Greg McKeown:
Welcome back, everybody. I’m your host, Greg McKeown, and as I’ve been thinking about you and this theme that we come back to on this podcast all the time about thinking about what’s essential, thinking strategically instead of thinking reactively. It’s almost like I’m taking it for granted, as many people do, that we know how to do that, that we know what it means and how to put it into practice.
In part two of my interview with Rich Horworth, we dig into that. Rich spent years providing strategic planning, coaching, advising, running sessions with corporations and executive teams. But as he was providing executive coaching to one of his clients, they said, well, listen, my bosses said I need to be more strategic, but what does it mean? And that was the beginning of a whole new phase of Rich’s life and his career as he started to think, well, really, what does it mean, and how can we apply some of these tools and frameworks that have become so useful in the enterprise space, in the business environment to help people in their lives?
By the end of this episode, you’ll have a better insight in not only how to be successful in the life of business but also in the business of life. Let’s get to it.
Remember that if you do want to get more out of this episode, go to gregmckeown.com and read the show notes. We’ve selected, carefully, questions and insights that help you to be able to apply the ideas we talk about in today’s episode immediately in your life. That’s gregmckeown.com/podcast.
So creating value, I assumed when you use that phrase, that would mean the discovery of value that is to say to somebody, so let me say, I’m saying to my wife, Anna, what’s disproportionately important to her? Let me understand her better so that I can make sure that whatever I’m doing is relevant to her and that I don’t waste time doing things that are low value add to her or could even have a negative value. My motives can be just as intentional, but I’m working on the wrong stuff. I’ve done that many times with Anna, with the children. I’ve done it in my business too. You’re putting tons of effort into the wrong things or the low-value things. Is that what you mean by create value?
Rich Horwath:
Yes. I think absolutely that’s what I mean by it, and I think also you can get to that through observation. It is not just asking them; it’s observing them. And what I would say is one tool that I use with executives and individuals is called the value mining matrix. In simple terms, the value mining matrix asks us to think about what are the current needs of the people we’re serving. So what are those current needs? And now, let’s break those down and ask ourselves how can we bring them new value with their current needs.
But then the second part of that is what are the problems, issues, or challenges that they have that no one has adequately addressed yet that I potentially could help them with? So what would be my ideas to create value in those two ways? Looking at their current needs and then also the problems, issues, and challenges that I’m observing or that they’re talking about, and how can I bring value in those areas?
Greg McKeown:
Is that second question really just about unmet needs? These are things that are not being adequately met by other people, is that right?
Rich Horwath:
Yes, yes, exactly.
Greg McKeown:
So it’s needs that are being met by different people that maybe I could also meet, but also unmet needs. Nobody is providing this for this person. So if I provide it, then of course there’s no competition for it, but also it’s a totally unmet need. So the value is higher because unmet needs motivate. Is that right?
Rich Horwath:
Yes, that is perfectly said, yes.
Greg McKeown:
Okay. I mean, I understand what the word observe means, but give me more behavioral. I’m watching somebody. How do we observe accurately without asking, which is, I think, what you just said, somebody’s unmet need.
Rich Horwath:
Well, first of all, I think most people are not observing at all. The research shows about 70% of air traffic control mistakes are the fact that they have the data there on the screen, but they didn’t observe it in a way that was actionable. So I would say in our everyday lives, very few people are observing others. Most people are really locked into that mental rut of what’s on my plate and what’s important to me today.
So I would say step one is, are you really observing? Are you really aware of the people around you? And we can get into the whole emotional intelligence piece, but it starts with what’s that awareness mean. And what I would say is give yourself a checklist. Have you observed someone for more than 30 seconds today? That’s part of the checklist. Have you observed someone for 30 seconds? If you have, what were their emotions? What were their needs? What was communicated? That’s number two on the, and number three, what could I do with that? Is there anything actionable out of that? So those are three points of a checklist that I would suggest most of us, including myself, sometimes are not doing.
Greg McKeown:
Yeah, I really like that checklist, that first question of observing somebody for 30 seconds, just shelving your own agenda and really watching somebody, I think it is rare. 30 seconds without just checking your phone. 30 seconds without being stuck in your own head with your own agenda filling, especially if somebody’s extroverted, filling the space with their own words, their own problems, their own concerns about the moment and about the day. So we’ve got that checklist now.
Rich Horwath:
So once we have the checklist, then it gets to what you mentioned a moment ago. It’s the confirmation of my observation. So that involves then the conversation that really is about, here’s what I’m observing, here’s what I’m seeing, and here’s what I’m thinking could be of value to you, but I want to check with you, does this make sense? Are you in this state? Does this truly matter to you? And if it does, do you think these actions would be of help? I think too often we rush to a solution before stepping back to say, what are the alternatives that could be of value? And that involves interaction. It’s not just us coming up with the new value. It’s saying this is the observation. These are the range of things that I think could be of value.
What do you think in business? We run into this case all the time, Greg, and I’m sure you’ve seen it too many managers dump their problems in the laps of their leadership and say, here’s the problem. What should we do? Great leaders want their people to come to them to have the mental muscle to say, here’s the problem; here’s the situation. Here are the five solutions I came up with, and here’s the one I’m recommending. What observations would you have on that situation? So to your point, the second part is really that confirmation through conversation.
Greg McKeown:
Yeah, there are a few places to go with that. One is that I read some really interesting research by Epley, I think is the professor’s name. And according to the research that he ran, he found that you had to get out of perspective guessing and into perspective getting. And I liked that language choice, that actually what’s correlated with better understanding is better asking that you really actually just have to ask them If you want to give somebody a great Christmas present, you have to ask them what they want for Christmas, and that will give you far better data than guessing what they want for Christmas. So it feels like there’s a little magic loss perhaps in that, but you actually just perform better in the end if you ask.
The only concern I have with what you’ve shared so far in this step-by-step process of these three overarching questions is that in relationships, it’s quite a tactical actionable approach rather than a focus on understanding. And so often in relationships, understanding is the thing. There might be a time for action, but there are enormous gains to be had just by genuinely understanding what’s really going on. And that’s because, in a lot of instances, the other person doesn’t understand themselves what is going on. And so if you can create the space to understand with them, everybody has gained this discovery before you take action and then get accused of being reactive even though you’re taking action, an effort to address what you’ve observed. So I’m just wanting to ask about where that is in this process.
Rich Horwath:
I’d like to suggest that understanding is only realized through action. If I truly understand what my wife Anne is going through, then my actions should show that understanding. So maybe she needs a night on her own, and she wants time on her own, or maybe she needs a night to go out with her friends, or maybe she wants a romantic evening with me. If I understand what her needs are, then my actions will dictate one of those courses, and again, through verification. Now, Greg, I’m not always successful. Trust me on that.
Greg McKeown:
I want your wife to come and join the podcast right now because what you just said, I don’t know, but I hypothesized that what you just said is 50% true, which means it’s 50% untrue. It’s like clearly correct action produces obviously all talk, and no action doesn’t help. But it just strikes me as a sort of a certain mindset that says it’s all about the action. And this is precisely the reason I’m raising the question, is that I think there’s an enormous amount to be gained from actual understanding and affirmation and validation of those things that sometimes, excuse me, but I’ll say it this way. I think that stereotypically men move to action rather than understanding, entirely misunderstanding what the real need is. We assume it has to be the action, but actually, it is the understanding. What’s your reaction?
Rich Horwath:
I would say that we definitely don’t do as good a job with understanding, which is one of the reasons I brought up the checklist earlier. But again, I do think action is going to signal to the other person that they’re understood. If we don’t give them the appropriate actions or a range of actions, then that understanding. And again, we go back to I preset this all with the idea that thinking is what we’re missing. We’re missing that isolation, we’re missing that ability to think, to reason, to understand, and that builds into then the action that needs to happen. So I think we’re saying the same things, maybe a little bit differently, and certainly, I’m not a marriage counselor.
Greg McKeown:
We’re not saying the same things. But it doesn’t mean that what you are saying is wrong. I’m not saying that I am right and you are wrong, but I think there is a distinction between action and just understanding precise, deep affirmation about what somebody is really experiencing and really wanting. And this presupposition, which I think is a kind of business orientation, that action and results are the primary value is it means that there’s a book that was written a few years ago, well more than a few years ago, probably 30 years ago. And it was like how to make sure that your business goals don’t wreck your life, something like that. But it was specifically about the way of thinking in business and how it’s different outside of business. And so you can become quite competent in a business environment. And then you get home, and you go, right, well, what we need to do is have a strategic plan, and we’re going to have specific goals, and it’s about action and results. And it’s like, yeah, that’s not going to work here because the whole value set is different. The objective isn’t action and results. The objective is an infinite relationship, and that the relationship goes on and on. So I just wonder about this, even though I think we ought to probably get back to these three questions and how to apply them.
Rich Horwath:
Yeah, one other note, there’s another tool that I’ve used both in business and individuals called the contextual radar. So it’s four areas. If you think of a radar screen in business, it would be market, customers, competitors, and company. And in the individual situation, it would be mind, body, spirit, and relationships. And that speaks to exactly what you’re talking about, Greg, is you have to be able to observe, and this contextual radar gives you a way to put your observations down on paper to say, here are the things I’m observing, and then get that verification. So that’s a tool for observation and understanding to your point. But like I said, I do think that action has to follow that thinking and understanding.
Greg McKeown:
Hey, listen, we’ve agreed that action will matter to people. If you understand them and they want you to take action, and you don’t, then you haven’t demonstrated full understanding. But if you take action when somebody just wants to be understood, and that is the point of it, and then you take action, I think it can create damage because it genuinely shows misunderstanding. Anyway, we don’t need to get too hung up on it.
Let’s go back to these three overarching questions. We definitely caught the first one. So now the second was after how to create value. It’s how to…
Rich Horwath:
Deliver value.
Greg McKeown:
What does that mean in the kind of setting we’re talking about? So you’ve done the observation, you’ve written down some observations, you’ve gone and validated them and said, Hey, listen, is this what matters to you? Are these the kinds of actions that would help to alleviate this for you? Then what?
Rich Horwath:
What we see when we think about delivering value is we’re too scripted in life. We do things the same things in the same ways day after day, and that involves both business and our personal relationships. We’re too scripted so that the key point around delivery is to deviate from the norm. We have to think about how can we deliver this value differently than we have in the past. What are the mechanisms to help us do that? The tools, the techniques that are going to help us deliver value in a different way so that it resonates with people at a deeper level. So deliver, think, deliver, and deviation. We’ve got to deviate from the norm; otherwise, our delivery gets lost in everything that’s out there because it’s too boring, it’s too scripted. It’s too mundane.
Greg McKeown:
Okay, so I’m going to keep on taking it back into the personal environment, which maybe is a test, but in that environment, it would be looking at how I’ve been doing it in the past versus, hey, let’s try and do this in a more inventive, innovative way. Something that’s fresh, something that shows new thought that isn’t just running the old playbook again and again without any thought going into it. This is what you’re saying.
Rich Horwath:
Yes. And I believe one of the key techniques here, key tools is domain jumping. So let’s say with the personal relationship, if we ask ourselves, okay, how would a company approach this? How would an industry approach this? How would a discipline like science or psychology, or aerospace engineering approach this situation? I believe domain jumping is something that does help people deviate from the norm, borrowing good ideas and good techniques from other areas, and it’s as simple as asking a few questions. How would Apple approach this? How would Spotify approach this situation? How would they deliver value in this relationship?
Greg McKeown:
Yeah, I just saw an interesting interview with Jeff Bezos from years ago, and it was about listening, and he said, “We all know that if you don’t listen properly to your customers, then you’re going to fail,” he said.
And then there’s another part of this, which is, I mean, he framed it this way. He said, “There’s the things you shouldn’t listen to from your customers.” It’s not listening, which you don’t have to frame it that way, but what he went on to say is “it’s not your customer’s job to help you invent the solutions for them.”
I thought that was very nicely expressed that they already have a job providing inventive solutions to their customers; whoever those customers are, business customers are in a personal setting. And so I like this idea that we ought to be listening actively and engaged in understanding whoever it is we’re trying to connect with and serve. But when it comes to solutions, yes, we can talk about it together, but also that’s sort of the job that we need to do so that we bring them a solution, that we bring them something that hopefully sparks joy, that is surprising and delightful. That’s the job itself is sort of the second half of listening, maybe the second half of innovation. Any reactions to that?
Rich Horwath:
Yeah, I mean, go back to Henry Ford. His point was if we asked our customers what they wanted, they would say faster horses. They wouldn’t say automobile. So I agree with you completely, Greg. I think it’s that keen observation, awareness, going through the checklist, understanding how we deviate from the norm, and then borrowing ideas from other areas to apply that
Greg McKeown:
Move us onto the third of these three parts of the value creation model.
Rich Horwath:
So now we’re thinking about how do we capture value. So in a business setting, obviously, we think about things like, do we sell this product? Do we license the product? Do we set up a subscription model, a brokerage model? So on the business side, it makes pretty intuitive sense that we want to explore the different ways we capture that value and then bring it to customers.
From an individual standpoint, we want to think about what does success look like for ourselves and the other people in our relationships. So again, we don’t want to assume that what success for Greg looks like looks the same for his wife or for me, or for our children. It’s going to look differently. So before we can capture value, we need to understand what does success look like for those people. And we say, success. We’re not talking just financial success; we’re talking about fulfillment, life, happiness, those types of things. But what does that mean? What does success mean for those people in our lives, whether it’s our spouse or friends?
Greg McKeown:
But isn’t that part of that first question where you’re trying to understand them, observe them? What does success mean to you? Value capture in a business setting is like how are you going to get paid for your work? Is there an equivalent of that in a personal setting?
Rich Horwath:
Yeah, I think the payment is fulfillment in the relationship. It’s the emotional, it’s the understanding, it’s the listening. It’s all of those things that make a relationship a two-way interaction versus here’s what I think is best for you. This is what you’re going to get. So to your point, the create part is coming up with what are the things to help you with your needs, your problems, your challenges. The capture part is really now; if we take those things in step one, the problems, issues, challenges, what does good look like at the end of the day? So it’s a little bit of a difference from the create to the capture.
Greg McKeown:
Yeah. I’m still curious about this on the capture side. Is there a way to apply the idea of value capture from a business in a relationship setting? And we’re just riffing on this together, but capture is about making sure the business is paid. It’s about how do you get that value. You can create a lot of value, you can deliver a lot of value, and your business can still be broke.
So clearly, it’s a necessary part of a business environment. Similarly, in a personal setting, it seems to me that if you both create value and deliver value, there isn’t this capture value. Then you could be in quite a toxic relationship because maybe you are giving, and somehow you’re not receiving. It’s not reciprocal. And so you could be in a codependent relationship, for example. So what does capture look like in a relationship? Maybe you don’t have the answer immediately right there, but I want to push on it to get a closer fit to what you mean by value capture in a business environment.
Rich Horwath:
Well, I like where you’re going with the reciprocity. I think that’s certainly going to be part of it. I think it comes down to what does a good relationship fulfill. And if we ask ourselves, we ask our partners, our families, what does a good relationship fulfill? I think number one, it’s that I’m heard, that I’m understood, that I’m listened to. Let’s go back to empathy. It’s empathy. So I’m heard, I’ve got a voice in this relationship.
Number two, there’s care involved. So there’s an understanding that I’m a human being. I’ve got emotions, I’ve got feelings. So whatever I’m delivering to you in our relationship, I’m doing it with care, not necessarily; it may not be what you want to hear or what you want to see, but I’m doing it because I believe it’s what’s best for you based on what you’ve communicated to me. So I think it’s that empathy. It’s the care.
And then I think, at the end of the day, how do we as a team define success as a family, as a couple? What does success look like? So I think if we think empathy, care, and success, I would say those are the things. Again, just thinking, top thinking out of our here. I think that’s what I see.
Greg McKeown:
Yeah, so the idea is in capture. The first two are about what value you are creating for them. Capture is about getting that value back to you. So I think it’s about being proactive in speaking up for yourself about what you want from them so that it doesn’t just lead to a relationship that’s one-sided. And, of course, ideally, both parties to a relationship or all parties to a larger group relationship are trying to follow this process. But I think that’s the idea.
Value capture is about making sure that you are getting what you need out of the relationship so that you are having your unmet needs met and trying to make that as explicit and clear and open, even though that’s vulnerable, to do it so that you really do end up with something that’s mutually beneficial, rewarding. And so back to something I said earlier, you get the infinite relationship, so you get the right to play the game again tomorrow, next week, and ongoing that you have a healthy relationship that lasts for a long time rather than one that either breaks down or lasts a long time, but it’s dysfunctional and toxic the whole time. I think that, to me, is a decent application of what value capture looks like in a relationship setting.
Rich Horwath:
I think that’s beautifully said. I can’t add anything to that.
Greg McKeown:
Give us the last word. We need to be more strategic in our thinking. We need to be able to create space to be able to do it. I’ve pushed you and hounded you a little bit here to try to apply this outside of a business-only context, and I think we’ve come to something that captures my attention and gives me something to think about as I go forward. But give us the final word.
Rich Horwath:
Well, one of the things you’ve introduced in your book, essentialism, was the idea of editing, the importance of editing. You talked about the Academy Awards, Best Picture, and Best Film Editing. That’s something that stayed with me over the last nine years since you wrote that book. And I think that if we can decide what we’re not about, what we’re not going to do, what’s not important to us, that really then shines a crystal light on what is important.
And again, for me, it’s got to be one or two things that are going to drive my purpose, my passion, and why I get up each day, and I need then to take time in isolation to think about those things. Because if I’m going to have new growth for my business or my life, I have to have the time, the space, and the tools to think about that new growth and that deviating from the norm. So I really think it’s about new growth comes from new thinking. We’ve got to give ourselves the time, the space, and the tools to allow that new thinking to blossom.
Greg McKeown:
To be able to prune the way that we’ve been doing it, the way that we’ve been trying to create value before trying to deliver value and trying to capture value, right? There’s a way we’ve been doing it. It’s perfectly aligned with the results and the relationships we’re in today. If we want to improve those things, we have to improve our thinking.
It’s been a pleasure having you. Thanks for being on the podcast.
Rich Horwath:
Thanks, Greg. I really enjoyed the conversation.
Greg McKeown:
Well, thank you. Really, thank you for listening. What is one idea that stood out from this conversation with Rich Horwath? What is one thing that you can do differently immediately, and who can you share this with who could help you to be able to apply these ideas like an accountability partner?
We’re seeing so many people provide reviews, provide ratings of this podcast. It’s really encouraging to see that. If you can take a moment to write a review yourself, just go to gregmckeown.com/essential to be able to take advantage of a great offer that we’re running right now. I’ll see you next time.
