The Leadership Exchange
Discussions on Real-World Leadership for professionals. We explore several topics about leadership and getting the best from your team to deliver amazing results while creating a great environment for them.
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The Leadership Exchange
S3E1 - Unlocking Organizational Potential with Ernesto Gomez
Ernesto Gomez, author of "Regrowth: How Organizations Can Overcome Stalling by Unlocking their People's Potential," shares how viewing organizations as living organisms rather than machines creates the conditions for people and teams to achieve peak performance.
• Organizations are living organisms that require nurturing, not machines that need optimization
• When companies focus solely on optimizing individual parts, they often suboptimize the whole system
• Creating an environment where people feel safe to speak up and challenge the status quo is essential for adaptability
• The team is the fundamental unit of any organization, not the individual
• Hire for values first, aptitude second, and skills third—most organizations get this backward
• "Talent density" means having the best talent you can afford in key positions that differentiate your company
• Like the Chicago Bulls' transition from "give the ball to Michael" to championship success, companies thrive when everyone contributes
• Leaders should function as stewards who help teams flourish rather than putting the spotlight on themselves
• Culture sits at the bullseye of organizational success, with capabilities and concepts as outer rings
• The better you are at your current capabilities, the harder it will be to change them—unless your culture supports adaptation
Join us next time for part two of our conversation with Ernesto Gomez as we continue exploring how to unlock people's potential for organizational growth.
The following are several links to Ernesto's company, profile and book.
Website: https://aspenmindset1.com/
LinkedIn Profile: https://www.linkedin.com/in/ernesto-g%C3%B3mez-arzapalo-8783ab43/
Ernesto’s Book Regrowth on Amazon: https://www.amazon.com/Regrowth-Organizations-Overcome-Unlocking-Potential/dp/1959009176/
Ernesto’s Book Regrowth from Independent Book Retailers [online and brick and mortar]. https://bookshop.org/p/books/regrowth-how-organizations-can-overcome-stalling-by-unlocking-their-people-s-potential/530c18cc6619dee7
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Hello listeners, this is Lupe. I wanted to let you know that this is the first of a two-part episode discussion with Ernesto Gomez. Because the discussion went so great and we wanted to stay within our 30-minute format, we decided to split it into two. So happy listening.
Speaker 2:Hello everybody, this is Steve McKeon. And this is Lupe Muñoz, and this is the Leadership Exchange. Lupe, we've got a very exciting guest today, a new author of a book that we both have had a chance to preview and just found it very fascinating. So why don't you go ahead and introduce our guest to our listeners?
Speaker 1:Yeah, absolutely, steve. I'm equally excited about talking to our guest today, Ernesto Gomez. This is going to be a mouthful, but well worth it. Ernesto has been within the executive world with over 30 years of experience. He's led some very successful ventures across the food and service industry in both US and Mexico and, as you said, he's the author of the book called Regrowth how Organizations Can Overcome Stalling by Unlocking their People's Potential. So we're definitely going to talk a lot about that.
Speaker 1:Ernesto has spearheaded global talent and cultural initiatives for several large companies 43,000, 83,000 employees in the international sector. He's played a pivotal role in the organizational transformation of those organizations. He's studied social communications and he's completed executive programs at some prestigious leading institutions, including Stanford, mit, wharton Business School, kellogg School of Management. I could go on and on. This gentleman's pretty impressive. He's the founder and the CEO of Aspen Mindset One. It's a consulting firm. It's dedicated to helping organizations and individuals reach peak performance and in 2024, ernesto was invited as a guest speaker in the Lead Through Ambiguity course at MIT Sloan School of Business Management. With all that said, ernesto, welcome to the show.
Speaker 2:Ernesto, please provide just a little bit more background on you and the interest you had in writing this book.
Speaker 3:Sure, thank you for having me. It's a pleasure and I think we're going to be enjoying this conversation a lot. Well, I've always been intrigued by what makes people achieve and what conditions are necessary for people to perform at the peak of their capabilities.
Speaker 3:I started off as an entrepreneur myself. I started more than 10 businesses small businesses mostly and I found that if you create the right conditions, people can really achieve and in achieving they're having fun too, they can be happier, they can contribute, they feel better about themselves, and when I moved into the corporate world, I noticed that the same principles apply. It's just that, of course, the scale is different and in order to scale that across multiple countries, there are certain things that you have to design for. But the principle is that what makes people and how is it? People, under certain circumstances, can really achieve and have a lot of fun in doing that, while different circumstances or different conditions kind of inhibit what people can do. And I just wonder if there was a secret sauce or something that I could probably describe so that we can make that happen, something that I could probably describe so that we can make that happen, and that's what really has moved me the capacity of people to achieve or attain things that they didn't think they were possible.
Speaker 2:And even when they achieve them, be open to what Lupe and I have been doing for several years now in our teachings.
Speaker 2:Lupe and I are both engineers and so you know the engineer mindset and you talk about it in the book is this you know how can you optimize the business areas where you're focused and you know you talk about in that model you end up with department level programs or functions that are really trying to optimize and benchmarking outside the industry, within, and it doesn't always lead to growth and maybe some sustainability.
Speaker 2:So one of the, I guess, early on lessons that I had from a really good mentor was what you talk about in the book on the other system that you need to think about the people side. Lupe and I describe it as creating that environment for the culture, right, the teams to work and thrive. And you spend quite a bit of time in the book, especially towards the tail end, putting your model together. So I want to go back and talk about that piece. But from your perspective I know in the start of your career because you shared this with us when we first met you really had that focus on optimizing the small businesses you started or helping larger companies, the international companies, you know, optimize those businesses and there's value in that too, and so maybe talk a little bit about that, and then we'll kind of move into the relevance of the culture aspect that you talk about in the book.
Speaker 3:Yeah, typically in organizations it's hard to see the whole picture all the time. Right, because you belong to a certain team, you belong to a certain department and you have a certain you know KPIs, the things that you have to do, and that is fine. And sometimes, in order to do your job better, you start, you know, optimizing, optimizing, optimizing. But paradoxically, when you optimize the parts, sometimes you can suboptimize the whole because you create like pockets, right, when people start to compete. People start to look only on their turf and I want to get my numbers right and I don't care if somebody gets their numbers or not. So it is paradoxical, because the more you get into you don't just focus on your piece the higher is the probability that the whole system may not work as well. So this is a vision of companies that we have had for many years now. A company is a machine. I have to optimize the parts, very well oiled, perfectly set to function efficiently and effectively.
Speaker 3:There is another view, right, that the company is not really a machine but since it's made out of people, it's like a living organism, right? If you go to your office or to your plant at night, when the lights are off, what you see is just tools, what you see is just assets, and the company is not there. The company starts, you know, at eight in the morning. When you arrive and you see people, that's the company. You know the teams, the people that make the company alive. So I was wondering well, if this is true, what kind of a system would you need to make or align all these people you know to work together in a way that is worthwhile for the company and for them as well? This view of a living organism is what prompted to say well, even for adaptation. You know when things change and nowadays you know you go out and see new products and new things all the time. If you're really set to optimize a part of the machine, again, paradoxically, you probably are making that harder to change just because it's so well configured and set. And I think the name of the game for this coming five years is adaptability, because if you don't adapt to the new things that are coming your way all the time, well, you're going to have a problem.
Speaker 3:And the truth about business is that the better you are at performing in today's business, the better you are at performing in today's business and the more set you are in delivering, you know the products and services you deliver today would make it harder for you to change and become something different when needed. So that bandwidth that you have to play in organizations is difficult because you need, of course, efficiency, you need productivity, but at the efficiency. You need productivity but at the same time you have to think about flexibility, and that's why I use this metaphor of living organisms. And if you start to think about organization that way, you may start saying, well, I think it's going to be a good idea to leave some room here, a little bit slack. Here and there, budgets may not be as tight.
Speaker 3:You probably can play a little bit more with certain ideas that are, you know, unforeseen or unexpected, and also allow people more room to imagine, to play, to create, to contribute and not just, you know, day in and day out, a set of activities that are probably fixed instead of you know, a little bit more open.
Speaker 3:And I really think that the world we live in right now it's really I mean they always say right, well, the world is changing and it's unpredictable. Think about the last five years COVID supply chain just a mess. You know all these weather challenges. They were in Ukraine, everything is happening at the same time and I don't think that the next five years are going to be easier. So, as a company, even if you're a small company, you say, well, sure, I need to deliver today, but I need to create the conditions for my people to adapt when required. It has been a long answer to a very specific question, but that's the way I see it. I mean, this mental model about the organization being a machine can get you to a place where you may not be as flexible and malleable as you should.
Speaker 1:No, I agree, Ernesto. I think that the analogy of a human organism, or any organism, is more accurate because it also implies… more so, I think, than a machine that that organism needs to be nurtured. As a leader, you have to be able to take care of it, to feed it, to give it water, to give it other needs, right? What are those things that the leaders need to be doing from a behavior standpoint? What's your opinion of that?
Speaker 3:Well, if you buy this idea that companies are living nowhere, then you start saying, well, there is a lot of life here waiting to do things. How can I open that valve and how can I probably take some risks and maybe do some things that are not, as you know, common? First of all, you say I need to let people speak up. I mean everybody needs to be free to say whatever they want. Speak up, I mean everybody needs to be free to say whatever they want. For that I have to create an inclusive environment, because otherwise, if people don't perceive that they belong, that they will not be able to contribute. So I need to create a place where people feel appreciated and valued, where people can say what they think without fear of reprimands. Like, wow, I mean I step over my boss and now what is this boss going to think of me? You have to also let people challenge the status quo and, in doing that kind of, make you think well, maybe there's a better way to do this.
Speaker 1:Or even challenge you right.
Speaker 3:Or even challenge you right? The thing about the companies these days is that you have to have small egos, because big egos back in the day, you know, when you have all these larger than life leaders like you know, lee Iacocca, those things, they were always right. I mean you cannot. They were the visionaries, they were the guys who say you know, this is the way Today, it's more balanced. I mean, you have to have direction, but you have to let people participate more in doing that, you know, in contributing.
Speaker 3:At some point in time you have to make decisions, and even if you open up this place for people to feel safe and speak as a leader, as a boss, you need to say, well, no, this is the way we're going to take, because otherwise you get lost in opinions. But you don't arrive to the decision without considering options, and for that you have to let your teams speak. The very basic unit of any company is the team, not even the individual. The team is the very basic unit. So if you nurture that team and allow that team to have some air to breathe, to contribute, the effect is going to multiply and it will be exponential.
Speaker 2:You brought up a subject that I want to definitely touch on, and that's you talk about recruiting the right talent within the organization, and it's a lot of times easy for companies to look at kind of a reverse order of attributes the person should have in order, because you're looking for things that you think are going to really drive activity and improve the organization. You want to talk a little bit about that, because I think we've all probably experienced that, as we've hired people that we think are really the right fit but recognize you know what. We should have checked a couple other things first, and what would those things be in your mind?
Speaker 3:Well, let me tell you first of all, talent density. What I call in the book talent density, it's the fact that you have to have the best talent you can afford on the key positions of your company. You don't have to have for every position the top talent there is in the world, because it is impossible, quite frankly, to have that for a normal and average company. But at least in the positions where your company is going to make a difference, if you have I don't know a creative agency, you need creative people in certain positions and you have to play on that. You may not care as much about payables. You can have just table stakes, individuals that can perform well, but you don't have to have above the average people right there. So, first of all, that idea kind of forces you to review your company, your organization, and say, well, where are the functions and what are the activities that need to be? You know I need to make sure that I have the best people.
Speaker 3:Now, this is, of course, a skills game and you get out of that are important as long as you create also the capacity for information to flow, to be exchanged, to go back and forth. So you need people who can relate to others as well. For instance, you can have really a very proficient skills-based approach to certain functions but at the same time, you need to have people that can have the ability to make things happen. In my book, what I say? You have to define your attributes of talent in terms of what your position demands, your skills, but also you have to have a certain point. You know you have to consider if people are able to apply information to make things happen, to work as a team, because we were saying that the team is a very basic unit of analysis. You need to have people that can play that game as well. Team- players.
Speaker 2:You make these points in the book that you know I really resonate with and you know you talk about the need for companies to really first hire for values. Right Values first. Aptitude second, skills third. You need all three, but a lot of times it's a reverse order, right we? We hire skills first and we miss the aptitude and the ability for that person, as you mentioned, to be able to work inside a team.
Speaker 2:And and I also like the reference, uh, to the chicago bowls that you brought into the book, because that you know, when you think about the you know, early Michael Jordan years compared to the championship Michael Jordan years, big changes, right, and I think the team analogy there within an organization is spot on as well as that, and you just brought it up. You know you can't have one person with the ball all the time You've got to. You got to raise the level of all players, and so I thought that was really insightful. Anything else in the building those teams or not so much building the teams, but really kind of attracting the talent that is key to getting to the regrowth.
Speaker 3:In the book. I also mentioned that. I referred to some research from companies like McKinsey and Bain, even some anecdotes from Steve Jobs. Steve Jobs used to say that a good software coder it's 50 times more productive than an average software coder. 50, 5-0. And it's not just that you know, it's a little bit better, it's orders of magnitude better. And he said you know, if you're driving a car, if you go to Manhattan and take a taxi and you happen to find a good driver, he may be maybe 50% better than other drivers. But there are certain practices where that makes a difference, for instance, attorneys. For instance attorneys A really, really, really good attorney according to Bain it's 12.
Speaker 3:But, as you were saying back in the day, you were also. You were hired not only because you have the skills, but just you know, because you're a good person. Where is now the space for you know? Is this a good person? Is this a person I can work with? I'm going to live with this person for hours and hours. So a person with values, a good person, a well-spirited person, also needs to be considered. Companies now are probably overemphasizing skills over the character or the attributes of a person, and I really think that AI is going to move us into this direction.
Speaker 1:Ernesto, I'll share some experiences that reinforce exactly what you're saying as it pertains to our inaccurate focus on skills and experience versus really understanding how someone fits into the culture.
Speaker 1:So I've worked with several teams where I've joined the team for the first time and these are physical, laborious roles that, or the type of work that they perform, is pretty physical, and I've had people say, well, this person, I really like them, I feel like they're really like a genuinely good person, but they have no experience and no skills, so we're not even considering them for that Right.
Speaker 1:And that was the model, and because of that model of hiring, the culture of the team when I joined them the specific one I'm thinking of right now was horrendous. And if there was like, if you can think of what the best culture is, they were doing everything the opposite. And so it wasn't until I really worked with the leaders of that team that were specifically hiring those front so frontline team members and convince them of what the fallacy is in that thinking. Did we really start to turn the culture around, if you will, and now those same individuals will tell you that I would rather get someone that has no experience and is the right type of person, because we can teach them everything that we do. It's not like we're doing astrophysics here and as long as they're genuinely good person that fits all the things that we see in a good culture behaviors then we can teach them the rest.
Speaker 3:Yeah, they say that sometimes you have to hire for attitude instead of aptitude. Right, attitude, really, it's the engine that moves you. I'm going to speak for myself. I've been given lots of opportunities in my life in different positions, without really having the skills you know to begin with, but somebody saw that I may be able to deliver just because I was very committed and I just wanted, you know, really, really hard to make things happen. And along the way I made mistakes, yes, but then of course you learn and there is a balance, right. There are certain positions where you really need to have people, for instance, safety. You need to have people that you know, that know what they are doing in terms of. But then again, that has to be combined with this other element, more humanistic, which also plays along very well with this idea of the company being living organisms, because that kind of aligns to well. You know, we're going to be adaptable and we need to improve gradually and constantly.
Speaker 3:Going back to Steve's comment about, you know, michael Jordan. You know, in the early Michael Jordan, the idea was just give the ball to Michael and he will figure it out right. So all the team was playing for Michael and what happened is that the other teams figured that out and started blocking Michael and they were now Michael was not, you know, the sole engine of the team. And then they realized well, what if we make also Michael play for the team and reverse that? And that's how Chicago Bulls started winning championships. That's a metaphor of organizations as well.
Speaker 3:Sometimes I don't like to use the name or the word leader, because leader, the idea of a leader, really puts the light into the person or just a singular individual that you know I'm the leader or this person is a leader. And I really like to use more like this idea of leader, slash, steward, where you can steward teams and you can really put the light and the accent into how can I work with this team to make sure that the team delivers? And it's just not the function of a single person but really how that person allows, you know, the team to flourish. So in the book I also use that term very often. You know stewardship that term very often. You know stewardship because I really believe that in today's world it's important to give more credit to those that are followers instead of, you know, just put the shine on the leaders yeah, that's a great point.
Speaker 1:One of the things that touches on this topic around who we hire and making sure that they fit the culture. I was kind of reflecting on one of the images that that you talk about as pertains to companies is is sort of the bullseye, where you you say, hey, these are sort of like three big things that need to exist, and you know one of them is is concepts on the outside, and then you work your way into the next ring is capabilities, but then dead center is culture and it feels sometimes that more often than not now, that bullseye is what's getting underestimated or undervalued as far as company's focus or people's focus, leader's focus. Is that your interpretation of what's happening as well, and part of your message is that, hey, we really got to put it front and center at that bullseye location, you know.
Speaker 3:I learned that. First of all, I took this idea from Satya Snedela's book Refresh, where he refers a conversation with Steve Ballmer in the days where Microsoft changed the focus. I'm going to talk about that in a moment, but you know I was guilty as charged where. You know. I got into the company and I just wanted to deliver to please my customers, have fantastic products, exceed their expectations, and that's it. And then you collect your bonus and you're happy.
Speaker 3:Well, the truth is that, yes, I mean you judge companies by the services and products they provide. Of course, I mean that's why you are willing to buy a certain product or service, and that's what touches people. You know the products and services is what touches customers. In order for that to happen, the company has to have capabilities. They have to deliver on time, they have to deliver with the quality you know, and all these things that we know that are important, the brand, everything. So you have the products and the outside, and then those are a function of the capabilities, and that's where most people stop, say you know what? I just want to build great capabilities, great products, and that's it.
Speaker 3:Truth is that the software that makes those capabilities work is people-centered, people-oriented, and you need to have the right culture for this idea to flow, because when the time comes that you have to change your products and change your capabilities, if you don't have the right culture, the culture is going to choke the whole effort, just because you know this is not the way we do things here. Oh no, that failed. I tried that and it doesn't work. You know there are a lot of stock switches that we all have and that attitude inside the company is what makes difficult to adapt. So you have to change the product, you have to change the capability, and the paradox is this the better you are creating strong capabilities to deliver, the more difficult it will be down the road to change them. More difficult it will be down the road to change them because you're stuck playing a game where you feel really, really comfortable.
Speaker 3:But when rules change, not what am I going to do? You know the people that I, that don't work in the company, need to turn this around and make it work, and they will not do that if the culture does not allow it. And I mean, at least in the book. I say it's culture, it's your talent, density, but also it's the collective mindset that creates as a result and these concepts, I know, sound really, you know, 30,000 feet high when you talk about running a company. But think about it. Some people have certain beliefs that say, you know, this cannot be done, that's why we don't do it. And then you start challenging that a little bit and say you know what if we try this? What if we change our belief? And maybe the thing that you thought it was impossible becomes possible.
Speaker 2:At least that's what has happened to me this is lupe and I'm steve mckeon, and thank you for joining us, ernesto, on the leadership exchange. We'll see you next time.