Author, executive advisor, and Managing Partner and Founder of Rossman Partners, John Rossman, rejoins the show to discuss “the innovator’s dilemma”, building foundations, chasing perfection, and making big bets, how to REALLY use metrics and make metrics a verb, 3 megatrends for the future of business, the role of business in democracy, and the #1 mistake leaders make.
About John:
John Rossman is the Managing Partner and Founder of Rossman Partners. He is a business strategist, operator, and expert on digital transformation, leadership, and business reinvention. He has consulted with many great brands including Novartis, Fidelity Investments, Microsoft, Walmart, and Nordstrom. He served as senior innovation advisor at T-Mobile and senior technology advisor to the Gates Foundation. He is an operator and builder whose love is diving into business problems and customer needs designing solutions and business opportunities.
At Amazon, Rossman was responsible for the launching and scaling the merchant integration team and played a key role in launching and scaling the Amazon marketplace business, which is now over 50% of all units sold at Amazon.com. Also responsible for the enterprise services business with responsibilities for Toys R Us, Target.com, NBA.com and other great brands.
As an author, Rossman has released “Think Like Amazon: 50 1/2 Ideas to Become a Digital Leader”, “The Amazon Way on IoT: 10 Principles for Every Leader from the World’s Leading Internet of Things Strategies”, “The Amazon Way: Amazon’s 14 Leadership Principles”, introducing readers to the unique corporate culture of the world’s largest Internet retailer, with a focus on the fourteen leadership principles that have guided and shaped its decisions and its distinctive leadership culture — as only an insider could do, as well as “Big Bet Leadership”, an executive leadership playbook for winning in the hyper-digital era.
Additionally, Rossman is a keynote speaker on innovation, leadership and digital transformation. John leads workshops on a wide variety of innovation, internet of things, digital strategy, and creating a culture of agility, trial and error, scaling and accountability. His goal is to give audiences tools they can immediately use to operate differently.
Learn more at JohnRossman.com.
The Action Catalyst is presented by the Southwestern Family of Companies. With each episode, the podcast features some of the nation’s top thought leaders and experts, sharing meaningful tips and advice. Learn more at TheActionCatalyst.com, subscribe below or wherever you listen to podcasts, and be sure to leave a rating and review!
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(Transcribed using A.I. / May include errors):
Host
We are pleased to welcome back to the program John Rossman, an author, executive advisor and keynote speaker on digital transformation, leadership and business reinvention. He was an early executive at Amazon and now serves as the managing partner and founder of Rossman Partners, and he was previously our guest on episode 433, of the Action Catalyst. John, welcome back.
John Rossman
Great to be back.
Host
A lot of your public work in the past has touched on your time at Amazon; The Amazon Way, Think Like Amazon, that was sort of the focus the last time we caught up. You’ve got a few new works out now. But I want to start with the Rossman Business Manifesto: The Pig, The Lipstick, and The Playbook of Champions, This really sounds like you’re taking the more holistic ownership of all of your experience, bringing it together. Who’s the target audience for this manifesto, and what’s the specific problem it’s addressing, and how did you come to identify that problem?
John Rossman
So I get to do a lot of keynote speaking, and I have some clients, and one of the interesting things I’ve seen over the past year is most of my work has been about kind of major transformation, innovation, but I’ve had a half dozen keynotes where it’s like, no, no, no, no, no. We want to focus on our culture and execution and kind of like some of the basics. And so that was like one clear signal, and the other signal is last year we saw a number of just gold standard brands. Ironically, a lot of them out of the Pacific Northwest. Here, a number of gold standard brands who went from being lauded in the pinnacle within their category to like a substantial business challenge that they have, right? So the brands I’m thinking about, think about this set of gold standard brands, Starbucks, Boeing, Nike and Intel, right? Very different sectors. All of them a different sort of situation, but they clearly have suffered from a combination of what I think are kind of two factors. One is they get kind of trapped within their own business model, and they’re just incrementalizing themselves to the next thing. So that’s kind of the innovators dilemma. And the other is a cultural thing, of like, what their expectations are in the business between themselves, and that’s kind of a culture of mediocrity that hasn’t become just accepted. It’s actually become the standard within a number of kind of healthy companies. And I think that that combination is really the challenge that I address in the pig, the lipstick in the playbook of champions, of being both trapped from our own success and not seeking high performance, both for our business and for the way that we work. And so that’s the specific problem. But I wanted to get it out. It’s a free resource ebook. It is a playbook. We outline specific things to do that I think are both practical, but they’re underplayed. They’re understated within most organizations, but a couple that I think are super powerful and simple. So there’s three sections of the book, building the foundation, chasing perfection, taking big bets under building the foundation, one of the key plays is about people, and I think everybody starts with the wrong place when they think about getting the right people in the organization, helping them be successful. Because everybody thinks it’s about like the person, and I disagree. I think it’s about a thoughtful design of the organization and what the job is that needs to be needed. And so many companies haven’t really thought through, you know, for this role, for this team, for this core capability, or a company, what’s the job that’s needed now and going forward. How would we define it? What do we think kind of the consistent goals are going to be? What’s the decision making criteria and scope of this? What are the key metrics that we imagine this role having? And what do we think the the non obvious skills and background and actions? Attributes that would help somebody be successful, even if you have somebody in the role today and you want to help take their performance from good to world class, rethinking what the job is, is a super powerful way to help that person achieve those goals. But it goes so underplayed in companies, and this is not a big exercise to do, you know, and everything, but companies don’t do it. So that’s an example. Here’s another one, and it’s kind of from the chasing perfection section of the book, which is all about, like, how do we run a great business today, and how companies design and use metrics to actually get the signal of where aren’t we good enough from a customer experience or from an operational standpoint. Today, I was a partner at Arthur Andersen. I was a green belt. I’m an industrial engineer by education. I thought I knew how to use metrics for impact, and I learned a whole graduate level course at Amazon, and it’s been kind of one of the consistent things I work with clients in my keynotes on since then, is like metrics and how we use them. And there’s two parts that I’ll talk about here today. One is like, just how you design metrics, and it always has to be a balanced scorecard of metrics, right? You can’t have just like one metric. You need efficiency, you need quality, you need cost metrics, right? And it’s the design relative to those. But then the second part is like, what do you do with those metrics, right? And so I always talk about, make metrics a verb, right? They’re not a thing, they’re not static, they’re a verb. And the and the action that we take is, how do we discover the signal, not to pat ourselves on the back, but to see where there’s opportunity to chase perfection? And that was, I think, the design of kind of the metrics meetings, and the tone and the tempo and the purpose of those meetings is an absolute game changer for teams and companies that can turn metrics into the fuel that a improve the business for today, but it also it’s like going to the gym. If you do this all the time, you’re going to get the idea that fuels the next section of the playbook, which is big bets, like, how do you actually innovate and transform?
Host
You’ve mentioned part three as big bets, and you’ve already alluded to your other work, which is Big Bet Leadership, Your Transformation Playbook for Winning in the Hyper Digital Era. But we’ve all heard about the digital era. We’ve been in it for a while now, but before we dive deeper, just give us the definition of what the hyper digital era is. Exactly what’s that distinction?
John Rossman
We know we’re not good at making change happen, right? Like, if you look at the history of time, like the competitive advantage and life of companies tends to be pretty short. And if you think the past 2530 years of digital transformation and digital disruption has been something, the next 25 is going to make that pale in comparison, right? Like we are heading to an era, and it’s not just because of technology. I outlined kind of three mega forces with kind of a fuse tying them together. And the three mega forces are a disruptive technology, which is, by itself, a highly disruptive factor. But the second one is just as disruptive, which is the aging of our population, the ability to attract, retain and get better leverage out of out of our skills and out of our people, is going to be a core competitive advantage. Because if you are just going to try to, like, continually hire and compete, you’re going to be at a competitive disadvantage. So that’s the second major, major force. Mega trend is, you know, the aging of a population and how scarce skilled talents can be. And the third is the overall indebtedness of our country to entitlement programs and to surfacing our debt, and that’s going to create downward pressure for capital, so you’re going to have to be both efficient for your capital, but it’s also a calling, which is for our country to win, we have to innovate, and that innovation comes from all of our companies. It doesn’t come from somebody else’s place. It comes from our place. And so those three mega forces together are going to create a vortex that creates both an opportunity and a challenge, and there’s going to be a bunch of new winners. There’s going to be a bunch of new losers in what I call the hyper digital era. And we you can’t wait until you go, Oh, now I get it. Now I really need to change. You need back to kind of the athletic metaphor, like you need to get good at how you go. About innovating and transforming. It is an organizational capability. And so the best attribute you can always have is some patience right time to do these things. And so if you wait until you see the signals of kind of slowing growth, customers who don’t love us, competition, that’s that’s kicking us in the rear. Now you’re under pressure. Do it from a position of strength and growth. That’s the time to build the capability of like, building the next businesses, innovating better, delighting customers better. That’s the championship way.
Host
To point number three about debts and entitlements. We’re now at the beginning of a new government administration looking to make a lot of changes to business and regulations and other things. Do you see a big impact there?
John Rossman
Yeah, well, a couple of things. I think that these changes were going to take place regardless of administrations. And I would say I’m hopeful and supportive of any administration that would seek to both serve our citizens better and do it more effectively. And I think that that is what every company needs to do, and all of our federal, state local government should serve you. Do it better, do it more efficiently. The government is here for the people, not the other way around. It’s We the People, right? We the People grant the government these powers. It’s not the other way around, right? That’s why it’s an important call to action to me, if our plan is to wait for the government to address and fix the situation, I’m not optimistic about that. That’s why I think, especially small, mid sized, large companies, they need to see it as part of the mission of like, our company needs to play a role in how America is more competitive and more innovative, because that’s how we keep our great democracy going. And so don’t wait for the government to fix it. That’s never a great idea. I think that, you know, I’m optimistic that they’re going to start tackling some of this. But that’s not the whole playbook. The playbook is our businesses need to play a role in this. One of the phrases I’m fond of is that complaining is not a strategy, right? And so what do we do with these observations today, in our business, in our team, in my life, that’s what I’m always interested in, is action.
Host
Well, that’s perfect for our podcast, right?
John Rossman
Exactly, The Action Catalyst!
Host
You make a pretty bold claim. You say that there are countless books making the case for digital transformation, innovation and reinvention, but they’re not sufficient. But what are they lacking that Big Bet brings to the table?
John Rossman
Wow. You really did read it. I love it. I love it. So here’s what’s insufficient. What’s easy to do is to talk to senior leaders, and it’s like, Oh, I know I need to transform. I know I need to innovate. I know I need to leverage technology. I know I need to delight my customers better. I know I need to evolve my my operating model. I know I need to understand kind of this, this trial and error, experimentation mindset, but there’s very little that actually for senior leadership and the teams that serve senior leaders. There’s very little that actually says here’s things that you the senior leadership team need to do different and the team that’s driving this transformation. And so there’s a lot written for kind of the individual contributor and the team leader around agile methodologies experimentation, but we couldn’t find anything Kevin McCaffrey, I’m referring to and myself. We couldn’t find anything that’s like, here’s what senior leaders need to do. Kevin ran new business incubation for T Mobile. I got to be the senior innovation advisor, working with them for three years. This is what we had to do AT T Mobile. Was our challenge. Wasn’t like this tactical process of like, how do we explore, you know, new business models for T Mobile. It was helping the senior leadership understand how they needed to adjust or recalibrate, how they make decisions, how they allocate resources, how they spend time on these businesses and opportunities of the future versus their operating expertise in running today’s business. And the biggest mistake that senior leaders make is they think that because they’re really good operators and they understand, they’ve heard these concepts of innovation and experimentation, and so like, okay, I can do that. It starts from a belief system and an understanding fundamentally of what that is about and how to go about it, and if you apply the same tactics, the same belief systems, the same things that made you a great operator into this playbook of experimentation and major transformation, you will fail at it. And that’s why we wrote the book. Big bet leadership is to for senior leaders and the teams. Serve senior leaders to really point out to them, these are things that you need to do different. Again, it’s a very action oriented book, not theoretical. And that’s what is missing in most books about innovation and transformation, is it’s like, yeah, no duh, I need to change and I need to be competitive, but tell me what I need to do differently today as a senior leader to help make that happen. That’s what we tried to answer in this book.
Host
But as a companion to that book, you’ve got a lot of tools available on your website for taking this big bet theme further, but one of the most intriguing to us was Big Bet GPT. Can you explain what that is?
John Rossman
Yeah, so, you know, we kept the book very readable, right? It’s, it’s 45,000 words. It’s a great narrative. It’s a great audio book. And so we offloaded from a lot of the templates and tools and, you know, checklists and things to do. And so one of the things we did with, with all of that, was we created a purpose built GPT, and we have a prompt sheet that goes with it that can help you do these exercises of kind of developing the what sucks, memo of really thinking through your three futures. Exercise of putting these practices into place, it won’t think for you. It won’t do the work for you, but it is an incredible companion to help you see different framing, different phrasing, different options that you have out there. And so it really is a kind of a turbo button to help you speed your way through thinking this playbook through for yourself. I think there’s more for us to do there too.
Host
Well. I’m glad you said that. So what’s next, and where can people find you?
John Rossman
Yeah, so people can find me on LinkedIn. John Rossman, that’s really simple, or bigbetleadership.com is where all the resources and everything is, and that’s also at rossmanpartners.com. What’s next? Like, that’s what I’m thinking about right now, and I think it’s something that is a combination of for senior leaders and team leaders. How do I actually address these two core challenges that we identify in this business manifesto, which is a kind of being trapped by our success, that’s the innovator’s dilemma, and B, kind of suffering from accepting mediocrity, but leveraging AI to help you do that better. And how do I incorporate AI into everything that I do within an organization? That’s what being an AI first company is about, and I think it’s both kind of small tactics that you take, but it’s also about re envisioning and leveraging AI. And so I think it’s a combination of kind of business strategy leadership, but leveraging these very real and dynamic, fast changing capabilities that generative AI and other technologies bring to us. Because it’s like a new internet. It’s like, oh, now we have electricity. Like, it truly is a fundamental capability shift and again. Like, don’t wait until it’s too late. You gotta get comfortable, both individually and as a company, in how you leverage these things to make change happen.
Host
John, thanks for being here once more.
John Rossman
I love it. Thanks for having me.
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