As Founder of Farnam Street, Shane Parrish talks about leaders’ tendencies to ignore positive outcomes and focus on the negative ones, being receptive to feedback, and the important concepts of “living life backwards,” and “outcome over ego.”
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CLAIRE: Hi, everyone. I’m Claire Lew and I’m the CEO of Know Your Team, software that helps managers avoid becoming a bad boss. I am truly thrilled to have today on The Heartbeat someone who is usually on the other side of the podcast table admittedly, but someone who I have looked up to and listened to and respected his work for years. And so today, I have Shane Parrish who is the Founder and Owner of Farnam Street, which is this amazing online resource where he has this podcast called The Knowledge Project where he interviews literally the top and brightest minds in the entire resources all about helping you make better decisions in your life. I know I’ve leaned on it tremendously. I don’t even know if you know this, Shane, your book recommendations, I very regularly go through and sort of compare notes to see, “Oh, of course. Yeah, absolutely.”
And the reason I particularly was so excited, Shane, to have you on the podcast is because I’ve been asking people who I respect and admire this one question about leadership. And I’d asked you beforehand if you wanted to know the question before or just live, and you said live.
SHANE: All right, give it to me.
CLAIRE: So, we’ll see if you picked your poison well – no, it’s all good!
CLAIRE: Hopefully, it’s not that scary. No, it’s totally not that scary of a question. But the question I had was, what’s one thing, or it could be several things, that you wish you would’ve learned earlier as a leader?
SHANE: Oh, this is so topical. Somebody recently in the past two weeks just pointed out a huge blind spot to me in my leadership, which I wish I would’ve known sooner.
And so my tendency with things is to just cut through and pick at the problems so when people come to me and they’ll be like, “We did all of these 10 exciting things, and here’s this one thing that is sort of not going 100% or not working,” I always gravitate towards that one thing and ignore everything that is positive. And for me, I don’t think in those terms. So, when people say something positive about the work that we do or something, I hear it and I listen to it and I appreciate it, but it sort of doesn’t sit or resonate with me. For me, it’s always like we can do so much better, and I’m always grabbing on to what we can do better instead of where we are. And so, I had somebody come and point out to me recently that I’m always like this. And I was like, “I had no idea. I thought everybody was like this.” And they’re like, “No, we’re telling you these 10 things because we want you to be aware of them and be excited about them.” And it’s like, “Oh yeah, but this 11th thing, we could be doing so much better on this one thing.” And so, that’s been a huge blind spot that I’ve had up until two weeks ago.
And now I’m sort of struggling a little bit to address it where I’m trying to make positive comments to people in a way that is genuine to who I am and what I think. And also sort of acknowledging the work that we’ve done well while being respectful of the fact that I still think there’s a gap between what we’re doing and what we could be doing or all the room for improvement that we have. It’s kind of funny to watch actually at this point. It’s a little awkward, but that’s where I’m at. I mean, it’s just been a big blind spot to me because of the way and the teams that I’ve managed, I’ve always been so operational and we’re doing a little bit different thing with Farnam Street. But my previous career, everything was driven by operations. So it’s always the next operation. It’s always the next problem. It’s always like troubleshooting and always fixing problems. And now, I’m sort of trying to step back from that and reevaluate myself as a leader. And I don’t think I’m a very good leader at all. And this is one of the reasons why. Like this is a huge blind spot and I was so unaware of it until a couple weeks ago.
CLAIRE: Thank you so much for being so candid about something that happened so recently. I feel like a lot of times, and you may have experienced this in the folks that you get to interview, you ask them about something that they learn and it’s something where it’s far enough away where there’s enough emotional distance where you say, “Oh yes, this is this thing that happened and it was resolved and I did the personal work.” And this is so raw. This is fresh.
SHANE: I know, and I’m struggling through this. Part of the reason I bring it up is like rubbing my nose in it a little bit and talking about it and not only being vulnerable with it because I think that that’s part of the way that we sort of acknowledge where we’re at, where we want to be and the difference between and how to get there to ourselves. But also, I think that it’s real for me and it’s not something I can sort of absolve myself from. “Hey, when I was 21 and I first took over a team, and this thing happened, but now I’m amazing and great.” It’s like, “I’m not.” There’s a messy process that we’re all sort of going through at all stages in life or maybe I just am and everybody else has everything figured out. And I’m the one walking around going, “Am I the only one that is going through this?”
CLAIRE: You know you’re not the only one. My God! I guess someone who does this for a living and asks this question literally for a living, you are not the only one. I think what’s fascinating about it, there’s like a few levels I want to dive into. One is I think just even sort of the historical context of this question, given your background, so what some folks might not know before you had a site that was read by hundreds and thousands of people following it and hundreds of thousands of downloads on your podcast. You worked for the Canadian National Security agency essentially. Essentially, what’s the equivalent of the NSA here in the US?
SHANE: I’m not really allowed to say where I worked, but I did work for a three-letter agency.
CLAIRE: Okay. Everyone’s going to connect the dots here, right?
CLAIRE: And I can only imagine I’m projecting here and all sort of give you some holes here so you don’t have to sort of self incriminate, but that I can only imagine that in an environment like that, the attention to the things that could possibly go wrong far as outnumbers any sort of attention or lifting up of, “Oh, here are the things that are going well.” So in many ways, just sort of even past experiences, and this is just based on assumption, based off what you’re sharing is wiring you and you’re getting positive feedback about, “No, those are the things as a leader that you need to be pointing out and that if you don’t, who’s going to?” And yeah, ten things can be going right but the 11th thing, that’s the thing that matters.
SHANE: Yeah. And the expectation is sort of like that you do your job and that is your job. And so like, where we’re not doing our job or where the room for improvement and somebody put this to me the other day too, they said, it’s like, “You’re the coach on the football team and the receiver catches a touchdown and you don’t get excited because you’re like, they’re supposed to catch the touchdown. That’s their job. They’re a receiver.” The ball’s thrown. It’s in the air and they caught it and that’s what they’re supposed to do. And it’s like, “Well, you’re that coach.” And I’m like, “Oh, man.” It hit me. Obviously, it’s still with me. But yeah, I mean, I come from a very operational background. There was no shortage of work. I started two weeks before September 11th. The world changed right after that. And I didn’t really get a break for 15 years. It was always the next thing. But that got me where I am, but it’s not going to get me where I want to go. It had served me, but now it’s sort of like not serving me if you want to think about it. And now, it’s hindering me and hindering what we can do with Farnam Street and what we can do with The Knowledge Project.
CLAIRE: I think your awareness around this is really profound because I’m personally guilty of this myself, which is that oftentimes as leaders when we receive a piece of feedback, the degree to which we accept that it’s true might be there. We might go, “Oh, yeah. No, that’s true.” But oftentimes, and again, I’m just totally guilty of this myself, we say, “But that might be true, but I have to do that because it’s in service of the way we have to run the team. If I didn’t point that 11th thing out…” So, it becomes this really interesting double-edged sword where it’s like the things that people might not like or hate me for as a leader, but I also feel like are the things that help us make progress. To what extent do I compromise on those things? And I think the most interesting sort of aha moment or sorry, let me pause on that. So I think what oftentimes happens because of that is it’s very easy to justify and continue sort of making the “mistake” over and over. You go, “Oh yeah, people are going to like it. But who else is going to do it? I don’t know any other way and this is how I’m wired and look where it’s gotten us here.” And so, you can sort of self-justify. And what I think is so remarkable about what you’re pointing out though is, to your point, if you want to elevate where your performance is going to be, what that outcome is going to be, something has to change. And to whatever degree, like you think it’s true that it’s helpful, someone else is thinking it’s not. And that takes a real degree of awareness, truly.
SHANE: The world gives us feedback, and whether we’re receptive to it or not is totally up to us. And sometimes it’s false feedback and sometimes you have to sort of be like, “I understand what you’re saying and that doesn’t apply in this situation,” and be honest with yourself about whether it does or doesn’t. And sometimes, in this case, I’m like, “You know what? You’re absolutely right.” It wasn’t a 180 degree turn on the spot, but it probably took 24 hours. And it was like, “I think you’re right. I think what I’m doing is getting in the way of where we want to go and help me correct it now. You pointed it out. So now call me on it. I want to get better at it.” I have a question for you because I’m used to asking questions.
CLAIRE: Please, yeah. Like, “This isn’t what I’m usually doing.”
SHANE: What’s the most recent piece of feedback you’ve gotten that sort of hit you and was like, “Oh man. Yeah.”
CLAIRE: Yeah, that’s, something that happened. I took a big vacation at the end of November. The first I’d done in like years where I’m truly unplugged. And right before I went, I had a one-on-one with our Operations Manager who’s only been with us for six months. She’s brilliant. She wears a ton of different hats. She even started — because she’s actually such an excellent writer. Our Operations Manager started writing pieces for our blog.
SHANE: That’s awesome.
CLAIRE: And I’ve been the only writer for our blog for years. So, a lot of potential. And there’s sort of been a reason I’ve been the only person writing on our blog for years. I have a tendency to have a really high standard for what we’re putting out content-wise. And if what really makes us different as Know Your Team is that content, then okay, there’s a certain bar I see. And so, the piece of feedback that she gave me was, “Claire, I so appreciate all the feedback that you’re giving me about my writing. But at the same time, there’s one post where it’s like you literally rewrote 60% of it.”
CLAIRE: And I was like, “Oh my gosh, right.” I did. Like I wasn’t playing editor anymore. I literally took off that hat and was just like, “It’s not how I would have written it.” And the problem with that is that it’s her piece. That’s the whole point. She’s the writer, I’m not the writer in this role and my role has changed. This piece needs to be exactly how I would have written it about this specific subject. It needs to be her voice. It was hilarious. I went back and looked and I was like, “Oh my God.” I would take the same sentence but just change it in the way I would have written it. Just like so cringe-worthy.
SHANE: It’s the exact same meaning, but it makes more sense to you.
CLAIRE: Yeah. It’s just the way I would have written it. And it was a hard thing to receive in the sense that, I mean, it’s hilarious when you sort of study leadership for a living and then you actually have to practice it and to notice where the alignment and the cognitive dissonance happens. And so, it was so interesting to in so many ways be so consistent around, enabling people to do their best work. You can’t do the work themselves. There’s so many times where that lesson has been reiterated for me where I practice that really well. And yet in this specific situation, a very specific domain that I had owned for years, I wasn’t able to hold true to that. And so, that was my blind spot there.
SHANE: But you were able to learn from it with the feedback and that’s what I think separates people who sort of stay in the same spot. It doesn’t matter their outwardly success, but they stay in the same spot from people who sort of go forward and get better and adapt more to what’s happening. That’s an example also of a very scalable thing. I have friends right now who run businesses and you can see it from the outside looking in. It’s easy to see because you’re not part of that day-to-day system. And you’re like, “What you’re doing is just not going to scale. It’s not going to get you where you want to go because you’re too focused on certain things that you can’t scale.” And you have to eventually trust other people, but they don’t want to invest the time to trust the other people because that’s a huge upfront time commitment. And they’re like, “We’re so busy. It’s just easier if I do it myself.” But they wake up six months from now and they’re in the exact same spot. And often, they have extra employees that they’re doing it for now. And it’s like, “Why does anybody work for you? You just do it all.”
CLAIRE: What’s the point?
SHANE: Yeah. But it’s like, “You’re stressed out. They’re not stressed out. You’re stressed out. They’re probably not happy because they feel like they’re not growing and they’re not learning from you. Here’s this remarkable opportunity to work with somebody who’s world-class on this really cool project and grow this company and you’re not even giving them that.” And it’s sort of like, it’s really hard to do that because you’re in the system, you don’t see it. You just see like, “We got to get this done by tomorrow and it needs to look a certain way. And I care.” And that’s the other thing. It’s because you care that you’re like, “I’m going to reword that sentence.” It’s because you’re so attuned to the detail and the brand and the message you want to send. So, it’s all positive things, but they lead to sort of like a negative long term outcome.
CLAIRE: Absolutely. And it’s so easy to get so obsessive and so zoomed in on just what those short term signals are and be like, “Ah! Ah!” And not understand. Okay, big picture. Long term. You’re so blind to that view. One thing I wanted to sort of jump back to that you touched on was just this idea, you had asked me like, what was the piece of feedback recently, or similarly, I’d received something hard. And what I find so interesting is when you dive into why certain pieces of feedback are harder to receive than others, and what are times where it’s easy to kind of roll it off your shoulder and what are times when you actually do take action.
CLAIRE: [Laughs] And it’s interesting, we study the subjects a lot and there tend to be sort of three different categories of triggers that people have around feedback. So one is a truth-trigger. So like when something’s real and like truthful, we go, “Oh shit. I’m a perfectionist and I really don’t want to do that because that just means I’m wrong.” You don’t like being wrong. So there’s truth triggers. There’s relationship triggers depending on the person who told us. We’ll receive the feedback in a certain way. So for example, for your piece of feedback, someone you were able to receive that likely because you had some sort of rapport with the person where you know they’re not just out to get you or they’re trying to throw you out of the bus or whatever. And the same thing with our Operations Manager in my case. And then the last, and this is the hardest one and this is why for me, the piece of feedback I received, I was like, “Ohhhh!” That feeling was an identity trigger is that you can fight your sense of self with your behavior. And so when something does not line up, just like, “Who am I? How can I do that?”
SHANE: Does ego also fall for you in that identity center? Because to me, I find myself when I’m instinctively defensive about feedback, it’s always feedback that’s confronting my worldview of myself in an area I care about. So if somebody’s telling me that I’m not treating people in the way that I — I think I treat people really well. So the minute somebody says even anything, I’m hypersensitive to it. And I just find myself getting really defensive and then you start mentally coming up with this list. “What do you mean I don’t treat people well? Look at all these things that I do for them.” You sort of lose track of the feedback at the moment and you lose track of the fact that it could be right, it might be wrong too. But either way, that person is able to control your response. And I always find that interesting too, where if it’s somebody who’s friendly to you, that’s a different story. But if it’s somebody who’s not, now they know how to trigger me. And if that’s also a really weird sort of bit of feedback when you walk away from it and it’s like any given day they can make me upset. Why am I giving them this power to do this? Not everybody is out there to be your friend and some people abuse those things when they know it’s a button for you.
CLAIRE: Absolutely. No, I think to your point, it’s when someone sort of touches this nerve of yes, your worldview is wrong or not what you say it is and it’s an area that I care about. Absolutely. I share this story actually quite often in some of the workshops that we lead around feedback where the hardest piece of feedback I’ve ever received was about, I still remember it was like 10 years ago, and it was someone who I was trying to do a partnership with and she actually called me up to say, “Claire, could I offer you some feedback?” I didn’t know her well at all. I was like, “Oh yeah, sure.” She goes, “You come across as fake to me.”
SHANE: Oh, really?
CLAIRE: She told me. Oh yeah.
SHANE: Oh, that would be so hard.
CLAIRE: I was on the phone because she couldn’t see my facial reaction and the color dropping from my face. First, it was just anger and then it was surprise, and then it was sadness. All the waves of emotion in like a ten-second span. Luckily what I did is, and this is part of the framework that we teach is, you actually just have to buy yourself some time to sort of emotionally calibrate when that happens. Take a few seconds. One, assuming some positive intent. Why would she ever say…? I don’t know. There’s no reason she would ever offer that because she’s not going to gain anything from that. So just assuming that she actually wants to help. And two, whether or not I believe that it’s true, in what ways can I accept it and actually take some sort of action on it. So I told her, I actually said thank you. I was like, “I’m going to think really hard about what you mean by that and reflect on my actions and see what I can do moving forward.” And she had said it was because there were a few emails that I had responded in a way where she thought it didn’t feel authentic, and it was funny. I said, “I would go back and I would read the emails.” In complete honesty, they were fine. But you have to balance that with. It doesn’t matter if it’s true for me, it’s what’s true to her. And I think the most beautiful thing that came out of that is you can sure bet, after that one interaction, everything that I do, I try so hard to make sure that that is never even close to a piece of feedback that someone could give me. But it hit home for me. Because that’s like the last thing I would ever want someone to tell me.
SHANE: It’s confronting your identity of yourself in a lot of ways. And we all, like we’re not perfect. I mean, there’s all instances where we inadvertently do something that we don’t intend to do to other people or you just sort of not your best self that particular day. And it’s also acknowledging that you can’t always be 100% on and sometimes you’re sending a rush email and it’s like 2:00 AM and you’re like, “Cut me some slack, I’m awake at 2:00 AM. I woke up with this list of things to do in my head.” I see it from both perspectives. I see it from the perspective of somebody who wakes up at 2:00 AM because I do that occasionally when I’m super busy and I’m rushing to do stuff and trying to go really fast. And we forget the difference between speed and velocity sometimes where we’re running really fast but we’re just going in circles where we’re impacting the people around us. And if we want to go with other people in a direction, we need velocity. And velocity might mean slowing down to go faster and farther over the long term.
SHANE: Yeah, I hear you.
CLAIRE: It was such an important line. Literally, I still remember it 10 years later. It’s so funny how something like that can stick with you.
SHANE: Did you circle back to her after?
CLAIRE: Oh, yeah. It was beautiful and brilliant because we ended up doing business together.
SHANE: Oh, awesome. Okay.
CLAIRE: And she was like, “I really appreciate the way you received that.” And we stayed in contact. It’s possibly the best-case scenario for something like that to turn out. But I think the biggest learning I had was just the degree to which that affected me and the way that it clashed with, as you were saying, my worldview of myself. I truly have thousands of questions to ask you, Shane, mainly because, here’s the thing. You literally have spent your working life studying mental models and this idea that a huge reason why there exists any sort of gap in understanding about any singular subject is not necessarily the lack of knowledge but the lack of available sort of collective situations and scenarios and patterns and possibilities of what could be. And the reason I find it so compelling and why I follow your work so much is when it comes to leadership, I feel like that problem, it’s exacerbated. So we, as leaders, have such a hard time figuring out how to be good. Not because we don’t know what the right thing is to do, but it’s because we’re usually not exposed to sort of the library of situations or possible things. Like we don’t know that “Oh, because this person has this personality disposition or because this is happening in the market or because I have five team members and not 15 or because I come across like this, I should be holding myself and conducting my actions in a completely different way versus if the team are 50 or versus if marketing conditions were different.” We lack that sort of set of stories. And so what we’ve tried really hard to do here in Know Your Team is just getting those frameworks out there and share with people. Not like this is the one way. But this is the possible set of things and here’s how to sort of try to distill that.
SHANE: It’s almost like you’re trying to build a repository of ideas in people’s head that they can pull out and try to pattern match to a certain situation and be like, “In this situation, this might not be the only way to handle this or the best way. But now I have a baseline, which is better than my previous baseline because I have an example and it’s vivid and I can sort of talk about it. And now I have fewer blind spots as a result of that.”
CLAIRE: Yes, exactly. And I feel like I was saying, you’ve literally spent your working life studying this on a broader level, mental models sort of across all industries. Whether it’s around science or economics or even love. And I know you’ve had folks who’ve talked about even — you had one incredible person recently who talked about mental models around leadership [crosstalk], Dr. Berger.
SHANE: Or was it?
CLAIRE: And him as well, yeah. You’ve had a few. And then you’ve had Jim Collins recently on the podcast who wrote Good to Great. And so, as sort of the person who has been sort of collecting all these conversations, and this is a really open question. What are things that have been surprising to you? What are sort of pieces where you’ve assembled and sort of put into your own leadership perspective, things that had stood out to you in those conversations?
SHANE: I think where I’m starting at this point, and I’m just at the beginning of this, which is we released 70 or 71 episodes, now I forget, over three and a half years. We’re biweekly now. But at the start, it was like once every three months. And what I’m starting to notice is ideas that people are talking about in different vocabulary. So we’re hitting on timeless sort of themes, if you will, or meta mental models if you want to, where different people have different ways of talking about them. But I think we’re fundamentally, and again, I haven’t deep dove into this yet, but I feel it when I’m talking to them. I’m like, “Oh, that’s like this and this and this.” And now it’s starting to be like, “Maybe we can pull those ideas out and we can create a set of metamodels for people to think about.” Just to go back to mental models for a second, the way that I thought about this, which is probably incorrect, but I went to school and then I did a Computer Science degree. And then I met and led people and then I did an MBA. But when I was doing a Computer Science degree, I was learning how to program computers. And I found myself, I don’t know, six months later or something, leading a team of people. And all these ones and zeros that I had learned in school were still super valuable because it was still doing work. But now I had to manage psychology and dynamics and I didn’t know a whole bunch of it. My education was very specialized in writing computer code and that’s what I wanted to do and that’s what I thought I wanted to do. And then the world changed and I had to adapt to the new world, but I didn’t know about all these other disciplines. And when we think of the education system, it’s increasingly specializing in a way. You’re going to get a business degree and why do you want to do that? It’s because the cost of the company to integrate you into the company and get it up to a baseline speed is really low. And so, they want the universities to specialize. But as a person that creates blind spots in all of these subjects that we don’t sort of know the big ideas from. Like, how effective are you going to be at anything if you don’t understand psychology? But not many of us do Psych majors or a lot of us don’t even do Psych 101. And the Psych 101 we do cover is not necessarily the psychology you need to understand people or living or marketing or any of that stuff.
And so, I think we started out with this project, we call it The Great Mental Model series. We have 109 listed on the website and we’re just writing the big ideas you should have learned in school. And we’re just going to iterate over them. We’re not connecting them at this point, but the world is connected.
But the reason we’re not connecting them is because we want people to connect them themselves. And if they connect them themselves, it’s going to be much stronger. But phase two of the project is sort of like we’ll connect them for you and then we’ll draw these metamodels out of them. Like time would be an example of a metamodel. It affects a whole bunch of things from compounding to relationships. And so when you start thinking about these core ideas, it’s like, “Nobody’s ever taught us about time and how it impacts all of these different things.” Are we compounding the relationships that we’re having with people? There’s four permutations of a relationship that you can get into with somebody. It’s win-win, win-lose, lose-lose or lose-win. But only one of those is going to survive over time. And that’s win-win. But win-win in the moment is not really what we’re taught in school when I did my MBA, they’re like, “Wring out every nickel from the supplier you can.” And it’s like, “Well, that works in the short term.”
SHANE: And tell that supplier, like we’ve all been on the other end of this. And we want out of that relationship. So the minute they could walk away from us, now they’re going to leave us high and dry. Or maybe there’s a crisis and they’re never going to support us through that crisis because we’ve treated them so poorly. And so you’ve taken yourself off survivability. And then if we map our understanding of compounding, which also applies across time, we know that most of the gains to compounding occur at the end of a relationship, not at the beginning. And so we naturally just take ourselves off of these very principles, timeless unchanging ideas. And we do it unintentionally because we’re trying to optimize for the moment. And that’s what school taught us. And I think that we’re just trying to open up everybody’s ideas or everybody’s mind too. There’s a broader world out there and we’re not prescribing anything. There’s nothing on Farnam Street that is like four quick ways to get ahead or get a promotion.
CLAIRE: No, you’re not. You’re not doing that.
SHANE: We want to help you think better. We want to help you. But you thinking better is not me telling you how to think because that’s never going to work. And that’s a dependency relationship where you’re dependent on us for the answers. And that’s not going to help serve anybody. But if we can give you better ideas or better software, if you want to think of it in terms of better apps in your head, you’ll be able to pick and choose similar to what you’re doing with leadership stories. You’ll have a repository of knowledge where you can think through problems from multiple perspectives. And if you think about why people are so busy today in organizations, I would say most of the organizations that we’ve done work with, it’s because of poor initial decisions. They’re trying to go too fast too quickly and a lot of their time is just spent correcting those decisions.
I didn’t communicate it in the right way. So now somebody went off and did a whole week’s worth of work in the wrong direction. And whose fault is that? Well, it’s really easy to blame them, but often the fault is on you. And then you didn’t check-in and that little five minutes that you thought you were too busy for has now cost a week’s worth of work for somebody else and sort of damaged your relationship. And it’s just those little things where everybody’s taught to go fast, but we really want to go far. And sometimes there are different things. In business school, you’re taught to value-efficient over effective, but we really want effective. And that sometimes, it’s not efficient. What’s effective long term is not having a whole bunch of debt on your balance sheet. What’s really efficient short term is having a whole bunch of debt, but then you can’t survive across time. And so we’re not integrating these ideas because each domain has their own way of looking at them and we just want people to sort of be aware of the other ones and find ways to integrate them themselves. And hopefully, we’re doing an okay job with that. But like I said earlier, we can do better.
CLAIRE: Shane, there’s so much there that is absolute gold. Actually very specific to sort of, okay, you’re sort of stuffing out almost these meta mental models. I mean I think even — as you mentioned like time being such an interesting sort of access is which as leaders we are kind of ignorant to. And I think it makes me sort of pose two things. Actually, we’ll just start with the first, which is, why do you think for leaders, in particular, it’s so easy to ignore the long term in favor of short term gains? What is it about leadership in particular?
SHANE: Think of the mismatch between just most companies. I mean, let’s exclude owner-operated companies for the time being and just think about public market companies or something. The timeline, I would imagine, I don’t know the stats off the top of my head, but the average duration of a CEO is probably three to five years max.
CLAIRE: Yeah, I agree on that.
SHANE: And then the shareholders, what’s the average duration of a shareholder? We’re probably down to like days, but let’s say years. A couple of years. And so you have this mismatch, right? Shareholders care about the next two years. The leadership then thus has to care about the next two years. But even without that, they’d probably care about the next five years because they know that they’re going to be gone. Whereas if you have private companies, you can actually do things differently. That doesn’t mean you’re doing them better, but you can definitely do them differently and differently could be, you can take a 50-year view, you can take a hundred-year view and you can optimize for that versus trying to optimize — and you have to have like a successful business because you have to not worry about payroll and survival, but then you can start making decisions. And the really interesting thing about that is if you think about it, it’s hard for competitors to do that because they have different pressures and you know what they’re taught in schools, so you can sort of use that to your advantage and play a different game than everybody else. Or it’s like, “Oh, we’re going to do something. We know you can’t copy us because we know it’s going to take a lot of resources and it’s not going to pay off for five years.” And at five years, it might pay off really big and it might actually not payout, but we’re not risking the company a lot. And so you can take those bets where your competitor will never do it.
I mean, there’s lots of different ways to think about how time affects the decisions that people make. And if you’re near the end of your career — we went through this where I used to work where we did all these handoffs between knowledge, handoffs between people — and the people towards the end of their career weren’t really excited to pass over a lot of the information. They’re winding down, they’re going to the retirement planning. They’re sort of like trying to figure out their next step in life. And you have these younger people who are really keen to learn and you sort of have this mismatch and timelines. It’s like you only have a couple of months to tell me everything that you know. And you’re also preoccupied doing something else during that time. And so time mismatches, like a huge [crosstalk] and it affects relationships with people. It affects dating, it affects marriages. It affects not only sort of like running a business, but you might have different ideas of what life looks like over time. One person might want to work really hard for the next five years and try to make a lot of money and then sort of kickback back and the other person might be like, “I want to work less hard over 25 years and I’ll be just as happy.” And then you have this mismatch in terms of timing and sequencing.
CLAIRE: Absolutely. I love that. It causes me to, actually even personally as a CEO, reflect instead of this idea of trying to get somewhere as quickly, to your point, as efficiently as possible. I mean, even questioning where. Not even how far, but like, where am I trying to go? It’s so interesting in the coaching that we’ve done, in the workshops we run, and all the conversations that I have with leaders, it’s this almost like artificial urgency. Like a myriad of different reasons and influences that’s like sort of that pressure cooker. But this question of where am I trying to — I actually think, I remember actually in a podcast that you had done with Jim Collins, I think he had asked or post the question or the question came up of what is the truth in your ambition? Just really figuring like, where are you trying to go? And to your point, when you figure out where that is, then you can align everything on a timescale where it fits, where it does match. And you can’t match it perfectly. People have their own personal timelines for where they would even be within their own career. And that might not match up with your long term view of where you want the organization to be.
SHANE: Just think of your life. We’re living life forward, but in reality, you should live life backwards. And that means sort of like pitching yourself at 90 and sitting on a park bench and it’s like, “What does my life look like? How have I treated the people in it? What matters to me in this moment?” And then living your life towards that direction versus living your life unconsciously in the best direction for tomorrow. You want to optimize for your life. You don’t want to optimize for tomorrow. And those things, often the decisions are the same, but often they’re very different. What’s going to matter to you towards the end of your life isn’t probably what matters to you tomorrow. But what matters to you tomorrow, it can affect the end of your life. So you have to sort of live with the end in mind. I think that was like Stephen Covey had said that. We sort of call it living backwards.
CLAIRE: Yeah, I love that framing of it.
SHANE: You have to let the hindsight of your 90-year old self become your foresight today and then make choices with that in mind. And it means you’re probably going to go home and spend more time with your family or you’re going to take time to celebrate little milestones. It changes sort of like how you think.
CLAIRE: Absolutely. And I think it’s funny the sort of unintentional consequence that comes when you put situations in that greater perspective and then that sort of backwards lens of I think you make better decisions. Because you’re not optimizing for, again, sort of that when tomorrow. You are a little bit more thoughtful, you have a little bit more space, you see how they sort of stack up in the long term view. It’s something that your competitors, as you were saying, can’t do as easily. And so, it’s just funny how it actually serves you right to do something that doesn’t always feel like it’s [inaudible] of the beginning.
SHANE: Well, my belief and I mean, is that you live a more meaningful and satisfying life if you live backwards. The flip side of this is like I’m super ambitious and I have a lot of drive and a lot of energy to apply towards problems. And those two things, they’re not necessarily mutually exclusive. It just means keeping in mind where is it you’re trying to go long-term and are you making the decisions today that are going to get you there? One example of this in personal life that I was just talking with a friend about at lunch today was another super ambitious person runs a company with like 75 people. And what’s suffering right now is his relationship with his wife because he’s like, “I’m exhausted. And as Esther would say, like I’m giving her the leftovers. And then after the kids get to bed, I don’t even want to have the talk. I just really want to go to bed.” But he’s not investing today. This is where this comes in. He’s not investing today on what matters to him because he feels like it’s always going to be there. And it’s not always going to be there if you don’t invest in it and it will go away and then you’ll wake up too late realizing that and it’ll immediately hit you. Like, “Man, that that 15 to 20 minutes of connection time that I thought was a chore actually was probably the thing that I’m going to regret not doing because it was so meaningful to where I wanted to be in life. And it doesn’t matter how much money or how successful this company is, that’s what I’m going to hold on to. And that’s what I can change today.” And one of the ways to help people see that is sort of living life backwards.
CLAIRE: I love it. You are giving me such personally a powerful reminder of viewing, not just sort of my role as a CEO, but really personally. And where we want to be in that ultimate view.
SHANE: This is interesting, too. I don’t project my view onto other people, but the way that I see the world is not me as a founder of a company and me as a person, it’s like I have one life, and that life includes all of these things and they have to work — and I don’t think of it in terms of balance. I think of it in terms of harmony.
CLAIRE: Right. Integration.
SHANE: I don’t want to optimize one area of my life at the expense of another area. I only get one life. And so, that life has to work. And if my things at home aren’t good, then the things at work aren’t going to be good. And if my health isn’t good, none of that’s going to be good. So if I’m not doing the things that I need to do in all areas of my life, then maybe I’m optimizing for tomorrow, but I’m definitely not optimizing for sort of 90 years.
CLAIRE: Exactly. And only for a part of the kind of real-life that you want to live, only a slice of it.
SHANE: And your community. One thing that I’ve sort of recently been blind to is my role in the community and what it means to give back and how do I do that? And I think that that’s a part of me that’s been missing. It’s a part of me that I need to feed in terms of I want to do more on that.
CLAIRE: I’m marinating in all of what you shared here, Shane. Thank you so much for being so generous with your time, your thoughts.
SHANE: Oh, thank you.
CLAIRE: I guess the one last thing if I had to ask before we head out here is, you are truly the expert like I was saying on having these conversations with people around assembling ways to be viewing their lives to make better decisions. And through those conversations, is there anything that’s come up where you feel like this is a big myth that needs to be dispelled? Like, “Too many people believe X and I believe Y.”
SHANE: Oh, that’s a big question. I don’t know if I have a really good answer to that on the spot. I think the one that initially comes to mind…
CLAIRE: Yeah, it could be like a pet peeve, like the thing that people say and you’re just like, “I get annoyed by that because it’s…” I’m sorry, I didn’t mean to cut you off of that.
SHANE: I think we’re just over overconfident in ourselves and our view of the world. And I think it annoys, if you want to use that vocabulary then I’ll use your vocabulary because it’s not sort of like how I would think through it, but it annoys me when I catch myself thinking I’ve figured it out or I understand this particular dynamic or area. And it really annoys me when other people sort of do that too. Because what I notice in myself and what I’m projecting I guess is I’m closed to new ideas at that point. I’m closed to somebody improving my understanding, I’m closed to ‘and the world is dynamic’ and everything is interconnected. And the minute that you become a closed system, you eventually die. I think that I want to be an open integrated system and catching myself thinking that, “Oh, I’ve got this figured out.” And so, one of the things we’ve started doing is having different guests on the podcast with completely opposite ideas and exploring the same subjects in a very similar way and trying to be open-minded about not predisposing what I believe or what I think personally because who am I? These people are experts in these respective domains. I have my thinking on relationships, but they’ve counseled thousands of couples successfully, both of them. And in the case of Sue Johnson and Esther Perel, they have very different ways of looking at this situation. Then it’s sort of synthesizing that and coming up with what I think is my tentative view. And after talking with Annie Duke, I actually consciously use this wording, which is like, “You know, I’m 80% certain that my ideas are right in this.” But it’s just that little delta, even if you say you’re 99% certain. And you can talk with people about that and be like, “Hey, I’m pretty certain about this.” But that signals to the other person you’re open to changing your mind and it also primes you to being open to changing your mind. And then the question becomes really interesting, which is like, what would cause you to change your mind? What information would I have to give you for you to know that your view of this situation is not accurate or your model of the world needs upgrading. And so much of that comes back to debugging our [crosstalk].
If you think back to computer science terms, it’s like watching what’s going on in your brain, watching the feedback and going like, “Oh, I just need to update this.” And computers are nonemotional. And so part of the metaphor of debugging is that if you can take the emotions out of it, watch the instructions go by, either in hindsight or real-time, you can update your views of the world. And it doesn’t necessarily have to hit your ego because what you’re optimizing for is the [crosstalk].
One of the phrases that we toss around at Farnam Street is outcome over ego. You want your ego wrapped up in the outcome. You don’t want your ego wrapped up in your view of the world. And this is a lesson that I’ve constantly learned and no doubt I will learn again because I’ll make a mistake somewhere. But when you own a business and you operate a business, it becomes very apparent to you that what matters to you is not that you have all of the ideas or you have your ego wrapped up in coming up with the best idea. You just really want the company to succeed. And that might mean that somebody else has the best idea and you’re happy about that. Not only is it less pressure on you, “Oh great, somebody else has got the best idea,” but it’s also like you can see it in a way that you can’t see it when you’re a knowledge worker. It’s really hard to openly admit that somebody else has a better idea because you view yourself as a knowledge worker. And then if you’re not a knowledge worker and you don’t have the best idea, then what are you? And it sort of seems to make you less. But again, your ego is tied to your view of things and not the view of what’s best for the team, what’s best for the organization.
CLAIRE: Yes, I love that, Shane. Thank you so much for sharing and reminding us all that whatever confidence that we have is just to maybe calibrate it a bit and to see what that reveals and the holes that it creates that are good for us. So, thank you so much for having us on here.
SHANE: Thank you. This was great.
CLAIRE: Yeah, so much fun. And for folks who have not yet, which I find it hard to believe, but if you’ve not yet checked out Farnam Street, The Knowledge Project and Shane’s book, which is a series of books which will be released over time on Amazon, please do so. Such a pleasure to have you on the show. Thank you, Shane.
SHANE: Thank you so much, Claire.