POWERING THE PROJECT ECONOMY
Identifying New Ways of Working

Unlearn to Achieve with Barry O'Reilly and Joseph Cahill - Season 1 Episode 4

Center Stage podcast: The Voice of the Project Economy

Good leaders know they need to continuously learn, but great leaders know when to unlearn the past to succeed in the future.

In this podcast, Barry O’Reilly shares the system he uses to help Fortune 500 executives and business leaders rethink their strategies, retool their capabilities, and revitalize their businesses for stronger, longer-lasting success. The best-selling author of Unlearn and Lean Enterprise talks with PMI COO, Joe Cahill, about how to rapidly adapt to changing circumstances, identify what to stop, what to keep, and what to change to unlearn, relearn and breakthrough to achieve extraordinary results.

ANNOUNCER: 

The nature of work is changing. As organizations restructure their activities around projects and programs during a time of unprecedented change and complexity, they are also called on to reimagine how problems are solved and how work gets done. This takes a deep commitment to collaboration, empathy, and innovation. 

Through this podcast series, Center Stage: The Project Economy, PMI presents the real meaning of innovative change focusing on the strengths of virtual teams and cross-functional, project-based work. We’ll help you stay on top of the trends and see what is ahead for the project economy and your career. 

The following episode was recorded remotely during the Covid-19 crisis.

CAHILL: 

Hi everybody, my name is Joe Cahill. I’m the COO of the Project Management Institute, PMI. Thank you to our new and returning listeners to the Center Stage Podcast series. 

As always, today’s podcast is exclusively and proudly sponsored by the PMI Knowledge Initiative. The Knowledge Initiative is a community of professionals and thought leaders that are focused on the art of getting things done. This global community is sharing knowledge, developing new thinking and harnessing the collective intelligence of the entire PMI global community as it relates to the future of work.

So onto the program. Today it is my pleasure to be here with Barry O’Reilly, Founder and CEO of ExecCamp. Barry is the author of two international best-sellers, Unlearn: Let Go of Past Success to Achieve Extraordinary Results and Lean Enterprise: How High Performance Organizations Innovate at Scale. This is included in the Eric Ries Lean Series and it is a Harvard Business Review must-read for CEOs and business leaders. 

He leads a popular podcast series for leaders and is an international sought-after keynote speaker, a frequent writer and contributor to The Economist, Strategy and Business, and MIT Sloan Management Review. Barry is faculty at Singularity University, advising and contributing to Singularity’s Executive and Accelerator programs, based in San Francisco and throughout the globe. His work has pioneered the intersection of business model innovation, product development, organizational design, and culture transformation.

O’REILLY: 

It’s a pleasure to be on the show, Joe, and it’s nice to meet all your listeners.

CAHILL: 

So Barry, I’d like to start off by asking you what are the greatest challenges that organizations, leaders and people will face in the coming years and how should we prepare for that future?

O’REILLY: 

I think we’re in a very interesting time even at the moment. We are in the middle of the Covid crisis here. And the one thing I think I’m reflecting on at the moment is what has caused the biggest transformation in our business? When you ask that, like, is it your company’s business strategy, is it new product technologies, is it changes in the environment? 

And I think it’s fair to say for so many people right now, they are having to respond to an unanticipated change, something that they couldn’t have planned for. So they are learning new things about themselves, maybe they’re struggling with certain things and maybe they are even realizing that they have maybe optimized for just executing rather than having responsive flexible systems that allowed them to recognize when change is happening and respond. 

And I think this is a pattern I’m seeing not only in organizations but in individuals. We get wedded to behaviors and methods that are comfortable to us. We find a business model and we optimize it and then there’s a new technology innovation and we’re disrupted. We’re a leader and we’ve set methods or behaviors that we like and then suddenly the market changes or our company is forced to change and we haven’t got the skills or the tools to adapt to that change.

So I think the real reflection for me is that we’re only going to experience more and more unanticipated changes in the environment, be it technology innovations, be it socioeconomic experiences that we have. And really the key for leaders in organizations is to build systems that they can rapidly respond to change rather than trying to control what’s going to happen and how things happen, and that’s a real reflection for me and observation over the last couple of months.

So many people are realizing maybe they optimized for just executing rather than having responsive flexible systems that allow them to recognize when change is happening and respond.

CAHILL: 

Do you think optimization is still the goal as it relates to the responsive, flexible system?

O’REILLY: 

You know, I think this is always going back to companies like managing both sides of the equation. Sure, when you’re building new products and you’re launching them the whole point is to capture market and grow your product, scale it and that requires some process optimization over time. But if you only go down that path it leaves yourself vulnerable to when change happens that you haven’t built the muscles to continuously respond to change or you’re actively looking for ways to try and change your business.

And I think what I continuously see - and when we wrote Lean Enterprise, this was one of the fundamental principles of creating a lean enterprise - is have you continually both explored new initiatives and opportunities to grow your business at the same time exploiting the opportunities that you have identified to scale them, to maximize them. And the companies and the leaders that succeed can manage both domains. 

And I think that is really something to really think about in your business is how much exploring are you doing versus just exploiting and optimizing? And if it’s a 90/10 ratio, that’s not good enough in today’s world. A company like Netflix is spending 90 percent of its investment budget exploring because they have to keep building new content, they have to create new technology to reach larger markets and different platforms. So you’ve really got to think about what your business model is about and then what ratio should you be spending and exploring new initiatives, exploiting existing initiatives and then scaling them for success.

CAHILL: 

Interesting. Your recent book is focused on unlearning. So tell the audience what is unlearning and how do I get started and why, quite frankly, do I as an individual or a leader, need to unlearn?

O’REILLY: 

Absolutely. And that’s a question I get all the time. And my inspiration for writing Unlearn really came from what I found from working with leaders deploying Lean Enterprise in their organizations. It’s not the ability to learn new things that’s the challenge, it’s actually the inability to unlearn existing mindsets and behaviors that were effective in the past but now maybe are limiting your success.

So this is really interesting, right? Like, a person like yourself, you’re a COO of a large organization, all your feedback mechanisms are telling you that you’re doing the right things - you’re getting promoted, you’re moving up through the company, your business is growing, why should we change? 

And the simple fact is, and I’m sure PMI is another great example of this, because you started making bets a year ago about how you move to a more distributed way of working, you are probably in a better place than you would have been when something like Covid happens. Well there’s other organizations that have been relying on, holding onto the tools that have made them successful in the past and now the market changes, and they’re struggling. 

And what I say to leaders really about unlearning, because most people do get very upset when I say you need to unlearn and they’re very senior people, it’s a system. And the way I describe unlearning is it’s a process of letting go or reframing once-useful mindsets and acquired behaviors that were effective in the past but now limit our success. So it’s not forgetting, removing or discarding your knowledge or experience, it’s the conscious act of letting go of outdated information and actively engaging and taking in new information to inform your decision making and action. And when I start to talk to leaders about that, they get much more interested. 

Just like a product has features and we’ve got to continuously innovate features in our products for them to stay relevant in the market, humans have behaviors. So if you’re not continuously innovating your behavior to adapt to your market… the truth is it’s not organizations that get disrupted, it’s individuals because we get stuck holding onto behaviors that made us successful in the past rather than adapting to the changing circumstance that we face.

And this is just a thing that has come up again and again. And it really inspired me, from working with these leaders from Fortune 500 companies all over the world to scaling startups here in Silicon Valley. The leaders that power ahead are constantly cultivating these scenarios where they are getting outside their comfort zone, that they are experiencing and recognizing where their existing behavior or thinking is limiting the outcomes they’re aiming for and therefore they need to adapt. 

And I have helped build a system captured in Unlearn about how to help leaders continuously adapt to changing circumstances, which as you can imagine at the moment probably has never been more important but also more impactful.

CAHILL: 

Exactly. There’s no doubt. Everybody’s… well it’s a shared experience as well. Everybody is going through the same thing, which makes it quite unique.

So in that regard then, why are the big barriers and challenges to organizational unlearning at the individual level but at the organizational level? How does that organization get over those and what are those barriers?

The key in organizations is for leaders to build systems that can rapidly respond to change rather than trying to control what’s going to happen.

O’REILLY: 

There’s a couple of obstacles that come straight from organizations. A lot of it is our existing leadership conditioning. Maybe you’ve grown up in an organization where the role model of what good leadership was was just telling people what to do and how to do it. Maybe that’s your model for what good leadership is. And other things are simply just our learning, our knowledge thresholds - what we have seen, what we have experienced about what good looks like and people’s desire to always be correct. 

One of the big inhibitors in innovation is too many people try to prove that their idea is right rather than test it to find out what the gaps are and improve it. And I also think aspects like rewards and recognition, how incentives are set up in organizations. Pay for performance is actually a problem rather than creating an environment where people are intrinsically motivated by connecting them to the outcomes of their work, connecting their work to the customer success stories. 

One of the deep dive case studies we share in Unlearn is from the work I did with Capital One, which is helping their organization truly transform the way that they work. Because they recognized, first off, they needed to get in the business of describing success in terms of outcomes. Too many organizations are trying to digitally transform but they have no measures of success to define what digital transformation is. 

The leadership team at Capital One got very explicit. They talked about the percentage of customers interacting digitally, the increases in customer wallet spend and savings that they would have with them. These are all outcomes, changes in behavior. And when they start to describe those at the organizational level, teams then start to realize well, if I need to increase our customer product usage with us by 50 percent, how am I going to do that? Everyone can start to be engaged in solving that problem. 

And they started to realize that they needed faster technology systems, more responsive technology systems, which led them to realize that to transform the business they also needed to transform their talent. And this was a company that was a traditional IT bank with mainframes and legacy infrastructure. 

CAHILL: 

Right, with big, big legacy systems.

O’REILLY: 

Right and a highly regulated industry. So they realized if we want to increase our customer investment with us by 50 percent, they’re going to have to build new products, they’re going to have to be launching products more frequently, quickly. And that led them to realize that they needed to transform talent, which means transform their technology.

So they started giving people opportunities to learn and practice using AWS cloud infrastructure or rapidly launching smaller products and testing with customers. And the reward and recognition was that the teams could actually see the impact that they were having from both bettering themselves as individuals, trying to grow themselves as an individual and being recognized in the company as someone who is curious, a high performer, and helping other people improve. 

But they were also then tied, because they’re working in these small, cross-functional teams, teams that are assigned problems with outcomes like increasing the retail bank’s portion of wallet by 25 percent, these teams are connected then to real outcomes. Customers using their products were great feedback loops. So they can start to iterate their products and own the problems and succeed. 

This is fundamentally different from the organizations where you’ve got leadership defining a strategy, which is opaque and abstract, like we’re going to digitally transform, then telling people all the initiatives they need to work on, what time they need to be delivered by, all the features that are in it. You’ve got these creative, talented people just being treated like they’ve no creativity to bring to the problems to be solved. And you lose people in that world.

And I think what we have seen, especially with Capital One now, they are Amazon’s favorite case study of using AWS to innovate their business, they’re growing 20 odd percent year on year from rapidly adopting these methods and changing the ways that they work. And I think there is a lot to be said about really working differently, encouraging your teams to take ownership by given them clear outcomes to achieve, problems to solve, and the opportunity to pursue them.

How much exploring are you doing versus just exploiting and optimizing? If it’s a 90/10 ratio, that’s not good enough in today’s world. A company like Netflix is spending 90% of its investment budget exploring.

CAHILL: 

So it’s kind of like the traditional measure is return on investment but this is more of a return on engagement, right? Is that a good way to put it?

O’REILLY: 

Well I often think when we talk about return on investment on innovation activities, you have no real idea how much revenue you’re going to generate from an idea when you first have it. And it’s a lagging indicator for success. 

CAHILL: 

Always.

O’REILLY: 

The last thing you get is revenue. So what I think was a fundamental shift at Capital One and a lot of companies I work with is I get leaders to start describing outcomes. So if you digitally transform, how will you know you’ve succeeded? What would success look like? And some people will talk about, well we have a million dollars more revenue and we’ll have happier customers. But this is all abstract stuff and it’s not inspiring to people.

CAHILL: 

No, no.

O’REILLY: 

But when you start to think about outcomes, like changes in customer behavior, like a 50 percent increase in customer investment ratios with us, right? Like, everybody can sort of understand that. Well, if customers are spending $100 with us how can we get them to invest $150 with us? We’d have to build great products that they want to use, that they are happy to invest. 

And the thing about it is, when you give people those sorts of outcomes, they intuitively start coming up with ideas. You have ideas flowing all over the company rather than telling people I want you to build a mobile app, it’s got to be ready on the first of January, you’ve got $10 to build it with and here’s all the features that need to be in it. They’re totally different worlds.

And I think what we see with high performance organizations is you give people problems, you give them the outcomes that you’re aiming for and then they will start coming up with ways to get there that you could never even imagine. And when they’re responsible for making those choices, that’s where you get the higher engagement in teams because they are problem solving. They can test ideas, they can have feedback loops to see are they increasing, are they getting to the 50 percent increase in investment spend that you’re aiming for, or not, and adapt. 

Versus when you give people output based measures of success, like make me a million dollars, deliver on this date, make sure all the functionality is there, that doesn’t inspire action in people. It feels like a death march. And I think what we’re seeing is the companies that get to outcome-based innovation are just powering ahead.

CAHILL: 

And you can’t do it the way you used to do it, which is the larger point here, the velocity in which you have to operate, the old structures are just obstacles, quite frankly. 

I want to shift a little bit because PMI has a 50-year legacy, quite big success in terms of building a large global community. In recent years we’ve been entering into the agile space, providing an agile answer into the marketplace. 

I just wanted to get your view because I was just recently looking at your report on scaling innovation means descaling work. I got a chance to read that the other day. And a couple items in there came up and I just wanted to... because it relates to our community, I wanted to ask you can you share with us your view on how big projects get stuck? And further into that context, can you provide us your insight into the limitations of enterprise or scaled agile frameworks?

O’REILLY: 

Oh absolutely, yes, it’s a pleasure to share these kind of insights. I’m constantly trying to share my work that I’m doing and showcasing the work that I’m doing with companies on frequencies of every few months and I’m delighted to share this report again with the community as well. But the observation that I continuously see with these big initiatives that companies are trying to run, the first challenge is they think big, they build big and they become too big to fail right from the start, which means people are forcing initiatives to get done. 

One of the examples in the report is with the Fortune 50 financial services company that I was working with. And they were doing the classic golden data project where they were trying to create this beautiful single source of data that would correlate all the information across this global institution into one place the everybody could use. 

And it’s a noble idea but what was classically happening is it was a big idea that had a big budget, everybody’s eyes on it, so they felt like they had to make a big splash and have a big bang release. And all of these different individual parties were working in their different silos. You had the sales team working on their work, the traders on their own, tax on another, operations, data, machine learning, all these organizations had had this big problem to solve but they started having their own little localized versions of success. But there was no correlation or coordination around what success was for everybody.

So the mistakes you see people do is thinking big, starting big and going big. And that’s wrong. You need to think big and actually start small and learn fast what works and what doesn’t. Again, small teams can iterate, launch - and I’ll talk a little bit more about how we solve that problem later. Having siloed teams, like different departments, like I said, the sales, the traders, the data machine, the cloud infrastructure, all these different silos optimizing for their own measures of success, there’s no shared measures of success. 

So when you have difficult tasks that need to be handed off or dependencies, you end up on the backlog of another team, waiting for your work to be done, which slows work down. And slowed work and delays is the death for large initiatives. 

Again, measures of success are often output based rather than outcomes. So when people write the big business case it’s about what date, how much are you going to spend, when it’s going to be launched. But again, the difference is you should be thinking about outcomes. So increasing the percentage of the market captured, increasing the rates of key functions used by the system. These are much more important.
And then when you have these competing priorities between teams, it’s difficult to get work done or requires coordination across all the initiatives. Often these organizations have too many initiatives in progress anyway, so you have your best people working on anywhere between 10 to 20 initiatives at any one time, constantly context switching. 

And then finally it really comes down to this idea of people’s personal brands or bonuses tied to these initiatives, often the delivery of the initiative. So and especially at the executive level when you’ve got anywhere from 50 to 80 percent of your performance, or pay for performance, reliant on initiatives you have to deliver, even if they’re failing people are forcing them to work. And I think this is a massive challenge.

So really the things I am constantly talking to leaders about is about thinking big but actually starting small and learning fast what works for you. And starting with getting shared outcomes.

When I was working with the financial institution, the first thing I did is I got all the different project teams together and asked them what’s your measures of success? And I had 12 different answers from six different teams. But so the thing here is this is when you need to think big is push up and find a goal or an initiative that everybody can get behind. And invariably that’s some sort of customer success. 

For them it was that they started to think about their customers will be able to do foreign exchange transactions at any time, at any moment, in any currency anywhere in the world. That was a big idea that everybody could get behind. And that created alignment. But then the trick was not to go after that big idea straight away. We started small. So I started to talk to them, all right, if any trade in any market with any currency... if that’s big, what could be really, really, really small? What could be just one percent of a step towards that outcome? And then that’s when people start descaling actually this initiative. 

And the power of descaling is it actually reduces the impact of unanticipated changes but it allows you to start learning quickly what works and what doesn’t in a safe-to-fail manner. So we descaled their initiative down to this one percent idea, which was like well, why don’t we try and do one trade in one currency at one time between London and New York and let’s see if we can get something working end to end, a very simple yet naive use case. 

But then that would actually give us this golden thread that would slice through the entire initiative and we could get something in the hands of customers to start getting real feedback about whether they would use that one trade in one currency in one market. And then you start to layer on the complexity of scale about how you start to tackle these problems. 

So much of these scaling frameworks, it’s like taking a fixed blueprint of practices and trying to copy and paste it onto these complex organizations or products and expecting them to work. And really what I continuously find is that you actually need to descale, like start smaller. Do things that actually don’t scale initially so you learn exactly what works and what doesn’t and then start to build out from there.
I think that’s one of the challenges with so many of these digital transformations and scaling frameworks is it’s easy to count the number of people who’ve got certifications as a measure of success but that’s not an outcome, that’s just an output. The outcome we aim even from certification is that the teams are delivering more frequently, that they are improving the customer success, that there’s higher usability and usage of their products and they are shipping more frequently. 

These are the outcomes you should be aiming for, not counting how many people have been certified, how many features you’ve released, have you hit the amount of budget you said you would. They’re all outputs. And I think that’s one of the dangers that so many organizations fall into that trap and really struggle.

It’s not the ability to learn new things that’s the challenge. It’s actually the inability to unlearn existing mindsets and behaviors that were effective in the past but now are maybe limiting your success.

CAHILL: 

If you’re speaking to the project managers or the project professionals that are listening to this broadcast, how does your research predict or anticipate the capabilities or skills that they’ll need, given the things you just said about projects and scaling agile?

O’REILLY: 

This is one of the questions I get a lot, right? It’s like, well, what happens to project managers when you have these cross-functional product teams? And if anything, the skills have really never been more important, the ability to manage cross-dependent work, the ability to connect dots across the organization when people are doing these complex programs, multi-teams involved in initiatives. The ability to coordinate and connect work has never been more important, especially as organizations of large scale.

So I think the things I would always be encouraging the project management group especially, is you also help create the measures of success for initiatives. So look at your reporting. What are you reporting? If your dashboard only says percentage complete, number of features delivered, budget burned... these are all execution, output-based execution metrics, which are important but the reason we are building everything is to actually change customer behavior that they use our product more, that we are shipping our product more frequently for the teams, that the percentage of market that we’re capturing is growing.

So the one small thing I would ask them to start with is just start putting some outcomes on what you measure success for your initiative or if you see initiatives with no customer outcomes or business outcomes on them, you’ve got to start getting that focus onto your report cards. Because if you don’t, you’re just going to have teams that are shipping but never really understanding from the start if it’s actually achieving any of the outcomes that they’re aiming for.

CAHILL: 

And one of the outcomes is actually the alignment, ironically, of all the teams across the different functions, as you’ve highlighted. That is within the team an outcome that’s needed to succeed.

O’REILLY: 

Well one of my favorite tests I used to always run in organizations is I’d ask individuals on the team why are we doing this work and what’s success for it. And if the teams can’t reel that off the tip of their tongue - we’re building this to increase our customer investment ratio by 50 percent - I would say that’s a fail. That’s a fail not on the person, it’s a fail on how well we are coordinating and communicating work across the organization and we need to improve it.

And then asking them how their work today directly correlates to impacting that outcome, again, if they can’t answer it means we’ve got an alignment issue. And these are all small little questions that project and program managers can be asking every day to understand how aligned are we really and are people clear on how their contribution is going to make a difference. Because when they are you’ll see amazing work being done and engaged teams. 

And when it’s opaque and unclear you’ll see confusion, frustration. And that’s when you start to get the finger pointing happening, when things don’t go right.

CAHILL: 

Don’t go right, yeah. We can see that much of your work is focused on business innovation both learning and unlearning as we have learned today, and successfully transforming organizations. So PMI has recently started a new program, this Knowledge Initiative with very similar goals. What do you see as the relationship between project work, knowledge and unlearning?

O’REILLY: 

It’s such a good question. It’s funny, I always say one of the reasons that you have these organizations like Amazon, Google and so forth, the reason that they are powering ahead of the competition is because they have built these platforms that rapidly allow them to both learn and unlearn what works, what their customers use and then iterate as quickly as possible.

So I often say the company that can gather the most information the quickest and cheapest and turn that into knowledge that they can use to both adapt or change their behavior are the ones that win. And we see that with Amazon doing... Amazon deploys software every second now. So every second they learn something new about their customers and that allows them to adapt to the market, to sense where the market is going and essentially win.

And what I would say for people, and again this is what my unlearning system is really about, is that you need to start recognizing where your behavior is not achieving the outcomes that you want. Where are you not living up to the expectations you have for yourself? Where are situations you’re struggling with or you’re avoiding? Maybe you’ve tried everything you can think of and you’re not getting the breakthrough that you’re aiming for.

You know, these are all signals that you need to unlearn, that your existing behavior is not working and you need to adapt. Just like Amazon adapts when it’s not achieving the customer outcomes it’s aiming for, you’ve got to get good at writing down what outcomes are you aiming for, where are you achieving them, where are you not? And if you aren’t getting to where you want to be, you need to adapt. 

And that’s what relearning is about. It’s about taking these small little steps, experimenting with new behaviors, new methods to see what works for you. And starting small, it’s learn fast, it makes it safe to fail, it allows us to get comfortable with being a little uncomfortable and try new steps. And that’s where you’re going to get the breakthroughs that you’re looking for both in your performance, your team’s performance and ultimately the products and services that you’re going to bring to market.

So again, I’d really encourage people to start thinking about the skill, as you asked at the top of the show, for the ages, is not to know one skill, it’s actually the skill of continuously adapting to changing circumstances. And that’s what we’re going to experience and really that’s what is at the core of this system of unlearning.

On unlearning: It’s the conscious act of letting go of outdated information, and actively engaging and taking in new information to inform your decision making and action.

CAHILL: 

It seems that there is a fair degree of self-reflection required as an entry criteria into unlearning, right? You have to look in the mirror.

O’REILLY: 

I think owning stuff is so important. One of my favorites... and I’ve got great examples of leaders who do this, one of my favorites was John Legere, who is the CEO of T-Mobile. When he took over T-Mobile in 2014, the first thing he did is he didn’t sit through PowerPoint presentations, he didn’t tell people what to do, he didn’t roll out a business strategy. He sat and listened to customer complaints on the phone for four hours a day for the first month so he could learn the problems that customers were facing first-hand. 

And then he used that to innovate their business approach. As a result of that, they launched the On Carrier program which was the first telco to offer $50 a month for a fixed set of minutes, a fixed set of data. And as a result, they obliterated the market. They listened to customer problems, they came up with a solution to meet them and now T-Mobile just goes from strength to strength. 

On ExecCamp one of the things we did with International Airlines Group, who own British Airways, Iberia, Vueling, Aer Lingus, they’re the sixth largest airline conglomerate in the world. We took eight of their executive team out of their business for eight weeks with the goal of launching new businesses to disrupt their existing company. And this is where leaders were literally launching new products every week to try and find out what would work and wouldn’t work but as a result they’re growing their skills.

And one of my favorite stories from it was the CTO of one of the airlines had this amazing idea to transform the airline booking. He was positive it was going to work. So we got him to sit down and build a little prototype and test it with a customer. So, how do you think it went?

CAHILL: 

Tell me.

O’REILLY: 

It went terrible. The customer didn’t like it. What do you think the exec’s initial reaction was?

CAHILL: 

Probably surprised.

O’REILLY: 

Yeah, they were like, well this is obviously the wrong customer, you need to get me the right customer for my idea. [laughter] And we did this two or three times to the point that they were picking the customers. We did this about four times and then we sat down to reflect, as you mentioned. And I asked him, what do you think the problem is here? And he’s like, well it’s obvious, the idea sucks. It’s not the customers. But that was the unlearning moment for him where he realized he was pushing his ideas onto customers rather than pulling them from them. 

CAHILL: 

Exactly. 

O’REILLY: 

And that was such an, as I said, unlearning moment from him. And he went on to be one of the best experimenters I think I ever worked with. He started to see his assumptions really as hypotheses and he needed systems to rapidly test those hypotheses.

CAHILL: 

To test them, yeah.

O’REILLY: 

Exactly. And now if you look at... obviously the airline industry is in a very interesting moment, a crisis moment for itself. But in the last two or three years, International Airlines Group, its profits have been growing by 20-25 percent because they have introduced automation, they have introduced new products and services, they are powering ahead. 

Because these leaders, after being on ExecCamp, have gone back into the organization and they are coaching other people instead of just executing projects to be solving problems with clear outcomes and experimenting what works and what doesn’t. And I think that has been a profound impact on their business. And it’ll be very interesting to see not only how they go through this crisis but what comes out the other side.

CAHILL: 

What comes out, yeah. That’s really inspiring, just that story in and of itself and what you were able to do in a very short period of time. When you were growing up, or even earlier in your career where did you derive inspiration for your work? Clearly there’s energy in your voice and in your work that come from somewhere. Tell us a little bit about that?

O’REILLY: 

Thank you for asking that question. My first job was... I was in university, I had the opportunity to come out to Silicon Valley and work for a company called CitySearch.com. And this was just at the beginning of the internet boom. And CitySearch had a very simple business model. You pay $50 a month, we would come around and take photos of your shop or your store and put it on the internet at the time. And our number one competitor was Zip To. Have you ever heard of Zip To?

CAHILL: 

No, I haven’t. 

O’REILLY: 

That was Elon Musk’s first company. 

CAHILL: 

Interesting.

O’REILLY: 

Yeah. And we were basically going to partner up with and I always joke, well we didn’t in the end, I don’t know what Elon went on to do but obviously I’m on your podcast. But it sort of gave me this first taste of being on the leading edge with technology and trying to find business models and products that work to really deliver interesting things for customers. And the thing that I learned there is that there is no framework to follow, there is no paint by numbers certification that’s going to get me there. I had to learn intuitively to rapidly test my ideas. 

And on the back of that, I went and started a mobile games development company. And again we were working with new technologies that there was no road map, there was no paint by numbers. We had to find and rapidly try out different practices to see what was going to work for us. We had to contextualize and customize a lot of these methods. 

And that’s when I learned that this notion of working in fast feedback cycles, being very clear on the outcome that we are working for and then coming up with options that we could try to get there, like to think big but start small, learn fast what works and what doesn’t. It allowed me to become a good experimenter. 

And I was inspired by methodologies from the Agile Manifesto at the time, I had the pleasure to go and work at Thought Works where Martin Fowler was the Chief Science Officer, and my first day I met Martin Fowler, I met Jez Humble who wrote Continuous Delivery, who I went on to write Lean Enterprise with. 

CAHILL: 

Okay.

O’REILLY: 

You know, there was just a phenomenal group of people in that company at the time who were really finding the edges of what both process and product innovation was. And I think I have just been very fortunate to learn that the trick is not to have all the answers but to ask good questions, to get clear on what you’re actually trying to achieve and think of options to get there and then rapidly test them as quickly and cheaply as possible is going to help you figure it out. 

And that’s just been a real privilege for me. One of the reasons I also like to share my experiences is someone... And people like Martin Fowler really encouraged me to do that. It’s like we’re in this field, we’re learning as we’re going, nobody has all the answers, but if you can share what you have tried, what’s worked, what didn’t work, what you would do differently, I think that’s very powerful for people to scale innovation. Much more than giving them five tools that they need to implement to be a scaled agile framework, I think that’s naive. 

I think people learn through stories and they learn from experiencing change themselves. And really leadership’s role is yes, give people training, give them the first taste of knowledge, but that’s just your first step. The first step is then to learn some of these methods and then you’ve got to start applying them and see what works and what doesn’t. And I think that’s one of the fundamental messages I hear from PMI a lot is it’s the first step to actually figuring out what works for you. And I think that is so important.

You need to de-scale. Start smaller. Do things initially that don’t scale so you learn the difference between what works and what doesn’t, and then start to build out from there.

CAHILL: 

There is no doubt that from PMI’s perspective, we are shifting into a world where choice matters at the way-of-working level as well as when you’re developing a product and the choices for the customers from the outside in. So we are very much tuned into that.

Let me ask you from a grand, big picture perspective, if you look forward into your career, what outcomes do you hope to achieve from your lifetime of work?

O’REILLY: 

I definitely have this notion of trying to help a million people learn to unlearn this year. That is one of my outcomes that I’m aiming for. 

CAHILL: 

Okay, I like that.

O’REILLY: 

Yeah and it’s sort of my - 

CAHILL: 

Well you can count me as one. I don’t know if you’ve been counting them.

O’REILLY: 

All right, so we’re one millionth of the way there, which is great, thank you for that. But again that’s inspiring for me. I think my measures of success is how many people that I admire are inspired by my work, because that’s something I really focus on. So people like yourself that you found some of the things I’ve shared useful, practical and have helped you, I can’t ask for better outcomes than that. That’s a tight feedback loop, right?

CAHILL: 

Yes.

O’REILLY: 

And it inspires me to keep putting my ideas out there. And not all my ideas are great. Some of them are half baked, some of them are just me trying to share to find other people with those problems so we can all improve this knowledge together. I think the person who connected us, Ed Hoffman, former Chief Knowledge Officer for NASA, Ed is just an inspiring person because he is working in space where we don’t have all the answers. We have to build systems to figure out the answers. 

And that is so fundamental to both the work and innovation of I think both of our missions is I want to create the knowledge to help us move forward and the only way we can do that is by sharing our successes and failures and creating a more transparent and pool of knowledge that everybody can contribute to. And I think that really inspires me to help make my little contribution and to encourage other people to make theirs.

CAHILL: 

Yeah, we’re really big on community here at PMI, as you know. So in order to achieve what you just said really relies on a robust growing curious community. And I can see exactly what you’re talking about, it’s fantastic. 

O’REILLY: 

Yeah and no one can do it alone. That’s the whole point.

The skill for the ages is not to know one skill; it’s the skill of continuously adapting to changing circumstances.

CAHILL: 

Yeah, if that were true then I’d be done by now. Tell me about... We did touch earlier on your new report, the scaling innovation means descaling work. So maybe that’s the answer to the question, what are you currently researching, or a portion of the answer to that question.

O’REILLY: 

I think this notion really of trying to help people understand that scaling innovation is important. I think you see that in your community as well. We figured out ways and techniques that teams can work in more innovative ways but how do we find a culmination where you can roll that up to entire organizations? And I don’t believe the answer is copying, pasting and scaling frameworks across your whole organization. I think that creates activity but it doesn’t create outcomes. 

And really what I have been trying to share in this most recent report is examples from working with these Fortune 500 companies, working with scaling startups here in San Francisco... I sit on the board of a number of startups that are also working in interesting ways. I really try to show my work so I can show lessons I’ve learned, things that have worked, things that haven’t worked, pitfalls to avoid. 

And this report is really about understanding why traditional approaches to scaling innovation are failing, seven mistakes that are made and how to avoid them, it’s got four case studies in it from companies like British Airways and others where you can see some of the outcomes. Like 400 percent reduction in lead time from idea to new solutions in some instances with these companies and applying this one percent system that I talked a little bit about to really help companies succeed. 

So yeah, I’d love to share that with your audience, I’d love to hear some feedback and maybe even come back again and do another Q&A if people get the chance to read it and we can debate the ideas a little more.

CAHILL: 

We would love to do that, we would love to do that. We’re definitely going to make it available to the folks that listen to this podcast and beyond from our PMI platform. I really want to thank you, Barry O’Reilly, it has been a fantastic time spent here this afternoon, I certainly look forward to working more with you through our Knowledge Initiative. You mentioned Ed Hoffman just a few minutes ago, he has been spearheading that initiative. And I think a lot of what you’ve talked about has a lot of alignment with what PMI is endeavoring to achieve with our community. So I look forward to that. Thank you again. 

O’REILLY: 

Yeah. And I think hopefully I’ll get a chance to have you on my podcast and you can share more of your experiences from PMI and beyond as a nice collaboration.

CAHILL: 

I only hope I can measure up. You have a…

O’REILLY: 

I think you’ll be fine. [laughs]

CAHILL: 

Thank you.

O’REILLY: 

Cheers. Thanks a lot, Joe.

ANNOUNCER: 

Thanks for listening to Center Stage. If you like what you’ve heard please subscribe to the show and leave a rating or review. We’d love your feedback. To hear more episodes of Center Stage visit Apple Podcasts, Google Play Music, Stitcher or Spotify or head to PMI.org/the-project-economy.

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