Hone - how purposeful leaders defy drift

In this episode of What Matters, we dive into the new book from Deloitte's Geoff Tuff (Global and U.S. Sustainability Leader for Energy, Resources, and Industrials) and Steven Goldbach (Principal, Sustainability Leader, Deloitte US), Hone: How Purposeful Leaders Defy Drift.

Hone builds upon the authors' two previous books Detonate (2018), which challenged readers to blow up outdated playbooks; and Provoke (2021), which focused on creating future advantage by spotting risk early. This third book addresses the daily work of staying on track once you've positioned yourself for advantage.

• What exactly is 'drift' and why is it all too easy for organisations to lose their edge in times of massive transformation?
• How can the way in which a kitchen knife is sharpened deepen strategic insight?
• What is the connection between how our nervous systems work and management systems?
• What do four artisans - a chef, a documentary filmmaker, a nautical photographer and a Canadian rock band all have in common?
• What can sailing teach us about navigating change?

In our conversation, Tuff and Goldbach make a compelling case for the power of purposeful, continuous, human-centred improvement - something that's so much more appealing than the often-brutal top-down corporate transformation!

Nicola Hunt: When change strikes, most companies wait too long to adapt, then scramble to respond with sweeping, top-down transformations. But the real threat today isn't disruption, it's drift, the quiet erosion of clarity, purpose, and performance that happens when leaders lose their edge without even realising it. In Hone, How Purposeful Leaders Defy Drift, best-selling authors Geoff Tuff and Stephen Goldbach offer a compelling alternative to today's reinvention and transformation frenzy.

The most effective leaders don't behave like visionary revolutionaries, they operate like master craftspeople. They don't overhaul, they hone. Today I'm going to be speaking to Geoff Tuff, a principal at Deloitte Consulting LLP, who leads sustainability work globally for energy, resources, and industrial clients, and Stephen Goldbach, who leads Deloitte's sustainability practise in the US, about their new book and why it's so important for these times.

Nicola Hunt: Steve, if we can perhaps start with you. What inspired you both to write the book and why did you call it Hone?

Steven Goldbach: Well, maybe let's start with why did we call it Hone, because that'll share some of the inspiration. I've had the pleasure of getting to know a chef named Flannery Klette-Kolton for the last 15 years. She started her career in her early 20s with her business partner, Lauren, and they were private event chefs.

And over the years, I've gotten to know Flannery, and one day she was standing in my kitchen, what I thought she was doing was sharpening her knives. And I said to her, Flannery, why do you sharpen your knives before each and every event? And what she said was, Steve, I'm not sharpening my knives, I'm honing them.

And I was like, well, what's the difference? Honing, sharpening? And she's like, totally different.

Sharpening is when you remove metal from the blade to form a new edge. Honing is when you're realigning the steel so that it cuts the way it was supposed to the last time it was sharpened. And right then and there, it was like a metaphor that Jeff and I started talking about, because what we thought of as like, sharpening is like transformation.

And sharpening leaves a knife more brittle, more likely to break because you're literally removing steel from it. Transformation is risky. Transformations often fail.

But sometimes they're necessary because the world around you changes. And so we just thought it was a great metaphor for businesses where we think that if you just put in the work day in, day out, to keep your organisation sharp and doing the things it's meant to do, that's an approach that can eliminate the need for transformations over time.

Nicola Hunt: Jeff, can you tell me, why does this concept of hone feel especially relevant right now?

Geoff Tuff: Well, I think it really goes back to the point that Steve was making about transformation. Clearly, that's the metaphor that we're trying to use here. Our audience is primarily big scaled organisations.

They can be in the public sector. They can be in the private sector that have been really successful and are at the top of their game. And those organisations are feeling every day as though they need to transform for a whole variety of different reasons.

A lot of what Steve and I have written about in all of our books has been the shift that we're living through, and it's really been accelerating over the course of the last decade from a time and place that was governed by linear change to one that's governed by exponential change. You know, the reality is when change itself is accelerating, which in some ways is the very definition of exponential change, things are ever more different from the way they have been in the past. And it's easy to pick up your head at any given point in time and say, all of these forces are disrupting us.

All of these new technologies that are on the scene, we need to take advantage of them. And therefore, we need to transform. We need to completely shift what we're doing.

So if you think about AI, for example, that's obviously a hot topic just about everywhere right now. And actually, Steve and I and a colleague of ours, Megan Buskey, wrote an article for Fortune recently on this, applying the concept of hone to tackling the pressure to adopt AI. And what we see, to overstate it for simplicity, what we see in most organisations is they understand they need to adopt AI.

They understand that there's a risk of disruption if they don't, that they have had the opportunity to do things fundamentally different if they do. But the approach is to say, OK, we're going to completely overhaul the entire system. We're going to transform our company to adopt AI.

And our argument is actually that's not only not necessary, but probably going to fail because we have seen, as Steve talked about, transformations when you attempt to do them, most of the time they fail. 70% of transformations fail. And so if instead you approach the adoption of AI in a way that adopts some of the principles of hone, you're much more likely to be successful.

So one of those principles is, first of all, just start doing it. Don't try to plan a perfect transformation. Just start playing with AI.

Start adopting it in your day-to-day activities and make what we call minimally viable moves. As a term, it's borrowed from the world of product design. I think many of your listeners probably know about minimally viable products.

The concept there is if you're doing product development, do a little bit of work in the lab, put it out into the world, see how the world reacts to it. And then if they react well, continue on down that build path. If they don't react well, then do something slightly different.

The exact same thing can be applied to any sort of management move in any organisation. If you want to go and try to get something done, boil it down to its smallest testable hypothesis and go do it quickly and get feedback from the real world. So as you think about applying minimally viable moves to AI, anyone in the organisation can take a look at a standard workflow of their day and just go try to start using AI in some small way and see if it works well for them.

If it doesn't, then they can do something different. If it does, great, continue on down that path. So that's just one example of one force of transformation that Hone can be applied to.

And there's dozens and dozens of different exponentials that are impacting all organisations these days. That, I think, is one of the central reasons the concept is so powerful in today's world.

Nicola Hunt: In praise of Hone, Shelly Zalas, founder and CEO of the FQ, notes that the book, "brilliantly defines management systems as the nervous system of organisations". What exactly do you mean by this comparison?

Steven Goldbach: We appreciate Shelly's thinking and we'll take the compliment. I'm not sure if I'd use the term brilliantly for anything we do. But the reason why we think about management systems as the nervous system of organisations is because they are the motivator and the cause of the human behaviour that exists in all the organisations.

So it's the reason why people behave the way they do. And in the body, the nervous system is the thing that controls the movement of the human body. So if something in your spinal cord gets severed, you become paralysed.

It's the control mechanism. Likewise, when we say management systems, we're talking about all the formal and informal ways that behaviour is influenced. So let me give you just some quick examples so you get a sense of what a management system is.

In the formal category are things like budgets and evaluations and organisation designs. There are the ways decisions are made. And for example, performance evaluation tells people in the organisation, this is what good looks like.

And so most people want to be successful. So they behave consistent with that way. But similarly, informal management systems are perhaps even more important because people respond to the questions that their leaders have or what they perceive will make them successful.

There's a famous story about J. Edgar Hoover when he was running the FBI, where in one memo that was given to him, he scribbled, watch the borders in the margins. And what he meant was actually just watch how much space that you're leaving between the text and the edge of the piece of paper.

But what his team misinterpreted was literally watch the borders of the United States. So they took that comment and they went and they placed people along the Canada, U.S. and U.S.-Mexican borders to quote unquote, watch the borders without ever asking him for clarification. So the formal management systems, the informal questions that leaders ask are all important motivators for human behaviours.

So if you want to hone, if you want to consistently respond to your organisation and to the changes that Jeff described in his prior answer, the management system is effectively the tool that leaders have to be able to consistently evolve the changing in behaviours.

Geoff Tuff: And Steve, it's probably important to point out that there is an underlying principle. Again, this runs through all the writing that Steve and I have done over time, that ultimately change does not happen by definition unless someone somewhere changes their behaviour. We talk about behaviour as being the subatomic particle of business.

It's what makes businesses successful. Everything that Hone rests on is based on the idea that if we are going to create change in the world, then identifying the right behaviours to change amongst the right participants and then using those management systems to drive that behavioural change is the way you get that done by honing.

Nicola Hunt: In the introduction, I briefly mentioned drift. Can you expand upon that and explain why it's such a big risk right now?

Geoff Tuff: Sure, I'd be happy to do that. And I'll blame myself for this analogy or metaphor. You know, we tend to rely a lot on the boating world for inspiration.

I love to spend a lot of time on the water. I'd like to think that I'm bringing Steve along with me, both physically sometimes, but also in my love for being out on the water. And we started talking about the concepts for Hone.

I try to describe what it's like to be in a boat to try to stay on track. And the way I think about it is, let's say you're out on a sailboat. You have a certain destination in mind that you're trying to get to.

Sometimes it's a point on the horizon or a point on land. Sometimes it's some coordinates that you're sailing towards. And you set your boat headed in that direction.

But inevitably, things happen. The wind shifts, the waves affect you, the tide or the currents, all the forces of nature impact the direction you're going in. And you need to make micro adjustments as you go along.

You need to trim the sail. You need to change the course of the rudder a little bit to keep yourself on track. And sometimes if you're heading up directly into the wind, you need to tank back and forth to stay on track.

The equivalent of those forces of nature in business are just the externalities and sometimes even the internal forces within any organisation that can knock you slightly off track. So think about competitive moves or changes in regulation or new technologies that suddenly arrive on the scene. The big difference though between boating and business is that in boating, you actually have either the coordinates to aim towards or that observable point to know whether you're on track or off track.

In business, you don't have that. And our hypothesis as we started writing Hone is that what ends up happening in organisations is there are so many external and internal forces that knock you slightly off track over time that as you react to them, as you should, and as all good business leaders are taught to, it can be easy to pick up your head at some point in time and recognise that you're doing a very different thing and headed a very different direction than what you had originally set out and had intended to do. And that's where the temptation to transform comes in.

And so a lot of what we write about in Hone is how to use the management systems that Steve talked about before to make those micro adjustments along the way to make sure you don't actually drift off course.

Nicola Hunt: As you say, managers have to stay on track and it's helpful to set your coordinates. Going back to this example of sailing, what is your take on the weather, the climactic conditions for business leaders at this time? And is that one of the reasons why you wrote the book?

Geoff Tuff: Yeah, we could quickly get into some really cheesy metaphors here, but I'll try to keep it as uncheesy as possible and equate some of what we see happening today. Let's go back to the AI thing. Think of it as a really powerful steady wind and powerful steady winds can either be really hard to wrestle with and they can create some really difficult conditions or they can be amongst the best sailing you ever have because all the things you would like to do as a sailor, whether it's to go fast or be challenged or what have you, that's what a powerful steady wind can do.

If you're not paying attention all the time, if you're not constantly adjusting the way that you're sailing, they can become overpowering and sometimes quite disastrous. So if you think about those exponential trends that I talked about before as that powerful steady wind, we can either take advantage of it or be knocked over by it. But Steve, I'll get off my boating metaphor and let you pick up your answer on that one.

Steven Goldbach: I mean, the thing I would say about this, Nicola, is if you believe that today's environment is volatile and uncertain and disruptive and changing, then the biggest challenge that you have to face within your organisation is not de-risking the moves that you make. It's actually figuring out how to make moves because the riskiest thing you can do is do the same thing in a changing environment. And the problem is a human problem, which is the status quo has the unintended consequence of feeling safe but actually being very risky.

Whereas doing something different has the problem of feeling risky but actually being the safe move if the environment is indeed VUCA. And that's the challenge of leadership today. It's how do you make it easy for the organisation to change their behaviour in such a way that doesn't make it feel risky to try new things because we know that trying new things is going to be necessary if the environment around us is shifting.

Nicola Hunt: Is this why you feature four artisans in Hone? There's a chef, isn't there? A director, a nautical photographer, and a rock band. And if so, how do they reflect the kind of leadership you believe organisations need today?

Steven Goldbach: The reason we chose the world of artisans to profile was because they, in general, as a very broad community, have a lifelong pursuit of getting a little bit better at their craft every day. So why don't I talk briefly about the chef and the director and then Jeff can talk about the nautical photographer and the rock band. So I already talked about Flannery earlier on in this conversation and she's honed her thinking about cooking and pleasing her guests over her entire career.

So at the start of her career, it was all about doing very little to high quality ingredients but also adapting to her surroundings. As she's become more successful and more confident in her cooking and being able to observe guests, what she's actually done has become a lot less fussy about plating and actually in observing her guests and how they interact with each other during her events, she's moved to a lot more family-style serving so that, for example, she noticed that guests sometimes felt guilty when they were just getting full and they didn't want to finish something.

She noticed them pushing around their food and so she started serving more family-style because that creates more congenial conversation and it also allows the guests to take just as much food as they want, effectively being more comfortable in her presence. We also profiled Sam Pollard, a noted documentarian. He was Spike Lee's editor in the 1990s and he's an Oscar-nominated director and he's won several other awards.

His craft he's honed over the years to actually become even more minimalist in his approach to documentary filmmaking, just trying to get subjects super comfortable so that they share their stories, trying to take less control over the subject matter and just put it on film in and by itself. Early in his career, he would describe himself as trying to be more in control, both of his team and his subject matter and he's still working well into his mid-70s and he's just getting better and better at his craft every day.

Geoff Tuff: And Nicola, it probably goes without saying that we chose to write about artisans in the first place in part because of the metaphorical value of what they've lived through and its application to business but also because, quite honestly, it's fun to read and we do like to keep our readers entertained and we think there are ways that you can learn lessons in business in oblique ways and that was the intention here and the lessons that we learned from Flannery and Sam as Steve talked about did exactly that.

The other two that we profiled, Onne Van Der Waal, who is a very well-known nautical photographer and Our Lady Peace, the Canadian rock band, were similar but different for a couple reasons. The first is, while Onne is well-known as a photographer, we actually chose him in part because in his spare time, what he does is he essentially takes old boats and he refurbishes them, restores them, rebuilds them in many ways for use by him and his family and there's actually been some documentaries produced about him and it's fascinating just to see how detail-orientated he is in every single thing that he does, whether it's tearing down the electronics of a boat or it's repairing some of the woodwork or, I mean, every single aspect he really does touch and it occurred to us as we talked to Onne and watched some of the documentaries about him that that exact same attention to detail and really understanding the operations of, in his case, a boat, in most other cases that we're writing for organisations, is what it takes for CEOs in particular to be chief system designers, which is what we argue they should be. Somewhat counterintuitively, one of the four artisans that has the most similarity to any organisation is actually the rock band.

So Our Lady Peace is a famous Canadian indie band from the 90s. Steve and I happen to both be Canadian, so we have great love for Our Lady Peace and they talked us through essentially what the business of being in a rock band has been over the course of the last 30 years and they have lived through probably one of the greatest shifts in the music industry that has ever occurred. They went from a period of time where they were producing multi-million dollar records, they had huge record contracts, they were up on stage in arenas, through the advent of streaming and essentially the deconstruction of what it meant to be a musician and they've had to rebuild the way that they think about the business they're in and every single aspect of how they interact with their audiences along the way and they've done it in a way where they've been able to not only stay relevant but stay at the top of their game for over three decades at this point. The final thing I'll say about the artisans is the one thing that binds them all together is they are really keenly focused on the so-called people they serve, whether you think of them as customers or audience members or what have you.

Everything that they did was in some ways aimed at better understanding how they could better serve their, I'll just call them audiences, and how they can tweak anything in what they're doing day in, day out to achieve their desired outcomes.

Nicola Hunt: Thank you, Jeff. They stuck with what they were passionate about, what they were good at, what they loved, and as you note, the people they quote-unquote serve, do you find that business leaders are deeply involved with this principle of the people they serve?

Steven Goldbach: My own observation is that that's a person-by-person characteristic. I think Jeff and I have the privilege of seeing leaders with all kinds of different patterns in how they lead. Certainly, we would have observed several leaders who have a high degree of customer focus or customer interest and therefore get out into the market, spend lots of time with customers, and see that as part of the job.

And there are others who feel like it's more their responsibility to inspire others to do things. I think the broader message that Jeff and I would send as part of this book is that the CEO really has a critically important job, and we think very few define themselves as the chief system designer. And so not only do they need to have a pulse on what it is that customers are wanting and where the direction of travel needs to be there, what we describe as their elemental purpose in the book, but they also need to have a theory of how to design all the collective management systems inside the organisation to get the organisation behaving in a way that's consistent with the direction that they want. We think too frequently, leaders delegate and split up many aspects of this choice of the system design to different parts of the organisation. And what you end up with is some unintentional competing systems inside the organisation that make it harder for leaders to get the outcomes they want.

So to come back to your question, it's a bit of a mixed bag in terms of how leaders define themselves regarding what they're spending time with externally with customers. But I think many more could spend more time doing the hard work of designing the system and how it works inside their organisation.

Nicola Hunt: Jeff, how does Hone build on your previous books, Detonate and Provoke?

Geoff Tuff: The first thing I'd like to say, Nicola, is I wish I could say that this has been a planned journey over the course of the last, I guess we started planning the first book about nine years ago. And if I did tell you that, I would not be telling you the truth because when Steve and I set off and started framing the book, Detonate didn't really think much into the future. We certainly didn't foresee a trilogy coming out of it.

But as we finished Hone, we were happy, we were proud with how they do actually hold together as a threesome. It started with Detonate, which was published in 2018. The premise of that book was in today's world, we have to understand that what has gotten us here as a set of playbooks and best practises and what have you is not going to be fit for purpose in the future for all the same forces of change that we talked about before.

And so Detonate was a book about blowing up the playbooks, challenging orthodoxy, and essentially bringing a beginner's mind to manage even the biggest and most successful companies out there. Once, though, we had blown up the playbooks, we felt as though we had to write something about looking towards the future. And so Provoke, which is the second book, came out in 2021, was all about how you look towards the future and create advantage for yourself, your organisation by spotting uncertainties as they resolve from being a question of if to being a question of when earlier than others.

And there's a lot of advice in the book about how to position yourself. Well, first of all, how to do the foresight about the future, but then how to position yourself well as those uncertainties resolve. And then, you know, Hone really has been the third leg in that stool, the third book in the trilogy, which is all about once you've set the conditions for a future in which you have advantage, how you manage every single day to make sure you stay on track and actually gain the success that you've been able to build by taking all of the advice that we gave in Detonate and then Provoke.

Nicola Hunt: Yes, I did pick up this important issue of timing from the book. What can our listeners, who are mainly managers and leaders, take away as a key learning and immediately apply that questions to both of you?

Steven Goldbach: Well, maybe I'll start that, which is I think our leaders and managers can trust their gut when they know the world around them has changed. For example, when AI came out, when AI came out and we had our so-called chat GPT moment, we're nearly three years into this. So it's not new anymore.

And what's interesting is how few businesses have really embraced it right from the start. And it was completely foreseeable that this technology would get better and we would need to adopt it in our day. But the instinct was to immediately wait and figure out, is this thing accurate?

What are we going to do with it? But it was completely clear that this was going to be disruptive to businesses and the way we work. And so the thing that everyone can do when that instinct strikes you is say, what I've got to do is actually start to learn and experiment with it, start to play with it.

In small ways, make a minimally viable move inside your organisation to figure out how to shorten the time that it'll take to adopt whatever new thing it is. Don't put off the things that feel like they're eventually going to be important and bigger for when they become more certain.

Nicola Hunt: Thank you. Jeff?

Geoff Tuff: I'll keep mine brief. I think there's really two key takeaways that I keep in mind from the book. One absolutely relates to what Steve just talked about, and I would summarise it as don't overthink it.

Important not to assume that we can analyse our way to any sort of solution, just getting out and trying something, as Steve said, is exactly the right inclination. The other probably more important principle is we are not going to be successful as managers, as leaders, unless we're deeply, deeply curious about people and what makes them behave the way they do, what they're motivated by, why they come to work every day. I mean, the list of things we should be curious about is somewhat limitless.

But ultimately, we can't create change unless we drive different behaviours. We can't drive different behaviours unless we understand what makes people tick. And on the surface, this sounds like a simple piece of advice, but I would ask the average manager or leader, including ourselves, actually, just how much time they spend each day thinking about what makes people behave in the way that they do.

And my guess is it's a smaller portion of their time than it should be.

Nicola Hunt: Finally, how can people get hold of a copy of the book?

Steven Goldbach: Well, depending on the market that you're in, if you're in the United States, you can go to www.honethebook.com. If you are in a market outside of the United States, check your favourite bookstore and bookseller, and they will most likely have a copy. And if for some reason you can't find it, then you can find Jeff and I all over LinkedIn these days and just hit us up and we'll make sure that we can hook you up with a copy.

Nicola Hunt: Thank you both very much. It's been a really enjoyable conversation today.