The Tao of Management with Patrick Pichette: How Routines Drive Success and Empower Teams

Aydin Mirzaee (Fellow.app)  03:53

Patrick, welcome to the show.

Patrick Pichette (Inovia)  03:54

Thank you for having me.

Aydin Mirzaee (Fellow.app)  03:55

Yeah, very excited to do this. You have a very extensive leadership career. You and I have not met before this. But of course your reputation is one that you know, I’ve heard of a long time and we’re gonna get a chance to meet each other in person very soon. But you’ve been a senior leader at companies like Google, Twitter, and McKinsey, Sprint, Bell Canada, you were the CFO at Google, chairman at Twitter. And you’re on the board of many, many other companies Lightspeed, Hopper Wealthsimple as with the list goes on. So lots of really cool things that we’re going to talk about today. But what I want to do is start from the very beginning. And I want to ask you, do you remember when you first started to manage or lead a team? And what were some of the early mistakes you made in your leadership career?

Patrick Pichette (Inovia)  04:40

As a professional, so I’m going to split my kind of early years like school and university and all that, and I’ll jump straight to professional life. My first real test was as an engagement manager at McKinsey and Company where you were with at the time probably still today wicked smart people. opinionated people, and in somewhat high pressure situations, and everything’s on your plate, you’re leading the engagement, you’re leading the team, the partners are looking for your thoughts on how to run it all. The partners are testing you to see if you can effectively both intellectually and with the team, rather a great process. So that was probably my first professional test, as a manager, where I had people I was accountable for.

Aydin Mirzaee (Fellow.app)  05:28

I know, this is quite a while ago, but do you remember some of the maybe earlier mistakes that you made when you first got thrown into into that role?

Patrick Pichette (Inovia)  05:36

Not sure how much time you got? I’m indebted to McKinsey and Company, I made the same mistake that most people do when they become managers, which is they become a super individual contributor, instead of being a manager. And so they put everything on their plate, they make everybody work hard, but don’t trust anybody. They think they have to know it all. And so they have to go into every model and do everything into every conversation. And so you use your strength as an individual contributor, and you think, Okay, now that a manager, I have people that can crunch stuff, but now everything’s on my shoulders. So you drive everybody nuts. And because you’re micromanaging everybody, you run out of time, you’re always stressed. And you need to learn to unlock that and learn to truly lead people. So that was a big, big step. So I was a bit of a basket case for my first year, I have to admit.

Aydin Mirzaee (Fellow.app)  06:36

Yeah, we’ve talked about similar things. And it’s very interesting to hear the emotional side of it too, which is you walk away very stressed, and you feel like you have all these responsibilities. And do you remember like, when did you first realize that or was it a year later, was it years later, like what got you to then realize, oh, I actually need to operate differently here.

Patrick Pichette (Inovia)  06:56

But in my case, it was having a great mentor. So the work I did was, you know, super high quality, but I was burning out teams, I was not particularly liked. I didn’t like myself very much. But you’re such an insecure overachiever that you’re like, whatever, right? As long as I kind of, I still win. So like, it’s a stupid way to think. But that’s kind of the way you think when you’re young and yours. You’re an insecure overachiever. And then one day, I had this great mentor who was a junior partner. And we were working on a project together. And he just put me aside. And he said, your work, like I said, like you really, really smart, you know, you’re just not working with any discipline and any understanding of what it really means to lead a team. And he said, This is going to be a make or break for you, you either learn to lead teams, and then the sky’s the limit, or you’re going to continue to kind of flame out, you’re going to be a great individual contributor, but you’ll never be able to run the aspirations that you have for yourself as a senior resource, and probably will never make partner of McKinsey and Company because as a partner, you lead teams that lead teams, so I see them more complex. And I was lucky to have that person next to me to invest the time to say, you know, here’s a couple of recipes. Let’s start with ABCs. And really showed me the way, Ben once, what’s amazing, because it’s a, once you see it, it’s so obvious, but until somebody tells you do it this way, instead of that way, and then you do it this way. And it’s like, oh, this is so much better, right? And then influence styles, and then you learn all the rest of it. So I was really incredibly lucky to have a good mentor. I had a couple of fantastic mentors at McKinsey. And then it happens that McKinsey was also investing a lot in our development. So on, like, early on, people figured out that I needed to vary my style. So they shipped me into said, okay, Patrick, need to work on his style. So they had a training for style. And then you kind of book I was shipping you for four days, you gotta learn about style. And I came back and I was like, wow, better toolkit on style. And I never thought that, you know, when you’re a hammer, everything looks like a nail. And then they kind of build an entire toolkit for you say, well, sometimes you need to be a screwdriver, and sometimes you need to be a pair of pliers. And it just, it’s not that I didn’t have empathy. I think I was just, yeah, insecure, overachiever type 100%.

Aydin Mirzaee (Fellow.app)  09:16

Yeah, super interesting. One of the things that is always interesting to hear is how like, I’ve heard many stories about McKinsey, and just how well they develop people. Are there things that you know, one can learn, you know, for senior leaders, for startup founders for CEOs? Are there lessons that you would advise that they could take from how well McKinsey can tend to do that within their company? Are they just so big and the lessons don’t apply to smaller? I

Patrick Pichette (Inovia)  09:45

Know, when I was at McKinsey, it was a tiny place. Like I think the whole place was like 600 people worldwide. To give you a portion. My guess was like, as big as my hand. And here’s what they did. Well, the lesson in it is don’t make development, personal development, an afterthought. It’s like coding, it’s like promotion time. It’s like all of these things that are about running your business, you should have development plans as part of the fabric of your place, you should be a learning organization. If you have high velocity, and churn you need to have kind of like a Google right, we had the same thing we had, like you had like a week of indoctrination, when you walked in, and [inaudible name] would show up with his dog. And he says, I was employee number 19. And let me tell you how we run this place. And here’s the values that we have, right? And so that people kind of get it. And so learning is really embedded in the culture of how you run your shop. And I think that people don’t have that as a natural muscle. When you’re just a techno entrepreneur and you just love coding. It’s not in your sphere of shine. Vizio is saying franchise, like in your your vision site. And I think McKinsey did that very well. I think other firms I mean, I think I know, yeah, we do that quite well now, right? I mean, in this firm, everybody’s got a development plan. I mean, we all need to learn, like, I’m 60 years old, and I have a development plan. That’s awesome. I’m at the front, like, I’m still at the frontier of here’s the things I still need to learn, right? And the minute you stop learning, I mean, most will die. Get yourself a bottle of whiskey and moan about the fact that, you know, everything’s broken in the world, and it’s all shit and like, what the hell, right? So the key moment is, it’s not that McKinsey was unique, it’s just a mechanism. McKinsey was smart at recognizing that in a professional service firm, or an affirm that, you know, has some level of rotation and fast pace, but that’s also true of most organizations, a learning agenda is super important for everybody. And you owe it to people, especially when they become managers.

Aydin Mirzaee (Fellow.app)  11:49

What’s really interesting is, you know, at some companies, I mean, what what’s happened over time is 10 years have shrunk at companies. I don’t know how long you were at McKinsey. But, you know, some companies might make the decision that oh, well, someone shows grit as an individual contributor, but you know, doesn’t cut it in this manager type stuff. And it’s best to exit him and get someone who’s really good at that particular thing. But obviously, it seems like that wasn’t the case at McKinsey. And they focused on development, would you say it was because you were identified as someone who was coachable and so that’s why that ended up really working?

Patrick Pichette (Inovia)  12:27

Actually not McKinsey at an offer out policy at the time I was there. And so you joined McKinsey with a contract that every two and a half years, you either got a promotion or you asked to leave. Wow. And that was the contract. And everybody was cool with that, right? But everybody had these big development plants, no matter where you were in the hierarchy, I think that your point is well taken that I think people make mistake by not investing in their people. And thinking that the grass is greener next door, I’ve spent a lot of my career taking people that are good, and making them great. And part of a manager’s job and part of a healthy organization is to do that. And again, it’s the recognition from the get go that everybody has development needs. Now, if you’re fundamentally flawed, or you have terrible values, or right, of course, you get rid of these people, right? So if you’re if you steal, or if you’re whatever, right harassment, like, Okay, I’ve seen too often people saying so and so I mean, because they’re running really hard as an entrepreneur, and I don’t have time, and this is like, I want somebody else. And I think it’s an lost opportunity. Not always, but many times, it’s a lost opportunity to actually have somebody come out on the other side. So take the time to invest. If you have the time to invest. So take the time to invest, see the person with clear development plans. And my experience is my batting average is kind of 66% 2/3 come out on the other side, better, but really better, thankful. And they have your name tattooed on their arm for the rest of their lives, because you were there for them in a moment of weakness. And, and that’s invaluable. And but it’s so much easier. And by the way, when you let somebody go, because now you got to do what you think that the grass is greener next door, your batting average of finding the right person is actually pretty low. And so I wouldn’t take that trade unless I’m pretty sure that the person will not grow into the job.

Aydin Mirzaee (Fellow.app)  14:24

This is super interesting. I have two follow up questions. But one small one, which is you mentioned the batting average, do you actually count like have you like, Do you have a spreadsheet somewhere? Is this like a rough number? I just wonder how precise like how well – 

Patrick Pichette (Inovia)  14:37

You don’t have a table that will complete pivot tables as you can imagine.

Aydin Mirzaee (Fellow.app)  14:41

I mean, some people take this stuff very seriously. And so

Patrick Pichette (Inovia)  14:44

I’m disciplined at it like look for larger organizations like when I ran Bell Canada’s operations, right 1000s And 1000s of kind of technicians and staff and same thing for Google where we, of course you have a lot of you track a lot of that what real data, if I think of my own personal track record over the years, it’s a gut feel that I’ve got two out of three. But as I go through all the people that I’ve worked with me, but one out of three didn’t make it like they did, right, you give them the bar, and you say, I’m gonna coach you, I’m gonna, and they don’t make it. And then sometimes, interestingly, the toughest part was not that the toughest part is when you have somebody who is if you think of like, Who do you let go right, as a manager, imagine that you have somebody who’s dishonest or just completely wrong. But it’s easy, right? The tough ones are the ones that are doing an ok job today. But they’re already at the limit of what they can do. And you see their job tomorrow is going to be a lot more demanding. And you’ve tested them in today’s job. And you can see they’re already breaking at the seams. And worse, they’ve been side by side with you for like seven years. And now you have to make the call to tell them, they’re not going to grow in the job, you’ve tested them softly. And you know, they can’t make it and you have to let them go. Now, that is a tough decision to make as a manager, but you have to do it. So in my batting average, I also have these in my third of letting go, I have these heartbreaking, I’ve let go of my friends. I mean, that is not a positive experience by a country mile. But um, I have to serve my company. I’m there to make sure that my company is healthy. So these are the extreme cases, right?

Aydin Mirzaee (Fellow.app)  16:25

Yeah, very interesting. I guess one of the things, it’s very hard, especially, you know, when you’re running a startup, or you’re the CEO, sometimes you hire people that know an area better than you do. Right. And so how do you create development plans for those two folks, when they actually may be the experts in their fields? And so how do you help them do that tactically speaking,

Patrick Pichette (Inovia)  16:51

I think, in a couple of ways, and by the way, I think you’ve raised something that’s absolutely the essence of this conversation, which is, as a manager, and certainly as a founder, you are in a position where you are leading people, that 90% of them will know more about their subject than you do. They think of my job at Google, right? I mean, just take a pause when I was at Google, I not only ran in finance, but I also ran people, I ran transport, I rent real estate around all the Employee Services, right? Security, economics, like keep on going, right? There’s no way just in finance, just taxes, right? Worldwide taxes that Google likes, just not like how dare you say, Oh, I gotta know everything. Right? Your job is to actually assess these people, make sure that they’re world class, if they’re not world class, then make them world class or see if they have the potential to be world class. And through the work that you do with them day in day out, your job is to see where their blind spots are. And they may be on the intellectual side, they may be on the emotional side, right? They may be in so many dimensions, but that’s your job. Your job is to assess them not only on the quality of the work they do for you, and with you. But they also you’re there to actually assess how they continue to grow. And that means that you actually have this vision of where you want to go. Right? Let me give you a Google example. Again, you know, fors Orla ran all of our networks at the time, and he probably still best, and ORs was extraordinary man. Like he’s a physicist, he’s an accomplished kind of academic, he invented our data centers, right and Google, but Larry would ask him and give him these challenges that were absolutely extraordinary. Just to push the envelope, and always would take on these challenges, right, on latency and speed of our hardware and on a number of dimensions, or power utilization. And I’m carbon offsets. And you don’t need to be a deep physicist to say how many milliseconds between here in Australia. And by the way, you know, take are your top five markets, and what’s the latency between the data centers? And what’s the latency between data and Android cell phone? And then say, okay, so 100 milliseconds, it should never be 100 milliseconds, right? It should be 20 milliseconds. So how do we get their words, right? So I’m giving you a theoretical example of how a great manager still pushes on people. And then that drives a person’s kind of needs for development as well. Because often when you give them challenges like that, they scratch their head, and they say, Well, I gotta think about this. And if it’s a team that like, you know, you hear through the grapevine that the whole team has kind of fallen apart because the person is not leading properly. And everybody is kind of at everybody’s throat. That’s also your job as a leader to kind of sniff how your team is doing. And then kind of culture leaders to actually you know, you want a team that has some positive tension because positive stress is a good thing. You don’t want the negative stress because negative stress is That’s it.

Aydin Mirzaee (Fellow.app)  20:00

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Patrick Pichette (Inovia)  21:27

I think development plans have a couple of dimensions? There’s the task at hand, which is the what and the how, right. So my tax lawyer? Are you delivering your taxes on time on budget? Right? The how is do you do it efficiently? Right? Are you in the best practices? Or are you leading the practices? Do you have creativity? Are you running your team properly? That’s the all of the how, right versus the white, which is, Hey, I gotta pay my taxes. Are they accurate? Right? So that’s on one dimension. And then there’s a second dimension, which is very personal is as an individual, what do you want to be when you grow up? Because everything I’ve just talked about is like the task at hand for this year’s plan, or the next 90 days or whatever, however you your cycle of planning is and delivery is, but everybody should also have a view of, hey, you know, what, 234 years from now? What do I want to be? And from there? What do I have to build now so that when I get there, it’s a Wayne Gretzky moment, right? Just skate to where the puck is going to be. And so I, I spend a lot of time in my career, having these conversations with people. And you know, what’s extraordinary is sometimes you have these conversations, and you realize these people doing the wrong race. And it’s fantastic to say, what I really wanted to do this, but I did this because of x, and I really shouldn’t be doing this. He said, Okay, let’s take two years, we’ll take a year so that you can build your skills to be able to do ABC, and then we’ll take six months transition, we’ll find the right person to take your job, and then you can go and do that. And that’s been an effective leader. Like not only are you serving your organization, your company, but you know, like 20 years later, and 30 years later, you bump into these people on the street. And they remember don’t cross the street and say, hi, you were there for them?

Aydin Mirzaee (Fellow.app)  23:10

Yeah, I think that’s awesome. And very well put. So we’ve talked a bunch about developing your people and how some people maybe under emphasize, you know, their own teams and maybe look externally, when they should maybe pay a little bit more attention to their to their current teams. What would you say about building teams in general? So just on the building side, like lessons that you’ve learned, I mean, there’s hiring but another hard thing to do is, of course, to get people you know, to work together. And you’ve obviously worked at a bunch of different companies, lots of large teams, what can you teach folks about team building?

Patrick Pichette (Inovia)  23:49

I think that it’s going to sound really corny what I’m going to say so but where it starts with a couple of key ingredients, the first one is to have a very clear goal for which after what you’re going after, because without clear goals, your teams all over the place. And so that’s why we loved OKRs at Google, that’s why I had really specific objectives. When I was at Bell Canada running the operations, people need to know what they’re shooting for the need to know what when it looks like what when looks like in the long term, as well as in the immediate, immediate term, right. And by the way, it gives them pride to actually get achievements, and everybody wants to win. So I think that that’s one key component that’s kind of under estimated, just very clear objective so that when you get up in the morning, it’s like, a bounce out of step out of bed and you’re like, just going to be a good day because I know what I’m shooting for. And then the second piece is, as a management team, you need to actually have diversity, diversity of opinions, diversity of styles, diversity, like there’s nothing worse than to have a team where everybody’s the same. Because there’s no spark. There’s no positive stress. You know, Larry and Sergey and Eric couldn’t be more different, the three of them, George Koch, myself, and Michael Sabia could not have been more different when we work together at Bell I put a team we made. And the same thing for me working with, like Larry and Sergey. I mean, they’re just completely different. But together, we had the great debates. And in the great debate, you find the insights, and you find aha moments. And if everybody thinks the same way, like you can be completely blinded, you get velocity, but you can be completely blinded. So one is literally have Northstars, after which you should after diversity in the team. And then to run an effective team, you need just enough processes, just enough so that you have really good coordination, really good alignment, like nothing gets dropped. Like we tend to forget about that. But I’m a very strong believer that routines are your your friend, and not your enemy. Routines are truly like the Tao of management, because it’s effortless. My Monday morning meeting, which is an hour has a very specific agenda, it’s a complete routine, you could argue it’s a total bore, and that meeting, just flow, right and which flow comes effortless. And so there’s a minimum of kind of what I’ll call positive admin, that actually just creates the oil in the garage, that just, and then you need serendipity as well. But that gear edge I find is incredibly useful. And then there’s, there’s a whole set of other elements, which are like, how do you work together and values and guiding principles by which you, you know, if there’s, like, one of mine is like, there’s an elephant in the room? Like, please tell us there’s an elephant in the room? Like, why pretend right? So we plumbed the elephants, right? And it was like, Okay, we know what, it’s so much easier to see the elephant when everybody can see it. But nobody wants to say that there’s an elephant in the room, right? These are kind of like the rules of conduct right of behavior. And so these are kind of like the cocktail of what you kind of need, right? If you have clear objectives, if you have diversity, if you have smart routines, kind of initial routines, but that are just oil. And then you have the right kind of code of conduct. If you wish, then you’re you’re set, right? I mean, you there’s no reason for you to not to be a high performance team.

Aydin Mirzaee (Fellow.app)  27:06

I love this phrase that you use, which is routines are like the Tao of management, and they make things flow. What other types of routines if you think about the routines that you would put in this category, so you have your Monday morning staff meeting, are there other ones I showed like goal setting, and the cadence around that is part of that routine? Are there other things, this is

Patrick Pichette (Inovia)  27:28

where I am really anal, my entire life is a set of routines. Like I people laugh at me, because you see I have my blue fleece. I have like, I don’t know, I have three fleeces, I have like, eight t shirts, I have no clothes, because it’s so much simpler. You get up in the morning, I have never asked myself, What am I wearing, I just wear whatever’s on top of the pile, and get going on bicycle everywhere I get my free exercise every day, just by cycling, my transport is my exercise, it flows, it’s my downtime all by myself with no cell phones where I kind of meditate. And then you know, in London, I get my kind of because of the traffic, it’s like half of a game. So you kind of play Super Mario Kart and the traffic all the way to the office. So you show up with a big smile on your face and everybody’s back. And here you are flying through the city, the way my in my kitchen, I think that it will drive people crazy, right? The number of steps between my bread and my toaster and my kettle, like everything flows like I’m a I’m a Toyota manufacturing stage, you know, kind of person so that I optimize, my calendars are set that way, my weekends are set that way, like everything flows. And what’s wonderful about that method of living. And by the way, I have windows where everything is like all screwed up. But that’s okay. And I love those as well. And when I’m on vacation, everything’s out the window, because I’m on vacation. But what’s great about this is everybody that works with you, especially if you’re the leader, they know that if it’s a technical issue, it’s going to be Wednesday afternoon at two o’clock. So there’s no sense sending you like 16 emails between now and Wednesday. They know their window is at two o’clock on Wednesday, and everybody’s going to be around the table to discuss it. And so they can prepare properly, they can debate with the team properly, they know it’s going to be there, you’re going to be there to decide. And if you can decide because you need a bit more information. It’ll be very clear. And it’ll be but it’s very respectful for the rest of your team. Because they can organize their lives as well to be as efficient as they can and respect their private time at home. And, and so I found routines and predictability. There’s so much chaos and everything we do every day. If you can set up some of these basic stones so that at least it flows. You keep your energy, you have positive energy. You always have energy in the tank for the surprises that you get, and life is not perfect. Right when I did the deal last year with Twitter. It was a bit chaotic. I convey it was very chaotic. Yeah, I’m saying this, but even then, right, we had agreed with our teams, here’s when we meet, right? And of course, you get phone calls at three in the morning, right? But at least you know that you got these basic milestones everywhere all along. And that makes it like, Okay, I know how this thing’s gonna flow for X percent of it. Right? And everybody else knew Okay, well, you know, Patrick’s gone for these hours and these areas, right? So again, respectful for everyone.

Aydin Mirzaee (Fellow.app)  30:28

It’s very interesting, because I think, you know, this year, efficiency is the word of the year everybody’s using it. Everybody wants to know how to become more efficient. But a lot of it is you’re right when things aren’t in their dedicated time slots. And the way that you talked about what happens is everything becomes interrupt driven. And it really gets hard to actually get work done, when, at any moment in time, there can be an interruption that takes you from one place to another. And, you know, a little bit of structure can definitely go a long way. And

Patrick Pichette (Inovia)  30:57

 I know, I’ll give you, you’re so right. And I’ll give you the perfect example of this, which is everybody knows that I read my emails first thing in the morning. And last thing in the day, during the day, okay, write me an email, got no chance, I’m gonna answer back to zero. But they know, right? Everybody knows it. Because they know, they were like, I’m respectful to them. They’re respectful to me. And if you have a real crisis, you’re gonna phone me. And if my phone rings, I know I gotta pick it up, right. But if my phone doesn’t ring, I know it can wait till six o’clock. And that’s like, so liberating. Because I don’t worry yet. Like, I see all these people in meetings, checking email, and I’m like, I have this rule. There’s no freaking laptop over at my meeting. Because what it’s disrespectful to, you’re not really contributing, and you kind of doing your email just waiting to see if you got something. And if you everybody should be doing emails, you should ask yourself the question, why are we having the meeting? I’m okay with that cancel the meeting, right? Because it’s not a value add meeting. But if you’re in a meeting, then maybe it should only be 10 minutes. I’m okay with that, too, then make it a 10 minute, right? But you’re absolutely right. Like, the noise in the machine is so extraordinary compared to and again, I I went to the School of if you’ve never read this is this because I was doing manufacturing in a prior life, one of my nine lives. Anyways, the Toyota manufacturing system has this fundamental academic paper called The seven sources of waste. And it was Taiichi Ohno. So this famous kind of Japanese guy that ran Toyota right after the Second World War. And he invented the pole system, right, a famous cabin system, he invented it because he had no space. So he couldn’t put inventory in the plant because he had no space, right? So it had to come at the right time, in order for this thing to work. And because all the materials were so scarce after the Second World War, like he had to invent it, right. But what he invented by his genius was this, like, he took a step back after he created the Kanban system, which was a manufacturing poor system, which is now popular everywhere. But he then reflected about his career. And then he wrote this paper basically says, There’s seven sources of waste in manufacturing. And nobody’s ever found an eighth one. Which is pretty cool, right? I mean, you just think about that. And so I’ll give you the two examples that are very easy. Rework is a source of waste, right? If you’re doing anything, rework is waste. So less inferior. Inventory is waste, because it’s in between, right? So it’s waste. And let me give you like a more extreme one. Movement is waste, because movement has no value. And so once you live in that world for long enough, then you see waste everywhere. Yes. And then your toaster moves because the bread is on the wrong side of the pantry behind your bread, and it just flows into the toaster and flows to the butter. And but I think you’re right, I think that, again, as managers, our job is to, obviously excite our teams, right, motivate them, make it like I always say to people, I have this golden rule, I only want to work with people that walk into the office with a bounce in their step. And if you don’t have a bounce in your step, you got to come and see me because we got to fix it. But our job is to like as a manager, part of your job is to push the probe to test because that’s your job. But part of it is to take out the roadblocks for these people that are working with you and for you and make sure that they can be incredibly productive.

Aydin Mirzaee (Fellow.app)  34:28

So on this seven sources of waste, what I find is that many there many business books, leadership books, and a lot of them regurgitate things that if you go to the source, and just focus on reading the source, you’ll save yourself from reading maybe 200 other books that have pieces of it. I actually haven’t heard of this paper. So is it like the sort of thing that anybody can read?

Patrick Pichette (Inovia)  34:50

It’s a small book. It’s an easy read. It’s an old book, like from the 1970s because it’s when he retired,

Aydin Mirzaee (Fellow.app)  34:57

and yeah, we’ll look it up and put it in the in the shownotes, for sure it’s a really small

Patrick Pichette (Inovia)  35:01

and you should know that he got his inspiration because before making cars, Toyota made looms, and fabric. And so this guy was all about kind of like making stuff. I mean, it’s just very Japanese, right? So it’s down. It’s like super cool. So it’s like a combination of a memoir, and a little kind of white paper on the sources of waste. So it’s

Aydin Mirzaee (Fellow.app)  35:23

I know what I’m doing this weekend, so that’s good.

Patrick Pichette (Inovia)  35:26

It’s a pretty dry book, actually. But I love it, because it kind of opened my mind. Yeah, again, learning agenda, right.

Aydin Mirzaee (Fellow.app)  35:32

100%. Okay, so we’ve talked about a lot of different things I did want to quickly touch on just because I know a lot of people would love to hear some information about this, or some learnings from it. You kind of referenced it, you were, you know, Chairman, at Twitter, you had this deal where you sold the company to Elon Musk during that time. And, you know, obviously, very high stakes, also public lots of things going on. And then you have a company that’s running in the background and people doing work. And all this stuff isn’t out in the open. And what are some lessons that you learned in that process?

Patrick Pichette (Inovia)  36:09

Let me tell you the biggest lesson I learned from this process. Let me start with the end game, which is Twitter was a C Corp, Delaware corporation, right? And in the end, that’s what sealed its fate. So let me give you an example. Imagine a continuum. At one end, you have Wikipedia, and at the other end, you have a company like Tinder or Candy Crush, all right, you’d never want to make Wikipedia, a for profit organization. And Tinder or Candy Crush is 100%. They make no bones about it. I just want to make money, right? Yes, I want to entertain people. But at the end of the day, I’m profit maximizing. And so the issue is, that’s a continuum. It’s not a binary. And some companies are closer to nonprofit. And some companies are closer to what I call a traditional C Corp. Right? A Delaware Corp. The issue with Twitter is, it was actually in the middle. It was both a for profit company, right? And could make profits. But it’s also a public utility. It’s the Townsquare. It’s a nonprofit, it serves the all the marginalized, right? It had all these other objectives and missions that were not for profit. And where Jack Dorsey and I agree, is that and he did an article last year and what he made that said, the fundamental mistake that he did at Twitter is to build it as a corporation, meaning a C Corp. And by being a C Corp, it was screwed. Because when somebody shows up and wants to buy your company, as a Delaware corporation, if I’m a director, which I was, my only fiduciary obligation is to the shareholders, I can throw everybody else under the bus, it doesn’t matter. If somebody shows up and says I want to pay 44 billion for your company. And all the shareholders say, great idea. My fiduciary obligation is to sell that company to that person. And if it had been some other even more

Aydin Mirzaee (Fellow.app)  38:12

kind of controversial figure

Patrick Pichette (Inovia)  38:15

and and controversial person, I would have had to sell it. And the biggest lesson of Twitter is when you start your company, be thoughtful about what you want to be when you grow up, and set yourself up in a corporate structure that enable you to be truly who you want to be. So the best example I have for that in today’s world is Yvon Chouinard, Patagonia. Never went public, and then created a foundation and gave his company into the foundation and the foundation’s profit serves only environmental purposes. So a little bit radical, you’ll tell me, but he’s not he never got trapped in the C Corp, the Delaware corp, right. And he actually was before he did that he was the first company in California to be incorporated as a B Corp. And what the benefit of B corps or the equivalent is you can be a C Corp, but you can staple on your C Corp to say, Yes, I know I’m for profit. But here are the other things I want to do with my company. And when you incorporate and your shareholders invest, they know that you’re going to do these other things. If you want to take 1% of your profits to do whatever, you can do that. So just be thoughtful about where you are on this continuum and organize your corporate structure from the get go in the right way. So that 5-10 years from now, when you have an incredibly successful company, you don’t have you know, Elliott Management or other kind of shareholder activists breathing down your neck because you’re a C Corp and you’re not maximizing shareholder value.

Aydin Mirzaee (Fellow.app)  39:40

Yeah, and I think it just goes back to also what you started with, which is, you know, have the goal in mind and a very clear goal and your if your goal is murky or in between two extremes, then it can cause problems. So I think that lesson resonates in a lot of other places as well. Patrick, this has been an incredible conversation, we’ve talked about so many different things, talking about investing in your people. What makes a great team, including having a goal diversity, having the right amount of processes, we went down the rabbit hole of routines being the Tao of management and how it incorporates into personal life, seven sources of waste, and we even had a chance to talk about Twitter’s acquisition. So very wide ranging lots of great lessons. The question that we always like to end on is for all the managers and leaders constantly looking to get better at their craft, are there any tips, tricks, or final words of wisdom that you would leave them with?

Patrick Pichette (Inovia)  40:38

I think one we’re going to talk about, which is really important. If you’re a startup person, and you’re starting your company, you have an opportunity to have diversity in your team from the get go, that you have to capture immediately. And let me be very specific, the minute that you’re 150 employees, if you’re 70%, or 75%, men, you’ll never get out of your hole, you will never be the company, you should be for diversity. And people don’t understand that. And by the time they figure it out, they’re 400 employees, or 350 Man, or 50, woman order engineering team looks like that. And they’re doomed, they will never be the kind of company I’d want them to be, which is the diverse company that we want to be today. And so that’s a key lesson that I learned clearly, when I was at Google, because by the time we tried to actually figure it out, we were big enough that it was too late. Now you can only do damage control and try to work over a decade to try to compensate a little bit, but you can never solve it. So diversity really matters in all dimensions, right? I mean, I’ve just used a woman man thing, but you get the point, I think that just be thoughtful about that you owe it to yourself, you owe it to your organization, you are to the benefit of diversity to do that. So that’s one piece. The other piece is just like I started this podcast with you, you’re never too old to get a good mentor, get a good mentor, get somebody who’s not a coach, a coach is different. They’ll teach you how here’s how you hold your racket. And now you can do whatever you want to mentor somebody who is separated from You, who knows you well, who will not judge you who will be genuinely helpful, who care about you, and who sees what you should be 10 years from now, and help you on the way, getting a mentor is extraordinarily powerful. I’ve benefited from it. I still do today. And that guy that I told you that helped me at McKinsey. I’m 60 years old. He’s still a close friend to this day.

Aydin Mirzaee (Fellow.app)  42:31

That’s awesome. That’s great advice and a great place to end it. Patrick, thanks so much for doing this.

Patrick Pichette (Inovia)  42:36

My pleasure. Thank you for the opportunity.