The Evolving Leader

Exponential Growth with Salim Ismail

• Salim Ismail • Season 7 • Episode 9

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This week on The Evolving Leader podcast, hosts Jean Gomes and Scott Allender spend an hour with Salim Ismail. In 2011, Salim Ismail co-wrote ‘Exponential Organizations’, a book that has since been widely read by CEOs who are looking for a new way to navigate uncertainty and embrace disruptive technologies and business models. In 2023 Salim and his co-authors updated the book and during this conversation he talks to Jean and Scott about ‘Exponential Organizations ExO 2.0’.

Salim is also the founder and chairman of OpenExO which helps companies implement the ExO playbook. He is a serial entrepreneur, the Founding Executive Director of Singularity University and serves on the board of the XPRIZE Foundation, and all of that is really just scratching the surface as to the work that Salim Ismail is part of.


Topics covered during this conversation include:

Core Principles of Exponential Organizations
The Exponential Mind Map and Hyper Scaling
Challenges and Successes in Adopting Exponential Organizations
The Role of Purpose in Exponential Organizations
The Impact of AI on Organizations
Navigating the Unknown and Embracing Technology
The Future of Leadership and Institutional Evolution


Referenced during this episode:

https://salimismail.com/

 
Other reading from Jean Gomes and Scott Allender:

Leading In A Non-Linear World (J Gomes, 2023)
The Enneagram of Emotional Intelligence (S Allender, 2023)


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The Evolving Leader is researched, written and presented by Jean Gomes and Scott Allender with production by Phil Kerby. It is an Outside production.

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Jean Gomes:

A decade ago, a book fundamentally changed how I and others looked at how an organization could grow exponential organizations was the result of a deep research project to uncover the practical things that leaders had done to grow their organizations 10 times faster than conventional market leaders using new technologies and ways of working today. Its author, Salim Ismail, is in huge demand to advise CEOs and heads of state, one reason being that the data shows that organizations adopting EXO attributes deliver 40 times shareholder value compared to those who don't. Tune In to a vital conversation on the evolving leader.

Scott Allender:

Hey folks, welcome to The Evolving Leader, a show born from the belief that we need deeper, more accountable, more holistic, more well understood and more human leadership to confront the biggest challenges facing us in the world today. I'm Scott Allender, and I'm Jean Gomes. How are you feeling today Mr. Gomes, what are you bringing with you into The Evolving Leader studio?

Jean Gomes:

I am beside myself. I've been waiting to talk to our guest for a very long time. I've been reading his work for a very long time. I've been immersed in it. I've been using it. I've been working with people who work with him. So, yeah, I couldn't be more excited. I have to say, I'm trying to control my enthusiasm. How are you feeling, Scott?

Scott Allender:

Similar. You introduced me to our guest's book a decade ago I think, and I love it, and I'm feeling all the excitement to have this conversation. So let's jump in. Today. We are joined by a true pioneer, a strategist who advises business leaders and heads of state. His book exponential organizations has been one of the most widely read by CEOs over the past decade looking for a new way to navigate uncertainty and embrace disruptive technologies and business models. One reason for this is the data that shows that organizations adopting exponential organization attributes deliver 40x shareholder value compared to those who don't, it's just incredible. He is the founder and chairman of OpenExO, which helps companies implement the ExO playbook. He is a serial entrepreneur, a VP at Yahoo, the founding executive director of Singularity University, and serves on the board of X PRIZE Foundation. Jean, I know you're not only a massive fan of his work, but you've also been to Singularity events, and this is going to be an incredible conversation. So, Salim, welcome to The Evolving Leader.

Salim Ismail:

Great to be here.

Jean Gomes:

Salim, welcome to the show. How you feeling today?

Salim Ismail:

Very well. Things are kind of, you know, I was asked by one of my board members, and I remember a quote where somebody said, 'How are you feeling in the answer was, I'm hanging on by my fingernails and fake as pouring oil from above. I think the visual is a pretty good one for most leaders today.

Jean Gomes:

Yeah, that's a really great metaphor or way of bringing to life. So by way of an introduction, acknowledging some of our listeners. I don't know who they are, but may not be familiar with your work with exponential organizations. Can we start with the basics? Can you give us a refresher on the core principles of exponential organizations?

Salim Ismail:

Sure, it's important to note that it came from seven years of a building Singularity University and reading most of the programs that right? So there's this, I have this framing that we have 20 Gutenberg moments of technology disruption hitting us at the same time AI being just one of them, autonomous cars, drones, life extension, Blockchain, solar energy, the list this goes on, and the challenge is most of our organizations were designed for efficiency and for predictability. And for about 100 years, that was how we kind of designed all our organizations, because markets didn't change that often, and therefore you could do strategic planning in a very traditional way, etc. And what we noticed, starting in about 2010 was that there was a completely different modality, where organizations had learned how to scale the org structure as fast as you could scale technology. And we'd never seen this before. And so we started, we looked at a couple of 100 of the fastest growing unicorns, and said, How are they doing it? Ted leveraging its community to scale to. A global brand, or Uber knock on its own staff, or Airbnb left tapping into other people's bedrooms as we teased out a model. And importantly, we didn't invent anything. We just labeled what was going on and put it into a cohesive framework. And then the book is half analytical and half prescriptive. The original book on how do you apply the model, and it's now been 10 years where we have data, evidence, anecdotes, etc. We just launched the second edition last year, updating it the A, the data and B, looking at the nuances of the model. And we're very excited about the we're very excited about the idea, and it's pretty clear to us, one of my my head of community, calls us the decade of be x. So because it's pretty clear that by the end of the next few years, pretty, pretty much every organizations in the world will be leveraging these characteristics, whether it's a nonprofit or an impact project or a for profit or government department, just because we can see that it's better.

Scott Allender:

So at the front of the book, you recap the Exo Mind Map, which is now like a mental tattoo for many leaders. Can you give us a sense of the origin story, and what was the source of why and how these companies thought and acted so differently from conventional organizations.

Salim Ismail:

Yeah, I think the birth, the birthplace for this is for us, Amazon Web Services. Because Linda launched, we could take computing up a balance sheet and make it a variable cost, and then scale your costs along with your user base, if you were a software company, and that for us, was an important inflection point, because for the first time, you didn't have to make major capital investment before you launch your product, right? And this led to the lean startup movement and to hyper scaling, and all the other movements that go get a product out there, as Reid Hoffman famously said, if you're not embarrassed by your product and you launch it, you wake it for long, right? So you get it out there, and then use data to iterate very, very aggressively to iterate the product, and then you you can't be beaten, because you're constantly going to where the evidence is as to where things are, what tactics are working, etc. My most famous example of this is probably Amazon Prime, where there's all this naysayers at Amazon saying this will not work. People are going to order a toothbrush at a time, and we're going to lose money on each transaction because of the delivery costs, and this will be a disaster. And the only way to test whether work or not was to run an experiment. So they ran an experiment and found the people who use it buy tons more and buy tons more together, and therefore they didn't lose money. And now everybody uses it. Nobody ever unsubscribed from Amazon Prime, right? And so you see the outcome when you're you're operating with that modality, if you're a truly flexible organization. And the heuristics here are flexibility, adaptability, agility and being purpose driven. And all the characteristics in the Exo model guide towards those few heuristics. And if we can move to that, then basically, in a world that's becoming more and more volatile, your your ability to adapt will drive market value. And the daily reference, which I could touch on a little bit more really, really reflects that.

Jean Gomes:

So since you wrote the book, a lot has changed, particularly with the sheer speed at which new players are getting to scale, can you kind of bring that to life for us?

Salim Ismail:

What we've been seeing is that more and more organizations are following this trend. And there's a, there's a there's a huge bifurcation in how we build organizations. Now there's either new organizations that are following models like this, and even if they're not consistent saying EXO, they're using attributes, that's fine. And then there's companies that are trying to maintain their status quo, and those are basically falling off a cliff, right? And let me just reflect on the data study we did so in 2015 when the book, a few months after the book first came out, we actually analyzed the fortune 100 against this model and said, okay, is Goldman Sachs purpose driven? Is the leveraging community? Is IBM using dashboards and lean OKRs or not, etc? And we kind of came up with an index. We scored them all for one to 100 and I did a segment on Squawk Box, the TV program. So here's an index of the Fortune 100 ranked by how flexible, agile, yet so friendly are they. Seven years later, he did the trailing analysis, one of our community members who've done a bunch of work for UBS, tracked for seven years the top 10 to use the characteristics the most and the bottom tend to use the least, and found that revenue growth was 3x higher, profitability 6x higher into your earlier point, shareholder returns were 40 times higher, right? And that just kind of gives you a very clear guidance that if you're not going to navigate towards this type of a model, you're not going to be around very long the second. Thing that I think we found over the decade is the nuances and the interdependencies between the attributes we didn't quite expect and when we first wrote the book, because there we just had no experience with it. But for example, GE trained 60,000 executives on lean startup campaign, the biggest training corporate training actualized in business history, and it failed. And the reason it failed is if you can't allow do experimentation without allowing autonomy as to what to experiment on, right? And so there's we found, I think the big difference between the first and second book of A, the data and the delivery of the model and the evidence we have, but B, we teased out some of the interdependencies. And how do you now progressively, prescriptively apply the model in a powerful way?

Scott Allender:

So in organizations where they, you know, they are trying to stay more status quo, and you're trying, you know, they're more conventional. What are some of the the challenges you're seeing in bringing this to them in terms of kind of changing their mindset, getting them to to adopt the playbook?

Salim Ismail:

It comes down to one, which is, I call it the immune system bubble, right? And I first came across this at Yahoo when I was the head of innovation, running their incubator. And it turned out, the more disruptive a product we created the left the company could absorb it and handle it and take a benefit. And of course, I've seen this in banks or telcos before, but Yahoo was a Silicon Valley company less than 10 years old. Why should it have this problem? And it really bothered me. And it wasn't until I had a conversation with Jeff Kowalski, the CTO lot adjuster, who said, Oh, immune system problem. And I kind of went deep on that, and we realized that every big organization, when you try anything disruptive, the default answer is no. And therefore, as the world is now being driven by disruptive innovation, which is the high order big, big organizations that legacy organizations have to figure out how to juxtapose with this, otherwise they won't be around. And a really great example of this is the car industry, where for years and years and years, they said, Tesla is going to fail. It's never going to work. We do cars. We've been doing cars forever. And boom, the market cap to Tesla at some point was, you know, all the others combined. And I think that, and they would say that companies were hugely overvalued. And I'm like, Yeah, but would you rather be them or you, you know, so the there's this unbelievable legacy, calcium and understanding and adopting this, just because every, I mean literally, there's singly, simply not an MBA program in the world yet today that teaches you how to build Uber right? Every MBA program in the world teaches you how to build a 20th century, scalable efficiency, uh, predictable or highly structured organization, top down, hierarchical command controls, and the world was completely changed. And I have this crazy anecdote I can talk about with with the deans of business schools. If you want me to do something, yes, please. So I got asked about six years ago to speak at a conference of 700 deans of business schools, like who knew? But apparently they all get together once a year, and the announcer asked me to come and give you open keynote. I'm like, wow, I'd love to kind of pop of that audio. So I get on stage and he's introducing me. Thing, oh, we're gonna hear from Salim, the latest scene with X Men film Greg from the pepper. Except what he sees in the audience is complete blank stares, no flicker reaction at all. And he notices this, and he's like, just a quick show of hands. How many of you read exponential 700 deans of business schools and two put up their hands? Wow. And you're like, Are you kidding? That's unbelievable. I mean, you know, okay. I mean, if I'm a car designer, I'm near me, not like the Tesla, but I should jolly will know what it's about. And the fact that they had no idea that this even existed was just completely blew my mind, and the seller took me aside. Later, later, of course, I was mobbed, and they were like, Hey, how can we partner with you? Etc, etc. Later on, I found out that the deans of all the business schools, they're researchers. None of them run a business, so they're all focused on the little areas of research, and none of them practically replied them. And it just completely shocked me that this is what people are paying hundreds of$1,000 to get that type of education.

Scott Allender:

That's incredible.

Jean Gomes:

And you still think that's the same kind of deal now,that it hasn't changed that much?

Salim Ismail:

Yeah, because when I talk about immune systems, the three worst immune systems I've ever seen, third worst of healthcare. The second worst is education and academia. But God help you to kind of take that. The worst being religion, where they'll literally kill you if you don't, you know, follow the orthodoxy. I actually got one of the strangest. Uncle, obviously, was a few years ago from the Vatican, saying, look, the Pope's trying to change the church. His immune system is is 2000 years old. So I actually went and did a workshop with the ad Senior Legal clerk, and it was one of the more eye popping experiences I've ever had, because these the fundamental change that's coming, right? Is something that people need to recognize and then just deal with, just talk a little life extension, right? I mean, that changes a lot of things in society. If you suddenly extend or double human lifespan, which we're likely to do in in the next decade, pension plans, insurance models, unemployment benefits. I mean, it cuts through the entire stack of what it means to be alive and how civilization is structured. The specific conversation with the radical I had was, your business model is to sell habit, and how are you going to sell heaven if people aren't dying, right? And that's that's a conversation to be had. Why do you adapt to that?

Jean Gomes:

There's a chapter in the book I love the title of it, which is the death of the linear organization. Now that might, in the light of the things that we've been talking about, seem fairly obvious, but can we talk about how you embrace non linearity? What does that mean to the conventional ways of thinking and structuring an organization.

Salim Ismail:

Great question. Maybe the one most important question is, how do you deal with it, right? And and this is the conversation of having, increasingly, with boards and C suites around the world. There's only one model that we've found in the kind of 15 years I've been looking at this and 10 years since the book came out, which is, if you have a legacy organization, you have to run an immune system disruptor in the core organization, we've developed a 10 week engagement that we've open sourced, we piloted with Procter and Gamble. We found a way of hacking culture at scale. In a legacy environment, you have to run that to change the conversation, soften people up second. Then what you do is that every organization has about 5% of their employees and team members that are completely crazy. They're very hard to manage, very smart, very loyal, right? And you never know if you're going to get them, they're going to be fired or they're going to stick around. It's 5050, kind of thing. You take those folks to the edge and have them build disruptive, exponential organizations at the edge of the organization, pointing into adjacent spaces. So Larry Page, a few years ago, came to me and said, Hey, your unity Yahoo is released at Frostburg. Did I have an incubator at Google? And I said, No, you'll have this immune system problem, but do something like it, keep itself and point it away from the core organization. And along with many other conversations that you have, you see the revokers Google X, where they have the core information management inside Google. But then to use hardware, Google cars, Google contact lenses, Loon, etc, to go into adjacent area. In my opinion, the master of this technique is apple. And yes, they have a great design capability and a great technology supply chain, I argue that Apple's real innovation is actually organizational. Because what they will do, and what nobody didn't even notice that they do, is they will form a small team that's very disruptive, put the team at the end of the organization, keep them secret and stealth and save them. Go disrupt another industry, and whether it's cars or watches or payment or retail, there's no limit to their market cap. They just have, I think, at last count, that they have 18 teams looking at different industries. And when they think something's ready for disruption, they pop into it, and then they iterate very well, right? And and so therefore, that model is something that I think will and then they fold it all back into the broader ecosystem. And you see Uber doing that with Uber health and Ibu. To see Facebook doing that with Instagram and WhatsApp, leaving these brands with the edges rather than trying to merge them in. And so the the transformation that's taking place over the last kind of 5070, years, is operating company turning in the platform, turning the ecosystem. The problem is, it's if you're a 20 year C suite leader in a legacy organization, you have no mechanism for understanding this, seeing it, migrating to it, and then if you get it, how do you get the rest of the organization to follow you? So this is most of the work that I've been doing, which is why I'm bold.

Scott Allender:

I wish I had an excuse for why I'm bald. I'm just bald.

Jean Gomes:

Can you bring to light this conversation about, you know, you're talking with it, and I don't want you to reveal all the secrets. Obviously we can't got time for that, but you're talking to a CEO about making the shift from running a conventional, linear type of organization to this ecosystem approach which can adapt to the opportunities and challenges facing it. What they need to do as an individual to make that kind of change.

Salim Ismail:

Yeah, honestly as an individual, they need to mind factor and the biggest mindset Kerby need to make this is the disruptive mindset and the exponential mindset. Okay? And let me explain in a couple times what I mean by that. The disruptive or change based mindset basically said you have to recognize that the world was fundamentally changing. It's never going to be the same again, the market you thought you had doesn't really exist in the market you're in. You don't really understand it, therefore you have to guide. You have to give autonomy to your teams to gather as much data and read as many experiments as possible, to keep tabs on what's happened, because you have no clue. By definition, that's one and I think the second is the exponential mindset, where you you place your your bets in a anything that could grow in a radical fashion. The master of this particular mindset is Elon, where his methodology for building companies actually absurdly simple. He will look at the technology that's growing exponentially and doubling on a price per coins pattern, solar energy, lithium ion batteries, neural interfaces, whatever. And then you look at 10 years, where will that technology be on a 10 year doubling pattern? And then you'll build a company. Intercept that curve, because it takes about 10 years to build a global company. Now, non trivial to last that 10 years, right? But if you can do it, then you catch that curve as of going vertical. And now, for example, lithium ion batteries have dropped 93% in the last 10 the cost, that's unbelievable. So now the cost of building a$20,000 test is really incredible compared to a test that was 10 years ago. So the the exponential mindset and the disruptive kind of change based mindset is two important things for the CEO. Then tactically, what you do is you take your crazy people to the edge and go, go, follow your passion, pick a project, create an MTP or massive transformative purpose for that project, etc. Once in a while you see a legacy organization actually doing it, and kind of hats off to them. My, my kind of favorite example of this is Philip Morris, which makes you know, cigarettes. I did a discussion with the board about 10 years ago, and it was a little delicate, because I said, What's your purpose? Your purpose can't be to have people smoke. You know, that's not a viable structure going forward. And along with a bunch of other conversations, absolutely not, not just me, they they had a they voted and collectively got together as an employee, based as a management team as stakeholders and shareholders, and fundamentally changed the company. The head of innovation called me about five years ago and said, Go, have a look at our website. And literally their MTP is a smoke free future, right? And you're like, is this a parody? Is this like, this? Unbelievable, but they did it. They did 180 degree pivot, and all of the bonuses released African has now come from smoke free product and wellness product, which is kind of incredible. And so once in a while, you'll see a company really taking it on. But most ways you have to kind of launch these and let the new thing become the gravity center. Because if the second order of success that we found is if you launch these things at the edge, like Amazon launching web services or etc, you can't bring them back in, because if it's disrupted, it will fit neatly, right, and all you'll do is kill it, which is, what is the pattern of legacy? Or they get up to float it off and let it be the new thing. So for example, Amazon Web Services. Do you know about the Amazon institutional Yes, yes. Can I describe this real quick, though? Yeah. Amazon. Jeff Bezos realized early on that it's really hard in a big company to say, to get to get disruptive ideas handled. It's easy to say no, and one or 20 people will say no, and they'll know the idea. So you came up with a blocker for this, and in the the ideas policy called the institutional Yes. So if you're inside Amazon, you come to me with an idea, and I'm your manager, my default answer must be yes. I'm not allowed to say no. If I want to say no, I forgot a two page thesis on why it's a bad idea, and post it publicly in the intranet. So they've created friction and embarrassment to say no meaning that many more ideas. Because if you come to me, I'm just it's much easier for me to say you're an idiot. That idea is never going to work. But you go right ahead and you deal with the embarrassment and it's and then I can kind of wash my hands with it. And actually, Amazon Web Services was one of the outcomes of this. Nobody could figure out how to say no to it. Nothing could do with their core strategy, and now it's delivering what 75% of their global profits. Right? That's just the most unbelievable concept and and I've got a kind of another model around this, one of the biggest vitality. In the world is worth about I'll give you the negative use case here. And one of the biggest hotel teams in the world was worth about $70 billion okay, if they had launched Airbnb, TripAdvisor, booking.com, their market cap would be closer to$300 billion and the reason I use that example is all those ideas were sitting inside the company, but the immune system would not let them out. So for fear of cannibalizing the existing model, they're literally eating Forex on the pool. And that is the pattern that has to be broken. And in this conversation, 10 years ago was very hard, right? When I'm sitting down with the CEO said, BMW or something. There's just no play in this. They're like, yeah, we'll build Tesla in a year. You know, 10 years later, it's a much easier conversation across industry to tackle. So I may have been I thought I was late when the book came out. It turns out of maybe a decade early.

Scott Allender:

Let's zoom in on on the purpose comment you made about Philip some more. As you said, MTP, which stands for Massive, transformational purpose as a real strategic imperative that moves far beyond the sort of like bumper sticker approach to purpose or sort of writing a purpose statement on the wall, but you're talking about something that really transforms an organization. And you used a great example with Philip Morris. Can you hone in on the concept a little bit more and why that's so critical in the exponential model? Yeah.

Salim Ismail:

So when we analyzed those 200 unicorns way back in the day, we had a big graph and we had a big matrix. Okay, who's doing what? Tick boxes? Uber does this? They use dashboards, they use AI vehicle. And what they had uniformly across all of them was a very it was very clear what problem they were trying to solve. Uber everybody should have their private driver, Google, organize the world's information, etc. And they all had it. And we were like, wow, this is like, really important every one of these Exos in Douglas. So we came up with the framing of a massive transformative purpose, saying you have to go for a really big problem. It has to be transformative, and it has to be very purpose driven. And that gives the ethical basis of an Exo and future organizations, because this applies to nonprofits. Governments have a natural NPP, etc. So I coined the phrase, I think was about late 2012 and then it was in the book, and that last time went on, people started driving this purpose driven ethos a lot more. Why? Because if you have an MTP, it excites an entire community to swarm around you, like Elon with SpaceX, right? Every engineer in the world is dying to work for SpaceX or a company like or Tesla, right? And so it creates a gravity well, where everybody wants to get involved. And what's really magical about it, it's if you're an evolved leader in your framing, if, let's say my MTP is a career counselor, and I'm kind of plugging away doing my thing. If somebody else solves that problem, I'm thrilled a bit because it's such a big problem we're going to spend lifetimes trying to figure this out. Therefore, kind of the you end up with a much more cooperative environment, the rather than a winner, kickball network, state network company, typical model. And so it changed the ethos. And also we found was in big companies, 99% of the conversation is about what's happening inside the company. And when you have an MTP, you can start looking outside. Whereas people are like, Okay, how are we going to deliver that MTP? Right? When some leaders at Google are trying to evaluate this project or this project, they can simply ask the heuristic of which one helped organize the companies in the world for making better and then put their resources there. And so it propagates in a very powerful way. Creates community around you and for us, the future of most organizations will be a purpose with a community around it, and then products and services pulling out from that community.

Jean Gomes:

So how, because everybody's talking about AI at the moment, how does AI change(or does it change) what's happening with with your work?

Salim Ismail:

It does radically better from so a couple of important points around AI here. I absolutely don't believe AI takes all the jobs. In fact, I don't think it takes any jobs, to be blunt. Okay, why? Because the evidence we've seen when we've had major technology and prevention in the past is we increase job employment, not deep reason. So we can talk more about that, if you want to get into that. But I look at it as a slide rule to excel spreadsheet information. It's just this massive game changer in how we think about things and what allows us to do. I think the thing that I'm most excited about is. Will eliminate a huge area of what I call white collar drudgery. So let's say I'm a booking agent for a family resort in the Caribbean, right? And a family calls up and says, We've got three families coming. We want to have rooms that are joining the kids should be near the pool. There's all this complexity. I could spend, like, a day and a half trying to figure out that crap, whereas in AI is going to go, Oh, give them these three rooms and you're done, right? And so, especially when the advent of generative AI, and so, I think there's an enormous ability now to really uplift most organizations. I'll give you a simple example. We came across a company recently. It felt like Palantir in a box, okay? And what they use? They drop an AR into your organization, into your back end servers, and they suck up all the sales force and and slack data or whatever, and they instantly can store all institutional knowledge, so if a key employee leaves, you don't lose all of their their insights with them. That's just, that's just a complete gain change over right there, in terms of a concern about, how do you manage your organization, the redundancy you have to have in various roles, all that stuff. So I think AI will become a massive game changer in the cleaning up internal processes and over time, over time it will, it will replace the need for more and more work. But if you think about, say, software development or a truck driving is a great example, right? We kind of you hear all this money about, oh my god, autonomous trucks are coming, and we're gonna have 3 million jobs out of the window, etc, etc. Whereas, if you go and talk any of the trucking companies, they're like, we would hire 1000 truck drivers today. We just can't find them. Nobody really wants to do that work. So we will absolutely need autonomous cars in places like Japan and China. China, especially with the aging problem, need robotics and AI to do a lot of the work going forward. So I think from as a societal level, the the technology will be massively a game changer, on the positive side.

Jean Gomes:

One of the things that we are constantly asking ourselves and our guests here is around as AI comes in into more and more of our lives. What do organizations need to do ensure it kind of lifts people up and that you get more of the, you know, the very precious aspects of human value, creation, decision making, creativity, relationships, you know, all of the kind of stuff that people are brilliant at, rather than getting them pushed down into more kind of almost serving the technology.

Salim Ismail:

Well, I think if you go back my earlier comment about the white collar drudgery that will solve, I mean the job satisfaction that people will get, having that problem handled in two seconds. It's like going back in the old days when you had to kind of tap out on a, on a on a path, register the different line items and add it up at the end and do a big thing, and this thing would print out, and then you can't collect the money, and now it's all digitized completely. We just want it, okay, no cashier wants to go back to the old days. So we forget, we forget that part of it. We worry about the kind of like, oh my god, what would people do? Etc. But we forget that there's we enable, generally, when you have an injection of technology, it uplifts the value the human can do much more customer service and deal with the exception handling and the harder, difficult problems, which is the main way more fun stuff to do. And so I think if I just follow that meme and that vector over time, AR just makes things a lot better and faster. Like, for example, imagine an AI is tracking all the conversation and comes to you every two days. And so this is the biggest HR problem you have right now, right? And it's surfacing problems that you could not surface in other way. And I think this is the key part around the AI than most people in this is that people think it's going to replace human endeavor, whereas I think what it's going to do is are orthogonally add massive capability given

Scott Allender:

So there's, there's a lot in there, I think, in terms of mindset, right? So, you know, going back to the cash register example, I'm sure at the time when there was, you know, I'm speculating, but when there was talk about the sort of scanning, I'm sure there was fear that it produced in the cashiers in terms of, what does this mean? Huge. So it's, you know, there's always that unknown, right? So it's like we're always moving towards the unknown. So as people, as you work with organizations, or a leader who wants to adopt some of these principles and push the organization into the unknown, how do you help? Or how can they help an organization ready themselves to have a tolerance for the unknown with an optimism for what's going to be possible by adopting these principles.

Salim Ismail:

So I think the biggest challenge that I see with humanity Rick Lark is what Peter identified. In the book abundance, what he calls the amygdala. So we all have in the back of our brains with little organ that's about the size of a walnut that's constantly scanning for bad knees, and it's a danger warning signal. When we were running around on the plains of Africa, you heard a noise in the Bucha and you ran. Why? Because bad news could kill you. If you wait around to see if it was your friend, the tiger eight years so we're 10 times the more likely to pay attention to bad if I missed a piece of good news, I might get some fruit of activity. If I missed a piece of bad news, I likely died back when, degree with a fraud, with danger in our environment. So we relate to uncertainty and unknown is danger, and then our mid below lights up and we run from it. So anything new, like if you talk to somebody when they first come across auto cars, the first reaction is, oh, my god, the car might kill somebody. Banned the car, right? Because people don't want to be killed by robots. They'd much rather be killed by drunk people, because what's happening today. So the we have to overcome this, and it turns out, we're 10 times more likely to pay attention negative news than positive news, because of that old survival bias, which is why Fox News does very well, right? If you watch Fox News, you're going to die this week, if you're lucky, laughs Well next week. Peter calls CNN the crisis in these network because when you can track every bank robbery in real time, high definite on screen to 20 devices, you think the world is going to hell, and you vote on that. And this is the mismatch that we have with the news cycle today, where good stuff doesn't report it right? The world is an incidentally, better place than we've ever had it in the history of humanity. And very few people will share that view, because they just live in the negativity, because their amygdala is lighting off all the time. So I think the the if I could make an evolutionary change to humanity today would be just to put out that amygdala, because the amount of time in our lives that we're faced with real, physical, existential threat of new route zero, and yet it dominates our conversation.

Jean Gomes:

So what is kind of on the horizon for you right now? So then, what are you really excited about in terms of, you know, trying to bring more of the thinking here to the wider world. What are you doing in Singularity University and other things that you're doing? What's the thrust of your future?

Salim Ismail:

So I think there's a so singularity is doing a great job of training executives and people on here's the future of technology, and be aware of it we provided, and that gives the why. Why, since you kind of pay attention to this, we've provided the how. Here's how you go about doing this. What's happened? About a few years ago, a political consulting firm came to me and said, Hey, we used your book, goodbye Fauci state. And I was like that, that was totally not designed for that. What are you talking about? And when I looked into it, it turned out to be several dozen heads of state. I was like, Wait, we have a community and a tool set and some credibility, but now we have access. And so I did do, like, a year of psychedelics to kind of get my head around, let the future hold, because that's a gift from the universe you have to take. And I've been thinking about, how would you rewire society at scale, and think and navigate the future? Because all our institutions are going to break with the onslaught of all of this technology. The famous biologist E O Wilson put it back. He said, The problem with humanity is our emotions are Paleolithic, our institutions are medieval, and our technologies God like if you think about that, pretty much all the problems in the world come from the gaps in those three layers. And as leaders, if all evolving leaders are going to spend the next 20 years of our careers dealing with those gaps, because the technology is moving in its pace, you can't slow that down. So we have to kind of bring humanity up and individuals, kind of, we have a pretty good tool set to navigate individuals, where I think the biggest weakness, and if I could think about from the leadership perspective, is, how do we update our institutions? Because we have no mechanism or feedback loop of updating old institutions like the UN or monetary systems or legal systems or healthcare systems, intellectual property broken. Education is broken that I think of the biggest challenge. So we've been thinking about, how would we rethink society in that model? I have this hobby in metaphysics and philosophy, okay, and I did this TEDx talk called, how do you pick civilization? My at the time, my 90 year old dad came to it, and he puts up his hand. He goes, I heard about your talk, can I Heckle? And I'm like, Yeah, of course you can Heckle. He goes, I totally disagree with your thought. I said, Whoa, okay. Do you do you not think you need to pick civilization? Really is like, no, no. The fixing, obviously, but the problem I have with civilization, because we have not civilized the world. We've materialized the world. We're apes with tools, acting with a genomic animality that that we have tribal wars at scale now, all we've done a scale tribal conflict. And you look at the Middle East this, it's like, of course, he's right. His comment was, we still have to do the work to civilize the world. I was like, Wow. You know, wisdom bomb from the elders, right? Boom. And I've been thinking a lot about, how do we actually go about that in an era where our existing institutions don't work, our religions don't apply, and the the technological changes hurtling us ever because the one instinct is slowed down, but you can't slow it down. And so what do you do? And so we have to kind of accelerate our human endeavor and our human organization, the better cope with this. And really, when technology you have new technology injection, the big challenge is always, how do you extract a promise without the peril? Because I can use fire to keep my house and I can use it to burn down your house. And via our secular laws around the world, we've done a pretty good job of doing that over the century, but now the technological innovation is so high between CRISPR and gene sequencing and editing and organ transplants. And Lord of what that, that our institutions are all going to break in the face of this. I don't know if you saw the story about the Uber car crash a few weeks ago. Um, so, so a couple in an Uber had a bad car crash when they sued Uber, okay, and so they were going through this lawsuit, and then what happened was their 12 year old daughter ordered something Uber Eats by using their account. And on Uber Eats, it says he cannot sue. And so it by accidentally, it wiped out their entire legal case. Because, I mean, it's just we can't even handle internet from a legal, regulatory perspective. So again, everything up coming, right? It's, I think this is a big challenge that we have as a global speech we break up.

Jean Gomes:

So can you give us just a couple of insights into how you think our institutions do need to evolve, the fact that they are unable to because of the way they are set up.

Salim Ismail:

There's the immune system problem, okay, but let me give you. Let's take education, because I've got fair bit of experience in that world, given singularity, and I get awful lot. I've been talking to many of you had the state looking at how do you think? So? I was talking to one of the bigger countries in Southeast Asia for the Minister of Education. This is literally about three months ago, and he's like, Yeah, I've got a big problem. I need to hire 40,000 English language teachers in the temple. And I'm like, hello, AI can teach you English in two seconds. Colleague, you don't need 40,000 decoup. And he's like, I can't do that. I have to hire people, right? And that, that problem is what needs to be solved. Because today you could take all the health care data, you can take all the legal data, all the legislature led the laws, and take all the educational data and put it into three different llms for any country, and give a kid three links, a doctor, a tutor and a lawyer, and and you just have to sit back while they do gun. You just need to get out of the way, is my opinion. And where we keep trying to control where things are going, and we can't, all we do slow down the progress. And so therefore, I think what needs to happen is, if I was thinking from an evolved leadership perspective, is let the technology out, police the negative use can't take, and then you go for it. From the there's a really great little insight here, effective broader data point. 20 years ago, when we had eBay and Craig was emerging as meager kind of platforms to be E commerce. You know, it's pretty easy. I'm on eBay to fake a transaction. I can put a picture of a MacBook up, and you send me $1,000 and I can be right, I can mask my email address pretty quickly. So sociologists and anthropologists are really excited, saying, okay, we can actually study human nature of scale. Okay, so now we have no news of transactions. What's the actual ratio of good to bad? And it turns out, consistently cross credit with eBay and other platforms like this, the ratio of positive, fraudulent transactions consistently something like 8000 to one. And that should give you enormous optimism for humanity, because in an open playing field where I can do either 8000 to one, is the ratio consistently right? Does that means the bear. When you technology go like draws, our first entity gets banned the draws, because somebody negatively loaded up with sequel in front by the White House, whereas the proper thing and the bad character is not. So we ban the drills, the bad guys not lit from the regulations anyway. So that doesn't help you. And all you need to stop all the good innovation. Whereas if we said, said everyone you do whatever they want with it, you'd have all this unbelievable explosion of innovation. And then you put the regulatory and put in the police, the negative use case, society would benefit way more. And I think that kind of mentality needs to seep into our how do we think about regulatory, institutional, institutions, etc, and that's just not there.

Jean Gomes:

That's an interesting insight, really, to understand that 8000 to one, crazy the other, the other. The other side of that, and it is reassuring. The other side of it is that as the as an exponential organization, becomes more successful, it also gets more powerful, and then its moral responsibility becomes greater. And many, many of the organizations that have done this have questionable moral kind of code in them.

Salim Ismail:

Very much so, but I think where that where that happened, the market tends to figure things out a little bit. But for example, I'm a cheap skate, so I never take search pricing on Uber. I have a friend who was always late, so he always accepts it. And we can be standing next to each other order the same card of the same destination, he'll be totally kind of the price, because they've gained it down. They know he's going to pay extra. So they just give them extra, a big fee every time, right? And that's just, you know, that's just that in certain level, and the drivers getting very little of that. It would be okay if the driver got a big gun, the driver is getting almost none of that upside. So there's, there's some nasty practices in some of these, but I think competition helps with some of that. I don't know where how we navigate this, but what we found is, if you have an MTP, generally, organizations are trying to do the right thing.

Sara Deschamps:

If the conversations we've been having on the evolving leader have helped you in any way, please head over to Apple podcasts and leave us a rating and review. Thank you for listening. Now, let's get back to the conversation.

Scott Allender:

If you were sitting down with a CEO or one of our leaders right now who want to adopt the ExO playbook, what would you advise them to do as sort of first steps?

Salim Ismail:

So being him over the years, female of a community of something like 40,000 consultants, entrepreneurs, innovators, technologists, in the giant community, in 150 countries. And so what we do is we we have a weekly EXO discovery call, if they come to the call, get a sense of what it's about, and then we pair you up with a coach from the community. And we have a very inexpensive, I think we tried, like 10 or 20k for this, an X already program where in a week or two, we analyze your company scored against the model, and then create a roadmap for the organization for the future. And so then the CEO has a clear roadmap on how to connect the organization and implement these because those nuances of which ones are you doing already at techra. We can navigate a lot of that. And so we, we are able to launch those. We're doing a whole bunch of those where CEOs will call us. We'll go, Okay, go talk to this coach, run this silly exercise, and then you can do it yourself, or ask some of the coaches for more help.

Jean Gomes:

And if you were talking to somebody who was, I don't know, 14, 1516, and they were asking you for advice about how to think about the future, where would you start that conversation?

Salim Ismail:

Oh very easy. So I'll speak a little bit to education. Back to education just for a second. Okay, we've been doing education on what I would call a push basis, or a supply side basis, the block two grand here, where the educational system you train them through the early 20s to be really good at one particular skill, because whether it was podcast host or or graphics designer or accountant or engineer or doctor or whatever, and then you went to the job market and sold those skills in the job market. But all education for the last couple of 100 years has been supply side. I think what's happening now is moving over to the demand side. We'd say, what problem do you want to fundamentally solve as an adult? What's your purpose, etc. Which moves you over to the demand side. Elon is a great flag bearer for those because he had no experience in the car or energy or space sectors in yet he's built market loopers and all of them, right? And so when you move somebody over to the demand side and say, what big problem do you want to solve, then drops out of that. What technologies, what techniques, what skill sets we need to solve that Matt Brown, your education from that perspective. So that's one major shift happening in education. It's going to happen no matter what, and it's happening in front of us. What I say to young people is, pick your MTP, and it doesn't have to be your ever, forever. MPV, what? What gets you excited now, right? And then go join a startup or build a startup doing that because. So today, there's no environment in which you can use leverage legacy environments to learn very well. So it used to be that the you people during gene your proctor and YAML to go through management training schools and etc, etc, and it just doesn't apply. It turns out, by the way, the best leadership training in the world today is playing World of Work on so, you know, there's there. The younger generation has kind of figured it out. We just need to get out of their way. Is my view.

Jean Gomes:

What haven't we talked about that's really important to you, that we should get, you know, close, our conversation with?

Salim Ismail:

Well first, I just want to acknowledge the work you guys do is so important. Because, you know, when it comes down to leadership, the future of leadership is one of the most important topics for them. You can see the fundamental lack of leadership and toxic leadership around the world. And so the work that you're doing along with other was is probably some of the most important work in the world today. In that realm, I think if I had to pick an area to talk about, it would be probably in the mindset realm. We finished the second edition of the book where, what are the mindsets you need to have, like the exponential mindset. And I think it'd be really amazing exercise for people to as you're making any kind of a business decision. What mindsets are at play right now in my head, driving it to Sweden, and are they the right mindset? Because if you're coming from, say, a fear or cautiousness or a whatever you really need, some future, focused mindset, gratitude, experimental mindset, trust, etc. One of my committee members, Jerry Mikulski, put this amazing framing. He said, scarcity equals abundance minus trust. And you're like, you know, you have to think about it for like, an hour, and because if we can solve trust, then we can get to abundance. And I think one thing to think about would be, how do we navigate the world as technology delivers abundance to us? And this is where our everything has to shift to a different side of the Ukrainian, whether it's education going from demand to supply, supply to demand side, or business models going from scarcity to abundance. Model with pepper. And I think navigating that is a big challenge, and being open enough to make that leap and live from the other side is probably the biggest heuristic, I think about for leaders right now, the best path we ever podcast, like yours, or psychedelics, or both, you know, and that's the path to follow.

Jean Gomes:

What's the mindset that you struggle most with? Because it was hard to imagine. You know that you you do. But where do you find yourself, kind of like at the edge?

Salim Ismail:

So I have a framing for the human condition which has your soul in the middle of it, your subconscious filters at one level, and then your concuss filters on the other side. And I maintain the point that our job as a human being is either vertical, back kaleidoscope, so your soul expressive in some way, or dissolve those barriers so that the soul can just express right? So a finger like a Christ or Buddha did the work to dissolve all but they're just in these shiny Lake. Whereas, if you take, say, a Tiger Woods, they rotate that kaleidoscope, they're really good at golf, and you can see a soul expression there, the messy playing soccer, but they're somewhat compromised in other areas of their lives, what they say. And so how do you navigate yourself as a leader going forth? And I think a lot about when I'm making a choice, what level is it coming from? Is it coming from my conscious bubble, subcon level, Soul level, and do I have the courage to listen to that field? And I probably struggle to moat with is that level area of my talk. You know, there's this concept of fail fast and make decisions quickly. I have an uncle. He's a business turnaround wizard, and his thing would just make a lot of this ring very quickly. You only have to be 51% forever. And I really struggle with that, one of those that agonizes forever about this thing, Should I do it or not? And etc, etc. And I had to think about one area, especially as the volatility of the world is increasing. I could add one superpower would be make decisions ruthlessly quickly and just get on with it.

Jean Gomes:

But I love that insight about the layers of where the decisions are coming from, I think that's super helpful. Thank you.

Scott Allender:

Yeah Salim, thank you so much for joining us today and for all your insights. And folks, if you, if you haven't ordered it already, get the second edition of Exponential Organizations, you will be glad that you did.

Salim Ismail:

Thank you so much. Many thanks to both of you.

Scott Allender:

And until next time, folks remember, the world is evolving. Are you?

People on this episode

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Jean Gomes

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Scott Allender

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