Peter Laughter - Recruitment is Broken—How Can We Fix It?
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Hello and welcome to the HR Data Labs podcast. I'm your host, David Tretzky. And like always, we try and find the most brilliant minds inside and outside the world of HR to give you actually what's happening today and what will be happening soon.

I mean, you can't even think about that being truer today with our guest, Peter Lafter. And I've had so many times I've wanted him to come on the program, but this is the perfect time. Peter, welcome to the HR Data Labs podcast. Thank you, David. And you were giving me an introduction that is...

quite flattering. I'm very grateful. Well, for those of us who have followed Peter over the years, and it's been quite a transition that he's taken, think of him as the caterpillar that keeps becoming the butterfly. Yeah.

Over and over and over again. Exactly. And that's a good thing. A lot of us reinvent ourselves, but Peter, you're doing this real time right now. I certainly am. Yeah, it was, we sold our home in Brooklyn in May of this year and have been traveling around looking for a new home while I'm simultaneously building a new career in the speaking and consulting industry. ♪♪♪

So let's talk a little bit about your past, because if there's anybody who doesn't know who Peter Laughter is, why don't you tell us how you got to where you are today?

So I started off quite by accident as an entrepreneur in the recruiting and staffing industry. I had intended of getting my PhD in sociology and anthropology. I graduated from college in 93, and I was fascinated by the growing culture of the internet. And I knew that something was going to happen there.

And so I went back home to New York and got a job as a social worker just to get some experience. And during that, my mom's family, my mom's business, Wall Street Services, was an admin staffing firm that did, they had a

really great high margin staffing business doing primarily administrative work for law firms and financial institutions. And she had a 24-hour component of her business where she had a live person answering the phones for law firms and their word processing centers and presentation centers. And that, in the recession of the 80s, that business just had died down. So she switched to an answering service and in 94 needed someone to take the phones at night.

And, yeah, I was, I don't know if you have heard, but social work, yeah, particularly on an undergraduate level, not a lucrative career. No. You're not going to get rich. Yeah. And I think my mom paid me $140 plus commission a week to stay at home and answer the phones, which was like, that was enough for me to make rent and be able to go out once or twice in the alternate weeks. But there wasn't a lot of business.

So I started selling and I hadn't been involved in sports as a kid. So I had no idea that I'm insanely competitive. And so sales was like, oh my God, this is, you know, this is, there's all these touchdowns that I can win. And I loved it. And I, the, the night business started growing really quickly. And my mom was like, you, you should do this full time. And I was like, no, you know, social worker, PhD, that's my path. Right.

And two things, yeah, happened simultaneously. This woman, Christine Smith, we're still friends. She's one of the women I placed and she, I replaced her regularly. And she said, Peter, I just want to thank you because I am able to pursue my dream of becoming an actor and you allow me to pay the rent and I couldn't do it without you.

And it was like, oh my goodness, I am making more of a difference in my night job than I am in my day job. And I'm having so much more fun. And then my mom, in a final act of desperation to get me to come over, said, I will give you equity based on growth, according to this formula. Wow. And-

Those things happened right on the back of each other. And I said, all right, let's do it. And from, I think we went from our sales were about a half a million in 94 to over 12 million in 2000. Wow, that's dramatic. It was insane. Yeah, it was insane. And neither of us had any idea what we were doing. We had a few strategies that we put in place. I actually, during that period of time, we built the very first

uh, VMS system, uh, a tool called staff way. We had, um,

Yeah, I had been working with JPMorgan Chase and we were their biggest vendor and they wanted to outsource. And we were competing with some of the largest staffing firms in the world. And we knew they gave us an RFP, but I think it was just a pity. You know, like, we like you guys, but you don't have a snowball's chance in hell. But hey, give it a shot. Yeah. Right. And we looked at, at the time, outsourcing was single vendor. And it was just a horrible deal for the clients. And we were wondering, like, well, why do they want this? Yeah.

And we realized, well, they, you know, we remember getting reports from them about this is how much you've staffing you've provided us. I was like, that's about 40% short. Like, you don't even know how much you're buying from us. And so I realized, oh, they need a single source.

And we thought, well, we'll build that. And we put as an addendum to our RFP, we'll build this mythical system if you give us the contract. And they did. And it was one of those moments where it's just like, oh, crap, what are we going to do now? Oh, crap, what did I ask? Right.

And I made a very, very expensive mistake as a young entrepreneur. I didn't take venture money or angel money. I didn't take angel money thinking I'd just jump right to venture. And then hearing years later, Brad Feld, the head of, at the time, SoftBank Venture Partners, but he founded Techstars and big name in D.C.,

And he said, oh, we only talk to people if they're introduced by angels. And it was just like, oh, I just shot myself in the foot. And then staffing started to gradually change. It started after 9-11, where we were in this place of being highly respected by our clients and trusted to a place of complete distrust, right?

And it was more, it was nothing because of what we did. It was just that they started to commoditize labor. And I remember, you know, I talk about HR data, the metrics that were being used to evaluate us

We're all commodity-based, and we weren't a commodity. You know, we were, you know, I remember this guy, Alex Michelli, who was a partner at Goldman, you know, called us and said, I have this idea. If we put together a group of MBAs, this was back before Goldman was public, you know, their folks didn't want to do anything that wasn't going to put them on a partner track.

So a lot of the kind of analytical grunt work, that analysis, the high-level presentation support, the building of models, no one wanted to do that. And so Alex thought, hey, we'll...

We'll just hire a group of temporary employees to do it. And they came to us because we were known as the quality folks. And we put together a strategy where we were recruiting out of second-tier business schools. And we had a profile of people who had been in banking for about five years before they got their MBA jobs.

And we were recruiting from places that Goldman wouldn't touch. I mean, great places like Babson, for example. And so the candidates we were being were just ecstatic. Like it was just a great, we launched so many amazing careers in that project and were able to put together this amazing team. And it was much more profitable. It was easier. Everyone was happy. Yeah. The client was ecstatic. The employees were ecstatic. And, and,

And that was the late 90s. And then I started to transition to more professional level staffing, which I continued to. But then we had that great trust where it was just like, put this team together for us. Do like, oh, send us resumes. And oh, the resumes are so important. So our vendors aren't going to screen anymore. And that's what we were known for. And yeah.

And gradually, it was only how many jobs did you respond to? How many resumes did you send? How many interviews did we conduct? How many candidates would we hire for interviews? Which I'm not saying those aren't important, but...

But, you know, the fact that our people continuously got hired and their projects got extended, you know, that like none of those quality metrics were part of it. Yeah, it was. It should have been, though.

And, but we, we just couldn't get ahead and the business stopped being fun. You know, it just, I, and we were working with people who didn't understand the positions that they were recruiting for. Yeah. I, you know, and so if you didn't have the exact words that were on the description, which is foreshadowing to the mess that people in recruiting are in now, you know, you, you, you didn't get moving forward, even if it was abundantly clear that,

that the

that Canada had the skills. I remember I had a candidate rejected. He was amazing for a corporate actions position. And on his most recent, you know, corporate actions splits, you know, mergers, you know, all the things that were dividends. And he, the guy who had a career in corporate actions, his most recent career was manager of dividends processing unit. Yeah. And. Right. But it didn't say corporate actions. It didn't say corporate actions. So he got rejected. Yeah.

Yeah. And yeah, it was just like, this is too much work. Yeah. For like, and like not the kind of work that I'm good at. And unfortunately, I, one of my greatest strengths is,

and greatest weaknesses, I'm ridiculously persistent. So I just kept at it and I kept at it for longer. In the gift of hindsight, I should have sold in 2006. But I kept going at it for much, much longer after that, but I was done.

and I ended up selling that company to a friend, a really brilliant entrepreneur who had a company called Compunel, has a company called Compunel, Andy Gower, and started a firm focusing exclusively on management consulting firms. But by that time, I thought, oh, this is a more bespoke client. They appreciate it. But

It was so clear that we had fallen into the space where we apply this incredibly simple process of buying stuff to the immensely complex process of engaging with other human beings. And in doing so, everyone's miserable. And I remember two instances. I had one where we were working with a management consulting firm. I won't mention the name, small one, but they had an abusive partner.

I mean, you know, and I had several people call me and be like, that's it, I'm done, I've quit. And we would work with these candidates who were very high level to say, all right, this is how you can manage this individual so you can go out on your terms. And that was very effective, but we had one person who just couldn't take it. A woman who I think, you know, had received really bad treatment before, and she wrote a scathing Glassdoor review. Yeah.

And for that, we were blamed. Like, that was our problem. Yeah. Because we provided someone who wouldn't put up with abuse. Like, you know, and the second instance we had working with another management consulting firm and they had, it was the first time we worked with them. They had a project. They needed someone with a particular expertise. We provided them with three candidates, one who was head and shoulders above the others.

And that's the only one that they wanted to see. And I understood that, but I was like, look, she has options. She's interviewing at other places. You need to speak to the other candidates. She is not a shoo-in. Not only did they not listen, but they presented her to the client as the candidate before she agreed to take the job. So dumb. And we were yelled at by the partner because we provided someone who wasn't completely sold on the job.

Yeah. And it was insane. Exactly. Like, how is it that that would be possible for us to do? We are not you. We are your broker. Yeah. You do not go to a real estate broker and say, pick me a house. I'll buy it. Right. Yeah. Right. With these qualities. Yeah. Right. Yeah. There's too many other things to have that happen and vice versa. So-

That was the real clear, like, oh, this is a broken structure. And simultaneously, I was very interested in the distributed leadership movement. And I had some experiences in my company. We had a horrible problem with Yelp when Yelp first came out. We had a five-star Google review, but Yelp disregards people who only write one review. And so our people who are, you know,

high-level professionals, and we were very closely vetted, didn't write a lot of reviews. They would write reviews for us because they liked us, but they're also not reviewing their laundromat or whatever it is. Right, right, the restaurant they just ate at, yeah. And we had fallen, it was this horrible practice, and it was an important lesson for me. I realized because my product was people, I had started to view people as product.

And it was a fatal mistake that almost killed me. But our Yelp reviews, we were ghosting the candidates who didn't pass our assessments. Now I had a very, very, very well-reasoned and totally wrong justification for this is we didn't always do that. We would say, hey, unfortunately you didn't do well in our assessments and they would have tantrums in our office and it was horribly disruptive. So we'd send them emails and then they would call and have tantrums over the phone, which was horribly disruptive.

So we just stopped. Someone said, you don't do anything. Yeah, exactly. It was a horrible thing to do. In hindsight, I'm really embarrassed about it. But I was convinced that if we tell people, they will throw a tantrum. And the folks that we were ghosting, understandably, started writing horrendous reviews. So our five-star review on Google dropped to one star. And it was really inhibiting our ability to find candidates. Right, right. And I had come up with a stupid...

you know, expensive, you know, difficult to implement, you know, difficult to maintain solution to this problem. And one of my employees, Becky, who I still am so grateful for to this day was like, no, that's no, we, that's dumb. You know, we, we just need to tell them. And I would say, well, they're, they're, they'll throw tantrums. It's like, that's because we're not properly managing their expectations. Right. And she was totally right, but I didn't see it. And,

And I kept insisting that my FACACTA solution was the right one. And she got in my face and she said, Peter, what you're suggesting is a violation of our core values.

And I was like, oh, crap, I can't argue with that. And so I said, oh, we'll do it your way. But in the background, I was like, oh, we'll watch it fail. I'll watch it fail and then we'll do it my way. But of course it didn't fail. It was just, it was easy. It was simple. It made everybody happy. I didn't know the extent my recruiters were suffering, having to like deflect these calls from, like everyone was miserable because of this stupid policy. And I realized, oh, yeah,

I got leadership wrong. It's not about me being the smartest person in the room, me having the vision. No, it's about me creating the environment where others can be great. And I think that's one of the problems that we have as leaders when we think we understand the business problem better than everybody else. And we've been successful at it usually is when we hire brilliant people around us.

Sometimes we stop listening and that comes back to bite us in the butt sometimes. But thank goodness we hired those brilliant people around us to help show us the way. Yes. So, so Peter, what,

What's one fun thing that no one knows about Peter Laughter? You know, it's funny. As a storyteller, I am readily telling on myself on those things. So when I was thinking about that question, something that came to me, a memory I hadn't thought about in years, and I have to figure out how to bring it in a story, but my Aunt Robin said,

I had a single mom growing up. And so my Aunt Robin, who has no blood relation, was my mom's best friend at the time. She would, when my mom would go on dates, would send me to sleep over at Aunt Robin's house. And she, I was probably about five or, yeah, I was kindergarten age. Yeah. She took me to F.A.O. Schwartz.

And there was this sports car and it was a slightly diminutive sports car with a real engine. And I saw this group of kids around this car and it was the coolest thing I had ever seen. And I beelined right for the car. Unbeknownst to me, those kids were part of some kind of film shoot for a television program. Yeah. And it was a news program and it was the 70s. So I don't think like releases were a big part of it.

Yeah. And one of the kids was like, you're not allowed to be here. And I yelled at him for not sharing his toys. Wow. And I either shamed him. I don't know what happened, but they let me play. And my aunt is watching this, like, who is this kid who just walks onto a film set? But I was oblivious to all that because all I saw was this cool car. Right. And yeah, ended up playing with the kids and they just let me be part of the shot. And

Having a mom as a hippie meant I didn't have a TV. So when the news program came out, there was about three or four kids in my class saw it, and they all thought I was famous, and I had no idea what they were talking about. Well, little do they know now, well, they probably know now that, you know, you are famous and that, you know, it was just a precursor of what to happen. I am a legend in my own mind. What can I say? Well, now you're on the HR Data Labs podcast, so there's a little note. Yeah, exactly. Yeah.

So Peter, today our topic is recruiting is broken. And I know we spent a little bit of time up front talking about this.

What was it that you saw that led you to believe that recruiting is actually broken? Well, I think it was a combination of things. So I think it was the two examples that I mentioned is that we were commoditizing recruiting.

But I think it's more insidious than that. And so I had created one of the first VMS systems for managing large temporary workforces, and we deployed it at J.P. Morgan. And then when the J.P. Morgan Chase merger, we were being considered along with another product at the time called White Amber, who was very well-funded, and we were not very well-funded. So it was an uphill battle for us. And I was meeting with the—I mean, probably like 28 at the time—

But I was meeting with the combined HR team from both sides. And I had read in Businessweek that both CEOs of Heritage Chase and Heritage J.P. Morgan were going into the merger for cost savings. That was the principal reason. And so I had built my entire presentation on cost savings.

And I get into this conference room and it is, I think it's one of the biggest conference rooms I've ever been in before or since. It was huge. And my sponsor was there and then her boss was there. This woman who had the largest diamond ring I have ever seen in my life. It was like a walnut, a sparkly walnut. It was completely captivating. And I'm going through my presentation and halfway through it,

She says, now, I just want to let you know that cost savings is not part of our mandate. So maybe you want to focus on something else.

And I was like in my late twenties and I was too much of a kid to pull out the copy of business week that I had in my briefcase and throw it on the table and say, Hey, it might not be part of your mandate now, but both of your CEOs saying that this is the number one reason. So it's going to be, so I can change topic or we can get ahead of this. But I was too insecure to pull off something like that. But I realized that, Oh, she isn't at the table. Yeah. And I,

It was this sign that like, how is it that our organizations can be effective if HR is viewed as a cost center as opposed to a resource? Like, and it was just insane to me. And I think HR folks get blamed for that dynamic, but it is not.

you know, have anything to do with them. And I think, you know, as we enter this new time, we are, we have entered in the most disruptive and innovative and perilous, uh,

Period of human history ever. Yeah. And I mean, if we just take stock at what has happened in the last four years, it is staggering. You know, it is absolutely staggering and it is just the beginning. So the changes that need to happen in business, it is not technology. It is not the adoption of technology. It is not strategy. It is implementation. Okay.

Yeah, it is our ability to work with other people. It is the structure of our organization to identify the myriad of opportunities and transformative opportunities and terrible threats that will be appearing around organizations at a breakneck speed that most leaders can't see. And so if we don't dramatically change how we view leadership and how we structure our organizations, then

we will see a tremendous amount of companies fail in the years to come. And I'm convinced of that. Give us a hint. What are some of these major...

issues that are kind of under the surface that they're not addressing right now. Well, so I think, you know, there's, so there's a couple cracks, you know, that have been there for a while. So, I mean, the IBM and McKinsey studies that point to that the failure rate of large-scale transformations is around 70%, 60 to 90%, depending on which organization. Now, let's,

That is absurd. And that's a number that has been consistent for 20 years. So next year, companies are going to spend a trillion, American companies are going to spend a trillion dollars in digital transformation alone. So merger, I mean, for, you know, so AI implementation, dissertations, all of these things, a trillion dollars. And the folks writing those checks know full well that

70% of that money is going right down the drain. So $700 billion, this is greater than the GDP of Belgium and Switzerland combined, right? Yeah. This is a huge waste. And some organizations are playing with this.

that are needed for this new time. And those organizations are gonna be in a position to capture a tremendous amount of that 700 billion. And they're gonna use that savings to,

to take a lot of market share. So I think that just the very ability of organizations to react has got to shift. And this kind of command and control orthodoxy that we've used is not working. And the second thing I look at is something that I'm sure you know very well. I mean, we all know is the Gallup engagement survey. Yeah, record number of engaged employees last year.

Twenty three percent. And with with 19 percent of those being actively disengaged. So you've got almost 20 percent of your staff who's working against your goals. They're putting sugar in the gas tank on a regular basis. And, you know, with the other 60 percent just or 62 percent, 63 percent just going through the motions, doing the absolute bare minimum.

And whereas companies with engaged employees are 17% more productive. So just the delta there, but they have 10% better customer satisfaction. So there was a study that said that the thing that you can do, the easiest way to increase your profits by 70% is to reduce customer churn by 5%.

That's a simple metric. So if you have companies with engaged employees have 10% greater customer satisfaction, I don't know how that translates into reducing churn.

But I would gather it would get you pretty close to that 70%. So you have on one side, you know, massive disengaged employees. And why is that? Well, it's because we think culture isn't something we need to pay attention to. You know, HR is not something that we need to pay attention to. Yet on the other side, these organizations that are figuring this out, they're capturing that and they'll use the immense gain in profitability to

and innovation that comes from engaged employees to just take huge amount of market share.

But then I also think that the need, like, why do people work for companies? It's because being an entrepreneur is too hard, right? Well, we have just been introduced in the last year now, and the fastest adopted piece of technology in history, generative AI. I mean, ChatGPT hit a million users five days after ChatGPT 3.5 was released. Wow.

I mean, it took Facebook four and a half years to get that one. And Facebook's fun, right? Yeah. Yeah. Or was. Yeah. Somewhat. Yeah. Or was back then. You know, it took Twitter five years and Netflix 10 years.

OpenAI did it in five days, you know, and so we're seeing this, these, the rise of this transformative technology. And I think, you know, the conversation of like, oh, there's going to be a small group of people who will use this technology and they'll take over the world.

No, this is generative tools. These are tools that allow anyone to create anything, right? And so the need for people to work for corporations, I think will start to decline precipitously, you know, in the next four or five years. Not to say that we won't need organizations, but if you look at the example of Blue Sky Social, it was the Twitter experiment that spun off into other...

So this is an open source social networking platform. And so they have situations where it's a small team. They're not well-funded. Their users are like, hey, we need functionality here. And they're like, we'll get to it. We'll get to it. And it's like, no, we really need it here. Well, groups of those users are building that functionality that they need and giving it to Blue Sky. Now, there's only a small group of people who are capable of that.

But in a year or two, everyone will be capable. Well, let me just say, while I agree that the generative AI is going to be great, I think, for productivity by being able to use some lessons from the past. One of the things that I've been talking about a lot on the podcast is that gen AI depends on the past. Gen AI also depends on data.

And a lot of the stuff on the web is horse. Pardon my French. I speak French fluently. So a lot of the data is horse too. And you don't have to be, you don't have to be Nostradamus to see that unless there's a revolution in how we store, what we store and what we promote as facts. I don't know how Gen AI gets away with being able to give us quality when the quality just isn't there yet. Well,

I agree that there are problems with how this is all playing out. Yeah. And I don't think that the path is clear, but I think we have to remember that Gen AI is one of...

transformative technologies. Oh, sure. Yeah. And so I think when we look at, you know, the combination of generative AI and predictive AI, for example, I mean, I think Anthropic has done a great job of giving us an AI model that's actually two AI models. But I think the implication of that is because what we have is, and I think you've pointed to, is Gen AI does not know

from fiction. Yeah. Right. Yeah. And, but that is a problem. By the way, Peter, a lot of people struggle with that as well. Yeah. I, not necessarily for me, it is, is my, I believe my hopes are, are my, my reality, which is, yeah, a road to disappointment. But, so I, I have visceral experience with that. But, but I think that that's a problem that's going to get worked out. I mean, I think there's just too, too many, you know, great minds behind it.

And so I do, I do, I think I probably, like I said, yeah, I predicted my daughter would never have to learn to drive because, you know, driverless cars would be ubiquitous. And this is when she was six and that the university system would collapse by the time she was six.

Well, she's 21 now, going into her senior year of very wonderful and highly expensive private school, and she still doesn't know how to drive. So, yeah. So my timing predictions will most likely be off. But I'm not, I think that dynamic is,

When we look at, we have the ability to create tools that will provide the structures that a corporation will in the background. And I think that is where we're headed and that is going to be a game changer and it will fundamentally shift how corporations look and feel. Hey, are you listening to this and thinking to yourself, man, I wish I could talk to David about this?

Well, you're in luck. We have a special offer for listeners of the HR Data Labs podcast, a free half hour call with me about any of the topics we cover on the podcast or whatever is on your mind. Go to salary.com forward slash HRDL consulting to schedule your free 30 minute call today.

So, Peter, you pivoted away from HR. So how do you think that experience gives you a better lens on what's going to be happening with the world of HR? So I am...

convinced that the time of HR being a cost center as opposed to a resource is coming to an end. And so I think, you know, where I think that the companies that really get it understand my, my friend, Ed Hanson says in the end, you know, it's, it's the human equation that needs to be solved for. And that's not to say that,

Yeah, there is a solution to the human equation. It's one that we constantly have to work on. But I think that that understanding when we're looking at, you know, the folks who get beyond the 70% failure rate of digital transformations or who are able to do much better than, you know, a 23% disengagement rate or 22% disengagement rate are, they figured that out.

And so suddenly, you know, HR is really being leveraged for the things that it is actually capable of. And they have a seat at the table. And so I think that that's how things will shift. And I...

am now consulting, mostly speaking right now. And so I've developed a talk, uh, the, the pyramid has collapsed adaptive leadership for the age of disruption. And, um, I, I talk about, uh,

Yeah, I use the Reverend Dr. Martin Luther King as probably the greatest example of an adaptive leader who, you know, in being interrupted in the middle of the most important speech of his career by Mahalia Jackson, just seamlessly pivoted, changed the speech, one which he had not prepared for, and extemporaneously delivered the I Have a Dream speech and changed the world. You know, he's known for being the father of nonviolence, but

Yet he carried a gun wherever he went, and it wasn't until he met Bayard Rustin that he put that gun aside, and in doing so, transformed the civil rights movement. And so I look at King as that, and then I talk about what it is that we're doing, and the need to really shift to distributed leadership where power and authority and decision-making are distributed throughout the organization, and decisions are made closer to the front lines. And that's the work that I am really interested in helping organizations do,

And so I think that that labor, which is a massive change in how we think about leadership. One, someone's got to own it. Yeah. And that's got to be, you know, HR because the leadership, you have the C-suite. Well, they're stuck in this mentality of command and control. It's all they know. So it's very difficult for them to make the decisions there. Yeah. To have that happen. And, but the problem is, is, is, is because we are so enmeshed in command and control, we need an intermediary step.

And I am trained in a practice called strategic doing, which if you, you know, is a non hierarchical project management methodology that combines strategy, planning strategy and execution into one step. So you start with an appreciative inquiry. What if we could, you know, you know, what would it be like if, and then you gather people who are interested in that. And then you say, all right, well, what, what,

What resources do you have and, you know, that you'd be willing to share? And, you know, and then how do we combine those resources? So I don't know if you know this about me, like one of my resources is I'm a fantastic dancer and you're a musician and we just need a good videographer. And all of those skills independently are great, but together, you know,

Awesome TikTok channel. There you go.

What do we do? Yeah. What do we learn? Yeah. What new people have joined us? What new skills or assets have we gained? What can we do now? Yeah. What should we do? What will we do? And you keep this process going. And because of the different stages of required different leadership strengths, you

that leadership has passed off throughout this project. So, and particularly when you look at this problem of recruiting, you know, where we deploy this very simple process of buying stuff to, you know, connecting with human people, that needs to be transformed. Well, that is a mission critical process that everyone hates and everyone is miserable with. Right. You know, and so how do we transform that? Well, it's,

We have to try new things. So methodologies like strategic doing are perfect to really move through past that 70% failure rate into really successful projects that make a difference. But in doing so, they fundamentally expose people to understanding of how to operate in a non-hierarchical environment. And that's not to say that there's a deference for people who have more skills or abilities. But how do we do that so that organizations can create their own?

So distributed organizations like BirdSog and, you know, Hair and NewCore or the Morningstar Company, who have been incredibly successful without hierarchy or shifting hierarchy, have done so. But they were founded with those principles. They've had years to experiment. Right now, Bayer is trying to transform everything all at once. It's going to fail.

Yeah. So this is a way that companies can gradually make that change and move with the times. It's so difficult from a culture perspective. There's got to be some kind of nexus. There's got to be some kind of event that enables that transition because transitioning through that is so hard, isn't it? I mean, it's like shedding your skin.

All of it to be able to get down to the real DNA that's necessary in order to be able to have people who are empowered to make not just decisions, but to make decisions.

really organization-changing decisions. And that has not been the core strength of leaders to give up that stuff. But at the same time, and I look at my own experience, like I was a horrible person to go into sales meetings with, with my salespeople, because I

I can't stand a vacuum. Like, so if there's too much silence, I'm going to fill it. Right. I'm the same way. Yeah. And, and that's not the best thing for training salespeople. Sometimes you just got to let them struggle. Yeah. And watch them do it. And, but I think that that dynamic is pervasive throughout leadership. Right. And so, and when you have environments where leaders can experience, wait, people are stepping forward in this project. Yeah. I don't need to, yeah, I can, I can bring a brick and a

trowel, I don't need to bring the cathedral. Right. They'll see, you know, because the people in this room will create a much better cathedral than I could possibly imagine working together. But it's, that's an experiential, you know, thing. It is not a, you can't force that on it or say, oh, we're doing it differently. It'll be undermined. Well, the first sign of failure, people are going to be like, see, I told you they couldn't do it.

And to me, there's nothing better than failure to enable you to understand what's the best next thing to do. So give it time, allow failures, and then enable them to learn from them and grow and experiment and actually make good, bad decisions.

As long as they're not a Barings or a ING, what was it, the Singapore trades on the market that just tanked the entire bank. Yeah. But I think that's also the other side is distributed leadership.

requires a lot of structure. Like jazz looks like a bunch of old dudes jamming, but it's the most highly structured form of music there is. And it's because everyone at the table or everyone in the band knows the structure that they are able to improvise. Right. And it's the same thing with our organizations.

Peter, I could keep talking to you forever, unfortunately. Well, so what I'm going to ask you to do is let's take an orthogonal thought on this about how recruiting can be fixed, if not necessarily just by the people. How do we how do we get beyond it? But we're gonna have to do that another time. I would love to do that.

Thank you so much. Thank you, David. This was awesome. Appreciate it. It was wonderful. A wonderful chat. Thank you all for listening. Take care and stay safe. That was the HR Data Labs podcast. If you liked the episode, please subscribe. And if you know anyone that might like to hear it, please send it their way. Thank you for joining us this week and stay tuned for our next episode. Stay safe.