217. What makes a better boss? With The Economist’s Andrew Palmer, host of Boss Class Podcast

15:16But once you identify the problem, approach that with an open mind rather than, okay, and this is the way we're going to solve it. Because you will often have, like meeting one, someone with a large salary and a loud voice will say, this is the way I think we should solve it. And potentially that's the end of the discussion. So ways to sort of avoid that problem are important. And I just like that phrase as a way of thinking about it.

15:44Al Elliott:You say loud voice, which immediately when someone thinks of a boss, they tend to think loud, booming voice. Some of the people who have had the, not necessarily volume-wise, but the loudest voices have been the likes of Jobs, have been the likes of Musk. But by all accounts, they're not amazing managers, not great leaders. So does that mean that we can say if you're loud you're not a great leader if you're quiet you are a great leader it's not as simple as that is it it totally isn't um so but by by loud i really mean the one that kind of silences debate uh before it's before it's happened uh yeah i think that this steve jobs um is is a sort of problem because he sort of gets wielded as this you know ace card in any kind of story or debate.

16:33And he was both a kind of one-of-a-kind genius and apparently a bit of a jerk. And so neither of those things are particularly helpful in a normal workplace. Most people are not going to invent the iPhone. Their range of achievement is going to be slightly less high. And most workplaces could... I mean, maybe we should talk about jerks, because I think actually you can get... Zero tolerance of jerks is not good. But that's definitely not code for you should behave badly. So Jobs got away with it because of what he'd done. And I'm not sure that's a useful lesson for anyone.

17:17Al Elliott:You just said zero tolerance is not the way. That sounds odd to me. I would have thought you don't want any horrible people or jerks in your company in your organization okay so i'm gonna like i don't want to be the person who's sort of arguing publicly for um you know horrible people but i think there are a couple of couple of issues one is um the definition of a jerk right it's subjective um so one person's jerk might be another person's kind of sort of grit in the oyster truth to power kind of person. So most of my columns are about trolling my colleagues, so I won't actually mention anyone.

17:57But there are people here who I can think of who are kind of exceptionally useful in the workplace because they're willing to say things in a way which is kind of, if not confrontational, at least provocative. Some people might regard that as jerk-like behavior, actually, I think it's extremely useful. So the subjectivity is a problem. Who gets to define who's a jerk? And the second is the jerkiness, if that's the word, may be coming from a particular place. It may be that that person is just not in the right job and needs to be somewhere else. Maybe that person is absolutely brilliant, but shouldn't be managing people or should be locked in a home office and not allowed to come into work.

18:54I think there's probably a lot of square pegs, round holes, which leads to jerky behavior, and you can solve that with lateral moves. People can be good in different positions from the one that they're in. And goodness doesn't just mean competence, it can also mean behavior. So for the record, not a big fan of jerks. Don't think horrible people is where you should put all your hiring effort. But zero tolerance for jerks strikes me as a bit like, you know, it's a bit Salem. It's a bit like, you know, that's a jerk. Let's get rid of him or her. and it's often not that simple.

19:39Al Elliott:So on this palmer-jerkidist continuum that we've just invented, at what point do we go, we're not accepting this behavior? Where does someone go from, they're maybe in the wrong role or perhaps they're just under stress to, absolutely, this person is just, we don't want them anymore? Well, there are certain types of behavior which are just plainly unacceptable immediately and that's you know then they're gone but there's a gray area which is you know difficult to work with really spiky gets involved in arguments leaves people feeling bruised where you might rather than okay i'm sorry we're going to have to park company you might think about it in a slightly more intentional way you know what is going on do you even realize you're being a jerk i mean some people are kind of unintentionally unpleasant to people.

20:35They just don't realize how they're coming across. So zero tolerance, I just don't like ever, I don't think, is a phrase. It just seems thoughtless. And plainly, there are some types of behavior where that's appropriate, but lots of jerky behavior is a bit more ambiguous. I think at least giving someone a chance, telling them, You know, you're behaving in a way which is upsetting. Are you aware of it? And seeing if they change, that's a reasonable first step.

21:07Al Elliott:You've spoken to so many different organizations, you've been exposed to so many different types of culture, and they're all very different, I'd imagine. But what are the commonalities? What does a great culture have to have? So there are certain types of behavior which kind of distinguish all bad cultures. The toxic culture, so a kind of institutionalized incivility or worse, is just bad for everyone. No one really enjoys being harassed, bullied, or shouted at. So that's one commonality. But I think more interestingly, the sort of good culture, it's very hard to define one good culture because people are different and strategies are different and cultures will therefore be different.

21:52so the example i like to give is there's a organization in the states which is called culture x which basically trawls through the reviews that employees leave on glass door and other sites and it basically looks at unstructured data so the comments and then pulls it together And what you will see there is in the aerospace industry, two firms which are rated above the industry average for their culture by their employees. One is SpaceX and the other is Lockheed Martin. Now, they score highly on totally different things. So SpaceX scores super high, as you might expect, for innovation, perks, because you get to see rockets taking off, and a sense of being at the cutting edge.

22:47It scores terribly on work-life balance. Basically, they're all just sleeping in the office the entire time. And then Lockheed Martin has a very different profile, where it doesn't score highly on innovation at all. scores really well on work-life balance and some of those more classic, you know, working from home sort of employee satisfaction measures. So, but both do well. So I think what I'm trying to say at incredible length is that different cultures can be good for different people. So it's not, I think it's very hard to define one good culture. The common thread though is among managers who have created a good culture or in companies where it exists is again thoughtfulness.

23:32And I think this is just the thing that always comes out from these interviews is that they know exactly what their culture wants to look like and they very systematically embed it. So there are tons of levers that you can pull to make a culture live and it's not painting abstract nouns or on the wall of the cafeteria and hoping that, you know, if someone reads the word integrity, they're going to be honest. It's much more systematic than that. So, you know, all of their hiring, all of their promotion, yes, the repeating of the mission statement, all of their performance management, and more, sometimes some of their organizational structure is designed to reinforce the values that they regard as most important to their companies.

24:21Al Elliott:What is it you've learned about teams from the people you've interviewed? Yeah, those examples, the Shopify was really just like, everyone hates meetings, how the hell can we sort this out for people? So that was a kind of less teams, more kind of like everyone in this spiral of despair about meetings. But broadly, the number one characteristic of a well-functioning team is psychological safety. Google famously did this project, Aristotle Research, on the components of a successful team, and that was the most important one. so you know that can be embedded in many different ways but a nice way of working out if you are the boss whether you've got a problem or not and this is the advice of amy edmondson who literally wrote the book on this is you know ask yourself when was the last time that you heard dissent so if you're the boss that's the question you should be asking yourself and if you can't remember you've definitely got a problem.

25:28And if actually it's a struggle, then you've probably got a problem too. So that's one component, psychological safety. Role clarity really matters. So this is what I do, this is what the other person on the team does, et cetera, et cetera. And so being clear about that without having turf wars is important. And the Netflix example is a sort of interesting one there. That's more of a sort of entire company as a team sort of problem that they were trying to solve for. But what they did, especially when they were a young company, was they would get every single employee, this is sort of relatively small at that point, and, you know, make sure that they understood everything about the P &L and take real time to explain the way in which the job that they did fed through into the bottom line.

26:27So, you know, if you're in customer service and you solve the problem, that is basically, you know, and that person retains, that is pure profit, you know, et cetera, et cetera. So just taking the time to explain how each role laddered up into the organization's mission and financials was something that they were very hot on. And it It does make sense because you can often feel completely disconnected to the health of the company and not quite understand why it is what you're doing. So if you can articulate that for people, that's really good. And then autonomy is the other thing. So people generally like autonomy.

27:07They like not being micromanaged. and you know again to come back to supercell which was the mobile games company you know their founding principle is that games teams kind of have the whip hand um in quite unusual ways so you know these small teams can spend months even years developing a title and it is in their gift at any point to say, we're canning it, it's not good enough. So you can literally spend years of company money. And if you feel like the quality is not good enough, then you can say no. There's a point when the game is out there in the world, and it's not in your gift anymore. And it's not that there are no management structures at all, but there is a very, very unusual degree of decentralization and autonomy at Supercell to the extent that one of the teams that was working there has decided to move out of the main office, is in a separate office in Helsinki, and the CEO doesn't have a key, so cannot get in.

28:17And that's a sort of like just slightly bizarre, but very vivid example of what autonomy looks like to them.

28:23Andrew Palmer:At the start of the episode, we teased you with a story about a factory where the production line was intentionally shut down multiple times a day. That factory is, in fact, the Toyota factory in Derby, England. Yeah, so one of the visits that we did for the second season of Boss Class was to the Burniston car plant, which Toyota runs in Derby. And Toyota is famous around the world for lean management and the principles that it has around continuous improvement and so on. But if you go into the plant, you see this come alive just immediately in a way which is unmistakable. It's sort of visible and audible.

29:09It's the way people talk, right? You have people sort of with snatches of Japanese in kind of Derby accents. It's just a kind of strange auditory experience. But when you're in the assembly plant, their principle at Toyota is this idea that everyone is empowered to come up with ideas for how to improve the car making process. This is Kaizen, continuous improvement. And every factory employee is expected to come up with two a month. And so you're getting up to 20 ,000, something like that in a month. they have these famous and on cords which is by each workspace as the body of the car is moving through the assembly plant there's a cord that hangs down a bit like a clothes clothesline and you can pull that cord at any point and that is a signal sometimes it's a signal of something very trivial but that can also be a signal of something is wrong and we need to change change it and what happens is that gives your supervisor, the supervisor has something like two minutes to get down there and sort it out.

30:19And if they can't, then the whole line stops. But that's fine, because what they want to do is encourage people to identify and surface problems. And the guy I was talking to said that when new people come onto the line, their first and natural reaction, if you think about this, right? Here's this cord. If you pull this cord, you're potentially going to stop the entire factory and you're signaling to your boss that I've got a problem and I can't solve it. So that is quite countercultural, right? I mean, it's sort of like you could imagine, especially young people coming into the workplace, wanting to impress their bosses, like, am I really going to pull that cord?

30:57So they spend quite a lot of time socializing people to understand that it's important. So the first shift they get everyone around the new person is there and is encouraged to pull the cord and everyone does this you know football chant crescendo so kind of thing and they pull the cord and a big cheer and but everything is geared towards that and i'm gonna give you a little test here so there's in in this plant there are um there are how many people are there two thousand people um who who work there and i want you to guess how many times this cord is being pulled

31:37Al Elliott:in a day i would guess somewhere between five and seven so six i said 20 and the real answer is 14 000 what yeah so it's just completely completely off the scale i mean like you just would would have no idea now as i say some of those pools are you know you're you're kind of you know there's a like you need a break for whatever reason or something like that. But even if you strip those away, there's this very, very high volume turnover of observations or this is the thing we ought to think about that then translates into a smaller number of suggestions for improvements that then goes through a process at the company in general of kind of like, do we do this?

32:22Do we not? Some of those improvements are plants specific. Some of them get rolled out around the world. and that number that number was just like mind-blowing to me it's like i i had i was so out on on the guests um and you know clearly they're very used to that they know that people are kind of being low low single digits um as a sort of first approximation so that was that was one very clear example of a lived culture so just to get these numbers right 2 000 people there

32:55Al Elliott:14 ,000 times a day. That's an average of everyone pulling it seven times a day. That is right. Now, I am going to, like, I will check this afterwards. So you'll hear from me again if I've got that, but that's my memory. I think the important thing is the difference between, you know, you're at five or six, I was at 20. The real number is ludicrously higher. And as I say, that number does include things which would be kind of, you know, I need to I need to take a break or whatever it is, right? So can you fill in for a minute? The important thing is that this is some sort of extremely kind of well-functioning feedback machine that is also operating within the assembly plant, and the two go together.

33:41Andrew Palmer:Andrew's podcast is packed with examples just like this. So there's a medical tech firm called Stryker, which is based in Kalamazoo, and that's in Michigan. And it's a weird place because the divisions are named after body parts, so you can start off in knee, but if you're lucky, you might get promoted to pancreas or something like that. It's a weird sort of place. But the reason that it's interesting is that they have, again, a very clear sense of what culture they want. They want basically performance-driven, low ego kind of underdogs that's what they just want this sort of hunger so it's very it's quite it's not a particularly cuddly place i don't think but it's it's it's driven by achievement and this is the point on levers that they the guy um i spoke to there is the the ceo called kevin lobo who sort of can articulate this for himself but then has it driven through the entire company.

34:46So one sort of example, which I hadn't come across before, was just structural. So when their divisions grow to a certain size, they split them in two. And so at that point, you're no longer number one in your market, and you've got to grow again. So they're very, very keen on organizationally, constantly sort of requiring you to think about growth. And being the top dog in a market is not helpful for that. All of their hiring, all their performance management is based around that quite hard-edged way of thinking about things. So if you're in sales and you're 99.9 % of your budget, you missed your budget.

35:28That's it. So it's that kind of... But as I was talking to him and he went through absolutely everything in the company, it was clear that they had just lined up all of these things in a way that that transmitted the same message. And that was super effective. So Novo Nordisk, which is the company that makes Wagovi and Zempik in Copenhagen, has a process called facilitations. And facilitations is, they don't like this word, but it basically is a cultural audit. And what that is, is basically sort of experienced employees, some of them full-time, some of them not, have the job of sort of going around departments, divisions around the world and around the company.

36:13They spend time with those units. They interview the bosses and the people within them. And the goal is to try and work out whether the values of the company are genuinely being lived. And then all of those cultural auditors come back and report into senior leadership. So there is some kind of independent monitoring of whether the culture exists when the CEO is not there, which is a good definition of culture. And that's their way of kind of ensuring that actually things are working as they should.

36:44Al Elliott:You just mentioned it was very Danish. So do you think that culture is perhaps affected by where you are, like if you're Japanese or Danish or American? Yeah, completely. So I don't think culture necessarily has to be a prison. So Toyota, which is a very sort of, you know, you'd sort of associate Japanese... society with a kind of hierarchical way of behaving, that hierarchy definitely exists. It definitely came off the company when I was there, but they just managed to make that coexist with a culture of feedback and what they like to call the inverted pyramid. So, you know, manager's job was to support the workers rather than give them instructions.

37:34So I don't think culture has to be a prison but it definitely has an impact so actually the novo are interesting on this because you know the bosses there spend a lot of time with the scientists um they want to have back and forth they want to understand what's going on um and they're quite into um it's a dutch sociologist called geert hofstetter has these um measures of defining national culture And one of them is to do with your willingness to challenge, basically, sort of hierarchy, levels of hierarchy. And people from different nationalities can find it more or less comfortable to be expected to go in and sort of talk and challenge the big cheese at a company.

38:24So culture definitely has some kind of impact there, but there are ways around it. Again, being thoughtful about these things definitely helps.

38:34Andrew Palmer:AI. We cannot have any conversation about the future of management without talking about AI. Here's Andrew's take on it.

38:43Al Elliott:You mentioned earlier that Daniel was both simultaneously terrified and fascinated by AI. I want to hear what you think about AI. Is it a good thing? Is it a bad thing? How is it going to change culture, teams, management? But I find that really hard to answer. The sort of ranges of possible outcomes are so big and the tech is moving so fast that I'm not sure that I could give you a really sensible answer. I could tell you the things that I worry about, which is that the incentives are strongly to look for efficiencies and cost savings. And particularly in that middle management layer, that we spoke about earlier.

39:27So you could well imagine, and we are seeing it in some of the tech giants already and some of the language that's coming out of Duolingo, Amazon, Klarna, and others, that there's a sort of layer of what is being labeled as bureaucratic fat that can be slim down quite radically if you've got AI doing certain things. I would be really worried about that, partly because it sort of just reinforces an existing problem, which is that managers already often have to do another job as well as manage. So they're kind of already. So by slimming them, you're not solving that problem. But also some of the kind of behaviors which are bad are likely, I think, to be reinforced.

40:16So I don't, you know, AI summaries of meetings are in theory good in practice, if that's going to be used for performance management as a way of kind of like, what's the level of engagement? You know, what percentage of time did you spend talking during this meeting? And that's somehow going to feed into a dashboard. We're going to have even more people talking for no good purpose in meetings in order to appear on a dashboard. So there's all those sort of unintended consequences from quantification, which sort of just worry me. I mean, you definitely want to know if people are, you know, unhappy, dissatisfied with their work, not engaged.

41:02And I don't think that, you know, six monthly surveys are the answer. but that you know one-to-one meetings is the most effective way to get at how people is talking and it's as opposed to you know occasional occasional surveys or always on panopticans um that are trying to work out your emotional state at any time so i think there is quite a kind of well-defined and effective way of working out what your team is feeling, but it does require you to meet them. So, you know, another problem with AI is that, you know, that incentive to stay at your desk and not to talk to your team is going to go up.

41:50If you can just look at a dashboard and it's going to tell you, well, you know, team engagement is okay. It's like in a range. Fine, I'll just sit here and not go out. And I'll come back to Toyota because they used this phrase, which was really new to me and striking, which is they talked about the right to digitize. And they're very, very keen on something. The Japanese is genchi genbutsu, which is basically sort of it's the idea of management by walking around you go you go to the place and if you can sit at your desk and the data comes to you the incentives to go out talk to workers talk to employees see what's actually happening um is muted and i could see ai doing that like in a massive way you know why would i ever talk to anyone is there anything that you've come across

42:45Al Elliott:in the two seasons you've done that you've actually applied in your own work? Yeah, so I was managing in the first season and not in the second. And I tried, I don't know, I mean, I think people probably who I was managing found the whole thing laughable that I was dispensing advice on how to be a good manager. What do I use? I mean, I think they're kind of just little sort of heuristics actually, which are just useful. So, you know, if you're in a meeting, Emma Wormsley has this DIA framework, you know, are we here to make a decision? Is it an input into a decision or is it for awareness? And so, you know, whatever framework you use, just understanding, you know, okay, this is what the meeting is for and articulating that is really useful.

43:32And almost anyone can do that. Even if you're not running the meeting, you can sort of ask the question up front. I had an excruciating experience at RADA being trained on how to present and it was like massively uncomfortable but quite useful and you know I'm not going to challenge for awards but I definitely there were a couple of tips there that were quite quite useful in terms of presenting. One thing which I haven't done very well in this conversation is slowing down So, you know, pauses are really, really important. Another is like when you carry yourself, this is like an acting tip. I don't know if you've ever acted, Al.

44:13I never did. So you're supposed to imagine that there's a golden thread that runs from the top of your head, the very top of your head, and stretches up for infinity, but is holding you up. And weirdly, once you sort of visualize that, your posture does sort of change. You start, see, there you go. You know, you start to hold yourself very differently, but not unnaturally. so there are certain certain things like that and then the jaw is vital absolutely vital apparently so um all of your kind of um emotion comes through vowel sounds um and it's really important to have an open mouth in order for the vowel sounds to come across and to be rich um and so there's a lot of sort of self pummeling that goes on before presentations by people who've gone through these these courses where they're sort of you know massaging their jaws and slapping themselves in the face um in order to to be able to kind of articulate properly so anyway that was that was

45:09Al Elliott:that was quite useful certainly diverting that was andrew palmer from the economist the bartleby column and host of boss class podcast three key takeaways i think number one great management is both poetry and prose you need to inspire and organize middle managers aren't bureaucratic fan. They're the crucial connecting tissue in every single organization and thoughtfulness beats loudness every single time.

45:34Andrew Palmer:And Andrew's insights are backed by research from Google's Project Aristotle on psychological safety to Danny Kahneman's work on cognitive bias. Plus, there's concrete examples like Toyota's 14th hours and daily interruptions and Claire Hughes-Johnson's working manual show you exactly how to put this into practice.

45:53Al Elliott:So if you're struggling with difficult team members or wondering how to build a real culture. Or maybe you're just worried about AI replacing human management. Andrew's just given you a framework for thinking differently.

46:04Andrew Palmer:The best managers aren't the ones with the loudest voices. They're the ones that think most carefully about their impact.

46:10Al Elliott:You can find Andrew's Boss Class podcast wherever you get your podcast. And you can read his weekly Bartleby column at The Economist. We're going to put links in the show notes.

46:18Andrew Palmer:This is Truth, Lies & Work. We'll see you next week.

46:25Drive & Thank you.