The One Question That Reveals Your Real Capability Gap with CEO Tom Monahan

[00:00:00] The goal there is move the AI script from the CEO's portion of the earnings call to the CFO's portion of the earnings call. Because right now, if you listen to any earnings call, there's a lot of good stuff going on in the CEO's section, and then you go to the CFO section, and there's still the same economic profile of the business. Bob Monahan is CEO of Hydric & Struggles, the executive search and leadership advisory firm.

[00:00:20] Before that, he was chairman and CEO of CEB, which he built into the advisor to the Fortune 500 before Gardner bought it in 2017. He grew up working his family's traveling carnival that taught him there's no such thing as a business that doesn't depend on people. In this episode, we talk with him about why the CEO job keeps getting more complicated and the emerging capabilities needed around the top table.

[00:00:48] Tom walks us through the three phases of AI he sees across Hydric's clients and why better, faster, cheaper won't set anyone apart. Stay for the t-shirt his father loved. Meg served on Hydric's board from 2021 to 2025. Welcome, Tom. Hey, Meg.

[00:01:18] Great to see you. Great to see you as well. Hey, Tom. In preparing for this interview, I saw something about you being in the carnival and how some of the best things you learned were from the carnival. Can you share a little bit about that? Sure. My mom's family business is a carnival in New England. It's kind of an iconic business.

[00:01:42] It's quite literally, as you would guess, travels from town to town across the spring, summer, and early autumn in New England. Like offhand businesses, you're pressed into labor early, right? What makes it interesting is very few businesses of that scale have both a capital-intensive side, the rides, and sort of a human capital professional services side, the game.

[00:02:05] So the economics of a ferris wheel are very different than the economics of the game where you fire water can into the clown's mouth. A ferris wheel, expensive piece of capital equipment. If it breaks, you've got to fix it fast. It needs to be insured. All the things you need to think about there. And the game side is, can I recruit people to play this game, and can I keep them playing? There are oddly applicable lessons for almost any business you encounter on any carnival midway.

[00:02:35] Many businesses have two sides, but not often at that scale. And what did it teach you about people? If you look at it, it teaches you ultimately that there are very few businesses that aren't all about the people and that, like most businesses, is all about the people. It doesn't sound silly, but anyone can buy a ferris wheel or merry ground.

[00:02:53] It's the experience around that, both protecting the asset, keeping it up, moving it effectively, doing preemptive maintenance, and then managing the rider experience that actually creates the experience someone buys. And likewise, most everything you can win at a game you can buy on Amazon. The question is, does the person running that game create an experience? They understand the desire to play the game, to win the game, to engage the people.

[00:03:20] So you can scour the earth looking for non-people-dependent businesses, and I haven't found one yet. I saw somewhere that you learned your listening skills from the carnival. Did I get that right? My wife and kids would be surprised to find I have listening skills, so thank you. I want to mark that and say my assertion that I have listening skills has been professionally validated.

[00:03:42] Yeah, it's one of the places you learn your listening skills, which is I watched great people, particularly on the game side of it. It's a stuffed animal or something like that, right? But it's not a stuffed animal. It's someone's kid who's moved out of town, and they want to win it for them. It's a first date, and the person wants to win it for their first date person.

[00:04:04] And the best people's developed rapport with people, listened a little bit to what they're hoping to accomplish, realized that they were delivering part of an experience that person wanted. So, Tom, I'm going to say that you went from the big top to the big boss. And I would say that you are the expert in CEOs. You're a CEO. You've been a CEO. You have a business that searches for the best CEOs.

[00:04:33] And then, of course, when you were running the corporate executive board, that was, again, about running companies. Recently, you published an article called The CEO Job Keeps Getting Big. And so we wanted to explore that a little bit. What's actually different now versus the past and what's really the same? I'm not sure the title's right when I reflect on it a little bit.

[00:05:01] Maybe more multifaceted is the way to think about it. My new favorite word is fractal, by the way. So it's fractal. Yeah. The CEO job keeps getting fractalier. Although, to be fair, it really does start with Toby at Shopify. So I always like to make sure to give credit who incepted ideas into my head.

[00:05:28] But definitely fractal is the way I think of this moment because there's so much dimensionality going on all at the same time. So back to you on the CEO's job and how it's changing. CEO jobs change because contextual factors in the world change. The first job of the CEO is to be, you're an ambassador in two directions. You're an ambassador from the real world to the company.

[00:05:57] And you're an ambassador from the company to the real world. So you're trying to figure out what's happening in the real world. Make meaning of it. And turn it into human activity and investment activity that creates outcomes for the people that you serve. And hopefully those outcomes create value for the people who work for you. So the specific issue that I wrote about in this article was what we've been talking about a lot internally.

[00:06:21] And I sort of tried from time to time encapsulized things that show up in our business through client questions. Our client requests. Our client needs for help. Spoiler alert. We live in a pretty divided world on a whole bunch of them. Right? Just politically. Politically. And you see companies trying to do some sense-making of that and trying to do some influence of it. Here's the example.

[00:06:47] Sometimes things that seem sudden really weren't. I'll use trade, international trade and investment as an easy example. U.S. has gone through a cycle right now of threatening and sometimes imposing tariffs on our trading partners. And understandably that's created noise politically in this country, noise politically outside this country. And set aside how you feel about it.

[00:07:11] It's attracted attention and it's a divisive issue and it divides trading partners from each other. It divides people in an industry one from another. It divides people across industries from each other. It's a new contextual factor that companies either need to influence, navigate, or both. What's interesting about it though, you could look at it as a kind of near-term recent tariff thing.

[00:07:31] You could also look and say from the late 40s through the early aughts, there was either a general agreement on trade and tariff or a world trade organization, multilateral global trade negotiation, reliably once every four to five years. Since 2004, 2005, how many have there been?

[00:07:53] Xi Jinping and the Belt and Road Initiative suggested and put in place alternate institutions to the Bretton Woods institutions. And the British populace elected to leave the European Union. So this dynamic of I want some national sovereignty or I want economic sovereignty at my country level has been creeping up on us. At the very least, companies are having to think about, okay, how do I show up? How do I manage a global supply chain in a fragmented, fractal world? To use that word.

[00:08:22] How do I think about positioning my products and services if I'm in one market and selling into another? How do I think about talent in a world where mobility of talent is less? And where do I try to understand those dynamics and where do I try to shape them? So we're seeing a different and new seat at the senior most executive table, the same way that Sarbanes-Oxley launched the CFO. There already were CFOs, but they became a lot more prominent. We're seeing that around sort of global corporate and government affairs.

[00:08:51] People are saying, I got to get somebody who can help me at the very least see what's coming and where possible engage, influence, remediate, blunt, blunt the force of it. But, you know, an easy example right now is data centers. I was talking to someone who's been in the business of constructing data centers for a good 15 years.

[00:09:12] For 13 of those 15, there is no sure way to have someone end a conversation at a cocktail party and just cry with boredom and say, what I do is I build data centers. And suddenly that has become... A lighting rod. A lighting rod. A Rorschach. Almost name the thing you're unhappy about. Are you unhappy about power costs? Are you unhappy about affordability in general? Are you unhappy about the environment? Are you unhappy about economic opportunity?

[00:09:41] Are you unhappy about AI is going to take my... What you're unhappy about, that was a name and a physical presence. And you have some agency over it. And that, you just look and say, I don't think anyone had that as a likely risk two years ago. And now any company in that space suddenly says, what's the governance structure of the county?

[00:10:00] So it's not just the CEO is getting...job is getting bigger, but the complexity around them and what they need their team to be able to do for them, with them, and with each other continues to grow. Understanding local politics wasn't something I thought a lot about two decades ago. And at the same time, whoever happens to be your CEO, if they have one superpower, that's pretty good. And they certainly don't have all of them.

[00:10:26] That complexity of the CEO job and their ability to have people looking after these incredibly complex issues, you can work well with them and work well with each other. I think it's more challenging. And I say that it's obviously good for our business, but I think it's just a reality. In the article, you said that it's really important to surround yourself with the right people. And often now there's new roles and new structures.

[00:10:52] And you mentioned government and corporate affairs as being something that's emerged recently. Are there other roles or new corporate structures that you're seeing starting to emerge? The AI moment is forcing a lot of interesting conversations. Bringing AI talent into the organization in most companies is a great thing. It just makes a lot of sense. And you can call that person your chief AI. We can call them whatever.

[00:11:21] And at the same time, if you're not reevaluating the roles you have and not demanding the other executives around the table understand what AI can mean for the company and mean for their function, that's going to be a very lonely person. Because they're not going to be able to make change. They're going to be a solo operator. And so it's a both and. But we are seeing people trying to figure out, do I change my ask of my chief technologist?

[00:11:45] Should they be my de facto lead AI person from a build and deploy perspective? Do I change the role of the head of HR? Are they now the head of work? Because work is going to be done by people and digital workers. So this is a particular area of interest for us. Are you seeing searches start to happen around heads of work or something along those lines?

[00:12:12] You can sort of imagine that in our business, the first draft of any assignment, particularly if it's new, yields a null set. Because they'll be like, here's someone who's really transformed a regional public utility using AI. And they're like, that hasn't happened yet. Many searches in these areas begin as a null set. And our team does a great job saying, well, before we talk about the leader we're going to elevate within your organization or find for you outside, what are you trying to do? What's the goal here? Okay, great.

[00:12:40] Now, what if you just told your team to go do that, what wouldn't happen? Because that's really the question when you start thinking about it. If the answer is as simple as, well, if I don't have a second baseman, people are just going to keep hitting ground balls to the middle of the infield and they're going to roll all the way to the back wall. Then you say, okay, hey, you know what? You should get a second baseman and maybe a center field to that case. But if it's more complex than that, you then shape what is it they're trying to accomplish? And therefore, how do you build a team that accomplishes that?

[00:13:40] Now it's, you know, we often are co-leading a re-envisioning of how work gets done at this company. So you do hear that. A little less the retitle things and a little more the day-to-day looks different. And when we're brought in, find me, help me assess, help me figure out how I build a team that does that. And can my existing team do it? Or do I need to add someone who brings the right discipline on the right side of that trade?

[00:14:09] So I really like that methodology because I like the idea twofold. I like the idea of looking at it strategically. What isn't happening and why? And do we have the people, the talent, the capability for that to happen organically? Or do we need to go out and search or develop or whatever else we need to do to fill those gaps?

[00:14:35] I think that level of curiosity and problem solving is really important. And it makes a lot of sense to me that leadership teams and boards would lean on Hydric's expertise in that area.

[00:14:52] Because obviously having the capability to think that way and to have the ability to look across industries and see how that might be happening similarly in other places is a real unique benefit that Hydric has. That thought process, in my mind, is recursively scalable.

[00:15:14] I think when we start to think about how work needs to happen, how operating models need to change, how organization structures need to change, the way that you articulated that is a really big unlock. The problem is the sort of classic how do you see data that's missing? Understanding where there's a gap is conceptually, intellectually difficult, right?

[00:15:42] Because you're used to like a pattern and add more and, you know, plus or minus on last year's model or plus or minus on last year's decision. But what we're talking about here is your null set problem. What do you do systematically when there isn't an answer? And so you need to kind of come up with some hypotheses and you need to come up with some actions to help you figure out what's next.

[00:16:12] Give us a little bit more color. What questions do you ask people to help them start going down this path more clearly? It is a really interesting question because here's where we think we are. Not we, Hydric, but just as several thousand clients globally, meaningful representation of the world and what the world is thinking about.

[00:16:34] There was a period in the AI thing where the currency was activity, right? Am I doing stuff? Experiments, pilots, people, all that stuff. My father was a deeply religious man and to the best of my knowledge, he only ever wore one t-shirt with a saying on it. He's just of a generation where he didn't wear t-shirts and sayings a lot. And he'd be appalled to find out I'm wearing a thing that says Hydric on it, even though I worked there.

[00:17:02] But I was walking down the street and I was in New York or Washington at the time and it had a picture of Jesus and I said, Jesus is coming, big letters. And then underneath it said, look busy. And he just was the funniest thing. He would wear that. I love it. Any day, he just got a huge kick out. And it was one of those times you get exactly the right present for someone. I got that one. And that was the first phase, right? Look busy. Talk the talk, activity, piloting, et cetera.

[00:17:31] The second is kind of, and it's exactly your point, Meg, which is march down the list of known productivity levers. This enables us to do things better, faster, cheaper that we do. And we need to do them better, faster and cheaper. And a lot of people are doing that.

[00:17:47] And that's the goal there is move the AI script from the CEO's portion of the earnings call to the CFO's portion of the earnings call. The challenge is not least even my industry is like, we're lucky we have exceptional competitors. They're well-led, great, super professionals.

[00:18:15] It's a classic professional services business. There's great people at these businesses. They're smart. They want to serve clients. There's no particular reason to believe that their list is any better than my list or my list is any better than their list. These are sophisticated people. Their better, faster, cheaper list probably looks the same. It might be ordinal rankings that are different. But ultimately, and will one of us get lucky and be a couple of quarters ahead or a year ahead for a while? Almost certainly, right?

[00:18:42] But at the end of that era, there'll be no competitive differentiation. That's right. Race to the bottom. Maybe it's great. Maybe it opens up profit margins. Maybe clients come and take the profit margins because they say, fantastic, it's better, faster, cheaper. And more often than not, land somewhere in between. That's true not just in our industry. It's really true in any industry. The third horizon is innovation. AI shifts the supply curve.

[00:19:09] It makes things possible that either we couldn't do economically or we couldn't do at all. An example in our business is we built kind of a cinema quality immersive platform for evaluating candidates under duress. And you can put all sorts of scenarios in and sort of see how they respond. Think about the aftermath of a breach. A scenario that... We're going to all see very soon. Yeah. Yeah. And all the stuff, you can put a CEO into that scenario.

[00:19:36] And the phone is ringing simultaneously from the Wall Street Journal and your member of the board of directors and the head of the union that now knows your employee records have been hacked. And all their members are, which one do you take? How do you handle them? And you don't know, actually, the extent of it. They may have more knowledge than you. And you can create a similar experience that... We've gone back for the heck of it and said, what would it have cost in 2015 to do that?

[00:20:04] And it's not even worth trying to figure that out. But it's a good example of a thing you just couldn't do. Unless you were the CIA and you had an immersive experience. But now you can do it for CEOs. Yeah. For pennies for serving, right? And it's an example. It's an example from our own business. I'm a Javon's Paradox person, which is when you can produce something cheaper, people tend to want more of it. Makes me kind of an optimist in periods of change like this.

[00:20:33] But you actually have to think, what exactly would they want more of? I'll brag about some of my colleagues. Our CFO search team is exceptional. They do exceptional work. And I stand by the exceptional quality of those folks. I have yet to find a client CEO who will fire their sitting CFO just because our team is good. Right? Or will hire a second one because our team is good.

[00:21:01] Because most activities at a company are built toward an outcome that someone's paying for. We have a great purpose, call it performance culture business, which helps CEOs translate strategy into human activity. And a lot of what they do in this moment is to say, well, what is it your customers pay you for? And usually that forces good conversation around, I'm a transport company. They pay me for an airplane seat or something. But really, what is it they pay you for? They pay you for efficiency.

[00:21:31] They pay you for what is the thing behind the thing that you exist to do? And how might AI let you differentiate that experience? And how do we open that up? And whose job is that to sort of go back to the first principles of what problem we're solving for whom? And then innovation basically says, are we solving new problems for the people we already serve? Or are we solving the same problem for people we can't currently serve? And how does AI change the economics of that?

[00:21:59] And therefore, where would that capability reside? What's in the way of getting after that right now? And how do you build a team that can make that happen? And align and motivate and catalyze the team that can make that happen. I think our team spent a lot of time trying to get back, swim upstream just a little bit from a friend, Tony Chan, wrote a great article probably 10, 15 years ago now where he talks about in a lot of businesses, the most interesting conversation is the one that happens three minutes before they call you.

[00:22:25] That thing that drives the, you know, we need help or we need to look at this differently or something happened. Our job is to swim upstream into that conversation and figure out, well, what was the meeting about really before they called us? Because that's usually where the most interesting way to innovate or break a paradigm is. Somewhere in that meeting, there was the dissatisfaction on the part of a market or an investor or an employee team that then manifested itself as a request for help.

[00:22:54] And we need to get back to that dissatisfaction level and help them get back because that's how we helped them build a great team. So to that end, how do you recommend that your clients and other operators really force themselves to break out of the better, faster, cheaper side of the conversation and into the innovation side? Do you think it's that it needs to be a different group of people or just a different set of questions?

[00:23:24] Because I feel like there's a lot of companies that really struggle with even recognizing that level of curiosity and question. Have you seen anything really work well there? The answer is it's always both. It's always the job of a leader with an existing team to catalyze new thinking and to provide the context, the psychological safety, the stimuli to think a little differently about the business. And it's always the job of a leader.

[00:23:53] So do I have the exact right team to do this right now? And the answer, am I doing enough of the first? Am I doing enough of the second? Is always probably not doing enough either. Let's make sure we're advancing on both fronts. And they're not uncorrelated. Companies have definitely said, oh, you know, get me someone who's super literate in deployment of agentic or deployment of frontier models, et cetera. You can bring that person in. But if you're not organized in a way to stimulate and leverage the team around them, nothing much good is going to happen.

[00:24:20] And so having both, I think, is really important. Are we creating an environment that are we creating teams that have the requisite mix of capabilities, attributes to win? And are we creating the context that allows them to do that? You know, it's a fascinating time. And at the same time, we've got a business to roll. We've got to get the, we've got to make the donuts. So we've got to make that.

[00:24:42] So, Tom, when Meg introduced you to me as a potential guest, she referred to you as a level five leader, a la, you know, our friend Jim Collins. Good degree. Out of like 150, I would guess.

[00:24:58] But, you know, some things that stood out were the focus on courageous humility, especially when you started as the CEO newly and really focusing on the human connection and framing problems for your teams to solve rather than being the expert yourself. So many of these qualities.

[00:25:21] You recently wrote an article about the importance of the human aspect of leadership and avoiding the Pygmalion trap. And it led me to think about something that we've been talking about a lot, which is the suppression of the importance of managers in this AI era.

[00:25:45] And, you know, specifically Jack Dorsey's announcement that Locke was going to get rid of hierarchies and kind of the undertone of, you know, AIs can do managers work. And we don't really, we don't need these people that do leader things anymore. And I wanted to get your take on that, you know, just in terms of like, what is, what is the role of a leader in this AI age?

[00:26:14] Not necessarily just the top jobs, but throughout the company. And where do you see that going? I think the most radical experiments around de-managerizing companies have not gone well. All right. Just different. And it doesn't mean there should, you shouldn't be looking for leverage or manager or leverage. Not everyone needs a span of two because no one wants a job where their boss has a span of two. That's as demeaning to the employee as it is wasteful to the P&L.

[00:26:43] There's a couple of ways in which we see leadership changing. I think in leadership always changes. That's if you sort of look, there's always a contextual factor that changes leadership. If you think about one facet of the AI era is it makes it easier to make things autonomous. You can develop agents and things that can do autonomous work more regularly than a human can. But we also reflected that most organizations already have a lot of things that look like autonomous processes done by people.

[00:27:12] And so deciding, I mean, ironically, as leaders, we often have to say, look, that autonomous process no longer serves us today. Right. That's that's an important thing is to reevaluate and evolve systems, evolve processes. That's one thing. The second is measures do have to ask the question, where does human interaction create value, either internally or externally? There are just plenty of places in the world right now.

[00:27:39] It's funny, at a prior company, I learned this lesson in a somewhat comical way. Oscar Wilde's experience is the name we give our mistakes. I guess CEO experience is the name we give to mistakes we imposed on whole organization. It was funny. We bought we bought a really tremendous data set with some really columns machine learning tools. It did great things with data.

[00:28:03] And I forced the organization to spend money to put a consumer grade UI on the platform and said, I want this to the point where any CFO on earth can just point and click. And someday they'll be able to do it with a chip in their head or whatever. But they'll be able to get the data they need immediately. I want no friction. I brooked no dissent. And so off we went and we spent real money on this and we brought it to market.

[00:28:31] And I would say more or less the first 50 CFOs almost verbatim said, this is great data. This is awesome. And it had sort of four or five obvious use cases. And the CFO said, so what I do, you know, kind of I just give you a quick call and talk through, you know, kind of how I'd like to see the data. And you guys will help me think through what my question really is. And you'll kind of, you know, shoot me the data pack or send me the report or whatever.

[00:28:57] And if I was in the sales call, I would immediately render the whole thing unsellable by saying, no, it's better than that. You know, let me show you. All you do is point and click and do this and see if there's a fortune 50 companies. They're like, first of all, I don't do that. Secondly, it's not how I'd want. It's not kind of a conversation. The question's only going to be about 85% formed in my mind.

[00:29:23] I think the salespeople who are working with the go-to-market team were exceptional because there's nothing you want more as a salesperson than for your CEO to explain to the customer that they're wrong. I find that super effective both. And it really. Great relationship building. Yeah. It ensures we not only got solid product, it also ensures we helped learn the darn thing. So there you go. Like I've really earned my key.

[00:29:45] But, you know, what we learned was that the use cases for that tool, the CFO wanted to have a convert. You know, they wanted to measure three times and cut once. We had made cutting easier. You just get data that you weren't able to get before and format you weren't able to get. And the CFO is like, I'm pretty sure this is the question, but let me just kind of grab you for five and frame it and tell you why. And they sure was the product they wanted. The good news, the product worked.

[00:30:14] The product eventually salespeople hid all their visits from me. And for some reason, there was a section of salespeople that was totally blacked out, so I couldn't participate in it. And they went out and the product team wisely put kind of an advisory layer on top. And CFOs were willing to pay a substantial premium over what our screen would have been worth to them. So it became a much better product by getting it away from me.

[00:30:39] But it became a much better product because the team sensed what the CFO need was. And suddenly they could afford, because having that CFO, prior to that activity, having the CFO call even a really smart analyst and talk to them, the analyst would have commiserated but in no way gotten them the answer they wanted. Now we had taken what was the high cost, hard thing about the process down to a zero cost, easy thing. If you live in a world where build has gone to zero,

[00:31:08] the flip side is that creates space and capacity in that product where the cost of build didn't go to zero. But the cost of getting something they could have never gotten before, suddenly got very low. They realized they had a different problem. And therefore, they wanted that problem solved. And they could have that problem solved in an economic way. We couldn't have done it before because we would have had a team of analysts churning the data out. And the advisor couldn't have had the conversation. Say, well, why are you asking that now? Like what came up in the last board meeting? Why did it come out?

[00:31:35] So there are still things that humans can do, thankfully. And therefore, the role of the manager is to try to figure those out. What are the most value-added things? And where there are things that absolutely humans can't do or shouldn't do or are no longer economic, where do those happen? And how do you manage people at least in transition period through that? So I think the role of management is still really important. It does change the nature and shape of leadership. Things always do. Things always change the nature and shape of leadership. You think of accountants and gap standards, right? There are no gap standards for leadership.

[00:32:05] No one has a massively codified set of rules about leadership that we all get to at least use as a starting point for problem solving. We've got to co-create a definition of leadership for that client, with that client, at that point in time. And that leader then has to re-co-create what it means to lead across time in that role, which is both exciting and hard. We want to have you join us in our leadership corner, but I have one more thing I really want to ask you. So I'm going to try to sneak it in here.

[00:32:34] We're all parents of kids in their 20s. And one of the big conversations that we have here at the show and that comes up over and over again is, are we ruining our leadership pipeline process by taking away the first rung and removing

[00:32:55] those pathways that we had for learning on the job and becoming proficient to be even considered in the senior leader ranks? So my question to you is, as a parent, not as somebody at Hydric, what are your thoughts on this? And what are your hopes that we as collectives start doing better or differently to avoid that disaster?

[00:33:24] I think in the early going. So I'm an optimist. I think in the early going, it's funny, I spoke at a event at J.P. Morgan last week for professional services firms. And a question came up, not quite that articulate, but someone said, you know, hey, are you worried about this? I said, look, in professional services firms, in the room, there was us, sort of leadership advisory.

[00:33:49] There was law, accounting, consultancy, environmental consultancy, turnaround, and kind of the whole range of professional services, many of which employed lots of really awesome people in their 20s. Those are formative experiences, both for our organizations and you sort of look at Fortune 500 list of, you know, where did the CEO start? You see all these great organizations as foundries of talent. So it's not, they not only grow their next generation, they are foundries of talent for lots of other organizations.

[00:34:19] The fuel for professional services is largely the energy and willingness of exceptional 25-year-olds to do work well beneath their capability. This is what the residency is like at this hospital. This is what, you know, the first rung of the ladder looks like. I see two pieces of the other that can be hope in our business. One is whatever the most miserable parts of our experience as an associate or an engagement manager have gotten a lot better. Like, you know, proofread this deck for the fourth time.

[00:34:48] This database lists this person's title in, these four different databases list this person's title in four different ways. Reconcile them. Like just all the stuff you have to do in our business, right? To be sure, most companies have some version of the M-word getting rid of that. It turns out, and this is all credits, my partner's who was sort of like, I think I just got five free hours a week of a kid who was like off the charts brilliant in high school,

[00:35:18] off the charts brilliant in college. And we had them, you know, comparing, you know, four different databases to see which one's right. And now I got five hours a week and it's going to 10 hours a week. How am I going to use that? I'm going to get them on the phone with clients. I'm going to have them talk to candidates. I'm going to have them out doing the things that actually smart people. So that person was valedictory of their high school class or president of the debate society in college or team captain should have been doing anyway. Now they can do it sooner. We're seeing some real evidence.

[00:35:46] Those two things are coming together in an exciting way. So we think more of our people getting more of those experiences sooner enables them to be one of our great advisors sooner, enables them to help clients sooner and more often. We think it's good. Yeah. So you're on team better work, not less work. Better work sooner. Better work sooner. And that just is showing up in our system.

[00:36:14] The other interesting thing is that that generation, I call it the Dr. Evil Austin Powers thing, which is, and I've seen this a lot in Back to the Build Zero thing, that scene where Mike Myers as Dr. Evil is plotting to kill Mike Myers as Austin Powers. It's obviously a send up of all the Bond movies.

[00:36:38] And Dr. Evil is killing, I think it was Liz Hurley and Mike Myers by having them rotate over a pool of crocodiles. I forget the elaborate way that he was going to kill him. And Dr. Evil's son says, I'm dead. I got a gun. And Dr. Evil's like, oh, no, no, no, no, no. That's not how we do it. He's like, do you want him dead or not? Because I have a gun. I can and we'll go kill him if that's the point. He's like, no, the Krakka candle has to burn.

[00:37:08] And I've just seen with those extra five to eight hours, we had this happen in our private equity practice. We had unearthed the client need, which they desperately needed. It was replicable or like, yeah, pretty much every private equity firm's world can ask for that one. Like, if we can solve that, it will be amazing. And immediately went to, I think you would date our product development approach to kind of, it was, you know, solid 1978. We could imagine agile, but we were still kind of water falling in our heads. And so we had like a little meeting around, what are we going to do?

[00:37:37] And of course, one of the 25 year old is like, yeah, we're not going to like stop with the crocodiles and the thing. Like over the weekend, they just tinkered with building out very quickly a thing that did 85% of the thing that that client had articulated and had never been able to do or get. And then you could put real resources against the 15%. And then there was a human layer on top of it. But it was really fascinating that with those, you know, that, that time, the eight, you

[00:38:07] know, two people basically solved a problem that I'll be honest with you. Again, it was another episode of, you know, unfrozen caveman CEO where suddenly I was like, what we're going to do is first, we're going to use a flint to start a fire. And I'm going to use, I'm going to use codex and create something that's going to be good enough for that client on Monday and be good enough for every client by next Friday. I'm like, and after we, you know, after we make the flints, we strike them together. And I, I'm an optimist. And, and that, that's something that that client had always wanted, had never been able to get.

[00:38:36] They suddenly were able to get it that they think that makes them better at something that really matters, lets them go faster, cheaper. And so I tend to be an optimist and some portion of this abundance is going to have to go into protection and human judgment insertion at the right areas. And, you know, there's gonna be good guys and bad guys, all that stuff, but I'm an optimist. Awesome. All right. Well, we have a tradition of doing a leadership corner at the end of every episode and you are our special guest for this one.

[00:39:04] And so is it all right if you join us? Please. So Tom, you've placed and advised thousands of leaders through massive transitions. What's the one quality every leader who came out the other side had that the ones who didn't come out the other side lack? My colleagues, Jeff Sanders and Kelly Kaye just wrote a great new book called Show Up

[00:39:30] to Win, which is hugely relevant to lots of constituencies, but particularly kind of the executive becoming a leader for the first time or stepping into a much more significant leadership role. I feel like I'm, you know, plugging a book on a talk show, which I kind of am. It's all right. We're big about books here. So we're readers. Jeff and Kelly have placed thousands of people. A couple themes stand out. One is intentionality about the work ahead, not the work behind. And are you showing up to do that work?

[00:39:57] Not reapply lessons from your past work. The experiences from your past work are why you get the opportunity, but the intentional application of them, not the boat application of them and intentionality about having that view about I'm showing up to do a new thing. And that mindset is really important. Was it Heraclitus who said, you know, no person's ever gone in the same river twice because the river changes and you've changed. Even if you think you're going in the same river, I hate the same river. And so that intentionality about the work ahead, not the work behind turns out to be

[00:40:26] really, really important. Second is curiosity, which you see there can be a tendency to the best executives kind of say, let me make sure I understand first. And they may be in a real shot clock. They may have to move fast, but they're not. They don't start with, I have the solution. It's let me understand exactly what makes this place tick. Third is agility, I guess, or resilience. You pick one or the other. We've been around for 75 years because we're good at this.

[00:40:54] And yet if you called any of our placements, I think they'd all say, of course there were surprises. We always advise the client, just whatever, whatever this person's going to encounter, let them know upfront because you don't want someone who feels you surprise them. We certainly don't want someone who feels that you surprise them. So let's try it. And yet there are, there are always surprises. And sometimes there are surprises because it took fresh eyes to see those surprises, to understand those surprises, to understand the importance of those surprises.

[00:41:23] So don't get too wound up about the fact that any assignment was not exactly as promised. In some sense, you're being brought in because they need someone to make sense of a situation. They don't quite have their arms all the way around. If they did, they could hand it to an autonomous agent to do it, right? They need someone who comes and says, well, what's really happening here? And probably the fourth is life is a sine curve. It's a sine curve that goes up in a direction, but it's not a linear process. Nothing you're working on will ever be linear. You'll have, you know, up days, down days.

[00:41:51] There's hopefully, look at the trend line, not today. Because the most exceptional executives and the best stories all have more setback stories than they'd care to imagine. One of my kids went to a school where they had an all-school colloquium, which meant that everyone from kindergartners all the way up to seniors in high school got together once a year for a conversation about something, including parents and family and all that stuff. So the head of school, the deputy at school called me and said, the senior class votes on the topic. They voted for failure.

[00:42:20] And I immediately thought of you. I literally said, did you mean for that, guys? Like, if you did, it'll hurt. But what was interesting is my then head of HR, who had just moved back from running in Europe for us. And I sat down and we did the math on how many times a day someone failed at our company, as best we could tell. So every, just take all the functions of a company. You know, I'm testing a piece of code. I am, I'm running this new agent that I thought was great.

[00:42:48] And it reliably is doing something silly. And I can't quite figure out why, despite the fact, you know, I made a sales phone call. I tried to book a meeting. I tried to, you know, all the things that could, and it was what we realized we had built a vast, somewhat scalable failure machine that most, most people, most days had more things go wrong than right. And this was a very successful company.

[00:43:12] And just that sort of almost quasi Zen dukkah type thing. There is something that the, the people who are super successful seem to have, which is they accept it. They learn from it and they move on. Like the batting average, right? Exactly. You, you hit 400, you're in the hall. I think even at the successful company, we didn't have anybody who was going to be on the bench in, in one season, all-star. We all were failing all the time at scale. We sat down and looked at the numbers because you're like, what percentage of sales, you

[00:43:41] know, what percentage of sales result in a meeting? What percent of those meetings result in the sale? And it just was startling the, the at scale systematic failure. And, and, and I think great leaders sort of internalize that and accept it and, and move through it and don't get stuck. So those would be my big four. Love that. I think that was super helpful. That's perfect. Thanks so much, Tom. It's been, it's been an absolute pleasure to have you on the show. We've learned so much. Thank you. Thank you. It was fun.

[00:44:09] And, and, and, and, you know, we all grow by having these conversations. So I'm, I'm just being asked to think about things or articulate them as sort of revisit, revisit things I'm thinking about and get new things to think about as well. Well, that was wonderful. Thanks so much for bringing Tom to us, Meg. Wasn't I just so lucky to be part of Heydrick when Tom came on board to watch him join the

[00:44:33] firm, to watch his leadership and to learn from him was just super, super great experience for me. So I'm glad he got to share some of his wisdom and his wit. Well, I want to say well done in your first CEO hire. Yes, that's right. That's right. It's, it really did come down to me. And yeah, so you're welcome, Tom. Yeah. Yeah, no, it was really fun. It was really, really fun to watch the entire process.

[00:45:00] And again, to see how he onboarded and how he led the company all the way through several transitions, the retirement of a well-loved CEO, the to ultimately being taken private by private equity. So yeah, a lot of, a lot of really good experiences in a really short period of time for me personally with, with Tom Monaghan. What did you learn Amy?

[00:45:24] One of my revelations from today is why I do not want to be a CEO. And that was when he was talking about the simulation exercise and it started giving me heart palpitations. My husband and I are currently watching the show Lioness. They're in the CIA and they just had, did a simulation where she's supposed to like shoot all these people and fails.

[00:45:53] And I'm like, oh yeah, I would, I would totally like crawl into the fetal position over that. Yeah. You know, it's funny. I had two thoughts when he went, when he went into that direction. The first one was, well, do they pay for the therapy required afterward for the trauma that was done? And it was the first, uh, the first question. But, but my second thought was of course, been there, done that, got the t-shirt and yeah,

[00:46:21] I know exactly what I would do in case of security incidents and in case of, uh, terrible things happening. So we need to go fund me for your therapy, Meg? Is that what? Pretty. I think you actually are my therapy, Amy Wilson. So, um, so yes, you are not being properly compensated for the therapy role that you play. The other thing was not only did we get to cover your favorite word fractal, but your

[00:46:50] second favorite word sense making he brought up on his own. I know, right? Like, am I, am I like either in the right conversations or, um, am I just lucky? I don't know. But yes, the world does need more sense making in leadership. I think he did a great job describing why it's hard. I was also pondering in this conversation, better, cheaper, faster optimization, all of

[00:47:16] that, uh, uh, really reflected similarly to our conversation with Stacey Harris and where people are getting value today and, and are seeing results. His lens on the innovation side in terms of, of innovation of business models and operating models. What I really liked was his question where he basically said, if we deployed our current

[00:47:41] team to solve this problem or this opportunity that we see in front of us, what wouldn't happen? That helps you get to the question underneath the question of where are we experiencing gaps in our ability to execute. And so my brain really quickly went to the whole conversation about survivorship bias and how we're really good at looking at patterns that we understand, but it's a cognitive gap

[00:48:09] that we don't do a good job of looking at what we're missing. Where's the, the pieces we don't see. And you really do need other perspective taking moments to help you see that. And so I think he talked us through some ways that his firm does that, but I, I really think that getting yourself into rooms with people that can ask questions differently is just

[00:48:37] so important to this innovation conversation. So this whole future is interdisciplinary thinking and thesis that I've had for a long time. I think starting with that question of if we know we're trying to go after a problem, what isn't going to happen based on the current talent and the current capabilities we have at the table? I think that's just a great way to ask the question. Looking at the voids. Which is easier for some than others.

[00:49:06] The other practical takeaway, I think was the focus that he brought forward on the partnership between the CPO and the CTO. It's always been important to have that partnership, but it's always been kind of a loose partnership. But in terms of making the human AI connection, balance, all of that successful in the coming

[00:49:32] months, years, days, minutes, that needs to be a very tight, very, very healthy partnership. All the way, you know, from the top, all the way down the line. So I thought that was a really good thing that he called out the most, I would say, in terms of having a healthy set of relationships on the executive team. But that particular partnership, so important. Yeah, lots to think about.

[00:49:59] I always leave conversations both feeling smarter and then also feeling like there's a whole bunch of things I'm not sure what my point of view is when I talk to Tom. Which is really my favorite state. It's the opportunity to invent. That's right. Let's invent the future together, everyone. I believe in us. Let's make every day count.