Radical Leadership, with David Burkus – Episode 180 of The Action Catalyst Podcast

Author, professor, and organizational psychologist David Burkus shares insights from his book “Under New Management”, including why salary transparency shouldn’t be scary, tips on setting email limits, being in the business of elimination, and why great leaders don’t innovate the product, they innovate the factory.

About David:

David Burkus is a Leadership & Teamwork Expert, Internationally Renowned Keynote Speaker, and Bestselling Author.

One of the world’s leading business thinkers, David’s forward-thinking ideas and bestselling books are changing how companies approach leadership, teamwork, and collaboration.

A skilled researcher and inspiring communicator, Dr. David Burkus is the best-selling author of five books about business and leadership. His books have won multiple awards and have been translated into dozens of languages. Since 2017, David has been ranked multiple times as one of the world’s top business thought leaders. His insights on leadership and teamwork have been featured in the Wall Street Journal, Harvard Business Review, The New York Times, CNN, the BBC, NPR, and CBS This Morning.

A former business school professor, David now works with leaders from organizations across all industries, including PepsiCo, Fidelity, Adobe, and NASA. David’s keynotes aren’t just entertaining and enlightening, they’re evidence based and immensely practical—offering leaders at all levels a set of actionable takeaways they can implement immediately.

David Burkus translates intricate research into actionable strategies. His thought-provoking keynotes not only inspire but equip businesses to reimagine their potential and redefine their workplace.

Learn more at DavidBurkus.com.

The Action Catalyst is presented by the Southwestern Family of Companies. With each episode, the podcast features some of the nation’s top thought leaders and experts, sharing meaningful tips and advice. Learn more at TheActionCatalyst.com, subscribe below or wherever you listen to podcasts, and be sure to leave a rating and review!

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(Transcribed using A.I. / May include errors):

Host
David Burkus is the author of Under New Management. His work is basically talking about why so many of the common day business management principles have become outdated and they just, they just don’t work anymore. And anyways, David, welcome to the show.

David Burkus
Well, thank you. Thank you so much for having me.

Host
So the whole under new management thing, like, where did that come from? Like, why? Why? Why this book? Why now?

David Burkus
Yeah, I was an undergrad English major, of all things. But in college, I fell in love with social science and thought, like, okay, there’s got to be a way to put these together, popularized insights from social science with good storytelling. And one of the phenomenon I found actually was was in the process of promoting my first book, The miss of creativity. You can’t, you can’t write a book about creativity innovation, and not be talking about your Googles and your three M’s and all of these companies that have, you know, a little bit different workplace practices, a little bit different management practices. And those get a lot of questions from people. Well, should we do that? Should we do 20% time, or should we give everyone free food, or that kind of thing? And this is where the idea for under new management came from. Is okay, let’s tackle those. Let’s actually look at what are the things that a lot of newer companies and even older companies that are trying to be more creative or innovative, what are the things that they’re doing that’s different from business as usual? And is there an explanation for why it works? And so we started with probably 20 or 25 different leadership and management practices, and then narrowed it down to Okay, these are the ones that we can see through the lens of social science. Are actually a really good idea, and also maybe some ways that you can be in the spirit of those ideas without going full on Google and giving everybody 20% time and free food, right? You might actually be able to kind of tap into it without going the full way.

Host
Can you explain? I don’t think everybody knows what 20% time is.

David Burkus
Oh I’m so sorry. So 20 Google, it actually started with 3m But Google kind of made it more famous. So it actually came from the senior leadership of 3m realizing that they were terrible at judging what ideas were going to be amazing products and which ones weren’t. And so one of the things they said is, if you’re an engineer with us and you’re doing research and development, you can have 15% of your calendar every week to work on whatever project you want. If you think it’s got potential, and we don’t agree, you still have this protected space to work on those ideas. And Google picked it up when they started working, they actually increased it to 20% so now you could have essentially one day out of every week. Of course, some of the over tax engineers joke that it actually should be called 120% time, because it’s sort of like you can do it, but you got to get everything else done. But the idea comes from exactly this, this realization that in senior leadership and in management, we might not have all of the information anymore, and it may be a better idea to give them some room to make decisions themselves, because they might have a better idea of what’s going to work than we can tell from our Excel spreadsheet in the conference room, right?

Host
So give me the goods. Like, what is the thing that like blew your mind that you said, Oh my gosh, I can’t believe people are doing this and it actually works. Or what are some of those practices that are really radical?

David Burkus
So I mean, I’ll tell you two. I’ll tell you the easier one that everybody says, like, I can’t believe that that works well. And then I’ll tell you the hill that I didn’t think I was gonna die on, but I did, which is a big setup. I hope I can deliver on that. But one of the ones that immediately everybody started asking me about is, what about these companies that have unlimited vacation, right? What about these companies that just say, ah, you know, you can take off whenever you want. You know your work, etc. It seems like sort of a management nightmare, because you never know who’s going to be at work when. But when we live in an age where most people are doing incredibly creative work or problem solving work, even you know everybody but accounting these days in a company is charged with doing creative work or solving problems or something like that. We still don’t really like creative accounting, so that’s, you know, that’s okay, but so when we’re doing that, what we need is a little bit more autonomy, a little bit more control. And what was happening at Netflix is probably the one that popularized us the most, because there was a feeling that you’re not controlling what when I’m working and where I’m working when I’m on days, on why do you need to know and sort of nickel and dime and keep track of all of my days off. And the the senior leaders of Netflix said, you know, you’re, you’re exactly right, and that’s they, they picked up on the fact that it was communicating sort of a distrust for employees that they wouldn’t act in Netflix’s best interest. So they said, so we’ll, we’ll just get rid of it. And you know how much time you need this year. You know your family life and your home life. You know your objectives for the company get those done. And they’re very, very true on that. But what I found most interesting is you dig into it, and one of the biggest complaints is everyone’s either going to take too much vacation or they’re going to take not enough. And when you look at the data on how many vacation days companies that switch to this take, it’s actually about the same as before. The difference is that the trust. Piece. The difference is the company saying to its employees, we trust you to act in our best interest with all this stuff, and we’re going to put the ball in your court. And the power of sort of autonomy and responsibility that brings makes a much more motivating workplace. So it’s not actually about the vacation days at all. It’s about trust.

Host
Amen, that one’s really cool. Tell me about the other one.

David Burkus
The hill I didn’t expect to die on? Salary transparency, letting everybody know in the company what everybody else gets paid. I get it. I get people’s fears at it. Because when I first started looking at this, I was sort of like, yeah, that makes me uncomfortable. I don’t want people to know what I get paid, etc. But the truth is, I believe I’m an optimist. I believe that most companies are trying to find a way to pay all their people fairly and equitably and in relation to how much effort and value they’re creating for the company. And if that’s the case, then there’s not much to lose by sharing it. The fear is, if we share it, everybody’s gonna get all crazy. Well, the truth is, everybody’s crazy when it’s secret, because we’re terrible judges of what each other get paid, right? We make, we make all these assumptions based on what car they drive. Well, they might, you know, have a really well earning spouse, and they don’t make a lot of money, right? So we can’t judge it by that or clothes or things like that. We’re we’re terrible when it’s a secret at judging what people get paid, and as a result, we’re more miserable, because we’re more likely to assume that somebody is overpaid or somebody else is underpaid, etc. But when you can point to the system and go, here’s how we determine everybody’s salary, and you know, it’s fair, and now you can trust us, there’s actually a huge increase that happens in morale, because people believe that if they work hard and provide value, they’ll get some of that value in return. Now they’re directed at the formula or the algorithm we’re using to determine pay, and not Larry, who’s been here 10 years, but doesn’t work as hard as I think I work, you know, on day one, etc. So now we can have a much more realistic conversation about, okay, well, we weighted experience at, let’s say, 30% of the formula, and you think it should be weighted less, because you think if you bring them more, that’s this is a conversation we can have now in a secrecy condition. You have no recourse. You might know that Larry gets paid more because he’s been around 10 years, but you can’t bring that up with anybody because you’re not supposed to talk about it. So it might not make everybody happy, but at least we can have an open conversation, and we can make refinements to the system when there’s a kind of a consensus that you’re right. We overweighted something or underweighted something in our formula.

Host
Do you put executives in the same category?

David Burkus
So some of it is public. What’s interesting is, with stock options and things like that, it actually is a little more murky than it than it should be. And I think you know, the best way to answer that question is to say that I don’t actually advocate that companies go from zero to full transparency right away. There’s sort of a sliding scale, right? And so you might be in in total secrecy. And if you can take the step to going, well, here’s how we determine how everyone gets paid, and we’ll share the formula. And I mean, if you wanted to plug in the numbers and do the math, you could, but at least you know there is a uniform system. That’s a pretty big improvement. And that’s that’s a lot to ask of people to adjust to in the course of a year or two years. So just take that first step, and then if you feel like you need more, take the next step very I don’t think a lot of companies can manage the transition to sort of full on transparency, especially for that reason, but I think everybody can take a step towards it and benefit from it. The culture of sales is actually a really good example. There’s sort of that friendly rivalry that goes on. You know that so and so got paid more than you, but you also know that you can point to what they’re getting commissioned on and that they produced more, and it creates kind of a friendly rivalry that I think is good. I think when it’s not a friendly a rivalry is definitely a bad thing. But sales is a great example of it sort of working pretty well.

Host
Are you finding that most companies are resistant to this stuff?

David Burkus
So there’s 13 practices in the book, lucky number 13, which really came about from the process of elimination. That was definitely not a goal. And I’ve yet to find a company that does all 13, some all out of New York City. Dane Atkinson is their founder and CEO. They do I think eight of the 13 practices. And really that’s because there’s no I would love to be that consultant that’s got kind of the four box model and the slide deck, and I can travel around and be like, this is perfect. Every company is a little bit different, right? So you’ve got to kind of tailor it. So, you know, I don’t say everybody should do all of these. The goal is to kind of show, here’s why it works in a very public, sort of famous example, like in Netflix. Here’s the science behind it. Here’s a couple other smaller examples of companies that are in line with it. And if you feel like it’s right for you, this would give you a place to sort of try it. The one thing I advocate almost every company begin to adopt is set limits on their email right there. We’re in this 24/7 world, and I think it’s killing us, so I think we need to either set limits on evenings and weekends, giving those back to people, or even setting hours in the day, like from 10 to two, we don’t do internal email because that’s when our people are focusing in on the work. I think that’s one that almost any company should should really think about, is, are we overloading our people with too much communication because of email? So a lot of it has to do with settings, right? And one of the things I actually love about Slack is the very first time I ever used it, about two or three days in, it actually said you’re getting too many notifications. So we’re gonna scale it down a bit, which I love, right? Because it’s, it’s the anti email, right? And that’s really, that’s really the issue is, what are we gonna do to our settings? We switch it over to slack. That’s great. We could keep it as email the different. Says we’ve got to, as a company and as a culture, kind of say, what are our communication times, and what are the times where we have off to focus on the, you know, as Cal Newport would say deep work, or what are the times we have to focus on friends and family, et cetera? So that’s the biggest thing is, is making it a choice when people go to the well to drink and to communicate, but also setting limits on when, as a whole company, we decide these are off limits times.

Host
Yeah, that’s, I mean, that’s pretty out there. So you mentioned there is a line, it’s about the reinvention.

David Burkus
Yeah, great, great leaders don’t innovate the product, they innovate the factory.

Host
Yes. So say the line again and then tell us what it means.

David Burkus
So great, great leaders don’t innovate the product, they innovate the factory. And yes, obviously great companies are built on innovative products and services, but those are the result of great leaders looking at, what are the ways that we’re structuring our company, what are the ways that we’re leading and managing our people? Our people are going to create the innovations. And so what we as leaders need to do is innovate the way that we’re letting them work. You know, I opened the book, I opened under management, with the story of Frederick Taylor, who sort of invented the first management Bible, if you will. And really was that epitome of, kind of the micro managing manager got a lot of efficiency done, but kind of drained the soul of it. And ever since then, the great leaders have been finding ways to reinvent sort of his work for their specific company. And as we get to doing more creativity and innovative work. We need more and more people looking at what works and what doesn’t work for management literature, and being willing to innovate their practices so that their people can be innovative. Okay, how do I innovate the factory? How do I know which one to tackle? I think leaders should be especially for large organizations and big bureaucratic organizations, but also entrepreneurs who are kind of using their old companies as a model for how to run their new company. Should be in the business of elimination. In other words, like the number one piece of advice I give to leaders and the managers is figure out what are the things that are blocking your people from doing best, their best work. It might be the vacation policy, it might be email, it might actually be the secrecy culture, whatever it is, and eliminate that. And so that’s one of the reasons I say that it doesn’t, not all of it works for everybody, because some companies didn’t need to eliminate it in the first place. But that’s really what I think leaders should be about, is what’s keeping my people from doing their best work, and then how do I eliminate it or negate it?

Host
I think one thing that every leader who’s listening has to ask themselves is, what is leadership going to look like in the future? What do you think are some of the next big changes, and what would you tell leaders in terms of what they can be doing to prepare for what’s coming? Because things are changing so so freaking fast?

David Burkus
So there’s a couple things to unpack there. So to kind of answer the second part of the question. First one of the things I wish I wrote, I wish great leaders don’t innovate the product they innovate the factory was my idea, but it stains so stains. But one of the things I wish I’d thought of before the book was published is someone said it to me this way, that the future is already here. It’s just not evenly dispersed. And that’s really what a lot of these practices are. They are glimpses at this is where the future of work is headed, because it’s being demonstrated by those companies. And so take a look at them, and you might want to sort of turn your nose and go, that would never work here. Well, it might, but no one may end up working here if we don’t make some of these changes. The other question really speaks to clay Christensen’s work on the innovators dilemma, the idea that companies like Netflix get big because they noticed a small part of the market that bigger company said, and it’s not worth it, right? Netflix actually attempted to get bought by blockbuster, right? Attempted to say, like, We’ll handle all of your what will be your online demand for movies and blockbusters like, that’s not worth it, right? Now, we’re making way too much money in these retail stores, so it wasn’t worth them investing in. But to a small company, that little niche of the market is enough to sustain themselves, and then they use that niche to scale up and to and to move up market, as Clay Christensen would say. And so that’s the biggest piece of advice for leaders in big established companies, is don’t neglect those small things that might might look like they have a justifiable ROI if you can kind of break even on it, but still establish a foothold, you’ll have a better sense of where the market is going, and you’ll be able to sort of adjust with it. It’s the companies that do that that’s that have sort of Netflix insurance, right? Because they already do have a foothold in that area. So when the market shifts that way, they can make the pivot way easier than a company like Blockbuster that’s just been ignoring it for decades.

Host
So if there’s one thing people could take action on, right? Action catalyst podcast is like, what is something that we can do now to prepare ourselves or to better ourselves as leaders? If there was, like, an idea or a practice or principle that we could we could do today to prepare for, you know, what may be a completely new set of management philosophies and beliefs coming out in the next few years, what would that be?

David Burkus
So I’ll give you a small scale one. I mean, the big one is great leaders don’t innovate the product, they innovate the factory. But the small scale one that really sort of changed my life as we were talking about email and not being on all the time. And one of the things that I did was I developed a two device strategy, so I have an iPhone and I have an iPad Mini, and when I get home from work. I switched them out. And the difference is, the iPad Mini is just entertainment and friends social media. It’s nothing work related. And it’s been amazing. Just that ability, that physical routine of switching them out and telling myself I’m officially off for the next few hours and it’s time with friends and family has been huge for resting and re energizing, so that the next day, when I wake up and I take my work one I’m far more focused and more able to get everything done which is, which is awesome. Been a huge decrease in stress, increase in productivity. And it’s weird because it’s sort of the anti tech solution. But I think the future of work is really having to figure that out. How do we not be always on so we can do that deep work that creates value?

Host
Very cool. DavidBurkus.com, and David, we appreciate you pushing the envelope here.

David Burkus
Love it. Love it. Thank you so much for having me.