Podcast Transcript

[00:00:00] Sean: G’day everyone and welcome to the ScaleUps Podcast where we help first-time Founders learn the secrets of scaling so they can fulfill the potential of their businesses, make big decisions with greater confidence and maximise the value and impact they can create in the world. I'm your host, Sean Steele. And I'm joined today by Rishad Tobaccowala - Advisor, Author, Educator, Speaker. And Rishad, welcome to you today. For those who don't know your background, maybe I can give a bit of insight. And I think, I can't remember the last time I saw somebody has such an illustrious career within one organisation, and clearly that was a lot of opportunity for you to grow. But you spent your entire 37-year career at Publicist Group, most recently as a Chief Growth Officer and Chief Strategist, and you're still advising them today. Is that right?  

[00:00:57] Rishad: Absolutely.  

[00:00:58] Sean: Beautiful. And for those of you who don't know Publicist, if you haven't been around the media and communications world. I mean, this is a business that's almost a hundred years old, third largest communications group in the world has agencies in a hundred countries and gives clients access through that group to about 80,000 different people, talented individuals in creative and media and technical domains that they can leverage to help them with their digital transformation, so incredible organization. And, Rashad, you were named by Businessweek is one of the top business leaders. You had Time Magazine dubbing you as one of the five leading marketing innovators. You're in the Ad Age, Interactive Hall of Fame. You've got lifetime achievement metals from the Chicago ad Federation. And recently you penned your book, Restoring the Soul of Business: Staying Human Age in the Age of Data, which really helps people think and feel and see differently about how they grow their companies, and sort of, I guess, remain relevant in these transformational times, is that a fair assessment, but I feel like you should be exhausted by now, even just reading that out exhaust me, even in the thinking of what you've gone through to have that career. How are you today? Are you well?

[00:02:11] Rishad: I'm doing very well. Thank you. So, it's the end of the labour day weekend here in the United States. So, it's been a four-day weekend. And my wife and I took a 600-mile drive to the state of Tennessee. So, we went to Nashville and a town, two hours from Nashville.  

[00:02:32] Sean: Awesome. So, you are refreshed and energised and ready to go. Well, you know, I obviously read your book, Restoring the Soul of Business, and originally, I wanted to interview you about the book and then I reflected on it and through our conversations and given the 37 years that you've spent leading growth and strategy in this incredibly large organisation, global orientation, which is actually a collection of both small and large businesses. And you work with leaders anywhere from SMEs to the Fortune 500. And I know you don't focus on sectors and size and for you, it's about people. But in that respect, I thought, well, actually, your views on what first-time Founders should be thinking about in order to scale, come from a really wide set of places. It's not only the book that you've penned. So, my suggestion was today that we actually really focus on the things that you think through all that experienced Founders in this community really need to focus on if they want to set their businesses up, and themselves up to be able to scale and.

[00:03:33] Rishad: I think that makes a lot of sense.  

[00:03:35] Sean: Perfect. Well, let's start. That's enough for me. Let's start with you. How did you end up in the world of media and advertising in the first place?

[00:03:43] Rishad: Relatively simple. I came to the University of Chicago for an MBA. I grew up in India and I wanted to work in a field that allowed me to connect strategy and culture. Strategies, because that's what I liked doing when I was in business school. And culture, because it was very clear having grown up in India that I did not understand American culture. And so, my whole thought was; if I could work in a firm that needed to deal with culture in which I could do strategy, and at the same time, if I could work for a firm that would expose me to lots of different firms without me having to switch firms, that might be a good place. And it just so happened that in the early 1980s, this was 1982, Leo Burnett, the advertising agency was the largest advertising agency in the United States. And it operated unlike any other agency in two or three different ways. The first was that it was privately held.  

[00:04:47] Sean: Okay.

[00:04:48] Rishad: Second, it operated from only one office. It had no other offices. And that office was not in New York, it was in Chicago, which is where I went to school. And the combination of those two and the fact that they overlooked the fact that I did not have a Green Card. And therefore, they said, we're going to give you a job regardless is how I got into it. And I thought, you know, after about three-four years of learning about culture and strategy and getting my Green Card, I would go get myself another job. But apparently, I was completely unemployable for 37 years. So, I ended up staying.

[00:05:29] Sean: And how did you think about, I mean, it sounded like you had strategy in your blood from day one, straight out of your degree. Did you have a vision of the kind of role you wanted to end up in early on, or did you sort of meander your way through these organizations? What did it look like?

[00:05:47] Rishad: It was meandering. And most people, even those who think they're going towards a particular destination, eventually, if they keep their eyes open and look for opportunities, they tend to meander. And sometimes they end up in where they were ending to go, but meandering was the way there in some cases, they just journey to a totally different place. So, while I joined Leo Bonnette the advertising agency and I thought it was going to work in TV and film and big clients, et cetera. That movie played itself out for about between 1982 and 1995. So, for 13 years, that's what I ended up doing. But during those 13 years, I was an account person. That's the best way of thinking about it, who is getting promoted. And then there was an event that occurred, which is why I often advise people who are of any age, including entrepreneurs and start-ups, which is; listen carefully because you might find that right next to you is really what you want to do. But if you aren't listening or watching, you may miss your opportunity. And I had become interested, I had been moved by my company into direct marketing because my client was interested in direct marketing. So, they asked me to go learn direct marketing. And when I was doing direct marketing, I began to realise that while it was strategically and mathematically very interesting that for most companies it didn't work. And the reason it didn't work is even if you were trying to reach maybe 5% of the US audience, by the time you found them in those days by subscribing or buying lists of magazines and then getting postage and cutting down trees to sending things to them. I ran the math and proved that for most brands. Again, these are for package goods, not necessarily for a car or something like that. If you want to reach 5% of the US, it's cheaper to reach them via television, than actually find those 5% and reach them narrowly. And having done that, I sat there and thinking, I liked what the direct marketing people were saying, but it wasn't working. So why wasn’t it working? Now, it wasn't working again in some categories. I'm not saying it wasn't working. And it was very clear. It was because of the postage and the paper and the buying the lists. And that's how I basically said; what if we do this online? And I happened to have a Mac and I was playing around with Prodigy and CompuServe. And I took our clients to a little company then, which had 300,000 people called America Online. And I said, maybe we should do this, which then got the client to say, we're interested, which then my management to say, what the hell is this that you just sold? And I said, I think it's time for us to launch the interactive marketing group. And one year after I launched the interactive marketing group, it became very clear that I did not know what I was talking about. And I needed real experts who actually knew how to write, not code, but develop it macro media, et cetera. And so, I convinced Leo Burnett, the agency to do things that they had never done before in their history. One was to take their name off the door that instead of calling it Leo with an interactive marketing group, you needed to call it something different.  

[00:09:28] Sean: Right.  

[00:09:29] Rishad: Second is with the exception of me….  

[00:09:31] Sean: And why was that? Why did you want them to dissociate the name from the…?

[00:09:36] Rishad: Because Leo Burnett was associated with television. And at that particular time, it was very clear that clients were looking for specialists that were looking for companies like organicadagency.com. And I said, we needed that, but the second was I needed all the employees not to be Leo Burnett employees, they had to be employees of this new company, because I needed to both attract them and incentivise them very differently than we were doing for the media. And so, I basically suggested that if you wanted to be serious about the future, we had to blow up the models of the past. And I actually used a line, which is now the line of my thought letter, which is “The future does not fit in the containers of the past.” But here is a company who basically said, whose Founders; If you take the name off the door, it means you're a thug Ruffin, and you care too much about money. And I convinced our board that if we wanted to get to the future, we had to take the name off the door. And so, we introduced a new company called Giant Step and working with the colleagues by the two Founders of Giant Step and myself, it was a two-person company and me, I remained a Leo Burnett employee. That was the deal. Leo Burnett invested in this company. We own 75% of it. I ended up with these two gentlemen running it. And we grew it profitably from three to 120 people from no revenue to 12 million dollars. And this was like 20 years ago. And that started me into this new career, which is about digital and innovation and the future, and this was in 1995.  

[00:11:19] Sean: In convincing the board because this is … but in an age where the data might not have been that available to you. So, you're having to have a pretty courageous conversation here with a board to go, I know what we've been doing is working, but actually the future looks a bit different. How much of their buy-in was based on faith in your argument versus the ability to sort of prove it up? Did they have to really take a big leap to back you in this?

[00:11:47] Rishad: They had to take two leaps. I had some data, but not enough alone to convince anybody, because often when you try to go into the future, most people have data that explains the past. As I explained to people, most algorithms are backward looking. They're not forward-looking. So, I had enough data, so it didn't look like I had too much to drink and it walked into the boardroom. But what I had, and I write about that is, I had been working in the company for 14 years and had a track record. And so, I had the data that nobody pays attention to, something called trust. And they said, we trust you. If you think this is important, okay, let’s do it. But we’re only going to give you three people, and if you get revenue, then we further invest. And so, I built a three-year business plan where the plan was that every additional dollar of revenue I got, got reinvested into the business for the first year, that I would break-even at the end of the second year and we’d make money the third year. And we did exactly that. And so, we grew really fast in the first year and we invested back of the company. And so, what we had is we had some data to make them feel happy, which is clients were demanding the stuff, I was getting revenue. And because I tried the first year by doing it with Leo Burnett, with the people inside the organisation and grow it from 3 to 12. And then we went back to three, but I couldn’t see how it would make money. And we were outsourcing the most interesting work to outside people. And I said, at some particular stage, our clients will say, what are you doing? If people at Giant Step are doing all the work, you are overhead. And they understood this, and our clients are smart people, they’ll figure out what’s going on. So, let’s do what is the right thing to do. So, that’s how it worked.  

[00:13:51] Sean: Wow. Well, and I can imagine over your journey, you would have asked people to take… because I know that what you’re fundamentally known for is for strategy and envisioning the future. And that ended up being fundamentally your job within the group. So given that, and when you bring this back to you, you’ve had all these varied experiences and whilst I could spend hours interviewing you about your career, I want to see if we can sort of distil some of that wisdom and knowledge of what you’ve seen from both small, they might've been businesses inside the group, they might've been clients of the group, they might've been people that you've been advising. When you think about three or four things that you think are really important for first time Founders, particularly to be thinking about if they want to scale their organisation. We had a bit of a chat offline, and a few words came out particularly around strategy and some kind of key thoughts around strategy management change, and also people. Where would you like to start, because I'd really like to figure out where…

[00:14:48] Rishad: Sure. What I want to start is with two statements then we can probe those two statements. So, one is a statement, which I would say is my left-brain statement. And my left-brain statement is; if you want to succeed in any business, particularly as an entrepreneur, you need to have a strategy, which is number one. You need to ensure that you have talented people around you. Number three is you need to ensure that you actually understand and adapt to technology, which is intensely important. And the fourth is that you personally continue to grow. So, have a strategy, get some talent, make sure you personally can continue to grow and adapt to technology. So, technology changes and you have to change, have a strategy that guides you and make sure you've got talent around you. That's my left-brain argument. My right-brain argument has to basically do with, and I’ve written about this, which is what do successful people eventually have. And those are what I call 5 P’s. And one of the P’s happened to be, they have a sense of purpose. So, if your sense of purpose is I'm doing this to make money, that's fine. That's not a bad purpose, but recognise that once you've made money, you will be purposeless. So, it's better having a purpose besides making money, that's one. Second is, you need to have a certain amount of what I basically call a perspective that whatever you think you're going to do, you're going to be shocked because the world is going to come very much like apparently it was Joe Lewis or not Michael Tyson who said; everybody has got a strategy till they get punched in the face. My basic belief as an entrepreneur is, I got punched in the face all the time and I was an intrapreneur, not even an entrepreneur. So, as a result of that, you basically have to have a sense of, you know in addition to purpose, a sense of persistence and a sense of perspective. Perspective, that's going to take some time. Persistence that you're going to keep going. You need to have a sense of perception, which is be very careful about understanding yourself and people around you, because you think you're in a technology business, or you think you're in a data business, but you're actually in a people business. And then you have to have a sense of passion.

And so you need those, you need the 5 P’s, but you also need the strategy and the people and the change management. And how you intertwine all of those is a big part of it. And a big part of what I always remind entrepreneurs is, don't be so hard on yourself. Because successful entrepreneurs really kick themselves in the butt all the time. And it’s good to do it once in a while, but after a while you twist yourself into a terrible shape.  

[00:18:13] Sean: Yeah, it's kind of like the concept of noticing what you don't want, but don't dwell on it and focus on it forever like, it's good to know that it’s there…

[00:18:19] Rishad: Yeah. And you should be kind on yourself, because the reality of it is, you know also the fifth P was very pioneering. And pioneering means you're going to go do things that no one else has done, which basically means once in a while, more than once in a while, you're going to fall flat on your face. And having those 5 P’s and having these other things are a lot of what I try to get people to understand. And over the years I've realised is, that's true for almost anybody. It's definitely true for entrepreneurs. But now, my belief is all of us have become companies of one. And I've written about that in this today's COVID age. I mean, you're working for a large company. You're sitting at home on the internet, pretending you're working for an 80,000-person company that you've never seen anybody at a large group for the last 18 months.  

[00:19:12] Sean: Yeah. And even in your personal circumstances, I had that conversation with my 13-year old yesterday morning where I said, well, let's start with actually what you want. Are you clear about what you want? Okay. Let's talk about the strategy to get that. Now let's talk about when the strategy stops working, what are you going to do and how are you going to maintain your motivation. So, all the same principles to your point.

[00:19:33] Rishad: It is. And so, what happens is that the way that this connects to the topic we were going to discuss, which is my book, the theme that runs across my book is how do you combine the story of the spreadsheet? And so, the spreadsheet is things like the strategy and the data, but the story of things like the pioneering and the perspective, et cetera, and you need to combine those. Having only one will not keep you successful.  

[00:20:02] Sean: Yeah, so true. So, if we take a step back, then let's just say, I'm a Founder and let's say you're working with a smaller organisation. It's going pretty well, businesses building, well, then maybe they’re starting to take on some management capability. Maybe they haven't gone out and proactively sourced the world's best people or the people who've actually been to the next stage. They might be getting a bunch of average sort of B players that they feel like they can afford, but they feel like that being able to delegate and they’re slowly freeing themselves up to be able to continue focusing on the business. And then you realise that the first step is they don't actually have a strategy. How do you encourage them to think about what does that actually mean and how should it, especially in a world where, to your point, they're having to adapt and change. And so, you know, a document that's 160 pages and sits in the top drawer for the next four years. It's not going to be all that helpful. How do you think about guiding entrepreneurs around strategy?  

[00:20:59] Rishad: So, there are two. One is to not get bent out of shape or driven crazy by thinking that strategy is highly complex thing that requires thousands of pages and consultants. I believe strategy requires two things. A definition of what strategy is, which to me is future competitive advantage. So, what that means is try to anticipate in the future, what your customer consumer might need, who you would be competing with, and what advantage will you be delivering for these future needs against these future competitors? It's that simple. Okay. Now, then to either develop your strategy or to sell your strategy, you need to have nothing more than nine 59. And so, my belief is, if you cannot tell your story in nine slides, you don't have a story. The 180 slides means you don't have a story. As I tell people, will you please tell me your cool shit? I don't want to know how your colon works. They're going to tell you how the colon works. I'm not interested in how your colon works. Where's the cool shit. I recently wrote two Sundays ago on my sub stack free newsletter, rethinking presentations. And it's been only 8-10 days. It's the most popular thing I've written.  

[00:22:49] Sean: I was going to say, you saw me. I actually commented on that within about 30-minutes I think of you releasing it, I thought; wow, this is such a, I love the fact that this was something that many of us just don't think about when we're in the world of corporate and the whole world is full of PowerPoints and presentations.

[00:23:04] Rishad: And the fact that yes, how you can do it. And that I eventually then hand drew to show you how I did it. Which is sort of meta about it. And it's kind of pretty incredible. It's been read a hundred thousand times.  

[00:23:18] Sean: Wow.  

[00:23:19] Rishad: Okay. And I don't advertise that. Yes, it's free, but it's all through word of mouth, people passing, like you commenting on it, LinkedIn, et cetera. A hundred thousand times, including hundreds of CEOs.  

[00:23:32] Sean: Rishad, just give the community a quick insight as to basically what the key points of this article that has gone viral.

[00:23:37] Rishad: Sure. So, the key points of the article very quickly, which you can find at Rishad.substack.com and it's completely free. Is that in order to basically … that we are all we're thinking presentations and presentations have become a process that we fill with pages and pages and pages, they're too long and we don't get to the point that we have nothing really interesting to say. So, I suggest that you have nine slides to a presentation. Slide nine happens to be the appendix. So don't worry about until the end. Slide eight is actually where you start, which is what's the order. What are you going for. Everything you write starts with slide 8. So, slide 8 is what are you trying to sell? What's the order? Once you have slide 8, then what you need are three slides, which I call slide 4, 5 and 6. So, slide 4 is what insight do you have about customer, consumers or the people you're trying to sell to? So, it lets them think differently or see differently. Then what ideas do you have? And then another slide on what imagination do you have for them to rethink their category? So, those I call ‘how you get them to see things differently, think differently and feel differently’. So just one slide that says here are my ideas, here are my insights and here some ways to rethink your category imagination. So that's slide 4, 5, 6. Therefore slide 7 becomes by the way, here are some proof that I've actually done the shit in the past. And then you do slide 1, 2, 3. Slide 1 becomes a really spicy title. Slide 2 basically becomes almost a navigation and agenda drive or three. Slide 2 happens to be, what is this title? Slide 2 happens to be something that you can deliver, right. That captures them right away. So, if you have a very spicy title and the next slide is I'm going to save you 20% of your costs. I'm going to deliver five times revenue or something of the sort that you can actually do, then by the way, now we're going to have this conversation and then all you have to show them is ideas, insight, imagination, why you've done it before. The end slide for the order

and then the appendix, that's it. My stuff is if once you’ve fill in those nine, you may not even need a presentation. You can just have a conversation. And that is what people don't do, instead they write huge goddamn decks killing a bunch of trees and boring the hell out of people. And so that's part of what that was. And so, my thing with strategy is think future competitor advantage. Think about these nine slides, and you’ll be fine. There are too many people who make too much money wasting people's time, making it complicated. And my basic belief is that's why when people often ask me, they say wait, you do your entire training programs in four hours. So, I said, yeah, you don't need more than that. And I said, I don't get paid by the hour, so I'm not going to purposely make 40 hours happen. I said, I have a fixed cost. And I say, here's what I'm going to do it for. And I'm going to do it for, if you think it's damn expensive for an hour, too bad, I'm not going to basically reduce it. But the reality of it is when you pay people a little by the hour, they drag out the hours  

[00:26:55] Sean: Yeah, totally.  

[00:26:55] Rishad: They give you big fat decks. You don't want a deck. You want a result. And that's what's basically happened. We are so fixated on the cost of the input. My old stuff is yes, you can buy a cheap pig, but you're going to get a diseased hot dog.  

[00:27:13] Sean: Yeah, that is very true. So, all right, I’m a Founder. I’ve got the book. I might be just selling to myself in the way that I’m thinking about nine slide development, but to your point, don’t over-complicate strategy. Strategy is about getting, building a future competitive advantage and therefore you have to understand the current issues and problems. You have to think about who you’re going to be competing against and how you’re going to develop it. And I always think, see if you can get inside the mind, the language of the customer and I’d certainly a guide my clients on this. What are the things they’re saying about everybody in the industry? There’s like, I hate dealing with these guys because X, Y, and Z, like, what are the things that actually drive them crazy about you and everybody else in your industry? Because those are the things that actually, they really would probably like to have solved.

[00:27:55] Rishad: Yes.  

[00:27:57] Sean: It’s an easy starting point. Anyway, so let’s assume, okay, our Founders now got a nice short, succinct strategy and they’re kind of often running, they now realise they’re going to have to make some shifts in their business because they’ve actually got a bit of conviction about this new direction, or maybe some competitive advantage they think they can develop. And they’ve now got to get people on board. How do you think that’s going to require likely some challenge? Some people are going to have to do some things differently, maybe they’re going to have to abandon some things that they did in the past. How do you think about managing change because the strategies just maybe shifted a bit?

[00:28:27] Rishad: So, there are two things I believe about change. The first thing is that change sucks. And I’ve obviously, you know… I’m a living proof. The fact that I stayed in the same company for 37 years and now it’s year 40 and I’m still an advisor. And my email still works, and my key card still works and there’s actually an office there still. So, my old stuff is, I don't like change. And when people come to me and say, change is good. I say, I'm happy. If you think change is good, you should change. Okay. And we all say change is good. And so, my basic thing on change is, it's really difficult because when you want to do something different, it's like learning how to bike, you fall down and you graze your knee, and as you become successful, why do you want to do that? So, we talk about change. But you know, when someone brings a great bottle of wine, they said, let's have it together because it's a good bottle of wine. Nobody comes to you and says, change is good. Let's do it together. They say you should do it. So, I'm very suspicious of that. So, the change is difficult. It sucks. But my second belief is, while change sucks. Irrelevance is even worse. And therefore, we're going to have to change. So, when you as an entrepreneur are trying to change, you're trying to bring people around for change. Don't say it's good. Recognise it's difficult. And therefore, how do you solve for that difficulty? What is by saying, look, I know it's difficult, but the way to solve for it is to address four issues, or not address four issues, solve for four.

So, the first one is, why is it good for the people who you want to bring along to the party? Whether it's your client, whether it's someone who is talented, whether it's a partner. Why is it good for them? If it's just good for you, no one is coming. So why is it good? Second is how are you going to incentivise them to change? Because if they're going to change behaviour… the reason the newspaper and magazine industry never changed is because they kept incentivising people to sell more newspaper ads and more magazine pages. And my whole basic belief is of course, I'll go to the offsite at go digital. Great. But if I get paid to sell paper, I'm going to do that. So, how's the incentive. The third is, which is as important is can you please explain to me in addition to the incentives, and in addition to the fact why this is good, is this good for me and there's an incentive plan. Where's my training. How am I going to do this? You know, we think there's something like immaculate knowledge that suddenly happens. But the same people I say, okay, where's your training program. So, give me your training program, give me your incentive program. Tell me why is this good for people. And then the last thing is, show me how you're doing it yourself.

Many leaders expect they talk about it, but they don't do it themselves. And so, I watch behaviour. And so, a big part of it is, if you're trying to drive change, you say, look, change is difficult. Here's why it's good for you. Here's how I'm going to incentivise you. Here is how I’m going to provide training. And yes, I'm eating my own dog food. I'm doing it myself. Then change happens. If you basically just have the strategy, some kind of M and A plan, some kind of real plan. And then you put out a press release. God bless you. Nothing's going to happen.  

[00:32:08] Sean: What if the change requires behaviours that people can't find training for? And what if it's new? How do you wrestle with that? People go, we haven't done it yet. We haven't done it before. We don't know how to train someone else in it.

[00:32:22] Rishad: So that's perfect. So, then what we basically say is we are going to be training on the job, which therefore means that every two weeks we're going to learn from everybody about the mistakes they've made. And we're going to basically say, we're going to go in together and learn new things. But as importantly, usually someone else has done it. It’s not in the same industry, somebody else has done about 75-80% of that somewhere else. So, you can read books about it or go online or listen to a podcast or a YouTube video or whatever it is.  

[00:32:55] Sean: Yeah, I think that's very true. Yeah. There's really that much ground-breaking activity going on. Most of the things that you think that you want, somebody else's already doing it.  

[00:33:05] Rishad: Someone basically has done, and if nothing else, you can even put up your hand and ask and someone will help you or just find someone, reach out to them. And my thing is, when you ask people for help, usually people give you the help and the people who don't give you the help that you ask for, you don't want their help anyway, because they've become irrelevant because they become full of themselves. So, my belief is if you can't help people, you are a little bit questionable.  

[00:33:37] Sean: And so, as a Founder, we've identified this new way that we can strategically move our business and develop competitive advantage for the future. We've done a great job of thinking about how to sell this package of positive change to our team members. We recognise that it sucks, but we also can articulate what's good for them. And we've got training and we've got all these ingredients. How do you then think about from your experience? And I'll be interested in any sort of practical examples, how have you tied then strategy to execution to make sure that where you think we'll want this strategy to go is actually what sort of happens on the ground and the focus is maintained and that there is a tight enough link between the strategic idea and the execution part?

[00:34:28] Rishad: So, the two ways of it, one is when you develop the strategy, if you can incorporate the people who will be executing it into the strategy development. If you cannot do that at that stage, let them know as they're executing that you might adapt the strategy slightly after you hear from what actually goes on as they execute. So, when I was an account person, half the time, I would write the creative strategy after I saw the creative work. Now, what I would do is I would basically say what the goals were and would write a rough strategy and give it to the creatives. The creatives would then come up with work. And when I saw the work, I said, okay, now I know what the strategy is because they actually had a better idea at a better angle.

So, the other thing is a strategy isn't something that is like the 10 commandments. It's sort of a future competitive advantage. It doesn't mean the future and competitive advantage are all frozen, you can continuously sort of improve. So, one of the things clearly is by trying to get the people who are executing both incorporated into the strategy so they buy into it at minimum by basically saying, I need to hear back from you as you're executing how this strategy can be improved, then they will have a sense of ownership of the strategy. It isn’t your strategy, and they're going to execute. It's their strategy, it's our strategy that they're going to go and get first pieces of data in the marketplace about, and that is that’s very important. You know, we always talk about feedback, but feedback from people versus feedback from machines is really cool. So, a lot of what we now do is an industry, particularly in the digital industry, we're trying to replace as much carbon with silicone as we can. We're trying to replace faces with dashboards. What we're trying to basically do, is we try to replace the messiness of people with the coolness of screens. The problem simply is, is the messiness of people that actually makes things happen because who you're eventually selling to, or trying to influence happen to be people in most cases.  

[00:36:53] Sean: They're on the other side of the screen.  

[00:36:55] Rishad: They're on the other side of the screens. And so, a big part of it is, I try to get people to sort of understand that, listen for what people are not saying. Listen when there is a lot of emotions, because it's in the emotion that the data really is, right. You can’t extract emotion from data. You can extract data from emotion. And just so people know that I'm not some sort of fuzzy person. I have an advanced degree in mathematics.  

[00:37:28] Sean: Yeah, but actually I think that's one of the things that is such a brilliant opportunity at the moment, and also such a challenge for the next generation who are… if you think about one of the opportunities, and I know that you talk about, I guess, you know, new processes and new ways of doing work, that's enabled by artificial intelligence and so on, and I always think. Well, the whole point of this should be to allow us to be more human, right? Like not have us use our bandwidth, our capacity, our time to do things that actually machines can do better than we can, but actually as a result, freeing our capacity to do things that actually only humans can do really well. And that's the perfect… it's not about replacing one with the other. It's about finding better ways to leverage our sort of respective skills.

[00:38:13] Rishad: Yes, absolutely. So, for all the entrepreneurs, small companies starting here, In addition to something like strategies future competitive advantage, and this how to write presentations, I will ask you all to constantly think that when you enter the room, with your talent, with your client, with the supplier and you take them, you know, there's obviously this data that you bring them, there's a whole bunch of things that you bring them. The question I'd like you to ask is, what are you adding to the data? Because if you're just showing them data, that in the fact you're basically saying you're useless because I could read the data myself.  

[00:38:56] Sean: We want the insight.

[00:38:57] Rishad: So, I basically suggest that you should deliver at least one of four P’s. And what I mean by P's are the first one is a sense of perspective. Second is a point of view. A third is a provocation and a fourth is a plan of action. You can do any of those four, all four. So, I'll give you sort of an idea. When I talk about technology, I basically say we're entering the third connected age and I talk about the first connected age being about search and e-commerce where people connect it to discover and connect it to transact. And then the second age building on the first, we were connected all the time and we were connected to everybody because of what we call social and mobile. And now we're entering the third connected age where there's going to be things like 5g and voice and AI and other things. And that makes the last 25 years understandable in human terms of connections. That's a perspective. A provocation is, I wrote in May of 2020, there's never going to be a new normal, this is post COVID, right? I said, and this is going to last much longer. We are fooling ourselves. That's a provocation. A point of view might simply be like, I've been providing points of view as to what a strategy is, et cetera. And a plan of action is, okay, here's how you can do it. Here are nine slides you can do, you can do the nine slides. That's what people want. That's what machines cannot do. They call provide perspective on themselves. They can't provide a point of view. They can't provide a plan of action. And my belief is it's man plus machine. It's not man or woman plus machine, it's not one or the other. And how do you do it together? And that's what we don't do. And what is tended to happen is my worry and that's the reason I wrote the book is we are defaulting to the machines and the end result is not even… forget about it not being good for human beings. It's not good for business. Show me a single successful business that is defaulted to the machine. It doesn't exist. Businesses that run only on data and math is United Airlines, people that wrote on story and spreadsheet of Southwest airlines, right? In every case, I can show you with data. The stock market valuation is higher. The retention of people are higher. So, I use data to prove to data people that rely on data doesn’t end up with the best result.  

[00:41:31] Sean: The people already get it. And I think this is such a challenge for our next generation who are growing up in an environment where machines are doing a far greater amount of heavy lifting and things that we used to have to just rely upon ourselves to do. And some of that framework that you've just articulated would be so powerful in the school system to kind of go; Hey, you need to actually think about your relationship with machines and some of these things that are not going to go away, that machines are never going to do well, that you actually have to get really good at, otherwise there's a risk that you become exceptionally reliant, but also quite redundant in your ability to add value to others.

[00:42:11] Rishad: Yes. And then for everybody, and this is very true for people who are running small businesses, medium sized businesses, any business. One of the pieces of advice I give them as, people say, okay, it looks like after many, many, many years, you still know what you're talking about or you're as stupid as you were, but at least you're more elegantly stupid. And they say like, is there like a secret? I said, there's no secret. What it is, is three single things that you have to do if you want to continue to remain successful. And the first one is, spend an hour learning every day. And I'm surprised. And by working very hard doesn't mean that's the same as learning. That's what people don't make a mistake, so learn. But the second one is really hard for an entrepreneur. So, you can sometimes get people around you to help you do this. Build a case with the exact opposite of what you believe. Because sometimes an entrepreneur, you're so passionate that sometimes nobody can give you the other perspective. And the third, and this is less for entrepreneurs because entrepreneurs are doers, but this is more like managers and other people. Please do, do some stuff. Okay. Just don't manage stuff or talk about stuff or read stuff. And these days, that's the reason I started writing the Sub Stack 55 weeks ago, because I wanted to learn how to do something new. So, I did it and it's turned out to be a great asset. And I've learned other things that have turned out to tell me how stupid I am, but you know, what tends to happen is unless you do, unless you build a case that's opposite and unless you spend an hour learning, you won't be an entrepreneur for long, you'll be unemployed.  

[00:43:54] Sean: Yeah, well, particularly when you're an entrepreneur, the success of your business is going to fundamentally follow your professional development investment in yourself, because actually you're creating all sorts of limitations every single day by how you think and how you don't think.  

[00:44:09] Rishad: Absolutely. And then the last thing, which I think I mentioned earlier, that I'm a huge fan of everybody and my basic belief is everybody's got an incredible talent and can succeed. They just got to get a combination of luck, chance and finding the right place. But there's one thing that everyone needs to be aware of. And this is a line from George Saunders, the writer, which I often use, which is ‘Err in the direction of kindness.’ Okay. If you've got two paths to take, one where you basically behave like Attila the Hun and the other one, like Florence Nightingale, or Mother Theresa. Try that one, it works better, especially on yourself. Because people who are very talented, tend to be very hard on themselves. So, err the direction of kindness even to yourself.  

[00:45:00] Sean: And is that what you meant when we sort of talked offline about your ability to actually stay the course and stay on the journeys mentally and emotionally. Is that what you're talking about?  

[00:45:09] Rishad: Yes. So, you know, what you need to basically recognise is it's a long, long career. So, one of the things I wrote was 12 career lessons. And in that I said, most people will have 40-to-50-year careers. And when you start thinking about 40-to-50-year careers, a bad quarter, a bad series of meetings fails as long as you're alive. And so, I often say is when you are losing something, it's okay. It hurts a lot to lose a pitch, lose a company, lose money. But if you can keep two things going, you can keep going. Obviously, you don't want to lose your life. And then the other is you don't want to lose your reputation. And if you err in the direction of kindness, you won't kill yourself and you won't lose your reputation.  

[00:46:02] Sean: Hmm, that's a true. And you know, Rishad, we're getting to the end of our time together. But I would really like to… I think that's such a really interesting statement. And to me sums up what I think is a remarkable career. Not so because of the size of the company you worked for, or from that perspective, but it takes to know that you're actually going to stay in the same place and within the same group, to your point, it actually relies on any moment that you have. I mean, I see this happen all the time. People get self-doubts, and they start hoping, you know, I think one of the other entrepreneurs I spoke to, she said, you just can't cross hop. You have to assume that actually it's going to take some decades, probably 20 years plus before you actually get really good at anything. But if you keep hopping every three years and doing something different and doing something different and doing something different, you actually end up in your mid-40s or 50s, actually not really skilled at anything. But when you know that you're going to stay there, it really changes how you think about how you treat yourself and how you treat other people, because you're not going to have a 20-year career if you're burning bridges at left right and centre and you're just out for yourself and you're just sort of railroading.  

[00:47:14] Rishad: That’s exactly right. And then the other is in most cases because the world is changing so fast, you could actually learn a lot in change inside the company. So, while I stayed in the same place for my entire career, the last time my business card said was Leo Burnett was, as I said, 1995. And since then, I've had 10 different business cards. I'm not talking about titles, I'm talking about different companies, you know, Digitas, Razorfish, Sapient, Publicists, you know, Starcom. And so you can do that. But here's the other reason why that's important is, you don't want to be a grasshopper because the only reason the grass is greener on the other side is because it's fertilized by bullshit. Whenever you see it at other company, you're only seeing the good shit and you realise the bad shit that goes on inside your company. That's number one. But the second to a great extent is the big asset you really build, which becomes a competitive advantage is people trust you. And I've written the fact that trust is speed.  

[00:48:19] Sean: Yup.

[00:48:20] Rishad: And people basically say, if someone sticks it out, we think that's pretty good. They're pretty good. I'm not against suggesting that people are like stupid like me who stayed in the same place, but think three to five years at a time, don't think three to six months at a time.  

[00:48:38] Sean: Yeah. Everybody is in a big hurry to get somewhere quickly when it comes to entrepreneurship. And certainly not all of them. And the number I would say, 75% of the Founders that I interview have been in this business, or certainly in this industry for a least 15-20 years before all of a sudden they're like, everyone's gone. Wow. The business is growing at a 100% year on year. I was like, yeah, did you look at the first 15 years where actually they were growing like snails, but they actually stayed in long enough to figure some things out, get close enough to customers, have a reputation, build a character, all of these things and all of a sudden a few of those ingredients came together. Might've been a bit of luck, might’ve been timing, but they are actually ready, poised, knew what they were doing, how a team, how to model and could activate where other people were just clambering to get on board late.

[00:49:22] Rishad: The most powerful word in finance is compounding, but that word is even more powerful in business. In finance is compounding interest. In business is compounding skills, compounding reputations and compounding networks. And what you usually find is in the last 20% of your career is approximately 80% of your returns.  

[00:49:52] Sean: Yep. And there's lots of good examples of that. Rishad, I would love to say a huge thanks to you for sharing your wisdom with us today. Really enjoyed the conversation with you, could chat to you for hours. How can people get in touch with you or follow along with what you are doing?

[00:50:11] Rishad: So, I'm on LinkedIn at Rishad Tobaccowala. I have a website which is Rishadtobaccowala.com. I have this weekly free thought letter, which I think you should take a look at, which is Rishad.substack.com. And my email is [email protected] and my Twitter is @Rishad and those are my two examples of early mover. And in both those cases, I was almost in my 50’s. People basically said, how did you get Rishad at Gmail or at Rishad? And I said, I was trying new things.  

[00:50:51] Sean: Love it. Well, we'll make sure that those end up in the show notes. So, thank you very much, Rishad. Folks, I hope you enjoyed the show today. A huge thanks to Rishad Tobaccowala. A couple of things before you go of course, if you enjoyed it and you got value out of today please subscribe to the podcast, but also give us a review. Let us know what you think. It means a lot to our team, but it also of course, helps other people find the podcast. If you'd like to know when new episodes drop or tools being provided by our guests are available. Just pop to the website, scaleupspodcast.com. You can leave your email there and we'll get those to you. If you like the socials, you can jump on any of the socials and you'll find us at @scaleupspodcast. And you can also see the full video versions on YouTube if you'd like to see Rishad's and my smiling face.

But remember, no matter what is going on and no matter how difficult this journey gets, and it does get pretty tricky, especially if you're going to be in it for a while. And there might be some times where you want to jump off the bandwagon, just remember that the only thing that can guarantee that you won't scale up is giving up. So, you've got to stay unshakeable in your faith, yet flexible in your approach. You've been listening to the ScaleUps Podcast. I'm Sean Steele. Look forward to speaking with you again next week. Thanks so much, Rishad.  

[00:51:59] Rishad: Thank you.