Catalyzing Organizational Change with Rita McGrath and Michael Lurie

let's not underestimate what humans are capable of and how extraordinary they are. So I get truly astounded almost on a weekly basis. I travel around the world constantly and I seek to meet people at every level and every part of the organisation to really do my own sensing right, of just where things are at. And almost every week I hear just these extraordinary stories of what people are innovating coming up with. Welcome to Thoughtsbarks. Like, subscribe, comment, share and enjoy. So hello everyone. Welcome to a weekly Thoughtsbarks podcast. I'm Rita McGrath. You probably knew that. And my guess this week is a good friend, a thought partner, someone I've known for some time, Michael Lurie, who has been a consultant, he's been an advisor to firms, he's a trusted advisor, but now he's taking on a massive new role as the chief catalyst at Fair. And so Michael and I met years ago when we were part of what's what what was then called the Thoughts Fortnite Group, which was every two weeks we'd get together and have either half an hour or an hour of conversation about, you know, where organisations going and what's the future of management look like and what two organisations of the future need to look like. And now Michael's actually making it happen for real in a large, very established organization called Bear. So welcome Michael. Thanks Rita. Great to see you and great to be here. It's a real pleasure. So maybe start off with, you know, the challenge. So you have been working with Bill Anderson for a long time. I know you started working with him when he was still at Roach, kind of shaking things up. So you get presented with this challenge of Bear, which when you walk in the place has 11 layers of management and an employee rulebook, it's like 1200 pages and, you know, decades and decades of bureaucracy built up. How do we even begin making sense of a situation like that? Yeah, so the so as you know, Bear is a hundred and six year old company. We've had 90,000 employees and 120 countries. We're a life sciences organisation. So we have three major divisions, pharmaceuticals, consumer health and crop science. And Bill joined the community as a CEO in the middle of 2023, which, you know, everybody who knows Bill and who knows Bear thought that was a pretty radical move. And because Bill, the thesis for, you know, what he wanted to bring to Bear and the core of what he wanted to do as CEO was bring in the system, which at Bear we called dynamic shared ownership. I'd got to know Bill, as you mentioned, that Roach, I've been developing the system over the last 20 such 20 some years. And I'd been engaged by Roach early in 2017 to begin introducing an earlier version of the system there. And really ended up being deployed in parts of the organisation, not the whole organisation. And that's where we met Bill and we started working together. So by the time Bill became CEO, he was a huge advocate for this and really believed deeply in it. And he called me and asked what I'd join him, you know, to introduce us to the organisation. Which really, you know, I think gave us a, a, a number of important opportunities as a place to start. So, so Bear at the time was facing significant challenges. Performance had not been good for the previous several years. Bear had made what is widely regarded as one of the worst acquisitions in recent decades. It's a legend in strategy circles that one. And, and as you know, one of the unfortunate consequences of that was some significant litigation challenges we were facing in our crop sciences division. So there's a lot of investor pressure on the company to potentially break up the company or to do something radical. And Bill offered the, the way forward is being we're going to implement dynamic shadow ownership. We're going to implement this new system and that's going to help us dramatically improve performance and address these definitions. The, you know, the Board of Management, which is the executive team and a German company and the Supervisory Board, which is the Board of Directors, were initially a bit hesitant. I mean, they had actually hired Bill to do this. He was very clear about it. It took about four months of conversation to really stack hands. But once we did, we, we really, we really got going. And, if it's awful, I can share a bit about what we did in those first few months. I'd love to learn more. So the way we started, we started, really with two tracks. And, you know, long this wasn't formed by the experience I'd gain doing this with actually over 100 companies at this point. So I've brought versions of the system into many different companies. And, you know, one of the things we learned is that you need to start with earlier doctors. And it's helpful to do it in two tracks, as I mentioned. So one is we engage senior leaders in introducing them to the system. We did that three three day immersive workshops. And as part of those workshops, we, we really launched them in their individual leadership teams on journeys to re-architect their part of the organization. We had about a thousand leaders and gays and this over about six to nine months. So like pretty much all senior leaders of Biocard introduced the system and, you know, got invited to kind of re-architect or do at least a first level, high level, architectural, let's say, within admittedly imperfect understanding of the system, but it'd be something to get started. In parallel, we launched what we called front runners. These were more teams on the ground that were earlier doctors and that were very excited to sort of test out the system quickly. So we had customer teams and product teams and manufacturing sites and others. We had about a hundred of them in total, which was a lot previously done, like maybe five or ten, I hadn't had about a hundred before. So they were exciting. And, you know, between them, they covered all three divisions and every region in the world. And within months, we started seeing just extraordinary impacts. So we had a member of product team, four months in, you know, shared that they were, the product they were responsible for, they thought was going to take two years to bring to market. And they'd now figured out a way to do that in nine months. And that would make a difference of, you know, 15 million of annual revenue in euro, but bring it forward that amount. So it was like a significant impact from just one team. And then another team came with a story and another team. So very quickly, we started hearing these different stories of impact from different teams. And what really helps is that the teams, when they start as front runners, as they always do, they find it difficult because they're operating within the system that hasn't changed. So it feels like they're running into brick walls all the time. So they kind of need senior leader air cover, which, you know, the senior leaders being involved in this were able to give them at the same time the senior leaders need the the stories of impact to actually believe that this is real, because they're doing the sort of high level architecture thing, but it feels a bit theoretical to them. But very quickly, as we as we brought these groups together, so we would get in, for example, whatever group of 30 senior leaders and we're bringing maybe 10 of these front runner teams and spend the day together. And they would share their stories. And you know, at the end of it, we frequently heard the reflection from senior leaders along the lines of, I've known these people for 10 years. I can't believe what I just saw. Like, I've never seen them show up like this. And I can't, like, I don't know why we didn't start doing this five years ago, because this impact is just extraordinary. So this is how we, we really got a lot of momentum going in the early days. I think that's very interesting that you're managing both sides of that corporate DNA. So, baby, describe with the elements of the system, or so there's a leadership component, right, which you have a great acronym for. And then there's the sort of structural component, and then there's the temporal component, right, which is how does the rhythm of things change? So let's just start with the before state. You've got a classic German bureaucracy with hierarchical limits. And I would imagine doors, you know, I've got offices with doors that close and know all that kind of thing. What's different about the new system? Yeah. So, now, bear is a global company. So about 20% of our people on Germany, but 80% around the world. So it's hate-court in Germany, but we should think of it and talk about it as a global company, because it really is. And there's hierarchy everywhere in the world, it turns out. It's not a uniquely German or American or Chinese phenomenon for that matter. So it was very hierarchical, bureaucratic everywhere. What we refer to as traditional management system. And, you know, the system that we're introducing looks at both the, you know, the architectural, sort of organizational hardware of structure, process and economics, if you will, as well as as you indicated the, you know, the cultures like this and mindsets and ways of working. So it looks at both. And we have five principles that underlie the system. system. The system has been distilled from a range of different disciplines that you're very familiar with. Your work has been a contributor to the evolution of the system. But, you know, agility, lean, design, thinking, systems, thinking, cutting edge work, innovation and strategy, leadership and entrepreneurship. So all of these disciplines are disciplines that we've drawn on over the years and distilled into these five principles. And the principles apply both in terms of, you know, the operating model and as well as kind of the ways of working. Very briefly, the first principle is about focusing on mission and outcomes. So this means focusing on the value we want to create as opposed to kind of tasks or outputs or a myriad of KPIs. The manufacturing site, you know, has now shifted from having maybe 200 KPIs to three to five outcomes, each of which has got, you know, critical metrics associated with them. So that really kind of focuses people and focuses really the whole organization on value creation. The second principle is collaborate in a network of self-managing teams. So this is the one that a lot of people raise their eyebrows at because we are doing this for real. So we shifting from this, you know, silent hierarchy into a network of thousands of self-managing teams that operate with a very high degree of transparency and pure accountability. It's the term that we use. So it's peer to peer. It's peer to peer. Yeah. So there's a lot of collaboration within teams. So teams have to learn how to actually be teams and be high performing. So there's a lot of, you know, part of the mind system ways of working us to do with that. And then there's a lot about just how do you set up the organization as a network of teams as opposed to hierarchy. And we can dig into all of these obviously in more detail. The third one is around how do we create value? And this one really focused on creating values on entrepreneurial businesses. So it's really having each of these teams and really, you know, the value streams within the networks think of themselves as end-to-end businesses and really operate as entrepreneurial businesses. In support of that, we've also introduced what we call dynamic resource flow, which means we've taken resources out of the hierarchy and actually pooled them so they can flow easily to different teams and to different business that that's a key one. You know, I'm looking at you. So many of these can't get passed through on budgeting process. Yeah. So we should dig into that exactly. And then the third piece of that is the frames. So we talk about a bold and light strategic and financial frame that leaders set to, you know, guide and enable the network on entrepreneurial teams and the resource pools essentially. So that's how we create value. And there's a lot of learning teams need to do at a team level or just how to think like a business and how to think about a business model or these kinds of things. And the fourth principle is about, you know, exploring, executing and evolving in rapid cycles. So we've set the whole company to now operate on my day cycles that are really anchored by retrospectives that happen within every team at every level. And so it's essentially becoming a learning organization that's constantly adapting and evolving with a very strong emphasis on, you know, make quick decisions and test and learn rather than, you know, overcook it with with detailed plans and really constantly evolving, as I said. And then the fifth principle is interesting because that's really how do we show up. And this is about showing up in what we call creative mindsets. So this is with, you know, higher levels of self awareness and consciousness with emotional intelligence, if you will. And it's really about learning the skills to become self aware of what are the limiting beliefs I'm holding that are often unconscious that keep me wedded to the traditional way of doing things that are really the orthodoxies in the organization. And then how can I actually, you know, explore those and challenge them really and embrace very different, you know, beliefs and convictions that are much more enabling. So we talk about the shift, for example, from the mindset of scarcity to mindset of abundance, from mindset of authority to mindset of partnership, from mindset of certainty to mindset of discovery and so on. So these are just some examples of this fundamental shift in mindset that we've really found as a critical maverick in this journey. And depending all of that, as you mentioned, there's a new approach to leadership we've introduced. We go by the acronym of VACC, which is Visionary Architect Catalyst and Coach that really lines up with those principles. So Visionary is really enabling teams to focus on mission and outcomes. Architect is about enabling teams to operate us on entrepreneurial businesses and networks on entrepreneurial businesses. Catalyst is about enabling and catalyzing the network of self-managing teams, working in high collaboration. And Coach is helping teams operate and learn and evolve in these in rapid cycles. So this is kind of, then it's a really a servant leader approach to, you know, guide and enable teams rather than to be, you know, commanding and directing controlling teams. And I was doing work with Genentech, which is part of Roch. The Roch group. And people that really embraced it, I think were, you know, much more effective than the ones that were operating in a more conventional manner. The, I mean, the performance impact, you know, one of the many amazing things that are happening at Bayer is that we get to really, you know, see what this looks like at enterprise scale. So, you know, I think it's unprecedented for a company. This long established in a traditional management system is undertaking a transmission of the, of the scale and scope that we're undertaking. And that means we also get to see the impacts and the impact is absolutely extraordinary. So we have, you know, lots of hard evidence now that this system will accelerate the rate of growth, you know, two to four times. So for example, our US farmer organization, which comprises about 80 or 90 customer teams in, in 2023. And for the years leading up to 23, 23 was growing at about three or four percent a year. In 2024, they grew at 15 percent. Well, absolutely shocking. And they repeated that in 2025. We now, like they now grown 30 percent over two years, whereas, you know, historically, they would have grown five or six percent over those two years. And simply extraordinary. You know, I was with a, you know, a customer team in Bangladesh a few a couple of months ago. Historically, they'd been growing at 10 percent to year until 24, 25, they grew at 40 percent. They grew at four times kind of the rate of growth. One of our product teams, New Becca. So this is a billion euro a year product. And they had an aspiration to do just under a billion euro of revenue in 25. And they achieved that by June of 25. And six months and half a year. So they're sort of running a tricerate. So, so, you know, doubling or better the rate of growth, like we've got, I think a lot of evidence for, we've got some evidence for increasing growth margins at least five or 10 percent. So as we look across our product portfolio, we have a number of products that through a combination of cost efficiencies and better fit for purpose pricing. They've been able to raise their growth margins at least that even more in ways better, better work for customers and being much better for the organization. And then we're seeing, we have lots of evidence of, you know, reducing SGNA costs by between 20 to 40 percent. A manufacturing site I heard about three weeks ago. So this is a site that's, we have about 150 manufacturing sites. It's probably 10 or 15 at this point that are pretty far along the journey. This is one of them. So they reported that they have reduced overall costs on the site 40 percent. They've increased quality and employee engagement has gone up from 25 percent two years ago to 75 percent today. So just extraordinary to see these impacts. So they're now with us as, you know, we believe this has got the potential to so double or better the ebit or the operating profit of a large organization. And we think we think these, this is the beginning. We think like it could grow to three, four, five times that. So a question that often comes up for me is, well, there's a lot come up for me. But one is, you know, there are parts of the organization which are the creative, the software, the asset, light stuff. But you have, you know, you have a manufacturing facility. You've got places where things need to be done exactly to plan and where you can't really have deviation and work force experimentation is not to be encouraged. How do you reconcile the need to do things with that kind of precision with the sort of self-managing peer to peer controls that this system implies? That's a great question. What we've learned is that the system applies everywhere. People tend to think exactly as you indicated that, yeah, I can see how this works in innovation and early stage, or in D or whatever. It does apply everywhere, but it needs to be a plodent fit for purpose way. Manufacturing really developed lean. The agile redeveloped software and software R&D, if you want, software developer. But if you look at them, there's actually a lot of common principles that end-lied both. They're just applied in fit for purpose ways. Manufacturing, there is innovation that happens every 90 days. It's just an thought of and experience has more like continuous improvement, rather than, you know, and sort of game-changing groundbreaking innovation that you'd see at sort of early stage research. So it's different, but the same principles apply. Certainly, you know, what we've learned is that self-managing teams that operate with high transparency and pure accountability. It's just a much better way to operate than a managed system. Because in a managed system, in traditional management system, you have like layers of management, which first, you means teams on really taking a kind of ability. They're kind of waiting to be told what to do. And they're pushing decisions kind of, you know, up. So it's very slow. People are working in silos. People aren't talking to each other, etc. There's many aspects to it that lead us to believe that something like 30% of the costs of the traditional management system, or to do with a hierarchy bureaucracy perpetuating that system. If you strip all of that out, it turns out people, you know, I think one of the convictions really underlying even traditional economics. And, you know, the traditional management systems that people are selfish, people are not reliable. They need to be like inspected and managed. Otherwise, they're all kind of crazy. And, you know, we can't have the sort of the inmates running their asylum is the very horrible, horrible analogy that you speak of them. And, you know, the conviction underlying DSS is that people are amazing. That people have got an immense potential. And, you know, highly responsible. And that they can and will make sure that things are done well. And we see this playing out every day. So we have self-managing teams on the shop floor, manufacturing sites. They take their commitments to quality. And to compliance with, you know, regulatory guidelines, extremely seriously. So they know, like, you know, this is a manufacturing site and our farm division. And they know that their products are going directly into the bodies of, you know, millions of patients around the world. And they actually bring that consciousness with them to work every single day. I attended a, they have daily standups in this manufacturing site. So it's, I don't just check on every 90 days, they check on every day. And it was just extraordinary. They had like a, a big computer screen. And with, you know, a number of like, with their clear outcomes and number of key metrics, so you're with each outcome. And these was team of, you know, front line workers in overalls, standing having a very intelligent conversation about quality and speed and, you know, economics. And what they were going to do tomorrow. To make sure that, you know, most most of the indicators on that day were running good, but they were two that were problematic. And what they were going to do, can't to address those two indicators kind of an extra. I mean, there was no difference in commitment, expertise, seriousness, dedication. Then you would see at the most senior levels and leadership team. Then I saw in that team on that day. And I've seen this kind of all over the place. So, so people are learning how to apply these principles in fit for purpose, where is. And it's a perfect, what it means to be human and turns out everybody's human. So if you're a human, a better way to work. I love that. I mean, it sounds almost too good to be true. So, you know, when you first started this, I would imagine there was a fair amount of skepticism, perhaps even some resistance. You know, they're not, not everybody's going to benefit from these kind of changes. So, so how did you get through that. That's a lot of challenges. So it's not easy. I mean, there was enormous skepticism and resistance early on, as you can imagine. And there's still is a lot of that. So we're nearly three years into the journey. We think we're maybe 40% of the way along. So there's still a long way to go. And there's, yeah, there's tens of thousands of people at Bayer that have only vaguely heard about this. and are just getting started. Even though it's been communicated to the whole organization, almost every week for like nearly three years. I mean, the amount of communication that we've done around this and their accountability organization has to fully implement this has been clear for at least three years. And yet, it's not a big organization, it just takes so much time for kind of the messengers to get through and for people to understand this is not just another thread coming out of, leave a coupes on that corporate headquarters, there's actually a wheel, there's nothing we actually gotta do here. So all of that takes a lot of time. So there's a couple of approaches that we took that we found to be very important. So as I mentioned first and foremost, we started with early adopters. As you know, about 15% of any population are typically early adopters. It better that means like 12,000 people. That's a lot. So at every level. So we spend a lot of time encouraging those people to reveal themselves. You don't actually have to even go find, you just put out a message and they come find you 'cause that's what people are early adopters do. So very quickly we literally have thousands of people leaning into this and you know, so those senior leaders, not all of them were early adopters, but you know, a good number of them were. Obviously all the friendrunner teams, et cetera. So all of that started happening. And we really decided to focus there first. So we communicated to the rest of the organization, but we didn't actually ask them to do anything. We just told them what was happening. So we had a very high degree of transparency. You know, build models as some way that people find very either alarming or refreshing depending on your point of view. I'm regarded as also unusually blunt and forthright in the way I communicate and others are as well. So we try to just share with people very directly, what we're doing and the good and the bad of it, et cetera, all of that, but really lean into supporting the earlier adopters. We built a community of what we call DSO practitioners. So these are folks who are 100% dedicated to this that we've really trained and developed with a lot of to be very skilled. And they have found out across the whole organization, and they're mainly again focused initially on the earlier topters now they're starting to broaden out into the rest of the organization. We both are doing it. - I think this is so important. And I think I see companies just mess this up all the time. You've got full time resources of people who have actually been trained and had to do this. I mean, what I often see is companies are like, okay, you're empowered, have a nice life. Well, you know, if I've only ever worked in a machine bureaucracy, if I've only ever had a boss telling me what to do, I don't know what to do, right? I don't have the skills. I don't necessarily have the ability to have a difficult conversation with my peers. You know, how would I be able to give Colleen feedback? Maybe their performance isn't up to par. Like how would I even do that? So I just, I really want to just emphasize that for our listeners because I think that's incredibly smart that you have this sort of army of people doing nothing but working the organizational aspect of things. - I couldn't agree more. This is high touch work. You can transform at this level without that. I mean, we have a clethora of self-learning programs, hundreds of videos across the organization, very intense communication, et cetera. So we're doing a very broad range and I think pretty good job of learning and communication more broadly. But the reality is the actual transformation happens like human to human, a lot of that in person. So having that community is important. We also built a community of what we call champions. So these are people in teams, you know, many of them on the front line, who are DSO enthusiasts and we have about 3,000 of them across the organization. So they are an important community for our full-time practitioners to engage with and kind of support. And we've also been building out and we're now accelerating what will become a network of between 150 and 200 transformation teams that will be embedded, you know, in every unit across Bayer. And we have probably 40 or 50 of these at the moment. So we're sort of expanding that. And these transformation teams will include early adopter leaders as well as full-time practitioners at a pretty senior level. So at essentially the top three levels of the organization. So that will create a community of about 1,000 people. So there'll be full-time practitioners plus, you know, leaders are probably dividing 30 to 50% of their time to those for the next 2, 3 years and together with the champions on the ground. So that's sort of the transformation community that we built. And then we also took a line of, you know, compassion and meeting people where they're at. I think that's very, very important. So we never thought that we never communicate that you have to do this. There's never been a lack of requirements or an expectation. These are all what we call reactive words. So they belong in a traditional system. In a system that's really based on fully formed adults collaborating together voluntarily by agreement. You don't do that. But you do extend limitations. You do inspire people. You do create a vision, an aspiration of what could be. And you help people understand what this future system can actually look like and what it feels like. And why it's so very creative and why the performance is so dramatic, you know, friends. And also why the lived experience of working in such an organization is just so much better. And, and so we meet people where we're at. We create forum for dialogue. And we'll have people to, you know, over time. So learning like how different the system is. What are all those, you know, as I mentioned before, the limiting beliefs that underpin the traditional system. And yet understanding that a very different system is. Is not only possible. It's just, it's just much better. So that's, that's been very much approach. And there's, it's a combination of sort of patience and persistence. You know, to, to allow that to unfold across the organization. At the same time, you know, in particularly in the last few months. So once we were about, you know, two years in. We started recognizing that we need to more actively exit some people. So there was some people, particularly at senior leader level. That we're really, you know. That we might need to be patient for 30 years before they get there. We're patient, but we're not that patient. So we're now, you know, we're now. Making that clear to people and we actually have a retaken action in the last few months. So that it's not many that there will probably be a few dozen senior leaders out of maybe our top thousand leaders. It will need an exit. But everybody else essentially, you know, in their own time will learn to embrace us and to implement. Well, and I think it's, it's really important. Culturally that, you know, you don't tolerate people who. Over time, you know, who just don't get the program. And I've seen that happen so many times in companies where, you know, you say you want X, but why. Person delivers great performance so they don't get any sanction for it. And, you know, after all, everybody just rolls their eyes and then they realize you don't mean it, right. Absolutely. to budgeting because I find this fascinating and very few companies to me have figured out how to get their best resources against their best opportunities. And it sounds as though you're making progress to doing that. So you know what we've come to have got strong conviction around is that they're three pillars of the traditional management system. These pillars are reporting lines between managers and individual jobs, budgets and solid information. So basic and traditional management system, which is you know defined by reporting lines essentially. So every obviously union department has purchased hardwired and has actually information on hardwired and is very difficult to move you know people, money and information around the company because it's so kind of aches into the whole system. And it's only really discussed once a year and then it's discussed in a very incremental way, meaning basically all the budgets and resources continue as is other than minor tweaks because it's almost impossible to do anything else. The system's just not built to do that. It's just not built to do that. And as you well know there's like just a huge amount of game playing, people are like spending their budgets so they keep the budget for next year, all of this kind of stuff. So you know the amount of waste is just staggering that goes into the system. So you know what we're doing quite simply is we eliminating reporting lines, eliminating budgets and eliminating information silos. And you know that's obviously a process that's unfolding. But we can talk briefly about each of those. So with budgets specifically, so we actually have already eliminated budgets. So we just stop doing budgets. One of the big symbolic things we did. So Bayer had the system, forget the acronym that was used, but it was essentially the you know operational planning and budgeting system that ran every year. It involved about 5,000 people. Wow. It started in like June or July every year and ended in December of every year. Right. So this was like a major part of the work life of the organization and a lot of people. And you know in 2024, even we just eliminated it there. We're just saying we're not going to do that anymore. We just send like an electric shop through the organization. We're just going to say wow. So you just decided you're not you just don't need it. We're just at all process. Yeah. Wow. And because it turned out as it always does that like you know 3% of that process was actually to do with like financial projections that you actually need to do. Seeker makes sensible decisions. 97% of it was all of the bureaucracy like the you know PowerPoint decks with hundreds of pages like endless spreadsheets. All of that stuff that got done it really like 12 different levels and then get socialised and sent to the next level and sent back down etc etc. So it was just incredibly like complex bureaucratic process that was creating no value whatsoever. What we shifted to is a system that we refer to as you know tier 1, tier 2. So the way it works is that tier 1 is really the level of the enterprise and the divisions and the major units with the divisions is down to that level. So so we set on an annual basis a starting point of our essentially you know financial plan for the coming year. So we really got this for 20 20 27 sorry. So we already got a first version of 20 27 starting to emerge. And so is the king of 26. So we have basically this year next year we have a view to what that looks like. It's not a budget or a target. It's more a financial projection and we use that as the basis for what we communicate and the commitments we make to the external markets. We look at that every 90 days and we actually tweak it and adjust it every 90 days and then communicate externally you know as a result of that. But essentially that is you know we refer to as a financial frame that really sets a baseline at the enterprise level of the visual level and for major units like research and development in a division which might be you know 3 to 5,000 people or more carving. That's the sort of that size you know. And again that frame itself is dynamic meaning it's not frozen it evolves. And actually we have two versions of it. We have the version we communicate externally which was you know the the the bottom line commitment we make that we will not miss. And then there's the internal aspiration we sit around there in which we encourage people to think much more poverty. So our internal aspirations are much bolder than the external commitments. And we are working to make the internal aspirations the lived experience of everybody with the external commitment like yeah obviously we're going to deliver that. That will just be a consequence of striving to meet the internal aspiration. The internal aspirations just that it's not a it's not a target. So if we send the aspiration for let's say 10% growth as opposed to an external commitment we are made for you know 3 or 4% growth. If we achieve 8% we celebrate there. It's not it's not a bad thing that's a wonderful thing. So again it's a bold aspiration that we're setting internally. Within you know within those within that tier one it doesn't it doesn't get pushed down lower than that. So that means every major unit now has a pool of funding and a network of teams within that unit that they need to figure out what to do with. So take that that example I gave of you know the US farmer organization. And so they're actually part of a bigger organization that has a pool. You know there's a pool that they're working with them across the 80 teams that make up that that organizational unit. And every 90 days so that unit is a bit further along the journey. They're now and having a conversation across those 80 90 teams of how to flow resources and they do this every 90 days. So that means every team has got to be thinking every 90 days what are the resources that we actually don't need that we could essentially release back into the pool or what are the resources that we think we could benefit from because we've got specific opportunities. And essentially the team need to make that case to each other. So we're now developing practices of getting you know large numbers of people like 200 300 people into a room representing maybe 10 to 20 30 40 or more teams in the room to actually have this conversation. And where every team shares that you know he has how we're doing he has our latest projections for the year. He has an aspiration. And like, yeah, actually, because of this and this reason, you know, the market's not turning out to be what we thought it was going to be, we lost the major customer, whatever we're running, like, you know, less than where we hope to. So we don't need all the resources that we have. We have to release, you know, money that we will back into the pool. And where's another team will be? Actually, we just uncovered like amazing new opportunities in the customers we are serving or in these product areas. And we think there's an opportunity to double down here. And when you do this with high transparency across the network of teams and everybody, also, there's a lot of coaching involved. And so it's not a simple thing to accomplish because people have to have enterprise mindset and put the collector above the individual or other kind of thing. But when you do that, and you do it in an evidence-based way, which is also important, it's going to be all fact based on people's opinion. But when you do the mix of things that you need to do, it's incredibly powerful. Because what starts happening is that everybody starts honoring this and actually living into it very quickly. And people start enabling this fluid flow of resources to happen. So this is on the budgeting side. And really, in a nutshell, we've replaced budgeting with a continuous conversation around, you know, flow of resources. It's not even an allocation because kind of the system itself is doing the allocation. It's not like a team that's allocating. It's more of the emergent result of the conversation amongst teams leads to the flow of funding to where it can contribute the best, you know, and away from areas that are less value-credits. That is so interesting. And companies just struggle with this so much. The other one, of course, is people's compensation and how people feel they're going to get ahead in the company. And I'm sure you've had to tackle that as well. So there's a couple of pieces to this. You know, one piece that's very important is like, how are we creating the pool of talent separate from the work teams? Because like we're creating the pool of funding, we're also creating a pool of talent. And the way we're doing that is we're setting up what we're calling professional homes that are separate from the work teams. So professional home is a skill-based community. So there'll be a professional home for like software engineers, for example, or professional home for marketing people or professional home for finance people. Actually, within marketing, there might be three or four professional homes for different professional disciplines within a major discipline. But probably not more they met. So within each major discipline, there might be three or four sub-disciplines, let's say. So there'll be several dozen of these ultimately across the organization, but not hundreds. So professional home may have a thousand, two thousand, three thousand colleagues in it, or kind of operate globally. And the core of the professional home is a skill-based career path from entry level to expert. And this will determine also compensation. It's really shifting the organization to become a skill-based organization where a big part of compensation is tired, literally, to skills. We're building these to be self-managing communities, which means people are supported in these communities. Firstly, they self-author their own career path and their career journey. Secondly, they're supported by a colleague who's further ahead. So if you're like a level two skill in a professional home, there may be someone who's a level four skill who's acting as your development partner or your so-called home leader. You're supporting you. You don't report to them, but they're supporting you in your career path. And they meet with you regularly and they help you reflect on your performance and they help you think about it. Okay, you're level two. You're trying to get to level three. Within the professional home, we wanted to find out very specifically what are the skill you need to demonstrate to get to level three. And also, what will you earn when you get to level three? So it's very clear to your transparentist objective that glass everybody's wearing a cruiser. It's fair. And then once you believe that you've got the evidence to demonstrate you're ready to move to move to the next level. And a panel of level four was in that example, we'll get together and we'll kind of review like maybe between them. They'll be supporting, let's say, 20 or 30 colleagues in that professional home. And maybe three or four of them are ready to advance in any particular moneyday cycle. So they'll review the evidence for those three or four colleagues and they'll make a decision whether they reach advance on them. So it's again done in a very transparent way. It's done in a way that is very clear to people and lays out kind of skill based career paths. What this also enables is it really enables the talent for the talent to live. Because it means that people aren't in no longer operating in jobs or the hardwired into kind of teams. But rather their stability, really, they're belonging and they're, you know, is in the professional home. So they know that they've got a long-term career with us within the professional home, but that they can move around different teams quite regularly. Now most people will stay in the same team for two or three years. They're not going to shift that quickly. But we don't want people to be on the same team for 15 years, like many of our people are today. And it also gives the possibility that you can shift teams off to six months. That makes sense because you're in a particularly dynamic part of the organization or whatever. It really kind of frees up the stability to move people around. And as we were saying earlier, so when teams are getting together for these retrospectives, these network retrospectives and thinking about how to move resources around the network, this allows them to release people from teams to join other teams because people are so, they still have consistency in their professional home and they're advancing on their career path there. This is just a work team towards which they're contributing their skills. So this is also a very, very big shift because we're building up 10 of processes around these professional homes outside of the work teams, you know, so this is a amazing job. It's huge. Well, and I've been saying for a long time that one of the things that one wants to do in an organization is reduce the return on politics. And a great way to do that is to separate out decisions about things like compensation and advancement from the hierarchical reporting relationship. And you're probably one of the first people I've talked to who figured that out at scale. And so, you know, the, you know, no surprise that the topic of compensation incentives is probably the most sensitive topic. So we're being thoughtful about that and we exploring many ideas, but we're not planning to do anything disruptive to the organization. We also as a German headquarter company, we work very closely with our employer representatives who are make a 50% of our super advisory board and our really close and wonderful partners with us, you know, on this journey. So we pay attention to all of that. But one of the mechanisms we just introduced is embed towards which are awards that anyone can nominate for anyone based on delivering impact. So it's completely outside of the hierarchy. It's also distinct from the skill-based career pairs. If you will, the skill-based career pairs are sort of your, you know, foundational compensation benefits is really going to be operational as three those in the professional homes. But then there's these other obviously other elements of compensation and incentives that we're exploring. And this is one that we just introduced. And the impact of this already has been very exciting to see. So we're seeing colleagues being nominated by their, by their peers, within teams or cross teams or within networks, really for heroic acts of impact. There's no other way to describe it. So it really honors people. It gives visibility to people, people and recognition to people. There's a financial piece to it that is meaningful to people. And it's something that is not just, you know, essentially done have to look good to senior managers to in this. You can't look good to anyone because this is just transparent. And again, anyone can nominate and offer these. And there's obviously a mechanism for curating the nominations and making sure we get to kind of a good place. And but it's really done as a system, as a peer-based system rather than through the hierarchy. So yeah, there'll be more to come on the conversation on centre side. But but we're seeing already, you know, very dramatic improvements. That's that's just amazing. So I can talk to you all day. How, how do you, when you think about strategy and you just to come back to the sort of role of the senior team, the kind of high level corporate decisions, the sort of centering of the company? I'm sure that's being done differently than it had been done prior to Bill's arrival. How does that work? Yeah, well, I do recommend your book, End of Computer the Danage. So which I think was a very important contribution actually to the to the space. And really, you know, it's a shift from a more reminds me technical terms of deliberate approach to strategy to an emergent approach to strategy. So back on the day, you know, when I started out McKinsey 30 years ago, we used to do five years strategic plans and actually you can actually execute them. Yes. And now, I remember at GE, they used to have them on giant flip charts with industry analysis, you know, is the first three things. So, you know, we've shifted to really a system where everybody is doing strategy firstly. So we're driving strategy down to, you know, to the individual team. So every team is thinking of itself as a business is thinking about, you know, we've framed around five sets of questions like who do we serve, who are our internal external customers, what are the solutions we provide, products or services we provide to meet their needs. What are the resources we need, who are the contributors of those resources, how to engage them and meet their needs to contribute resources. And what are the capabilities we need to build, including kind of core processes, to execute all of the above. So these are like foundational strategy questions. You can pose at the level of the enterprise. You can also do them at the level of a team. And so that's where we're encouraging people to do it. We've also designed our systems such that there's within the network there's four kinds of teams. Each with a strategic mandate. So we have customer teams. Each customer team serves a specific set of customers across the customer lifecycle with a mandate to bring to those customers the full set of our solutions. And we have about 1500 of those. We have product teams. We have about 400 product teams. We have a mandate to develop and deliver products across the product lifecycle from early research to commercialization and growth. And to think about which are the range of customer teams and markets that be relevant to this product. So we set up this kind of networks of customer product teams, each of which have got very clear kind of strategic mandates. And there's kind of this constructive tension between them. And that really reflects the market dynamics. And it's important that's constructive, but there is a real tension that that that we've designed into the system. So a lot of our, you know, product market strategy is emerging from this. The interplay between the 1500 customer teams and the three 400 product teams. We also have what we call technical teams, which are essentially the, the functions of R&D product, what we call product supply, which is manufacturing and supply chain and sales and marketing. So those functions have now shifted because we've taken the customer product teams out of the functions. And we shift to those functions to be service providers to the customer product teams. So we've said, for example, a customer team, conbuilders own marketing agency. It has to use the internal marketing agency, i.e. the marketing team providing marketing services or a product team, conbuilders, and manufacturing site. It has to use the internal network. Now, in doing that, they also encourage to look externally and to find out what are the external alternatives to our internal service providers. And to make sure there's market discipline on this. But essentially, in practice, the technical functions are becoming service providers to customer product teams. And so sort of functional strategy, if you will, is now being done in a very different way because it's also been done through the lens of as, you know, so our leader of our consumer health. And so, the organization said to me recently, you know, you know, what we're working towards is every leadership team of every manufacturing site, think of themselves as standalone business. Thinking about which of the customer product teams are their customers. They're all aware that we have an external network of hundreds of contract manufacturers that we can use. We need it. So they've got to actually build their business in a way that is, you know, that is at least as good as the best in the world in terms of cost quality, etc. Well, the kind of metrics that we look at. And most importantly, in terms of responsiveness to, you know, the markets. As as as mediated through the customer product teams. So you're really seeing this like strategy making happen at every level within the technical functions through this lens. And then the fourth category are our enabling functions of this HR finance and it etc. So they're they have a mandate to really engage and create value for, you know, what we call our contributors employees and investors and others contributing resources. Whereas the first three categories really focus on customers. This category of teams needs to focus on our contributors and enabling the dynamic flow resources that we spoke about as well as our what we call our license to operate. So, you know, ability to operate as good core presidians all over the world. But also so they've got to think about their strategies again with much more entrepreneurship and much more through evaluating lens. In addition, you know, we're we're helping our leadership teams learn that. You know, to set what we said earlier, kind of these these frames around. So to really think strategically at the level of what we call a bold and light strategic frame. Largely informed by what's happening in the external world. So we want our managers, our senior leaders to be much more focused on sensing external environment to be actively engaging with, you know, customers and external, you know, industry associations and all other kinds of ways of engaging kind of externally. And do we sensing continually what's happening in the external environment and using that to inform the frames that we're setting. They've also got to be doing that sensing internally, of course. And so there's a lot of sensing that goes into now, you know, senior level strategy making. And in order to set frames appropriately and to evolve the frames continuously over time. That also requires, you know, senior leadership team to communicate with each other and ways they never have before. So in the in the traditional way every leadership team set a zone strategy and, you know, cascaded down in that way and really only came together at the board of management, the kind of executive team. We know we're not creating ways in which, you know, leadership teams, you know, two, three levels down on meeting with each other and sharing information and so on. So they're all operating with more of an end to end picture and they can cross strategy in a way that really makes sense for the system as a whole. So there's many other things we were talking about as well, but these are some of the key elements of our strategies evolving in the system. I love your emphasis on sensing because one of the things I would observe. And you know, I do a lot of work around strategic and fletching points and one of the things you think you see when you see a company that's missed one. They, you know, there's plenty of evidence, but everybody was, you know, knows down in their emails and just turning the crank and operating and they're not paying to they're just not paying attention. So one of the things I think your system is doing is really pushing people to say what is going on in the outside world and what signals do I need to be paying attention to because in a traditional hierarchy, you can go for years without ever noticing what's happening outside your. I mean, there's a reason that you know, innovation always happened at periphery and largely in most industries that happens amongst the startup world as we know, right? So it's like the big companies are not really the big innovators that they really, you know, buy up the startups and then they maybe scale innovations that other people came up with. And we're seeing to turn that on his head, you know, we want to create an organization of thousands of entrepreneurial businesses, like I said, but with with the ability to innovate and to leverage the resources of, you know, of a major enterprise. That could be the problem. Right. Were there any big surprises? I'm sure there have been in this journey. You know, I've been doing this a long time. So at least for me, I can't say there were any real surprises. I think, I think. But there's been some, you know, lessons relearned. So. So one of them is like, let's not underestimate the dead, the depth of the traditional management muscle memory. I mean, it's really deeply baked in until everybody's psyche and to like all the systems of the company, like literally every system. So, so to do this, you know, ultimately. 90,000 people at bay, I have to personally transform the way they think and operate. And we have to kind of, you know, reimagine, reinvent every system and process in the company, which is obviously, you know, that's going to take some time. I think we're doing it, you know, at a pretty accelerated pace. But yeah, like that's not to be underestimated. You know, there's also the lesson underestimate what humans are capable of and how extraordinary they are. I travel around the world constantly. And I seek to, you know, meet people at every level and every part of the organization to really do my own sense, saying, right, just where things are at. And almost every week, I hear just these extraordinary stories of, of what people are innovating coming up with. You know, when it comes to mind is that customer team, Bangladesh, that I mentioned that's growing at 40%. This year, you know, or they grew at 40% last year compared to 10% previously. So one of the ways they did that. Is they just, they started thinking of themselves really as a business. And they said, well, as a business, what, what can we do to change the way our customers think about, think about us. The customers they serve are smallholder farmers. So these are farmers with maybe. you know, less in an acre of ground. It'll basically mean that there are subsistence farmers or maybe, you know, on the margin of subsistence or, you know, creating some crop for trade, but a lot of it is just really to feed their families. And, and this isn't Bangladesh, right, which is, which is very much a developing economy. And the innovation they came up with was to create a football match, where one of the teams was named off to one of their products, and the other team was named off to another of their products. And they all has this football match and they pulled together two football tests. There's a soccer, by the way, when I say football, I mean, soccer from American audience. And they had, you know, uniforms for both teams with the product logos and so on. And they had 5,000 farmers in their families turned out for this for this football game. Which is just extraordinary. So the kind of the brand awareness that they created. And the, and the number of like products and queries they got after this football game, which is one of like several things they innovated to torpedo and too much charge kind of their growth as a, as a little business, essentially. And this is a group of like 8 or 10 people on this customer team came up with this idea and, yeah, he's just, and that's the world. Perfect to the environment. So again, it's just what a great idea and so perfect for the environment. Absolutely. And that's just genius. Wow. Well, I don't want to impose too much on your time. This is just stunning. And I really appreciate your sharing the story with us. And I'll check in on you now and again. And we'll see how it's going. So Michael, Laurie, thank you so much for spending the time. And thank you so much for the work you're doing. You're proving that human centered organizations are actually possible. Well, thanks so much, Triton. I'm going to let you, to be friends with you and collaborate with you these last few years. And thanks for all you're doing to raise awareness of this really what's a whole new era in how we think about and build organizations to allow all of us to thrive at at levels, maybe we never believed we're possible. That's my hope for the future. Absolutely. Thank you so much. Thanks.