Linda Hesselberg: Hello, and welcome to Lorn. My name is Linda Hesselberg and we are recording today from the Nordic Business Forum. My guest today is a professor at the University of California Berkeley and best-selling author Morten Hansen. The topic today is ‘Leadership : The future of work’. Morten first of all great to have you here and welcome.

Morten Hansen: Thanks for your invitation.

Linda: Before we dip into the future of work. I want to know who Morten is and how you get into leadership.

Morten: Yeah, I actually grew up in Oslo. So it's really nice to be here in Oslo but I left quite early and I was working at Boston Consulting Group and doing strategy work for clients and I got more interested in organizational leadership. Then I decided I want to become an academic. So I kind of jumped over to Stanford Business School to do a PhD in topics called ‘Organizational Behavior’ and part of that is leadership. How you organize, how you innovate, how you collaborate and from then onwards I just got smitten by that topic. I think it’s so important, it has been ever since.

Linda: I wanted to ask you about your book ‘Great At Work’. It's been a 5 year study based out of 5,000 people. And first of all I want to know why you started the research? And after you did it, did the results surprise you? 

Morten: Yeah. That's an academic I do research and you think they're going to take two years but they never do, it's always twice the amount of time that it takes. The linear show that book, this one I've been working closely with my friend and co-author Jim Collins and game wrote a very famous book called ‘Good To Great’ and we did a follow-up study on Good To Great in a book called ‘Great By Choice’ and these are really about companies. So we're studying the future of companies and wiser companies do well and others fail. Then after finishing Great By Choice I thought myself well, wait a minute, how about studying individuals and teams inside of organizations and not entire companies where I can apply the same kind of methodology or idea which is to say, take a large set of people and look at what is the difference between those who succeed and others. When you mentioned 5000 it is very important to note that I didn't study 5,000 successful people as 35,000 people in a kind of random sample more or less, and then there was a huge variation in performance. That's what you need. You need to sort of compare the best to the rest. So I went down that path as saying, “If you're going to study individuals, you need to have more of a just 10, 20, 50, you need to have a large sample”, and that led me to 5,000.

Linda: And also you learn from the people, kind of the bottom, what do they do? Why do they do it?

Morten:  Right. Yeah exactly, you know in order to understand success we have to study failures too.

Linda: What separates the high performers from the low ones? 

Morten: Yeah. So there were many surprises to this and in some of the surprises as a little bit to do, you know about the new-outs the details. So for example, the very best, it's pulling a principle called ‘Do Less Than Obsessed’. And I talked about that on the main stage.The first part is Do Less it’s basically focus, extreme focus. Now, I'm not the first one to say : focus on that, people have been saying that for years. What they have not said is, once you have chosen a few things to focus on you must be obsessed. Because, if you don't obsess over those things, you are not going to out-compete somebody who's doing five-things when you're doing one-thing, and that's also brutal. Obsession is brutal, but that is the part people haven't talked about. They just talked about, focus, prioritize, it's not enough, and that's what I mean by the nuance, and that's price makes a great deal because, if you're good at prioritizing the rest will follow and it's not true. It's simply not true.

Linda: But, how do you prioritize? How do you know what activities to obsess upon? Especially now when someone is certain what's going to happen, you feel you have to be on top of almost everything.

Morten: Yeah that's important. You know, I started off with this story of the race to the South Pole as an illustration. It is a hundred year old story. What does it has to do with future work? It really has to do a lot because they faced incredible uncertainty, nobody has gone there before, and that is the world we live in right. If you mess up the consequences are huge, you know, it's not you go out of business or you fail completely. So it's a very relevant story for us. What I discovered is that people are chasing the wrong things, often the wrong metrics and they don't ask the question. What is it that I do, that can create incredible value for others? So they might put out things that are just about volume. So I had a bunch of examples today. It is one of my favorite example, logistical warehouse in high tech company in the valley that was shipping electronic products to corporate customers anywhere. Measuring whether these shipments went out of the warehouse on time according to the schedule, (and the escort is extremely well), they forgot to measure what the customer thought about the shipments. And when they did that they discovered a third of them arrived too late for being useful for the customers.  And they never measured that, they did this for 10 years. So measuring, you know, according to your own internal schedule it's a type of productivity measure, but what the customers need is a value measure. And it's very fascinating to me working at SMAC in the middle of Silicon Valley, I live in San Francisco. Is it that so many tech companies make this mistake? I will give a couple examples. So one is YouTube. What is the internal measure of YouTube and it's actually the number of minutes and hours that you watch or re-watch the videos. So, for hours of watching some silly videos and wasting your time on YouTube, does that necessarily equate with value for the listeners, for the users? Not at all. Maybe it's better to have high quality viewing time as opposed to just volume of viewing time. Another one is a company that I'm sure listens very familiar to Slack. Which is the internal cup of the messaging system. They measure the success of Slack on the basis of number of users and user engagement. Which is equated with the number of hours they sit and use slack. How many messages and how many hours and how many downloads, but they never measure whether or not those programmers and users are more productive as a result of using Slacking. And it's incredible. That's a value metric. You know, we're better software programmers because we are using slack, they never measure that. Harder. Yes, but more important.

Linda: Can you mention SMAC in your model? Can you tell us a bit about it? 

What does it stand for? 

Morten: Yeah. This goes through the work of Jim Collins and other book Great By Choice. What we found is that companies are really thriving and doing well in a very disruptive fast pacing kind of industry. They have a very core operating model and let’s consider airlines as an example, you know recent airlines, exactly the kind of business they're in. They are between two cities. They have low cost, low fare freaking departure. There is no first class. There is no food or nothing.

Linda: They had a bus-on-wings kind of business model.

Morten:Yeah. And it's incredibly simple. But, for the fly within two hours, they only use 737s, 10-minute turns at the gate, etc. And we call that a SMAC recipe. The first letter is ‘S’ for sugar, is that as ‘S’ for SYSTEMATIC. It is actually a formula for success there, if you can do those eight things on the list, you create an economic profit. Then the ‘M’ stands for METHODOLOGICAL that It has to be based on what works, not sort of your idea, but proven empirically, maybe for experimentation or copying or whatnot. Then there is an ‘A’ and then there's ‘C’ at the end and that stand for CONSISTENT, that this is not a list of taxes you change it, like you change your clothes every day. It's durable, you have to change it over time. But if you keep on changing too much, you'll never be good at something and that's the only thing that I think is a misnomer in a lot of tech today, which is agility and many miss-interpreter what agility means. They think they should just shift with the wind all the time, and you have to pivot. But many times if you do only pivoting all the time, you'll never become really-really good at one thing. I mean, the classic example for Tech is Google and search. They stayed with search in the early days for 7-8 years while Yahoo! was all over the map. Why did Yahoo! become, you know, B to C media company and on, and Google became number one in the world of such. Where did Yahoo! start with search? 

Linda: So many people think you should innovate all the time but you should maybe more stick to your course and be experts in what you do.

Morten: It is a combination between the two. You need to Invent all the time. But if you forget about the core, if you are changed too much every year, every six months, you don't have any consistent performance. The SMAC operating model sort of gives you that and it crystallizes it.

Linda: Back to the ‘Do Less Than Obsess’ part of your book. How can leaders and managers help employees to work smarter by finding the right activities to obsess about?

Morten: Right. So that's a huge job of management. This may be the most important which only few managers can do,  it's more important than that of all the things that they could do in an organization, in the business. It's the ability to say, let's not taste 10 opportunities. Let's say 3 right, go fewer not more. And you make that priority list, and once you've done that, it is to sort of give those charges and inspiration to your team. Now, you might have people working for you that they love starting new stuff. They don't want to follow through and there is a bit of discipline there. You shouldn't start a new initiative before you're finished the first one, and so if you're working on a product feature, you know this, go all in and make it the best product feature, before you start with your next feature. And people sort of abandon the first one before they fully finished. Because let's face it, it's great to start something new, it's fun, it's creative. But it is the follow-through which is important. You know, there's a story about Steve Jobs that when he had a top 100 meeting he would put up a flip chart and asks, okay, what are the 10 most important thing we can do in a company next year? As of, you know, they move things up and down the chart, and there will be 10 things eventually on this flip chart. And then he takes a pen and go up to the charts, and will cross out the bottom seven. He said, we can only do 3 things.

Linda: In your session earlier, you talked about the purpose and passion and purpose should be something you make strategic decisions upon and it shouldn't be just one of those things your PR firms tells you to put on your web page. And you also talked about how you should recruit people based on whether or not they connect with your purpose and that they have a passion. But how can the leaders recruit based on these soft skills, how do they see that the person in the interview actually have a purpose, that connect with their own purpose.

Morten: Yeah. It's a great question, it is a difficult thing to do. But, first of all, purpose should drive you know, it should be a statement and it should also be a belief, and why you're here beyond just making money and that should drive the strategy of the Firm. Let’s consider a French Food Company as an example.They changed the purpose of providing healthy food and they had a cookie business. Now, what do you do with a cookie business, right? If you want to be true to your purpose then you shouldn't be in a cookie business, because that's not healthy food. Right. Or doing something different like, different kinds of cookies, they sold it off. But is that really being authentic to your purpose? So that's the first thing it's not about having a statement that looks good on the website. It is about making sure it follows through into your strategy, the products you have in it, the services you are providing. And then you need to recruit people into that. You want to have people who believe, who have a passion for healthy food. Because I also show data that, if you have people feel the purpose, they will perform better, they provide more energy into the job. But it's a difficult thing to know that. Right, because they're, you know, they show up for an interview, and they want the job. They may care nothing about the idea of healthy food. They just want to have that marketing job. So what do you do? I mean, you could say well are they fired up, right? I think at a minimum, if they haven't bothered to do some investigation about the purpose, right? One thing I look for is, are they bringing up the purpose? Have they bothered to figure out, that is what this company is about. It's incredibly hard for an interviewer, and I know companies that have given up more or less using interviews as a screening device, they rely on Internships at least for junior positions, so that between the next last school year there would be a summer job that’s an internship, like say for two months. And it's sort of like taking them for a test run and observing employees. Do they talk about the purpose, do they feel like they're connected to it, do their supervisor sort of like, when they mention it, do they get fired up? You can really observe people and you get that chance to see if they really have that kind of passion for that purpose, but you really want to have people it's a selection mechanism. Right, you want people who are drawn to your purpose.

Linda: Is there any interesting controversies today, how people are being taught or how they think about efficiency or leadership?

Morten: Yeah, We have some terrible working myths out there, and especially in tech by the way. One of them is you should work, you should be a hacker, you should work long hours. Right, a coder, you know, up all night, putting in those 12 -18 hours straight, putting in those 100 hours. And of course, when you are about to launch a new product and there's a deadline you need to work really-really hard. But, what is sort of your average pace? And we think that those who work the hardest, longest hours, are the great performers and it's not true. In our statistical analysis of these 5000 people, we sort of tracked their working hours. And if you are a slacker and you kinda bring a 30 hours in a full-time job, of course, that's not a good place to be. When we get to 50 hours on average, these are US Numbers, you have a gruesome 40 to 50 hours, obviously you're working hard in your job. But, from 50 hours to 65 hours the performance Curve still goes up, but just very little. So you're putting in an additional 15 hours. You're not getting much for it, and then beyond 65 hours to curve actually turns downward. So those are the people sitting there at night, doing their coding, instead of doing good coding they are putting bugs into those codes, and they're exhausted, and so on. So it’s sort of Inverted-U-Curve in terms of performance. So the myth is that you know, we gotta work hard, you got to be busy, you know in Silicon Valley people walk around and it's almost a sign of success to appear busy. Running from meeting to meeting its like, I walk faster, I talk a brag about my frequent flyer miles, how much I fly or how little you sleep as a Badge Of Honor, even though we have tons of research that says good sleep is one of the best things to get energy. And even if they don't perform better, they give an impression that they do. But I mean, let's face it, you know flying around is not an accomplishment. To go to meetings is not an accomplishment. Sleeping very little is not accomplishment. Yet, we have this method that's what it takes, it’s terrible.

Linda: We need a work-life balance. Basically.

Morten: Well, seriously we need some balance but, if I was just saying, I don't care at all about the work-life balance if I'm a company, a startup. The only thing I care about is performance, right? Not your private life. How can I get the most performance out of you? And the myth, the wrong, the incorrect way of thinking is : I'm gonna have you work 100 hours a week. And it's wrong. What I should do, is to have you work about 50 to 60 hours a week, which is a lot, and I need you to work on the right things, ‘Do Less Then Obsess’. Not to waste your time on other stuff. And then we need to prioritize that. Now I'm getting the best performance out of you, and almost like a luxury side product is that, you're going to actually have a life outside.

Linda: And also maybe emphasize more on the value created and not the hours spent.

Morten: Exactly. Tracking hours is a terrible thing. It’s an Input factor not an output factor.

Linda: Where can we learn more about how to work smarter? Of course, there's your books. But is there anyone where you find inspiration or where maybe you found, where you went for inspiration during your research?

Morten: Well, one of the great things about writing a book is that we wrote more 120 case studies of individuals for that we did a deep dive, and we find these people have done something extraordinary, and when we got in and asked them, we figured out that they are really good at prioritizing. I mean, well, the one person that I actually didn't write about him in the book but, he is a senior partner in one of the elite consulting firms. So I met him and I asked him, how did you get to this incredible position, he is one of the rainmakers really-really incredible performance, and he said I have been incredibly good at prioritizing. I said NO to a number of things and I look at a few clients and I say, how can I create the most value for those clients and they go all in, and that is the secret of my success. And by the way, I always take a few weeks of vacation in the summer. I give time to my family and I have a work-life balance. When you meet people like those who are saying, oh boy I am under enormous pressure. But if these guys are under the people who are good at prioritizing then they could do it. And I find inspiration in meeting people. So one suggestion I have is don't seek out the person who is 100 hour-a-week person. Seek out the one who seemed to have a good life. And who is an incredible performer. Try to learn from him.

Linda: It's so easy, but it's also so hard because saying NO is so important.

Morten: Yeah. 

Linda: And it really is the best thing for the people who are giving you the job. If you can't do it then say NO, and say YES to things that you know you can do, the things you're gonna focus on and prioritized.

Morten: Yeah. We're not very good at saying NO.

Linda: No.

Morten: Absolutely, especially if you're ambitious and want to get ahead and you want to do great stuff, you think you can't. 

Linda: Agreed. If the listener should remember just one thing from our conversation. What do you hope it will be.

Morten: Do Less Then Obsess.

Linda: Yes. I agree. Thank you so much for coming to Lorn Tech and teaching us more about efficiency and the future of work and thank you for listening.

Morten: Thanks for having me.