: you have done a fantastic job so far, we just need something else going forward. Secondly, the accountability of the people telling you that something else is needed is typically not there. You have a senior partner coming in who might have seen a lot of companies but has not been responsible for doing the job. I have seen very senior leaders say: theoretically, content-wise, you might be correct, but it is not as easy as how you put it on a shiny piece of paper. And the problem becomes even bigger when you go into execution, because then the juniors come in, and they have zero credibility. They have never done the job. If you want to talk to a supply chain guy, a lady in operations, in sales, and you are talking to someone who is telling you how to do your job that has never done that job before, that is a huge credibility gap. What I have seen happen is that people then start giving the reasons why the consultant does not understand it, which leads into resistance. They might actually want to change. They might be fully behind the fact that the opportunity is there. But the way it is executed triggers human resistance. ##### Where ADKAR runs short Jesse Hopps: The predominant change-management framework came out of Prosci, and it is called ADKAR: awareness, desire, knowledge, ability, reinforcement. Everyone in the Fortune 500 has heard of it or been through a training session on it. On paper it makes sense. Do they know why we need to change, what is the burning platform. Desire, can we talk about what is in it for them, using incentives and implicit punishments. Knowledge, the classroom training. Ability, tools and software. Reinforcement, KPIs and governance. To me that whole paradigm is about managing change, or managing resistance to change. Roy van Griensven: The whole makes sense. It is correct. There is nothing wrong with it. What I see is that there is one crucial element that is typically failing or under-present, and that is the desire. The way big companies handle it is: we need to explain the why, what is the burning platform, what does the company need to change. Then companies explain why it is good for the people. But that is where it starts, and it is explained from the company's perspective, not from the individual's. One very simple example: very few companies would actually say this gives you an opportunity to develop and grow, which gives you a ten times bigger opportunity to find a job at any company. No company says that, because they want to retain their talent. But then if you move into the desire, hardly any company I have seen or heard of genuinely asks people what they think. What do you think needs to happen to get our company to the point where it needs to be? ##### Consulted, or genuinely asked Jesse Hopps: I have to push on this, because people running a PMO will say we consult, we inform, we do stakeholder interviews. What is the difference between consulting and informing and truly getting people's ideas on the table? Is it that they do not act on them? Roy van Griensven: Two things. The interviews typically happen in a way where we say: this is what we are going to do, what is your feedback, do you have any problem, do you have any ideas. So the idea, the approach, everything has already been decided. And then, am I going to speak up that I have a different opinion, while the entire company and the board and all the leaders have already signed up for this plan? That is not genuinely asking for people's opinion. Jesse Hopps: Not very psychologically safe to disagree with the momentum of the rest of the company. Roy van Griensven: Absolutely the case. But then it is about whether you genuinely start by asking people what they think. And secondly, and this is a very tough thing to do: what now if someone comes back with an idea that is very different from what the company had in mind, based on what the consultants told you that you had to do? What do you then do? Change the approach? You ask them for the input, but then you are in a dead-end street. That is again where you lose the credibility, because people feel: I have been asked to give input, but nothing happens with it anyway. ##### Stakeholder mapping, and who gets called a resister Roy van Griensven: It becomes: we need to tick the boxes. That is what typically also happens with the stakeholder mapping in change management. It is used to identify the people who resist, and that means they resist a plan that they were not able to provide input to. And then the approach in change management is: how do we change their minds so that they are on board with the plan that we already had? That is strange, right? They have good ideas, you are asking them for their ideas, but the moment they have a different idea, you do not adopt it. You say no, no, no, you are wrong by default. Jesse Hopps: So everyone is wrong by default. Convincing them, manipulating them, coercing them. ##### Extrinsic and intrinsic motivation Jesse Hopps: Walk me through the difference between extrinsic and intrinsic motivation as it relates to generating desire that lasts. When we started working together you told me: I do not care what we design, the fundamental design principle is intrinsic motivation. That changed my whole trajectory. Roy van Griensven: The challenge with extrinsic motivation is that it is short-term, always. You incentivize, and people think: let me get on board with this because it helps me realize the next step in my career. Or I am just afraid to speak up. Or we have a hierarchical culture and therefore we follow whatever it is. In the end there are cultural differences, but in principle it is the same for everyone. People are more motivated to do anything if they feel it is something they are passionate about, something they are on board with. In Japan, people start moving not when you touch the head but when you touch the heart. The content does not matter so much; what matters much more is whether they feel comfortable with it. In any other culture it shows in different ways, but it is the same: people get moving the moment they feel I buy into this, I genuinely believe this is the right thing to do. If you look at any transformation, there is a multitude of speed you can get if you do not have to chase people to do it. You do not have to tell them what to do. They will come up with ideas. The biggest factor in the difference is the sustainability of it. Extrinsic motivation is never sustainable. It might work for three months, twelve months, twenty-four months. And what do you do after? What happens when a new leader comes in with a new set of ideas? Intrinsic motivation is much more something that lasts, because you do not need to keep encouraging it. But that is a difficult part for organizations. You need to have much more of a servant behavior. How do you serve people? How do you help enable people to do the right thing? The only thing you do as a company is say: this is where we need to go, that is where we need to be. Employees do not get to decide what type of a company we are. But how you get there, that is where the more intrinsic motivation there is, the higher the chance you actually get things to change sustainably. ##### The three conditions, and the parenting parallel Jesse Hopps: I am a parent. I have two daughters, and I tried carrots and I tried sticks. What I learned is that the minute you are not there to reinforce or govern, they do what they are going to do. So the real key is that we want them to make good decisions for themselves when we are not around. I have learned to give them choices: do you want broccoli or asparagus, spinach or brussels sprouts. You can choose any one of these, but you have to pick one. When we started working together the second time, you mentioned this intrinsic motivation piece and I was puzzled by it. I went deep on the behavioral science, and it was really clear. Self-determination theory has been widely validated for a very long time. Three psychological needs. What blew me away was how top-down transformation approaches seem to violate all three. Autonomy: do people feel they are actually in charge of the choice of how this gets done, not just consulted and informed but meaningfully involved in the design. Competence: do they feel they can develop the skills and mastery required, something challenging but not out of reach, and not below their level of expertise. Relatedness: does this really apply to my everyday work? People often cannot see how their day-to-day job changes. And if the people around them, their boss or their peers or someone with a lot of followership, are not going along with it, they are probably not going to be motivated either. ##### Same playbook, different delivery Roy van Griensven: The content itself, the playbooks and the approach, is not bad. The way you execute on it, that is where the difference is. If you want to change your go-to-market model, you can have a consulting firm figure that out, put it on slides, and then run all kinds of sessions to explain this is what we are going to do. Guys, how are you going to make this work? Get them involved and then monitor whether we are progressing. Or you could say: we believe these are the three or four topics that are most relevant to our company to achieve our goal. How do you feel that changing our go-to-market model could contribute to that? And by the way, for inspiration, here are some examples of how other companies have done this. It does not mean it is going to work for us. How do you relate that to your daily job? You might even use the same content, the same playbook, the same framework, but the way you expose people to it is very different. Am I telling you, or am I inspiring you with this could be something, but maybe you have better ideas? In my experience you typically get the same outcome that the consultants said was needed. The difference is it is their idea. They came up with it. ##### The menu card instead of one plan Roy van Griensven: The value potential defined by a benchmark or a consulting firm: just adopt it. It makes sense, it is logical. I agree with the strategy, this is possible, that is where we need to go. Now how we get there, that is where we need to have a discussion. In a lot of companies there is one plan that different regions and different business units all have to follow. If you have a consulting firm coming in, they always have one plan: we start with this topic, then we deploy to the rest. By nature that is what creates resistance, because a business unit leader says: my business model is not exactly the same as the other one, the maturity in my organization is different, the context is different. In a lot of companies the perception is that these people are always resistant because they always talk about how different they are. You know what? Acknowledge that. Acknowledge that there is a clear difference. If you tell them we are going to bombard you with these eight programs and train you in one setup, one process, one tool, one data model for the entire company: resistance immediately. The moment you say this is the menu card of things that, if we all do them extremely well, will get us to our maximum value, but in order to make progress we need to talk about what matters most to you. Which of these twenty capabilities in commercial matter most to you right now? And the interesting thing is that different business units then start working on different topics, and that is okay. Jesse Hopps: Is this your structured autonomy in action? And you are doing this with whom, the general managers? Roy van Griensven: Heads of the business units. You are accountable at the end of the quarter and at the end of the year for the results of your business unit, so you determine. ##### Academically correct, practically irrelevant Jesse Hopps: And where do these capability gaps come from? Are they in the strategy, saying to get from here to there we have to close these gaps? Roy van Griensven: That is where I sometimes use the phrase: it is academically correct but in a lot of cases practically irrelevant. Academically it is correct that we have capability gaps in twenty different areas. But it does not mean all twenty are equally practically relevant today for each individual business unit or region. The moment you give them the option to say these five topics not for now, these three matter most, then you immediately hit the point of intrinsic motivation. Jesse Hopps: You are taking a servant leader's approach. You are not pushing what you think are the top three, you are asking what would move the needle, and then supporting them on closing the gap. Roy van Griensven: How can I help you work on the two or three most important things that matter most to you in order to get as close as possible to your targets? ##### Leading indicators, and the board conversation Roy van Griensven: Nine out of ten, if not ten out of ten companies always focus on the endpoint. How do we get to the north star, how do we get to the full value potential. They make a beautiful plan with lots of ambitions, not a strategy to solve the problems. And then the PMO question is: how far are we, when are we hitting that number? The problem is we are focusing far too much on a lagging indicator. The moment you take that away and start managing on leading indicators, you start addressing that the ideas people have and the work they are doing is creating change. Take CRM adoption. How do you show that we are actually changing? Focus on early indicators: the value of our pipeline in the first stage of the opportunity pipeline is increasing, we are changing the conversion rate from stage one to two by ten percent. We are progressing. The outside perspective, investors and markets, they are not looking at whether you hit the number in your five-year strategy. The stock price goes up the moment people see what you put in the strategy starting to happen. Jesse Hopps: Visible momentum. This reminds me of The Gap and the Gain, by Dan Sullivan. That was a big unlock for me personally. I am an idealist, always measuring forward, measuring what I have left to achieve, never arriving. That book is about measuring backward and looking at how much progress you have made. But how do you convince a board of directors to measure progress instead of end results when they are on the hook for the end results? Roy van Griensven: Two things. First, go back to the employees. Instead of focusing every quarterly review on how big the gap still is, you say: the work you have done in the past quarter has moved us this much. That is recognition. That is reinforcing intrinsic motivation. We are on the right path, we are making progress, what we are doing is working, let us continue. That is the biggest part, because that is where you need to get your people. The change does not happen through a board. It happens through the people itself. For the board, in most cases they use the lagging indicator because they need to say something in the quarterly market dialogues with investors. And in a lot of cases numbers are fabricated, because we need to get to a hundred and twenty right now, so let us pull some orders forward. What investors want to see is progress. It is an open dialogue with the board to say: we can keep focusing on the lagging indicator, but then you will only be able to look back and say we did not hit it again, do a better job next quarter. If you look at the leading indicators, how much have we progressed, is this enough, where do we need to steer. It drives a very different dialogue. Having said that, you need the link between your leading indicators and the lagging one to be tight, and the correlation to be there. ##### Adaptive capacity, or getting unstuck Jesse Hopps: I have a question about a leading indicator most boards would not consider one. When we were designing this, there was an idea of mindset KPIs, or adaptive capacity as an organization. I was not sure you were going to buy it, or the board, or anybody. Adaptive capacity is an individual's or an organization's ability to metabolize and adapt to change. We are in a more volatile time now, with AI and geopolitics, than we were with the internet. Is that a soft, fuzzy HR metric, or does measuring adaptive capacity at scale correlate to EBITDA impact? Roy van Griensven: Two angles. Having a dialogue to say our adaptive capacity translates into X EBITDA improvement: never going to happen. The positioning is that this is a crucial enabler to get you to that potential, combined with a lot of other work. If you put it as a metric and say we are measuring that and therefore there is an X amount of EBITDA, no CEO or CFO will say yes, I fully recognize that. But the moment you have a qualitative dialogue, let me provoke a little: at least nine out of ten companies, the board would say we are a bit stuck as a company. Stuck is the symptom of not having the adaptive capacity. So the moment you have a dialogue with any board member and say: do you think that if we get a little less stuck, if we are able to move beyond the problems we see faster, that gets us a higher likelihood of reaching our target? I guarantee a hundred out of a hundred board members would say yes. Jesse Hopps: So the question is how do you get unstuck. Adaptive capacity is part of the solution, but it is not framed as we need to make our people adaptable. It is we need to get unstuck, and we need to get our earnings unstuck from flat or declining. ##### Selling it internally Jesse Hopps: How did you sell this internally? We found that McKinsey study on unlocking engagement and innovative behavior. Around seventy-seven percent of people do not feel very resilient and adaptable. But when adaptability and resilience were combined with organizational support and psychological safety, there was a roughly sixfold unlock in engagement and innovation. How did you convince stakeholders that mindset and preparing people for change was worth investing in, rather than a fluffy HR thing you do with leftover budget? Roy van Griensven: First of all, because it is the way to actually get people on board. The way I have used it is that it is predominantly something the company needs to provide as an enabler. If you ask individual employees, they will never refer to the point that they individually get stuck somewhere. It is always because this function did not help me, someone else is not doing their job, or it is external factors, China and so on. Everyone can get unstuck, and that starts by the person saying: given everything that is happening, what can I still do today to make a step forward? But it does not work to tell people you just need to get unstuck. So the typical way for me to open the door is to say: we recognize that maybe as a company we have not done the best job of enabling you to do what you need to do. So let us talk about it. Jesse Hopps: You take ownership of it. It is not you are to blame, it is we are to blame. Roy van Griensven: And then combine that with providing a safe environment where people feel it is okay to openly share their ideas without immediate ramification. So you build a peer environment, not immediately the manager on top where it needs to be spot on. ##### Why it is not a town hall Jesse Hopps: Is this like a town hall, or different? Roy van Griensven: A town hall is a one-way street of information. Jesse Hopps: It is: ask any questions, if you dare resist what we are telling you. That is not very psychologically safe. You get the odd person who pipes up, and that is career suicide. Roy van Griensven: It is. Jesse Hopps: And that is the negative guy, they are not on board. But to me that is the person with the most passion, who cares about the company, and who sees the train wreck of this thing not being realistic and practical. Roy van Griensven: Absolutely. Jesse Hopps: So instead of viewing these people as detractors, you are suggesting leveraging them, listening to them more. ##### Inspire, reflect, apply Roy van Griensven: You give people guidance and direction of where the company needs to go. Look, this is what other companies have typically done. That is the inspiration. We are not saying this is what we need to do, it is just to inspire your thoughts about what is potentially possible. The reflect phase needs to be a safe environment, peer level, even if there is a hierarchical difference among the people joining. You need to bring everyone to that same level of peer dialogue. All ideas are good ideas. Jesse Hopps: That sounds great, but how do you actually get thirty, forty, a hundred people to open up and be vulnerable about maybe we are not managing the pipeline well, maybe we do not have a process? How do you get them to admit shortcomings publicly? That does not sound easy. Roy van Griensven: There is a huge element of servant leadership. The moment you go into these sessions you say: we are here to help you with whatever is critically most important, we are not going to tell you, you can pick whatever topic you like, and no one is forcing you to pick a topic if you do not believe it is there. And it needs to be genuine. You cannot fake your way through this. Fake it until you make it does not work in this case. That safe environment does not arrive in one go. People need to see consistency in how people around them behave. They need to see that we have actually solved one or two of their problems first. Now they are asking for my advice. They are doing that again. I told them something and I see it is not coming back to me. Jesse Hopps: Talk is cheap. You have got to demonstrate consistency. You cannot do this in a one-time occasion. Roy van Griensven: And people talk to each other, so they need to hear that what you are saying is true through other people's experiences. The moment they come with a different idea, you have to actually support them with it and not cut them off and say this is different from what I had in mind. ##### Ninety days, and opting in Jesse Hopps: So you are engineering the conditions for adaptation to occur naturally, as opposed to trying to force change on people. How do you bridge from reflect to apply? Roy van Griensven: We keep reinforcing that you do not need to pick any project. We are here to give you an opportunity, in a ninety-day phase, to get help from credible experienced coaches who can help you solve your day-to-day challenges. But if you say there is nothing there that I need, then no one is forcing you. There is a little guidance from the inspire and reflect stages about the topics that matter to our company, but we let people pivot to the topic that matters most in their own job. Jesse Hopps: What level are these people? Roy van Griensven: It ranges from senior leaders to mid-level to front office. All levels, all different roles. ##### The CRM rule Jesse Hopps: Let us say there are non-negotiable top-down things, we are all going to SAP, we are all implementing Salesforce. It does not sound like you are pushing those projects on people. Roy van Griensven: Let me take a CRM implementation. We can tell people we are going to implement the CRM, this is the process, clean up the data, do the training. Or it is a bottom-up approach to achieving the same thing. Because for no company is the objective to implement CRM. The objective is to improve my pipeline, get more opportunities, get the conversion rate up. So we let people figure out what the biggest challenge is in order to reach that goal, and automatically some come to the point that our pipeline is not filled enough, we do not have enough opportunities. Okay, now what do we need to get there? We never push for the system, because I would much rather have a team that goes from not managing a pipeline of opportunities to being able to prioritize the right ones and know where to spend time, and do that on paper. Because typically, after they do that for a while, they start asking whether we could do this in a tool. Jesse Hopps: There is going to be a better way than this. Roy van Griensven: And again, it is intrinsic motivation. Sure, we have got a system for that. But they are asking for it. ##### Why centrally designed systems struggle Jesse Hopps: Why does the pro way fail, compared with letting them use paper and having them ask to configure the enterprise tool when they are ready for it? Roy van Griensven: I have seen quite a few CRM implementations. Typically it is the wrong people designing the way it works. It is not the people doing the job who need to use it, it is people observing and monitoring the people who need to use it. And it goes back to intrinsic motivation: people feeling that for me there is a need to do this in a more efficient way. Go back to the board. Does any of the board members care about the adoption rate of the system, when they can also trade that for a ten percent increase in our conversion rate, hence faster time to money, or ten percent more opportunities? Everyone understands that eventually you cannot keep doing this on paper. But getting to that point, the adoption is much easier when people say I am getting fed up keeping this on paper, can we put it in the system. Jesse Hopps: How does their attitude to the little nuisances change, the data quality, the configuration, the UX, when it is their idea versus pushed on them? Roy van Griensven: If you come with predefined terminology, stages, design, UX, it triggers a human reaction: let us find what I do not agree with, let us criticize something, why will it not work. I look for the differences versus my own idea. The moment you let people define how they think it should be done, and then you say okay, that makes perfect sense, but instead of calling this potential can we call it prospect: sure, I do not care, as long as it works the way I have in mind. Very different adoption. But you need to allow for that to happen. ##### Chaos, control, and what the board really wants Jesse Hopps: That seems crazy to me. If field teams are deciding how to configure their systems locally, does that not breed chaos? Does senior leadership not lose control? Roy van Griensven: In the end, my experience is that the board does not care about the standard. They care about the outcome. The reason they start using terminology like standardization and harmonization, design first and then roll out, is that they are trying to hold on to something controllable. And I can tell you, in any company, eighty percent of the people know what to do. They know how it needs to look. They will design it the way it has to be done. But there is a huge factor of fear of not being in control, fear of chaos. That is a job for people in my role: guide people in the right direction. You do not tell them what to do, you let them discover, but you guide them. If someone wants to do something completely wrong, how do you let them see that it might not be the best idea, or use peers to convince them? If eight out of ten have the right idea, can the eight not convince the other two, rather than someone else telling all ten what to do? ##### Making it survive the next leader Jesse Hopps: Leadership changes. I hear a lot in the Consortium: another transformation, another person blowing into town. They cannot even absorb the first transformation before the next one is coming at them. How do you create staying power? Can the organization sustain this if you move on? Roy van Griensven: I would wish to say it is completely person-independent, and it can be for a certain part, because as long as you are able to show progress, as long as you have people working on the right things, the reinforcement by the individual becomes less important. Even if someone else comes in, they look at it and ask: is this my biggest problem to solve? Probably not, if they see progress. That being said, it requires leadership behavior. The questions keep coming up. If you have a bad quarter: is there anything else? No, we need to stay the course and keep going, because we see the progress. Persistence, sometimes a bit of patience. There is a role for leadership in that. ##### Portable, and what it costs Jesse Hopps: Could you help another organization implement the same behavioral system? Is it universal, and is it affordable? Roy van Griensven: Having been in different industries and different companies, I one hundred percent believe it is universal, and it does not matter the company or the industry. Having said that, it is situationally dependent on what is needed and how to apply it. In some contexts you need a bit more convincing, sometimes it is more the middle management, sometimes you are at the start of a transformation and sometimes in the middle of a failure. The context matters for how to turn it around, but the logic is very universal. On the investment, it is quite simple. For any company, I dare to guarantee you can cut down consulting costs by seventy to eighty percent by taking a different approach and asking how we can leverage our own people differently. You might still need one of the big consulting firms to help set a piece of the strategy. But how you then execute it, you can do at a fraction of the cost, because what you mainly need is operator-coaches who can guide with credibility. The credibility of the people is massively important. People who have been there, held the bag in the industry. They get it. They guide people. They do not have an interest in selling more hours. Jesse Hopps: So not career consultants or guys like me. The people who were general managers, heads of sales, who have done the job at a high level in the industry. They get it, they understand why it is hard, and they do not sugarcoat why the plan is going to be difficult to implement. ##### I would fire myself Jesse Hopps: The predominant response I hear when expectations are not delivered on is one of two things: our people resisted the change, or they could not execute. What do you say to a leader who tells the board that? How would a board feel about you as a leader if you said that to them? Roy van Griensven: If I would say that, in all honesty, I would fire myself. Because in the end, it does not mean it is easy. There are things you need to do. But I fundamentally disagree and do not buy into the fact that people do not want to change. It is just the way you get people involved, how you get them motivated. There is always the exception, maybe someone with active resistance, someone with something else going on, someone who just wants to sit out the last three years of their career. Those are the exceptions. The majority has no problem with change. The problem is how that change is brought to them, instead of how they are involved in it. And that is what a leader needs to take on. You need to say: I have a fundamental belief and an idea of how we can get people involved and get change to actually happen. And if the board does not believe that is the way it should be done, then stand for what you believe in and say maybe I am not the right person. If you want to do it the traditional way, the way we have failed for twenty years, then that is fine, but that is not me. Take ownership and say: I am not giving you a guarantee that all of the objectives will happen, there are so many factors. But for influencing the chances to be as high as possible, this is the way we believe it needs to happen. Then stand for that. And also be mentally okay if people say no, we want to do it the classical way, and be ready to say then probably it is not me. ##### The leader changes first Jesse Hopps: People do not really resist change. They resist the feeling that someone is trying to change them. It threatens their ego, their identity, the sense that who they have been until now is not good enough any more. And that is not the case. A lot of the time the environment changed. That was the key insight. Roy van Griensven: Two things. One, you are spot on: the environment has changed, it is not you. Not your fault. Secondly, the moment that as a leader you take the first step in changing, that is pivotal. Saying: we are not going to do the same thing you have seen before. When I arrived, people said, this is the fourth person who comes in, I have heard that before, sure, sure it is not going to be different. So saying, one: it is not you, it is the environment that changed. And secondly: by the way, the first change I will do is by changing what we are going to do and how we approach this. That already generates accountability, so people say okay, this is going to be different. Let us see. Let us give it a shot, maybe. Jesse Hopps: There is a book on change management that makes exactly that point: if you want real change, change your approach as a leader to doing change first. It starts with us. --- ### Structured Autonomy with Paul Souren https://commercialexcellenceconsortium.com/podcast/structured-autonomy-with-paul-souren Sixteen years at Roche, and the "playground" model for owning the how. Topics: structured autonomy, change vs. transformation, guardrails, empowerment and accountability, passive resistance, agile transformation, back-casting, feedback culture, coaching #### Summary Paul Souren spent sixteen years at Roche, in Dutch affiliate roles and global ones. He was portfolio strategy director when a patent cliff arrived on products that had built the company, and revenue on a drug in a market like the Netherlands can evaporate within months of it. What followed was entry into neuroscience, hemophilia and immunotherapy as the new arrival rather than the incumbent. He draws a hard line between change and transformation: change is continuing to improve what you already do and taking the same way of working into a new market; transformation is redesigning how people think and behave. A metamorphosis rather than an improvement. The mechanism he describes is a playground with a stated perimeter, three non-negotiables you may not cross, and everything inside left to the team, including the freedom to fall off the swing. Around it: outcomes instead of numbers, back-casting instead of forecasting, four modes a leader switches between, and a deliberately built feedback culture in a company that had been very good at being nice to each other. #### Key points - Sixteen years at Roche, arriving at transformation work through marketing, sales and portfolio strategy rather than by design. - The patent cliff: revenue on the products that built the company evaporating within months in markets like the Netherlands. - Entering neuroscience, hemophilia and immunotherapy as the new arrival, not first to market and not first in class, after being the big player in oncology. - The line between change and transformation, drawn precisely: improvement and portability on one side, metamorphosis on the other. - Why the leader is the force multiplier, and what people conclude when leadership will not move first. - The playground: a stated perimeter, an entrance and an exit, everything inside left to the team, and permission to fall off the swing. - Three non-negotiables at Roche, and how much room the absence of a fourth created. - Empowerment and accountability as one thing, and why people hand back authority whose edges they are unable to see. - VACC: visionary, architect, catalyst, coach, and switching between them rather than leading one way everywhere. - Building a feedback culture inside an organization that was very good at being nice to each other. - Feedback against coaching: one is specific to a moment, the other assumes the answer sits inside the person. - Abandoning the annual planning cycle, and measuring outcomes rather than numbers. - Back-casting instead of forecasting: five years, then three, then the one to two years that decide it. - The two forms passive resistance takes, and why self-preservation sits under the first one. - Fifteen to twenty percent as the critical mass that starts the snowball, and the accountability half few leaders enjoy stating. - How the agile shift was made: leadership alignment, no safe corner to pilot in, and celebrating the failures. - Taking one hundred and eighty people out to other companies to watch how somebody else does it. #### Definitions - **Change vs. transformation** — Paul's distinction. Change is continuing to improve what you already do, and applying the way of working that made you successful to a new area. Transformation is reinventing and redesigning how you work, including behaviors and mindsets, so how people show up is different afterwards. Jesse's image for it is the caterpillar becoming the butterfly, and Paul's word is metamorphosis. - **The playground** — Paul's model for structured autonomy. Leaders provide the guardrails and define a virtual playground: this is its size, here is the entrance, there is the exit, and you can use whatever is inside it. The order in which people use it is theirs. His closing clause is the part most models leave out: it is okay to fall off the swing. - **Structured autonomy** — The what and the why come from leadership as guardrails; the how belongs to the people doing the work. Paul's argument is that the boundary is what makes the freedom usable, because it gives people a line of sight on where the empowerment is ring-fenced, and the fence is there for safety rather than containment. - **Patent cliff** — The point at which exclusivity ends on the products a pharmaceutical company's revenue depends on. In markets like the Netherlands, Paul describes revenue on those products evaporating within months as generics arrive. It is a known date rather than a surprise, and it converts an improvement problem into a reinvention problem. - **The three non-negotiables** — The guardrails a Roche leader stated: do not compromise patient safety, do not break the law of the land you work in, and do not compromise the Roche brand. Inside those, you can make a lot of mistakes. Naming three and stopping is what made the space inside them real. - **Empowerment and accountability** — Two halves of the same act. Paul's position is that empowerment lands only when people can see where it is ring-fenced, and that the other half has to be stated as clearly: an expectation that people take accountability for what they do with it. Announcing the first without the second is why people leave the authority on the table. - **VACC** — Visionary, architect, catalyst, coach. Four modes a leader moves between rather than one style applied everywhere: painting the direction, working out how to get there, bringing energy and keeping people focused, and drawing the answer out of someone. Paul credits the framing to outside work rather than to Roche, and the value to having made it usable in practice. - **Five Frequencies** — The book Roche's leaders worked from on how a leader shows up: what you tolerate and refuse to tolerate, what you reward and recognize, and how you behave informally rather than only in meetings. They used it through conversation and mutual feedback rather than as a reading exercise. - **Feedback vs. coaching** — Feedback is specific and tied to a moment: in that meeting yesterday, this happened, this is how it landed on me. Coaching starts from the belief that the truth sits inside the person, so the work is finding the question that lets them reach the insight themselves. - **Guided discovery** — Jesse's term for the coaching half. Rather than supplying the answer, you ask the question that produces the realization in the other person's head. The conclusion is then theirs, which is what makes it something they act on rather than something they were told. - **Outcomes vs. numbers** — Roche shifted from working toward a number to working toward impact. Paul's objection to the number is behavioral: a target is something people can stop at once it is hit. An outcome is expressed as reaching a given share so that a given number of patients can be reached, which is a change in someone's life rather than a figure. - **Back-casting** — The inversion of forecasting. Describe at a high level where the company needs to be in five years, work back to where that means being in three, and then to the one-to-two-year outcomes that are the only route to the three-year ones. The future gives direction to the present rather than the present being extrapolated forward. - **Passive resistance** — People nod and agree in the meeting, then go back to what they were doing the next day. Paul names two forms: a leader who agrees verbally and disagrees mentally, usually out of fear for their own position, and anyone who has lost the connection to why this is happening and why now. - **Critical mass** — Paul's estimate is that fifteen to twenty percent of a population is enough to start the snowball, after which people tend to follow the mass. It is the reason a transformation does not need everyone at the outset, and the reason the early group matters more than its size suggests. - **Adversity Quotient (AQ⁠®)** — Dr. Paul Stoltz's measure of how a person responds to difficulty, which Jesse introduces in this episode and Paul is hearing for the first time. Its relevance here is the critical-mass number: rather than treating the willing fifteen to twenty percent as fixed, AQ is presented as a way to measure adaptability and raise it. - **Climbers, campers and quitters** — Stoltz's three groups, as Jesse describes them. Climbers accept that a better future means changing who they are. Campers have reached a point they do not want to lose and prefer the environment to stay as it is. Quitters have stopped. The argument Jesse makes is that these are measurable positions on a curve rather than fixed character, and the curve can be moved. #### Questions this answers ##### Who is Paul Souren? Director Business Transformation at Roche, based in the Netherlands, with sixteen years at the company across marketing, sales, portfolio strategy and global roles. He was portfolio strategy director for the Dutch affiliate when a patent cliff arrived on several of its major products. ##### Did he set out to work in commercial excellence? No. His words are that it was not by design. He came through commercial roles: marketing, sales, product and portfolio, in the Netherlands and globally. His view is that commercial excellence is fundamentally about using the people and resources available to create the biggest customer impact, which is what those roles were about anyway. ##### What is a patent cliff and what does it do to a company? It is the point at which exclusivity ends on the products the revenue depends on. In markets like the Netherlands, Paul describes revenue on those products evaporating within months once generics arrive. The date is known in advance, which is what makes it a planning problem rather than a shock, and it converts improvement into reinvention. ##### What did Roche have to do after the cliff? Enter neuroscience, hemophilia and immunotherapy. Having been the big player in oncology, it was now the new arrival: not first to market, not first in class, not best in class. Paul's assessment was that this needed a completely different approach from the people and a different mindset, not a better version of the old one. ##### How big was the organization at the time? Around seventeen thousand five hundred people in the international organization, and between a hundred and eighty and two hundred in the Dutch affiliate. The reinvention had to happen at that scale rather than in a startup. ##### When did he shift from running a function to running the system? In the portfolio strategy role, and it happened organically. It was the first time he had to think not only about what the strategy was but about how to get there: what it would take from the people, how to bridge the gap, and what it required of him as a leader. Several changes stacking on top of each other, in his description. ##### What is the difference between change and transformation? Change is continuing to improve what you already do, and taking the way of working that made you successful into new areas. Transformation is reinventing and redesigning how you work, including behaviors and mindsets, so how people show up is different afterwards. Paul's word for it is metamorphosis. ##### Why does that distinction matter in practice? Because the first is portable and the second is not. Applying the approach that won in oncology to neuroscience is change, and it is a reasonable thing to try. What Roche found was that being the new arrival in an unfamiliar category needed people to think and act differently, which is a different piece of work with a different timeline. ##### Do other transformation leaders draw the line the same way? Jesse notes the same distinction from Roy van Griensven, who put it to a CEO as an interview question: are you looking for change, or are you looking for transformation? If it is incremental improvement, I am probably not your person. If you want to transform this organization, with the pain that comes with it, I can help. ##### How do you tell people that what got them here will not get them there? By separating the person from the situation. Paul's framing is that these are great people and the environment shifted, so what is required is different rather than better. The mistake is delivering it as a verdict on how they have been working, because that lands on identity rather than on method. ##### What do leaders most often get wrong in a transformation? Paul lists them in one breath: lack of understanding of the why, of the direction, of the speed, of what the change requires of people, and an underestimation by leaders of what it takes from themselves. The last one is the one the others sit on. ##### Why does leadership behavior matter more than the communication? Because people look to leaders, and the leaders are the force multiplier. Paul's line is blunt: if leaders are not willing to change, why should anyone else? A program can be explained perfectly and still be read off what the leadership is visibly doing. ##### Is it acceptable for a leader to say they do not know? Paul's position is that it is an answer in itself: I do not know yet, let us find out together. It costs some ego and it shows that not knowing everything is human. If the search happens with the people, and mistakes are allowed along the way, it produces cohesion and sometimes urgency. ##### What is the playground model? Leaders provide the guardrails and define a virtual playground. This is its size, here is the entrance, there is the exit, and you can use whatever is inside. The order in which people use it is up to them. And, in Paul's words, it is okay to fall off the swing. ##### What does the swing clause add? Permission to get it wrong. A perimeter without it produces people who stay in the middle and check upward, because the unstated question is what happens when a decision inside the boundary goes badly. Saying it out loud is what converts a boundary into usable space. ##### How did they decide where the boundaries sat? A Roche leader named three: do not compromise patient safety, do not break the law of the land you work in, and do not compromise the Roche brand. Inside those, you can make a lot of mistakes. The discipline is in naming three and stopping, because a longer list closes the space it was meant to define. ##### Does the CEO stating the guardrails make them real? Not on its own. Paul's observation is that leaders are human, interpret direction through their own character, and create a smaller environment for their people out of that interpretation. In a company the size of Roche, some leaders disagree with a direction, and some agree verbally while disagreeing mentally. ##### What do you do when a manager narrows the space the CEO opened? Feedback in the other direction. Paul's account is that people take the stated guardrails back to their leader and say the CEO said this, and you are not giving us the room to create impact. When that dynamic runs, you are no longer managing a program. You are shifting a culture. ##### Why do people hand back the authority they are given? Because there is risk involved, and announcing empowerment does not remove it. Paul's condition is a line of sight on how the empowerment is ring-fenced, and he is specific that the fence is there for safety and security rather than to contain anyone. Without visible edges, using the authority is a personal gamble. ##### Why does empowerment need accountability attached? Because it is the same act. Jesse's example is an executive who took the empowerment on offer, reframed the problem, built a case, ran a pilot and scaled it, and who had to put his own reputation behind the prediction. What he accepted along with the authority was the consequence of being wrong. Most people decline the second half, which is why they leave the first on the table. ##### So is announcing empowerment enough? No, and Paul is careful not to judge any particular case. What he connects it to is the structure: the guardrails, the line of sight, and an explicit expectation that people take accountability. Empowerment stated without either is a message rather than a change. ##### What is VACC? Visionary, architect, catalyst, coach. Four modes a leader moves between: setting direction, working out how to get there, bringing energy and keeping people focused, and drawing the answer out of someone. Paul's point is that leaders ideally do not show up the same way all the time, everywhere, with everybody. ##### Where did the framework come from? Outside work rather than Roche, and Paul credits it rather than claiming it. What he does claim is the application: they took the terminology and made it usable in practice, which he treats as the part that mattered. ##### Why invest disproportionately in leaders? Not because they matter more than anyone else, in Paul's framing, but because if leaders get it better, it is better for their people too. The multiplier runs the same way in both directions, which is also why an unconvinced middle layer does so much damage. ##### What is the Five Frequencies work? A book on how a leader shows up, which Roche's leaders worked from: what you tolerate and refuse to tolerate, what you reward and recognize, and how you behave informally rather than only in meetings. It was applied through conversation and mutual feedback rather than as a reading exercise. ##### Why did Roche have to build a feedback culture deliberately? Because it did not have one. Paul's description is that there was a lot of niceness in the organization, which he calls fantastic, and which does not make you better tomorrow than you are today. The feedback culture was put in place on purpose rather than assumed. ##### What is the difference between feedback and coaching? Feedback is specific and tied to a moment: in that meeting yesterday, this happened, and this is how it landed on me. Coaching starts from the belief that the truth sits inside the person, so the work is finding the question that lets them reach the insight themselves. ##### What is guided discovery? Jesse's term for the coaching half: asking the question that produces the realization in the other person's head rather than supplying the conclusion. The insight is then theirs, which is what makes it something they act on rather than something they were told. ##### Did they try to build adaptability into the organization? Yes, though not under that name. The concrete move was abandoning the annual planning cycle in favor of much shorter planning and execution cycles. Paul reports it lowered risk aversion, which mattered because people had known the off-patent products and their customers for years and the new markets asked for something else. ##### Why does a shorter cycle lower risk aversion? Because the cost of being wrong falls. On an annual cycle a wrong call is carried for a year, so the rational move is to avoid making one. On a short cycle it is corrected in weeks, which makes trying something the cheaper option. ##### What is the difference between outcomes and numbers? Outcomes are about creating impact, and impact goes beyond hitting a figure. Roche's version translated a target market share into the number of patients that share reaches, which is a change in people's lives. Paul's behavioral objection to the number is that people can stop once they hit it. ##### Is a customer metric like NPS an outcome? Paul's answer is that it can be a signal of success rather than the outcome itself. The outcome is the impact on the person at the end of the chain; the metric is evidence that you are producing it. ##### What is back-casting? The inversion of forecasting. Describe at a high level where the company needs to be in five years, work back to where that means being in three, and then to the one-to-two-year outcomes that are the only route to the three-year ones. Paul's phrase is that you let the future give you direction. ##### How is that different from a normal five-year strategy and annual plan? Paul declines to judge how other companies do it and names the difference for Roche precisely: instead of forecasting, they back-cast. The five-year picture sets the direction and each nearer horizon is derived from the one beyond it, rather than the near-term plan being extrapolated outward. ##### Can you build capabilities and hit short-term numbers at the same time? You have to, and Paul says they did both simultaneously. The focus on numbers did not disappear; what changed was that the organizing question became the outcome rather than the figure. What he reports coming out of the first few years is more empowerment and accountability for the people closest to customers. ##### What is passive resistance? People nod and agree in the meeting, then go back to what they were doing the next day. Paul names two forms. A leader agreeing verbally and disagreeing mentally, and anyone who has lost the connection to why this is happening and why now. ##### Why do leaders agree verbally and disagree mentally? Fear for their own position, in Paul's account. Jesse's framing is that self-preservation sits under most passive resistance, and that people are more averse to loss than drawn to gain. Neither treats it as a character flaw, which is what makes it addressable. ##### How do you address it in a senior leader? By acknowledging the uncertainty rather than talking past it, including that it may not resolve quickly. Then by being clear that they are not the wrong people in the wrong place: they are good people, and things are shifting. From there the question is a shared one about how to bridge the gap. ##### What causes the second kind of passive resistance? Losing the thread of why. Not disagreement, but no live connection to why this is happening and why now. Paul's remedy is involvement in working out what needs to happen collectively, because that forces someone to think the why through themselves rather than receive it. ##### Does a better-told why fix it? Not on its own, and Paul says so directly when Jesse presses him on whether some people simply stop caring. The other conditions of a good workplace have to exist too: leaders walking the talk, career perspective, development opportunities. Without those, a well-framed why lands on nothing. ##### How much of the organization do you need to move first? Fifteen to twenty percent, in Paul's estimate, is enough of a critical mass that the snowball starts and the ball of change grows. Once there is traction, people tend to follow the mass. It is why the early group matters more than its size suggests. ##### And the people who stay at the back? This is where Paul states the accountability half. It is not only about creating an environment for empowerment; it is about creating the expectation that people take accountability for it. If someone is keeping the bus from making progress, at some point they need to get off it. ##### Is that critical-mass number fixed? That is the challenge Jesse puts to him, and it is the part Paul had not encountered before. The alternative on offer is Adversity Quotient: rather than treating the willing fifteen to twenty percent as a given, measure adaptability and work on raising it, on the argument that the distribution can be moved rather than only sorted. ##### What are climbers, campers and quitters? Stoltz's three groups, as Jesse describes them. Climbers accept that a better future means changing who they are. Campers have reached a point they do not want to lose and would rather the environment stayed as it is. Quitters have stopped. The argument is that these are measurable positions rather than fixed character. ##### Had Paul come across AQ before this conversation? No. Asked directly whether he had heard of the science, his answer is that he had not. What he had done independently was build for the same outcome by other means: shorter cycles, permission to fail, and leaders modeling the change first. ##### How did Roche make the shift to agile stick? Three things, in Paul's account. Leadership alignment from the most senior people down to middle managers on the urgency and on creating an environment where mistakes and risk were allowed. Making it meaningful rather than safe. And celebrating the failures as well as the successes. ##### What does making it meaningful mean? Not piloting in a low-stakes corner of the portfolio where failure would not matter. They ran the new way of working on the three launch products going into the new markets, which were the most important things they had. Paul's expectation was that the rest would follow, with help. ##### Why not pilot somewhere low-risk first? Because a pilot everyone knows is low-stakes teaches the organization that the new way is optional. Putting it on the launches made it real, and made the question how do we make this work rather than whether it is worth adopting. ##### Why celebrate failures? To make trying survivable. Paul pairs it with the guardrails: if the perimeter is stated and falling off the swing is allowed, then the failures have to be treated publicly the way the successes are, or the permission was rhetorical. Jesse's version is asking his daughters each night what they failed on. ##### Where did the new thinking come from? Two sources. Consultancy help in the first few years, which Paul credits. And deliberately going outside for inspiration: the leadership team travelled to Silicon Valley for a week, and locally they took a hundred and eighty people out to other companies in the Netherlands to watch how somebody else does it. ##### What is the point of taking a hundred and eighty people to look at other companies? Observation rather than instruction. The question afterwards is how could this work in our affiliate, in our country, which is the same guided-discovery move made at organizational scale. It also signals from the leadership that they do not have the answers and are willing to go and look. ##### Does any of this apply outside pharmaceuticals? Paul's answer is that it is not unique to Roche or to pharma and can be applied across sectors. The pharmaceutical detail supplies the pressure and the deadline; the mechanism is a boundary, a stated set of things you may not do, and everything inside left to the people doing the work. ##### What is the one-sentence version? Draw the playground, name the few things that are out of bounds, hand over everything inside it, and say out loud that falling off the swing is allowed. #### Quotations > "This is the size of the playground. Here's the entrance, there's the exit. You can use whatever is in that playground. In what order you do that, that is up to you. And it's okay to fall off the swing." > — Paul Souren > "Leaders don't have all the answers. But admitting that and saying I don't know yet, let's find out together, is also an answer." > — Paul Souren > "People will look to leaders. The force multiplier is the leaders. If leaders are not willing to change, why the hell should I change?" > — Paul Souren > "Change for me is continuing to improve on what you're doing, and applying the same way of working that always made us successful into the new areas." > — Paul Souren > "Transformation is completely reinventing and redesigning the way you work, including behaviors and mindsets. How people show up." > — Paul Souren > "As long as you don't compromise patient safety, as long as you don't break the law of the land that you work in, and as long as you don't compromise the Roche brand, you can make a lot of mistakes." > — Paul Souren, on the guardrails a Roche leader stated > "There was a lot of niceness in the organization, which is fantastic, but it doesn't make you better tomorrow compared to today." > — Paul Souren, on why Roche built a feedback culture on purpose > "Coaching is much more about believing that the truth sits within people themselves. As a coach, it's about what questions you can ask to help them reveal those insights to themselves." > — Paul Souren > "Not all leaders agree all the time with the direction. They verbally agree to it, but mentally, no. And that has an impact on how they lead people." > — Paul Souren > "Instead of forecasting, we started back-casting." > — Paul Souren > "It takes about fifteen to twenty percent of a population to create such a critical mass that the ball of change grows and grows." > — Paul Souren > "Don't experiment in a corner of your portfolio. We started with the three launch products into the new markets." > — Paul Souren, on where to put the new way of working > "Not only celebrate successes, but celebrate the failures as well." > — Paul Souren > "What got us there will not get us there in the future." > — Paul Souren > "You had to put your neck on the line. To be empowered, what he really accepted was a pile of accountability." > — Jesse Hopps #### Transcript ##### Sixteen years, and not by design Jesse Hopps: It is always interesting to see how people got into commercial excellence. Sixteen years at Roche. Did you start in a commercial excellence role, or did you evolve into it? Paul Souren: No, this was not by design. I started in commercial roles: marketing, strategy. I have done marketing and sales at a product level and a portfolio level, both in the Netherlands and globally. But in the end it is about how to effectively use the resources, the people and the money available, to create the biggest customer impact. And to a certain extent that is what commercial excellence is about as well. In those years the experience and the learnings, the failures and the learnings, create the critical mass. That is what propels you forward into thinking about different ways of doing things, and helping people to get the best out of themselves. ##### The patent cliff Jesse Hopps: I am curious about the point where you transitioned from being a contributor or a manager into working at a system level. Do you remember when that happened? Paul Souren: That was the strategy job. I was portfolio strategy director for the Dutch affiliate, which meant I was accountable for the individual product strategies and the overarching portfolio strategy. At that point in time, about eight or nine years ago, we were facing a patent cliff on a few of our major products. Products that made Roche the great company that it is, and helped millions of patients globally with various forms of cancer, solid tumors as well as hematological tumors. To continue to drive innovation, companies like Roche need to bring new innovations to market through research. And when a company faces a patent cliff, in many markets, and the Dutch market is one example, you see your revenues evaporate on those products within months. Jesse Hopps: They go to a generic solution, essentially. Paul Souren: Exactly. We knew that was coming, so it has an impact on your internal organization. ##### The new kid on the block Paul Souren: A company like Roche is able to launch new products into markets every so often. But where we were the big player in oncology at that time, we were now entering markets where we were the new kid on the block. We needed to familiarize ourselves in neuroscience, in hemophilia and in immunotherapy. We were not first to market, we were not first in class or best in class. We needed a completely different approach from our people, a different way of working and a different mindset, to get a form of beachhead in those markets. Jesse Hopps: You look at a big company like Roche and you never think they have major adversity like a patent cliff, where all of a sudden they need to reinvent themselves, no longer the eight-hundred-pound gorilla, figuring it out almost like a startup but at major scale. How many employees did Roche have then? Paul Souren: In the international organization, around seventeen thousand five hundred. In the Dutch affiliate, maybe between a hundred and eighty and two hundred. And as it always is with things like this: what got us there will not get us there in the future. ##### From running a function to running the system Paul Souren: Coming back to when I started thinking about transitioning, it happened organically, because it was the first time as a leader that I needed to think not only about portfolio strategy but about how we get there. How do we bridge the gap? What does it need to get our people there? And what is then needed from me as a leader to help them get there? These are multiple changes stacking on top of each other. ##### Change and transformation are different beasts Jesse Hopps: You had a pretty acute way of describing the difference between change and transformation. How would you define it? Paul Souren: For me, change and transformation are two different things. Change is continuing to improve on what you are doing. Incremental improvement on the current status. And applying the same way of working that we always did in oncology, that made us successful, into the new areas and the new markets we want to enter. Jesse Hopps: So you transplant the way you think and act into the new application area. Fundamental thinking and acting stays relatively the same. Paul Souren: Yes. And transformation, I believe, is a profoundly different beast. Transformation is completely reinventing and redesigning the way you work, including behaviors and mindsets. How people show up, and what is actually needed to make that transformation happen. Transformation is going from one state to another state. Jesse Hopps: You need to fundamentally get people to change how they think and how they act, as opposed to moving them from doing what they do and thinking the way they think into a new area. It is the caterpillar turning into the butterfly. Paul Souren: It is a metamorphosis. Jesse Hopps: That is in line with what Roy van Griensven told me. He took a job at a big German chemicals company, and in the interview process he asked the CEO a fundamental question: are you looking for change, or are you really looking for transformation? Because if you just want incremental improvement, I am probably not your guy. But if you truly want to transform this organization, with all the pain that is going to come along with that, I think I can help you. ##### Where it goes wrong Jesse Hopps: If you tell people what got you here is not going to get us there, you are touching their beliefs and their identity. They were successful. The environment changed, so it is not that they did something wrong. But you need people to fundamentally think and act differently. Where do organizations get this wrong? Paul Souren: It is about understanding, or lack of understanding, of the why. Lack of understanding of the direction, of the speed. Lack of understanding by leadership of what it requires of people. Underestimation by leaders of what it takes from themselves as well. Because in the end, people will look to leaders. The force multiplier is the leaders. If leaders are not willing to change, why the hell should I change? And as a disclaimer: we make mistakes. You do not learn without mistakes. Before we got there it was a continuous loop of reinventing ourselves on the go, and that in itself brought a lot of value. ##### Leaders do not have all the answers Paul Souren: When you shift from one market to another, it starts with alignment on what we know and what we do not know. By taking that approach and bringing people alongside you as a leader, it became clear that there were many unknowns. The question is how we get answers, and how you involve people in getting them, rather than letting them depend on the illusion that leaders know it all. Because leaders do not know it all. Jesse Hopps: There is ego involved in letting go, in letting the people you are leading figure things out and not rely on you for the answers. Paul Souren: Leaders do not have all the answers. But admitting that and saying I do not know yet, let us find out together, is also an answer. It takes away some of your ego and shows that it is only human not to know everything. And if on the way to an answer with your people it is okay to make mistakes, it shows you are all in the same boat. That creates cohesion, and sometimes even a sense of urgency. ##### The playground Paul Souren: At that moment we decided to create an environment where, as leaders, we provided the guardrails and designed not a framework but what I would call a virtual playground. And we said to the people: you can all be involved. This is the size of the playground. Here is the entrance, there is the exit. You can use whatever is in that playground. In what order you do that is up to you. And it is okay to fall off the swing. Jesse Hopps: So you give them the what and the why in terms of guardrails, and you let them figure out the how. Paul Souren: Exactly. ##### Four ways a leader shows up Paul Souren: It boils down to a form of situational leadership, which is not a new term, and I am not sure I completely like it, but it is not so much about the terminology as about how you apply it. We worked in the beginning with some consultants, some of them from the big four, who were really helpful. We took some of that terminology and found a way to put it into practice. An example is that leaders ideally do not show up in the same way all the time, everywhere, with everybody. Sometimes you need to be more of a visionary. Sometimes more of an architect: how are we going to get there. Sometimes it is about coaching. And another time it is about catalyzing, bringing energy into the room and making sure people continue to be focused. Visionary, architect, catalyst and coach. Jesse Hopps: I feel like I have already stepped through all of those just this morning. Paul Souren: This is not something that we invented, so kudos where it is due. But it worked for us. We made it work. ##### Five Frequencies, and building a feedback culture Paul Souren: A lot of time and money was invested in leaders. Not because they are more important than other people, but if the leaders get it better, it is better for their people as well. One of the concepts we applied was the five frequencies. There is a book about it. It is about how you show up as a leader. What you tolerate and do not tolerate. What you reward and recognize. How you show up informally, so not only in meetings but also when you meet somebody in passing. Jesse Hopps: Was this a book club, everyone reads it and then you talk about it? Paul Souren: By having a lot of conversations and applying a lot of feedback to each other. That was another big shift, because Roche did not necessarily have a great feedback culture. There was a lot of niceness in the organization, which is fantastic, but it does not make you better tomorrow compared to today. Jesse Hopps: So you intentionally put a feedback culture into place. ##### Feedback and coaching Jesse Hopps: How would you distinguish feedback from coaching? Paul Souren: Feedback is mostly specific and linked to a certain time and moment. Great feedback for me is when you are able to call it out: Jesse, yesterday in that meeting, this happened in this specific situation, I felt like this, and that created a certain impact on me. It is highly specific to a situation. Coaching on the other hand is much more about believing that the truth sits within people themselves. As a coach it is about what questions you can ask to help them elevate or reveal those insights to themselves. Jesse Hopps: We call that guided discovery. Instead of telling people the answer, you ask the right question so the epiphany happens in their mind. ##### Abandoning the annual cycle Jesse Hopps: How did you go about improving the adaptive capacity of the organization? Were resilience and adaptability things you intentionally tried to measure or coach on? Paul Souren: Maybe we did not call it that, but we for sure tried to build it in, and we have successfully built it in. One of the big shifts was to completely abandon the yearly planning cycle and move into much shorter cycles. It helped to lower the risk aversion of some of our people. With the products that went off patent, people had known them for years and knew their customers. Entering the new markets required a completely different approach. So we went into shorter planning and execution cycles, and focused much more on impact than on hitting a certain number. Because if you work toward a number, there is a risk that people stop working once they hit it. ##### Outcomes instead of numbers Jesse Hopps: Can you describe the difference between outcomes and numbers? Are numbers not a form of outcome? Paul Souren: The way we see it, outcomes are about creating impact, and impact goes beyond hitting a certain number. Jesse Hopps: Could you give an example? Would something like a customer satisfaction score be an outcome? Paul Souren: That could be a signal of success. But how we described it was: let us say we want a market share of X percent, so that this number of patients can be reached. It is about changing people's lives. Jesse Hopps: So you get very intentional about the end impact. The benefit-how part. ##### Forecasting and back-casting Paul Souren: The way we did that was basically back-casting. We described at a high level where we want to be in five years from now, the long-term outcomes. That describes where you directionally need to be about three years from now to achieve them. The three-year outcomes are the midterm outcomes, and they can be a bit more specific. And the three-year outcomes can only be reached if you hit your short-term outcomes, which are your one-to-two-year outcomes. Jesse Hopps: How is that different from a typical five-year strategy and one-year operating plan? Paul Souren: I cannot judge that perspective. The difference for Roche was that instead of forecasting, we started back-casting. Let the future give us direction. Jesse Hopps: What would need to be true to reach the outcome in five years, and then problem-solve your way toward it, knowing if you are on track from the markers at one and three years. Paul Souren: Yes. And to come back to balancing the new way of working with building capabilities: we needed to do that simultaneously. And strangely enough, over the first few years, there was a lot more empowerment and accountability for the people closest to the customers. ##### Empowerment, and the neck on the line Jesse Hopps: I heard from a CEO recently who felt they had sent the message of empowerment across the organization: go solve issues, take resources, do what you need. There was one person who stepped up and took it. He reframed the problem, built a case, found evidence in a pilot and scaled it up, and was really successful. But the part that resonated with what you said is that he had to put his neck on the line. To be empowered, what he really accepted was a pile of accountability. Most people do not take the empowerment. They are afraid of the accountability that comes with it. Why are so many leaders hesitant to actually be empowered? Paul Souren: Because there is risk involved. I cannot judge the example you gave. But I want to connect it to what we talked about before, about providing structure and guardrails, because only if people have a line of sight on how empowerment is ring-fenced. And that is not to contain them, but to provide them with safety and security. ##### The three non-negotiables Jesse Hopps: That is the psychological safety of the empowerment, because there is a dark underbelly of personal risk. It sounds so positive, you are all empowered. But does that mean if I take that power and use it, I could lose my job? Paul Souren: That may be true. But we had a great leader who said, in the case of Roche, there are a lot of things you can make mistakes on. But as long as you do not compromise patient safety, as long as you do not break the law of the land that you work in, and as long as you do not compromise the Roche brand, you can make a lot of mistakes. Jesse Hopps: So there are non-negotiables. Those are your guardrails. Failing that, it is not the end of the world if you take a shot and get to eighty percent of what you thought you could do. That is part of learning and growth. Did that actually create more momentum for people to take the empowerment? Paul Souren: Yes, that really helps. ##### The verbal yes and the mental no Paul Souren: If a CEO says that, it does not mean that all leaders pick it up the same way, because leaders are only human. They interpret things, and they create a small environment for their people based on their own character and personality traits, and their interpretation of what outcomes should be. In a huge organization like Roche, not all leaders agree all the time with the direction. They verbally agree to it, but mentally, no. And that has an impact on how they lead people. So if the CEO says those three things, people can take that back and give feedback to the leader and say: the CEO says this, and you are not giving us the room to create impact. That creates internal dynamics. And if you have that dynamic going, you are talking about a culture shift. ##### Where passive resistance comes from Jesse Hopps: You mentioned the middle layer, the verbal yes and the mental no. We call that passive resistance. Where have you seen it put the emergency brake on the work you were doing? Paul Souren: Two things come to mind, in random order. The first is leaders, middle managers or even some senior leaders, verbally buying in but mentally not. This might occur because they fear for their own job. Jesse Hopps: Self-preservation. We are much more averse to loss than we are drawn to gain. Paul Souren: As senior leaders in those situations, it is again about acknowledging that there is uncertainty, and that it may not be resolved in the short term or within a certain timeframe. It will stay for a while. And also assuring them that it is not that they are the wrong people in the wrong place. They are great people, but things are changing and shifting. The environment has changed. So how can we help them bridge that gap, or come to a joint conclusion about the capabilities needed in the future. The other one, and this can be regular employees and leaders at the same time, is that passive resistance occurs when people do not completely understand the why, or have lost connection to why we are doing this and why we are doing it now. Getting them involved in what needs to happen collectively requires them to really think about that why themselves. ##### When the why is not enough Jesse Hopps: This is the elephant in the room sometimes. Looking at engagement scores across big enterprises, I am not sure it is fair to assume everyone really cares about the corporate mission on a personal level. Did you ever feel you had a good narrative and a good why, and there were still people who did not seem to care about it? Paul Souren: That is certainly not always enough. We mentioned capability building, but some of the other elements of having a great workplace need to be there as well. Leaders need to walk the talk. If there is no career perspective or development opportunity, people lose their motivation. But I want to come back to the point you raised, because it takes about fifteen to twenty percent of a population to create such a critical mass that the snowball gets bigger and the ball of change grows and grows. If there is traction, people tend to follow the mass to a certain extent. Jesse Hopps: You have to get the coalition of the willing moving faster than the detractors pull everyone down. Paul Souren: Then at some point you have the tail of the curve. And it is like that empowerment and accountability story: it is not only about creating an environment for empowerment, it is also about being very clear and creating an expectation that people take accountability. So when it comes to change, and people do not want to change, and the narrative is not enough, at some point you need to be clear that if they are dragging the bus from speeding up and making progress, they need to jump off the bus. ##### Whether the critical mass is fixed Jesse Hopps: That is the standard response to change, and I want to challenge it a little. I have spent the past two or three years working with Dr. Paul Stoltz, the world's leading expert on human adaptability and resilience. He is master coach to the US Olympic team, his science is used at Harvard, Stanford and INSEAD, and MIT uses his assessment in admissions. Because he has figured out that if you want that fifteen percent, the number of those willing to get on the bus early, there is a way to increase how many people hop on. It is called Adversity Quotient, and it assesses how you perceive and respond to challenges, the way IQ assesses intelligence. Transformation is always full of adversity. Change management was always: get twenty percent on the bus, the middle will follow, and the last group gets more jaded over time and maybe leaves. We are leaving people behind by default. What Stoltz says is that there is a bell curve inside your population made up of three groups: climbers, campers and quitters. If you assessed the AQ of every coalition of the willing you have ever assembled, I would almost guarantee they have a proportionally higher AQ. They are just more adaptable. And the rub is that it is not about getting rid of the people at the tail. It is how you invest in them. A camper is someone who has arrived at a point in their career and does not want to lose what they have gained, so they hunker down and want the environment to stay the same. A high-AQ person thinks there may be a better future, but I am going to need to change who I am. The point is that you can measure and then strengthen AQ in everybody. Have you ever heard of this science before? Paul Souren: No, I have not. Jesse Hopps: Stoltz's line is that if you and your top competitors are dealing with essentially the same set of challenges, patent cliffs and the rest, isn't it fair to say that those who deal with them better and faster will win? ##### How the agile shift was made Jesse Hopps: How did you transition people from traditional strategic planning and stage-gate project management to agile, not from a systems and tools perspective but on the mindset? Paul Souren: Two or three things, in random order. The first is the leadership component again. Really make sure that from the most senior leaders in the organization to the middle-level leaders all over the world and in our affiliates, people really understood the sense of urgency of the change that was needed, and the necessity of creating an environment where people were allowed to make mistakes and take risks. The other thing, which we did specifically in the Netherlands and which was later applied in other countries and globally, is to make it meaningful. Do not experiment in a corner of your portfolio where, if things go southwards, it does not matter. Jesse Hopps: Do not limit your risk too much. Make it a real, high-stakes thing. Paul Souren: Exactly. We started experimenting with this way of working on the three launch products going into the new markets. Jesse Hopps: The most important things you had. Paul Souren: And the rest will follow. We will help you, but you will follow. And the third is not only to celebrate successes, but to celebrate the failures as well. ##### Going out to look Jesse Hopps: How did you come to these conclusions about the behavioral side? Did you figure it out naturally, or did you get help? Paul Souren: Two things. Yes, we got help, from some consultancy companies in the first few years at least. The second is that we deliberately went out, as the affiliate leadership team and also internationally, and sought inspiration in other industries and outside our own geographical area. We went to Silicon Valley for a week. Jesse Hopps: Spend some time with the tech companies and their culture. Paul Souren: And then: how could this work in our affiliate, in our country? From a very humble point of view, you just observe. And on a local level in the Dutch affiliate we offered the same kind of inspiration, not to Silicon Valley but locally in the Netherlands. We literally brought a hundred and eighty people to different companies and said: this is how they are doing it here. Jesse Hopps: Rather than doing a maturity assessment and saying here is the roadmap, being very judgmental about the current state, you said we do things a certain way now, and maybe there are other ways to look at it. It is the humility that comes shining through, and the ability of senior leadership to signal to frontline staff that we do not know everything. Let us go see what we can learn. ##### Where the logic applies Paul Souren: What we talked about is not unique to Roche or to pharma in general. It can be applied in many sectors and industries. That said, my professional career has developed and grown in the life science sector, before Roche as well. That is the world I know, and it is a sector I feel makes an impact on people's lives, as many other sectors do. That is where I would love to continue to bring value. Jesse Hopps: Pharma, med tech, that kind of thing. Paul Souren: Science-based, but it could also be science-based nutrition. Jesse Hopps: Increasingly, nutrition is probably the way to focus on avoiding the need for the medicines later on. Paul Souren: Absolutely right. So if there is a place where I can help people get the best out of themselves in service of the company's objectives and purpose, I am your man. --- ### Transformational Leadership with Dominique Signorel https://commercialexcellenceconsortium.com/podcast/transformational-leadership-with-dominique-signorel Why 70–90% of transformations fall short, and where ADKAR runs out. Topics: transformation failure rates, ADKAR, desire and intrinsic motivation, compliance vs. commitment, frontline-up design, coaching vs. training, the frozen middle, customer pain points, leadership rotation #### Summary Dominique Signorel has spent three decades in the electrical industry, from components through to IoT-enabled devices, at Amphenol, ABB and now Honeywell. Mostly global roles, and lately transformational ones, tying customer pain points to business outcomes. His verdict is blunt and he does not soften it: transformation does not fail in a strategy role, it fails in the field. Direction was clear and leadership support was strong on the program he describes; then it reached the regions, where teams were still owed a monthly number on the old way of working. He and Jesse Hopps work through where ADKAR earns its place and where it runs out, what separates compliance from commitment, why the message goes down and rarely comes back up, and what he would do differently on day one of the next one. That answer is short: start at the bottom, much earlier. #### Key points - Three decades across Amphenol, ABB and Honeywell, and the shift from pushing innovation at customers to pulling it out of their pain points. - Why hardware businesses reach a red ocean quickly, and what software and AI add beyond the margin. - Where transformation fails, in his experience: not in strategy, in the field. - The squeeze that produces it: change how you work, and hit the monthly number on the old way while you do. - Running several transformations at once, misaligned in timing and outcome, and what that looks like from one person's desk. - What ADKAR does well: structure, sequence, and a common language across functions and regions. - Where it runs out, and why desire is the stage a program supplies messaging for. - Compliance against commitment, defined in one line each. - The margin project where the team owning the pricing logic saw the P&L effect and pushed harder than anyone asked them to. - Dashboards built for the field by people who have not been in front of a customer. - Why a group setting is the wrong room for some people to disagree in. - The middle layer: if the regional and country managers embraced it, teams followed; if they were unsure, everything became an excuse. - Handing over the outcome and letting each region design its own path, and what has to exist before that is survivable. - Senior leadership rotating often, and the question people started asking him directly. - Why training sticks only when it is practiced, and what a consultant's PowerPoint leaves undone. - What makes a good enterprise coach: active listening, low ego, and enough patience without waiting ten years. - What he would do differently on day one: ask where people are stuck before presenting the model. - His career advice, which is about rotation rather than ambition. #### Definitions - **Pull innovation** — The shift Dominique describes across his industry. Technology companies used to push innovation at customers and markets. The change is to start from customer pain points and let those drive what gets built, which he credits with driving the transformations themselves rather than being an output of them. - **The red ocean problem** — Why hardware businesses transform. In the hardware world you reach a red ocean fast if you are not careful, and it gets very crowded. Software and AI capability change the solution set, and they also make the business stickier and produce recurring revenue. - **Where transformation fails** — Dominique's central claim: transformation does not fail in a strategy role, it fails in the field. Direction can be clear and leadership support strong, and reality still arrives when the program reaches the regions, where the same teams still owe this month's number on the old way of working. - **The short-term squeeze** — The choice a field team is really given: hit today's targets, in a publicly traded company under real pressure, or invest time in working differently. Strategy says change; the field says I still have to deliver today, and I am still incentivized on the short-term target. - **Transformation collision** — Several transformations running at the same time, not aligned in timing or in outcome. Each may be defensible on its own. From the desk of one person expected to absorb all of them, the combination is very difficult to make sense of. - **ADKAR** — The change-management model naming five sequential conditions for an individual to adopt and sustain a change: Awareness, Desire, Knowledge, Ability, Reinforcement. Dominique has used it more than once and is clear about what it delivered: it structured the work and gave a common language across functions and regions. - **The Desire gap** — Where the model asks for desire and a program has no way to manufacture it. Dominique's account is direct: they could not explain why the change mattered to the individual, and belief is not something you can force. Training still ran, and people went back to the habits that had made them successful. - **Compliance vs. commitment** — His definitions, in one line each. Compliance is I have to do it, because something bad will happen to me if I do not. Commitment is I own it and I will push it forward, because I believe in it, I understand the end state, and I can see the impact I am going to have on my own team. - **Awareness without ownership** — The state a program reaches when the first stage worked and the second did not. People know what is happening and why the company says it matters, and no responsibility has been taken for making it true. Dominique names the absence of ownership and accountability as where it goes wrong. - **Passive resistance** — People nod and agree in the meeting, then go back to what they were doing the next day. Dominique's explanation is partly about the room: a group setting is not the right forum for some people to challenge anything, so what surfaces is a passive yes, and the behavior at the desk is unchanged. - **The message goes down, not up** — His summary of the failure mode. Vision, strategy and change are pushed downward, and the organization is not set up to listen upward: here are my pain points, here is how we should do things differently. Reversing that direction is what he calls a big shift. - **The frozen middle** — The regional and country managers balancing global direction against local execution. Dominique's experience is that everything turned on them: where they embraced the change, teams followed and it went smoothly; where they were unsure, everything slowed and everything became an excuse. - **Outcome ownership** — Bringing the outcome to the table and letting teams design their own route to it. Different regions take different paths, because the dynamics and cultures differ. Dominique's condition for it working is trust, and his method for building trust is being physically present with people. - **Accompaniment** — The word Dominique reaches for when explaining why training alone does not stick. Training is a piece of the equation and it sticks when it is practiced, so somebody has to go with the individual, hands-on, through the doing. It is what a delivered PowerPoint structurally leaves out. - **Active listening** — What he names first when asked what makes a good enterprise coach, and he extends it past the obvious: listen to more people than the one leading the transformation. His reasoning is that a coach who is not listening to the field, the department, the factory has nowhere to start. - **Bounded patience** — Patience matters and Dominique qualifies it immediately: if you are transforming, ten years is not available. Jesse's structural answer is the ninety-day Growth Project, which supplies a time-bound window and a presentation at the end, so coaching stays patient without becoming open-ended. #### Questions this answers ##### Who is Dominique Signorel? Chief Product Officer at Honeywell, with about three decades in the electrical industry across Amphenol, ABB and Honeywell. His career has moved from components to IoT-enabled devices, mostly in global roles, and lately in transformational ones tying customer pain points to business outcomes. ##### What is the industry shift he has watched? From pushing innovation to pulling it. Technology companies used to push innovation at customers and markets. The move is to become customer-obsessed, understand the pain points, and let those drive what gets built. In his account, that is what has been driving companies to transform rather than being a result of it. ##### Why do hardware businesses end up adding software? Because in the hardware world you reach a red ocean fast if you are not careful, and it gets very crowded. Software and AI capability change the solution set you can put in front of a customer, and they also make the business stickier and produce recurring revenue. ##### Where do transformations fail? Not in strategy. Dominique's line is that transformation does not fail in a strategy role, it fails in the field. He describes a program with a strong vision to move from a project mindset to a product mindset, clear direction and strong leadership support, that met reality when it reached the regions. ##### What happened when it reached the regions? Teams were under pressure to deliver numbers monthly and quarterly, managing installation and dealing with customers. That produces a choice between hitting today's targets in a publicly traded company and investing time in working differently. Strategy says change; the field says I still have to deliver today. ##### What share of transformations fall short? Depending on the source, between seventy and ninety percent fail to hit their objectives or create long-term shareholder value, across McKinsey, Bain and BCG. Dominique's own answer when asked how many he has seen succeed fully is that he has yet to see one. ##### Is that consistent with what practitioners report? Jesse describes putting it to a roundtable of senior operators. Not one claimed a hundred percent, or fifty. Very few claimed more than ten percent of their transformations hit their objectives. The published statistic and the room agreed. ##### So are companies just bad at setting goals? That is one reading Jesse offers, along with the possibility that the goalposts move as everyone learns. Dominique adds a structural factor: companies run multiple transformations at once, and they may not align in timing or in outcome, which makes it very difficult for one individual to work out what is being asked of them. ##### Why do simultaneous transformations cause a problem? Because each is designed on its own and they all arrive at the same desk. Timing and intended outcome do not line up, so the person expected to absorb them has no way to resolve the combination into a coherent set of priorities. Any one of them might be reasonable; together they are noise. ##### What is ADKAR and what did it do well for him? A change-management model naming five sequential conditions for adopting and sustaining a change: Awareness, Desire, Knowledge, Ability, Reinforcement. Dominique has used it more than once, and he is clear about what it delivered: it structured the work, and gave a common language across functions and across regions. ##### Where did it run out? At desire. His words are that they could not really explain why the change mattered to the individual, could not answer what is in it for me, and could not force that belief. The rest of the sequence continued to run: the training happened, and it did not get them there. ##### What did people do instead? Went back to old habits. In his example, some teams understood the product model perfectly well and reverted anyway, because the old way was what had made them successful in their environment. Understanding the new model and having a reason to adopt it are separate things. ##### So what was missing? Ownership. Dominique's summary is that they had awareness but not real ownership, and that the absence of ownership and accountability is where the transformation went. Awareness is a condition a communication plan can produce; ownership is not. ##### What is the difference between compliance and commitment? Compliance is I have to do it, because something bad will happen to me if I do not. Commitment is I own it and I will push it forward, because I believe in it, I understand the end state, and I can see the impact I am going to have on my own team. ##### Is there an example of commitment appearing? A margin improvement project. The team that owned the pricing logic could see the effect on the P&L, and they became strong advocates. They pushed it further than anyone expected of them. Seeing the impact produced the belief, and the belief produced the ownership. ##### Why does seeing the P&L effect change behavior? Because it closes the loop between what someone does and what happens. Most people in a transformation are asked to change a behavior whose consequences they will not observe. When the connection is visible, the argument for the change stops being someone else's assertion. ##### What goes wrong when the people designing are not the people using? Dominique's example is dashboards built to help a salesperson be more insightful in front of customers, by people who have not been in the field or in front of a customer. The result is a beautiful dashboard with a lot of data on it, and no answer to: so what do I do with this? ##### Is there a version of that from a CRM rollout? Jesse's: a salesperson was moved into a market manager role and given the design of the opportunity screen. Wanting data for market research and reporting, he specified around eighty-seven fields, forgetting that a rep in five or six meetings a day is not going to ask ninety questions. It had to be redesigned. ##### What would have worked instead? Jesse's answer is a small set everyone can genuinely commit to, enough to roll up global reporting, then additional fields where a region or a team needs them. The failure was designing for a perfect world of unlimited data capture rather than for the day the work happens in. ##### What is passive resistance? People nod and agree in the meeting, then go back to what they were doing the next day. Dominique's version is the passive yes, yes, yes, we will get it going, followed by returning to the desk and doing what they were doing before. ##### Why do people not simply disagree in the meeting? Partly because of who they are and partly because of the room. People have different backgrounds, skill sets, experiences and personalities, and a group environment is not the right forum for some of them to challenge anything. The disagreement is real; the setting is wrong for surfacing it. ##### What is the other cause? Not being a believer. Dominique's framing is that the individual does not see what is in it for them in their day-to-day role, so the change does not resonate. You can run a transformation with tools, and if it does not bring value to the individual, the tools do not make up the difference. ##### What does he name as the core failure mode? Direction of travel. Most of the time, vision, strategy and change are pushed down, and the organization is not listening upward: here are my pain points, here is how we should do things differently. Reversing that is what he calls a big shift. ##### How much does the middle layer matter? In his experience it decided the outcome. The regional product leaders and country managers had to balance global direction with local execution. Where they embraced it, teams followed and it went smoothly. Where they were unsure, everything slowed down and everything became an excuse. ##### What does that look like in practice? Ordinary work getting slower. His example is setting up a SKU: something that should be immediate starts taking ages. The resistance rarely announces itself; it appears as friction in operations, and the reasons offered are all individually plausible. ##### Does he have sympathy for middle managers? A lot, and he says so without qualification. They are absorbing corporate direction from above and the operational reality of customers, revenue and operations from below, and are expected to reconcile them. His conclusion is that if a transformation is not designed with their reality in mind, you lose them. ##### How do you activate the middle rather than instruct it? Bring the outcome you are after to the table, and let them design how to reach it. Different regions take different paths because the dynamics and the cultures are different. As long as the outcome is clear, the route is theirs. ##### Isn't that frightening for a senior team? Jesse puts it exactly that way, and Dominique's answer is that where it feels frightening the problem is usually a lack of trust. That is the thing to build first, and his method for building it is unglamorous: being physically present with people, meeting face to face, having dinner, spending time. ##### What does a senior leader have to do differently for this to work? Open communication, which he calls extremely critical. And a specific reflex when somebody challenges an objective or a strategy: read it as passion rather than as obstruction. That individual cares. Listen to what they have to say, ask how they want to implement it, and ask how you can help. ##### What is the risk in giving up control of the how? That a senior leader who has a history of solving big problems now has to let someone else solve one in their own area, and is not in the room for most of it. Jesse's point is that developing people means letting them fail and supporting them through it, and that the patience for it is scarce when there are numbers to hit. ##### How does leadership rotation affect transformation? It undercuts the trust the approach depends on. Senior leaders in large corporations rotate between regions and functions, so you build trust and then move. Dominique has been on the receiving end of it, describing himself as the fifth leader in a role, with people asking him directly whether he was going to stay. ##### How do you make a transformation survive the next leader? Anchor it on the customer rather than on the leader's agenda. If the outcome is clear and what you are doing is solving customer pain points, then whoever occupies the leadership position matters less. Being the fifth or sixth leader stops being the determining fact. ##### Why isn't training enough to change behavior? Because training is a piece of the equation and it sticks when it is practiced. Dominique reaches for the word accompaniment: somebody has to go with the individual, hands-on, through the doing. A course that ends at the end of the course has not supplied that. ##### What does he say about consultants? He declines to bad-mouth them and names the structural gap. The PowerPoint is one thing. Once it is delivered, there is no real follow-up. His phrase for the pattern is: it is not PowerPoint, thank you, bye, which he says happens quite often. ##### What does coaching add that a deliverable does not? Being on it together. Working alongside the customer or the team rather than handing something over and leaving, and supporting the work as it happens. His summary is that it comes down to taking the time, which is exactly what the delivered-and-gone model is designed not to spend. ##### Why is coaching accepted in sport and not in business? Jesse raises it as the puzzle: in athletics few people expect to learn a skill from an explanation, and a coach watches you do it and gives you feedback. His illustration is his daughter's round-off back handspring, two years of twice-weekly work. A backflip is not a weekend-workshop skill. ##### Do enterprises have people who could coach? Jesse's argument is that the talent usually exists and two things block it. Long-tenured people may be inwardly focused and lack an external view of what better looks like, so they coach toward more of the same. And the ones best placed to do it have little personal incentive to spend their time on it. ##### What makes a good enterprise coach? Active listening, first and repeatedly. Dominique extends it past the obvious: listen to more people than the one leading the transformation. His test is practical, that a coach who is not listening to the field, the department or the factory has nowhere to start. ##### Does ego matter? He is unequivocal that a coach should be humble and a servant leader, and that a high-ego coach does not work. His reasoning connects to the rest: a coach still answering their own what is in it for me is poorly placed to help anyone else answer theirs. ##### How much patience does coaching need? Enough, and not unlimited. Dominique says patience is important and qualifies it immediately: on a transformation, ten years is not available. Jesse names the failure in the other direction too, that a coach who jumps to the answer stops people forming their own. ##### How do you keep coaching patient without it becoming open-ended? Jesse's structural answer is the ninety-day Growth Project: a time-bound window, a real piece of work, and a presentation at the end. It lets a coach be patient inside the window while the window itself keeps the work moving, since people progress at different speeds. ##### What would he do differently on day one of the next transformation? Start from the bottom much earlier. Rather than opening with here is the model, here is the strategy, here is what we are going to do, ask the teams where they are stuck and what is slowing them down today. Identify the pain points first. ##### And then what? Build the transformation around those pain points. His prediction is that doing it correctly creates energy, because people see that their problem is being solved rather than that an initiative is being pushed down at them. That is where the belief comes from. ##### Does starting from the bottom take longer? It takes more time and it requires patience, and Dominique accepts both. His answer to whether it is slower is that you invest up front and at least you get the result, which he contrasts with an approach that falls short most of the time. ##### What does it do to change fatigue? It reverses it. What he reports is more passion, more energy, a spark in people's eyes, and the shift to it being my transformation rather than yours. Ownership at each level in the organization, and results that arrive quicker than the slower-looking route suggested. ##### What ultimately makes change stick? People seeing the results themselves. Visible progress, plus understanding what is in it for them and how they contributed to the impact. Not being told the transformation is working, but observing it in something they had a hand in. ##### What connects an individual to the change beyond their own interest? The customer. Dominique's answer is that everything gets connected back to reality and done with the customer in mind, and that this is worth explaining rather than assuming. Jesse's parallel is that people move mountains for others more readily than for themselves. ##### What career advice does he give? Fast-track rotation through different departments, functions and regions. Understand what makes the sales person tick, what makes corporate finance tick, what makes the plant manager tick. He adds one thing outside anyone's control: really good mentors. ##### Why does rotation matter for transformation leaders specifically? Because moving a large business means working through functions you have not sat in. Jesse's reading of the advice is that rotation is what stops you bringing your own bias about how things should be done to a job you have not done yourself. ##### What is the argument in one sentence? Transformations rarely fail in the strategy; they fail where people are asked to change while still owing last quarter's targets, and the fix is to start from what is slowing those people down rather than from the model. #### Quotations > "Transformation doesn't really fail in a strategy role. It fails in the field." > — Dominique Signorel > "I have yet to see a fully successful transformation." > — Dominique Signorel > "Strategy will say: change. And the field will say: I still have to deliver today." > — Dominique Signorel > "We couldn't really explain why the change mattered. What's in it for me at the end of the day? We couldn't force that belief." > — Dominique Signorel, on where ADKAR ran out > "Compliance is: I have to do it, because something bad will happen to me if I don't. Commitment is: I own it, and I'll push it forward, because I believe." > — Dominique Signorel > "We had awareness, but not real ownership." > — Dominique Signorel > "A beautiful dashboard, a bunch of data on it. And then: so what? What do I do with all this data?" > — Dominique Signorel, on tools built by people who have never been in front of a customer > "You get this passive yes, yes, yes, we'll get it going. And then I go back to my desk and I do whatever I was doing before." > — Dominique Signorel > "Most of the time the message comes down, it doesn't come up." > — Dominique Signorel > "If they embraced it, teams would follow and it all went smoothly. But if they were unsure, everything would slow down. Everything would be an excuse." > — Dominique Signorel, on the regional and country managers > "Training is a piece of the equation. It will stick when you practice." > — Dominique Signorel > "Once the PowerPoint is delivered, there's no real follow-up. It's not PowerPoint, thank you, bye." > — Dominique Signorel > "If you're not listening to the field, to that department, to that factory, you can't coach. Where do you start?" > — Dominique Signorel > "Instead of saying here's the model, here's the strategy, here's what we're going to do, I would ask teams: where are you stuck? What is slowing you down today?" > — Dominique Signorel, on what he would do differently on day one > "It becomes ownership. It's my transformation, not yours." > — Dominique Signorel > "Information doesn't create results. Action creates results." > — Jesse Hopps #### Transcript ##### Three decades in the electrical industry Jesse Hopps: Could you give a quick background on who you are, what kind of companies you have worked in and what sort of roles you have had? Dominique Signorel: I have been in the electrical industry for about three decades, moving from components to IoT-enabled devices, and I have been working with Amphenol, ABB, and now Honeywell. Very significant companies, most of the time global roles, and most recently transformational roles to help tie customer pain points to business outcomes. ##### From pushing innovation to pulling it Jesse Hopps: One thing that comes to mind is organizations with a deep history, very asset-focused manufacturing companies, going from product organizations to solutions companies. Has that been a common thread? Dominique Signorel: Absolutely. More and more we are trying to tune the offerings to customer pain points, and those customer pain points are helping companies transform. That is what I have been seeing over the past few years. What is interesting about the phrase pulling innovation is that in the past, technology companies were pushing innovation to customers and to markets. Now we are a lot more customer-focused, customer-obsessed, trying to understand pain points, and that is driving companies to innovate and deliver true value to the customers and to the business. Jesse Hopps: Did they all at some point start doing software in addition to their products? Did they get into hybrid business models? Dominique Signorel: Yes, absolutely. In the hardware world you go pretty fast into a red ocean if you are not careful, and it gets very, very crowded. Companies evolve into software and AI capabilities, and that helps deliver a different solution set to customers, but it also becomes a lot stickier and gets recurring revenues out of it as well. ##### Where transformation fails Jesse Hopps: You have led major transformations at a lot of these companies. Why do so many fall short when it comes to executing the plan? You have a great strategy, maybe worked with the big consulting firms, the milestones are clear. What happens in execution mode? Dominique Signorel: In my experience, transformation does not really fail in a strategy role. It really fails in the field. In a previous company we had a very strong vision to move from a project mindset to a product mindset. There was clear direction and very strong leadership support. But once we hit the regions, reality kicks in. Teams were under pressure to deliver numbers monthly or quarterly. We had to manage installation, deal with customers. This is when you have a choice between hitting today's targets, under pressure, in a publicly traded company, or investing time in working differently. And that is where the gap is. Jesse Hopps: That is the contention. Short-term targets and long-term capability building. Dominique Signorel: And that is where a strategy will say: change. And the field will say: I still have to deliver today. I am still incentivized on short-term targets. ##### The numbers, and the collision Jesse Hopps: The ones that have pulled it off, would you say that is the majority, or have most under-delivered on the vision? Dominique Signorel: I have yet to see a fully successful transformation. The stats, depending on who you look at, McKinsey, Bain, BCG, are somewhere between seventy percent and ninety percent failing to hit the objectives or create long-term shareholder value. Jesse Hopps: We just did a roundtable. We asked who is batting a hundred percent. No one raised a hand. Who is batting fifty percent. No one raised a hand. Anyone over ten percent, and still it was very few. So either we are really bad at setting goals, or we change the goalposts along the way as we learn. Dominique Signorel: There is another aspect. When going into transformational initiatives, we have multiple transformations happening at the same time. They may not completely align in timing and in outcome. And that makes it very, very difficult for an individual to look at it and say: what is in it for me at the end of the day? ##### What ADKAR did, and where it ran out Jesse Hopps: One of the most prolific change-management models is ADKAR: awareness, desire, knowledge, ability, reinforcement. A linear process to bring people through to a defined future state. Where has it been helpful for you, and where does it fall short? Dominique Signorel: I have used it a couple of times, and it really helped us structure the whole thing. It was very clear, and it gave us a common language across functions and across regions. You could really land the arrangements, the training and the reinforcement. That part worked pretty well. The way it actually broke was the desire piece. We could not really explain why the change mattered. What is in it for me at the end of the day? We could not force that belief. Jesse Hopps: Force the desire. Dominique Signorel: You will do the training, but you will not get there. In the previous example, some teams would understand the product model, but they still went back to the old habits, because that is what helped them be successful in their environment. So we had awareness, but not real ownership. The lack of ownership and accountability in a transformation, that is where it goes. ##### Compliance and commitment Jesse Hopps: What is the difference between compliance and real commitment? I think ownership might be that difference. I tell my wife we cannot use carrots and sticks to raise good kids. We do our best to incentivize and punish, and none of it works. They make decisions when we are not around. Dominique Signorel: For me the difference is simple. Compliance is: I have to do it because I have to. Something bad will happen to me if I do not do it. And commitment is: I own it, I will push it forward, because I believe. I get the destination, I get the end state, I understand the impact I am going to drive in my own team, my department, whatever it is. You can layer it down across the organization. For example, when we worked on a margin improvement project, the team that owned the pricing logic saw the impact on the P&L, and they became strong advocates. They pushed it further than we expected. That was an example where seeing the impact drove the belief that we are on the right path. Jesse Hopps: The belief brought ownership. ##### When the designer is not the user Jesse Hopps: I was working on a CRM project, and they pulled a guy off the sales team to be a market manager. The minute he was no longer a sales guy he wanted all kinds of data for his own market research and reporting. When he designed the interface and the inputs for each opportunity, he put something like eighty-seven fields in there. He forgot how busy those people are, going to five or six meetings a day, and that they cannot ask ninety questions in a meeting. He built the process around a perfect world of unlimited data. The whole thing fell apart and had to be redesigned. Dominique Signorel: I see it quite often, where teams are building dashboards that should enable a salesperson to do a better job in the field, or to be insightful in front of customers. And those individuals have never been in the field, never been in front of customers. So there is a beautiful dashboard, a bunch of data on it. And then: so what? What do I do with all this data? Jesse Hopps: Information does not create results. Action creates results. ##### Why the yes in the room is not a yes Jesse Hopps: This phenomenon I call passive resistance, where people nod their head and agree on the surface in the meeting, and then when they go back to work they do not really do it. Why do people agree in principle and then not shift their behavior? Why not disagree in the meeting and hash it out there? Dominique Signorel: A couple of things come to mind. First, we are all people with different backgrounds, skill sets, experiences and personalities. A group environment may not be the right forum for some individuals to challenge or to have those discussions. So you get this passive yes, yes, yes, we will get it going. And then I go back to my desk and I do whatever I was doing before. And the challenge is that the individual is not a believer of that change. They do not see what is in it for them in their day-to-day role. It is all about what is in it for me, and I may be repeating myself. You have tools, you can run your transformation with tools, but at the end of the day if it does not resonate, it does not bring value to the individual. Most of the time the message comes down, it does not come up. And that is where the failure mode in transformation is. Most of the time we are pushing down vision, strategy and change. We are not listening and not bringing it from the bottom: here are my pain points, this is how we should do things differently. It is a big shift. ##### The middle, and what it absorbs Jesse Hopps: Talk to me about the gap between the ivory tower and the front line, and the middle managers who need to protect their field teams from the corporate material coming down while carrying the ideas and challenges upward. What is your sympathy with the middle manager? Dominique Signorel: A lot. What we saw in the product transformation is that it really depended on those regional product leaders, the middle managers, and the country managers. They had to balance that global direction with the local execution of the business. If they embraced it, teams would follow and it all went smoothly. But if they were unsure, everything would slow down. Everything would be an excuse. And you are looking at real pressure at that level: the customers, the revenue, the operations. Setting up a SKU, instead of being immediate, would take ages. So if we do not design transformation with their reality in mind, we lose them. It is that simple. ##### Handing over the how Jesse Hopps: Can you share an example where rather than bringing a top-down edict you got them activated, helped them articulate their challenges and built solutions with them? Dominique Signorel: At the end of the day you bring to the table the outcome you are after, and let them design how to get to that outcome. Depending on the region, a different path, because there are different dynamics and different cultures. As long as the outcome was clear, the how was theirs. Jesse Hopps: That sounds terrifying for a C-level team. We are going to design the outcome, the place you have to get to, but we are going to rely on you to figure it out. What happens there? Dominique Signorel: It is a lack of trust, in most instances. You need to build that trust. And you know how much I travel. You build that trust meeting people face to face. You have a drink, you have dinner at night, you are with them. That is how it goes. ##### What open communication looks like Jesse Hopps: When it is done really effectively, how do corporate and top-down leadership need to act? And on the flip side, what is the middle manager's role? Dominique Signorel: Open communication. Open communication is extremely critical. And you can see when individuals start to challenge an element of an objective or a strategy. I see that as: okay, that individual is passionate about it. Let us listen. What do you have to say? And how do you want to implement it? And then, how can I help? That kind of discussion. Jesse Hopps: It is a humble servant-leader mentality. It seems risky, because the senior people are smart, they have figured it out, they have a history of solving big issues. Now they have to give up some control over how someone else solves it in their own area. As a senior leader you cannot be in every room. You have to build up your people, let them develop and fail, and support them. ##### Rotation, trust, and the fifth leader Dominique Signorel: Another challenge very big corporations face is that senior leadership tends to rotate quite a bit between regions and between functions. It is difficult, because you may want to build that trust and then suddenly you have another role and you move away. Jesse Hopps: How does that affect the middle managers when they think: by the time I am halfway through this, you are going to be gone and someone else will arrive with something new? Dominique Signorel: I start all over again. I have seen it personally, where I am number five in the organization and it tends to change quite a bit. People said to me: okay, hey Dom, are you going to stay? We literally had those discussions. And ultimately, if the vision and the outcome are clear, and we are solving customer pain points, then no matter what the individual leadership position is, it holds. Jesse Hopps: So it is less about the new leader's agenda and more that if we are always focused on our customers and solving their issues, me being the fifth or sixth leader should not really matter. Dominique Signorel: Absolutely. And that is my mindset. ##### Why training is not enough Jesse Hopps: If training alone and information and tools were all you needed, everyone would be walking around in fantastic shape. It is easier to buy the treadmill and the shoes and the gym membership than to get up at five thirty and have the discipline. Why does training often not create behavioral change that sticks? Dominique Signorel: Training is a piece of the equation. It will stick when you practice. So you need to, and I am going to try to find my English word, accompany. You need to bring an individual with you, hands-on, and go through it. Jesse Hopps: I have four coaches right now. A book coach for the book I am writing, a swimming coach, a coach for spirituality and becoming a more patient human being, and a coach for nutrition. My daughters do gymnastics, and my older daughter just got her round-off back handspring, which she had been working on twice a week for two years. You cannot learn how to do a backflip in a weekend workshop. Why is coaching so accepted in athletics, but in business we pay lip service to it and mostly tell people what to do? Dominique Signorel: I do not want to bad-mouth any consultant, but the PowerPoint is one thing. Once the PowerPoint is delivered, there is no real follow-up. And that is where coaching comes in. You are with your customer or with your team, and you are on it together. Being together and supporting the work together is an important piece. It is not PowerPoint, thank you, bye, which happens quite often. At the end of the day it is all about taking the time. ##### Who can coach, and who will Jesse Hopps: In the big enterprises I work with there are enough people who could do the coaching. But there are two problems. Some have been in the same organization a very long time and may not have an external perspective on what better looks like, so it becomes coaching on the same. And beyond that, how do you get the people with the most ability to take time out of their day, when they have big problems and goals of their own, to help the next person get better? The talent exists. They do not seem to want to spend their time on it, because there is not much for them personally in it. Dominique Signorel: Absolutely. And that goes into listening mode. If you are coaching a company and trying to support a transformation, and you are not listening to the field, to that department, to that organization, to that factory, you cannot coach. Where do you start? ##### What makes a good coach Jesse Hopps: If you were going to pick ten coaches to work with teams through a transformation, what would you look for? Dominique Signorel: It goes back to active listening. Really understanding what my viewpoints are. But also listening to other individuals in the organization, not just one individual. Because if you are building a transformation, yes, you will have a leader of the transformation, but taking the time to discuss and understand more widely matters. Jesse Hopps: What about ego? High ego versus a humble servant leader? Dominique Signorel: Completely humble and servant leader. High ego, I do not think it is going to work. Jesse Hopps: And patience? Dominique Signorel: Patience is important. But I would be careful with patience, because if you are transforming, you cannot wait ten years. Jesse Hopps: I do not think I am a very good coach, because I get so excited that I want to share my thoughts. I do not always have the patience to listen long enough or let other people form and articulate their own ideas. If you jump the gun on solutioning, you can be a really bad coach inadvertently, by not asking enough questions and telling too much. Dominique Signorel: And that is where bias comes in. We all have bias, and everybody has a different background and culture. You want to pause, and listen. Jesse Hopps: We have always done coaching in the context of ninety days, what we call Growth Projects. A time-bound window to get to a result, with a presentation at the end. If it were open-ended, people would progress at different speeds. You need the patience to coach effectively, and on the other hand you need to keep the person moving forward. ##### What he would do differently on day one Jesse Hopps: If someone is about to embark on a new transformation of any kind, what would you do differently, knowing what you know now? Dominique Signorel: I would start from the bottom much earlier. Instead of saying here is the model, here is the strategy, here is what we are going to do, I would ask teams: where are you stuck? What is slowing you down today? When you look at the complexity of our businesses, it is really important. You need to identify the pain points. Where are the challenges in your organization? Then you use that to build the transformation around those pain points. And if you do that correctly, it will create energy, because people will see that their problem is being solved, rather than an initiative being pushed down at them. And that is where you get the belief. ##### Time, and change fatigue Jesse Hopps: That is a radical approach, and it resonates. But does it take more time? Dominique Signorel: It takes a lot more time and you have to be patient. Jesse Hopps: Does it really take more time, if the other way falls short most of the time? Dominique Signorel: There we go. You invest up front, but at least you get the result out of it. Jesse Hopps: There is a lot of built-up baggage in initiatives that fall short. It burns the political capital of the leaders, and staff get tired, which is what people mean by change fatigue. How has this listening-based approach affected that? Dominique Signorel: You get more passion, more energy, maybe a spark in the eyes of those individuals. It becomes ownership. It is my transformation, not yours. And ultimately you get the results, quicker. Jesse Hopps: It is actually faster, although it feels like it is going to take longer. ##### What makes it stick Jesse Hopps: If you could boil it down, what ultimately gets change to stick inside an organization? Dominique Signorel: Ultimately, it is when people see the results by themselves. Then it sticks. Jesse Hopps: Visible progress and momentum for themselves. Dominique Signorel: Visible progress, and I understand what is in it for me and how I participate in that impact we are looking at. I think that is what it is. Jesse Hopps: A doctor can say you will die of a heart attack if you do not change your diet, and people still will not change. What is different about the people who do? Dominique Signorel: It connects everything to reality. Everything they do is with the customer in mind. It is important to explain that. Jesse Hopps: When you think about who quits smoking or starts improving their health, they usually do not do it for themselves. They are motivated by their grandkids, their family. People will move mountains for others more than for themselves. In a business context, connecting the transformation to serving the customer, and connecting that back to their own life, relationships and career, seems to be the ticket. ##### Advice for someone twenty years behind him Jesse Hopps: If you had to give advice to someone twenty years younger in the transformation and senior leadership game, what would you send them? Dominique Signorel: To better understand corporate dynamics and how we run businesses, one key is fast-track rotation through various departments, various functions, various regions. Within the company, to understand what makes the sales person tick, what makes corporate finance tick, what makes the plant manager tick. Rotating through all those environments and spending time understanding would be super valuable. Jesse Hopps: Was that your path? Dominique Signorel: Yes. And really good mentors. Jesse Hopps: If you want to truly move a big enterprise, the way you serve everyone around you best is by understanding what they are going through and how their function works, and not bringing your bias to the table about the way things should be when you have never actually done it yourself. --- ### Personal Backstory with Jesse Hopps https://commercialexcellenceconsortium.com/podcast/personal-backstory-with-jesse-hopps The psychology of transformation: why the hard part is your team's legacy, not the systems. Topics: passive resistance, structured autonomy, psychological legacy, Demand Metric, Adversity Quotient (AQ⁠®), Growth Projects, guided discovery, the future of work under AI, commercial excellence #### Summary Jesse Hopps in the other chair, interviewed by Daniel Kube on Executive Conversations. It starts at nine years old selling flowers door to door in London, Ontario, and runs through the whole arc: quitting a job to move west, washing dishes at Earl's, ten thousand dollars of borrowed rent, and twenty years building Demand Metric into a network of more than three hundred thousand members and over a thousand tools. Then the part that redirected it. Three years around the world with a chemicals client, running workshops that scored well and changed nothing on Monday, and a question he could not answer: how do you get the people who are not natural high performers to want to win? The answer arrived through a friend in San Luis Obispo and a body of science few people with an MBA have encountered. The back half is the design that came out of it, in more detail than it exists anywhere else: the four capabilities chosen out of fifty, the cohorts, the ninety-day Growth Projects, the operator-coaches, the deal made with each business unit leader, and the one percent of design freedom that makes the other ninety-nine land. #### Key points - Selling flowers door to door at nine, telling his mother at fifteen he would get into Ivey and be a millionaire by twenty-five, and living on his own from around the same age. - Five years to finish a three-year degree, a ninety-five average that was not enough, and a rejection from the business school he had aimed at since high school. - Quitting Info-Tech rather than staying, moving west with no plan, and washing dishes at Earl's. - The business he almost started instead, and the phone call that redirected it to marketing. - Ten thousand dollars of borrowed rent, two hundred calls to reach ten people, and the first five hundred tools built on demand rather than on spec. - The break they did not engineer: the American Marketing Association finding the site, and a licensing business he had to have explained to him. - The Marketo call that started the vendor business, and the analyst-versus-media line they crossed without noticing. - The software venture that lost a few years and taught him group-based behavioral change, which turned out to be the thing worth having. - Three years around the world with a chemicals client, and the pattern: good workshops, real content, and nothing different on Monday. - The question he left that assignment with, about the middle of the bell curve rather than the top of it. - Transformation theater, named and defined, and the suspicion that a large share of transformation spend is waste. - The drive to San Luis Obispo, and the introduction that answered the question. - Climbers, campers and quitters, and why the campers are where the work is. - The McKinsey Health Institute numbers: 3.8x, 6x, twenty-three percent, and the sixteen percent of companies investing in any of it. - The academy design in full: fifty capabilities cut to four, the two-day format, the four corners, and the charters on the wall. - Ninety-day Growth Projects, operator-coaches who ran P&Ls, weekly calls where no answers are given, and a science fair at the end. - The deal Roy made with each business unit leader, which is the mechanism that made it spread. - One percent of design freedom, and why the other ninety-nine percent lands differently because of it. - Trading a conventional upskilling plan for design freedom, and the visible momentum that followed inside a year. - What AI changes and what it leaves exactly where it was. #### Definitions - **Psychological legacy** — The counterpart to technical debt, and Daniel Kube's phrase in this conversation. Alongside the systems a company has to keep running sits everything its people have learned about how change goes here: initiatives announced and abandoned, and ways of working that have long been done a certain way. It does not appear in the business case and it is the first thing an announcement lands on. - **Passive resistance** — People nod and agree in the meeting, then go back to what they were doing the next day. On the surface everyone agrees it is the right thing, they have bought in and they have the information, and their behavior does not line up with what they are telling you. Jesse's position is that transformation rests on whether you can minimize it. - **Engineering resistance in** — Jesse's reframing of who is responsible. A transformation designed elsewhere and aimed at people produces resistance by construction rather than by accident, so blaming the people for failing to execute mistakes an output for a cause. The corresponding job is to engineer passive resistance out. - **Structured autonomy** — Real agency inside clear boundaries. In his formulation it is roughly one percent of design freedom over the transformation, enough that people experience themselves as part of it rather than as the object of it. The direction and the guardrails stay central; what gets worked on inside them does not. - **Transformation theater** — The name Jesse gave the pattern after three years of running it: strategy decks, playbooks, workshops, travel, millions of dollars of spend, and no observable difference in what marketing and sales do on Monday morning. His suspicion is that a large share of transformation spend is waste that also distracts people from the real issue. - **Adversity Quotient (AQ⁠®)** — Dr. Paul Stoltz's measure of how a person responds to adversity, built over roughly four decades. Distinct from IQ and EQ, and predictive across a wide range of outcomes. The crucial property for transformation work is that, unlike IQ, it is not fixed: the pattern sets around age twelve and can be permanently improved once it is measured. - **Climbers, campers and quitters** — Stoltz's three groups. Climbers keep moving forward and up, with entrepreneurs at the top of the scale as a group. Quitters have effectively given up, take the paycheck and do the minimum. Campers are the large middle: they have arrived somewhere they do not want to lose, so they would rather nothing changed. Getting campers back on the climb is where transformation is won. - **The adaptability numbers** — From a McKinsey Health Institute study of thirty thousand people. Where people reported being resilient and adaptable, innovation and engagement ran about 3.8 times higher; adding psychological safety and organizational support took it to roughly six times. Only twenty-three percent reported being highly resilient and adaptable, and around sixteen percent of organizations were investing in building it. - **Mindset → Skillset → Toolset** — The sequence the academy runs on, and the inversion of standard practice. Most consulting and transformation work starts with tools. This starts with readiness to change and the ability to harness adversity, then builds skill on real work, and reaches tools last. - **Guided discovery** — The Socratic method applied to capability building. Rather than telling people what to do, you ask what their challenges are, have them frame their own problems and needs, and involve them in designing the solution. Jesse names it as the critical move, and points at the schools his own children attend as the same principle. - **Align, inspire, reflect, apply** — The academy's four phases. Align is asking business unit leaders which capabilities would matter most if they improved overnight. Inspire is showing the gap between status quo and best in class without a maturity assessment. Reflect is a safe room where people put their own challenges on the wall. Apply is a ninety-day project they chose. - **Growth Project** — A ninety-day piece of real commercial work, chosen by a self-formed team of three to five people drawn across business units, inside the capability areas the leadership named. Coached weekly by an operator, charter written on a large sheet on the wall, and presented to a panel at the end. Some scale into company-wide practice and some end, and both are acceptable outcomes. - **Operator-coach** — Deliberately not an analyst or career consultant. People who ran business units and led chemicals companies, coaching weekly by asking questions rather than supplying answers. Jesse is explicit that he excluded his own profile from the role, because the credibility that matters here comes from having done the job. - **The deal** — The reciprocity Roy set with each business unit leader, and the mechanism that let good work travel. You choose what you work on rather than receiving one program applied identically everywhere. In exchange, when someone else's unit develops something that works, you stay open to picking it up. Everyone accepted, which turned rollout into pull. - **Commercial excellence** — The title the field is consolidating on, largely a rebrand of digital transformation now that everything is digital. Usually a head of commercial excellence reporting to strategy across a portfolio of business units, funded by those units, working on pricing discipline, capability gaps, market strategy and getting units to work together on shared accounts. A few thousand people worldwide have the title. - **The information assumption** — That people behave differently once they know more. Twenty years of building exactly that is what led Jesse to the opposite conclusion. His own test of it: if information were the issue, everyone would be walking around in perfect health. We know better and we do not do it. #### Questions this answers ##### What is this episode? Jesse Hopps interviewed by Daniel Kube on Executive Conversations, rather than hosting. The two have known each other for twelve to fifteen years, since Daniel used Demand Metric as a founder building startups. It is the fullest account of the backstory and of the academy design in one place. ##### Where does the story start? Nine years old, knocking on doors selling flowers in London, Ontario. His parents had little means and little formal education, and he wanted to get somewhere else. He worked door to door, then in restaurants, and was living on his own from around fifteen. ##### What did he tell his mother at fifteen? That he was going to get into Ivey and be a millionaire by twenty-five. Her response was to keep dreaming. He had set the goal and picked the school, which is the part that mattered for what followed. ##### Did he get into Ivey? No. He was not pre-accepted out of high school despite roughly a ninety-five average, and he applied again after two years of university with mid-eighties grades and a strong recommendation, and did not get in. It took him five years to finish a three-year degree, in philosophy. ##### What happened to his family during university? His parents went bankrupt, and he had a bank loan. That is what forced the job over the summer of first year, and the question of how he was going to pay for school from there. ##### Where did the career begin? Inside sales at Info-Tech Research Group in London, a startup at the time in the IT analyst space, founded by Joel McLean, who had come out of Ivey and taught there. Jesse applied partly because he thought the connection might help him into the school. ##### Why did he leave Info-Tech? He wanted to move to Vancouver and asked to work remotely. The answer was that it was not something they did and it would set a precedent. So he quit and moved anyway, with Joel offering to help him with whatever he needed. ##### What was his first job out west? Washing dishes at Earl's. After that a software company, where he met his boss Alfie, and where he started working out what business he wanted to build. ##### What business did he almost start instead? An events company called culture branding, built around corporate sponsorship. He had it ready to go and the first event planned. Looking at the numbers, he concluded it would be a fun business that would not get him where he wanted to go. ##### Where did the Demand Metric idea come from? From applying the Info-Tech model to a different audience. In the early 2000s, with SiriusDecisions and Eloqua emerging, B2B marketing was becoming data-driven and revenue-focused rather than communications and pretty pictures. He saw a business in helping operationalize that shift. ##### What did Joel say when he called? That he would be doing it himself in about ten years, after HR. So Jesse should get it started, and they would see where he was in a few years, and Joel would help with whatever he could. That is what cleared the way. ##### How was it funded? By asking his boss Alfie for about ten thousand dollars, framed as two months of rent, enough to give the idea a go. He had data and a concept and thought he could build the product, test it, and see whether he could get subscription sales. ##### What was the operating model in the early years? Sales first. Two hundred calls to reach ten people, working from lists of eight hundred numbers, calling the same companies repeatedly. Find a need, then build. The first five hundred tools were built on specific jobs the market asked for rather than on a content plan. ##### How did the revenue work? A sale funded the asset, the asset produced a subscription, and the subscription produced renewals, with a little advisory work on the back of it. Building on demand rather than on spec is what let it grow without capital. ##### What were the early conditions like? Him and four friends in a loft in Vancouver, sleeping on futons, with Jesse sometimes on the floor when he was hiring people to come and live and work with them. ##### What was the first real break? The American Marketing Association finding the site and asking to license and white-label the material for their members. Jesse had not heard of licensing and took it because it sounded lucrative and was all profit. The licensing relationships with the AMA and the ANA have run for well over fifteen years. ##### How did the vendor business start? Around two and a half to three years in, with an email list of thirty to forty thousand marketers built from sampling the product on cold calls. Marketo called and asked whether they did newsletter syndication. Jesse asked what syndication was. The offer was five thousand dollars to send one white paper. ##### What did that turn into? Syndicated sends became webinars, then research projects, then virtual summits with keynotes and research produced ahead of the event. A few hundred projects with Eloqua, Salesforce, Marketo and HubSpot. His partner John still runs that side, researching how technology affects revenue growth. ##### Was there a downside to taking vendor funding? Jesse names it himself as selling his soul to the devil, and is straight about why: an analyst business probably should not also be a media business. They were part media company and part analyst firm with no rules, because they were trying to stay alive. ##### How big did Demand Metric get? More than three hundred thousand members who joined to use the material, not counting distribution through the associations, and millions of downloads. Well over a thousand tools and templates, which is what it became known for. ##### What was the software venture? An attempt to build something like Monday.com without capital, closer to what ClickUp became. The insight was real: everyone was using Trello, and there was no way to combine Kanban boards into one view showing what was high priority across forty boards. They added their own methodologies as prebuilt project plans. ##### What happened to it? It lost a few years and a lot of resources. They got about fifty companies adopting it, who tolerated buggy technology because the help with understanding their problem and designing a solution they owned was genuinely good. Project management software is a commodity, so they scrapped it and offboarded clients onto other platforms because they felt bad having convinced them in. ##### So was it a waste? No, and this is the part that mattered. What they got out of it was a new skill: group-based behavioral change, and solutioning of spreadsheet messes. Difficult to learn and, as it turned out, the thing worth having. ##### How did the Mitsubishi Chemical work come about? Their head of market strategy development found one of the templates in a Google search. The lead landed in the CRM, Jesse's partner Matt booked the meeting, and it turned into building a strategy development playbook to roll out globally across dozens of teams. ##### What did that engagement involve? Three years and three trips around the world, with a lot of time in Charlotte, Düsseldorf and Tokyo, trying to get people using a new playbook. It started with advisory work customizing the playbook and an invitation to co-present at a workshop. ##### Why is strategy hard in a chemicals business? Because there are a million applications. Plastic goes into everything, and the price per kilogram differs by application, with healthcare at far higher margin than automotive. Each application means different competitors and a complicated supply chain, so the strategy problem multiplies. ##### What did he observe over those three years? That giving people the information and the tools, and even running interactive workshops where they built strategy alongside him, produced nothing different on Monday. It bothered him because the work was not making the impact it was meant to make. ##### What question did he leave with? How do you get people who are not the naturally driven, high-performing profile to want to win? The entrepreneurs and the high-performing sales people were already doing it. His question was about everyone else, the middle of the bell curve, and he did not have an answer. ##### What is transformation theater? His name for the pattern: strategy decks, playbooks, workshops, running around, millions of dollars of spend, and no visible effect on EBITDA. His suspicion is that a large share of what gets spent on transformation is waste that also distracts people from the real issue. ##### How did he find AQ? Through Kurt Friedmann, who was running a consultant incubator Jesse had launched, helping around a hundred people move from corporate life into coaching and consulting. Kurt had been Demand Metric's most successful customer and had mentored more than seven hundred startup founders over fifteen years using Lean Startup customer development. ##### What triggered the introduction? A new opportunity arriving while Jesse was driving his wife up for a weekend with the kids at their grandparents'. Roy, who had left Mitsubishi, was now head of commercial excellence at a German chemicals company with a four-year upskilling plan from a top-three strategy firm and wanted the usual content and workshops. Jesse's reaction was that he did not want to be complicit in the theater again. ##### Who is Dr. Paul Stoltz? The originator of AQ, master coach to the US Olympic team, and faculty at MIT among others. He has spent roughly four decades studying how people respond to adversity, and how that response predicts outcomes across work, health, relationships and longevity. ##### What did Stoltz say when Jesse laid out the situation? That he could assure him giving people the information on what they should do would not solve the problem. What Jesse needed to consider instead was the bell curve of adaptability inside any large organization. ##### What are climbers, campers and quitters? The three groups on that curve. Climbers keep moving forward and up, with entrepreneurs at the top of the scale. Quitters have effectively given up, take the paycheck and do the minimum. Campers are the large middle: they have arrived somewhere and do not want to risk losing it, so they would rather nothing changed. ##### Where is transformation won? With the campers. The climbers are already producing most of the results. Quitters drag and have to be dealt with, and focusing there does not make a transformation work. The question that matters is how you get campers back on the climb. ##### Is AQ fixed, like IQ? No, and Jesse names this as the good news. The pattern of response is roughly hardwired from around age twelve, and once it is measured and shared with someone it can be permanently improved. The effects reach past work into relationships, family and health. ##### Which groups score highest and lowest? Entrepreneurs are at the top of the scale as a group. Teachers, of all the groups measured, are at the lowest end, which Jesse notes with some alarm given who they spend their days in front of. ##### Does having faced adversity raise your AQ? Not by itself, and Jesse is careful about this. It is not that a country or a person with a lot of hardship scores highly; it is whether they learned to respond well to it. Being handed difficulty and getting better at handling it are two different things. ##### Why did he need external research to make the case? Because he was arguing against a recommendation from a top strategy firm, and his client's boss was a former partner at one of those firms who had bought the plan. Stoltz had studies, including Deloitte work on promotion speed, and Jesse needed something from a source that would land in that room. ##### What did the McKinsey Health Institute study find? Across thirty thousand people, where individuals reported being adaptable and resilient, innovation and engagement ran about 3.8 times higher. Adding psychological safety and organizational support raised it to roughly six times. ##### What is the number that makes it urgent? Only twenty-three percent of that sample reported being highly resilient and highly adaptable. So a company attempting wide change across tens of thousands of people is starting with nearly eight in ten telling you, up front, that they are not good at absorbing change. ##### How many companies are doing anything about it? Around sixteen percent were investing in building adaptive capability. Which is the gap in one line: you need it, people say they do not have it, the whole transformation depends on it, and very few are funding it. ##### What is the mindset, skillset, toolset argument? That most consulting and transformation work runs tools first, and the order should be reversed. Get people ready to change and able to harness adversity rather than be worn down by it, then develop skills on real work, and reach tools last. ##### Why does classroom training rarely produce the change? Because transformation is not an information problem, a strategy problem or a clarity problem. Companies know what to do. The difficulty is getting people to do it consistently when things get hard, which is exactly when the behavior has to survive and usually does not. ##### What is guided discovery? The Socratic method applied to capability building: rather than telling people what to do, ask what their challenges are, have them frame their own problems and needs, and involve them in designing the solution. Jesse calls it the critical move and points at the schools his own children attend as the same principle. ##### What is the align phase of the academy? Going to the business unit leaders and regional heads and asking which capabilities, if they improved overnight, would move the business. The consulting recommendation had been to close all fifty in the capability matrix over four years. Jesse's counter was: pick four. ##### Which four did they pick? Key account excellence, go-to-market strategy, value-based pricing, and opportunity and pipeline management. Those four floated to the top out of fifty, chosen by the leaders who fund the function rather than assigned to them. ##### What is the inspire phase? Podcast-style videos with an expert drawing the gap between status quo and best in class, without a maturity assessment or a diagnostic. They recorded Ron from Mitsubishi, asking what most companies do on key account excellence and what the best he had seen looks like. The purpose is to plant seeds rather than to grade anyone. ##### What happens before people arrive? They take the AQ and GRIT assessments, and get a guided discovery assignment: how would this show up in your work, and what would improving this capability change about your day and about hitting the goals? They arrive mentally prepared rather than cold. ##### What happens on day one? Cohorts of thirty to forty people. The first half is Dr. Paul on AQ and GRIT, the science, and how it affects their own lives, then their scores are revealed. Then the framing: we are not consultants, we are not here to tell you what to do, you are the consultants. And the room fills with their challenges, what they have tried, the cost of not solving them, and what they need. ##### What happens on day two? Focus. Four corners of the room for the four capability areas, and people go to the one they want to work on. Teams of three to five form spontaneously across business units, pick a topic, and spend about three hours writing a project charter, blown up onto a three-by-four sheet on the wall, with sticky notes. ##### What was the hardest part for participants? Picking something. Their reaction was that there were so many things they could work on to get better. Which is itself the finding: the constraint was rarely knowing what was wrong. ##### What is a Growth Project? A ninety-day piece of real commercial work the team chose, inside the named capability areas, coached weekly by an operator. It does not have to solve the problem. It might shine a light on it, build a business case, or do some research. At the end it is presented to a panel, and some scale into company practice while others end. ##### Who does the coaching? Operator-coaches: people who ran business units and led chemicals companies, deliberately not analysts or career consultants. Jesse excludes his own profile from the role explicitly. The weekly call gives no answers, and teaches by asking questions. ##### Wasn't this seen as extra work? That was the first objection, and the answer given was that this is the work. If one adversity is getting in the way of hitting the growth targets, and there is support and resource to go and fix it, that is not an addition to the job. ##### What kinds of projects came out of it? Everything from an AI pilot to a team tackling the thirty days it took to get a SKU into SAP, which was costing them quotes. That team's own reaction was that it was out of their control, sitting with master data and IT. The reply was that they might still make progress on it. ##### Did anyone senior see it happen? A board member was in the room and walked around during the presentations, and was struck by the level of engagement. What she was watching had involved zero training. It was people deciding which problems to work on. ##### How did the playbooks come back into it? By request. One team working out how to decide between direct and indirect channel built a template and then asked whether Jesse had anything. He did, and had all along. The difference is that demand for the playbooks was generated rather than a template being pushed at anyone. ##### Where did it start, and where did it go? North America first, on the theory that it might be more open to trying something new than German headquarters. The CEO backed it, in a company going through drastic cost cutting, and it moved to Germany. Stoltz had run the same science at Carnegie Mellon with German companies including Bosch and Mercedes and expected it to land well, because it is rigorous and heavily researched. ##### What did participants say about it? One line Jesse repeats: the Academy is my happy place, this is where we can talk about the real issues we do not get a chance to talk about otherwise. Some of what surfaced was contentious, including friction created for one team by another department simply doing its job. ##### What was the deal Roy made with the business unit leaders? No one-size-fits-all, no identical rollout everywhere at once. You choose what you work on. In exchange, when another unit develops something that works and it becomes the new way of working, you stay open to picking it up. Everyone agreed, because it is a fair trade. ##### Why does that deal matter so much? Because it converts rollout into pull. The usual objection to letting units choose is that nothing can then be standardized. The reciprocity solves it: choice earns openness, so good practice travels on consent rather than on mandate. ##### What is the one percent argument? Give people roughly one percent of design control over the transformation, and the other ninety-nine percent, the strategy firm's work, the systems, the corporate projects, lands far more easily. Because you respected the autonomy and the identity of the people you are asking to change, meetings about everything else happen in a different mindset. ##### What were the results? The upskilling plan changed inside a month, and within a year the company had visible momentum where there had been none — the mood moving from beaten down to proactive. Measured with a validated instrument across the cohorts, adaptive capacity moved from the Average band into Above Average. Jesse is careful that the financial results of that period are not attributable to the academy alone. ##### What does he think mattered more than the number? The visible momentum. A company that had felt beaten down, with a sense that it would not get through, became optimistic and proactive about solving its own problems. Back on the climb as a collective organization, at scale, is how he puts it. ##### What is commercial excellence, as a function? Largely a rebrand of digital transformation now that everything is digital, and less IT-focused than PMO-focused. Usually a head of commercial excellence reporting to strategy across a portfolio, funded by the business units, working like an internal consulting group to drive profitable growth across regions and units. ##### What does that function do day to day? Rolling out pricing discipline into businesses that may not know what it is or why they need it, closing capability gaps, running market strategy development, and getting business units to work together in markets. A few thousand people worldwide have the title. ##### Why does the unified-account problem come up so often? Because many asset-heavy manufacturers are organized around product lines and regions rather than market segments. Jesse's example is a conglomerate with ten business units all approaching Tesla separately, and Tesla asking whether they could work out what they do and send one person. ##### What does AI change? The capacity. Jesse runs the Consortium largely alone and does work that would previously have taken a team of six to ten, at very little cost. Critical thinking is not going anywhere, and using an LLM well without letting it agree with you is a skill in itself. ##### What does AI leave exactly as it was? Whether people do anything differently. If people go into it treating AI as a threat, that becomes self-fulfilling. So the sequence is the same as ever: change their relationship with change and disruption first, then give them real projects in their own function with someone who has done it guiding the discovery. ##### Who makes the best AI coach? Not the most technically inclined, in Jesse's experience. The best are people who frame questions that do not lead, because an LLM will build on whatever you have already said. Researchers with real clinical research training turn out to be among the strongest, because designing a study is the same discipline. ##### What is the Commercial Excellence Consortium? A free, invite-only peer room for director and VP-level people running strategy, transformation or commercial excellence at multibillion-dollar B2B companies. No consultants, sponsors, vendors or sales people. Monthly roundtables, run as a nonprofit. ##### Why run it as a nonprofit? Because the alternative reproduces the problem. Jesse contrasts it with peer communities that come with an upsell on the back end. His stated aim is for organizations to see there is a way to adapt and grow quickly, and to recognize how much resistance they are causing themselves by how they approach change. ##### What is the argument in one sentence? Transformation rests on whether you can minimize passive resistance, and the way to do that is to stop aiming change at people and give them enough design freedom to be part of it. #### Quotations > "You're actually engineering resistance into your system. What you need to learn is how to engineer passive resistance out." > — Jesse Hopps > "Give people one percent design freedom on the transformation, so they feel like they're part of the transformation, not the object of change." > — Jesse Hopps > "There's technical debt, but there's also psychological legacy, where people have just always done things a certain way." > — Daniel Kube > "On the surface everyone's agreeing that it's the right thing to do, and they buy in and they have the information, but their behavior doesn't line up with what they're telling you." > — Jesse Hopps, on passive resistance > "If at the end of the day, on Monday morning, the marketing and the sales guys don't think and act differently, what's the point?" > — Jesse Hopps, on three years of workshops > "I didn't want to be complicit in this theater anymore." > — Jesse Hopps > "How do you get people who are not that profile, everybody else, to want to win?" > — Jesse Hopps, on the question he left the Mitsubishi assignment holding > "I can assure you that giving them the information on what they should do isn't going to solve the problem." > — Dr. Paul Stoltz, as Jesse recounts their first meeting > "Do you really want them to score that they had the knowledge on the test, or do you really want the organization to start winning again?" > — Jesse Hopps, to his client > "I measure on EBITDA, not attendance." > — Roy van Griensven, as Jesse recounts it > "We're not consultants. We're not here to tell you what to do. You're the consultants." > — Jesse Hopps, opening the first cohort > "The Academy is my happy place. This is where we can actually talk about the real issues we don't get a chance to talk about otherwise." > — A participant in the German cohort, as Jesse reports it > "We generated the demand for the playbooks, because they asked for help. Not us shoving a template on them." > — Jesse Hopps > "It's not the short-term EBITDA. It's the visible momentum. They're back on the climb as a collective organization, at scale." > — Jesse Hopps > "Before people find their purpose, they need to be better at dealing with change in the first place." > — Jesse Hopps, on the future of work > "If information were the issue, we'd all be walking around like fitness models in perfect health. We know better, we just don't do it." > — Jesse Hopps #### Transcript ##### Selling flowers at nine Daniel Kube: I would love to hear about your story. You started off in the London area and built a really cool company. How did you get started? Jesse Hopps: My story starts way back when I was maybe nine years old, knocking on doors selling flowers door to door. I came from a rough neighborhood in London, Canada, not London England. My parents did not have a lot of money or a lot of education, but I had always wanted to rise up in life and get to a new station. So I worked really hard as a kid. I worked door to door, worked in restaurants a lot, and then I was going to Western University, and my goal was to get into the Ivey School of Business, one of the top business schools in Canada. When I was fifteen I told my mom: I am going to Ivey, and by the time I am twenty-five I am going to be a millionaire. And she said, okay, keep dreaming. ##### The school he did not get into Jesse Hopps: I did not get pre-accepted in high school, which was one path in, and it was really competitive. I think I had about a ninety-five average and it still was not enough. So I went into first year and studied philosophy. While I was at university my parents went bankrupt, and I had a loan from the bank. So over the summer of my first year I had to get a job and figure out how I was going to pay for school. I had been living on my own from the time I was about fifteen. There was a company in London, a startup called Info-Tech Research Group, that is now probably half a billion dollars in annual revenue and competes with Gartner head on. They were just getting going in the IT analyst space, and they had come out of Ivey. The founder, Joel McLean, taught at Ivey. I thought, maybe this is my path. So I applied and got a job in inside sales. It took me five years to get through a three-year degree, and I did not end up getting into Ivey. I applied after two years, my grades were mid-eighties, not enough even with a great recommendation from Joel. ##### Quitting, and washing dishes Jesse Hopps: After five years I was about to graduate, and I asked Joel: I want to move out west to Vancouver. He asked why. I said the weather here is not great, and young men go west. My dad did, my uncle did. So I asked what if I work from home and do it from out there. You can trust me, you helped me through university, I worked full-time and went to school part-time all this time and kept my numbers up. He said, we do not really do that, it sets a precedent. So I said okay, I am going to quit then, and I am going to move out west anyway. And I did. He said he would help me with whatever I needed. I got out there and got a job at Earl's washing dishes. That was my first job. Then I got a job at a software company, and I met this guy Alfie, a great guy, a British guy. ##### The business he almost started Jesse Hopps: I knew I wanted to start my own company. That was why I left Info-Tech. I was going to do an events company, this thing called culture branding, a whole sponsorship play getting big companies who want to sponsor events. I had it all ready to go and the first event planned. Then I looked at the numbers. It would be a fun business, but it was not really going to get me where I wanted to go. So I thought, why do I not take what I learned at Info-Tech and apply that business model to a different job type? This is early two-thousands, when SiriusDecisions was first coming out and Eloqua and the marketing automation thought leadership was appearing. B2B marketing was going through a revolution where it was not just communications and pretty pictures, it was data-driven and metrics-oriented and revenue-focused. Maybe there is a business in helping to operationalize that transformation of marketing as a function. So I called Joel and said: what do you think about doing an Info-Tech idea but for marketing? He said, well, I will be doing it in ten years. I am going to do HR after this, and then I will get into marketing. So why do you not get it started, we will see where you are at in a few years, and I will help you with whatever I can. ##### Ten thousand dollars Jesse Hopps: So I talked to my boss Alfie. I said I do not really have money to start this business, but I really think it can work. I have a lot of experience in it, but I need some startup capital. I need a couple of months of rent so that I can just try. He asked how much. I said two months rent, ten grand would be enough to give the idea a go. This was before lean startup was even really a thing. I said I have some data, I have a concept, I can build the product and test it and see if I can get some subscription sales. ##### Two hundred calls to reach ten people Daniel Kube: How did you manage to get all those assets created? Jesse Hopps: The business model was sales first. Make the calls. Back then you could get hold of people. You do two hundred calls, you talk to ten people. I did not even know who was in charge. There was no data, really. I just had eight hundred numbers for companies, and called them about five hundred times in a row. So if you think about lean startup, it was: go sell, find a need, build something. And I repeated that for years. We built our first five hundred tools on the back of specific needs the market asked for. Jobs to be done, really. That is how we built the assets. It was all based on getting a sale to develop an asset, then a subscription, then renewals, and we did a little advisory on the back of that. It was me and four buddies in a loft in Vancouver, sleeping on futons, and I think I slept on the floor sometimes when I was hiring people to come and live and work with us. ##### Licensing, and a word he had to look up Jesse Hopps: We got a break when the American Marketing Association found our site. They said we love your stuff, we would like to license this and white-label it and send it to our members. We thought that would be a great brand play for us. So we got into licensing of content. I did not know what licensing was. I had never heard of that before. It sounded like good money, and it was all profit, so we started doing it. We have been licensing with the ANA and the AMA now for well over fifteen years, which has been a great thing for distribution and for building up the brand. ##### The Marketo call Jesse Hopps: Around two and a half, maybe three years in, we had a pretty good email list going, maybe thirty or forty thousand marketers by that point from sampling the product on the cold calls. I think Marketo was the first one who called us, a director of demand generation or something. They asked: do you do any syndication of your newsletter? I said, what is syndication? She said, I will give you five thousand dollars if you send an email with my white paper to your list, and it is a really good white paper. I said, how many do you want to send? So we did our first deal with the vendors. I would say selling my soul to the devil. We did not really know that if you are in the analyst business you probably should not be doing both. We were kind of a media company and kind of an analyst company, and we did not really have any rules. We were just trying to stay alive. So syndicated sends turned into webinars, turned into research projects, turned into virtual summits where we had to have a keynote and a gold speaker, and we would do the research leading up to the event. Probably a few hundred projects with Eloqua, Salesforce, Marketo, HubSpot. My partner John still runs that whole side, doing research on how tech is impacting revenue growth. We ended up building well over a thousand of these tools. That is really what we got known for. And we are over three hundred thousand members who have joined Demand Metric to use our material, not counting all the distribution through the associations. Millions of downloads. ##### The software fiasco Jesse Hopps: We had launched a little software company, trying to do something like Monday.com but without any capital. It was a flaming disaster of resources lost. We were trying to build what ClickUp ended up being, before ClickUp came out. Everyone was using Trello, but you could not really combine Kanban boards into one simplified view if you just wanted to see across forty boards what was high priority this week. So we thought, let us build that, and add all of our methodologies so you have all these prebuilt project plans. We thought it was a brilliant idea. We sunk a few years into it. We got about fifty companies adopting the solution. They put up with technology that was pretty buggy, because we did such a good job helping them understand their problem, their workflow, and how to design a solution the team felt they built and owned. So we got really good at group-based behavioral change. That was a new skill we learned, and it was really difficult. But our technology was pretty poor, and project management technology is a commodity. So we scrapped the software business. We had to offboard all the clients we had brought in onto new platforms, because we felt bad that we had convinced them to get into the tool. ##### Three years around the world Jesse Hopps: While that was happening, somebody needed to make payroll. My partners John and Matt were dealing with the software clients, and I got an opportunity to do some deep consulting and coaching work with Mitsubishi Chemical Group. Their head of market strategy development had done a Google search and found one of our templates online. We were like, this whale lead just came into the CRM, get hold of this guy. My partner Matt booked him. He wanted to build a strategy development playbook to roll out globally across dozens of teams. So we did a little advisory work customizing a playbook, and then he invited me to co-present at a workshop. That was the beginning of a three-year run with them, around the world three times, a lot of time in Charlotte and Düsseldorf and Tokyo, basically trying to get people using this new playbook. In the chemicals business it is really complicated, because there are a million applications. Plastic goes into everything. There are different prices people pay per kilogram depending on the application, so healthcare applications are much higher margin than automotive. Every application means competing with different suppliers, with a complicated supply chain. ##### Nothing different on Monday Jesse Hopps: So I learned about complex strategy in practice, and I learned that giving people the information and the tools, even doing interactive workshops where they built some content or some strategy with us, they would go back to work on Monday and nothing would have really changed. We had licensed content to them for years. I was really bothered that I did not feel it was making the impact it was intended to make. We did not really have the answer at that point. We had the question. And the question was: how do you get people who are not super highly motivated, type A, the people who win all the time, who carry companies, the entrepreneurs, the high-performing sales people, how do you get everybody else to want to win? To want to perform, to grow, to get better at their job, when they are not intrinsically motivated to do that? I was baffled. That is what I now call transformation theater. You have the strategy decks, the playbooks, the workshops, running around, spending millions and millions. But is it really affecting the bottom line and EBITDA at the end of the day? My suspicion was that a big chunk of what is being spent on transformation is waste, and it is distracting people, and they are not solving the right issue. You can get paid a lot to do consulting, playbook design, roll out tools and templates. But if on Monday morning the marketing and sales people do not think and act differently, what is the point? ##### Technical debt and psychological legacy Daniel Kube: A transformation is really weaving a huge blanket together, and revenue is a really important thread. But to your point, unless you can affect change to motivate people to do things, it is really hard to get systems adoption across the board. And there is technical debt, but there is also psychological legacy, where people have just always done things a certain way. I think that frustration is what built you up to go to this new thing. Jesse Hopps: Transformation to me rests on one thing. Whether or not you can minimize what I call passive resistance to change. It is not people outright saying no, and maybe they say it behind your back when you leave the room. They tell their colleague: this is not going to work here, we tried this before, you are the fifth person who has tried this. We tried CRM, it does not work for us. That is a mindset. So you get this passive resistance where people say, okay, I will log in, I will put in the minimum data fields that are required, and I will put in poor data. You have adoption on the surface and the reports are not usable. Anyone who works in systems and software and transformation knows this. On the surface everyone is agreeing that this is the right thing to do, and they buy in and they have the information, but their behavior does not line up with what they are telling you. ##### What commercial excellence is Daniel Kube: Is commercial excellence a new thing? Are there commercial excellence titles now? Jesse Hopps: It is a new title, out of B2B. A lot of pharma companies and industrials are changing what used to be called digital transformation, because everything is digital and the name does not really make sense any more, to commercial excellence. It is less an IT-focused thing and more of a PMO thing: we are doing this because we want to drive growth and revenue, so we need to modernize how we understand the market, sell and market. A few thousand people in the world have the title. Typically a head of commercial excellence reports to the head of strategy across a portfolio of businesses. Think of a large enterprise with ten business units and fifty product lines. The commercial excellence job is a kind of internal consulting organization, driving profitable growth across all the regions and business units. And the business units are typically the ones funding the shared service. If you are trying to roll out pricing discipline and systems into businesses that do not know what it is, why they need it, or how it should work, that is one thing they would do. They might also do upskilling, closing capability gaps, market strategy development, or getting different business units working together in markets. A lot of organizations are structured around product lines and regions, not market segments, especially asset-heavy manufacturers. So you might have ten different businesses all targeting Tesla with their product line. And Tesla says: can you figure out what you do and how you could help us, and send one person in here instead of ten who do not talk to each other? That is the customer experience out there. ##### The drive to San Luis Obispo Jesse Hopps: After the software fiasco I was doing enterprise consulting and coaching, and I had launched a consultant incubator, helping people out of corporate life transition into coaching and consulting. People are living longer and it is hard to get a job after fifty-five or sixty. We had about a hundred people in it. The person I pulled in to coach the program was probably our most successful Demand Metric customer, who used the tools to build sales playbooks and monetize them. He has had a few exits and works because he wants to. He has mentored startup founders for about fifteen years, over seven hundred of them, using customer development from Lean Startup. His name is Kurt Friedmann, in San Luis Obispo. I was driving my wife up for a weekend, kids with the grandparents, and on the way I got a new opportunity. Another big chemicals company. The person who had left Mitsubishi had gone to a new place and was now head of commercial excellence. He had a plan from one of the top three strategy firms to upskill the organization in sales and marketing over four years, and he wanted us to develop content and do workshops and playbooks and the usual. But I had this feeling that if we do this one, people are going to say yes, yes, I get it, I have the playbook, I understand, and then not act differently. And I did not want to be complicit in this theater any more. So I asked Kurt: how do you get people to want to grow and develop? And he said, it is funny you mention that. I have a friend in my hometown. His name is Paul Stoltz. ##### What Stoltz said Jesse Hopps: Paul is the master coach of the US Olympic team. He has been faculty at MIT. He has developed this science over the last forty years, studying how human beings respond to adversity, and how our interpretation of it predicts pretty much everything. It predicts how well we deal with change, who wins in sales across all industries, whether you beat diseases, whether you live longer, whether you stay married. Your ability to deal with setbacks, challenges and difficulties is the thing. It is not about IQ, it is not about EQ, it is about AQ. So I flew to San Luis Obispo and told him the situation: a German chemicals company, Chinese product flooding the market, getting beaten up across industries, trying to work out how to transform and sell on value. And I have been commissioned to deliver training on business best practices, but my feeling is that is not going to get them over the hump. He said: I can assure you that giving them the information on what they should do is not going to solve the problem. What you need to consider is that there is a bell curve in every large organization. ##### Climbers, campers and quitters Jesse Hopps: At the front end of the curve you have people who are highly adaptable, highly resilient, thriving on adversity. Entrepreneurs as a group are at the top of the AQ scale. Paul calls them climbers. They are always on the climb, forward and up. At the bottom end you have people who have learned to be helpless, who are victims: it is out of my control, so why even try. Those are the quitters. They have quietly quit. They still take the paycheck, and they do the minimum. And then there is a big group in the middle. Your B and C players. Paul calls them campers. Campers have arrived at a certain point in their career, and they want to keep things the way they are. They do not want to risk it to get better. They do not want to lose what they have already accomplished. That is the majority of the world. So when a new transformation comes in, a new leader arrives, the campers think: all this stuff is coming at us, let us minimize the impact. That is the passive resistant group. The climbers say: let us do it, it is new, let us make it work. The good news is it is not like IQ, where it is fixed. You can permanently improve people's response to adversity once you measure it and share with them how they are wired. It is a hardwired pattern from about the age of twelve, and they can change how they view challenge and difficulty. And when they do, it is not only the business impact. You can change these people's lives, in their relationships with their children, their family, their health. So the real challenge is how do you get the campers back on the climb. The climbers are already getting it done. Quitters drag everybody down and you do need to deal with them, but you are not going to make transformation work by focusing on the quitters. ##### Finding the business case Jesse Hopps: I went back to my client and said, I met this guy, he works with Olympians and top companies, and all the top business schools use this in their problem-solving courses. It is predictive. How do we incorporate it into this upskilling thing? Do you really want them to score that they had the knowledge on the test, or do you really want the organization to succeed and start winning again? He said: I want real impact. I measure on EBITDA, not attendance. But I was reacting to a strategy recommendation from one of the top firms. My client's boss was a former strategy consulting partner at one of those firms, who had bought the plan. So I needed something at that level that was going to be convincing. Paul had studies, including Deloitte work on people getting promoted faster, but it was not coming from a top consulting organization. So I searched for how adaptability and resilience factor into engagement and business results, and this study came up. The McKinsey Health Institute report on adaptive leadership. Thirty thousand people. What they found was that when people self-reported that they were good with change, that they can form new habits easily, that they can bounce back from a setback, they were about 3.8 times more innovative and engaged at work. And the other two factors that took it from 3.8 to six times were psychological safety and organizational support. But the shame of it is that only twenty-three percent of that sample felt they were highly resilient and highly adaptable. So you are trying to get wide-sweeping change across tens of thousands of people when almost eight out of ten will tell you right out of the gate: I am just not that good at taking in new changes. And I think it was about sixteen percent of organizations that are investing to make their people more adaptable. So you need it, people do not feel they have the adaptive capacity, you are relying on it to get major change through, and only sixteen percent of companies are investing in building it. ##### Why information is not the problem Jesse Hopps: The soft stuff has really become the hard thing: getting people to want change, to be open to it, to be excited about new possibilities. So we said, no matter what we do here, we need to not just give people information. Transformation is not an information problem. It is not a strategy problem, it is not a clarity issue. Companies know what to do. It is getting people to do it consistently when things get tough and customers are demanding, when you are trying to hold pricing discipline and the customer is grinding you at the end of the quarter. It is in those moments that if the behavioral change does not take, the transformation does not happen. We pitched it as a mindset, skillset, toolset framework, whereas most consulting and transformation work is tools first. Get them ready to change, get them to harness adversity instead of getting bogged down and beaten down by it, then develop skills. I do not believe traditional classroom training, providing information and doing simulations, really works. Look at the people who went into Crotonville at GE. That was an amazing place where they gave you real-world projects. The issue is that you cannot manage change. People resist when they are asked by someone else to change. They have to want to change for themselves. If information were the issue, we would all be walking around like fitness models in perfect health. We know better, we just do not do it. So we put in the big thing called guided discovery, using the Socratic method. My kids went to Montessori and now go to a school on the Fontán system, which is independent learning: here are the questions, you have a teacher and a coach you can ask, and you decide when you are ready for your exams. Do not tell people what to do. Ask them what their challenges are, have them frame their own problems and needs, and get them involved in designing the solutions. That is the critical unlock. ##### Align: fifty capabilities down to four Daniel Kube: If you are talking about one-off projects where sales people give input, how do you make that repeatable? Because if there are snowflakes, it is really hard to replicate snowflakes. Jesse Hopps: What we designed with Roy at this roughly seven-billion-dollar chemicals company was a next-generation commercial excellence academy structure. It is engineering an environment for adaptation to occur naturally, rather than the typical top-down mandated change. And it is not that Roy does not have dozens of corporate projects going, major pricing initiatives, all kinds of things. What we added was a layer. We have an align, inspire, reflect, apply framework. Align is going to the business unit leaders and the regional heads and asking: what are the capabilities that, if you could wave a wand and get better at them overnight, would actually make an impact on the business from your point of view? There were fifty capabilities in the matrix. The big consulting firm said you have to close all fifty over four years, with rounds and rounds of training. We said that is too many. Pick four. You are the ones paying for our function. What do you want to get better at? They came down to key account excellence, go-to-market strategy, value-based pricing, and opportunity and pipeline management. Of the fifty, those four floated to the top. ##### Inspire, and preparing people before they arrive Jesse Hopps: To get the field bought in and encouraged to work on these things, we had them watch some podcast-style videos. We recorded an expert. We actually got the person from Mitsubishi to do a podcast, and we asked: what is status quo, what do most companies do when it comes to key account excellence, and what is the best you have seen? He drew the gap between normal and best in class without a maturity assessment or a diagnostic or any of that. Let us plant some seeds: we are doing this, but maybe we could do that. Then we sent out the AQ and GRIT assessments ahead of meeting people, so they would measure their AQ. And we gave them a guided discovery assignment: how would this show up in your work? How would improving in this capability area manifest in making life easier and helping us hit our north star goals? We prepped them mentally before we met them. ##### Day one: you are the consultants Jesse Hopps: We brought cohorts of thirty or forty people together. We started in North America, figuring it might be a bit more open-minded to trying new things than German headquarters. We called it the Commercial Excellence Academy and brought in Dr. Paul as a keynote speaker. Day one was learning about AQ and GRIT, the science, and how it can affect people's personal lives. Then we revealed their scores. People were excited. They were thinking: maybe we can take these challenges and adversities and use them as fuel to get somewhere we would never otherwise have got to. Then we told them: we are not consultants. We are not here to tell you what to do. You are the consultants. Put your consulting hat on and tell us your top challenges. Why is doing key account excellence the textbook way not easy for you? What is the difficulty with standing up on price? And they said: you have overcapacity being dumped in our markets, how do we win against that, people do not want to pay for sustainability. So we get all the reasons why it cannot work on the table, all the challenges and issues. We ask what they have tried so far. We ask what they need to solve it. And they littered the conference room with challenges, hurdles, actions they had tried, the impact of not solving these things, and what they felt they needed. ##### Day two: four corners and a charter on the wall Jesse Hopps: Day two was about focus. We said: for the next ninety days we are going to pair you with a coach. Not someone like me, an analyst consultant type, a career consultant. An operator coach, someone who ran business units and was a CEO of chemicals companies. And you are going to design what we call a Growth Project. This is structured autonomy. Within the bounds of those four capability areas and your own problems and needs, pick something you are intrinsically motivated to work on. We set up four stations, four corners, with about thirty-five or forty people. Go into the corner you want to work on. Is it key account? Go-to-market? Pricing? Pipeline? And they spread out. We had mixed the business units together. Then: form teams of three to five, spontaneously, pick a topic, anything you want, as long as it improves your capability in one of these areas. We gave them project charters, the basic one-pager, blown up onto a three-by-four sheet. We put them on the walls and gave them sticky notes. Your job for the next three hours is to form a team, write a problem statement, and describe the current state and the future state you want to get to. It is a completely safe environment. We know nobody is perfect on any of this, and we know there are all kinds of internal issues. The hardest part for them was picking something. They said: there are so many things we could do to get better around here. You do not have to solve the problem in ninety days. You might shine a light on it, build a business case, do some research. Some teams wanted to run a pilot with AI. Others said: it takes us thirty days to get a SKU up into SAP and we are getting killed because we cannot quote fast enough. And then: but that is way out of our control, that is master data and IT. And we said, you might be able to make some progress on it. ##### The science fair, and the coaching Jesse Hopps: In the afternoon we all walked around in a group and they presented their projects, like a science fair. This is the problem, this is what we intend to do. It is a part-time project in addition to everything else they have to do. The initial objection was that people might see this as extra work they do not have time for. And we said: no, this is the work. If there is one adversity getting in the way of hitting our growth targets, and you have support and resource to go and fix that problem, then we are going to treat strategy the way Richard Rumelt does and solve issues rather than set goals and ambitions. We had a board member in the room, and she walked around and was blown away at the level of engagement. There was zero training. It was them deciding what problems to work on. Then the coaching starts. Ninety days, a weekly call, how is it going. No answers being given. Teaching people how to fish by asking questions. At the end of the ninety days they present to a board panel, and they would get additional resource if they wanted to scale up. Some things just ended. Others became new best practices. One was: how do we decide between indirect and direct on the channel? They made a little template for it. And they said, Jesse, do you have any templates? I said, do not worry about it, I have all kinds of templates back here. But we generated the demand for the playbooks, because they asked for help. Not us shoving a template on them. ##### Germany, and the happy place Jesse Hopps: In the end the CEO got behind this, in a company going through drastic cost cutting. They decided to bring it to Germany, to try it at headquarters. Paul has been doing this at Carnegie Mellon with a lot of German companies for a very long time, with Bosch and Mercedes and others, and he was confident German leadership would like it, because it is so scientifically based and rigorous and there is so much research behind it. So we get to Germany and do another round of the academy. People are saying things like: the Academy is my happy place. This is where we can actually talk about the real issues that we do not get a chance to talk about otherwise. And some of the issues were contentious. They said: we have friction because another department doing its job is inadvertently creating this problem for us with our customers. ##### The deal, and the one percent Jesse Hopps: And what happened to all the other top-down mandates and projects? The acceptance and the social contract changed. When Roy started the program with every leader, he said: I am not going to give you one size fits all. We are not going to implement everything the same way across all regions at the same time, which is what most people do because they think it is more efficient. You are going to pick what you want to work on. We will work on these things together, and I have a whole host of things commercial excellence can help you with, but you get to choose. But here is the deal. If you work on something and develop the best practice in your region or your unit, and we take that and spread it through the rest of the company as the new way of working, will you, on the flip side of getting to work on what you are passionate about, be open-minded about picking up something somebody else in the company worked on? And he made that deal with everyone. They all said, yes, of course. If I can work on the thing I think is most important to us growing, then I will be open to trying new things from other people. It is a fair deal. And so it was pulling. Even at the corporate level, when we added this tiny layer, imagine giving them one percent control over the design of the transformation. The other ninety-nine percent that has been playing out with the big firms lands so much easier, because you respected the autonomy and the identity of the people you are trying to get to change with a small portion of it. Once you let them design something they feel is real, all the other projects, all the other meetings, meeting with the consultants, meeting with new vendors, happen in a completely different mindset. ##### What it produced Daniel Kube: So this is transformational from an economic impact perspective? Jesse Hopps: Let me put it this way. Not all of this is attributable to the academy. But in general, the client took the job, and within a month changed the entire plan on how to do upskilling, which is a really risky move. He said: I am going to cut the consulting budget by eighty percent, but you have to give me some leeway on how I approach transformation. In less than a year he had a mid-eight-figure impact on CFO-validated EBITDA. In fairness, some of that was a pricing change. But once you pull the pricing lever you have to find other ways to organically grow EBITDA. And the big thing was not so much the short-term EBITDA. It is the visible momentum. The feeling in the company went from being beaten down, there is no way we are going to get through this, to optimism. The culture changed to: no, we can do this, we can get proactive, we can solve these issues. They are back on the climb as a collective organization, at scale. So rapidly changing the mindset and behavior of people is doable. It is just not the way that ninety percent of the people I talk to in the Consortium are doing it. They are still stuck in hire the big firm, get the trainers in, get the content out there, and then have the passive resistance and selective adoption, and blame the people for being resistant and unable to execute. And I am saying no. You are actually engineering resistance into your system. What you need to learn is how to engineer passive resistance out. The way to do that is structured autonomy, these Growth Projects, and giving people one percent design freedom on the transformation, so they feel like they are part of the transformation team, not the object of change that everything is aimed at. ##### The Consortium Daniel Kube: The gig you are running now, sharing these practices in a community. What does that look like and how can people get involved? Jesse Hopps: It is called the Commercial Excellence Consortium. When I found this new title, I thought maybe there are more people like him we can help, and share his story. So monthly roundtables, no consultants, no sponsors, no vendors, no sales people. Only peers: director and VP level running strategy, transformation or commercial excellence at multibillion-dollar B2B companies. It is invite only, and it is free. We did one on enterprise adaptability. We brought in Dr. Paul to speak at some of these. Roy spoke about intrinsic motivation and broke down his program as a case study. We are creating a peer exchange network, and it is not one of these typical things where there is an upsell on the back end and everyone is going to be pitching you at the conference. It is truly peer to peer, and I am running it as a nonprofit. I just want the world to see there is a way to rapidly transform and grow and adapt. If I can get a few more organizations on the climb, and get them to realize how much resistance they are causing by the way they approach change, it will have been worthwhile. ##### What AI changes Daniel Kube: If you take your model, and that one percent, and add gasoline to the fire where that one percent can now drive real impact with capacity people never had before, that magnification is insane. Jesse Hopps: I am seeing it myself. I am running this Consortium virtually by myself, doing the job of what would have taken a team of six to ten before, with very small amounts of money and time. That said, critical thinking is not going anywhere. Using the LLMs effectively, and not having it be a yes-man that tells you what you want to hear, is a skill in itself. But before we help people learn to use AI effectively, we need to get them thinking about the opportunity it provides. If people go into it treating it as a big threat that is going to be terrible, they will have a self-fulfilling prophecy. So fundamentally we need to change their relationship with change and disruption, and get proactive about how they learn to adapt. Help with resilience and adaptability first, then give them real-world projects in their own function using AI, with someone who has done it before guiding their discovery. Our best coaches on it are actually the less technically inclined. They have learned to make GPTs, but they are much better at framing questions that are not leading questions. Researchers who have done solid clinical research are probably some of the best, because AI will often take what you have said and build on it. It is like designing a research study. ##### Adaptation, and what comes next Jesse Hopps: I think we are entering an age of disruption like we have never seen before, and the ability of human beings to positively adapt to the environment matters more than it ever has. So I am really passionate about getting Paul's life's work in front of the world, to help with the amount of adaptation that is going to have to happen as people reskill. A lot of knowledge worker jobs are going to go away. Those people are going to need to find something to do. Human connection and a sense of purpose are going to be key. But before people find their purpose, they need to be better at dealing with change in the first place. I am grateful I found AQ, and that I found it in a business context where I could use it to help people at scale. I am hopeful that through this platform and others we can get more people understanding their own relationship with change and adversity, and strengthening it. Not only for their job, but for their family and their community. --- ### From Exec to Coach with Ron Denoo https://commercialexcellenceconsortium.com/podcast/from-exec-to-coach-with-ron-denoo Thirty years in global chemicals to a full consulting practice in five weeks. Topics: leaving an executive career, consulting as a trust business, consultant vs. coach, guided discovery, operator-coaches, humility, who not how, building capability in-house #### Summary Ron Denoo spent more than thirty years as an executive in chemicals, plastics and composites: a mechanical engineer who did real engineering for the first few years, ran global research organizations, was CEO of a German plastics company, and spent his last twelve years at Mitsubishi Chemical Group, moving from a business unit to a regional role to a global one. It was a good career and a difficult way to live. He kept his family out of Japan while his office was in Tokyo, averaged around a hundred and twenty flights a year, and took meetings at whatever hour the time zones demanded. The moment he names is an acquisition approval meeting scheduled for December 25th. He retired in January and hit his annual consulting-income goal five weeks later, with no website and no advertising. This session, run for people considering the same move, covers how he left, where the first two clients came from, and the distinction he draws between arriving with answers and arriving with questions. #### Key points - More than thirty years in chemicals, plastics and composites, from real engineering work through global research leadership to CEO of a German plastics company. - Twelve years at Mitsubishi Chemical Group, moving from a business unit to a regional role to a global one, including a spell in M&A. - What the life cost: family kept out of Japan, an office in Tokyo, around a hundred and twenty flights a year, and meetings at whatever hour the time zones dictated. - The acquisition approval meeting scheduled for December 25th, and what it told him about how much say he had over his own calendar. - Announcing the exit roughly two years early, so that leaving was a plan rather than a surprise. - The first client: his previous employer, who still needed an acquisition closed and got it from a consultant instead of an employee. - The second: an industry contact at another company with the same problems, who is now by far his largest client. - Hitting a full year's consulting-income goal five weeks after retiring, with no website and no advertising. - The problem he has now, which is turning work down rather than finding it. - The guitar business that started as a way to spend downtime in Japan, and what it taught him about work that does not feel like work. - Why a consultant gets a license an employee rarely has, and what drops off the plate along with the job title. - The opening line he uses with a new client, and why it takes the chip off their shoulder. - The watch joke, told to a business unit leader he had been warned about, and what it opened. - His single piece of advice for an executive who is used to having the answer. - Who not how: finding the person rather than working out the method. - Why the community turned out to matter more than the content for people making this move. #### Definitions - **The two-year announcement** — Ron began telling Mitsubishi he intended to leave about two years before he went. It surprised no one, and when the time came there were projects they still wanted him on. That is what turned a departure into a first engagement rather than a closed door. - **Consulting as a trust business** — The observation underneath his whole approach. Both of his first two clients arrived through people who already knew what he was like to work with: his previous employer, and an industry contact who had moved to another company. No website, no advertising, no marketing plan. - **Consultant vs. coach** — Jesse's framing, which Ron works inside. A consultant analyzes the situation and tells you what to do, and may execute part of it for you. A coach asks what you think needs to happen and then asks the questions that lead you to the answer yourself. The consultant does the work; the coach makes it so you can. - **The hired-gun engagement** — The other legitimate shape, and Ron did both. Where a company lacks the specific experience or the bandwidth, you come in, do the work and produce the deliverables. Closing the Mitsubishi acquisition was this. It is a real service and it leaves no capability behind, which is the trade. - **Guided discovery** — Asking rather than telling, so the answer arrives as the client's own. Ron's version starts in his introduction: he is not there because he has the answers, he is there because they have the knowledge, and his job is to facilitate a discussion that turns it into something actionable. - **The chip on the shoulder** — The default posture toward an incoming consultant, which Ron treats as reasonable rather than as an obstacle. Few people want to be told what to do, and plenty of people have watched a consultant arrive with a deck. Saying up front that you are not there with the answers is what lowers it. - **Humility as the operating principle** — His single piece of advice for an executive making this move. The mistake is pushing your expertise at people because it feels like the route to being accepted and re-engaged. Staying open and finding out what they know creates the openings to contribute; leading with what you know sets the wrong tone. - **Who not how** — The principle Ron credits to Dan Sullivan and built his own business plan around. Rather than working out how to do everything yourself, find the person with the expertise and the appetite for it, and bring them into the problem. You still own delivering what the client needs. - **The gig-economy overhead model** — How Ron runs lean. Legal, design, marketing, ad management and marketplace operations all go to freelancers on a project basis rather than to hires. He launched his guitar businesses this way and applies the same approach to consulting, on the grounds that it saves time and keeps overhead near zero. - **The outside-in license** — What a consultant gets that an employee does not. Freedom to be direct, without the political calculation, the long institutional history, or the accumulated positions that shape what an insider can say. Clients expect the fresh perspective, which is a large part of what they are buying. - **The removed overhead** — What comes off the plate along with the job title. People management and the day-to-day obligations of leading inside a large organization consume time and energy without often producing results. Ron reports spending less time on the client than he did in his old business and having more impact. - **The enterprise misconception** — Jesse's warning against pigeonholing yourself into small and midsize work. Enterprises have far more resource to apply to a problem and the work is often about the same size, so the deals come with another zero. Few people have genuine enterprise experience, and the belief that large companies only hire the big firms is a limiting one. - **Identity follows the work** — Jesse's answer to the person waiting until they have the experience before claiming the title. You shift into the role, start doing the work, and the identity arrives afterwards. Waiting for it first leaves a permanent gap between what you think you are and what you are doing. - **The community finding** — What surprised them about the consultant incubator. They built it expecting the tools, templates and playbooks to be the draw. Surveyed after a year, members said it had almost nothing to do with the content and everything to do with the community, because going out alone is lonely and quitting is easy on a bad day. #### Questions this answers ##### Who is Ron Denoo? A mechanical engineer by training who spent more than thirty years as an executive in chemicals, plastics and composites. He did engineering work for his first four or five years, ran global research organizations, was CEO of a German plastics company, and spent his last twelve years at Mitsubishi Chemical Group. ##### What did the Mitsubishi years look like? Twelve years, starting inside one of the business units, then promoted into a regional role and finally into a global one. He also spent a period in M&A. His own verdict on the career is that it was a great one and he has no complaints about the opportunities he was given. ##### What did that life cost? He made a conscious decision not to relocate his family to Japan while his office was in Tokyo, which meant around a hundred and twenty flights a year and meetings at whatever hour the time-zone difference dictated. He did that for many years before he started questioning it. ##### What was the moment that crystallized it? An acquisition approval meeting scheduled for December twenty-fifth. His reaction was that the company did not care about his schedule or his lifestyle. Alongside it sits the count of important life events he missed for a meeting somewhere. ##### What did he conclude? That life was too short to live that way, and that he should start looking for off-ramps that would give him more balance. The specific thing he wanted was control over his own calendar, which he describes as the single most important item. ##### Why is calendar control the thing he names? Because in a senior role at a global company you have very little of it. Someone else schedules a meeting, a conference or a trade show, and your life reorganizes around an event you had no say in. That is a structural feature of the job rather than a scheduling failure. ##### How did the guitar business start? As a way to spend downtime in Japan. He is a musician and started visiting secondhand guitar shops and flea markets, bringing vintage instruments home, until his wife pointed out there was a guitar in each room of the house. So he started selling them, because what he enjoyed was the hunt. ##### Did that turn into a business? Fifty sold the first year and two hundred the next, at which point he concluded there was a business model in it. That was about twelve years ago and it is still going, now run mostly by a partner. He started a second guitar company with a partner shortly before retiring, and is launching another brand. ##### What did the guitar business teach him? That work does not have to feel like work. It was work and it brought income and it was not stressful, because he genuinely enjoyed it. That is what started him thinking about how to spend more of his time on things he wanted to do rather than things he had to do. ##### How much notice did he give? He started talking about leaving roughly two years before he left, so it surprised no one; they knew what his plan was. That is the piece of the sequence that makes everything after it possible. ##### Why does announcing early matter so much? Because when the time came, there were projects he had been involved in that they still felt needed his attention. That conversation went: I am happy to keep supporting those, and I will do it as a consultant rather than as an employee. A surprise resignation forecloses that entirely. ##### Who was his first client? His previous employer. He was supporting an acquisition, then was asked to take the lead and close it, which he did in July of that year. His own assessment is that he did not have to work very hard at that one, which is the point of how he left. ##### Where did the second client come from? An industry connection. Someone he had worked with previously had moved to another company in the same industry and recognized that they had many of the same problems he had been solving at Mitsubishi. Once they heard he was leaving, they reached out. That client is now by far his largest. ##### How quickly did the practice reach his target? He had a number in mind for annual consulting income and had worked it into his financial plan. He met it within five weeks of leaving. His framing of the result is that it has not been what he expected, it has been better. ##### What is his problem now? Turning work down rather than finding it. He still has his own businesses to run, and his wife's reminder is that he did not retire in order to work more. The constraint has moved from demand to capacity, which is a different problem from the one most people making this move expect. ##### Did he build a website? No, and no advertising either. What he has done is work his network. Both of the first two clients arrived through people who already knew what he was like to work with, which is the argument against front-loading effort into marketing infrastructure. ##### How does he keep overhead down? By using freelancers rather than hiring. Legal work, design, marketing, ad management and marketplace operations all go out on a project basis. He launched his guitar businesses this way and treats it as advice for any small business owner, including a consultant: it saves time and keeps overhead very low. ##### What is the difference between being an employee and being a consultant? As an employee you have to weigh the political impact of what you say. As a consultant you get a license to shake things up, to be direct and truthful in a kind way, because the client expects an outside-in view untainted by politics and by long history inside the company. ##### What else changes? The overhead disappears. People management and the daily obligations of leading in a large organization consume a lot of time and energy without often creating results. Removing them lets you spend your time on the things that do. ##### Does less time mean less impact? The opposite, in his experience. He spends less time on his largest client than he did on the business he used to run, and feels he is having more impact. He describes it as a kind of reach that is hard to get from inside a large organization. ##### What is the difference between consulting and coaching? A consultant analyzes the situation and tells you what to do, and may execute part of it. A coach asks what you think needs to happen and then asks the questions that guide you to the answer. You do not do the work for people; you help them do it for themselves. ##### Is one of those better? They solve different problems, and Ron has done both. Closing an acquisition for his former employer was a hired-gun engagement: they needed the specific experience and the deal closed. The transformation work is coaching, because the goal there is capability that stays after he leaves. ##### When is the hired-gun shape the right one? When a company lacks the specific experience or the bandwidth and needs the work done. Jesse's example is someone who has stood up a supply chain center of excellence being brought into a company doing it from scratch: they need a read on the situation, a road map, and often the deliverables produced. ##### Why does coaching differentiate you commercially? Because it is not what most firms sell. Plenty of people have bought consulting or sat through a project where a consultant was involved, and there is a real bias in many organizations against them. Arriving to build capability rather than to present a recommendation is a different proposition. ##### How does Ron open with a new client? Within his first few sentences he says he is not there because he thinks he has all the answers for their company. He is there because they have a tremendous amount of experience and knowledge in their business, their products and their industry, and his job is to facilitate a discussion that extracts it and turns it into something actionable. ##### Why does that opening work? Because it takes the chip off their shoulder. Few people want to be told what to do, and an incoming consultant is assumed to be there to do exactly that. Saying otherwise in the first minute changes what the room expects from the rest of the day. ##### Does he believe clients already have the answers? Most of the time, yes. You are usually surrounded by expertise in those organizations. What they may not know is which lever to pull, which direction to run, or what good looks like in a particular area, and that is where outside experience combines with their in-house knowledge. ##### What is the watch story? He was warned before a full-day workshop that a particular business unit leader was tough and hated consultants. At lunch that leader told him: somebody once said a consultant is someone who borrows your watch to tell you what time it is. Ron's reply was that this is untrue, because a consultant borrows your watch and charges you to tell you what time it is. ##### How did that land? The leader laughed and said: that is why I know you are not a consultant. Ron treats it as an important moment because it built trust, and that leader has since engaged him for further work with his business unit. ##### Was the leader difficult? Ron says no, and is careful about it. He did not find him difficult or anti-consulting at all. He found him quite open-minded, and attributes that to having approached him with questions rather than with answers. ##### What is his advice for an executive who is used to having the answer? Be humble. He names it as the single strongest thing, against the instinct to push your expertise at people because that feels like how you get accepted and re-engaged. Prefer staying open, and understanding what they know rather than overwhelming them with what you know. ##### Does that mean keeping your expertise to yourself? No. His point is about sequence. The opportunities to share what you know and what you have done will come naturally, and they arrive because you stayed open first. Leading with the expertise sets the wrong tone, and the tone determines what happens afterwards. ##### What is who not how? A principle Ron credits to Dan Sullivan and built his own business plan around: rather than working out how to do everything yourself, find the person who has the expertise and the appetite for it, and bring them into the problem. ##### How does that apply to a solo consultant? In the end you have to deliver what the client needs. Sometimes you have the recipe and sometimes you do not, and either way you want to remain their problem solver. Ron's example: asked whether a commercial academy could be run for supply chain, his honest answer is that he is not the person to do it, so the question becomes who is. ##### Should you only target small and midsize companies? Jesse argues strongly against it. Enterprises have far more resource to apply to a problem, and the work involved is often about the same, so you can add a zero to the deal. Very few people have real enterprise experience, and the belief that large companies only want the big firms is a limiting one rather than a true one. ##### What is the most common mistake people make on the way out? Starting only once they have been laid off. Ron's contrast is that he positioned his departure two years ahead and left on his own terms and on a high note, at the point where the company's question was what he was working on that no colleague could pick up. The power dynamic was reversed before he ever asked for anything. ##### What do people over-invest in? The website and the polish. Jesse's version is that people who love the optimization avoid the fundamentals, and that consulting is bought on trust and reputation. The fundamental is talking to your network, out of curiosity about what people are doing rather than to sell anything. ##### What does the pattern look like across everyone they have coached? Across more than a hundred people making this transition, the number one challenge is getting customers. And when the question is how many prospects they met with last month, the answer is some version of not enough. Beautiful sites and struggling pipelines coexist regularly. ##### Why do people make this move at all? Mostly not for the pay, in their experience. Many of the people who succeed at it do not need it. What comes up instead is contribution, community, purpose and relevance: continuing to be useful, and sharing what they know rather than replacing an income. ##### What if you have not done fractional or consulting work before? Jesse's position is that the identity follows the work rather than preceding it. You move into the role, start doing it, and it becomes real. Waiting until you have the experience before claiming it leaves a gap that rarely closes on its own. ##### But interviewers do ask for that experience. They do, and one participant with a long enterprise background offered the practical answer: inside a large company you can build it before you leave. Reach out to other executives, help on projects where your specialty speeds up their execution, and you have both the experience and something concrete to point at. ##### Does the leadership style you had transfer? If it was development-oriented, yes, and Ron treats that as the natural bridge. If you spent your employed career upskilling people, creating opportunities and getting the best out of them, that is the attitude to bring into a consulting career. The business benefits when its people do a better job and are happier. ##### Why is it easier to do that as a consultant? Because the distractions come off the plate, and because you chose the engagement. Ron contrasts it with the feeling as an employee of having lost the ability to choose anything, with other people's decisions dictating his schedule and his life. Choosing the work changes the attitude you bring to it. ##### What surprised them about the incubator? That the content was not the draw. They built it expecting tools, templates and playbooks to be the reason people joined, and when they surveyed members after a year the answer had almost nothing to do with the content and everything to do with the community. ##### Why does community matter for someone going independent? Because it is lonely, and on the days when a client is hard to find it is easy to give up on yourself when you are alone. A group to share the wins and the setbacks with supplies the spark you need. Their advice is to find one whether or not it is theirs. ##### What is the one-sentence version? Leave two years out and on your own terms, work the network you already have rather than the website you do not, and walk in with questions instead of answers. #### Quotations > "A consultant is a person who borrows your watch and charges you to tell you what time it is." > — Ron Denoo, to a business unit leader he had been warned about > "That's why I know you're not a consultant." > — The same business unit leader, who has since engaged him again > "I'm not here because I think I have all the answers for your company. I'm here because I believe you have a tremendous amount of experience and knowledge in your business. My job is to help facilitate a discussion, to extract that knowledge and turn it into something actionable." > — Ron Denoo, on how he opens with a new client > "That automatically takes the chip off their shoulder, because nobody actually really wants to be told what to do." > — Ron Denoo > "I was approaching him with questions, not with answers. That's more the coaching approach." > — Ron Denoo > "If you ask for a single good piece of advice: be humble." > — Ron Denoo, asked how an executive stops telling people the answer > "They scheduled the approval meeting for this acquisition on December twenty-fifth. That was one of those moments where I thought: this company doesn't care about my schedule." > — Ron Denoo > "I met that goal within five weeks of leaving Mitsubishi." > — Ron Denoo > "My biggest problem at the moment isn't finding more consulting work. It's throttling back on the opportunities being presented to me." > — Ron Denoo > "My wife keeps reminding me I didn't retire so I could work more. I retired so I could work less." > — Ron Denoo > "I'm spending less time working with this company than I spent in the business I was in before, and I feel in many ways I'm having more impact now." > — Ron Denoo > "Actually, I don't have a website. I haven't done any advertising. What I've done so far has been working my network." > — Ron Denoo > "Don't underestimate the need for enterprises to get value from your experience. You can generally just add a zero onto the back of the deals." > — Jesse Hopps > "Don't spend your time on the website. Spend it on coffee catch-ups. That's ten times more important to driving business than a perfectly polished site." > — Jesse Hopps > "You shift into the new role, you start doing the work, and then the identity comes to you. It's not the other way around." > — Jesse Hopps #### Transcript ##### Thirty years, and twelve of them at Mitsubishi Ron Denoo: I spent more than thirty years as an executive in the chemicals, plastics and composite space. I am actually a mechanical engineer by trade. I did real engineering work for the first four or five years of my career, doing research projects and a lot of process development, and then moved more into the business side. Over my career I had the opportunity to serve in a number of different roles. I ran global research organizations. I was the CEO of a German plastics company for several years. And I spent the last twelve years of my career working as an executive within Mitsubishi Chemical Group, first within one of their business units, then promoted into a regional role, and ultimately into a global role. It was a great career. I do not have any complaints. I was very blessed with the opportunities I was given. ##### A hundred and twenty flights a year Ron Denoo: But when I reflect back on it, and even during the last years of that career, it was a really difficult way of life. I made a conscious decision not to relocate my family to Japan, and yet my office was in Tokyo. So I was traveling a lot. I was averaging about a hundred and twenty flights a year, working very long days, having meetings at all different hours because of the time zone difference. And I did this for many, many years. At a certain point I really started to question some of my life choices, and decided life is too short to live this way. I started thinking about off-ramps I could take that would give me a bit more balance, and about finding other ways to spend my time on things that were more important to me than plastics and composites and chemicals. ##### December twenty-fifth Ron Denoo: Probably the most important thing for me was figuring out some way to get control over my calendar. I cannot tell you how many important life events I missed because there was some meeting I had to be at in Europe or in Japan. In those executive roles, particularly in global companies, you have very little control over how you spend your time. You are at the mercy of when somebody decides to set up a meeting or a conference or a trade show somewhere. There is always some event you have no control over impinging on your calendar. I always remember, I was running an acquisition, because I was in M&A for a while at Mitsubishi, and they scheduled the approval meeting for that acquisition on December twenty-fifth. That was one of those moments where I thought: this company really does not care about my schedule, does not care about my lifestyle. It was pretty frustrating. ##### The guitars Ron Denoo: I am a musician and have been my whole life, and I had a passion for guitars. I started a business restoring and reselling vintage Japanese guitars, which began as a way to burn some downtime. When I was in Japan I started hitting all the secondhand guitar shops and flea markets, finding great vintage instruments and bringing them home. One day my wife said, you have to stop bringing all these guitars home, because you literally have guitars in every room of the house. So I said, okay, maybe I will sell some, because what I really enjoyed was the hunt. I sold fifty the first year and two hundred the year after that, and I thought, there is actually a business model here. That was about twelve years ago and the business is still going strong. I have turned it over to a partner now, so I am not too involved day to day. It gave me a sense of something. I enjoyed it. It was work and it brought income, but it was not something I felt was stressful. It was something I really enjoyed doing. So it triggered me to start thinking about how I spend more of my time doing things I actually want to do, rather than things I have to do. ##### How Demand Metric came into it Ron Denoo: Part of this was the connection I made with Demand Metric a few years ago. I had signed up for a subscription on their website. At that time I was in a regional role at Mitsubishi, and I had been tasked with putting together market-facing teams across a broad organization of business units that had never actually worked together before. So I was looking to standardize some tools they would use. How do they look at opportunities, how do they manage their opportunity pipeline, things like that. I reached out to borrow some of the templates they had created, just to save myself time building the tools I needed. Matt reached out to me and we had a short conversation. I explained the challenge ahead, which was pretty sizable. We had a lot of people whose hearts and minds we had to win over. He suggested a call with Jesse to explore whether they could customize a playbook rather than me just downloading something from the website. Within an hour of that call it became very apparent to me that these were people who really understood how business worked. It was not what I would call the typical consulting approach. I had worked a lot with McKinsey and with Boston Consulting. These were different. Really hands-on, really practical. So I engaged them to customize a playbook, and asked Jesse to attend one of the seminars I was running to help facilitate. That first workshop must have been September 2022. It blossomed into a two-year relationship while I was still at Mitsubishi, to help globalize the program. Jesse came on board as my partner, and I put him on an airplane and had him live the crazy life I had been living for a long time. Between the two of us we did dozens of workshops all over the world. ##### Retiring, and five weeks Ron Denoo: I finally retired from Mitsubishi Chemical in January of this year. I had started another guitar business a few months prior with a partner, and we are now the fastest-growing guitar brand in the United States. That has gone extremely well, and we are launching another brand this month. On the consulting side, I had set a goal for myself. When I left Mitsubishi I had a number in mind for how much I wanted to make consulting in a year, and I had worked that into my financial plan. I met that goal within five weeks of leaving Mitsubishi. It has been incredible for me personally. My biggest problem at the moment is not finding more consulting work. It is throttling back on the opportunities being presented to me, because I still have my own businesses to run. And my wife keeps reminding me I did not retire so I could work more. I retired so I could work less. So I have to refine that balance. I feel very blessed with how this year has gone. It is not really what I expected. It is actually much better. ##### Where the first two clients came from Jesse Hopps: If you had to give advice on where to look for your first engagement: did you build a website? Did you do a big marketing strategy? Did you spend much time on thought leadership? A lot of people get caught up in thinking they have to do all that in order to get to a great account, and I believe that is just not true. Ron Denoo: My very first account was Mitsubishi, my previous employer. I had given them lots of notice. I started talking about leaving the company about two years before I actually left, so they were not taken by surprise by any stretch. They knew what my plan was. But when it finally came time for me to go, there were some things I had been involved in, some projects I was working on, that they felt still needed my attention. And I said, okay, I am happy to continue to support those, but I am going to do it as a consultant, not as an employee. I was working on an acquisition for them, supporting it, and they then asked me to take the lead and close it, which I did in July of this year. That one I did not have to work very hard at. The next client I landed was an industry connection, somebody I had worked with previously who had gone on to another company in the industry and recognized that they had a lot of the same problems I was involved in solving at Mitsubishi. Once they found out I was leaving and might be available to help, they reached out. They have now become by far my biggest consulting client, and there are a ton of opportunities there. It has been really rewarding, and I feel like we are having impact. ##### No website, no advertising A participant: One of the things I have struggled with most is wanting the website to be perfect, because that is the world I come from. I had a marketing department, an advertising department, all these departments that did the work. What have you done in terms of self-promotion, or did everything come to you from your network? Ron Denoo: Actually, I do not have a website. I have not done any advertising. What I have done so far has been working my network. The other thing I would say, and this is more of a learning from my guitar business: one of the great things for any entrepreneur these days is the ability to tap into the gig economy and not have to hire a full-time marketing person. You can outsource so much of that, find an expert, hire them for a single engagement, pay them a reasonable amount to do a project, and keep your overhead extremely low. That is how I launched all of my guitar businesses. I still rely on freelancers all the time, for everything from legal work to design work to marketing to who sets up my ads to how I manage my marketplace sales. It is a piece of advice I would give to any small business person, including a consultant. It saves you a lot of time and a lot of overhead. ##### Do the fundamentals Jesse Hopps: I heard on the Huberman podcast that there are a lot of people who love to get deep in the science and the hacks and the intricacies, and they do not want to go to the gym and do the work. It is optimization when you are not doing the fundamentals. Consulting and coaching are bought through trust. People know your reputation. You can make friends and build new relationships or leverage existing ones. We have all got large networks. If you are not working your network to get curious about what people are doing these days, not because you are trying to sell anything but because you want to be active and see where you can add value, then don't spend your time on the website. Spend it on coffee catch-ups. That is ten times more important to driving business than a perfectly polished site. Matt: Over the last fifteen years, working with consultants and agencies and people, the number one challenge everybody has is getting customers. I have seen sites that look beautiful where the person is struggling to get deals. And when I ask how many prospects they met with in the last month, the answer is always: not enough. ##### What changes when you are outside Jesse Hopps: When you think about what you did for Mitsubishi at the end and what you are doing now, is there a distinction between consulting and coaching and advisory? How do you look at those roles? Ron Denoo: It is very different in a lot of ways. When you are an employee, you have to worry more about the political impacts of the things you are doing. As a consultant you get an amazing license to shake things up a little, to be very direct and very truthful, in a kind way. They are expecting that you bring an outside-in view that is not tainted by politics, not tainted by long history in the company, and all those other things. You bring a fresh perspective that is very valuable to the client. In many ways it is more liberating. It is a lot more fun to be doing this from the outside than it was trying to do it from the inside when you had all those other dynamics to worry about. It is also great not to have to worry about all the people management and everything that a leader in a big organization is saddled with day to day. That burns a lot of time and a lot of energy, and often it does not help with creating results. What we do now, we can focus our time on creating results. So even though I am spending less time working with this company than I spent in the business I was in before, I feel in many ways I am having more impact now than I did before. It is a leverage point that is hard to get inside a big organization. ##### Two different roles you can play Jesse Hopps: I want to draw a distinction, because I think it is important. There are two different roles you could play. The first is a hired-gun role, where there is a skill set or a set of experiences you have and the company does not have the internal capability or the bandwidth. Someone who has run a center of excellence for supply chain knows the ins and outs of standing one up. Another big company doing it from scratch says: we could accelerate our timeline, we just need someone to come in, look at what is going on, tell us what we need to do and give us a road map, because nobody has done it here before. That is a specialized set of knowledge, and often they need you to do the work. You are developing the reports, producing the deliverables. When Ron took the lead on that M&A transaction, they did not have anyone else who could do the job. They needed a person with that background and that context to get the deal over the line. Very much a consulting role. Contrast that with the transformation work. I would call that coaching. A consultant analyzes the situation and tells you what to do. Here are the five steps, and they may or may not execute for you. Coaching is asking people what they think they need to do, and then asking questions to guide them to the answers on their own. You do not do the work for them. You guide them into doing the work for themselves. And that is very different from most consulting firms. ##### The chip on the shoulder Ron Denoo: You have to be a little careful, because there is a bias in a lot of organizations against consultants. Some of us have probably also been the people who sneer a little when they hear a consultant is being brought in. So what I do personally, when I engage with a client for the first time, in my introduction, some of the first words out of my mouth: I make it clear that I am not here because I think I have all the answers for your company. I am here because I believe you have a tremendous amount of experience and knowledge in your business, in your products, in your industry. And my job is to help facilitate a discussion, to extract that knowledge and then turn it into something actionable that we can work on to improve the business. That automatically takes the chip off their shoulder a little, because nobody actually really wants to be told what to do. And I really do believe that most of the time they do know the answers. Usually you are surrounded by expertise in those organizations. They may not know exactly which levers to pull, or exactly which direction to run, or what best practice looks like in certain areas. So you bring some of that expertise, combine it with their in-house knowledge, and partner with them. That is a more coaching-type approach than the traditional consulting approach. ##### The watch Ron Denoo: With this big client, I did a one-day workshop with one of the business units. I knew, because I had done a little homework and had some friends in the company, to ask about the business unit leader who was coming. I said, tell me about him, I would like to prepare myself. And they warned me. They said, this guy is tough. He hates consultants. He never wants to do anything new. Good luck. That is basically what they said. Good luck with this one. So I showed up, gave my introduction, and told them what I was there to do. It was a full-day workshop and we took a break for lunch. At lunch this business unit leader came up to me and said: you know, Ron, somebody told me once that a consultant is somebody who borrows your watch to tell you what time it is. And I said, no, no, that is absolutely untrue. A consultant is a person who borrows your watch and charges you to tell you what time it is. He started laughing. He said, that is why I know you are not a consultant. That was an important moment for him, and now he has engaged me in additional engagements to support his business unit, because we built that trust. And by the way, I did not find him difficult to work with, or anti-consulting, or anything. I found him quite open-minded. But it was because I was approaching him with questions, not with answers. And that is more the coaching approach. ##### Be humble A participant, a chemicals executive who left an operating role the previous year: Like all of us, I have been in the driving seat in an executive position, making hundreds of decisions every day. What would be your best piece of advice for moving from that to a coaching style? What can you tell me to refrain myself from telling people what to do, because I know the answer, of course. Ron Denoo: If you ask for a single good piece of advice: be humble. I think that is extremely powerful. A lot of people make the mistake of trying to push their expertise on somebody, because they feel that is how they get accepted, that is how they get the next engagement. That is not my style at all. I prefer to stay humble and stay open to working with people, and to try to understand what they know rather than overwhelm them with what I know. Naturally, you will have opportunities to share your expertise and your experience. But if you try to lead with that, it sets the wrong tone. Jesse Hopps: When you do not have the big business card behind you and you are out there developing business for yourself, it is easy to fall in love with your stories, your experience, and what you think the client should do, when you have very limited information about what is actually going on. You do not have a lot of context to form an opinion. So a major driver of success is falling in love with their problem, their challenge, the implications of it, what they have tried already, and staying extremely curious and humble before you make a judgment. ##### Who not how A participant, a global supply chain and transformation leader: You said that sometimes you needed support from an expert and reached out to your network. It is not always a one-man show. Sometimes something grows and you think, I can do it, but I had better get an expert to cover that special part, and you still coordinate and stay the point of contact. How did you do that? Ron Denoo: One of the principles I learned while formulating a plan for my own business is the principle called who, not how. I think it is a Dan Sullivan principle. It means: do not try to do everything yourself. Go find people who have the right expertise, who are passionate about a topic you are not that deep in, and find a way to get them involved in your problem. In the end you have to deliver what the client needs. Sometimes you will have exactly the right recipe, and sometimes you may not, but you still want to be their problem solver. One of the big benefits of working with the Demand Metric team is that they have a tremendous network and access to experts in different areas. So if I say, I have been working on this commercial academy concept for this client and now they want a similar academy for the supply chain, I am not the person to run a supply chain academy. Do you know somebody? And inevitably they do. We can bring people in on a project basis and give the client what they need. It is a huge advantage. ##### Say yes more often Jesse Hopps: Matt and I do a lot of meetings that are not linear. They are not transactional. We are not doing this meeting because we are going to get some goal this second. We take calls, we meet people, we put events on, we try to add value. We do not know it is going to turn into anything. But when you have an intention and you are paying attention, you have this thing called your reticular activating system, the part of your brain that notices things. If you have ever thought, I want a new red car, you see them everywhere when you did not before. In this case, I was going to skip this session and leave it to Matt and Ron. But I came. And there is an active situation right now where a client is looking at taking what we are doing in commercial and moving it over to supply chain. So how did I suddenly meet someone who might be the right person? By adding value. By going out and trying to create value for other people. So do not feel like every meeting needs a direct, immediate, resolved purpose. Sometimes throwing yourself out there and letting things happen is the point. Say yes more often. Get yourself out into the world where you meet more people and have more conversations, and share what your purpose is and what you are up to. The world has a way of making those connections happen. ##### Why people actually do this Jesse Hopps: We all have different reasons for getting into this kind of career, especially late stage. And we have learned it is generally not about the money. It is a lot more about contribution, community, purpose, relevance, people. Most of the people we have seen succeed do not need the money. Ron has made it sound really easy. His employer hired him back, he got an account right away, he hit his goal in five weeks. The truth is we have worked with more than a hundred people trying to make this transition. If you are outstanding as a human being and can add value, the world will value that and you will find work. That is close to a universal truth. But there are things you can do to give yourself a better chance. Sometimes people only dive into consulting once they have been laid off. Ron contrasts with that. He started positioning his exit two years before it was time to go, and left on a high note, on his own terms. It was not a debate about whether an expensive salary was still needed. It was: we are going to lose him, what is he working on that nobody else here can do? He flipped the power dynamic. This is a forty-billion-dollar company and he is one person. There is a lesson in how he left the organization and how he maintained relationships with people after they moved on. ##### Identity follows the work A participant, a former VP of engineering: I have always invested in the companies wherever I have gone. How is the attitude of being a consultant or a coach different? When I have had these discussions, people say: you have not done fractional work before, you have to have that experience. But you have to learn what it is before you can claim the experience. Ron Denoo: One of the things I did during my employed career was spend a lot of time developing people. That was important to me personally. It was a responsibility I felt and something I enjoyed. If that is the kind of leader you are, that is the attitude you want to carry into a consulting career: figuring out how you actually help the people. Ultimately the business benefits if the people are doing a better job and are happier. And there are a lot of distractions that get removed from your plate when you enter as a consultant rather than as an employee, which lets you focus more intently on that goal. It is also easier when you have a lot more freedom. I was now choosing these engagements. As an employee I really felt I had lost the ability to choose anything, with other people making decisions that dictated my life and my schedule. So it gives you a more positive attitude, because it is something you are choosing to do rather than being told to do. Jesse Hopps: On needing the experience before claiming the identity: a big part of the coaching we do is about not putting limiting beliefs on yourself. You shift into the new role, you start doing the work, and then the identity comes to you. It is not the other way around. If you are always waiting until you have a certain thing, there will always be a gap between what you think you are and what you are actually doing. A participant with a long enterprise background: I would add one thing. If you are in a large corporate organization, whether or not it is called a fractional role, you can reach out to other executives. That is how I got into this concept first. I had a conversation with my group president and reached out to other executives, helping on projects where my specialty could speed up their execution. Being able to say you did that while holding a full-time job will definitely help. It helped me. ##### What people actually joined for Jesse Hopps: If you are going to go out on your own as a coach or a consultant, it can be lonely. On the days when it is hard to find a client, it is easy to give up on yourself if you are by yourself. But if you are with a group and can share your experiences and learn from others, it often gives you that spark, that bit of motivation and encouragement you need. When we built the program we thought our tools and templates and playbooks were going to be the main draw, and why people would sign up. When we surveyed everyone after about a year of doing it, shockingly to us, it had nothing to do with our content. It was everything to do with the sense of community people were getting. So do not underestimate that. Regardless of whether you work with us, if you are going to go out and do this, find some people you can have as part of your community to support you. It is invaluable. ## Masterclass lessons ### Building a "Next-Gen" ComEx Academy https://commercialexcellenceconsortium.com/masterclass/building-a-next-gen-comex-academy He stopped the consulting plan one month into the job, and rebuilt it on 20% of the budget. Speaker: Roy van Griensven · Head of Commercial Excellence, LANXESS Topics: commercial excellence academy, capability building, guided discovery, Growth Projects, intrinsic motivation, change fatigue, Adversity Quotient (AQ⁠®) #### Summary Roy van Griensven took over commercial excellence at LANXESS, a global specialty chemicals company spun out of Bayer, and inherited a capability-building program already designed by a top-three strategy consulting firm. The concept was academically correct: every capability mapped, a curriculum written, and one rollout applied to all nine business units at the same time. It had produced very little traction. What he heard in his first weeks was not an execution complaint. It was that people had seen it before. He was told he was the third or fourth person in the job, that it had not worked, and that this company was different. So rather than run the same design a fourth time, he went to the CEO with a proposal: stop the consulting engagement, take twenty percent of what was budgeted for it, and let him test a different approach without it being argued down. Two things changed. The first was who chose the work. Instead of one sequence imposed across nine business units, he asked each business unit head a single question — what matters most to you in hitting your plan, whether or not it is on the list. Those conversations exposed the real problem: the leaders had been ticking a box because the CEO expected it. They did not believe the priorities were the right ones. Once each unit worked on what it had chosen, the same capabilities still got built; only the order changed, and what one unit built could be handed to the next. The second was the shape of the teaching. The inherited program opened with roughly a hundred and forty slides. Talking to people in the organization, Roy concluded they largely knew what needed to be done — nobody had asked them. So the Academy runs upside down. Cohorts of about thirty move through mindset, skillset and toolset in that order: shown what good looks like elsewhere, then given room to work out what of it matters to them, then choosing what they will work on for the next ninety days, with an experienced operator coaching them through it rather than a junior consultant explaining their job to them. The mindset work is the part he singles out as having the largest effect, separate from any content. In a company that had spent twenty years in survival mode, people were fluent in the reasons nothing could move: Chinese competition, overcapacity, dumping, tariffs, customers in trouble. All of it true, and all of it a reason to wait. The work was to get from that list to the one or two things still inside their influence this week — which is coaching on how a person responds to adversity, not instruction on how to write an account plan. The results arrived in a shape the original program never reached. Around twenty programs are running company-wide, with more than seventeen self-selected Growth Projects behind them, and the business units report on the work themselves because they picked it and want it credited to them. The capability change was measured rather than asserted: across the cohorts, adaptive capacity moved from the Average band into Above Average. When severe financial measures landed in the budget cycle, cutting into personal compensation, the commercial excellence plan was left untouched. It was the one thing in the company people experienced as being listened to. #### Key points - Why a technically correct capability plan produced no traction across nine business units, and what the first weeks in the job revealed about the reason. - The proposal that got it stopped: twenty percent of the consulting budget, and permission to test a different design without it being argued down. - Replacing one synchronized rollout with each business unit choosing what it works on first — and why the full capability set still gets built. - Turning a hundred and forty slides into guided discovery: inspire, reflect, then ninety days of self-chosen work with an operator coach. - Why mindset work on adversity response mattered more than any content in a company fluent in the reasons nothing can move. - How the CRM went from rejected to requested, and five business units converging on ninety-five percent of the same design without a mandate. - Adaptive capacity measured before and after, moving a full benchmark band — and why the business units stopped arguing about whose result it was. - What the design costs leadership: control over knowing in advance what will get worked on tomorrow. #### Definitions - **Guided discovery** — Letting people arrive at the answer through questions rather than being told it. In the Academy, participants are shown what good looks like elsewhere, then work out which of it applies to them, then choose what to act on. The topic often ends up the same as a mandate would have produced; the difference is that they asked for it. - **Growth Project** — A ninety-day piece of real commercial work that a team selects for itself, on a problem it already has, coached weekly by an experienced operator. It is the unit the Academy delivers in — capability is built by doing the work rather than by attending a session about it. - **Mindset → Skillset → Toolset** — The order capability is built in: how people interpret a setback first, then the skills, then the systems. Most programs run it backwards, starting with a tool rollout and treating mindset as a communications problem. - **Change fatigue** — The state produced when priorities reset faster than teams can act on them — a new leader, a new operating model, a new set of messages — until people stop investing in any of it on the reasonable assumption that it will change again. Named by this roundtable as one of the two hardest problems in capability building. - **Adversity Quotient (AQ⁠®)** — A measure of how a person responds to setbacks, developed by Dr. Paul Stoltz. In this program it is used with GRIT⁠™ to get teams from cataloguing why nothing can move to naming the one or two things still inside their influence. - **One-size-fits-all rollout** — Applying the same capability program to every business unit on the same timetable, on the assumption that it is more efficient. It is the design Roy stopped, on the grounds that it standardizes the sequence rather than the outcome. - **The knowing–doing gap** — The distance between people knowing what to do and doing it. Named in this session as the fallacy underneath most adult learning design: that showing people the plan and what good looks like is enough to change behavior afterwards. #### Questions this answers ##### What is a next-generation commercial excellence academy? It is a capability program built around work people choose rather than a curriculum they are enrolled in. Cohorts of about thirty are shown what good looks like elsewhere, decide what of it matters to them, then run a ninety-day project on a real commercial problem with an experienced operator coaching them weekly. The teaching stage is the shortest part; most of the program is the work itself. ##### Why did LANXESS stop a capability plan designed by a top-tier consulting firm? Not because the plan was wrong. Roy van Griensven describes it as academically correct — every capability mapped, a curriculum written. It produced very little traction because it was pushed onto nine business units on one timetable, and the leaders were complying with it rather than believing in it. Running the same design a fourth time was the thing he declined to do. ##### What did he propose to the CEO instead? Stop the consulting engagement, spend twenty percent of the budget set aside for it, and allow a different approach to be tested without being argued down. He asked specifically for it not to be objected to while it ran, rather than for extra funding. ##### How do you decide what each business unit works on? By asking the business unit head what matters most to hitting their plan, explicitly including things not on the corporate list. In this case those conversations revealed that leaders had been ticking a box because the CEO expected it, and did not believe the assigned priorities were the right ones. ##### If every unit picks its own priority, do you still build all the capabilities? Yes. Across nine business units the full capability set was still addressed — what changed was the order each unit took them in. Once one unit had built something, the others were willing to adopt it, because they had been allowed to start with what they believed in. ##### What was wrong with a hundred and forty training slides? It assumed people did not know what to do. Talking to the organization, Roy concluded they largely did — they had not been asked. A program that opens by explaining their job to them spends its first hours confirming that nobody is listening. ##### What does guided discovery mean in practice? Inspire, then reflect, then choose. Participants see examples from outside the company, work out which parts matter to them, and select what they will work on for the next ninety days. The destination is often the same one a mandate would have named; arriving at it themselves is what changes whether it lasts. ##### What is a Growth Project? A ninety-day piece of real commercial work a team selects for itself, on a problem it already has, with weekly coaching from an experienced operator. It is how the capability gets built — by doing the work rather than by attending a session about it. ##### Why use operator coaches rather than consultants? Roy is direct about the dynamic: a junior consultant with three years of experience telling someone with twenty years of marketing experience how to do their job typically does not work. An operator who has done the work for thirty years is not there to judge, only to help when a team gets stuck — with examples, with the right questions, and with what worked and what did not. ##### How long does a cohort run? Ninety days of project work after the workshop, with weekly coaching. In this program teams were asking what happened next before the ninety days were up. ##### How did a company that rejected CRM end up asking for it? It was never introduced as a CRM program. The company had said CRM was unusable and that its business did not fit an opportunity model. When the question became what visibility do you need to manage your business, teams arrived at pipeline transparency themselves — and then asked when they could start using the system, because it was the way to get what they had asked for. ##### Did letting business units choose produce inconsistent designs? The opposite, in the case that mattered most. Five business units worked on opportunity and pipeline management separately and arrived at ninety-five percent of the same setup — the same stages, the same data, the same configuration. A mandate would have needed two years and an argument to achieve the same convergence. ##### How do you prove return on investment for work driven by intrinsic motivation? By measuring the capability itself and reporting on the work monthly. Adaptive capacity was assessed before and after across the cohorts and moved a full benchmark band, and each business unit reports its own results. There is no debate with them about whose impact it is, because they chose the work and want it credited to them. ##### Why was the original impact number rejected? The inherited program carried a two-to-three-hundred-million impact figure that the business units were fighting as unrealistic. It was parked rather than defended, and the argument was dropped. Impact tracking became straightforward once the units were reporting on work they had chosen. ##### What happened to the program when the company made severe financial cuts? Nothing. On the day the CEO announced measures that hit individual compensation, the commercial excellence plan was discussed and left unchanged. It was the one thing in the company people experienced as positive, and as evidence they were being listened to. ##### Who finds this approach uncomfortable? Leadership, rather than the teams. Sales and marketing run at it because the priorities are theirs. The unease sits with headquarters, the board and business unit leaders, who give up knowing in advance exactly what will be worked on tomorrow. ##### Should you start with the leaders or with the people doing the job? Both are needed, but the weight goes to the people who do the work. Roy finds influencing a leader easier than influencing the field, so he spends his time in the field. When a business unit leader is unwilling, starting with them stalls; when the motivation builds under them, they tend to come along. ##### How do you keep a CEO focused on capability when the current quarter is bad? By separating the two conversations. Questions about this month's margin and volume are legitimate and stay in the business review. Growth gets its own dialogue: is the pipeline healthy, are we on the right customers, what support is missing. Roy's framing to his CEO was that the current months were going to be bad regardless, so the question was whether the work being done now put the company in a better position in six months. ##### What should a CEO do differently under this model? Reward people who try, and resist asking what is not correct. Roy asked his CEO for one behavior specifically: say thank you, and do not open with the two questions about what went wrong, because that is what signals whether bringing an idea forward is worth it. ##### What are the hardest parts of running it? Three. Influential leadership is a skill his own team had to build, because the program cannot be delivered by presenting at people. Some business unit leaders are simply not interested and generate friction that costs time. And intrinsic motivation alone is not enough where people have never seen what good looks like — those cases still need inspiration, delivered without it feeling like instruction. ##### What are the unintended benefits? Visibility for people who would not otherwise have had it. Individuals rose from inside the organization on the strength of their ideas, including cases where someone junior presented to the CEO and was considered for future leadership — a route the normal promotion path would not have produced. ##### What did commercial excellence leaders name as the hardest part of capability building? Asked to rank seven challenges, the room put managing change fatigue and building intrinsic motivation joint first, with demonstrating business impact close behind. Getting budget, sourcing content, and deciding what to work on ranked lowest — the constraint is behavioral rather than material. ##### Why is change fatigue so hard to manage? Because the resets come from above and arrive faster than teams can act. Participants described new leaders bringing new directions, go-to-market models changing and priorities resetting with them, and technology moving faster than anyone can absorb — until people stop investing on the reasonable assumption it will change again. ##### Is transformation the right word for this work? Several in the room argued not. Transformation implies a start and an end, when what is being asked for is continuous adaptation. One participant described uncoordinated, siloed transformations arriving one after another as a domino effect that teams experience as never ending. ##### Why do people resist tools that would help them? Because they are measured on something else. A participant put it plainly: salespeople are incentivized by their number, and are not rewarded for using the system. When a rollout then removes flexibility they had, they lose faith in it and revert — and the program pays for that at go-live. ##### Why does capability building get cut in a downturn? Because leadership hears it as training. Framed that way it looks deferrable — the existing skills can get the company through. Framed as the organization's ability to adapt to the conditions it is in, it becomes the thing that gets you through, and the measures of progress change with it. ##### What is the role of AQ and GRIT in this program? To move people from cataloguing constraints to acting inside them. In a company fluent in the reasons nothing can move — competition, overcapacity, dumping, tariffs, customers in difficulty — the work is getting to the one or two things still within influence this week. Roy names this as having had possibly the largest effect of anything in the design, separate from content. #### Quotations > "Maybe doing the same thing for the fourth or the fifth time is just not the right thing to do." > — Roy van Griensven > "What if we take twenty percent of what you're budgeting to spend on consulting, and we stop the whole consulting?" > — Roy van Griensven, on the proposal he took to his CEO > "They actually knew what had to be done. The problem was no one had ever asked them, what do you think?" > — Roy van Griensven > "We didn't have to do anything to get people motivated to work." > — Roy van Griensven > "You need to trust that the right things start to happen, and that you're not in control of telling everyone what they're doing day to day." > — Roy van Griensven, on the conversation with his CEO > "The discomfort is not at the board level, it's the level below. The sales and marketing teams, there is zero discomfort. They run through brick walls by now, because they have the feeling they're listened to." > — Roy van Griensven > "They were actually asking for when can we start using CRM." > — Roy van Griensven, on a company that had called CRM unusable > "Reward people that try. As a CEO, say thank you. No matter how big the urge is to ask the two questions about what's not correct, don't do it." > — Roy van Griensven > "The people that actually do the job, that's where the change happens — not the people that sit in management positions." > — Roy van Griensven > "The biggest single fallacy in adult learning is that all you need to do is put a bunch of people in a room, show them PowerPoint, show them what good looks like, and then somehow expect behavior changes after." > — An operator coach with thirty years in chemicals and composites > "Every time there is an organization change, the message being sent to the commercial team keeps changing, and it makes the team very confused on what to focus on." > — A commercial excellence lead in life sciences > "Transformation implies a start and an end. Isn't it really about constant adaptability?" > — Jesse Hopps --- ### What Is Adversity Quotient (AQ⁠®)? https://commercialexcellenceconsortium.com/masterclass/what-is-adversity-quotient Resilience is bouncing back. AQ is responding optimally — and unlike resilience, it can be measured. Speaker: Dr. Paul G. Stoltz · originator of AQ⁠® and GRIT⁠™ Topics: Adversity Quotient (AQ⁠®), GRIT⁠™, resilience, response ability, emotional intelligence (EQ), measurement, adaptive capacity #### Summary Paul Stoltz set out from a finding that sounds heretical and is now unremarkable: IQ predicts very little about wealth, success, happiness, or performance. What separated people, in the research, was what they did with the hard parts. If there was such a thing as an IQ, he reasoned, there should be a measurable equivalent for how a person handles adversity. That became AQ. His objection to resilience is precise rather than dismissive. Ask a room of five hundred people what a resilient person does and the answer comes back in chorus: bounce back. Stoltz's point is that bouncing back thirty-six times a day contains no learning and no growth — you end up where you started, repeatedly. What he argues for instead is what he calls response ability: the capacity to respond optimally to whatever happens, the moment it strikes. The distinction matters because it is measurable and, he argues, improvable. The AQ Profile is a four-to-six-minute assessment, now in its eleventh major version, developed alongside Harvard Business School, MIT, Stanford, Carnegie Mellon and INSEAD, and used to measure more than five million people across a hundred and thirty-seven countries. Groups that go through the work improve by eleven to twenty-three percent on average — and Stoltz reports those gains as permanent, with teams re-measured over ten years and no case yet of a score going back down. On where AQ sits relative to emotional intelligence, he is unusually generous about the rival. EQ arrived about sixteen years after AQ, and Stoltz went to its originators to work out the relationship rather than argue about it. The conclusion he reports from that conversation is the line he still uses: it takes a sufficiently high AQ to ever attempt to optimize your EQ. Your ability to read and use emotion matters — but what matters more is whether you can bring it in the moment things go wrong. The business case he puts to leaders is a single question. You and your competitors face essentially the same conditions; if that is true, then those who deal with them better and faster win. He cites work with Harvard Business School putting only about twenty percent of transformation investments in the promised land, with eighty percent falling short — and asks how you equip people to beat those odds, given that any change worth doing is full of setbacks by definition. He also reports a global average of six point one out of ten when leaders are asked how well their people respond the moment adversity hits. GRIT came later, and for a reason he is careful about. Raw tenacity has what he calls a dark underbelly: telling some populations to dig deeper and try harder is a dishonor to them and can crush their spirits. So GRIT was rebuilt across four dimensions — Growth, Resilience, Instinct, Tenacity — after a survey of a million people produced a result he calls the most impossible statistic he has seen: asked whether the quantity or the quality of their grit matters more, a hundred percent said quality. That reframing produces two distinctions he keeps returning to. Smart grit over dumb grit — because organizations have pursued the wrong strategy relentlessly, and effort spent on the wrong goal is still effort. And good grit over bad grit, which is about the effect you have on the people around you while you pound away at yours: a noble goal pursued in a way that burns out your team is, in his framing, bad grit. The simplest description of how the two fit together came from the US Olympic coaches he taught. AQ is how you respond to whatever is coming at you — defense. GRIT is how you go after what you want in the most effective way — offense. You need both. And when he asks clients to lay out everything they are trying to teach their people and place AQ among it, he reports the same two answers every time: they put it at the foundation, or at the center as the fuel cell that makes everything else worth more. #### Key points - Why IQ predicts very little, and what the research found in its place. - The precise objection to resilience: bouncing back thirty-six times a day contains no learning. - Response ability defined — responding optimally to whatever happens, the moment it strikes. - How AQ is measured: a four-to-six-minute profile, eleven major versions, five million people, a hundred and thirty-seven countries. - The improvement claim, and the part Stoltz says he did not believe at first: gains of eleven to twenty-three percent that have not reversed in ten years of re-measurement. - How AQ relates to EQ, worked out with EQ's own originators rather than against them. - The four dimensions of GRIT — Growth, Resilience, Instinct, Tenacity — and why quality beats quantity. - Smart grit over dumb grit, good grit over bad grit, and why raw tenacity has a dark side. - AQ as defense, GRIT as offense — the description that came from Olympic coaches. #### Definitions - **Adversity Quotient (AQ⁠®)** — A measure of how a person responds to and deals with adversity, and a method for changing it. Developed by Dr. Paul Stoltz on the finding that IQ predicts very little about performance or wellbeing, while adversity response predicts a great deal. - **Response ability** — Stoltz's term for the capacity to respond optimally to whatever happens, the moment it strikes — as distinct from responsibility, which is about what you own. It is the thing AQ measures, and the reason he treats AQ as going beyond resilience. - **Resilience (and why AQ goes past it)** — Commonly understood as the ability to bounce back. Stoltz's objection is that bouncing back repeatedly returns you to where you started with no learning or growth attached, which is why he treats it as a component of AQ rather than a synonym for it. - **The AQ Profile** — A four-to-six-minute online assessment, now in its eleventh major version, developed alongside Harvard Business School, MIT, Stanford, Carnegie Mellon and INSEAD. Results can be released immediately or withheld, and come with coaching tailored to the score. - **GRIT⁠™ (the four dimensions)** — Growth — how far you seek fresh perspectives and inputs toward a goal. Resilience — how well you make positive use of adversity, rather than merely withstanding it. Instinct — whether you are pursuing the best goal in the most effective way. Tenacity — the raw persistence most people mean by the whole word. - **Smart grit vs. dumb grit** — Dumb grit is effort spent relentlessly on the wrong goal or the wrong strategy. Smart grit adjusts and reroutes while still pursuing the goal — what Stoltz calls a climber's agility: you have a trail map, and you adapt it. - **Good grit vs. bad grit** — The effect you have on the people around you while pursuing your own goals. A worthwhile goal pursued in a way that burns out the team is, in Stoltz's framing, bad grit — noble goal, bad grit. #### Questions this answers ##### What is Adversity Quotient (AQ⁠®)? A measure of how a person responds to and deals with adversity, and a method for changing that response. It was developed by Dr. Paul Stoltz on the finding that IQ predicts very little about success, wellbeing or performance, while how a person handles the hard parts predicts a great deal. ##### How is AQ different from resilience? Resilience is commonly understood as bouncing back. Stoltz's objection is that bouncing back returns you to where you started — do it thirty-six times a day and no learning or growth is attached to any of it. AQ is about responding optimally the moment something strikes, which includes making use of the adversity rather than merely surviving it. ##### What does Stoltz mean by response ability? The ability to respond optimally to whatever happens, the moment it happens — as distinct from responsibility, which is about what you own. He describes it as humbling, because few people can honestly say they responded optimally, and inspiring, because it can be grown. ##### Is AQ the same as grit? No, and the clearest description came from the US Olympic coaches who learned both. AQ is defense — how you respond to whatever is coming at you. GRIT is offense — how you dig deep and pursue a goal in the most effective way. Stoltz's position is that you need both. ##### How is AQ different from emotional intelligence (EQ)? EQ appeared about sixteen years after AQ, and Stoltz worked the relationship out directly with EQ's originators. Their shared conclusion, as he reports it: it takes a sufficiently high AQ to ever attempt to optimize your EQ. Reading and using emotion matters — what matters more is whether you can do it when things go wrong. ##### How is AQ measured? Through the AQ Profile, a four-to-six-minute online assessment now in its eleventh major version, developed alongside Harvard Business School, MIT, Stanford, Carnegie Mellon and INSEAD. Results can be released immediately or withheld, and are returned with graphs, scores and coaching tailored to the individual result. ##### How many people have taken it? Stoltz reports more than five million individuals measured, across every sector, in a hundred and thirty-seven countries. ##### Can AQ actually be improved, or is it fixed? Improved. Stoltz reports that groups going through the work gain eleven to twenty-three percent on average — significant statistically, and more importantly visible in behavior. ##### Do AQ gains last? Stoltz says they are permanent, and is candid that he did not believe it at first. Neurologists told his team the work was permanently rewiring patterns of response. Some groups have been re-measured over ten years, and he reports never having seen a score go back down once it rose. ##### What is the global average AQ? When leaders are asked to rate, on a scale of one to ten, how well their people respond the moment adversity hits, Stoltz reports a global average of six point one. ##### What happens if that number moves? He asks leaders exactly that — what would it mean if it were consistently an eight or nine. The most common answer he gets is game changing, and it shows up across performance, productivity, engagement, attrition, customer satisfaction and innovation. ##### What outcomes does AQ predict? Stoltz cites independent studies showing higher-AQ people outperform lower-AQ people on sales, engagement, retention, productivity, problem-solving speed, and the level and quality of innovation. He also reports health effects: lower-AQ individuals taking roughly triple the sick days and falling ill about twice as often. ##### Has AQ been shown to predict sales performance? Stoltz says his team has yet to find an industry where higher-AQ people do not outsell lower-AQ people. ##### Why does AQ matter for transformation specifically? Because change is defined by setbacks. Stoltz cites work with Harvard Business School putting roughly twenty percent of transformation investments in the promised land and eighty percent falling short, and his framing is that any change worth doing is full of problems and frustrations by definition. AQ is how you equip people to handle those better and faster. ##### What is the business case for AQ in one sentence? You and your competitors face essentially the same conditions; those who deal with them better and faster win. Stoltz reports that when he tests the premise with leaders, they agree the challenges are close to identical across the board. ##### Why is AQ relevant now in particular? Because change is accelerating, complexifying and intensifying at once, and most organizations are already change weary. Stoltz's framing is that people need to be equipped rather than trained — able to harness change rather than only absorb it. ##### Which organizations have used AQ? Stoltz cites a long client list including Amazon, Apple, AT&T, Microsoft, FedEx, Marriott, Deloitte and Ernst & Young, across chemicals, manufacturing, consumer goods, pharmaceuticals, healthcare and financial services. These are his figures and his account rather than the Consortium's. ##### What results has AQ produced at named companies? Among the examples Stoltz gives: a global insurer with over seventy thousand employees reporting a hundred and seventy-three percent improvement in engagement and a ninety percent reduction in attrition; sales teams moving from worst to best in their organizations; and Deloitte finding AQ predictive of how fast people advance, then using it in promotion and development decisions. ##### How is AQ used by the US Olympic team? Stoltz became a master coach across the summer, winter and Paralympic teams. The committee's reasoning, as he tells it: at that level everyone has freakish talent, so the competitive differentiator is how athletes show up in moments of adversity. The work is now being extended toward the wider team of around five thousand athletes. ##### How is AQ used in private equity? Two ways, in Stoltz's account. In diligence and hiring — deciding who to bring in to create short-term growth under pressure. And with the existing team, equipping people to produce results in competitive conditions and under the compression of a hold period. He notes that entrepreneurship itself is hard to do without a high AQ, since adversity is the daily diet. ##### Why did Stoltz develop GRIT separately from AQ? Because AQ addresses how you respond to what comes at you, and something was still missing about how you go after what you want over the long term. Raw tenacity alone was not the answer — he is explicit that telling some populations to simply dig deeper is a dishonor to them and can crush their spirits. ##### What are the four dimensions of GRIT? Growth — how far you seek fresh perspectives, inputs and ideas toward the goal. Resilience — how well you make positive use of adversity rather than only withstanding it. Instinct — whether you are pursuing the best goal in the most effective way. Tenacity — the raw persistence most people mean by the word. ##### Does the amount of grit matter, or the kind? The kind. Stoltz calls it the most impossible statistic he has seen: asked whether quantity or quality of grit matters more, a million respondents answered quality — unanimously. ##### What is dumb grit? Effort spent relentlessly on the wrong goal or the wrong strategy. Stoltz's counter-example is the company that pursues a losing strategy with total commitment, spending energy, hope and resources on the wrong thing. Smart grit keeps the goal and adjusts the route. ##### What is bad grit? Grit pursued in a way that damages the people around you. Stoltz applies it to himself: being passionate about bringing AQ to the world is a worthwhile goal, but doing it in a way that burns out his own people would make it bad grit regardless. ##### What does GRIT predict? The size of the goals people set and the share of them they complete. Stoltz's finding is that as grit strengthens, people set bigger goals and achieve a higher percentage of them at the same time. ##### Where do AQ and GRIT fit alongside the other frameworks a company already uses? Stoltz asks clients to lay out everything they are teaching their people and place AQ among it. He reports the same two answers: at the foundation, because it underpins everything else being taught, or at the center, as the fuel cell that makes the rest worth more. ##### Won't adding AQ overwhelm people who already have too many frameworks? Stoltz's answer is that it replaces clutter rather than adding to it — clients tend to clear out competing models and keep the one with the largest effect. The tools are designed against three criteria: for what, with whom, and when. If the answers are not close to anything, anyone, and starting now, he treats the tool as a failure. ##### What is the CORE strategy? Stoltz describes it as the highest-octane tool in the set, used by companies pursuing their largest opportunities or facing their most serious adversities. He credits it with breakthroughs that changed companies' positions in their industries. ##### Do the benefits stay at work? No, and Stoltz treats the spillover as part of the offer. His framing for leaders is that they can tell people plainly the work is hard, that nobody is being asked to do less or go slower, and that the organization will invest in equipping them — explicitly encouraging people to use it outside the day job as well. #### Quotations > "IQ predicts next to nothing about wealth, success, happiness, productivity, performance, anything. We discovered there's this hidden element, and that is what we do with the tough stuff." > — Dr. Paul G. Stoltz > "If we bounce back from adversity thirty-six times a day, what's missing? Any kind of learning or growth." > — Dr. Paul G. Stoltz, on the limits of resilience > "Your ability to respond optimally to whatever happens the moment it strikes. That is both humbling and inspiring — because how often can you say, I responded optimally?" > — Dr. Paul G. Stoltz, defining response ability > "If you and your competitors are dealing with essentially the same stuff, isn't it fair to say that those who deal with it better and faster win?" > — Dr. Paul G. Stoltz > "It takes a sufficiently high AQ to ever attempt to optimize your EQ. I think that's the best answer I've ever heard." > — Dr. Paul G. Stoltz, on what EQ's originators concluded > "Any change worth doing is rife with challenges, problems, setbacks, and frustrations." > — Dr. Paul G. Stoltz > "We have to give our people the gift of equipping them to bring their best stuff every day — in spite of everything that conspires against them." > — Dr. Paul G. Stoltz > "Once AQ goes up, we have never ever seen it go down." > — Dr. Paul G. Stoltz, on ten years of re-measurement > "What matters more, the quantity or the quality of your grit? One million responses, a hundred percent say quality." > — Dr. Paul G. Stoltz > "How many companies have pursued relentlessly the wrong strategy? Grit 2.0 gives you a climber's agility. You've got a trail map, but you adjust and reroute to achieve your goal better and faster." > — Dr. Paul G. Stoltz, on smart grit > "If I burn out my people — noble goal, bad grit." > — Dr. Paul G. Stoltz > "AQ, how you respond to anything and everything coming at you — that's defense. Grit, how you dig deep and go after it — that's offense. You need both to win." > — US Olympic coaches, quoted by Stoltz > "How can you be a successful entrepreneur without a sufficiently high AQ? You are feasting on adversity for breakfast, lunch, and dinner." > — Dr. Paul G. Stoltz > "Every AQ tool has to be like a mini Swiss army knife — you can whip it out in any moment, with anything, for anyone." > — Dr. Paul G. Stoltz #### Transcript ##### What AQ is, and how it goes beyond resilience We discovered decades ago that there is this pivotal element in what we call the bedrock of human endeavor. We knew way back when that IQ predicts next to nothing about wealth, success, happiness, productivity, performance, anything. We discovered there is this hidden element, and that is what we do with the tough stuff — how we handle adversity. So we thought: if there is a thing called an IQ, maybe there is, based on the science, something called an AQ. AQ today has evolved into the global gold standard for two things. Being able to measure how we respond to and deal with adversity and really life. And a method for being able to permanently upgrade and, dare I say, rewire how we deal with adversity. Now, how does that go beyond resilience? When people think about resilience, if you ask a crowd of five hundred people, if a person is resilient they do what — this chant comes back: bounce back. The problem is, if we bounce back from adversity thirty-six times a day, what is missing? Any kind of learning or growth. So AQ goes beyond resilience into something we call response ability. I define it as your ability to respond optimally to whatever happens the moment it strikes. That is both humbling and inspiring, because how often can you say, I responded optimally, I could not have responded any better? We all respond better to some things than others. Sometimes it takes a little time — sorry I got so angry, but I am better now. Imagine if you can grow this capacity in yourself and your people, to respond more optimally to more things more quickly. ##### Who uses it, and what changed The answer is kind of boundless at this point, but you can say the vast majority of the Fortune 500. Let us start with some of the A's. Amazon's global leaders use AQ. Apple has used AQ. AT&T, a hundred and fifty thousand leaders globally, used AQ. Aviva, one of the biggest insurance companies globally with seventy thousand employees plus, went all the way through the organization — a hundred and seventy-three percent improvement in engagement, and cut attrition by ninety percent. We have seen radical improvements in customer satisfaction. Sales teams that have gone from the worst in the world to the best in the world using AQ to propel them. Then we have the Microsofts, the FedExes, the Marriotts, the Ernst & Youngs and the Deloittes. Deloitte found out this is predictive of how fast people move up the ladder, so they started to use it strategically in how they think about promotion and development of their people. In hospitality, when you have the biggest in the world trying to improve guest satisfaction, the wake-up call was this: you cannot improve guest satisfaction until you improve associate satisfaction. So they used AQ from an inside-out approach to equip their people to be far more engaged and satisfied in what they do — and then they could finally achieve those breakthrough gains in guest satisfaction. ##### The US Olympic team You are the US Olympic Committee, and you have all these teams and all these coaches from all these sports — summer, winter, Paralympic. What do you choose to take your athletes to the next level? And these are the best of the best. What they arrived at is: it is one thing to have that level of talent, freakish talent. What we care about is how they show up in moments of adversity. That is the competitive differentiator. So they brought me in to teach our material. I became a master coach for the whole US Olympic team — winter, summer, Paralympic — and now we are looking at entire Team USA, which is five thousand athletes. ##### Why AQ, and why now In the simplest of terms it comes down to this. Is it not fair to say that you and your competitors are dealing with essentially the same stuff? The answer is always yes. We download what their challenges are and they are pretty identical across the board. So if you and your competitors are dealing with essentially the same stuff, is it not fair to say that those who deal with it better and faster win? And is that not true not just of an enterprise, but of human lives? Think about change. Most organizations and people are change weary, and on top of that, change is accelerating, complexifying and intensifying. So we get brought in to equip — not train, but equip — people to be able to not just accept but harness and drive the right kind of change. In my work with Harvard Business School we discovered that a mere twenty percent of companies that invest their best energy and resources, often millions of dollars, in transformation get to the promised land. Eighty percent fall short or fail. So how do you equip your people to beat the odds? Any change worth doing is rife with challenges, problems, setbacks and frustrations. Then there is capacity, performance and productivity. All these things we ask of our people — engagement, being all in, bringing their best stuff every day. We have to give them the gift of equipping them to bring their best stuff every day, and here is the key part: in spite of everything that conspires against them. Not just for a moment, not just for a day, but on an ongoing basis, in a way that you do not just survive, you thrive. What if adversity fired you up? What if the challenges were your juice? We ask leaders, on a scale of one to ten, how well do your people respond the moment any kind of adversity hits — not later, in the moment. The global average is six point one. So we ask: if that were authentically and consistently more like an eight or a nine, what kind of effect would that have on your enterprise? The most common response is game changing. ##### AQ and EQ EQ came out about sixteen years after AQ had been out in the world. When it hit, especially in Asia and certain parts of the world, we confronted the question. So I sat down with the original creators of EQ and we said, let us talk about this. No question: your ability to sense, tap and use your emotions effectively within yourself and maybe even more importantly with others is critical to your happiness, wellbeing and success. Full stop. But what do you care about more — how that person does that when everything is going great, or how well they bring it in the moments that matter, when the stuff hits the fan? What the researchers told me was: our conclusion is that it takes a sufficiently high AQ to ever attempt to optimize your EQ. I think that is the best answer I have ever heard. ##### Measuring AQ, and improving it We have had the privilege of measuring and permanently improving more than five million individuals' AQs, across every sector, in a hundred and thirty-seven countries. Starting with version 1.0, and now we are on version 11.6, through collaborations with Harvard Business School, MIT, Stanford, Carnegie Mellon, INSEAD and others — all these smart people making us smarter. The AQ Profile is the global gold standard for measuring AQ. It is a four-to-six-minute online assessment. You can either withhold results or release them immediately; both have their uses. When you get your results you get full comprehensive graphs and scores, and video coaching bespoke to your scores that gives you proven behavioral tips you can activate immediately. But my passion is in the how. Over these decades we have tested and honed a series of scaffolded AQ tools. Core questions for making the impossible happen. A lead sequence, internally and with others including teams, to achieve higher AQ outcomes than you otherwise could. The highest-octane tool is something we call the CORE strategy, and that has created multibillion-dollar breakthroughs for companies either going for the biggest opportunities or dealing with the most dire adversities. Every AQ tool has three criteria. We ask: for what can you use it, with whom, and when. Honestly, even in the most jaded groups out there, if the answer is not resoundingly pretty much anything, pretty much anyone, and pretty much anytime starting now, we failed. Every AQ tool has to be like a mini Swiss army knife you can whip out in any moment, with anything, for anyone. Most groups that go through an AQ experience improve on average eleven to twenty-three percent, which is not only statistically significant, which keeps us geeks happy — more importantly it is material, it is behavioral. The stunning part to me, because I did not believe this when it first happened, is that those improvements are permanent. What the neurologists tell us is that we are permanently rewiring these patterns of response. We have assessed some of these teams over ten years, and once AQ goes up, we have never ever seen it go down. ##### What AQ predicts There is this magic moment. Imagine a room full of your most trained, brilliant, maybe cynical, been-there-done-it professionals. We ask two questions. Of all the factors that impact your happiness, wellbeing and success, which ones are in some way affected by AQ? There is always a pause, and they go: well, all of them. Then — of all the human factors that influence your success in getting where you are trying to go, which ones are in some way affected by AQ? Same answer. These are all independent studies that have proved correlations and predictive validity. People who score higher in AQ outperform those who score lower. Take sales: we have yet to find an industry where high-AQ people do not outsell low-AQ people. Engagement — high-AQ people are measurably more engaged. Attrition — high-AQ people are more likely to stay when others leave. Productivity — high-AQ people get more done, they have more capacity measurably, they solve problems better and faster. AQ is predictive of the level and quality of innovation. Wellbeing and health — high-AQ individuals are healthier; low-AQ individuals have triple the number of sick days and are sick twice as often. At the enterprise level, AQ drives and predicts financial results. Whatever it is you are trying to get your people to do, AQ is going to help them do it better and faster than they otherwise would. It is a magnifier of human performance and results. That is why AQ is both timeless and universal — when has there been a time you do not want that, and to whom and to what industry does that not apply? As a leader you have this opportunity to turn to your people and say: we get it, it is tough. We are not going to ask you to do less, and we are not going to ask you to go slower. So unapologetically, we are going to pause. We are going to invest in you. We are going to equip you with the best tools in existence to handle all this better and faster in a way that you can prosper, not just in your day job but in your lives. And we encourage you to take this home. What a gift to give your people. ##### Why GRIT came after AQ We realized when we saw AQ play out that it was having a profound effect. But as everything was getting tougher, muckier and more complex, and everybody was being asked to do ever more with ever less, that dig-deep-over-the-long-term-and-make-it-happen piece seemed to be missing. So we upgraded from grit 1.0 — just basic raw tenacity and perseverance, which has a dark underbelly. Imagine turning to certain populations and saying, just dig deeper and try harder. It is an incredible dishonor to them and can crush their spirits. Equipping people to do it in the right and most effective ways turned out to be a real game changer. We had a book on AQ with Harvard Business Publishing named True Grit. Then they called and said: they are rereleasing the movie True Grit. We are Harvard, we cannot have a book named after a movie, so stop the project. Best thing that ever happened. We retrenched our global research team, and that is where the four dimensions came from. ##### The four dimensions, and smart grit Ask a million people, as we have surveyed around the world: when you think about the kind of person you want to be, the enterprise you want to grow, the results you want to deliver — on a scale of one to ten, how important is this thing called grit? It is a ten. Then here is the question: what matters more, the quantity or the quality of your grit? Most impossible statistic — one million responses, a hundred percent say quality. So we measure grit across four dimensions, not one. Growth: to what extent you get fresh perspectives, inputs and ideas toward your goal. Resilience: not how well you respond to adversity, but how well you make positive use of it. Instinct: how well you pursue the best goals in the most effective ways — is there ever a day where you could not improve the goal and the way you go after it? And tenacity, which is grit 1.0. That equips us to demonstrate smart grit over dumb grit. Have we not all blown plenty of energy and effort on dumb grit? How many companies have pursued relentlessly the wrong strategy? How many have spent countless energy, effort, hope and resources on the wrong stuff? With grit 2.0 you have a climber's agility — you have got a trail map, but you adjust and reroute appropriately to achieve your goal better and faster. And good grit over bad grit, which humbles me every day. That is the effect you intentionally or unintentionally have on the people around you as you pound away at your goals. I am super passionate about being able to spring out of bed every day and bring AQ and grit to the world. But if I do that in a way that burns out my people — noble goal, bad grit. There is not a day that any one of us cannot demonstrate better, smarter and stronger grit across all four dimensions. ##### How organizations use GRIT Grit predicts and drives the magnitude of goals you set. The stronger you get at this, the bigger the goals you set — and at the same time, almost ironically, you achieve a higher percentage of them. So for organizations that face a long tough slog and need to up their game, they use grit. Think about healthcare during the pandemic. Some of the biggest providers had to bring this in and say: we are facing the existential challenge of all time. How do we do this in a way that reduces physician and nurse burnout and improves outcomes against impossible odds? That takes tremendous grit. ##### AQ and GRIT together, and where they fit No one put it better than the US Olympic coaches — summer, winter and Paralympic, across all the sports. I asked them, now that you have learned both, how would you say it? They said: AQ, how you respond to anything and everything coming at you, that is kind of like defense. Grit, how you dig deep and go after it in the most effective and efficient ways, let us call that offense. And you need both to win. AQ and grit together, you are unbeatable. On how they fit alongside everything else, I give our clients' answer. We ask them to dump out the cupboards — everything they are trying to teach their people. A lot of it is mindset, a lot of it is skillset and toolset. Then we say: assemble the puzzle pieces, where does AQ fit, and grit? It is always one of two answers. They either put it as the foundation or at the center. The foundation, because they say this is the foundation of everything we are trying to help them learn and grow and do. Or the center, because it is the fuel cell that fortifies and enriches everything else — the way we are going to get optimal value out of all the rest of this is to equip them with AQ. ##### AQ in private equity You are dealing with entrepreneurs, you are dealing with these companies. Who do you bring in to create that short-term growth, that radical upside, those multipliers you can cash out on — and under that kind of pressure cooker? We can help with who you bring in. Then: how do you equip your existing team to really thrive on that kind of pressure, stress and adversity, and to create extraordinary results in extremely competitive environments? As a relevant aside — how can you be a successful entrepreneur or intrapreneur without a sufficiently high AQ? You are feasting on adversity for breakfast, lunch and dinner, and how you process and digest that determines everything. --- ### Implementing Learning Programs That Drive Growth https://commercialexcellenceconsortium.com/masterclass/implementing-learning-programs-that-drive-growth Do you know it? Can you do it? Will you do it? Most programs only ever answer the first one. Speaker: Dr. Paul G. Stoltz, Ron Denoo, Kurt Friedmann and Jesse Hopps Topics: learning programs, project-based learning, guided discovery, the forgetting curve, self-determination theory, psychological safety, Mindset → Skillset → Toolset, Adversity Quotient (AQ⁠®) #### Summary Four people who have attacked the same problem from different directions: Ron Denoo, three decades in chemicals and plastics from project engineer to CEO, running turnarounds and transformation at a company of seventy thousand people; Dr. Paul Stoltz, thirty-eight years measuring and strengthening adversity response; Kurt Friedmann, twenty years leading revenue growth before mentoring fifty thousand students and five hundred startup founders; and Jesse Hopps, who built one of the largest commercial content libraries in the world and then had to work out why nobody used it. The conversation starts where the failure rate does. Denoo's account of why most transformations fail is a spectrum rather than a single mistake. At one end, raise the targets, change the KPIs, tie the bonus to them, and tell people to work harder. In the middle, do all that and add a three-day pep rally — everybody is excited for a few days and back in their old habits within two weeks. Neither is wrong exactly. Neither does anything on its own, because neither touches how people think and decide. Stoltz brings a harder number and a sharper objection. Told by a Harvard dean that only about twenty percent of transformation efforts succeed, his response was not to accept the standard change-management story that goes with it — the three stages, the inevitable dip in motivation and productivity, taught as gospel. His question is who says it has to be that way. What that model actually asks of people is to do more with less under more uncertainty for no more reward, and then do it again. Nobody goes home enthusiastic about that. The alternative he describes is a pause before the push. Tell people why this matters and what is at stake, help them work out why they would want to take it on, then equip them to flourish in that weather — not just in the day job but in their lives — and let the results follow. He frames it as company A versus company B: the same transformation, one running the standard process at low odds, the other having flipped the odds before starting. On why training does not stick, Friedmann takes the famous statistic apart rather than repeating it. Yes, the Ebbinghaus curve from the 1880s shows roughly seventy percent of new information gone within a day and ninety percent within a week. But that is not the problem; it is a symptom of how the learning was structured. Retention runs to about seventy-five percent when people learn by doing, and about ninety percent when they have to teach it — which is good news for anyone with coaches and team leads in the building. What replaces the lecture is guided discovery and project-based learning. Guided discovery is questions rather than instructions: ask the right ones and people arrive at the path themselves, which produces ownership that being told never does. Project work supplies the other half. Stoltz explains the mechanism from the brain labs — retention runs through the struggle, and doing something is more multisensory, higher-focus and higher-intensity than receiving it, because the consequences of getting it wrong are real. Jesse connects that to self-determination theory, and to a school his own children moved into that runs on the same principle: five hundred assignments that ask questions rather than deliver answers, inside a framework of what has to be learned. The three conditions are autonomy, competence and relatedness — people choose, people feel capable, and the work connects to something they value. Miss any one of the three and the program is unlikely to produce motivation that survives it. The session's most contested exchange is about psychological safety. Jesse cites research linking resilience, adaptability, perceived organizational support and psychological safety to large gains in engagement and innovation, and asks how you build the last two. Stoltz gives what he acknowledges is an unpopular answer — you cannot coddle your way to greatness, and nobody ever gets all the support they need, so equip people to make it happen anyway. Denoo argues culture and top-down alignment make it possible, and that companies should hunt for examples of the new culture and market them internally. Friedmann's contribution is the most practical: build psychological safety into the program and do not talk about it, because naming it in the room is what removes it. It closes on Friedmann's three-part test, which is the cleanest summary of the whole argument. Do you know it. Can you do it. Will you do it — on an ongoing basis, as a habit, one that adapts as conditions change. Most learning programs answer the first question, some answer the second, and the third is where AQ and GRIT do their work. #### Key points - The spectrum of transformation failure: raise the targets, add a pep rally, and why neither moves behavior on its own. - Why the standard three-stages-of-change model asks people to accept a dip that nobody has to accept. - Company A versus company B — the same transformation with the odds flipped before it starts. - The forgetting curve taken apart: seventy percent gone in a day is a symptom of design, not a law. - Retention by method — around seventy-five percent by doing, around ninety percent by teaching it. - Guided discovery: asking the questions rather than delivering the answers, and the ownership that produces. - The three conditions of self-determination theory — autonomy, competence, relatedness — and what fails when one is missing. - Why project-based learning sticks, explained from the struggle centre of the brain. - The disagreement on psychological safety, and Friedmann's rule: build it in, never name it in the room. - Do you know it, can you do it, will you do it — the test most programs only pass on the first count. #### Definitions - **The forgetting curve** — Ebbinghaus's finding from the 1880s that new information decays fast without reinforcement — roughly seventy percent gone within twenty-four hours and ninety percent within a week. Friedmann's position is that this is a statement about how learning was structured rather than a limit on what people can retain. - **Guided discovery** — Teaching through questions rather than instructions. Rather than telling someone what to do, you ask the questions that let them find the path, with coaching alongside. It produces ownership of both the learning and the problem, and it mirrors how decisions actually get made at work. - **Project-based learning** — Building capability by working a real problem rather than attending a session about it. Sometimes called experiential learning; General Electric's leadership programs are the canonical corporate example. It works because application forces focus and intensity that receiving information does not. - **Self-determination theory** — The three conditions under which motivation comes from inside the person: autonomy, meaning they chose; competence, meaning they feel capable; and relatedness, meaning the work connects to something they value and they feel supported in it. Fail any one and a program tends to produce compliance rather than commitment. - **Mindset → Skillset → Toolset** — Jesse Hopps's holistic growth model, and the order it runs in. Mindset first, so people meet a challenge believing they can work it; then skills, built through coached project work over intervals; then tools — frameworks and playbooks that frame the questions rather than supply the answers. Remove any layer and little of it lasts. - **Control (the first dimension of AQ)** — A person's perceived ability to influence what happens next when something goes wrong. Stoltz reports it as the first core dimension of AQ, with effects measured well beyond work — in nursing home studies it has been predictive of how soon and whether a person dies. - **Psychological safety** — An environment where people can take a risk, be wrong, and say the unpopular thing without being punished for it. Named in research alongside resilience, adaptability and perceived organizational support as a condition for engagement and innovation — and, in this session, the subject of genuine disagreement about how much a company can supply. - **Do you know it / can you do it / will you do it** — Friedmann's three-level test for a learning program. Knowing is comprehension. Doing is application. Will you do it is habit — repeated, sustained, and adapting as the business changes. The third level is where most programs fail, and where adversity response does its work. #### Questions this answers ##### Why do most corporate transformations fail? Ron Denoo's answer is that they skip the part that decides everything — how people think and decide. He describes a spectrum: at one end, raising targets, changing KPIs and tying bonuses to them; in the middle, all of that plus a multi-day rally that produces a few days of enthusiasm. Neither is harmful on its own. Neither changes behavior, because business decisions come from how people process information, and most programs never touch that. ##### What percentage of transformation efforts actually succeed? Stoltz reports being told by a Harvard Business School dean that the figure is about twenty percent — lower than the thirty percent he had expected from the published research, and consistent with the widely cited seventy percent failure rate. ##### What is wrong with the standard three-stages-of-change model? Stoltz's objection is that it teaches the dip in motivation and productivity as inevitable. His question is who says it has to be that way. Read plainly, the model asks people to do more with less, absorb uncertainty and stress, receive no more reward, and then repeat it — and then treats their lack of enthusiasm as a change-management problem. ##### What should a company do instead of announcing a transformation? Pause before the push. Stoltz's version: say plainly that what is coming matters and will be hard, explain why and what is at stake, help people work out why they would want to take it on, then equip them to flourish under that pressure — in their lives as well as the day job — and let the results follow. ##### How much of what is taught is forgotten? Around seventy percent of new information within twenty-four hours and up to ninety percent within a week, without reinforcement — the Ebbinghaus forgetting curve, first described in the 1880s. Friedmann accepts the number and rejects the conclusion usually drawn from it. ##### Is the forgetting curve the real problem with corporate training? No. Friedmann's position is that it is a symptom of design. The real issue is that companies do not structure learning so it sticks — no reinforcement, no coaching, no relevance to the person, and no application. The decay rate is what you get when those are missing, not a limit on what people can hold. ##### What retention rates do different learning methods produce? Friedmann cites up to seventy-five percent retention when people learn by doing, and up to ninety percent when they have to teach the material themselves. His point for organizations is that this favors coaches and team leads over lecturers. ##### What actually makes learning stick? Four things in Friedmann's account. It has to matter to the person and be contextual. It has to be active rather than received. It has to be spaced, with concepts revisited at intervals. And it has to be coached — coaching is what converts an insight from a training session into action. ##### What is guided discovery? Teaching through strategic questions rather than instructions. Instead of telling someone what to do, you ask the questions that let them find the path, with guidance and coaching available. It creates ownership of the learning and the problem, and it mirrors how decisions actually get made in the real world. ##### Why does asking questions work better than giving answers? Because people resist what is thrown at them and defend what they arrived at. Jesse Hopps calls the opposite belief — that people will never get there unless you tell them — the biggest fallacy in the world, and argues that a well-designed set of questions gets people to breakthroughs that feel novel to them even when the field already knows the answer. ##### What is project-based learning and why does it work? Building capability by working a real problem rather than attending a session about it. Stoltz explains the mechanism from brain research: retention runs through the struggle, and doing is multisensory — kinesthetic, cerebral, sometimes emotional. Focus and intensity both rise, because the consequence of getting it wrong is real. ##### Which companies are known for project-based learning? General Electric's leadership development programs are the canonical corporate example, where executives worked real problems rather than case studies — often described as experiential learning. ##### What is self-determination theory, in practical terms? Three conditions for motivation that comes from inside the person. Autonomy: they chose, within a framework rather than without one. Competence: they feel capable of doing it. Relatedness: they feel valued and supported, and the work connects to something they can apply. Fail on any one and the program tends to produce compliance instead. ##### Can you have autonomy inside a corporate framework? Yes, and the framework is what makes it work. Jesse Hopps describes a school his children attend that runs on five hundred assignments made of questions, inside the curriculum the education ministry requires — students plan their own time and route, but the destination is set. The corporate equivalent is letting teams choose the problem and the path within priorities leadership has named. ##### Why can't people just read the book? Because without reinforcement, relevance and coaching, it decays — and this applies to any framework, including the ones the panel sells. Friedmann's summary is three words: learn by doing. Stoltz adds Covey's version, which is that the difficulty was never getting people to understand the seven habits, it was getting them to use them the moment they hit a challenge. ##### What is the first dimension of AQ? Control — a person's perceived ability to influence what happens next when something goes wrong. Stoltz reports its effects reaching well past work: in nursing home studies it has been predictive of how soon and whether a person dies. ##### What happens to people's sense of control when a change is announced? It drops, usually before the work starts. Stoltz's point is that people are already carrying more than they can finish, already missing deadlines they care about, and often suspect the stated reasons serve shareholders and executives more than themselves. Announcing a transformation into that lands on an already low sense of agency. ##### Does AQ predict sales performance by industry? Stoltz cites figures across sectors: a two hundred and fifty to three hundred and twenty percent difference in sales volume between higher and lower AQ real estate agents, a hundred and sixty-seven percent difference in telecom, fifty-nine percent in hospitality, and eighty-eight percent in life insurance, with one study at a hundred and sixty percent. These are his figures rather than the Consortium's. ##### What else does AQ predict? In Stoltz's account, drawing on more than three thousand five hundred independent studies: attrition, engagement, productivity and performance, plus roughly triple the level of innovation from higher-AQ people. He also reports lower-AQ people taking about triple the sick days and falling ill roughly twice as often, and cites Harvard work associating higher AQ with longer life. ##### Can AQ be improved, or is it fixed like IQ? Improved — and Denoo names this as what struck him most. Your IQ is what it is; puzzles do not move it. AQ can be worked on. Stoltz reports average gains of eleven to twenty-three percent through a roughly hundred-day program, sustained in teams re-measured over ten years. ##### Where is the biggest return — on top performers or the middle of the curve? The middle, in Stoltz's view. People at the very top are already finding a way. People in the middle or slightly below are also finding a way, but at a cost — and that cost is negotiable. The work shrinks the stress and the toll while raising what they can accomplish. ##### What did the research say about engagement and innovation? Jesse cites a study of around thirty thousand people in the workforce finding roughly six times the engagement and six times the innovation where four factors appeared together: resilience, adaptability, perceived organizational support, and psychological safety. ##### Can a company simply give people psychological safety? The panel disagrees, and the disagreement is the useful part. Stoltz argues you cannot comfort your way to greatness — nobody ever gets all the support and resources they need, so the durable answer is equipping people to produce results despite the gaps. Denoo argues culture and top-down alignment make it real over time. Friedmann says build it into the program and never name it in the room. ##### Why shouldn't you talk about psychological safety in a training room? Because naming it removes it. Friedmann's observation is that the moment you start telling learners a session is psychologically safe, it stops being so — and that raising it with an executive buying the program is a fast route to no sale. ##### Can psychological safety be switched on by an announcement? Denoo's answer is no — it is a process rather than a switch, but it can be accelerated. Smart companies look for the places where the new culture is already being lived, and market those examples internally until people believe the change is real. ##### What does a culture that tolerates risk look like in practice? Denoo tells the story of a recruiter who spent part of an interview describing a project the company had sunk eight to ten million dollars into, which failed. Asked why he was telling him that, the recruiter said: because nobody got fired. Denoo took the job. ##### What is the Mindset → Skillset → Toolset model? Jesse Hopps's holistic growth model. Mindset first — reframing how people perceive challenge so a can-do response shows up in more situations rather than only on good days. Then skillset, built through project work with coaches who have done the job. Then toolset — frameworks and playbooks that frame the right questions rather than supplying the answers. Remove any of the three and little survives. ##### Why do tools alone fail? Because a tool does not create the will to use it. Jesse's own account is that his company built one of the largest libraries in the field, sold it to thousands of companies, and heard the same thing back: I wish they would use them more often. The tools were necessary and not sufficient. ##### What is the three-part test for a learning program? Do you know it — comprehension. Can you do it — application. Will you do it — habit, sustained over time and adapting as the business changes. Friedmann's point is that most programs stop at the first, some reach the second, and the third is where adversity response determines the outcome. ##### What should a leader take away from this session? That a learning program is a behavior problem wearing a content costume. The content is rarely the constraint. What decides the outcome is whether people chose the work, feel capable of it, are coached through applying it to a real problem, and have the adversity response to keep going when it gets hard. #### Quotations > "They're gonna set their targets higher, change the KPIs, tie the bonus to it, because that should drive new behavior. That doesn't work." > — Ron Denoo, on the immature end of transformation design > "Everybody's excited for a few days. And within two weeks afterwards, they're right back into their old habits, producing the same old results." > — Ron Denoo > "Most people don't really want to change. We think we've got it all figured out and our life is fine. So getting people to change is hard business." > — Ron Denoo > "For thirty years, armies of change consultants have been saying: there's the endings, there's the new beginnings, and all you have to do to get from here to there is go through the dip. They teach it as if it's gospel. I'm the guy who says — who says it has to be that way?" > — Dr. Paul G. Stoltz > "How many people go home at the end of the day and go, hey, guess what — they're turning the screws even tighter?" > — Dr. Paul G. Stoltz, on what change programs actually ask of people > "What we're about to do is important, but it's going to be tough. Let's pause for a moment and equip you to flourish in this kind of weather — not just in your day job, but in your life. And the results will take care of themselves." > — Dr. Paul G. Stoltz, on the alternative opening > "The problem isn't the forgetting curve. It's that companies aren't structuring learning in a way that makes it stick." > — Kurt Friedmann > "People retain up to seventy-five percent when learning by doing, and up to ninety percent when they're teaching the information themselves." > — Kurt Friedmann > "The key to discovery isn't just finding something. It's asking questions." > — Kurt Friedmann, on guided discovery > "There's a big fear out there that if you don't tell people what they've got to know, they're never going to get there. I think that's the biggest fallacy in the world." > — Jesse Hopps > "If I give you a lecture about gardening, how much would you learn? But if I took you down to my garden and said, let's muck around and give it a go — which one leads to a better harvest?" > — Dr. Paul G. Stoltz > "It's not getting people to understand the seven habits. These are timeless universal truths. It's getting them to do them as soon as they face any kind of challenge or difficulty." > — Stephen Covey, quoted by Dr. Paul G. Stoltz > "The bad news about IQ is that yours is what it is. You can do all the puzzles you want, it doesn't make it go up. But AQ you can change." > — Ron Denoo > "Psychological safety is important to build into the program. It's important not to talk about it. Start talking to learners about psychological safety and all of a sudden you've got a learning program that's no longer psychologically safe." > — Kurt Friedmann > "I'm telling you that because nobody got fired." > — A corporate recruiter to Ron Denoo, on a failed multimillion-dollar project > "Do you know it? Can you do it? Will you do it? That's my simple way of talking about the three components that need to be in good learning programs." > — Kurt Friedmann #### Transcript ##### Why most transformations fail Ron Denoo: I can back up that statistic. I have seen many attempts at corporate transformation, and for sure most of them fail. You can look at corporate transformation on a spectrum. You have some immature approaches where the company says: we need better results, so we are going to set our targets higher, change the KPIs for the management team, tell them to work harder, and tie their bonus to it, because that should drive new behavior. That does not work. Then you have companies more in the middle of that spectrum who do that, and back it up with a three-day pep rally. Bring all the people together in a big room, get them excited for a few days about some new program or initiative or strategy. Everybody is excited for a few days, and within two weeks they are right back into their old habits, producing the same old results, and nothing has really changed. Those first few things are not necessarily bad. They just cannot stand alone — they do not drive any change by themselves. The missing piece is that people do not pay enough attention to the people side of the equation, and how to actually change the way people think and act. The business decisions every one of us makes every day come from how we process information, how we think. If the company is not focused on that, they are pretty much doomed to fail. They try to treat it like a sprint rather than a marathon. You actually need to provide more in-depth support. You need to figure out how to motivate people to want to do something different. It is not natural for people to want to change — most people do not really want to change, we think we have it all figured out and our life is fine. So getting people to change is hard business, and that is why the failure rate is so high. ##### Who says it has to be that way Dr. Paul Stoltz: The first time I went into Harvard Business School, they sat me down with the faculty, and the dean asked: based on your global research, what percentage of transformation efforts actually succeed? Like Ron, I had read the material, and I said about thirty percent. He said, actually it is twenty percent. And I thought, it is even more dire than we realized. For the past thirty years, armies of change consultants and firms have been going around the world saying: we are about to go through transformational change in three stages. There are the endings, which is where we are now. There are the new beginnings, the promised land. And all you have to do to get from here to there is go through the dip — the dip in motivation and productivity and engagement. That is how they teach it, as if it is gospel. I am the guy who says: who says it has to be that way? Because what they are basically saying is, do more with less, take on massive uncertainty, take on massive stress, get incentivized no better, and get us from here to there. And by the way, if we pull this off, we will make you do it again and again. How many people go home at the end of the day and say, hey, guess what — they are turning the screws even tighter? The fact of the matter is there are things inside us that make us want to devour change, that make us drive and shape it instead of resisting it. To create that mindset it comes down to our relationship to what we perceive as the challenges and frustrations and difficulties — let us call them adversities — that you are for sure going to encounter getting from here to there. Is anything worth doing easy? ##### Company A and company B Dr. Paul Stoltz: Look at the difference. Here is company A and company B. Company A does a standard change process. They pour in resources, they do everything Ron just described, they have been trained at this. They are low probability. Company B says: let us pause. What we are about to do is important, but it is going to be tough. Let me tell you why we are doing this, why it is so important, and what is at stake. And more importantly, let us unearth what it means to you — why would you want to embark on this? And now, recognizing it is going to be tough, let us pause for a moment and equip you to flourish in this kind of weather, not just in your day job but in your life, because we care about you as a human being. And the results will take care of themselves. By doing that you begin to unearth what it is really all about. People pinpoint exactly why they want to engage fully. You give them the tools to do it, and now you flip the odds. And when you get to beat the odds once, what are the chances you will do it again? ##### The forgetting curve, and what it actually tells you Kurt Friedmann: The statistic comes out of the 1880s — the Ebbinghaus forgetting curve. Do I buy that ninety percent of what is taught is forgotten in a week? Yes and no. The research shows that without reinforcement, without coaching, and without it being important to the person, memory retention drops dramatically after a training event. People forget about seventy percent of new information within twenty-four hours and up to ninety percent within a week. But is that the real issue? The real issue is not that people forget. It is that companies are not structuring learning in a way that makes it stick. So what actually works? One, it has to be important to the person, and it has to be contextual. Two, there has to be an active learning experience — let me fight a statistic with a statistic. Ninety percent of what is taught is forgotten by that week; people retain up to seventy-five percent when learning by doing, and up to ninety percent when they are teaching the information themselves. That bodes well for leaders and coaches inside companies. Then space out the reinforcement — revisit the concepts at different intervals, and that boosts long-term retention. And there has to be coaching. Without applying knowledge that has been memorized or learned, people forget. Coaching transforms the insights people find in training into action. So the problem is not the forgetting curve. It is how we design learning and integrate coaching, guided discovery and real-world application, so we do not have to accept that ninety percent. ##### Guided discovery Kurt Friedmann: Guided discovery is really all about asking questions. The key to discovery is not just finding something — it is about asking questions. Unlocking insights through strategic questioning is the key. Instead of telling someone what to do, we ask them the right questions, and they discover the right path on their own, with some guidance and coaching. That creates real ownership over the learning and the problem-solving, and it mirrors what is actually going on in decision-making in the real world. There are frameworks Dr. Paul uses and frameworks we use at Demand Metric, and most of them do not tell people what to do. They have questions embedded inside them, and that gets people to think and apply it to their own real-world situations. Jesse Hopps: I went to a school interview today for the school we are looking at putting our daughters into. Before we came here to Colombia they were in a Montessori school in Canada, and we really liked it because it was autonomous. They did projects, they loved school, it was clear they were learning a ton. We did not have to tell them to do homework — they had their planner, they had the responsibility to get it done. They were acting like little independent humans. This school uses a method that came from a couple who came to Colombia from Spain, wanting an alternative approach to education. They have about five hundred assignments, and all these assignments do is ask questions of the students. They have a planner, they plan their time, they figure out when they are going to do their learning. It is guided discovery, because they are asking questions, but in a supportive environment with experts around them — when they are trying to figure something out they can go ask. So it is not, hey guys, what do you want to learn. It is within the framework of what you have to learn by a certain point in time to graduate. But the way you get to that level of knowledge is through a set of assignments that ask questions. There is a big fear out there that if you do not tell people what they have got to know, they will never get there. I think that is the biggest fallacy in the world. With the right set of questions you can have people go and discover the breakthroughs and insights on their own, where it is not being resisted, because they are arriving at them. That is exactly what we are trying to teach corporations to do with adults. ##### Self-determination theory Jesse Hopps: Autonomy is critical. People do not like to be forced to do anything; they need to make choices for themselves. And when you are responsible for your own decisions and you assume the consequences, that is what you learn from. You made a decision, you had a consequence, that did not work out the way I wanted — what do I learn from that? That is the actual process of learning, through making errors. But in a safe environment where it is okay to make errors. You are not going to put your hand up in front of the class and look stupid. You need three things. Autonomy — people need to choose their own path to some extent, within a context of questions or projects. The second is competence: they have got to feel capable of doing it. My wife does not feel comfortable walking into a gym and doing a workout — without feeling capable, you probably will not be motivated. And the last is relatedness. You have to feel valued and supported, and you have to feel that what you are learning is connected to something you can get value from or apply in the real world. If you fail on any of those three, your learning program is likely to fail at getting the intrinsic motivation you are looking for. Dr. Paul Stoltz: Spot on. Academics work their entire careers to reveal something that makes us all go, well, obviously. Our perceived ability to influence our environment — self-efficacy, agency, self-determination — according to the research can quite literally be the difference between life and death, not just high and low performance. It affects you biochemically at the deepest level. Imagine a cocktail going on inside your body all the time, influenced by the way you filter your world and your perceived ability to influence it. That cocktail can be toxic and erosive, or galvanizing and fortifying. The difference between the two in the same situation is the way you are filtering your world. We call that your AQ. The first core dimension of AQ is called Control — your perceived ability to influence whatever happens next when things happen. In nursing home studies, that single factor is predictive of how soon and whether a person dies. So think about companies. They announce they have decided to go from here to here for these reasons. How bought into those reasons are the people? How many think the reasons sound a little suspect, because it sounds like it serves shareholders and the board and executives more than them? And then, when they are already buried, already have more to do than they can handle, already feel that a large percentage of the tasks put on them do not get completed satisfactorily and on time — how much perceived control do you think most people feel the moment you announce that change? What does that do to their appetite to be all in? ##### A transformation that worked Ron Denoo: One of the best corporate transformation examples I ever saw was the first company I worked for out of college — one of the largest privately held companies in the country, around for a hundred and fifty years, still owned by descendants of the founder. Deep culture. The shareholders decided we need to change: we are not growing, we are not dynamic enough, we need to up our game. What they did was adopt the seven habits of highly effective people, shortly after the book came out in 1989. What was brilliant was that they did not start by announcing the new goals and what the business needs. They started from the other end. They said: we are going to do this for our people. We are going to invest in our people, because we believe that better people who are better equipped and happier will produce better results for our business. They invested heavily for years. It was not a sprint, it was a marathon — years of asking everybody to read the book, workshops, internal and external coaches to help bring people along, changing the corporate vocabulary. And it worked. When you have a whole organization feeling that my company cares enough to invest in me — and look at the principle, it is the seven habits of highly effective people, not of highly effective companies. It is a people-focused approach, and people could quickly see how it applied to their lives. This will make my life better if I adopt it. So all the motivation in the world was there. Engagement improved, company results improved. That was over thirty years ago, and the same human principles still apply. Dr. Paul Stoltz: When Covey came out with his work I was at one of his very first sessions, and I asked him: what is the biggest challenge or adversity you face in teaching the seven habits? We ended up becoming fast friends and he wrote the foreword for my book. He said, in his very intense way: it is not getting people to understand the seven habits — these are timeless universal truths. It is getting people to do them as soon as they face any kind of challenge or difficulty. ##### What AQ predicts, and who benefits most Dr. Paul Stoltz: We have had more than three thousand five hundred independent studies over the years. Look at sales. We have yet to find an industry where AQ does not both predict and drive it. In real estate the difference between high and low AQ agents is two hundred and fifty to three hundred and twenty percent in sales volume. In telecom it is a hundred and sixty-seven percent. In hospitality, for the people who sell the rooms and banquets, fifty-nine percent. In life insurance the difference was eighty-eight percent, and in one study a hundred and sixty percent — and it also radically predicted who stays and who goes. It affects attrition measurably, engagement measurably, productivity, performance, innovation. Higher-AQ people generate about triple the level of innovation of lower-AQ people. Lower-AQ people have triple the number of sick days and are sick twice as often. Higher-AQ people have measurably greater quality of life and tend to live longer, based on a Harvard study. On grit — people who score higher on GRIT 2.0 set bigger goals, and they complete a higher percentage of them. You would think you complete more if they were easier. They set tougher goals and complete a higher percentage of them. Jesse Hopps: If you are already a high performer, you are already there. What is the benefit for the average good employee in the middle of the bell curve, in terms of their job performance and their quality of life? Dr. Paul Stoltz: You nailed it. If you are in the top tenth of a percent and you say you are excited to improve more — good for you. But if you are in the middle of that bell curve or slightly below average, what that really means is you have found a way to make it happen, but at what cost? And at an unnecessary cost. That cost is negotiable. We can shrink the stress, shrink the toll, enhance the upside, and make your work so much more energizing and enjoyable, and have you accomplish more along the way. When we take groups through the experience — a roughly hundred-day journey with a one-day program, sometimes less or a little more — the average improvement is eleven to twenty-three percent in either AQ or GRIT. We have tracked some of these teams more than ten years, and to my amazement, once it goes up we have never seen it go down. ##### Why projects stick when lectures do not Jesse Hopps: I have always found the best way to learn something is to be teaching it in two weeks. I will have to figure it out because I am going to be teaching it. So my process is to take on a little project — build a toolkit, come up with a skill model, go teach the course. I have always taken on my own learning through projects. There is such a thing as problem-based learning and project-based learning. It is the same thing General Electric did with their leadership development programs — experiential learning, real problems. If it is related to something live in our life, a real problem, a real complex situation, now we have a filter: how can I test this, how can I apply it in what I am actually dealing with? That is when it clicks, and it is not just theory. Dr. Paul Stoltz: You can get as nerdy as you want. I have had the chance to be in the brain labs at Harvard and UCLA, and there is an emerging understanding of what we would call the struggle centre of the brain. What we are seeing is that the stickiness — actually learning something — requires going through that zone. The more multisensory something is, the bigger the difference, and two things matter: focus and intensity. Think about it. Someone is giving you a lecture — what is your intensity level as a receiver? What is your focus level? But as soon as you have to engage and do what Kurt said, learn by doing, now it is kinesthetic, it is cerebral, it may be emotional, it may be tactile. The intensity goes way up. By definition the focus goes up, because the consequence of getting it wrong is greater. So the retention is dramatically better. If I give you a lecture about gardening, how much would you learn? But if I took you down to my garden and said, let us muck around and give it a go — which one leads to a better harvest? This is what we do with every tool we teach. We have three tough rules. We ask people — and some are tough audiences — for what can you use it, with whom, and when? If the answers are not authentically pretty much anything, pretty much anyone, and pretty much anytime starting now, we failed. The only way we get there is by having them actually do it. They get up and muck around with it and make their mistakes and get to the point where they say: I am at a six, but if I did this two more times I would be at an eight or nine. That self-evidence is what you create when you learn by doing — and look how it brings us back to self-determination, because now you have the confidence that you can apply it. ##### The disagreement about psychological safety Jesse Hopps: I read a study of about thirty thousand people in the workforce. Six times engagement and six times innovation traced back to four factors together: resilience and adaptability — which AQ and grit cover — plus two others. The perception of organizational support to achieve the goals being set. And psychological safety. If we can teach resilience and adaptability through AQ and reinforce it with coaching, how do we build the other two, particularly if people have not felt them before? Dr. Paul Stoltz: This is maybe going to be an unpopular response. But you cannot comfort your way to greatness. So much has come out in recent psychology where everybody is trying to over-respond and over-protect. It is lovely, it is humanistic, it is compassionate. But go down that path hard and fast and you are in the space of trying to comfort your way to greatness. What are your competitors doing? How about we help equip people to toughen up? And that is not being a tough sergeant saying, hey, you need to toughen up. That is the problem with grit 1.0 — you need more grit. That can be a massive disservice to certain populations. But if you can equip people to grow stronger and more robust, with greater fortitude and resilience and grit from the inside out, then we have done something different. We know we are highly imperfect. We know you are not going to get all the support and resources you need to make this succeed — guaranteed. What we are going to do is equip you to somehow make it happen despite the limitations, frustrations and injustices, because that is called life. Is that not what all of us have to do? So it is a combination. Part of your strategy and messaging should be about aligning resources toward the thing you are trying to do, so people have some of what they need. That is smart, good business. But using perceived safety and support as fallback excuses for doing less is another matter. Ron Denoo: A lot of it has to do with company culture. When I was interviewing in college for my first job, I spent an hour and a half with a corporate recruiter, and he told me about one division that had worked on groundbreaking new technology, invested something like eight or ten million dollars in it, and it failed. I remember looking at him and going: why are you telling me that? He said, I am telling you that because nobody got fired. And I ended up going to work for that company. People want to be in an environment where they are allowed to take some risk. We talked about the learning journey and how sometimes it is a matter of making mistakes and learning from them. If you do not have an environment that enables that, how do you expect people to learn? Company culture is really important, and that tone comes from the top. Jesse Hopps: Can a CEO announcement flip that switch — we are investing in learning, we want you to take chances, we will equip you with the tools? Ron Denoo: I do not think it is a switch. I think it is a process. But smart companies look for examples of where they are living that vision, where they are living that new culture, and they internally market the heck out of those things so everybody sees them. That is what builds organizational confidence, and it can really accelerate the journey. You have to be constantly on watch for the examples you can point to and share, so everybody understands that this is real. Kurt Friedmann: Psychological safety is important to build into the program. It is important not to talk about it. That goes for the training program itself — you start talking to learners about psychological safety, and all of a sudden you have got a learning program that is no longer psychologically safe. You start talking to an executive who is buying training programs about psychological safety, and you have got a one-way ticket out the door with no sale. ##### Mindset, skillset, toolset Jesse Hopps: In my vision of how you solve this, you need three pieces. You need to equip your people with more than a can-do attitude that is temporary and based on the best of days. You need to reframe the whole mindset so they perceive the world and challenge it and have that attitude in more situations more of the time. That is where Dr. Paul's work on mindset and reframing is critical. Without that foundation I do not think you can do anything. The second piece: how do you equip them with the right set of skills? We know passive learning, just dumping information at them, does not work. So you need project-based learning with experienced coaches who have been there and done it, to coach and mentor people through a real situation they could implement on the job. This is exactly what General Electric did with their executive education — real-world problems, best practices shown, skills developed in context. The last piece is tools. Frameworks like Dr. Paul's that you can use any time, any place, for anything — mental models and frameworks. Or what we have built at Demand Metric: playbooks and methodologies and templates for thinking through doing things. But as Kurt said, these tools do not do anything for you other than frame up a set of questions to ask yourself, so you do the critical thinking and problem-solving with a little guidance when it comes time to doing the job. So I call it mindset, skillset, toolset — the holistic growth model. You have got to have all of these working in concert. Without the tools to do the job, without the skills mastered over time with reinforced coaching at intervals, and without the right mindset going into the learning — autonomous, choosing the projects, feeling capable, and related to what matters in their job — I do not think anything is going to stick. ##### Do you know it, can you do it, will you do it Kurt Friedmann: There are three things that need to happen in learning, and I am going to make it super basic. One is you have got to know something — do you know the material, do you know what it is you need to do? The second level happens once I know something: I have to apply it. So, can you do it? And this really speaks to what Paul is doing with AQ and grit. The key to the whole thing is not whether you know it, and not whether you can do it. It is whether you will do it on an ongoing basis, such that it becomes a habit — and such that the habit can be dynamic and change with the changing business environment, which is really a function of the adversities that business and that individual go through. Do you know it? Can you do it? Will you do it? That is my simple way of talking about the three components that need to be involved in good learning programs. --- ### Igniting Intrinsic Motivation https://commercialexcellenceconsortium.com/masterclass/igniting-intrinsic-motivation Nine out of ten companies asking for transformation want an improvement. Say so before you start. Speaker: Roy van Griensven · Head of Commercial Excellence, LANXESS Topics: intrinsic motivation, leading indicators, capability building, guided discovery, Growth Projects, change fatigue, transparency #### Summary Roy van Griensven opens by taking a word away from the room. Transformation, in the literal sense, means doing something fundamentally different from what you do today. In his experience nine out of ten companies asking for it want an improvement on what they already do — a better outcome from the same machine. Those are different jobs with different designs, and running one while the board expects the other is how programs fail before anything is built. So his first conversation at LANXESS was with the CEO, and it was two questions. What do you actually want, and why. Then: if we are calling this excellence, what does excellence mean here — best in class, matching what worked elsewhere, or as good as we can be inside our own constraints? His position is blunt: if the answer is that the company wants transformation labelled onto what is really an improvement, walk away, because there is no version of that which succeeds and everyone is only fooling themselves. What he found in his first thirty days was fatigue rather than resistance. People told him he was the fourth person in fifteen years to arrive with this, that the sticker changes and the consulting firm changes, and asked what would be fundamentally different this time. That is a fair question, and his answer starts by dismantling the shape of the usual answer: install a function at headquarters, assemble a team, run a set of projects, bring in a firm to produce the slides and the value potential, and wait for something to happen. He offered the CEO a choice framed as the easy way or the hard way. The easy way follows the consulting approach, delivers some projects and some bottom-line impact, and leaves the company in the same place two years later. The hard way means addressing all four elements of a capability at once — people, process, data and systems — including correcting data nobody wants to touch. His recurring warning is that companies jump to the pricing tool or the CRM first, and the system makes no material difference while the other three are unaddressed. The motivational argument follows from a misconception he sees in his own company. People expect a change in strategy to arrive with a detailed account of what it means for each of them. His view is that the board's job is direction and guardrails, and filling in how it gets executed belongs to the people doing the work. Companies then train the opposite behavior — centralize everything, run global initiatives, bring consultants in to explain the method — and produce an organization that waits for instruction, then wonder why nothing moves without a push. The Academy is built to interrupt that. Inspire briefly, because a company grounded in fifty years of the same practice needs some sense of what good looks like elsewhere — but no more than a few minutes of an hour, because the useful question is why we are not there today. Then reflect: does this apply in your day job, would it help, do you recognize it. Then apply: pick the one capability that matters most to you over the next three to six months, and take ninety days of coaching from someone outside the company on it. Those become Growth Projects. On measurement he is unusually disciplined, and it is the part most transformation leaders get wrong. Ninety percent of the effort goes into agreeing the leading indicators that show real progress; ten percent goes into making a credible connection between those and EBITDA. The word he insists on is contribute. A one-to-one link between an excellence activity and the bottom line does not exist, because a customer's own situation, a competitor, a tariff or the weather all sit in between — and claiming one destroys the credibility of everything else you report. The last piece is a behavior he asks of the CEO and CFO at least once a month: reward transparency rather than punishing the gap it exposes. When someone shows where the problem is, a leader can ask what support they need, or can hit the person responsible over the head for past performance. The second is more common and it closes transparency for everyone watching. He is direct that this amounts to educating the C-suite, because their reaction is what accelerates or blocks the whole thing. #### Key points - Transformation means doing something fundamentally different — and nine out of ten companies asking for it want an improvement. - The two questions to settle before starting: what do you actually want, and what does excellence mean here. - When to walk away, and why running a transformation against improvement expectations fools everybody. - Change fatigue as it actually sounds: you are the fourth person in fifteen years with this. - The easy way and the hard way, and why the hard way means people, process, data and systems together. - Why the CRM or the pricing tool makes no material difference while the other three are unaddressed. - Who owns filling in a strategy — and how centralizing trains an organization to wait for instruction. - Inspire, reflect, apply — with inspiration capped at a few minutes of the hour. - Leading indicators at ninety percent of the effort, EBITDA contribution at ten, and why 'contribute' is the load-bearing word. - Reward transparency: the one leadership behavior that accelerates or blocks everything else. #### Definitions - **Transformation (as distinct from improvement)** — Doing something fundamentally different from what you do today, rather than getting a better outcome from the same activity. Roy van Griensven's position is that the two need different designs, and that most companies asking for the first want the second — so the distinction has to be settled with the CEO before any program is built. - **The four elements of a capability** — People, process, data and systems. A capability is structurally built only when all four are addressed together. Companies typically start with the system — a CRM or a pricing tool — which makes no material difference while the other three are left alone. - **Leading indicators** — Measures that show whether the work is moving in the right direction before financial results can, such as pipeline growth with customers in a target segment. Roy allocates ninety percent of the measurement effort to agreeing the right ones, and ten percent to connecting them credibly to EBITDA. - **Contribution (rather than attribution)** — The honest form of the ROI claim. A one-to-one link between a commercial excellence activity and EBITDA does not survive contact with reality — customers, competitors, tariffs and market conditions all intervene. Claiming contribution is defensible; claiming attribution costs you credibility on everything else you report. - **Growth Project** — The one capability a person chooses to improve over the next three to six months, worked as a ninety-day piece of real commercial work with coaching from outside the company. Ideas surface from inside the organization, improvements are tangible while the work is running, and what succeeds can be scaled to other businesses. - **Guided discovery** — Bringing a team through the reasoning behind a plan by asking the questions rather than presenting the conclusions — letting them supply the answers. Roy's version starts from what people believe is stopping them, then asks what they themselves can change and where they need help. - **Rewarding transparency** — The leadership behavior the design depends on. When someone surfaces a gap, a leader either asks what support is needed or punishes the person for the gap existing. The second closes transparency for everyone watching, which is why Roy treats it as a matter of educating the C-suite rather than of reporting discipline. #### Questions this answers ##### What is the difference between transformation and improvement? Transformation, taken literally, means doing something fundamentally different from what you do today. Improvement means a better outcome from the same activity. Roy van Griensven's experience is that nine out of ten companies asking for transformation want improvement — and since the two need different designs, the mismatch has to be settled before anything is built. ##### What should you ask a CEO before taking a commercial excellence role? Two questions. What do you actually want, and why — improvement, or something fundamentally different. Then, if this is being called excellence: what does excellence mean here? Best in class, matching what has worked elsewhere, or as good as possible inside your own constraints. Each implies a different ambition and a different approach. ##### When should you walk away from a transformation mandate? When the company wants a transformation label on what is really an improvement. Roy is direct that there is no version of that which succeeds, and that proceeding means everybody is fooling themselves — so it is easier to say so at the start than to discover it two years in. ##### What does change fatigue sound like in practice? Not refusal. In Roy's first thirty days people told him this was the fourth time in fifteen years, that the sticker changes and the consulting firm changes, and asked what would be fundamentally different. That is a fair question rather than resistance, and any credible program has to answer it. ##### What is the standard approach he wanted to dismantle? Install commercial excellence at headquarters, assemble a team, define a set of projects, bring in a firm to produce the concepts and the value potential, and expect that to move an organization. His objection is that people telling you what to do have often never been on the other side of it, living with the consequences. ##### What is the easy way versus the hard way? The easy way follows the consulting approach: run some projects, get impact that outweighs the fees, and be in the same place two years later. The hard way means structurally building capability — adjusting processes, correcting data, fixing systems and developing people competencies, all of it at once. ##### What are the four elements of building a capability? People, process, data and systems. All four have to move together for the capability to be structural rather than temporary. Roy notes that correcting data is the part companies most want to avoid. ##### Why doesn't buying a CRM or a pricing tool work? Because the system is one element of four. Roy's account is that companies jump to implementing the tool first, and the sobering reality is that it makes no material difference while process, data and people competencies are unaddressed. ##### Whose job is it to fill in a strategy? The board's job is direction, guardrails and guidance. Filling in how it gets executed belongs to the people doing the work. Roy names the opposite expectation — that a strategy change arrives with a detailed account of what it means for everyone — as a fundamental misconception. ##### Why do people wait to be told what to do? Because they have been trained to. Roy's point is that centralizing everything, running global initiatives and bringing in consultants to explain the method produces exactly that behavior — and then the organization is blamed for lacking initiative. ##### How does the Academy actually run? Three moves. Inspire — a short look at what good looks like elsewhere, because a company grounded in decades of the same practice needs some sense of the possible. Reflect — does this apply in your day job, would it help, do you recognize it. Apply — choose the one capability that matters most to you for the next three to six months, and take ninety days of coaching on it from outside the company. ##### How much time should be spent on inspiration? Very little. Roy's rule: if you have an hour, spend no more than five minutes on inspiration. Agree quickly that the destination would be good, then move to the question that matters — why are we not there today, and what is stopping us. ##### Why let people pick only one capability? Because nobody improves at twenty-eight things at once. Leadership narrows the field to the capabilities that matter for the next three to five years, and each person picks the single one that would most help their own day job over the next three to six months. ##### What do you do with people who complain rather than engage? Take the complaint and then ask for the obligation. Roy's sequence is to let people say where they think the company is stuck, then ask what is the one thing that should change tomorrow — not the thing someone else must do, but the thing you can do, and where your ability to change it stops and you need help. ##### What are the side effects of running it this way? Ideas start coming from inside the organization, so the motivation to change is there by default. Improvements are tangible while the work runs rather than waiting two years for a launch. And solutions that work in one place turn out to be suitable to scale across several businesses. ##### Does it spread beyond the commercial organization? In Roy's account, yes — the rest of the company began wanting the same approach, because a pull effect had formed. His reading of that: people are not resistant to change, they are resistant to the way it has always been done. ##### What is uncomfortable about this design? The loss of control. Roy is explicit that it is uncomfortable for headquarters, the board and business unit leaders, because you no longer know in advance exactly what people will do tomorrow. It requires believing that with the right coaching and direction, people will make the changes one at a time. ##### How do you measure a program like this? Ninety percent of the effort goes into identifying and agreeing the leading indicators that genuinely show progress. Ten percent goes into connecting those to the likely effect on EBITDA. Roy's framing is that if you cannot agree the leading indicators, no amount of financial modelling downstream will save the argument. ##### Can you prove ROI on commercial excellence? Not as attribution. Roy's position is that a one-to-one connection between an excellence activity and EBITDA does not exist, because a customer's own circumstances, a competitor, a tariff or market conditions all sit in between. What you can claim is contribution — and the word matters, because claiming more costs you credibility on everything else. ##### How do you explain leading indicators to a CFO? Roy uses an analogy from taking a company through an IPO. Investors are not looking only at quarterly EBITDA; they are looking at whether the company is progressing toward the potential of its strategy. Connect the leading indicators to the direction of the strategy, and the question becomes whether you are doing the right things. ##### What does a good leading indicator look like? Something simple and tangible tied to the strategy. If the aim is growth in particular markets and segments, the indicator is whether the pipeline of opportunities with customers you do not have today in those segments is growing. ##### What hard conversations do leading indicators force? The ones about where effort is going. Roy's example: transparency shows you are over-serving customers who will never grow. If you want growth, you lower the cost to serve those accounts and spend more where growth is possible — which is an honest conversation rather than a comfortable one. ##### What single leadership behavior matters most here? Rewarding transparency. When someone surfaces a gap, a leader can ask what support they need, or can hit the person responsible over the head for past performance. Most jump on the problem — and that closes transparency for everyone watching. Roy repeats this to his CEO and CFO at least once a month. ##### How do you know whether participation is real? You look past the dashboard. Roy describes a board conversation where the transformation dashboard was showing green and business unit leaders were reporting participation, and asking directly whether anything was materially different or whether they were satisfying the CEO. Changing the approach gave him a much better view of which is which. ##### How does the design surface the right people? By giving people the opportunity to say what needs to happen. The ones with intrinsic motivation come forward with ideas and passion, and you can have a real argument about content. The ones without can agree to everything and change nothing — which you otherwise discover two or three years later. ##### What is the 'what needs to be true' question? A way into a target that people believe is impossible. Rather than opening with raise the win rate from X to Y, you ask what would need to be true for that leading indicator to move, and what can be done tomorrow to change it by one percent — then five, then ten. Sometimes the answer that comes back is to do it fundamentally differently. ##### What is the inversion exercise? Jesse Hopps's method for getting an honest plan out of a team. Instead of asking how we hit the target, ask: if we were going to miss it badly this year, what would we be doing? People answer freely — we would not visit customers, we would not fix this. Then flip each answer over, and you have the plan, arrived at by the team rather than delivered to them. ##### Why does asking rather than telling work better with a field team? Because a smart plan is a chain of assumptions, and by the time it reaches the field there are many of them. Guided discovery brings the team through the same reasoning by asking the questions and letting them supply the answers, which means they own the conclusion rather than receiving it. ##### Is this about adding new practices or removing obstacles? Both, and Jesse argues the removal is underrated. When you talk to people on the ground, what comes back is often that something takes thirty days and produces a poor customer experience. Fixing the fundamentals outranks the sophisticated work — there is little point in marketing automation while a simple thing cannot be done for a customer. ##### What should you expect from a portfolio of self-selected projects? A distribution. Jesse's framing is that in any large organization some projects will be excellent, most will be in the middle, and some will never get going — which is simply what a cross-section of people produces. The design is built to work with that rather than to pretend otherwise. #### Quotations > "Nine out of ten cases, a company does not want transformation. They just want an improvement of what we're doing today." > — Roy van Griensven > "If the question is we're going to install a transformation, but what we actually want is just a better outcome of the same thing — I would walk away. There is no way on earth you can ever become successful, and we're just fooling ourselves in the end." > — Roy van Griensven > "The only thing I heard was: fourth time this is coming by in the past fifteen years. Put a different sticker on it, hire a different consulting company — what's going to be fundamentally different?" > — Roy van Griensven, on his first thirty days > "If you have an hour to talk to someone, spend no more than five minutes on inspiration. Very quickly it boils down to: why are we not there today?" > — Roy van Griensven > "The system is not going to make any material difference if you don't address the other three elements of structurally building a capability. That's the hard way." > — Roy van Griensven > "People simply wait for instruction. And we allow them to wait for instruction, because we centralize everything." > — Roy van Griensven > "It's not the fact that people are resistant to change. They're just resistant to the way it has always been done." > — Roy van Griensven > "It's an extremely uncomfortable approach for people in the headquarters, for the board, for business unit leaders — because you don't control. You don't have full control of what people are going to do tomorrow." > — Roy van Griensven > "If you want a one-to-one connection between the ROI of an excellence activity and EBITDA, forget it. It might just as well be influenced by your customer's own situation, or something happening on the other side of the world." > — Roy van Griensven > "Reward transparency, and do not hit people over the head for showing that there is a gap." > — Roy van Griensven > "Do we think something materially is different, or are they just satisfying the CEO by saying yes, we'll participate?" > — Roy van Griensven, on a dashboard showing all green > "Never did a CEO ask the sales guys: what do we need to do around here to get more sales and make your life easier? Very rare." > — Jesse Hopps > "If we were going to completely drop the ball this year, what would we be doing? And then you flip it on its head and ask, what's the inverse of that?" > — Jesse Hopps, on an inversion exercise > "Lagging indicators are not a transformation. The transformation is when you challenge the teams responsible to say how they would go about affecting them — and then they get to choose." > — Kurt Friedmann #### Transcript ##### The word that gets abused Roy van Griensven: It starts, for me, with clarifying a word that I think is overused in many cases. A lot of companies say we want transformation, we want commercial transformation, we want commercial excellence. My experience: nine out of ten cases a company does not want transformation. They just want an improvement of what we are doing today. This comes back to when I started at LANXESS. We started with a very open, transparent dialogue with our CEO — as a Dutch guy it is easier to be straightforward than in some other cases. One of my initial questions was: what do you really want, and why do you want it? Do you want an improvement of your commercial performance, or do you actually want the transformation, and what does that mean? Because in the literal sense of the word, transformation means doing something completely different from what you are doing today. And are you up for that? That is where the first question needs to come, and this is my personal plea to myself and my recommendation to anyone, because it makes your life a lot easier. If the question is that we are going to install a transformation, but what we actually want is just a better outcome of the same thing, I would walk away. There is no way on earth you can ever become successful, and we are just fooling ourselves in the end. Then, if transformation really is what the company is looking for, the second question is: what does excellence mean? Do we want to be best in class? Do we want to copy what has worked for other companies, or do we want to be as excellent as we can within the constraints we have? Do we just want to grow one maturity level and get a bit better? Let us align on what we expect, because uplifting an organization to best in class is a very different ambition from wanting to get slightly better. ##### The fourth guy in fifteen years Roy van Griensven: In my own environment, when I stepped into LANXESS, transformation had already started and commercial excellence had already been defined. There was a great deal of tearing down misinterpretations first. I spent my first thirty days listening and in conversation. The only thing I heard was: fourth time this is coming by in the past fifteen years. We will sit it out. What is going to be different? Do you know you are the fourth guy trying to do the same thing? So there is a very clear fatigue in any company, on transformation and on change. People look back at the past fifteen years and say, we have tried this before. Put a different sticker on it, hire a different consulting company — what is going to be fundamentally different? In our company we also started very traditionally. We need a performance improvement, let us call it a transformation, let us install commercial excellence at headquarters level, bring a group of people together to run a set of projects, work with our businesses, hire a firm, they create some great slides, they show us the value potential, and then magic will happen. We needed to tear that whole approach down. Magic is not going to happen by looking at a couple of slides from people who have never done the work — who have told others what they might need to do, but have never been on the other side of it, accepting the consequences and dealing with that. From an inspiration perspective it is all nice. But if you have an hour to talk to someone, spend no more than five minutes on inspiration. Quickly agree it would be fantastic if we lived in that environment. Then very quickly it boils down to: why are we not there today? What is hampering us? ##### The easy way and the hard way Roy van Griensven: The biggest challenge in many big companies is that we fall back to central, top-down direction, where people say these are the five or ten or twenty programs that need to get done across all our businesses, and they just have to adopt them. Humans do not work that way — at least the companies I have seen do not work that way. If you want transformation, meaning fundamentally doing something different from before, it does not happen because someone comes in with a slide telling you that as of tomorrow this is what you will do differently. Most people are not wired that way. So this is one of the questions I discussed with our CEO before I got started. Do you want to do it the easy way or the hard way? If you want the easy way, follow the consulting approach — you will get some impact, do a couple of projects, see results in your bottom line next year that may outweigh the fees. But I can guarantee that in two years you will be at the same point. Doing it the hard way means addressing every element of structurally building capabilities in your organization. Adjusting your processes. Adjusting the data, correcting the data, dealing with the state of the data in most companies. Correcting the systems in place. And adding the people competencies. In a lot of cases, and at LANXESS the same thing, companies jump very quickly into how fast we can implement the pricing tool or the CRM system. You need to bring people back to the sobering reality: the system is not going to make any material difference if you do not address the other three elements of structurally building a capability. That is the hard way. You need to do the difficult stuff. ##### Who fills in the strategy Roy van Griensven: In a lot of cases, and in our company today, there is a change in strategy and then people expect a very clear, detailed account of how we move to that strategy and what it means to everyone. I think that is fundamentally a misconception. The role of the board or the CEO is to give a certain direction for the company — guardrails and guidance of the strategy. It is the people's responsibility to fill that strategy with how we achieve it and how we execute on it. That is misperception number one. I see in our company today that people simply wait for instruction. And we allow them to wait for instruction, because we centralize everything, it is top down, we have global initiatives, we bring consultants in to tell you how to do it. So you trigger a behavior where people wait for instruction. So what we have done differently: we have done enough inspiring about where we can go as a company. Now let us pause. Let us stop. Let us first have a dialogue about where the individuals think we get stuck. One thing is complaining — a lot of people can complain easily, saying this is all that is wrong and what the company does not do well. But the next step is to call on the obligation and the responsibility people have. What is the one thing we should change tomorrow? And not the one thing the other person needs to do — what is the thing you can do? And where does the limit of your ability to change something stop, and where do you need help? What is that help about? That is a much more difficult approach, because you are calling on the intrinsic motivation of people who are really motivated to do something different. Are they clear about the sense of urgency, or are they perfectly fine with what it is today? But you will see the people who raise their hand start to become vocal and say: I believe we fundamentally have an opportunity to do better. This is what I can do, and this is where I need help. If you then build the transformation on the support those people need, all of a sudden people start doing the real change themselves. Of course you need to guide it, you need to inspire with what other companies do, the art of the possible. But it is an extremely uncomfortable approach for people in the headquarters, for the board, for business unit leaders — because you do not control. You do not have full control of what people are going to do tomorrow. You need to believe that with the right coaching and the right guidance on direction, people will be motivated to make these changes one at a time. And if you have a hundred of these changes together, then something really starts to happen. If you do not touch upon that intrinsic motivation of people wanting, out of their own motivation, to do something different — okay, tell me, help me how to do it — change will not happen. We have seen more than enough transformations fail. One thing I object to is that a lot of the research says communication broke down, communication was not good enough. That is nonsense. It is not about communication, because communication is one-sided and typically top down. It does not address the core of human behavior in that transformation, and that is intrinsic motivation. I am not here to tell a fantastic story that everything is perfect. What I do see, in a very traditional German chemical industry company which is tough to change, is that the moment you start touching on intrinsic motivation, things start to happen. All of a sudden people want to do it, they start asking for help. But it is a far less upfront predictable method of getting things to change. ##### How the Academy runs Roy van Griensven: On the Academy specifically — if we build structural capabilities across people, process, data and systems, the people element is the sustainable, structural way of upskilling knowledge in the organization. The moment I entered the company they had an idea of an academy where all marketing and sales people would be trained in modern commercial capabilities. Very traditional: a hundred slides, sit in a room for two days, do some exercises, let people go away and hope something stuck. I think all of us have seen enough to understand that learning does not happen that way. So we changed the whole approach into three steps: inspire, reflect and apply. You need a bit of inspiration — in the chemical industry, in a company in Germany grounded in decades of heritage doing the same thing, you need to give some idea that other companies have tried different methods. That is a small piece of inspiration. Then we get people together to reflect, and we say: talk about it. How does that matter in your daily job? This is not academic, theoretical stuff. How do you see this applying day to day? Do you recognize it? Would it help you, yes or no? At the end of that we pick one component. You could easily pick twenty-eight commercial capabilities — all fine, but you can never address twenty-eight different things at the same time. So we limit it to what we feel are the critical ones for the success of the company in the next three to five years. And within those, we let people choose the one thing that matters most to them, for their personal learning and their day job, in the coming three to six months. What is the one thing you want to get slightly better at that would help you improve day to day? Then we apply a ninety-day period of coaching, with help from people outside the company. Let us take this and help you make an improvement in how you deal with it over the next ninety days. We identify those as growth projects, and the combination does several things. Great ideas start coming from within the organization, which by default carries much more motivation to change, because it comes from within. It makes very tangible improvements while you go, so you do not wait two years for a big launch. And things come up that are suitable to scale across many different businesses. The interesting part is that we started in the commercial organization, and now the rest of the company wants to do the same thing — there is a pull effect from within, because people want to learn. It is not the fact that people are resistant to change. They are just resistant to the way it has always been done. ##### Democratizing the consulting process Jesse Hopps: What is fundamentally different about this approach — the way I explain it to people getting started — is that we are going to teach you the same skills consultants use. The frameworks for purpose, definition, identifying needs. We are trying to democratize the consulting process and say: if you looked at things through this lens, you pick a problem, you identify the needs, you start designing a solution, you figure out where the roadblocks are, you figure out what resources you need to solve it or at least make progress. And you have some support on that. Not everyone responds. But those who are going to be your next generation of leaders, the ones you want to promote, they do step up and they find things that need to be improved. So I would say it is as much about removing obstacles as it is about adding new things to the business. It takes us thirty days to do something and it is not a great customer experience — can we fix that, please? Let us get the fundamentals straight before the fancy stuff. Who cares about marketing automation when we cannot get a simple thing done for our customer? When you meet the people on the ground dealing with those issues — I wish corporate knew about this and we could solve it — and you actually jump on that thing, that is when the light bulb goes off. It is not just about adding new methods and systems. It is removing the things that make it hard to be excellent day to day. So it is even more problem-solving oriented than it is training on new practice. You also have to temper expectations. In a big organization the projects come back on a bell curve. You are going to have some amazing ones, a bunch in the middle, and some that never really got going. That is just humans. That is the cross-section of humanity. ##### What to measure A participant: Do you have any metrics you anchor to that help guide you on how effectively your programs are working? Roy van Griensven: Very good question, and this is where I had quite a strong dialogue with our CEO and CFO, because naturally they look at one thing — they want EBITDA impact. This is where you need a very honest conversation. All of our salaries get paid in the end from bottom-line results, but EBITDA is not the way to steer a transformation, because a lot of effects can influence the bottom line that may have nothing to do with the progression and success of what you are doing. So the dialogue I had with them is: we will develop a method that shows the leading indicators of progress. Ninety percent of our time is spent identifying whether we believe these are the right leading indicators — the ones representing that we are doing something better and different than we did before, that we are moving in the right direction. The ten percent is making a connection between how those indicators changing will likely contribute to the EBITDA result. And that word is extremely important: contribute. If you want a one-to-one connection between the ROI of an excellence activity and EBITDA, forget it. It might just as well be influenced by your customer's own situation changing, by a competitor, by something happening on the other side of the world. You can never get a one-to-one relation. So you need to believe in the right leading indicators, and you need to make a credible connection to contribution. The leading indicator discussion is the most important. I take an example from my past, when we separated from a parent company and went through an IPO. Investors are not looking only at quarterly EBITDA or quarterly performance. They are also looking at the mid- and long-term effect — are we progressing toward the potential of the strategy? So you connect the leading indicators to the direction of the strategy and ask whether we are doing the right things. Very simple, tangible things. We want to grow in certain markets and segments, so a clear indicator is whether we are growing our pipeline of opportunities with customers we do not have today in those specific segments. There are many of these, and in several cases they lead to a hard dialogue based on transparency — guys, we are over-serving customers that will never grow. If we want to grow, you need to lower your cost to serve those customers, and increase what we spend where we need to grow. That requires an honest dialogue. Once people buy into it, you show progression on the growth accounts and progression on lowering the cost to serve. ##### Rewarding transparency Roy van Griensven: One element that comes with that is not so much an indicator as a behavioral call on board members, and certainly the CEO and CFO, and I repeat it at least once a month. As the leader of the company, you need to reward transparency — and even if you do not feel that way, act it. Fake it until you become it. You need to reward transparency and not hit people over the head for showing that there is a gap. Because the moment you start creating transparency, people show where the problem is and where they need help. Then you can do two things as a leader. You can say: fantastic, what support do you need? I really appreciate knowing what our customers are experiencing — so what do we need to do? Or you can jump on the problem and hit the person responsible for past performance over the head, and completely block any level of transparency that anyone feels comfortable showing again. It sounds a little arrogant and I do not mean it that way, but there is a huge element of C-level education in how their behavior can either accelerate or block any form of transformation. ##### Where strategy meets motivation Kurt Friedmann: I have had a fairly unique position to see this initiative from the outside. One of the key things is that we talk a lot about the executive team naming the lagging indicators they want to see — EBITDA, more revenue. That is not a transformation. The transformation is when you say, here are some of the leading indicators we want to look at, like more deals in the pipeline, and then you challenge the teams responsible for that to say: how would you go about affecting this leading indicator? How would you transform this to make it fully transformational? That is where strategy from a leadership position does not get lost when it meets the teams who are in the problem every day, saying here is how I would do that. And then the question is: do you want to do it? Do you want to do a high-visibility project to make a difference here? And then they get to choose. That is where strategy meets the person-specific motivations that get to intrinsic motivation. Roy van Griensven: It is massively important. Financial targets get set and they are typically steep and ambitious, and in a lot of cases you hear wishful thinking — we can never get there, impossible. What is much easier to rally people around is exactly that. Let us forget the lagging indicator for a moment. Let us believe that if we do the right things we will get as close as possible. But what are the leading indicators that would bring us there? Then the dialogue becomes: what can you do? What needs to be true for us to improve that leading indicator? So do not go immediately to raise the win rate from X to Y. Start with the dialogue about what needs to be true and how we can influence it. That is where the biggest effect is, because people feel this is something tangible I can start dealing with, something I can see happening. What needs to be done tomorrow to change it by one percent? And how do we get from one percent to five, and to ten? Sometimes the ideas that come up are to do it fundamentally differently — that takes a bit of guiding, because this is not just continuous improvement, sometimes you need much bigger moves. But the moment we have a dialogue about how to influence the leading indicator, it is far easier than asking how we improve our business by a hundred million more EBITDA. ##### Asking instead of telling Jesse Hopps: I have been guilty of this for twenty years, and I am sure everyone on this call has done it. When you are a smart person and you feel like you know the answer to the puzzle, you build a chain of logic. If this were the case, we need to do this. A whole chain of reasoning and assumptions. And when it gets down to the field level, there are so many assumptions inside your great plan for fixing the company. The exercise I have done to flip this completely on its head: rather than build the plan for how we win out there, I go into a group and say — if instead of hitting our target we were going to completely drop the ball this year, get nowhere near it, what would we be doing? And it is fun. People will give you everything. We would not do a lot of customer visits. We would not fix this, we would not fix that. They give you all the issues that are probably true about the current status quo. They do not necessarily connect it to the reality they are in, but they state how to not get there. Then you flip it on its head and ask what the inverse of that is. If we said we would not visit our customers very often, then we visit our customers more often — and what does that practically look like now? The whole idea is bringing the team through the chain of logic and the assumptions of building the plan, but letting them provide the answers by you asking the questions. Guided discovery. Roy van Griensven: I had a somewhat controversial conversation with our board members early on, because we were looking at the dashboard for the transformation and there was a lot of green — business unit leaders showing that everyone was participating. And I said: to what extent do we now think this is really happening? Or are we just installing an expectation that people need to show their hand and say yes, I will participate? Is something really happening? I said, we are showing here that in this business unit we are doing these projects in commercial excellence. Do we think something materially is different, or are they just satisfying the CEO by saying yes, we will participate? And that was happening. So by changing the approach you also get much better sight of who the people are. Here I go back to something which for me is still incredibly valid, from good-to-great thinking: if you first get the right people — people with intrinsic motivation who are willing to improve and to change — then great things can happen. With the wrong people they can easily say yes, we will participate, we will do all the things, and nothing materially happens until two or three years down the line you realize nothing has moved. By turning it around and giving people the opportunity to say what needs to happen, starting from intrinsic motivation, you will see some people take it as an opportunity to back off. What it does in an organization is also identify where we have the people who will help move this company forward — because they come with ideas, they come with passion, and you can have a real dialogue about content. You can agree, you can disagree, that is all fine. But you get that real motivation, and you avoid people acting as if they are playing along when they are not. ##### Asking the field Jesse Hopps: To give some context — what Roy is doing is going around the world talking to hundreds of frontline salespeople, mid-level managers and country leaders, then giving them the time and the space and paying for coaching to kick off ninety-day projects. Little problem-solving projects, shine-a-light-on-things projects, adopt-a-system projects, whatever they want to do. Anyone here worked in sales before? I worked in sales most of my life before I got into this. Never did a CEO ask the sales guys: what do we need to do around here to get more sales, make your life easier, help customers? Very rare. That is what inspired me to work with Roy on this. They are going out and asking the field what we can do to make your life easier and help your customers. And a lot of the time the first thing back is: stop throwing random things at us. Stop throwing too many initiatives at once and filling my calendar with meetings so I can actually do my job. It is also risky. Imagine kicking off that many projects with no clear immediate line to EBITDA, and having faith that we work on the right things, that the right people step up, and that we drive meaningful change. It is fairly early days, and I commend Roy on the courage to try something this different from the old playbooks.