Full Transcript for 101: Strategy, Not Tactics w/ Don Schmincke

(05:17) So there was a community college up the street and, um, I started going there and they didn't care whether I showed up cuz they had my money. I thought that was interesting. So I got motivated and I got exposed to a lot of things that I wanted to learn about, you know, the early days of electronics and computers and anthropology and this and that. And, but a couple of people saw something, uh, in me. Um, one was a person who was running student activities that I was actually heading up at the time. And her husband, she came out of, uh, uh, Boston, Cambridge area. Her husband was an mit uh, grad. And, and there was this physics professor who was a retired, uh, MIT grad. He was just teaching fun at the local college. And, uh, they both said, wanted to go to apply to mit. (06:02) And, um, I was like, I have no idea what that is. Was like, was it a trade school? I mean, I don't know what, what the heck it was. And, um, so I, I did because they said I should. And, um, I went through a battery of tests much as a whole lot of grueling testing. And, and they, and I got in. And, um, so next thing I know, I'm in Cambridge trying to figure out what is this all about? Um, but it really opened up the door to areas of science and engineering. I never had an opportunity to, to explore before. And I, and, and they were very, um, open for students to explore what area areas they wanted. I ended up, you know, automating the Harvard m a t by by a medical laboratory. I ended up getting involved in the early ai, you know, artificial intelligence, um, development. (06:48) I ended up working on nuclear missile, um, guidance systems. Uh, and I just, um, yeah, uh, it was fabulous. And that's when I began to notice humans. So I, I did part of my degree in planetary physics and in planetary physics. I, um, started noticing this planet and I noticed humans and like I became, became fascinated with how humans group. Um, so I left, uh, graduated, went to Hopkins to do my graduate research. Uh, ended up teaching there in the area of, um, studying human grouping behaviors. And again, I had access to a lot of brilliant people. And, um, I got attached to the executive MBA program. So I started hanging out with a lot of executives and I began seeing what they were struggling with around the failure rate of management theory. And that took me into a whole different direction. So I was asked to, um, see if there was a biological primal pattern that's driving profitability and growth. (07:51) <laugh> Gotcha. <laugh>. So, um, you know, could I explain why management theories fail to implement at such high rates? And, um, like if you go on Google Scholar and do a search for management theory failure, you'll get over like 5 million hits of scholarly papers published on this. Yeah. So it wasn't like a new idea. I was just asked to try to explain it from a, a scientific, biological level. And so that's what started it. And we started discovering some amazing things. So Oxford had

let me publish, um, an ancient manuscript they had for training Samurai executives. Mm. Wow. And so I published a book called the Code of the Executive, and the code of the executive took off and like a dozen languages. Uh, I lost count. And, um, people started saying, can you teach us more about what you're discovering? So a lot of the work that we ended up with was not only scientifically validated to explain the failure rates of management theory, but how to drive it to improve sales and performance by magnitudes more than people had seen using traditional, um, consulting models. (09:01) Um, but it was also validated through thousands of years of, um, of history. So, um, that's a good way to validate a theory. Has it, has it worked for more than a few centuries? Sure. Uh, so that's what happened. That's how I got here. So now I, now I train about 700 to a thousand CEOs a year and, um, write books and we work with companies and I'm having a ball. I'm learning and I'm hanging around some brilliant people. I'm just like, just yesterday I had lunch, um, with, uh, George Stalk who developed the, uh, lean manufacturing revolution Yeah. 20 years ago. And, um, he's got a number of Harvard Business Review articles, um, just published, um, one this past year on disruption. And he just told me I've got a new one and he just emailed me this morning, so I gotta look that up. Um, but it's, it's great because, um, I'm able to, um, just hang out with these brilliant people and learn from them and try to, uh, parlay that into, uh, a actionable ideas, um, with, for CEOs in driving their companies forward. So that's kind of a long answer to your question. Joe Boyd (10:06): No, I love it. That's, I you kind of buzz all the way through, which is great. Uh, cause I, I do have some, I guess some, uh, specific questions with your background that I'm, I'm curious about as, um, as a leader of this organization and then of course, Leadercast, uh, you know, we have, uh, broad influence over almost every sector in the world. Uh, we're the worst and best. The, the worst and best thing about Leadercast is we're for leaders everywhere. So, um, it's not, it's not one particular kinda leader. Uh, uh, big bigger companies and small mom and pop companies and school teachers and moms and dads. People just find us and wanna be better leaders. So, uh, I think I have a, I guess an assumption that you can let me know how I'm doing that it feels like, uh, the world is more desirable and, uh, open to a more sort of empathetic leader, maybe a little more vulnerability as opposed to what I would consider like a classic sort of, uh, confident walls around me, you know, the, the, um, the sort of dictatorial kind of leader, um mm-hmm. <affirmative>. And I'm curious if, uh, I guess what made me think of that is I, I have assumptions that the, uh, samurai executives weren't super touchy Philly soft skills, but I might be wrong. Uh, so, uh, is, is that, is my perception that the world is moving a little more that way. Accurate in your mind? And, and what are your thoughts on whatever I'm trying to ask you would be great. <laugh> not a great question. I understand. Don Schmincke (11:41): No, it's fine. It's, uh, I, I get it. Um, yeah, I think we're moving back to empathy and, uh, vulnerability and trust. It's not a new idea. I think during the industrial evolution, we've shifted our beliefs to running the world like a machine. And so we might have, uh, went, we left it to become more machine-based in terms of our style of leadership. And, and so, and it worked. I mean, there were a lot of great corporations that were, uh, built around that. But, um, in the ancient ways, you wanted people to be willing to do a couple of things we should be teaching more of in our leadership programs in, in our, uh, schools, in our, in our, um, and our internal corporate universities. I think a required course that is not offered anywhere is, um, are you willing to suffer in sacrifice with us? (12:32) And suffering and sacrifice is not found in any academic curriculum. <laugh> Yes. Unless you're in the military. Right. And what I found is, why is it missing? Because it was always there. Like, why did we stop? And so for you to be willing to suffer and sacrifice with someone, you have to have a level of trust and, and, uh, and realize that some of these areas of, of empathy are important because you, you have to join to believe in the cause that's ahead. Mm-hmm. We don't teach that, you know, because stop over the past a hundred years, um, to do that. Now some companies still do and they're really great and you can see the results they produce. But generally, we don't teach people how to die for a cause. So we lost it. And now we get books coming out on empathy and vulnerability and all that. (13:21) I'm thinking, well, thank God we've been doing this for thousands of years. Why did we stop? Yeah. We thinking like it's a new idea. It's not a new idea. Um, uh, uh, organizations that have been willing to, uh, suffer and sacrifice together for a greater cause outperformed organizations that were just following a blind leader with that, that data and trust. Yeah. How, or a leader that just wanted to make everybody happy. I know there's a big happy employee movement going on. It was more like, um, you know, it's, yeah, happy employees are great, but the big question none of these authors and speakers are asking is, what do your people do? What do your people do when they're not happy? Yeah. You lock arms with you or do they and go into battle? Or do they turn and run? Um, we use a lot of military terminology because it's the most documented industry in the world and the most interesting litmus test of performance. (14:17) Because one thing to say you, hey, it's great we're, you know, we're having fun and we're doing good things for the world. But it's another thing to say, okay, what happens when they go and get stuff? What happens when you have to

compete? What happens when the company is going bankrupt? What happens when, you know, the forces of the market just don't agree with your opinion? And that's the time when you see great leadership emerge. Or, or not. But, um, yeah, so I, I think, I think when we work with companies and we're able to invoke, uh, this level of performance, execution, speed and decisiveness and accountability go up and when it goes up, sales go up, competitive advantage goes up. So we've learned a lot by, like I said, working with great organizations, learned a lot working with Black Hawk down and, and met average many people like this in terms of how do you get superior performance and what's, what is, what are you doing that we're not teaching in our business schools? That's what I'm interested in. Yeah. Yeah. And so that's how we end. Joe Boyd (15:25): I'm a bit of a serial entrepreneur. I've started a few businesses, some of them worked. Uh, and, uh, I do wonder, like, I I what you're saying makes total sense and resonates as as truth to me. I also just so you know, happen to have a, a theology and, uh, religion degree. Um, so I can clearly see in, in religious leaders how, um, I mean, take Jesus as his ex example is, is certainly rooted in suffering for a cause, right. His whole story ends up in, I mean, suffering. So, yeah. Um, as, but I guess in my mind, there's, and any, any great causal leader like the Martin Luther King, anyone, Gandhi, anyone, we think of that that's gonna make sense that there's a greater cause and there's suffering. Cuz to me, those feel like, you know, the ultimate fight of humanity to sort of overcome ourselves or something like that. (16:13) Uh, but then I think of, of businesses I've led in the past, or my friends are leading, or the folks that listen to this that are like, look, you know, I, I started, I started in a company selling a better toothbrush, and people really like it. And, but even I as the leader don't wake up in the morning and think this is my great cause in the world. It's just a nice little company I'm running. So, uh, for, for a lot of us that get that, but don't honestly, and ourselves, see maybe, maybe we think there's, there are more important causes in the world than what I'm doing every day, but I'm doing a good thing. How, how do you bridge that gap without, I guess feeling like, I don't know, my words would be like a con artist or like a crooked televangelist, or like, you don't, you don't want to like convince the people following you that this is some changing the world thing if, you know, it's maybe not just making the world a little better. <laugh> So do what do you think, what, how do you deal with that if that's sort of your inner dialogue as as a leader? Don Schmincke (17:08): Oh, I, I remind people that, I don't know, uh, maybe you're selling a commodity product like coffee or tennis shoes. (17:16) Yeah. What happened became explosive. Yeah. You know, it's like $500 for a pair of tennis shoes. Are

you kidding me? I mean, really? Yeah. Or, or five bucks for a cup of coffee. Really? Like what happened? Yeah. What happened is somebody had something, they thought, something, they saw something that was different and uh, they were able to create some meaning around it. So I, uh, what we have found is that, um, it's interesting, uh, uh, Simon Sinex coach, uh, Mark Levy was a great brand guy. I, I got him with me. Cause I'm like, what, what do I do with all this research and, you know, thousands of CEOs and companies they're working with? And he said, okay, you may take a look at that. But one of the things that that came out of it was he had to do a, uh, a talk at a major conference on what's your definition of strategy? (18:04) And he went and interviewed the top lines and the top CEOs in industry and he said, your don, your definition was the biggest buzz of the conference for days. And I said, what? He goes, basically, the best way to look at it is what does winning mean? And how do we do it? Yeah. And that is the best definition of strategy. And so it comes back to what does winning mean? Because people want to do that. You know, they, in fact, this book I have coming out in the fall called Winners and losers has to deal with that. You know, we should be teaching, we should be teaching more about how to lose powerfully. Cuz great entrepreneurs lose powerfully. And you mentioned in your case, you had some things didn't always go well. Yeah. But there was something about losing powerfully where we learned and we grew and we got a better insight and awareness and all that comes together. (19:00) So when you look at these top entrepreneurs in the world, their history that people never write about are all the failures they've had leading up to this moment mm-hmm. <affirmative>. And so, um, we talk about, so, so you're making a toothbrush, uh, what does winning mean anyway, you know, to you. And people will rally around that. Gotcha. So if you, if you look at the meaning of, of that, it, it, it, it takes on a whole new dimension. And look all the commodity products I mentioned as an example, which became incredibly highly profitable, highly branded because somebody made it mean something. Joe Boyd (19:39): And it's the story. Right. The, um, I'm a story nerd. Uh, we generally root those, this soul podcast in kind of Joseph Campbell's hero's journey if we can. Uh, but Oh, yeah, yeah, yeah. Um, but that's what I hear you saying is people, people rally around a story more than even a person or, or even a cause sometimes it's the story that they believe in. Yeah. And wanna be a part of, um, there's a new, uh, I was just fascinated, I I obviously I didn't plan on saying this, but the, there's a new, uh, movie coming out about the Air Jordans. I don't know if you had seen, uh, seen that. Um, I haven't Don Schmincke (20:11): Seen, I heard about Joe Boyd (20:11): It or the trailer or whatever. And there's also one coming out about Tetris. It's just interesting to me now that like our movies are about our products, uh, and the stories behind them. Um, but I wanna see both of them. I'm sucked in. I wanna see it. Uh, while we're there, since with all your research, do you have any thoughts specifically for those of us that those folks that, uh, with me are kind of weigh into story theory around like Campbell's Heroes journey and how that plays into leadership or sort of, uh, uh, this idea of, uh, storytelling and telling a great story? What anything you've learned through your research about how great leaders use story are storytellers, et cetera? Don Schmincke (20:49): Yeah, I think, um, I mean, yes, story works because our Arab species has evolved following story. So, you know, the neocortex, when that was an evolutionary event, all of a sudden we were able to have thoughts when thoughts we were to hey about have story. So you go back for thousands of years or you talk to any anthropologists, a lot of the grouping behavior and a lot of the expansion of markets or more migrations in the day were around people following a story for what's ahead. And, um, that always will be there, I think until we get replaced as a species <laugh>. Uh, so the problem though is I found when we did autopsies of companies, because, you know, we found out like every year there's a bestselling book with a top, top, uh, great companies, and we all want to be like these companies and we try to emulate these companies and what do they do to become great? (21:48) But nobody talks about like three years later they're off the list. I'm like, why did they die? And, and so when we started doing our autopsy research, we found out it's not just about the story. The story needs to make strategic sense. So when we run into companies where they've got this great story, it's like, great, but how does that support you winning? And then they can't answer the question. They like, shut up. They're like, oh, I never thought nobody ever challenged us that way. Mm-hmm. <affirmative> says, no, that's the point. Sure, you want story, but the story has to index strategy, story has to index. There's something to allow you to win however you define it, you know, I mean, the winning could be a purpose in the world or some great cause you behind or capturing a market or you know, bringing a new technology to the surface, whatever that is. But what's the strategy behind the story? Because so many autopsies are out there of companies that died with great stories because the stories didn't make strategic sense. They didn't empower any sort of winning. Everybody felt good. It was a great rally, it was a great cause, but that it didn't mean anything. Yeah. When it came to winning, Joe Boyd (23:00): What do you do if someone's listened to this and they're, maybe they're leading something that's going pretty well, but as they hear you talk, they're like, I don't really know how, what we're trying to, like, what our win is. Like as a leader, when you

have that realization, like, I sh I should probably figure this out. Uh, what are the first, what's the first thing you need to do as a leader when you start to realize that? Don Schmincke (23:19): I'd say figure it out. Yeah. <laugh>, I'd say, you know, it's, it's time to go back because we found that, here's another myth you asked me earlier. Yeah. Um, what myths are we debunking? And here's another myth that, myth myth that might help, uh, these people. Uh, and that is the myth that we're doing strategic planning and we're not, when we look at the autopsies and we review, we have a lot of CEOs saying, Hey, can you look at our plan? Like what's missing? We find that most strategic plans are tactical. So that's the thing. A lot of us are doing strategic planning and we're not, we're really developing tactical plans that are analytical. That came out of, well we did this great SWOT analysis and this analysis and that analysis, but none of that strategy, that's all tactics. Because the strategy is around when, when you look at companies that start off and they're small business and all the management consultants and industry experts say they're never gonna make it. (24:19) They're never gonna make it. And this company rises up and not only makes it, but dominates their entire market At that point, all the consultants shut up <laugh>. Sure. They just shut up. Yeah. This big com, this small company became huge, became big. And it, and I was always curious, why has no one asked the question, how did that happen? There's a company, all the experts said would fail and they didn't. Yeah. And they outmaneuvered their vessel we found out is they were using intuition. They were out intuiting the enemy, enemy's moves. They were out intuiting the market, shifting their beliefs around what, you know, where the real battlefield was and who the real enemy was and how we're going to win. And that's what strategy is. So I would say to people that are maybe getting a little nervous about these questions is open up your strategic plan. (25:09) Does it show how you're going to out maneuver? Does it, does, does it really define the battlefield tomorrow? Your market landscape tomorrow? And where are you gonna position yourself and how you gonna out-maneuver? How are you gonna out intuit the forces against you? If it does not, you don't have a strategy, you got tactics. So therefore, I would say rework your strategy. So it's really strategic cuz when you come up with a winning formula, here's where we're going, here's what's gonna be against us, and here's how we're gonna out maneuver that to win. Now that becomes the source of creating a story Joe Boyd (25:45): Super helpful that, that, uh, that resonates, uh, with me very closely that I will not even, uh, admit on my podcast just in the day-to-day. Uh, okay, lemme this, this particular company I'm leading right now, there's such a, um, and everything we ever do, the, I think tactics make us feel safe and comfortable,

you know, like, like yes. In, in control. And so, um, and I hear you differentiating that between, uh, strategy, which sometimes probably feels like you were talking about it's gonna may include some suffering and some risk. Uh, but that's probably what it's all about. So, uh, yeah, Don Schmincke (26:20): You have an interesting point there. You have an interesting point. In fact, I may, um, it is about safety because when we did our models, when we try to unearth the ancient model our ancestors used that apply today, it's, it's, it's leaders, leaders lead by altering the decisions of their humans. And how they alter and align those decisions is by altering their beliefs. But then we get, then we seduced into these tools, which we need tools like, what do I gotta do? How do I do it? You know, 35,000 business books a year are published on what do I do and how do I do this differently? Yeah. Which is great cuz tools are great, but the problem is we get seduced by them because they make us feel safe. Because the analysis and the models and the things you said. Exactly. It's safety. So he gets seduced by the human instinct for safety and we get seduced by our tools. (27:07) Now, when my co-author Chris Warner, when we wrote this book on, uh, high altitude leadership, he was pulling dead bodies off of mountains and he's probably the top rescue climber in the world. And, uh, I was climbing with Chris and we did this NBC thing with, uh, k2 and that's where the book came out. We did it live high, high altitude leadership, dead bodies when he's pulling them off of mountains or clutching their tools because they believed they would make them safe. And I said, Chris, dead companies, same thing. Interesting. Clutching their tools, all their processes, all their systems, all their new software, all their new bestselling books on their shelves, and they all die clutching those tools. And that's the point we're we're reaching for safety. Whereas your point is well taken. We should be reaching more for the risk, what you call the art, the art of crafting beliefs. There are no tools there. We're looking lay an entrepreneur yourself. I mean, there was no checklist. There was no formula. Yeah. You were like figuring stuff out as you were blazing the trail to this new possibility. And that's, I think we should, we should be teaching more of. Joe Boyd (28:10): Well, you got me fired up. I'm ready to go lead today. Thank you so much for, uh, for being a part of this. Uh, Don if folks want to connect with you or buy your books or hire you as a consultant or anything in the world, uh, how should they get, get in touch with you? Don Schmincke (28:24): Well, you can, uh, email me at, at don@sagaleadership.com or the website is saga, we stole it from the Vikings <laugh> saga leadership, S a G a leadership.com. And um, yeah, love to get the word out there. Joe Boyd (28:39): Awesome. Don, thank you so much for your time. Really appreciate it. I'm sure we'll be in touch again. Don Schmincke (28:45): Great. Thanks. All right.