303: Inspiring Teams through Purpose with Fred Kofman

By June 1, 2018Podcasts



Fred Kofman says: "The way to integrate a team is not by payments, not by rewards and punishments, but inspiring them."

Fred Kofman shares how to unlock the power of purpose to strengthen your team and drive better performance.

You’ll Learn:

  1. The first hurdle to working in a group
  2. How to find the inspiration in your work
  3. How to solve the problem of disinformation

About Fred

Fred Kofman is a Leadership Advisor at Google and former vice president of executive development and leadership philosopher at LinkedIn, where he worked with the top CEO’s and executives around the world. Born in Argentina, Kofman came to the United States as a graduate student, where he earned his PhD in advanced economic theory at U.C. Berkeley. He taught management accounting and finance at MIT for six years before forming his own consulting company, Axialent, and teaching leadership workshops for corporations such as General Motors, Chrysler, Shell, Microsoft, and Citibank. At its height, his company had 150 people and created and taught programs to more than 15,000 executives. Sheryl Sandberg writes about him in her book Lean In, claiming Kofman “will transform the way you live and work.”


Items Mentioned in this Show:

Fred Kofman Interview Transcript

Pete Mockaitis
Frank, thanks so much for joining us here on the How to be Awesome at Your Job podcast.

Fred Kofman
My pleasure, Pete.

Pete Mockaitis
I’m so curious to hear, so you had a nice run there as the Vice President of Executive Development at LinkedIn. You just recently made a switch. What are you up to now and what’s the story?

Fred Kofman
Well, I’m now an advisor for Leadership Development at Google. Well, the story is I would say a transition, but along the same line.

I’d been with LinkedIn for five years. They are – I feel that they are all my brothers and sisters. It was an amazing opportunity that Jeff, the CEO, gave me to work with all of them. But after five years I think I worked with almost every executive in the company, so my mission was fulfilled.

I had shared what I can do and what I can help people learn and I felt that the value of my contribution was going to start diminishing quickly because it would be mostly repeats or tweaks, whereas there were a lot of other organizations that could use that and I wanted to offer my gift more broadly.

I agreed with the people in LinkedIn that I would be out in the market and combine the work I did with them with some work I would do for other companies. Then when I went out, some people from Google asked me if I could consider doing a more extended engagement with them, a project that would be more absorbing.

I thought it was a fantastic opportunity, so I just accepted and I’m here. I’m beginning this project of Leadership Development or advising them in the area of leadership development.

Pete Mockaitis
Very cool. I’ve been enjoying digging into your book a little bit, The Meaning Revolution. Could you give us how do you conceptualize it in terms of what’s the big idea behind the book and why is it important now?

Fred Kofman
There’s a fundamental problem that every person that is trying to work with a team has to solve. It starts with a couple, just two people or a family, a small team and is the same problem that an organization with hundreds of thousands of people will have.

That’s to try to combine or integrate the need to have each person be accountable, to do what they’re supposed to and also the need to have each person cooperate for the achievement of the common goal.
This seems obvious. You want a group of people that work together. Every company wants the same thing. We want people to work together and each person doing what they’re supposed to do.

But there’s a hidden problem with this. There’s some incompatibility between these two imperatives. That is that if you evaluate people based on their what’s called OKRs or KPIs, which are the key results or key performance indicators, people are going to focus on their own individual jobs.

Pete Mockaitis

Fred Kofman
And they won’t really collaborate with others and they will even build silos to make sure other people don’t prevent them from doing what they need to do.

Today we live in an illusion where people think they are getting paid or that they’re hired to do what they call their jobs, but they’re all wrong. Every person is wrong when they say, “My job is accounting,” or “My job is sales,” or “My job is engineering.” I think everybody’s job is to help the company succeed, just like every player’s job is to help the team win.

But a defensive player will think that his or her job is to stop goals and the offensive player will say my job is to score. That’s not wrong, but it’s not true either. The job is to help the team win.

You normally do your job as a defensive player by stopping the other team from scoring, but in some instances, under some conditions, it would be better for the team if you left your position and you went forward and tried to score. For example, if you’re losing one – zero with five minutes to go.

It’s a typical strategy that teams will send the defensive players to the offense to try to tie the game. But if a person thinks, “Oh, no, no, my job is just to defend,” they will not want to go forward.

The same thing happens in a company. If you feel that your job is to reduce costs, you are going to be less interested in satisfying the customer because it could be expensive to satisfy the customer, even though the best thing for the company to achieve its mission would be to pay attention to the customer.

Or if you’re in customer retention – I tell this story in the book about somebody that was trying to sign off on Comcast and saying, “I don’t want your service.” It went viral because that was a crazy conversation.

Pete Mockaitis

Fred Kofman
It lasted like ten minutes with the customer service

Pete Mockaitis
Cancel the account. Yeah, I remember that.

Fred Kofman
Exactly. That costed Comcast tens of millions of dollars in brand loss – in brand, I would say, distraction.

This was a stupid tradeoff that a person made because they think or they have a performance indicator that is how many people cancel the service during your time, when you’re on the phone.

The less people that cancel their service, the better your performance, so of course you’re going to try to convince everybody not to and you will even try anything to the point that you’re going to upset the customers and then create a brand disaster for Comcast.

Pete Mockaitis
Right. Then that’s making a lot of sense in terms of your job is broader than your job description, whether it’s to prevent customers from leaving or what not. Then at the same time, given that there are perhaps thousands of things that an organization needs to do in order to succeed and you’ve got to have some degree of division of labor and responsibility.

How do you think about that appropriate balance between folks sort of executing on their key performance indicators versus doing whatever is necessary to help the organization win?

Fred Kofman
Yeah. That is what the book is about. I’ll give you a hint; it’s not a balance. It’s a relationship of subordination. The primary goal is to achieve the mission. That is the super-ordinating imperative. That’s why you’re here.

If you’re a soccer team, you’re there to win the game. You’re not there to say, “Well, how do we balance winning the game with having more shots or having less goals scored against.” It really doesn’t matter. It’s better to win seven – six than to lose one – zero. You say, “They only scored one goal against us,” yeah, but you lost. It’s not really balance; it’s a subordination.

But it’s very difficult to try to incentivize this subordination because the moment you tell people, “We’re all here to win,” and you can’t observe what people do directly or even if you observe, know if people are doing the right thing or not, because many times it requires judgment or discretion.

When you give people a collective incentive and you say, “We all win together or we all lose together,” you become vulnerable to predators and parasites, people that will come and prey upon the system because they are –

For example, if you pay an average sales commission, like the whole everybody sells and then you pool the money and you pay every salesperson the same, well, all the people that are below average would love your company and they will come and work for you and all the people that are above average are going to leave because they are going to be brought down by the average.

In a sense, average pay drives the best ones away, if I can do a little verse, and makes the worst ones stay. That’s a very unfortunate result in economics that if you want to encourage individual excellence, you have to evaluate people by their own individual performance. But if you evaluate people through their individual performance, you’re discouraging them from contributing to the team objective.

That is in mathematical terms an insolvable dilemma. If you just take self-interested agents and you try to create an organization, you can’t. It just doesn’t work. There’s no clever incentive system that will solve this problem.

The book is about understanding why that’s the case, but then seeing how do you manage this problem better. What can you do?

Very, I would say, surprisingly for me in an ironic sense, the solution of the most material, the hardest problem is soft. I would say the solution to the economic problem is really spiritual because the way you have to integrate a team is not by payments, not by rewards and punishments, but by inspiring them. That’s where leadership or what I call transcendent leadership comes into play.

You have to give people the opportunity to participate in a project that they feel passionate about. They’re not doing it just because you pay them, but they’re doing it because it makes sense, because it fulfills a deep longing they have in their lives. It is done in a way that is ethical and makes them proud. It also gives them the chance to connect with other people who they just crave to be in community with.

Pete Mockaitis
Well, yeah, that sounds like a great place to be. Could you maybe help us go from a bit of a point A to point B sort of given what is currently the case in many workplaces? What are some of the very first steps to bring it into that spiritually robust, purpose-filled great place?

Fred Kofman
Yeah. Okay, let’s just say that some of your listeners are entrepreneurs or leaders in existing companies. The first step is to find the deeper meaning of what the company does.

Let’s imagine that I’m a doctor and I go home and I have a seven-year-old daughter that asks me, “Daddy, what do you do?” I say, “I make money.” Well, that’s not very inspiring. She goes, “Oh, well, good.” If she asks me why is that important, “Oh, because I can buy nice things for you.” She’d understand that and that’s okay. We have a nice house or we can eat tasty food and so on. But it’s not very uplifting.

If I dig deeper, what do I do “Well, I cure the sick,” or “I use medicine to make people well, to help them reestablish their health.” But if I go deeper, it’s like, “Well, when people are at risk and they have illnesses or they feel terrible or they are hurt, I help them first survive, and then come back to health,” and so on and so forth.

If I describe that as my job, as my profession, well, I feel uplifted. I feel happy and my daughter will be happy too. She will be proud to tell other kids at school what her daddy does.

I know it sounds a little perhaps simplistic, but if you are running an organization in the market, the people that are buying your product or service are finding some way in which that product or service makes their lives better. It makes them sufficiently better that they are willing to part with their hard-earned cash to acquire your product or service.

Don’t focus, as Peter Drucker, said, don’t focus on the drill because people don’t really want drills. Focus on the hole. What people want is holes. That’s why they buy drills, to make them. The question would be what is the human need, the human aspiration that your product or service is helping people to address and take care of.

You need to know that and you need to feel that in your bones, like deep inside that you’re super proud of what you do. If you’re not proud, like if you’re not on fire, you’re not going to be able to light up the people that you want to inspire. You need to feel it inside and then be able to communicate and invite people who join you in that project.

Don’t invite people to work and say “Okay, come and put your effort and I’m going to pay you.” Of course, that’s the economic deal, but the economic deal will only get you average performance.

Pete Mockaitis
This is really reminding me, Fred, of a fun chat I had. I think I was freshly hired at Bain & Company. I was chatting my fellow consultants in between some training stuff. Somehow it just sort of came up, it was like, “Hey do we do good as strategy consultants?” For me, it was kind of like, the answer was of course or else why would you have ever taken this job.

Then I went on I guess what was a rant associated with, “Well, what we do is we make companies more valuable which is extremely important because folks who are saving for retirement or for college education need for the stocks in their portfolio to appreciate and we help make that possible so that their dreams can come true.

Non-profits and foundations within their endowments have their investments placed in a basket of equities that individually we are helping make. And the leverage of us doing it is so huge in terms of being 23 years old and not having a lot of experience yet and trusted to tackle things that are going to liberate millions and billions of dollars of economic value that …”

So I went on this whole rant and the others were kind of like, “Whoa, I just thought this would be a good place so I could get into Harvard Business School or something.” I was surprised. I guess for me, I call it naïve or what, but I would just sort of assume, “But, of course, you would only choose a job that had deep purpose for you or else you would have chosen a different job.”

But different people, I quickly learned, operate from different starting points in their career decision making.

Fred Kofman
Absolutely. Yet, if you allow me, Pete, to challenge you a little bit.

Pete Mockaitis

Fred Kofman
I think you missed the most important part of your job when you described the benefits. I agree with every one you listed, but for me at the top of the list, not for me, economically, at the top of the list, the reason why these companies are going to become more valuable is because they will serve their customers.

The real value in the economy is not the mission of giving jobs to people or money to the investors. The real value in an economy, the one that propels humanity forward, is the competition to give value to the customers. That’s what good consultants help companies do. That’s what the mission of every company needs to be.

If not, we become a bureaucracy. But, “Oh look, we’re doing so much good because we’re hiring all these families.” Okay, that’s like 1% of the good you are doing. Don’t forget the 99% because the real good you’re doing is that people are buying your product because they find it useful in their lives.

You have no idea how much value you’re adding because as I say, if I use an Apple computer, it would cost me maybe 1,000 dollars to buy, but I would have been willing to pay 5,000 dollars. Even if Apple makes a profit of 2 or 300 hundred dollars, I made a surplus value or a consumer profit of 4,000.

Now, nobody knows that because there’s no place where I say I’m willing to pay 5,000. That’s something only I know how much value this computer is going to give me or how much would I be willing to pay for it.

I find it a little problematic today when people talk about social enterprises or “We’re doing good,” or we hire whatever people you’re hiring and say, “Well, so many families eat because of us.” Yes, that’s true, but that’s so small compared to the wealth that you’re creating in terms of life richness, not necessarily measured by money.

But we at Google today is the Input/Output conference for developers and just looking at all the developments in artificial intelligence and the assistant and all that, there’s thousands of people here that are just day and night thinking non-stop, “How can we make people’s lives better?”

There was a clip of a lady that had a difficult handicap. I’m guessing something similar to what Steven Hawking’s had. The kind of life that she was able to live because of the products that were created, it’s infinite. There’s no money in the world that would pay for that or she would not be willing to pay to access the level of quality of life that she’s able to achieve through some of these new technologies.

I want to be very emphatic. I emphasize this in the book, particularly in the last part, that there’s no system that we know that creates social cooperation and the growth and development of humanity like a market system, where everybody opts in because they think they’re getting a good deal or opts out otherwise.

Pete Mockaitis
I like that. It does connect and resonate and it’s easy to get kind of lost in the weeds a bit. As we discussed this, it kind of reminds me of the book, The Goal, in a manufacturing context in thinking about you had all these performance indicators about manufacturing, but it’s really just about making an efficient product such that it can be sold profitably and then that is enriching the individual end-user who are engaging it.

I’d love it, Fred, if you could tackle, maybe just bring to life a little bit some industries that might be kind of tricky in terms of finding that fulfillment and purpose. I guess some of them could just be controversial in terms of weapons or – well, I could name all kinds of controversial issues, like weapons, tobacco, alcohol, certain insurance drugs, insurance products, hedge funds.

Could you give us a few examples of how “No, no, if you’re working here is actually awesome in this way.” Or maybe you say, “Yeah, maybe work somewhere else.” What do you think about some of the trickier ones?

Fred Kofman
Well, let’s with weapons. What would be the need that a person buying a weapon can satisfy?

Let’s just say an honorable need. I’m not talking about a criminal buying a gun to murder people or to rob them. I’m talking about good people because if you’re going to be inspired, you have to believe that your mission is conducive to some higher good. If you can’t come up with anything, then you shouldn’t work in that industry.

I’ve never worked with gun manufacturers, but I’ve heard the arguments, so I’m sure you have heard them too. What would be the argument for a noble goal that weapons could pursue?

Pete Mockaitis
It’s interesting, when I said weapons, I was originally thinking of tanks and jets and nukes for nations. But I guess on the personal-

Fred Kofman
Okay, that works too. That works. What would be the reason to – let’s just say you’re working for McDonnell Douglas and you’re a leader and you want to inspire some young people to come work there.

Pete Mockaitis
I would suppose you would say, “We are keeping our servicemen and women safer with these offerings. We can rest easier in our homes, in our nation, knowing that we can resist the threat of a foreign power who would seek to kill and enslave us and we don’t have to worry about that much on a day-by-day basis because we have brave people equipped with these useful tools.”

Fred Kofman
I would work for you.

Pete Mockaitis
All right.

Fred Kofman
That’s inspiring. Again, I’m not claiming that this is true and that there are no weapons manufacturers that are evil. There are weapon manufacturers that work for the other guys too and they create the possibility of aggression or dominance or all these horrible things.

But at best, it’s possible to work for a certain kind of military-grade weapon manufacturer or even a gun manufacturer and say, “Yeah, it’s about protection. It’s about maintaining the quality of life, of sleeping well because I am aware that any thug can come and abuse you.” That’s inspiring.

Again, it’s not the weapon, but what is it that the weapon allows a human being to do that will allow this person to take care  of important human concerns in an ethical way, meaning without aggressing or without hurting other people in a violent manner.

Pete Mockaitis
Okay, thank you. Now that that is well-established in terms of your view or purpose in terms of how folks are enriched by the existence of your product and service.

If you zoom into sort of the day-in/day-out of work life, how can we stay connected to that and let the meaning really serve to be energizing and empowering day after day. I’d particularly like to hear that from a vantage point of maybe not an executive or a founder, but perhaps a manager who only has a few direct reports.

Fred Kofman
Yeah, well, let’s start at the bottom, not even a manager with individual contributor. There’s a great story that I found and I use it in the book that refers to President Kennedy’s visit to NASA. I think it was 1962.

He went to NASA and was touring the facility and there was a custodian that was mopping the floors. Just being gracious, the President stopped and said hello and asked him, “So what’s your job here?” He said, “I’m helping to put a man on the moon, Mr. President.”

That is culture. That is a culture that clarifies every day what are we here to do. He was certainly mopping the floors, but that’s not the way he felt about it. Just like it’s different to put brick over brick than to build a cathedral. If you keep the cathedral or the man on the moon in mind, then everything you do takes a different meaning.

This is true, there’s lots of studies. I quote several of them in my book about hospitals for example, and you’ll see the custodians in the hospitals finding a lot of meaning in helping people regain their health and cleaning their rooms and even chatting with them and bringing some joy on the nurses too.

You say, “Oh, some of these are menial tasks. They have to change the sheets.” Yeah, but in the process of changing the sheets, they’re making contact with another human being. They are participating in their life. They are giving them hope when they feel down, when they’re distressed.

It’s profoundly meaningful. It’s almost like a saintly thing to do. You’re going and touching with love and compassion people who are suffering. That’s an amazing opportunity that you only get if you work in a hospital.

I know we may consider some of these things like, “Oh, it doesn’t really matter. You’re just washing clothes in a hospital or making rooms in a hotel.” You say, “Those things are just worthless, meaningless tasks,” but the truth is there are people who do find a lot of meaning in that, but it’s not about the task. It’s always about the goal, the human concern that is being taken care of through the task.

If you’re a manager, then your job is first to remember that and second to remind other people in your team what are you really doing, maintain this awareness day in and day out and everything we do is for that. Everything we do is to fulfill our mission, the service that we’re proud to provide to the community or humanity in general.

Pete Mockaitis
All right. I’m with you there. Then you also mentioned a few problems that crop up within the organization in terms of things being disorganized with disinformation or disillusion. Do you have a couple actionable steps you recommend for hitting these pieces?

Fred Kofman
Yes. You may have a clear mission and everybody could be aligned to the mission, but different people see different parts of the organization and have different opinions about what would be the best way to accomplish the mission. I call this touching the elephant.

There’s a great story of a king bringing five blind men and putting them next to an elephant and telling them to describe the shape of the elephant. They start arguing. One of them says, “The elephant is like a column,” touching the leg. The other one says, “Oh no, it’s like a wall,” touching the side. The other one said, “No, no, it’s like a snake,” touching the trunk and so on and so forth.

The king at the end says to them, “Well, you’re all right and you’re all wrong. You’re all right because the part you are touching is really like you describe, but you’re all wrong because you are … extrapolating the part you touch and using it to elicit or to infer what’s the shape of the elephant as a whole.”

Many times in organizations we do that. People are close to some part of the organization and they think that the whole organization is an extrapolation of the part they perceive. The ones that see the organization are so far away, it would be like seeing the elephant from a mile away, that you can see the whole thing, but you don’t have any granularity and you don’t have the details that are required to make intelligent decisions.

I call this disinformation. Different people have different information and nobody knows the whole picture with the level of granularity that’s required to make intelligent decisions. How do you solve this?

Well, if people are aligned on the mission and they know how to share information in a non-arrogant way, I call it humility, then they can come together and each person can say what they see, and what they infer, and what they experience in their immediate environment.

Then the other people can integrate that and create the pool of common information out of which they can make an intelligent decision together, what would be the best way to proceed to accomplish our mission. But that requires kind of gathering the intelligence of everybody and creating this collective consciousness, this group awareness that encompasses the information that everybody’s bringing.

That is surprisingly difficult to do. After I wrote the book I was having some interactions with General Stanley McChrystal who wrote the book Team of Teams. It’s surprising how in the military and particularly having to fight guerrilla warfare that is very decentralized, they were dealing with exactly the same problem in spades.

One of the biggest managerial revolutions that McChrystal triggered in the US military was the creation of the Special Operations Command, the Joint Special Operations Command as a learning adaptive network, as a group of people who were operating in a decentralized manner, but were creating this shared consciousness to have all their resources available to make intelligent decisions to win the war, not win each particular battle, but to achieve the mission.

Pete Mockaitis
Very nice. Thank you. Well, tell me, Fred, anything else you really want to make sure to cover before we shift gears and hear about some of your favorite things?

Fred Kofman
I’d say that one of the consequences of this revolution from money to meaning is that you can’t do it as an addition to your personality. You can’t say, “Well, I’m who I am and then I’m going to do this.” The inspiration to use meaning as a galvanizing force, that inspiration requires you to be in a certain form, not just to do things. But who you are really creates the drive for people to follow you.

You have to earn your moral authority from your life. You can’t use formal authority to do this or monetary authority or economic power. You are trying to elicit the internal commitment from people so that they give you what you have no way to extract.

Pete Mockaitis
That’s a nice turn of phrase. ‘They give what you have no way to extract.’ Thank you. Now could you share with us a favorite quote, something you find inspiring?

Fred Kofman
Well, this is a quote from Mother Theresa that says, “Not everybody can do great things, but everybody can do small things with great love.” I find that very inspiring that this being a moral hero is not about having super powers; it’s about doing day-to-day things with great integrity, with great care, with great compassion. But it’s something I’d like to … in my life.

Pete Mockaitis
How about a favorite study or experiment or bit of research?

Fred Kofman
Well, I’ll tell you a shocking study if it’s favorite, but it’s the fact that the level of engagement worldwide is about 12 – 13%, so meaning almost 90% of the people hate their jobs. That’s incredible that so much suffering is happening because we don’t know how to work together and in way that uplifts human beings.

Pete Mockaitis
Right. How about a favorite book?

Fred Kofman
I’d say from Ludwig von Mises, Human Action. It’s not an easy book to read, but it’s a treatise in economics that changed my life.

Pete Mockaitis
Interesting. How about a favorite tool, something that helps you be more awesome at your job?

Fred Kofman
Gmail. Google search and Gmail. I think they’re incredible service opportunities. They’re so well designed.

Pete Mockaitis
How about a favorite habit, a personal practice of yours?

Fred Kofman
I won’t turn on my phone until I finish meditating, doing my yoga exercises, and going to the gym.

Pete Mockaitis
Okay. How about a particular nugget, a piece that you share that really seems to connect and resonate with folks and has them quoting it back to you?

Fred Kofman
The distinction between a victim of circumstance or being a player and responding to whatever life gives you.

Pete Mockaitis
If folks want to learn more or get in touch, where would you point them?

Fred Kofman
The best way would be to look at my profile on LinkedIn. I put hundreds of short videos and papers there. They’re publically available. There’s also a website called Conscious.LinkedIn.com. There’s also the book on Amazon or my previous book, Conscious Business.

Pete Mockaitis
Okay, perfect. Is there a final call to action or challenge that you’d issue to folks seeking to be awesome at their jobs?

Fred Kofman
Yeah, find something that inspires you then live in that space. Don’t waste your life doing something that doesn’t have that juice.

Pete Mockaitis
Well, Fred, thank you so much for taking the time to share this wisdom and expertise. It’s powerful stuff and I just wish you tons of luck and all the meaning that you’re bringing to folks.

Fred Kofman
Thank you, Pete. It was a pleasure talking to you.


Leave a Reply