How Will You Measure Your Life

Hi folks. My name is James Allworth. I head up innovation here at Cloudflare. I'm very excited to be here on Cloudflare TV with you guys. So, actually today I want to spend some time talking about a project that I worked on previously. It was a book that I co-authored called How Will You Measure Your Life? I worked on it with a professor from Harvard Business School. His name was Clayton Christensen. As a student at HBS, I was very fortunate to get into Professor Christensen's class. It's one of the most popular ones there. It's called Building and Sustaining a Successful Enterprise. The class is all about equipping students to be good general managers when they leave business school. And the way that Clay does this is by giving them a series of theories. He goes out and he surveys the best of management literature that there is. And each class, we take a case study, as is normally the case with HBS, but we also get a theory and use the case study to apply the theory. And that forms the basis of each class conversation. Clay is most well known for his work on disruption or disruptive innovation. And as is the case, that was one of the classes that we were taught, the theories that we were taught, the cases that we went through. Every different class is a different theory. Now, on the last day of class, Professor Christensen used to do something a little bit different. Instead of one particular theory and one particular case, he would take all the theories that we studied and he would write them up on the board and he would write three questions beside them. How can I find happiness in my relationships? How can I find happiness in my career? And how can I stay out of jail? And that last question was a little bit tongue in cheek, but Jeff Skilling of Enron fame was apparently in Clay's class and by all accounts was a really good guy. And something threw him off the tracks and he ended up in the situation that was Enron. And so this last class is basically taking these theories and using them to answer the questions. And it sounds a little dry, but you end up getting some of the most phenomenal insights into living a well-lived and considered life. And so what I want to do today is take you through a few of the theories and how they might apply outside the context of business and in the context of life. One of the theories that I found most helpful was on motivation. And this was derived from one of the work of Andy Hertzberg, who wrote one of the most well-known HBR articles that there is called One More Time, How Do You Motivate Employees? Now, I don't know about you, but the way that I thought about motivation previously was this spectrum all the way from really motivated all the way down to not motivated at all. It turns out this isn't the way that our minds work at all. There are two independent vectors almost at work that have a completely different impact. And this is what Hertzberg discovered with his work. The first of these is what Hertzberg called hygiene factors. And these tend to be more extrinsic in nature. They are things like how much you get paid, whether your work is prestigious or not, the conditions in which you're working. And the interesting thing about the hygiene factors is if they're absent, you feel a lack of motivation or a sense of dissatisfaction. But if they're present, you don't suddenly get motivated or feel satisfaction. It's just this absence of dissatisfaction. Now, on the other end of the spectrum, we have what Hertzberg called motivators. These are things that tend to be more intrinsic in nature. They are things like, do I find the work meaningful? Am I learning new things? Do I get to shoulder responsibility? These are different to the hygiene factors in how they impact our feelings towards motivation. The way that Hertzberg describes them is if you don't feel these things, you don't feel a sense if they're missing. It's not that you feel a sense of dissatisfaction, but rather an absence of satisfaction. And if they're present, that's where you feel the motivation. That's where you feel this sense of, yeah, this is great. I feel motivated towards it. I have this sense of satisfaction. The interesting thing about this is given these are two scales working with independent variables is you can actually feel these things concurrently. So if you have a job where you're paid really poorly, but you believe in deeply, you can actually feel this sense of motivation. I really love this, but at the same time, this gnawing sense of dissatisfaction as well. And it explains circumstances such as people who work in the military. These conditions typically aren't very safe. They're not typically very well paid either, but the folks who do it deeply believe in their job. They deeply believe in what it is that they're doing. It's also the case with inner school city teachers. Again, deeply believe in what they're doing, but not well paid conditions aren't great. And conversely, you hear stories of folks who work in high paying jobs where they don't really believe in what they're doing. It's like, oh, well, there's a sense of prestige associated, but I'm not necessarily, I don't really believe in what I'm doing. And that's a case where the hygiene factors are present, but the motivators are lacking. It was interesting to me because it allowed me to reframe when I understood this research and how this worked inside our minds, it allowed me to reframe how I approach making career decisions. It's like, oh, hygiene factors are something that you just need to satisfy. Like coming out of school, getting to the point, going from earning no money or being in debt, getting to the point of earning some money feels really good. And there's a trap that you can fall into because these things are easily measured. It's much easier to measure the extrinsic factors than the intrinsic factors. And it's like, oh, so I'm feeling good going from no money to some money. If I just keep focusing on that, things will keep getting better. But it actually turns out hygiene factors, it's a much better idea just to satisfy. There's a diminishing sense of return you get once you start to get beyond a certain point. And instead, once you've hit that point, it's much more important to optimize for the motivators, those intrinsic things like, do I believe in this? Am I learning new things? Am I getting to shoulder responsibility? It also explained why after business school, when I was working with Professor Christensen, despite the fact that I wasn't being paid much compared to many of my peers, I actually found myself really, really enjoying myself. That was a phenomenal career experience. And the Hertzberg's theory of motivation helps to explain why. Another one of the theories that I find really, really helpful in terms of thinking about career decisions is strategy, the strategy theory. Now, strategy is one of these things that it often gets talked about a lot. But again, one of the things that was so helpful about Clay's class was he'd done the work of finding all the best research. And some of the best research on the strategy making process actually came from an academic from Columbia University by the name of Rita McGrath. What she discovered is that really strategy falls on a spectrum. There's deliberate strategy, which is, you know exactly what you're doing. You know the path to profitability, the path to success, and you need to double down on that strategy. And the other end of the strategy is emergent strategy. That's the other end of the spectrum, where it's like, we haven't exactly figured out how to approach this, and we need to be more open to possibilities. Learning about this is actually, we learn about it and apply it in the instance of Honda and Honda's entrance into the United States market with its motorcycle business. Honda now is obviously very well regarded as a motorcycle maker inside of the United States, but that wasn't the case when it entered. It was looking to enter the U.S., and at the time, the bikes that were most popular inside the United States were big cruisers like Harley -Davidson's and some of the British motorbikes. And Honda realized, well, or came to the conclusion that if we want to break into this market, the way to do it is to replicate these big bikes that are popular inside the United States. And so Honda set out to make these big cruiser bikes. They didn't have a lot of experience because they want the type of bikes that people would ride in Japan. They launched the bikes in America, and it wasn't too much success. To begin with, these bikes from a branding perspective were considered pretty inferior, a poor man's Harley-Davidson. Not only that, though, because they didn't have experience with the type of conditions that were common in America, these long rides at high speeds, the reliability of the bikes weren't that great. They often leaked oil and so had to be sent back for service. Honda struggled with this strategy for some time, pursuing in Rita McGrath's what we would call a deliberate strategy of copying the incumbents. An interesting thing happened at the same time, though. In order to get parts, run them around Los Angeles, where Honda was based inside the United States, they had imported a few of their small little courier bikes. These were bikes that were designed for the local market inside of Japan, much smaller, more agile, designed not for high speeds but for maneuverability, very different to the highway-style bikes that Honda was selling in Japan. One day, having a bout of frustration and kind of anxiety to do with the failing strategy that Honda was pursuing in the U.S., one of their employees decided to take one of these bikes out into the hills of Los Angeles and rode it around in the dirt, relieving their frustrations, and actually had a really good time. Interestingly enough, a few folks who were out in the hills of LA at the time saw this Honda employee riding the bike and asked where they could get one of these dirt bikes from. The Honda gentleman was like, oh, sorry, these aren't for sale. These are just for our internal use. It happened a few more times, and the seeds of an emergent strategy started to appear. It was the case that Honda thought it knew how to enter the United States, like by copying what was already being done, but it turns out that them entering with this strategy wasn't working that well at all. And so they decided, out of desperation almost, to try bringing out some of the smaller bikes that were popular in Japan and selling them in the United States. But rather than trying the approach of selling them through dealerships and mimicking all the strategies that weren't working for them trying to sell these bigger bikes, they decided to sell them in sporting goods stores. So they made them more affordable bikes that were opening up the market to people who previously wouldn't necessarily have bought them. And the nature of what they were selling them for was totally different. These were more like the same type of people who would go to a sporting goods store and then might take the bikes up into the hills and ride them around on the dirt. This strategy was completely different from what they set out to do, but it turned out to be incredibly successful and paved the way for Honda to successfully enter the United States and gradually build up expertise. And now their bikes are considered definitely more sporty than perhaps some of the traditional American or European manufacturers, but they're considered one of the leading motorcycle manufacturers here in the United States. And this notion of emergent versus deliberate strategy is very helpful in a number of circumstances. But taking it into the subject of how to use it for your career, it's often the case that you think, ah, I want to do this, to draw a parallel with Honda. This is what I'm quite certain will be a successful strategy. But if you haven't tried things before, you may not know how it's going to work. It's just an idea. And at the beginning of things, before you figure out the equivalent of what works, it's often better to take a more emergent approach. And the idea behind this is, I don't know what works, so I need to be more open to possibilities. The thing that ends up working is possibly something I haven't even tried yet, I haven't even imagined yet, and so I need to remain open and see what possibly emerges. And then, just like with Honda, if something does emerge, whether in your career, it's something that you really enjoy doing, an opportunity that you find you're really good at, once you figure out this is what works, then you start to switch from an emergent mode into a deliberate mode. You start to double down on the approach that you take, and you focus. It's like the aperture goes from very wide to much more focused. And as is sometimes the case in business, but also the case in people's personal lives, that area of focus may at some point start to no longer work, and you may have to switch back to the other end of the spectrum, to a more emergent strategy, and figure out something new. The third of the theories that I'd like to talk about, and I find really, really helpful, is the theory of culture. One of the preeminent scholars on the subject of culture is an MIT professor by the name of Edgar Schein. Culture is one of these funny things where everybody thinks they know what's going on, but it's actually really hard to pin down. It's often talked about in Silicon Valley as the foosball tables, or whether there are meals in the office, or things like that. But that's not culture per se, those are more artifacts of the culture. The thing that I love about Edgar Schein's work is that he gets very specific about defining what it is that a culture is, and that is the way that decisions are collectively made and repeated. So to ground that a little bit more, let's imagine in the context of a business, the first time folks experience a problem, maybe it's inside of a startup, and maybe it's the question of whether we're going to ship a product. It's not quite ready, but do we ship it on time, or do we hold it back and make sure that it's feature complete and bug free? And the first time that folks inside a business encounter a problem like this, they're not entirely sure of how to deal with it, and so they will oftentimes talk about it. And for various reasons, there'll probably be different sides of the argument, but eventually they will come to a conclusion. Either we ship on time, or we hold it back and we make sure it's right. And whether that works, that solution that is proposed works, and it doesn't have to work perfectly, it just has to work well enough. The next time folks encounter a problem like this, they're like, oh, well, last time we did it this way, and it seemed to work, and so we've seen this problem before, let's just do it the same way again. It's like, okay, let's say they decided to ship on time, even though it wasn't completely feature complete. And customers were like, this isn't great, but oh well. And it's like, okay, that works well enough, let's take that approach again. And eventually it happens again, and again, and again. And it gets to the point where people don't even ask, like, what are we going to do when they see this problem? They just assume, okay, this is the way things are done around here. This is the way we solve this particular problem. And that is how a culture gets formed. It's like encountering these problems, figuring it out, seeing that it works well enough, and then eventually it gets to the point where people don't even need to have the conversation. It's almost like a shorthand or a heuristic. This has a number of important implications. If you're a leader inside of a business and you want the culture to form in a specific way, it's important to have thought through, okay, what are the ways in which I want the culture to form? In the specific instance of shipping early or making sure things are bug-free and feature complete. Again, if it's an easy fix, if you're in software and it's not completely mission critical, then you might go for on time. And it's like the adage that you hear in Silicon Valley, if it's not embarrassed when we ship B1, then we waited too long. On the other hand, if you're working in hardware or if it's mission critical, like it could impact like people's lives depend on it, then you probably want to err on the side of like, no, we need to make sure this is thoroughly tested and works really well before we ship it. Making sure that you've thought through the type of culture that you want in these various aspects. And then once it's thought through, making sure that that part of like people make decisions and then it needs to work well enough. Well, working well enough can be feedback from customers, but it can also be feedback from leaders inside of a business. And if you see someone making a decision that you don't agree with, then it's like you stop them and you say, actually, folks, like this isn't the way that we make decisions here. We make decisions in a very different way. We go for, it needs to be bug free. It doesn't matter if it's a little bit late, we need it to be bug free because people are depending on it to be like that. And then for those people who are making the decision, the decision they made didn't work well enough. And next time they see that problem, they're much more likely to err on the side that you kind of course corrected. The interesting application of this outside the realm of business is actually inside the family. Families, just like businesses have a culture that forms. And just stepping back and speaking generally, one of the things that's great about this theory when it's been well -formed is that it's almost nested in its nature. The things that like the culture, the theories work rather at the level of the corporation, but they also work at the of the business unit and it works at the level of the team, but it also works at the level of the individual as well. And so you can take the way that Shine's theory works and think about it in the context of a family. If you decide to start a family and you want to think through the various aspects of a culture and how your kids make decisions, it's an incredibly powerful tool because Shine almost refers to it as an invisible hand inside an organization helping to guide people to make decisions. And that's absolutely true inside of businesses, but it's also true inside of families and you're not always going to be there with your kids. And so having that invisible hand pointing them towards whether it's kindness and compassion or honesty or whatever those elements of the culture that you want to form inside your family are, having that tool there and understanding the causal process by which it works can be super helpful. The last one of these theories that I want to talk about very briefly is the resource allocation process. We talked about strategy earlier and strategy is almost like an intent. These are the things that we want to do and you can be deliberate in your strategy and saying, oh, this is the way that we're going to go after this opportunity. Or you can be more emergent and it's like, oh, I don't know exactly how this is going to work yet, so I'm not going to lock us into a specific way, but we'll see what happens. The resource allocation process is almost where the rubber hits the road of your strategy. Inside of a business, ultimately, it's one thing to look at what people say, but the best way to figure out what a company is actually doing is to look at where it spends its most valuable resources, which are its people and its money. You can look at press releases and corporate statements, statements to financial investors, and those are all nice and they may be indicative, but much more powerful than what people say in terms of figuring out where their resources are allocated is actually looking at where they spend their resources, where they spend their money, where they spend their time. That works the same way, again, for companies as it does for people. You can say you have a strategy of spending lots of time with your family and, in fact, one of the observations that Professor Christensen made is that many of his classmates, when he graduated, had exactly this strategy, but if you peeled back the covers and you looked at the places where they spent their time, well, when they had an extra hour of time, they would often invest it at work. It's like, why is that, he would ask. I think the conclusion that he came to is that professional people, particularly ones that have been successful, have a big return when they achieve professional success. They get a promotion, they get hired into a new job, they get a new project, they get a raise. These things all feel good and the return on them is quite immediate. If you spend an hour at work or you spend a whole bunch of extra hours at work, the return you get, you see that pretty quickly, like you see the raises and the promotions and so on. If you compare that with investing time in your personal life, the returns are on a much longer time horizon. He talked about seeing kids. It's like, well, if you take that extra hour of time and you invest it at work, you see the returns, but if you don't invest it in your family, you come home from work and your kids are still there, your partner's still there, your friends are still there. Nothing tremendous has happened, so it seems like you can not spend the resources in one area and things are fine and spend the resources at work and you get this immediate return. But the interesting paradox that he found was that even though in the short run, you get this very immediate sense of return from all these professional investments, in the long run, you end up investing your most precious resource, which is your time, in a strategy that ends up leaving you very unhappy. The context that Professor Christensen gave, also being a student at Harvard Business School, was he graduated and at the five-year reunion, everyone seemed to be doing great, but at the 10 -year reunion, he noticed that people were starting to drop off. They weren't showing up and he would inquire as to where they were and he'd get the responses, oh, they're going through a divorce or they're estranged from their kids or something embarrassing and they were a little bit ashamed to show their faces. It was through this understanding of the theory but also the real-life application of it with his classmates that he began to realize that it's really important to keep a very close eye on your resource allocation process and make sure that you're investing in a strategy, A, the strategy that you say you're investing in, but also B, one that's going to lead to long-term happiness and what gets you the most immediate returns in the short run isn't necessarily the one that's going to give you the most returns for the long run. So that's a little bit of a sample of some of the theories. We talked about the theory of motivation, Hertzberg's intrinsic versus extrinsic motivators and how they work differently inside of the brain. Rita McGrath's work on strategy and how strategy is ranging from emergent, where you don't really know, through to deliberate, where it's like, ah, this is the path to success and we need to be very focused. We talked about the culture process, which is Edgar Schein's work on how culture gets formed inside of an organization and how it's this repeated process of decision making. And finally, the resource allocation process, which is understanding how an organization or a human, when given an extra dollar of money or an extra hour of time, how they choose to invest that and making sure that that maps closely to what your strategy is and what you say your strategy is, because sometimes those things can drift apart. I am going to pause right here. Thank you for staying with me. I'm going to check to see, this is the first time on Cloudflare TV, so I'm going to check to see if there are any questions that have come through. So give me one second, please. Looks like we're good on questions. Well, folks, I've really enjoyed this opportunity to talk to you a little bit about this book. It was definitely an incredible experience getting to work with Professor Christensen and getting to understand these theories. And I hope this small sampling of it has given you some insight, hopefully something useful that you can take away into life afterwards. Yeah, I really appreciate it. Thank you very much for joining me. Thank you. Thank you. Thank you. Thank you.