Incentivizing Leadership: Are We Rewarding the Wrong Behaviors? w/ Nigel Thurlow

In this thought-provoking episode of Relationships at Work, host Russel Lolacher sits down with Nigel Thurlow, co-creator of The Flow System and former Chief of Agile at Toyota, to break down the hidden dangers of how we incentivize leadership.

We discuss:
 ✔️ How financial incentives can backfire and create toxic leadership
 ✔️ The difference between responsibility and accountability in leadership
✔️ Why many employees don’t want leadership roles—and how to change that
✔️ The real question leaders should ask: If you stopped paying people, would they still follow you?
✔️ Why "productivity theater" is ruining workplace culture
✔️ How distributed leadership can fix broken incentive systems

🎧 Tune in for a game-changing conversation on leadership, workplace culture, and what it truly means to inspire others.

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Transcript

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Russel Lolacher: And on the show today, we have Nigel Thurlow and here is why he is awesome. Speaker, trainer, executive coach, co creator of The Flow System and the award winning Scrum, The Toyota Way approach. He's the co author of The Flow System, the Evolution of Agile and Lean Thinking in the Age of Complexity and The Flow System Playbook.

That book led him to being named a Forbes. Top 10 author. He's also the CEO of the flow consortium, which is a collection of highly reguarded companies in the LEAN, agile world. He's also the president of CQD LLC, which also is a learning organization in that LEAN, agile, and complexity world. And he previously served as the first ever Chief of Agile at Toyota.

I get a dollar every time I say the word agile in that bio. Hi, Nigel, how are you today?

Nigel Thurlow: I'm doing well, Russel. Good to be here, man.

Russel Lolacher: Today we're talking a bit and around and agile, but we're talking about incentivizing leadership, which I'm super interested to talk to you about this. But before we get into any of that, sir, I have to get into the first question, which is something I ask all of my guests, which is, what is your best or worst employee experience?

Nigel Thurlow: It's interesting you asked that and I, I sort of thought about it for a while because I'm getting old now. So there's been a lot of time as an employee, but I think the best experience and, and it's not really, it's not a worst thing. The best experience was when I realized that I was the problem.

I was in the way of my, the people who worked with me and worked for me. I was in the way of them expanding their horizons. I was always the guy with the microphone in front of the audience, the big, I am, the, the showboat because I enjoyed it. It was good fun I mean, Hey, you do some of this stuff and it's good fun when you're standing in front of 50 people and they're all listening and hanging on your every word.

But then I realized all the people that were working with me and, and being developed by me would, were being starved of development because I was in the way. So I actually stopped going to the training until the, to the events that we were hosting for other people. And I just let the team go with themselves and they figure it out.

And trust me, I was on WhatsApp and the speed dial if they had a problem. But... and that was really, for me, it was a massive learning point for me, a huge catharsis and when I realized that no matter how good I was, if I didn't get out the way, others that I was mentoring and who worked with me couldn't develop.

So I would describe that as one of the sort of, was it a bad moment? It wasn't a bad moment. It was a really good moment for me. It was a tough learning point. It was one of those things that you had to sort of really look inwardly and retrospect and introspect. But it was also paving the way for other people to go on and do great things, which they have gone and done. Which was wonderful.

Russel Lolacher: So I'm a communications nerd. And I look at that situation as great as it turned out. I can also see it seeing a team go, what you know everything, you don't need to go to training anymore?

Nigel Thurlow: Yeah, that. And and the other thing is look, I mean, I've been a LEAN guy for most of my career, thanks to Toyota. The one thing I've realized is we never stopped learning. I have a thirst for learning, continuously craving to learn. And if I hadn't had actually surrounded myself with the people that I'm now lucky enough to work with and call friends, I wouldn't know the majority of the stuff I know now, I just was a good learner, a quick learner, and, and fortunately have been able to sort of use those skills to help other people sort of gather some of that.

And that's an interesting thing as well, because, and I don't know if it's a real bias, I sometimes call it knowledge acquisition bias, which I think is completely a wrong phrase, but I, we forget how hard it was for us to learn the things we learn. And so when we look at others and get frustrated, well, it's easy. Why don't you get it? Well, we forget it took us a tremendous amount of time to learn those skills and even master those skills. And so I've realized that we are constantly learning and constantly having to adjust and adapt and actually things you mentioned, agile things we were teaching five years ago, 10 years ago, I I'm embarrassed about now. Would never teach those things. I cringe when I think of some of the nonsense we used to talk about five or ten years ago. So we need to be constantly, evolving our understanding of things.

Russel Lolacher: And I also love in that story, how much you've highlighted the importance of knowing your team, knowing how your team sees you and perceives you, even if your self awareness might be this, your situational awareness is that, and they have to kind of be in alignment because you're hurting those you're responsible, for those you're in your charges as a leader.

I hate using the word people leader because truthfully leaders are people leaders. It's redundant. Managers are about resources. Leaders are about people. So I love that you're thinking that way, but again, we're all in our own journey that way too. And we're also, we want to learn. We're starving for knowledge too, but then you'll have team members.

And I've encountered this myself where they're like, well, I'm not Nigel. I can't do that. I'm not Nigel. I'm not Russel. I can, I can't do that level of dot, dot, dot. And I'm like, no, but you can do your own level of dot, dot, dot. And, and be just, if not more successful doing that.

Nigel Thurlow: That's actually a really interesting point because to begin with, they were trying to, they were taking my material and trying to emulate me. And trying to use the same sort of sarcasm and humor maybe I'm known for it. I'm a, I'm a Brit. So Hey, it comes with the territory. But also the, the anecdotes, the stories and all those things that really engage an audience and really bring home, the sort of practical experience in something you're trying to share with them.

They were trying to use my experiences and they realized that that was never going to work because they're my anecdotes, my experiences, and they started to develop their own and started to run those by me and see how I felt that they landed from a point of view, them presenting them, not the content on and they start to develop really, really quickly. But that situational awareness you talk about, I think we're always trying to improve that. I mean, we talk about that in the work that I do with my partners. But we're always seeking to understand a little bit more because sometimes the way we convey something, present ourselves, or behave or act, we may think is appropriate.

Others may not feel that way, but we'll never tell you. So you've got to constantly be trying to become more and more self aware. And I fail all the time. I mean, I'm not it's, it's a thing. I think that I'm representing myself. And then I'll read the surveys that people fill in after the event or the training or whatever, and I go.

Who do you didn't realize that? And then you start having to think, well, where did I go wrong? And how do I improve that? And it's hard. It's not easy to do.

Russel Lolacher: No, it's not. And also, it's so important for those teams to have the psychological safety to be honest enough with you about how much you need to improve because sometimes they'll hear the whole, oh, it's career impacting if you're overly honest, and there's a reason these need to be anonymous, because nobody would want to put their name to any criticism, even if it's constructive.

So for them able to be able to be honest, for you to be constructive in improving your leadership involves a whole ecosystem of factors for that to even be possible and valuable.

Nigel Thurlow: Yeah. The amount of leaders that, well, leaders that sort of stand there and say you, you are psychologically safe. I've told you you're psychologically safe and they just don't understand that it's more about environments and creating that. And, and, and of course, candor is welcome and needed.

And, and that's really is a demonstration of true safety within an environment in the workplace that people can express themselves of that fear of repercussion or career limiting moves or promotion. And I've suffered over my years of career by, being... in fact, I was actually removed from a contract once for being too blunt and, and very honest, I'd, I'd, I'd revealed a situation. It was a senior role and I'd revealed a situation and I called BS on one of the executives who was behaving in an inappropriate way, nothing, nothing illegal, just from a point of view of a business point of view. And I made that very clear to others. And a month later I was gone. And so that was the type of, but now the the I guess the, the small nugget in that story, a few months later, he was already, he was also gone. The person, because they'd realized that what I'd said was true, didn't do me much good, but it was a real lesson in the type of environments that we were surviving in and what we're trying to eliminate within other organizations.

Russel Lolacher: Yeah. We talk about honesty, but then actually don't want it in or, or want it in a sugary Trojan horse pill rather than the actual... let's save a lot of time and just have the conversation now. No. Okay, well, then you'll suffer in a couple of months from now. Great.

Nigel Thurlow: When you start talking about quality and safety and risk mitigation, if you don't have an environment where people are able to put the hand in the air and say, Hey, I made a mistake, or you need to look over here, I found something that's really important. Then, as I've joked more recently in very topical for the time of recording this you get Boeing and and, and that's the challenge and organizations that struggle with code quality and product quality and delivery issues because they've been dogged by problems, defects, rework, technical debt, and these things is because people had found it's easier just to ignore and let somebody else make the decision versus actually putting the hand up and saying, Hey, we really need to fix this.

This is not. acceptable. But they know that if they do that, they get, they get accused of whining or whinging or complaining or being, being problematic and not understanding the big picture and all this sort of nonsense.

Russel Lolacher: One of the biggest things I talk about on the show are the seven roadblocks to great leadership. And one of the biggest ones is every leader seems to want responsibility, none of them seem to want accountability. And that and that seems to be the biggest roadblock to that. Another roadblock is how we hire or how we get our leaders.

And this is our topic today. Which is specifically when we did our pre chat, you're like, Oh, you know what I really want to talk about? Like, I love that your tone went up a little bit. Like you were like, like, this is, this is something I want to dig into, which is the dangers of incentivizing leadership.

Now, before we get into this bigger conversation, if you're a regular listener of the show, definitions are my bread and butter. I need us to understand what the hell we're talking about before we get there. So Nigel, in your words, how would you define incentivizing leadership?

Nigel Thurlow: Ooh, I know you've talked about this before. But, we all understand the, the simple terminology of what an incentive is, a reward, a, a, a sort of an encouragement for a certain type of behavior. What I would like to see is that we're incentivizing leaders to develop others. In regards to a specific definition, I'm sure you have something that you favor, but from my perspective, it really is giving somebody a reward for an outcome that they're seeking to achieve. Of course, we'll get deeper into the fact that it's all completely off the rails and we're incentivizing the wrong behavior and the wrong actions by various people.

Russel Lolacher: So why would organizations do this? I mean, we, there's incentivizing good and there's incentivizing bad, which the traditional ones, as you've mentioned, is more pay, more responsibility so you get a higher profile so you can get that other job later, being exposed to other executives that may help your career down the road.

Why would organizations... let's lean into the bad right now. Why would organizations do those more typical incentivizing?

Nigel Thurlow: One of the challenges with most organizations, they are for profit and therefore they are focused on their P and L, their profit and loss, on their market positioning and American corporations predominantly driven by revenue, which is always amused me because there's the old phrase revenue is vanity, profit is sanity.

The difference between the two is called profit and, and we won't cost down revenue up, but they're always driven to meet PnL targets. And when we incentivize people to meet those financial targets and Goodhart's law talks about, well, paraphrase is when a measure becomes a target, it's no longer a good measure.

So when we start to hear you're an agile guy, velocity. Once velocity becomes a target, we need more points in a sprint, it's no longer a good measure of capacity of the team. So when we start to make financial targets, financial. comes as a target or as a measure, it's no longer useful as a measure. It's just become this arbitrary target.

And then the behaviors of the individuals that have put on the hook, that accountability, that ownership of the decision making to deliver that revenue, to deliver those financial targets, that becomes their sole focus and things like leadership and team health and work life balance and product quality and risk mitigation, they all become second fiddle to making those numbers. And that's a behavior of corporations that tend to be, I assume, are more run by people who count the beans than actually look at product quality and, and what they're doing for their customers. I mean, I'm a Toyota guy, so we always talk about customer first and, and delivering things for the benefit of the customer and then money being a happy consequence.

If people like your product, your service, the way you treat them, they'll give you money. Definition of a customer, they give you money and then hopefully over time, they will converge on more of your products, you'll retain those customers, you'll attract them to new products and services, and they'll increase their level of commitment and sustainable revenue generation with you.

But we tend to measure people very much on short term gains. This month's numbers, this quarter's numbers, best this year's numbers. I think we're driving people to behave the way we do.

You mentioned the difference between management and leadership and let's be clear organizations need both without the lunatics running the asylum. But at the same time, leadership is a set of characteristics, behaviors, attitude, and they are available in everybody, not just these with a senior job title.

But if we're talking about those that companies have put in positions of senior authority to lead the organization in the right direction, then you need to be inspiring others to follow you. And we, we get followership, which is this characteristic about people choosing to follow other people as leaders.

And we follow people in, in day to day life. We may follow preachers and imams and other previous bosses and anybody who's inspired us in our lives. So one of the things I tend to ask these people who consider themselves senior leaders in an organization, if you stopped paying people, would they still follow you? And that's these, these leaders you, we follow in real life who we never paid them any money or they never paid us any money, or perhaps that we've we've got those bosses we used to work with that still truly inspire us.

They become mentors and coaches to us and we maintain years long relationships with them long after we started working for them and long after we left their employment. That's for me, a good test of a real leader. And then those sort of leaders create environments for other people to thrive, for them to be innovative, creative. For them to feel safe, to challenge the status quo for sort of critical feedback and critical thinking and appreciative inquiry.

These sort of phrases that we're seeking from them. And then when we start to incentivize those leaders, we should be looking to incentivize how they create this working environment and deliver that extra something special within the organization. Yes, we've got to meet targets, we've got to deliver great products, and we can measure things like quality and customer happiness and customer retention and these types of things.

But we need to be looking at the elements of how you truly inspire your workforce, how you develop them, how you improve those people so that they themselves can go on to better positions and better support for the organization they're in. It's a difficult challenge, but the and of course, the other thing is the incentivizing individuals is always going to be fraught with challenge because we're incentivizing people to achieve certain measures or metrics with them as an individual.

And they will do that in difference to every other measure of metric if it means there, as you mentioned, bonus promotion credibility in the organization, et cetera, responsibility, whereas we need to be looking more at incentivizing the results for customers or the result of an organizational department, be it a team, a department, a division, we need to look at how we improve the results of that.

And I'm talking not just on a financial basis, on our productivity, our quality, our education, our development of people, our happiness within the workplace. Then you start to find people are really in tune, but unfortunately this is the USA and we tend to be driven very much by financial targets.

Russel Lolacher: So what are we looking at, because there's somebody listening to this going, yeah, but where are the numbers? What am I pointing to? That is the ROI of that incentive or, 'cause again, numbers are easy to point at because...

Nigel Thurlow: Yeah, they are. So I always tell people, if you want to get the attention of people that make decisions, always make it about the dollars. How much is this costing us? One of the things I talked to about leaders more recently is what we call the cost of capacity. So you mentioned we're driving people.

We're getting the work done. We're meeting the targets. We're meeting the deadlines. There may be some challenges with quality and other things that we just cut corners to get it there, but they'll tell me, yes, but Nigel, we're meeting the deliveries and I said, but at what cost? Imagine if you could refine that capacity that you could create the space for that innovation, that creativity, or you could increase the effective number of people or teams you have by reducing all the aspects that are causing you to just pay for things that aren't necessary. This comes back to. Basically in teaching of eliminating waste and finding non value added activity.

So if we're not willing and able to call out when we've made a mistake, if we're not willing and able to be able to point out problems that we see that are occurring in the product service system that we're working in, because we're afraid to do that, then that's being covered up. And then the cost of that, that rework, that challenge that problem. It's been occurred that that's occurred, we are unable to deal with that because we are creating, as I say, call it the cost of capacity, because what is the cost of meeting these deadlines, these targets and this, these outcomes are outputs that you're trying to achieve versus if we improve the environment, we improve the safety, we improve the happiness, we improved our willingness and ability to look at challenges that we know are in the system and actually talk to the people in the system and understand that?

How would we bring that capacity, the cost of that capacity down? Now we can actually put a financial value on it. And a simple one just for people who are maybe wondering what I'm rambling about. Just think about how much we wait in a system, the amount of waiting we do. Waiting for an answer, waiting for a decision, waiting for a vendor, waiting for another team, another department, another step in the process.

If you just started to measure that, and that's something called Process Cycle Efficiency, there's an official measurement that's very simple to do. You actually start to see the cost of all the waiting. Then you start to work out how you do what you do, that you map the process of getting work done. And then you start to realize there's lots of things you're doing that are unnecessary. And if you start to understand that and eliminate that, the cost of doing that work comes down significantly, I mean, substantially. Now, you can actually put a measure on the things that you're doing as a leader to improve the way we deliver to improve the environment in which we operate, which we function, reducing risk, reducing the issues with quality.

So improving quality, reducing defects and rework and things of that nature. You can actually start to measure it and then you can demonstrate as a leader, the financial benefits you're bringing to the organization. And I won't tell you the client is we've been doing this recently in one client using sort of traditional value stream thinking from my Toyota background, we're seeing improvements between 40 and 60 percent in time to market.

So just by doing that and the cost of delivery has come down significantly and the time to market has come down. So the cost of that capacity has come down and we're creating capacity to do more work. So these are the sort of simple things that I hope that leaders listening would think about these would make amazing incentives or help them to deliver on their incentives.

Russel Lolacher: Does this conversation change a little bit when we start getting into conversations around diversity and inclusivity? The reason I ask for this is that there are a lot of organizations that are looking awfully white CIS male throughout their entire leadership. So they'll use traditional incentives for those that reflect more diversity to be more enticed to those roles.

However, again, we're hiring non leaders. We are throwing shallow metrics at them as reasons for them to, but I understand the intent is a positive one. However, the tactic might not be the best.

Nigel Thurlow: It's an interesting conversation, especially given the, the election results in November this year, of course, in the U S and the challenge. Look, we want a very inclusive workplace. We want, we want diversity of thought. We want cognitive diversity. These are things that are absolutely necessary. And when we talk about multi skilled workers and cross functional teams and the ability to bring people together, we want that diversity of thinking, that diversity of thought, which is.

Coming from a lot of our backgrounds, our education, our nature, our nurture, our life's experiences, what the Germans call The Worldview, which is a much better word than talking about silly things like agile mindsets. I think where the challenge comes, and this has been a challenge and I'm no expert on this, so take this with a pinch of salt. And of course I, I sort of fit I'm a boomer. I'm a white, a white male and I'm as my daughter would tell me I'm cisgendered, so, I mean, I fit that sort of... that, that sort of archetype, but it is who I am. But when you start to hire just for a quota, that becomes problematic for not just the organization, but I think it's disrespectful to the people themselves because you've been hired because you fit a certain characteristic versus you've been hired because you've got what it takes for that organization to succeed or within that role or job as an individual. And so I think we have to really start to practice respect for people, which is ensuring we hire the right people into the right roles and then provide them with the right opportunities, the right mentorship, the right guidance for them to succeed and thrive without discriminating against them for any characteristic, be that a traditional DEI characteristic or something else disabilities or other things that limit them in some other way, but don't limit their ability to perform to exceptionally high levels within the role. I'm lucky. I travel all over the world in my work.

I've just come back from a 24 day trip. Nine flights, five countries. So I, I am mixing with a tremendous amount of different people from all walks of life, from all different cultural and ethnic backgrounds. And unfortunately, I know I just see people, I don't see anything that distinguishes them, but I still need to find the people who've got the something special, that je ne sais quoi, those skills, those cognitive abilities to be able to perform in the, in the work that they need to do.

Russel Lolacher: One diversity I don't think we talk about enough is on the side of generations as a Gen X and you're a Boomer. So I get that. But the difference is, is there a lot of people coming up in these systems who have no interest in being leaders? They are like, that's great. I like my work life balance. That's a stress job. That's a, I'm closer to the fire hose. Not interested. So incentivizing might be the go to for a lot of organizations going, well, how do we get these younger generations to replace us when they're being very vocal that they do not want to.

Nigel Thurlow: That's a really interesting thought because we're looking we talk about my son's a millennial. He was born just at the tail end of 1999. But you look at the Gen Zs and now they're talking about the gen alphas and I talked to my son, he's doing his master's degree at the moment.

And he's focuses in sports and I talked to him a lot about motivations and things that he wants to do and the things that drive and excite him. And he sort of better represents the, the generation we now see in the, the 2020s that we're sort of living in, I'll soon be exiting the workplace.

Maybe when I'm too old to be bothered. But and you are right. How do we motivate people who see life very differently with social media today? The influencers, the influencers on social media and the influences that people take from social media. So with all these influences that they are exposed to, they are seeing things in a very different way than I saw them when I was growing up and again, very old, born in the sixties.

When I was growing up, it was about finding a job, working in that job for the next 20, 30, 30 plus years and then taking retirement by the time you were 65. Then he transitioned more into the world that I was sort of in a professional capacity through the nineties and the early noughties, when it was really about leadership and about helping people grow and evolve within organizations.

But as you say now, because of the, the influences around people, they see that everybody seems to have a lot of stuff. Everything we do now is about getting more stuff. More, more gadgets, more toys, more possessions, spending more disposable income. And a lot of people are finding... you talk about work life balance.

I think there's a desire for people to play a lot more away because if you're talking to a 20 year old, they're not really sitting down thinking about marriage and kids and paying bills. I mean, one or two may be in that. But the majority of them are just thinking about enjoying life. Now, as you start to get a little bit older, and you start to get into your sort of thirties, and maybe you have now got married, you're starting to have children, you've got your first home loan, or your mortgage, and you're starting to pay for that, you've probably already got a car payment, and credit cards that are a little bit stacked, and so, suddenly now the thoughts then turn to the direction in which they want to go.

And they realize that more senior roles pay better salaries and give better benefits. So they see leadership, which is wrongly associated with the seniority of a role, but let's just say, see leadership as a direction they may want to follow to get that. So I wonder whether it's a problem that we perceive that may go away through its own natural evolution as people get a little older and they need more, more stability in their life. And they want to find these more senior roles in organizations or whether we have just created a, a generation or an environment where people don't want to take on these responsibilities and this accountability of leadership and in these organizations.

But if we have created that, then I start to wonder, where's it going to end? I mean, are we going to end up in some sort of a weird dystopian future? Which of course, everybody worries about. I think it will correct itself. I think when I was in the growing up as a kid in the seventies, I was more interested in how many pints of beer I could drink down the local pub when I was 17 years old then, then worrying about running a international conglomerate. But as I got older and I realized that my lifestyle choices were probably not the best at the time, then I started to correct those and, and make some changes and hopefully they were for the better.

Russel Lolacher: I think some of the, a lot of the people I see are of the younger generations who are talking about they don't want those leadership roles are saying it within organizations that are kind of crap, like organizations that are not showing what leadership could be. They're showing, they're just grinding out leadership as a, we're going to burn you out.

Of course, nobody wants those jobs A, you're not selling leadership as a job that's enticing. You are showing the results and the stacked calendars that people don't have room to breathe in going, Hey, do you want this job? Of course they don't want that job. They want to be able to, I don't know, have lunch.

Like I, I honestly don't think we do a good enough job about selling what leadership could be. And then just doing a horrible job with unhealthy organizations going, it's that young generation nowadays. They just don't get it.

Nigel Thurlow: So this comes back to the environments, the, I mean, people talk about culture and I talk about culture being the product of our behaviors. So if you don't like the culture you're in, change how you do what you do, change your behaviors, change your attitude. And most, most companies I mean, whether you're in the office or out of the offices is a never an... endless stream of meetings about meetings, about meetings to have a meeting to decide about a meeting to make a decision that you never ever bother keeping to and then have more meetings about why we didn't keep to the decision. So, of course, no, I mean, these, these poor sods are coming into the workplace.

They're seeing people nose to the grindstone working 8, 10, 12 hours a day. If you're in the U. S. that's not uncommon. And then giving up some of your discretionary time at the weekend, Sunday evening, you're catching up on your reports, maybe even doing the damn status report to present on Monday morning, or at least looking through your calendar, replying to emails, making sure you've got your ducks in a row for another 50 plus hours of meaningless attendance in Teams and Zoom sessions.

Even if you are lucky enough to be working from home, if your context allows that. So of course we need to be looking at what, and I come back and I'm sorry, it's just the LEAN guy in me, I come back to it. Just go look at how you get stuff done. I talk to leaders all the time about what they think the problem is.

And we know, why did you buy agile? Why did you buy LEAN? Why did you buy safe or whatever else you, you're throwing at your problems in the office. And I'm asking you, what do you think the problem really is? And they, they'll tell me things that like, revenue is down, costs are up, attrition of customers or staff, these types of things quality isn't where we need it to be.

And I keep telling them these aren't problems they're outcomes, the results of the way you do what you do. And if you don't like the results, you need to go look at how you're doing, what you're doing, and actually go dig into that and really, truly understand that. And when you realize the farce, what we call productivity theater, that's going off the constant robbing Peter to pay Paul to make it look like something is happening in the organization.

When you go look at that, that farce that you're perpetuating and start to actually fix the real root causes, the real underlying causes of why you do what you do and the way you do what you do, then you'll get a better result. And I think unless we address those problems, then you bring a new person in.

They just look at it in complete shock and horror and think to themselves, this is not what I want. And of course, back to the sort of social media influences, they're looking at what the world purports to be, and then they enter this real world of typically corporate hell and they start to understand this isn't really how it looks on Instagram or Tiktok or whatever, this is a completely different life. So if we want to fix that we want to engage the younger generation You've got that knowledge that creativity that innovation those new ideas that fresh thinking we want to nurture and exploit, then we've got to create an environment that attracts them. But if the environment as we go back to incentives again if the environment is just run, run, run as fast as you can in the hamster wheel to make these arbitrary targets without actually thinking about what it is we're trying to achieve here, I think these companies are going to have a hard job attracting and retaining the younger generation.

Russel Lolacher: First off, I'm going to write, I wrote down productivity theater. I'm going to use that a lot. That's a T shirt. I am all over that

Nigel Thurlow: I didn't come up with that. I have friends who told me these things. So.

Russel Lolacher: Fantastic. And just, I'm like, oh, that hits so close. The other piece that I really want to ask about is in your book, The Flow System, you do talk about a distributed leadership approach. Do you think that could be an answer to avoiding some of these dangers when we share leadership

Nigel Thurlow: Yeah, I mean, that comes distributed leadership comes from leaders intent or intent based leadership, which is stuff that people like Dave Markay talked about of commander's intent in his book, Turn The Ship Around. There's a lot of other influences that flow into that. Psychological safety is part of distributed leadership.

You talked about accountability and responsibility and definitions are important because in Spanish, whenever I go anywhere that speaks Spanish, they don't differentiate the two terms, they're basically synonyms. But in the English language, accountability is about owning the decision making, owning the outcome, the result where responsibility is just the responsibility for doing the work that achieves an outcome or a result. That that's the sort of nuance there. But what we want to be able to do is to transfer the ownership of decision making to other people so that we entrust those decisions throughout the organization where delegation is, I let you decide for me on my behalf, but I still retain the overriding decision making on that.

I'm still fully accountable where we want to transfer that accountability to that ownership of decision to people who are closer to the work. And that's where my case, as it says, move authority to the, let's say, move authority to the information and the information is where the work is done. What lean people may call the gem, but the real place, the actual place, the work is done.

So we truly want to enable people closer to the work to make the decisions that are right. The right decisions closer to that work. Now, of course, to be able to do that, they need the skills, the competency, and they need the right decision making understanding the right thing to do which Markay calls the clarity.

So clarity and competency. Toyota, of course, have done this for decades in giving the authority on the production line to reach up and pull a cord to effectively stop production. It's known as the andon cord when they spot a problem. So we give the psychological ownership, not just the psychological safety, but the ownership of the decision making for quality to the people building the car. And I challenge a lot of leaders that I speak to is how do we enable that metaphorical andon cord, as it's known, in your line of work. So if somebody spots a problem in, in a system in code, in some development, doing anything, any product or service delivery, wherever it is, how do they have the ability to pull that metaphorical cord and stop production, take a pause, reflect on where we are, consider the appropriate action before continuing on in that process, that system, whatever it is we're doing. That's the, that's what we really mean by distributed leadership, moving the ownership of the decision making within the organization, because if you can't do that.

You can't scale. If you are, if you are the single decision maker, or maybe you've got two or three people who make all the decisions for a thousand people, then how do you ever scale beyond you? My wife's a chef and I often say if the chef's in the kitchen, the restaurant will fail because you need the chef to be able to teach, mentor, and guide multiple people to be able to do what you do.

Otherwise, how do you scale you? You are the constraint. And I see that a lot in a lot of organizations where nobody can make an effective decision. The bias towards action becomes more action bias, which is action biases where people are making a decision to be, to be seen to be making a decision versus bias towards action, which is making faster decisions, better decisions, the right decision and to enable that you have to distribute that decision making authority within the organization.

Russel Lolacher: And speaking to the incentivizing of leadership piece of that, it also allows that frontline staff, that middle management team to have a taste of leadership as opposed to thinking of leadership as an other, as it's us versus them, or they don't see us. Or they undervalue us. They are part of the ecosystem rather than feeling it outside of that ecosystem.

So if you're incentivizing going, if you want to be a leader, here's a taste of it. This is what it feels like. You may want to continue on a leadership journey based on that. So I find that to be a huge incentive because you already know kind of what it's going to feel, look and look and taste like basically to move up.

Nigel Thurlow: And if you want to bring on the next generation of leadership to help inspire others and mentor and guide the company and the organization in the right direction, you need to do that. And one of the messages I give people, and again, this only works if you have an environment is just psychologically safe, which people feel safe to make mistakes, safe to speak out, safe to be, to give critical thinking, critical feedback is if you don't.

Allow what you do to be done by others, you can't move up because the people above you want to get rid of some of the stuff they own, and they've got nobody to give it to you. If you're clinging onto what you do, because you don't want to lose that, that control, that value, you can't inherit some of those more senior decisions, those more senior roles that you can do because you're too valuable because you become this single point of failure, this critical link in the chain and the senior leadership don't want to move you from that because the realize it's brittle. So you have to give away some of that control if you want other people to succeed so that you can therefore move on up.

It's a really difficult thing to, to convince people to do. And it just require a very strong, safe environment, which has to be nurtured by those people calling themselves senior leaders. And they'll only do that if they act and model the behavior themselves.

Russel Lolacher: Well, that's an exclamation mark to wrap this conversation up. Thank you. Nigel for that. I could go down so many different paths with you, but unfortunately, we're out of time for now. But I do have to wrap it up with our regular question, which off the top of your head, sir. What is one simple action you believe people can do right now to improve relationships at work?

Nigel Thurlow: Just listen more. Close... big eyes, big ears, small mouth. It's a real hard lesson, definitely for me to have learned, but we need to listen more and understand what other people are saying.

Russel Lolacher: That is Nigel Thurlow. He is a speaker, trainer, executive coach, and co creator of The Flow System. You can buy the book and the playbook and the award winning Scrum, The Toyota Way Approach. Thank you so much for being here, Nigel.

Nigel Thurlow: Thank you, Russel.