Episode #70 - Your Leadership Blind Spots: Part 1 Ft. Jim Haudan - Employee Engagement

Jim Haudan, founder and former CEO of Root Inc., discusses the importance of creating more human workplaces. He believes that many organizations have untapped human potential that is not fully engaged. By bringing the drama and dynamics of the business to employees and allowing them to solve challenges, leaders can unleash the talent and creativity of their people. Jim shares practical examples of companies that have successfully implemented this approach, leading to improved performance and employee engagement. He emphasizes the need for leaders to challenge their blind spots and rethink how they engage and involve their people.

Takeaways

• Creating more human workplaces involves unleashing the untapped potential of employees.

• Leaders should bring the drama and dynamics of the business to employees and allow them to solve challenges.

• Companies that engage their people and involve them in decision-making see improved performance and innovation.

• Leaders need to challenge their blind spots and rethink how they engage and involve their people.
  

Jim's work showcases the results of inviting employees into the conversation and fueling their natural motivation to make a difference. He encourages organizations to reimagine engaging their workforce as equal partners in crafting a future. Part two available May 1, 2024.

Episode Transcript

You have dedicated your entire life to this topic, this is core to who you are. Why?  

It's a good question. Part of my background was also in education, and it may even go back to the days when I played football. I was physically able to play, but in some schemes and in some formats, I just keep getting it mixed up. I didn't see the field, I didn't quite get it. It just didn't compute in my head. As we sort of progressed in different adventures, it just seemed like there are a lot of things that I didn't get. 

 There might be other people like that. In other words, they are on the bench and they don't get in the game. Then as we got more aware of how many people, in how many organizations, had this dormant human capability that was just sitting there, not fully engaged, it became a passion. Then as we experimented with it and found a few examples where once given the chance, once given the opportunity that leaders became absolutely dumbfounded at the untapped intelligence, the untapped curiosity, the untapped passion, and the untapped capability of their people. That became a purpose. We ultimately said, how do we get people off the bench and to their workday life? And we refined that as how do we invigorate the power of human beings to make a difference where they spend 40-60% of their waking hours, and that's at work. 

I think in a world focused on optimizing people, processes, and technology, process and technology tend to get a lot of attention. We're always looking to leverage exploding AI applications to reduce our workforce's focus on menial tasks and the like. But while that's valuable, it also risks taking the spotlight away from the value of human interaction and engagement. To me, that's a risk in this scenario we find ourselves in. 

It's kind of fascinating. I think the first comment would be it's an and, right? I think we forgot the and. It's almost like how we use process and technology and minimize the challenge of managing people. It's a failed experiment. It's how do we process technology and fully liberate and unleash the talent of people. I think that becomes really important. The thing that we found early on was that, we forgot that human beings work here. You know, we see people engaged in all aspects of their lives. You see a mom that runs a bake sale and raises $2 ,300, or you see a dad who's a coach and somehow organizes a team tournament and it's fabulous for everybody involved. But when they go to work they're seen as a task or a job, or a proofreader, whatever their official title is.  

I think it's really important to recognize that people are engaged everywhere in their life, just not at work. And that's in so many dimensions.  

I used to joke, you go to a concert and when the whole concert crowd starts to sway to the music, nobody has to put up a sign and say, now start to sway. It's a natural event. But the question really becomes, what are the natural things that motivate, that inspire, and that engage people that we've blocked ourselves out of in the workplace?  

What does that look like? How do we actually get our people to be in sync, be in unison, roll in the same direction, fully engaged? 

I think it starts with a mindset. I'll never forget we were in California with a large distributor and they were trying to make some changes. We sat down with their people and really began to talk about the business. He just slapped himself in the head, he goes, “You know, it just hit me. We spent the last 10 years trying to tell our people how to do a better job, assuming it would improve the business, but we never told them anything about the business. And if we would have really brought the business to them, I am at this moment really confident that they would have came up with better ideas than we could ever script for them.”  

And so, I think the first thing you've got to do is you've got to change your mindset. As leaders, we're really not trying to create implementers of our ideas, we're trying to create creators of better ideas. And so how do we begin to really bring the drama of the business, the challenge of the business, the opportunity of the business, the threats to the business, to people in a way that first and foremost, they understand it. But secondly, we then step back and let them figure out how to solve the biggest puzzles we face on our adventure.  

I think that's the first key and that is the belief that people could come up with better answers than we'd ever script for them if they truly understood the drama and dynamics of the business the way just a few of us do.  

We spent six months figuring out our strategy and then expect in an hour meeting for people to jump up and down and clap and say, let's go. I mean, it's ludicrous. How do we begin to really create a company of business people that really have the acumen, the understanding, the curiosity to really help us win? One of the pictures I used to use that's fascinating is a grandfather with two grandkids and they're sitting down in a bedtime story and it says our strategic plan. The point is whoever takes their kids to bed with a bedtime story on the strategic plan, they take them to bed and read them a story. And that story has an adventure, and that adventure has meaning, and that adventure has ups and downs, and ultimately, hopefully, there's a victory and that's what there's more drama and adventure in our businesses. We have found a way to mute it, to paper over it, to try to compartmentalize it and to make it so dull and boring that nobody would want to be part of it.  

The real key is, you know, how do we unleash the stories of our businesses? And with the full understanding that if people understood those stories and were part of those stories, they would write better chapters of the end of that story or the next version of that story than we could ever imagine.  

That's a very poetic way to describe the challenge of a lot of businesses out there. Can you give a practical example?  

There are quite a few of them, I have I have a couple favorites. One would be a large beverage company, and the beverage company was with a lot of employees, tens of thousands of employees, and they were really trying to change the beverage company from a carbonated soft drink company to a total beverage company, which meant they went from, we're going to go from literally a handful of SKUs, to hundreds. That would mean that we would have to change everything we did, from new packaging to new routes. It was just a massive change. Most of the members of this organization said, "You know, hell no, we won't go.” They had all kinds of reasons. All of that was profoundly rational, but a huge stop to sort of expand this business beyond what it currently is. And so we did two things.  

We took, and we do these things called learning maps, which are 40x70-inch visualizations of business systems where you don't have to, figure out what it is, but we would try to simplify the complex. Once you do, now the question is, with that insight, what could I do about it? So the first one was the big picture. And so we looked at all the forces of change in a beverage world, changing carbonated soft drink volumes going down, proliferation of new products, aging populations that drink less sugar, new competitors, changing purchase occasions, all of these things, and for the first 10 minutes, most of the thousands of people said, "We're not going to change, just go back and try harder." By the time we got about, 20 minutes into this, people had a haz extraordinarily rapidly. And so, you know, whether they had a high school degree or a PhD, they were having robust conversations on all of these forces and factors that were sort of culminating in either a tremendous threat for those that stayed still or an opportunity for us. They went from, we're not going to change to how quick can we start to make these change in 90 minutes.  

The CEO said, I've tried for the last two and a half years to get people to sort of embrace this with no success. And he said, how did you do that? And the fact of the matter, the way we did it, is we got people to see the entire horizon, to see all the forces and factors, to compare and contrast the data stories, and to talk to each other about what they thought they knew and then what this new information showed them, and then ultimately what their new conclusions were, and those new conclusions or ah -has create a new sense of willingness to behave differently and be part of this. And so it even got to the point where a couple of people said, what's holding us back. And a colleague said to another colleague, well, “One of the things holding us back is the fact you don't fill out those customer information sheets, you throw them in the garbage every week and those fuel this change.” And he literally said, “Give me the sheets back.” And so again, the whole point is people without information, without understanding, without comprehension can't possibly take responsibility for it. 

Our experience is that people with understanding, with comprehension, with literacy around the drama and adventure we're on can't avoid responsibility for it. And that has happened in company after company after company.  

There's another company, it's one of the icons of American manufacturing, and they had a $3 billion company total revenue, they had about $600 million tied up in working capital. And they had tried for three years to try to reduce that, tell their people we need to redo it. Not any movement. We found a way visually to look at the balance sheet and the P&L as a run. It was called the money run. Where does the money come from? Where does it go? How much do we keep? And what do we do with what we keep, 90 minutes of people really beginning to understand the circulatory system of a business. Six months later, they reduced working capital by $500 million.  

I could tell you story after story after story where people without information and understanding or being part of the adventure can't take responsibility for it, sit on the bench. Once you get them off the bench and get them in the game, they play and they play in an extraordinary ways that surprise even the most seasoned executives.  

Well, I'm struck by not only the impact of those stories, but also the reality that, I can't think of too many companies out there that are doing what you just described. This approach is not prolific by any means.  

I think the bigger you get, the more you get concerned about standards, and you get concerned about consistency, whether it's consistency of brand or it's consistency of process. And so that all makes a lot of sense.  

If you're running a QSR restaurant, you don't have the manager and the crew show up every day and decide, how are we going to do it today? I mean, there's ways to do that. Yet all of the extraordinary examples of high performance somehow combines what we call the framework, which is one way every day, all day with the freedom. And that is how do we bring human variability, human innovation, human creativity and it has to be added to that because if we don't, if everybody wakes up and says, I can't wait to be average today, you don't have extraordinary. There is this paradox and the paradox, we call it framework and freedom. We are going to have things that we do one way everywhere, and then we're going to have things where we want people to bring their skills and capabilities and technicolor. One of the ways we try to make that simpler in organizations for people and for leaders is we call it hard lines, guidelines, and no lines.  

• The hard lines are the things you don't violate.  

• Then there are some things that have borders, guardrails. So, between these guardrails there's variability and flexibility.  

• Then there's no lines.  

And so this is where you bring all that you have to offer. And the combination of those kinds of understanding of where we play one way, where we play within boundaries, and where we play the way we think we can exceed expectations is a little more complex than scripting everything the same for everybody. But the results of it is phenomenal.  

Company after company that's been able to do that, gets the advantage of consistency and the exceptionalism of human creativity and human performance.  

It strikes me how many times organizations have claimed to value their teams' ability to think outside the box, value innovation, value creativity. And then they tell their employees, 'Now go do what you're told.' It's contradictory. Where does the innovation really live then? At just the director level? Because employees below that level don't seem to be exercising creativity. 

And I think that really sucks the life out of people who joined the organization expecting their voice to be heard, their unique talents realized, and their creativity fostered. But then every time they try to think outside the prescribed box, they're told to get back in line. 

This happens time and again, not necessarily because leadership is vindictive or doesn't believe in employees' potential, but because there hasn't been a clear strategy with guidelines and guardrails to empower employees and give them that framework to truly be their best, innovative selves. 

I think you're absolutely correct. I mentioned the learning maps, which are all driven by visualization of business systems and strategic dialogue, what you find is that many leaders have been sort of groomed to maintain control, but they don't know how to give up control and get better performance. The way you give up control sometimes is not predicting or directing, or telling, or selling an answer, but framing the question and letting people come to an answer. But the idea is, it could be a heck of a lot better than mine. Now that takes some confidence even more. It takes some examples of where that could happen because once the thing becomes unwieldy, then it feels like I'm not doing my job.  

I can't tell you how many leaders when we've sat and watched, six to eight people around a business visual of a system said, well, what if they don't come up with the right answer? And I said, well, let's watch.  

• For the first 10 minutes, they write all the things people aren't getting.  

• And for the next 10 minutes, they start to cross it out.  

• And for the next 20 minutes, they write notes.  

Whenever I asked them, what did you do? They said, well, they didn't get it the way I thought they would, so I was getting all the things they'd miss. And then in their own way, they made connections different than I would have made them, so I started to cross out what they got different the way I would have thought they got it. And then I said, they came up with better ideas than I could ever, ever come up with so I wanted to capture them.  

And so you went from this place where:  

• These dummies don't get it.  

• I guess they're getting some of it  

• I'm the dummy that doesn't get what's possible if we really engage the hearts and minds of these people with a belief that they can help us achieve results far beyond what we would expect.  

And so I think now you have to witness that a couple of times, right? You have to witness that when you put people together and they begin to co-explore, co-examine, co-think, co-challenge, and co-answer that you come up with something much more powerful. It's not one plus one equals three. It's like one plus one equals 23 because there is this dynamic of wisdom that gets extracted from these 8 to 10 people now applied to the challenges we face. 99 % of the time, they don't stray off track. They come up with better ways to do it.  

Leaders are barbarians in the way that we want to engage our people, and just direct tell and sell, are dumbfounded that the untapped intelligence and interest and curiosity and motivation and wisdom of our people. 

 I had one executive with tears in her eyes say, welcome to the church. And I said, what do you mean by that? And she goes, we always knew they were capable, but we never had the courage to be vulnerable with our people to the extent that they could rise to the occasion and watch what's happening. This one happened to be in a room of 12 ,000 people where all tables of 8 to 10 were engaged in their business as the concert they went to the previous weekend, they were swaying and moving and singing and dancing and whatever else the music inspired them to do. It's so fascinating. 

I think people absolutely want to be themselves and bring all they have to offer. It's just unfortunate that with 70 % of our people still not actively engaged, there's just not an environment for them to do that. Which was kind of why we wrote the book, What are your Blind Spots? We had found techniques and methods where we can get large groups of people to quickly engage in dialogue that authentically moves their thinking forward. I came up with profoundly important answers and responses to the challenges. 30 years later, we just found the thing was so fascinating. If you look at the research, cancer deaths and highway traffic deaths, came down by like 30 % over the 30 years. There's been massive improvement in those two categories that 30 years ago, the percentages were just extremely high and troubling. 30 years later, the percentages on people actively engaged in the workplace haven't changed. So why is that? And so I think we set back and said, we think leaders have some real blind spots that we want to see if we can challenge and see if it begins to move that ball down the court too. And that is that how we think about engaging our people, involving our people in our businesses needs to be challenged.  

I couldn't agree more. I had my team down to Florida in January this year. We've gone through a tremendous amount of change internally, spearheading the launch of a new product that's bleeding edge, like first to market. The team is just going, what are we doing? We have no process for these things in place. We don't know how we're gonna get where we're going. The number of times I sat in my office, where I've been just up there for hours scribbling ideas and erasing ideas and just trying to rack my brain to go, how can I help them be successful? And I had this moment last fall where I went, why am I doing this? They know their job better than I know their job.They know their customer interactions more than I know their customer interactions. They know what they're hearing in the field more than I do. Why aren't they doing this? So we gathered the team and we brought everyone to Florida. And for three days straight, we just troubleshot. I'm going, yep, never would have thought of that. Or that's not the way I was approaching it.   

I think part of it is how do you, as a team, as a group, frame the better questions and then engage in those questions. We always say the dialogue is the oxygen of change. So how do you make this a process that lives and breathes in a way that you're open and vulnerable to the challenges and wherever it takes us.  

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Jim Haudan is the co-founder and chairman of Root Inc, helping organizations transform through innovative employee engagement strategies for over 25 years.

He's the author of bestsellers "The Art of Engagement" and "What Are Your Blind Spots?" on unleashing workforce potential.

A sought-after speaker on topics like leadership, strategy execution, and change management, Jim shares his insights through speaking engagements, publications, and working with top companies globally.

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