Fred Kofman – Conscious Business

Here’s a summary of a couple of talks by Fred Kofman. Thanks to Jen Allum, now leading X (Alphabet’s moonshot factory), who I worked with when she was Director of GOV.UK, for the recommendation.

Your job is the goal you pursue – not the activity you do

What you do is only ever a means to an end. The end is what matters.

“I’m a taxi driver” vs “I help people get where they want to go”

Perfect organisation design is impossible

“In order to optimise the system you have to sub-optimise the sub-system. That’s a mathematical truth.” In assessing peoples’ performance, and compensating them, you can either measure the system or the sub-system. Both are flawed:

If you provide global incentives, then you’ll create a unified, aligned team, with cooperation and risk-pooling. But it’s harder to manage, you can get free-riders, and great performers will likely feel that their unique contribution is not recognised.

If you provide local incentives (focusing on more narrow performance goals or measures of success) then you get excellence, with focus and accountability, and can attract great people. But you get a silo mentality, with people only thinking and acting to pursue their narrow immediate interests. For example, if waiters keep their tips rather than putting them in a common pool, you’ll get good waiters – but if a waiter sees that another table is having a bad experience, they won’t be incentivized to intervene. Optimising for silos doesn’t make sense – there’s no use having healthy kidneys if the body as a whole is sick.

So incentive systems cannot drive a company properly.  You need a mobilising, cohering vision and purpose to transcend this contradiction. This will inspire people to do the right thing, regardless of the incentive system around them.) The good news is that because this is a universal, unsolveable problem, you just need to do a slightly better job at solving it than your competition.

Material compensation is only helpful to a point. People value self-transcendence more highly. So make space for people to be themselves, but bigger.

Leadership is about inviting people to follow a mission

“Leadership is eliciting the internal commitment of others to pursue a mission” – it’s about moral authority rather than formal authority.

Going further: “Don’t work for me, work for the mission.”
“A true leader doesn’t say ‘follow me’, a true leader says ‘join me and we’ll follow the mission’”

You’re a part of everything that happens to you

Everything that happens in life is a result of the challenge and your ability to respond to it.

You can see life in one of two ways, which has a big impact:

1 – your experience of life is determined by what happens to you

2 – life is giving you raw material and you have to choose how to respond. It’s like a game of chess, and you can make good things out of bad raw materials. Take responsibility for your own choices and actions, even if circumstances aren’t great.

Acting with integrity is the only solution to the problems of life.

You must accept that you are part of the problem. You need to take responsibility and work out how you can respond. “If you don’t feel part of the problem, you cannot be part of the solution.” So ask yourself:

  • How did you contribute (through action or inaction) to create the problem?
  • What can you do now?
  • What can you learn from this?

“Die before you die”

We will all die. Start from this inevitable point. What do you want to do with the time that you have left?
Heroism is living by your values, being vulnerable, telling the truth.

(Aside: I disliked how Reid Hoffman acted dismissively towards Rachelle Diamond who introduced the second session. This type of behaviour doesn’t suggest a high level of psychological safety)