This week on The Digital Download, we’re exploring how businesses can thrive by continuously evolving their strategies in a fast-changing world. Our guest, Sid Mohasseb, Entrepreneur Philosopher, author, and adjunct professor at USC’s Marshall School of Business, brings decades of experience in helping leaders navigate uncertainty and avoid the pitfalls of static thinking. Sid’s insights push business leaders to break away from conventional wisdom and embrace disruption as a path to growth.

Join us as we discuss:

* How do you know when it’s time to evolve your business strategy?

* How can leaders maintain their unique vision while constantly adapting?

* What mindset shifts are necessary for embracing change in unpredictable environments?

* Why is innovation often stifled by the need to conform?

Sid’s unique ability to combine philosophical depth with practical business advice offers a refreshing approach to leadership. He’s founded multiple companies, advised Fortune 500 executives, and written extensively on thriving through transformation. Expect actionable insights on how to align with unpredictability and keep your business on the cutting edge.

We strive to make The Digital Download an interactive experience. Bring your questions. Bring your insights. Audience participation is highly encouraged!

This week we were joined by our Special Guest -

• Sid Mohasseb, Entrepreneur Philosopher, author, and professor

This week's Host was -

• Rob Durant, Founder of Flywheel Results, a proud DLA Ignite partner

Panelists included -

• Tim Hughes, CEO & Co-founder of a DLA Ignite

• Adam Gray, Co-founder of a DLA Ignite, and

• Bertrand Godillot, Managing Partner, Odysseus & Co, a proud DLA Ignite partner

Transcript of The Digital Download 2024-10-18

Rob Durant [00:00:03]:

Good morning, good afternoon, and good day wherever you may be joining us from. Welcome to another edition of The Digital Download, the longest running weekly business talk show on LinkedIn Live, now globally syndicated on TuneIn Radio through the IBGR Radio Network, the world's number one business, talk, news, and strategy radio network. Today, we're learning why continuous evolution is the key to business survival. We have a special guest, Sid Mohasib, to help us with the discussion, entrepreneur, philosopher, author, and adjunct professor at USC's Marshall School of Business, Sid's unique ability to combine philosophical depth with practical business advice offers a refreshing approach to leadership. But before we bring Sid on, let's go around and introduce everyone. And while we're doing that, why don't you in the audience reach out to a friend? Ping them. Have them join us. We strive to make the digital download an interactive experience, and audience participation is highly encouraged.

Rob Durant [00:01:15]:

Right? So with that, Tim, would you kick us off, please?

Tim Hughes [00:01:20]:

Yes. Welcome, everybody. My name is Tim Hughes. I'm the CEO and cofounder of DLA Ignite, and I'm famous for writing the book, Social Selling Techniques to Influence Buyers and Changemakers.

Rob Durant [00:01:36]:

Excellent. Thank you very much. Good morning, Adam. Welcome.

Sid Mohasseb [00:01:40]:

Good morning, Rob. Good morning, everybody, and hello. I'm, cofounder of DLA Ignite and his business partner. And, every time you introduce this show and you say we are the longest running weekly business talk show on LinkedIn Live, I feel a sudden urge surge of pride. It's it's fantastic because we've been doing this for 3 years or something. Haven't we? 3 years.

Rob Durant [00:02:05]:

More than that. Approaching 4.

Adam Gray [00:02:07]:

Wow.

Rob Durant [00:02:09]:

Excellent. Well, welcome and and glad to have you here again. Bertrand, good morning and welcome.

Bertrand Godillot [00:02:16]:

Hey. Hi, everybody. I'm the newbie on the team, to be honest. Bonjour. Sitting in France, I am the founder of, Odysseus and Co, a very proud DLA partner. Sorry. And, I'm I'm quite happy to sitting to to be sitting here with you, on Friday.

Rob Durant [00:02:40]:

Well, we love having you here, Bertrand, so thank you. And myself, I'm Rob Durant. I am the founder of Flywheel Results. I help start ups scale, and I too am a proud DLA Ignite partner. Alright. As I said, on the digital download this week, we'll spit speak with Sid Mohasib. Sid brings decades of experience in helping leaders navigate uncertainty and avoid the pitfalls of static thinking. His insights push business leaders to break away from conventional wisdom and embrace disruption as a path to growth.

Rob Durant [00:03:19]:

Let's bring him on. Sid, good morning and welcome. Sid.

Sid Mohasseb [00:03:26]:

Good morning. Good morning. I felt kinda left out not being a DLA partner.

Rob Durant [00:03:33]:

We can work on that too.

Sid Mohasseb [00:03:35]:

Too late. It's never too late.

Rob Durant [00:03:39]:

Sid, let's start by having you tell us a little bit about you, your background, and what led you to where you are today.

Sid Mohasseb [00:03:49]:

The the last part may be a little a little hard to explain. I guess, life did, but I could tell you a little bit I could tell you a little bit about the and I'll give you the 25¢, version of it.

Rob Durant [00:04:03]:

Invoice me.

Sid Mohasseb [00:04:04]:

I am an immigrant. I came to United States in 1976, and, went to school here, and, started a career. Actually started a company while I was in college and then exited, and started a career in the consulting business, management consulting business. Became a partner, very large clients, such as Federal Reserve Bank, Motorola, IBM, and and sort. I started my own firm focusing on, turnarounds in buying companies and leveraged buyouts. Towards the end of my, tenure at the consulting firm, I had a lot of clients in Wall Street, and they were making a lot more money than than we were. And and I was going in to clean up companies and and do the, do the turnaround. And I said, wait a minute.

Sid Mohasseb [00:05:02]:

Why am I on this side? I should be on the other side. So it started that in the nineties. Started 4 companies. Did 2 turnarounds, purchased companies and turned them around. And then in the in the 2000, I started a carve out piece of a business, offices globally in in Europe and in, in Asia. That was a huge success. We were able to increase revenues by about 30 fold in, close to a couple of years. Exited that, became an angel investor.

Sid Mohasseb [00:05:41]:

I was the president of Tech Coast Angels, which is the largest angel investment entity, in the US. Made a lot of early stage investments. Started a fund, a venture fund, and then jumped into one of our portfolio companies in 2010 to drive it to exit. Sold that company, which was a analytics company, to KPMG and spent a little bit of, time at KPMG as the national lead for strategic innovation. And, along the way, I've been teaching at various places. I teach at USC, as you mentioned, both in the engineering school and in the Marshall Business School. I've got a couple of books. I'm kind of old enough that, I have become brave to write a lot of articles and, put myself on the line.

Sid Mohasseb [00:06:38]:

As you mentioned, a lot of people know me as the, as the entrepreneur investor. I don't recall who first called me that, but, it it kinda stuck, because I believe that, that that things happen, first in your mind and and the philosophy that you have as a personal authentic person, an entrepreneur. And, and that's how I kind of I see the world through that through that lens.

Rob Durant [00:07:06]:

Fantastic. Thank you for that. Sid, I wanna start with a foundational question. Now businesses, just in the course of doing business, always face challenges. How do you know when it's time to evolve your business strategy versus just push through?

Sid Mohasseb [00:07:37]:

It seemed to be frozen.

Rob Durant [00:07:39]:

Okay. I can, hear you now. My question was, how do you know when it's time to evolve your business strategy versus just push through? Keep doing what you're doing.

Sid Mohasseb [00:07:51]:

So, the the question of evolve, has to be, has to be explored a little further or or the term evolve. So, my question, would be when when do you know you shouldn't? Not because, things around you are always changing. The customers are changing. The organization is changing. Your value proposition is changing. The people inside the organization is changing. The technology you could use is changing. So, you have to always evolve.

Sid Mohasseb [00:08:23]:

Now the question becomes, well, are we randomly changing strategies every day? No. That's not the case. I use the analogy of, a caterpillar turning to a butterfly all the time. A caterpillar goes through multiple stages, 4 or 5 stages in in in normal. There are some caterpillars in in in the Amazon area that that that period takes 14 years. But it is a constant it's a constant chain, adapting to the environment, adopting to the needs, and and so forth. So, evolve doesn't mean radical change. Yes.

Sid Mohasseb [00:09:03]:

Eventually, you will become a butterfly, but that is not like a switch that you turn around and say, oh, this morning, let's get evolved. It's an ongoing process, and it has to do with how you see the world. Whenever you say I am good enough, whenever you feel that that that, okay. I've got it. I'm making $1,000,000 a minute or a day or a that's exactly the time that you have to think about evolving. The fact of the matter is it's not you that drives success. It's them, and I can explain that. There are 5 pillars to any organization, gentlemen.

Sid Mohasseb [00:09:44]:

There is the customer. There is the employees, investors, partners you deal with, and, and eventually, the society. These 5 pillars drive a business, every business. Doesn't matter if you have a donut shop, or if you're IBM and Microsoft or Tencent in China. It's the same 5 pillars. On the other side of these 5 pillars are people. Let's start with with customers. We have an illusion that we make money.

Sid Mohasseb [00:10:14]:

We have a Salesforce. The fact of the matter is the decision of giving us money is somebody else's. The buyer makes that decision. We have no decision in that. We we have the illusion as companies that we have the decision. We don't have the decision. We we have great salespeople. We present our stuff.

Sid Mohasseb [00:10:35]:

And but at the end of the day, the one whose hands a dollar or a $1,000,000 to us is the buyer. They make that decision. They make that decision based on a series of reasons that they have. And those reasons are constantly evolving and changing. Why? Because the same 34 to 25 to 34 year old, customers that we think we've been serving for 5 years, and they're not the same people. They they have different needs. The market has changed. So it is the understanding of that reason and the exchange that we can create as a company that makes them makes a decision to do a transaction.

Sid Mohasseb [00:11:18]:

That's the same thing as with with employees. We are generally under the illusion that we hire people, and we give them a job. The fact is, in their mind, they accept a job, and they accept it based on their own terms, not our terms. They they they didn't sign up to be creative at 2 o'clock in the morning. They decided that this money is gonna give me a benefit because my son is, not feeling well or I need to pay for the rent or and and and that's what they decide to engage you with. Their reasons. The the people now that are getting getting employed are very different than 5 years ago. Their their demands, their expectations of salary, their expectations of working from home, it's it's all different.

Sid Mohasseb [00:12:05]:

So they make the decision of being productive or not being productive. The definition of productivity is as we measure it. That's true. But they define it. The same thing with investors, the same thing with partners who engage with us, And of course the same thing with the society that we operate in. So here here's the deal. When do we evolve when they evolve? Because they're really making, they are profit and, and, and, and revenue. In my opinion is an outcome.

Sid Mohasseb [00:12:38]:

It is it is generated as a result of a series of decisions that's based on how, we deliver value and the exchange that we have with with with our constituents or stakeholders, those 5 pillars.

Adam Gray [00:12:52]:

So I I I absolutely get that, what you said. That makes perfect sense. So, we've all, to some extent, been under the illusion that we're in control. You know, I'm creating the product. I'm selling the product. You're the buyer. And and now I've acknowledged that, in fact, the other people other than me are the ones that are actually driving the business and the business success. So given that I've I've I've always been wrong about my role in this, how how does that shift how I need to envisage development of the business? Because it's entirely different now, isn't it?

Sid Mohasseb [00:13:40]:

An absolutely wonderful question. Absolutely wonderful question. So if and and and what do they say when when you're an alcoholic? The first thing to do is, to say, hey. I'm an alcoholic. You just said, yeah. I was wrong, and that's okay. Being wrong is is not bad. That's how we evolved by realizing, okay.

Sid Mohasseb [00:13:59]:

This doesn't work or that. So what does that do essentially to the role of the leader? Because that then trickles down to how we operate on the front line. The role of the leader then switches to being a conductor, to being a harmonizer, because there's a give and take. I can satisfy my employees a 100% and not satisfy my customers and their reasons, or my investors. I can give a lot of money, a lot of benefits to my employees. I could cut my cost and control my margins with the customers and create the best, most exciting quality of of a product, but then there's nothing for my investment. I can I can truly do wonderful things if I cut corners with respect to environment and the things that I do? I haven't satisfied the reasons of my society, but I've created a lot of money. So there's a give and take.

Sid Mohasseb [00:15:04]:

So when we say give and take that requires an act of harmonizing. It's not balancing. These are not equal parts at all time. This is like a symphony. So another thing that that I always say, it's not a matter of, work life balance. It's a whole life balance for us as a company, as individuals. Life is not a business and entrepreneurship. It's not that we have these 5 things, like in music.

Sid Mohasseb [00:15:35]:

We don't say, okay, the drum plays exactly 7 and a half minutes, and then the, this, the, the guitar comes in and plays 7 and a half minutes. And no. It's this blend that makes the symphony symphony, makes it harmonized. So the role of an of of a leader becomes a harmonized. That's constantly realizing what is changing in constant it's always in flux. It's not a one time I optimize this formula. And if that pushed down that method of leadership, then it becomes a different structure. Now let's see what this does.

Sid Mohasseb [00:16:12]:

If I'm saying that for example, let's let's take these, notions that would change. We say and and this is pretty pretty prevalent in the HR business and so forth. And so people have to belong to us. No, we have to belong to them. This notion that people have to belong to us puts us at the center, the controller, meaning we empower people. The fact is they have the power. They have the power of creativity. They have the power of productivity.

Sid Mohasseb [00:16:46]:

They have the power of execution. They have the power. We don't have the power to give them the power. We just have to facilitate them to create and apply that power to the collective advantage of the company. So in this case, if you look at it this way, culture is not imposed. We don't sit in a room and say, oh, we have a culture of productivity. We have a culture of this. Our culture is created because we are satisfying similar reasons for people of similar minds and they bring their reasons to the table.

Sid Mohasseb [00:17:20]:

And then the symphony begins.

Bertrand Godillot [00:17:25]:

So do do you think that, shift, explains the rise in introverts being, being, being great leaders, emerging leaders. I mean, compared to to to what we had in the past, you know, tough guys, you know, basically shaping a vision and and then pushing that vision into the organization with a with a lot of, strength.

Sid Mohasseb [00:17:51]:

Well, you know, I have a belief, that what what made us us in the US and also I think in in in in other, industrial world and where where capitalism, if if you would, prevails. What has made us us was an unwritten, unadmitted, understanding of, of of what I just explained, ex except over the years, we have focused on creating metrics, particularly at Wall Street that are outcome based. A lot of folks at wall street, I do give it. They make a lot of money. Who am I to judge? But these analysts sit in a room and say, inventory turnover is, is high, man. Have you ever managed inventory? No, except that a piece of paper that, that, that, that operational mind, that, that understanding of how things really click and work has been turned into a series of very rigid KPIs. Now I I'm I'm 4 KPI. Now, now remember I teach one of the courses I teach is analytics.

Sid Mohasseb [00:19:04]:

I am an absolute believer in using data to strategize, to optimize and to create value. But there is a qualitative and the soft side of things. No, I don't think it's a matter of being introvert or extrovert. I think introverts have been successful in the past and extroverts have been successful in the past. I think the, the key is perhaps maybe I haven't done the research to see if there's any correlations, but maybe the interviewers are less about themselves and their ego and more about building things. And maybe that's why it works.

Bertrand Godillot [00:19:47]:

Okay. Thanks for that.

Rob Durant [00:19:49]:

Sid, I love your philosophy around the 5 pillars. It it speaks to me and and what I believe. What it seems to fly in the face of the prevailing concept of capitalism. The prevailing concept of capitalism was brought to us by Milton Friedman. And his goal of the organization is one goal, simply maximize, investor value. And that's how we've been operating for a long time now. Are we at the precipice of evolving that, or just you and I on the sidelines sitting there being wrong?

Sid Mohasseb [00:20:31]:

No. I I I think so there's let's talk about capitalism. So first of all, I don't disagree with him. That's one man's opinion, but it is a pretty good opinion. The question is, how do you maximize profit? See, it's the matter of approach of how we get there. It's you and I want to go on vacation. You wanna walk a 1000000 miles to get from Los Angeles to, you know, to, to New York to have good time. No.

Sid Mohasseb [00:20:59]:

I'll say there's a better way of doing it. It's more efficient. Everybody is on board, and we're having drinks and margaritas along the way. The the the question is not if you wanna maximize profit, but the maximization doesn't start with profit. You have to maximize what you deliver and how you satisfy the reasons if you maximize and harmonize because you can't maximize one of these pillars, you mess up the other one. I I mean, the trend there there there are million, examples of it. Let let's take, everybody's darling now, mister Elon Musk. Okay? So he did a great job at SpaceX because those people as employees focus on employees, those people love to go to Mars.

Sid Mohasseb [00:21:44]:

They have a mission, but the folks at Twitter didn't have the same mission. You apply the, the, the value exchange was different. You, you can't just take those people had a different reason to be there and to do what they did. SpaceX folks didn't. He had lots of lots of people that loved his car. But at 1 in in in a matter of couple of weeks, he cut the price by 10, 15%. I don't exactly know the number because the Chinese are are are doing it, and I have too much inventory. He he ignored the fact that some people had bought a car last week, and they haven't even received their car, make them upset, broke broke that exchange relationship, and wanted to give himself a $56,000,000,000 bonus.

Sid Mohasseb [00:22:37]:

That my friends is not harmonizing. It may be optimizing his shareholder, but it will have consequences. And it does. I mean, if he's lost 83% of, of, of revenue on Twitter, there's something there. If for 8, quarters in a row, he has had excess capacity in Tesla, that says something.

Bertrand Godillot [00:23:03]:

So when when it comes to harmonizing, Sid, because, yeah, we talked about partners, customers, investors, the employees, the society. Right? But these are these have different triggers. Right? And potentially even different targets. So, how do you make sure as a leader that, so what's the recipe for aligning the target, and creating that that symphony you were talking about? Because Well in my experience, that's a very challenging thing to do.

Sid Mohasseb [00:23:39]:

That is. But the rewards would be the profits that that Rob just talked about. The rewards would be worthwhile. I have a a good friend of mine. He's not my client. I don't sit on his board. And, and and we have, we have wine every once in a while. And he is he became when I talked to him the first thing, he said, Sid, I wanna do this with my company.

Sid Mohasseb [00:24:04]:

And he now calls himself a platform, not a company. And he says, our our mission is to do these five things. His profits have doubled in a matter of 6 to 8 months. Doubled. His his clients say, I we've never seen anybody look at the and you genuinely are practicing. So, it does it it is complicated. It is hard. It is hard, though, if we are see, if you play football, and I'll take you out.

Sid Mohasseb [00:24:39]:

You may be a great athlete. If I take you and, for for for you and friends, let's call it soccer. So, if you're playing soccer and you're Ronaldo or you're, you know, you're Zidane, and I put you in a in a in a basketball game against, you know, the likes of LeBron James, You're not gonna win because the rules are different. You may be a great athlete. So you you have to change the way you look at this formula, and you look at this thing that this will change. Everything will change, and these people have and they are people, and they are the ones who are generating revenue for it's not just the customer. Hey. People say customers are the king.

Sid Mohasseb [00:25:31]:

Yeah. But no king can manage, an empire without the rest of the people. It it just just it's not possible. So the idea of harmonizing in these 5 pillars means recognizing the reasons. And guess what? It's not perfect. It's it's not perfect. And there is give and take. And if you believe in this and you you really, approach it, then you don't measure the outcome.

Sid Mohasseb [00:26:03]:

The fact that I made n number of dollars at the end of the quarter doesn't mean that my strategy was right. Doesn't mean that my it doesn't mean that that that it it might have been that the guys, my competitor, lost their best salesman. It may be that it it's it's not that they increased their price. I had nothing to do with it. They had a flaw in their manufacturing. They had delays. They had It's not necessarily a, a, an indication that my strategy worked. If we measured the outcome measure from a strategy measure.

Sid Mohasseb [00:26:41]:

Are you delivering the reasons for these people? And if you are, you're on the right track. It's the the measurement changes.

Adam Gray [00:26:51]:

Okay. So, we've all been viewing this from the wrong direction, and, we acknowledge that we need to keep these 5 different pillars in balance. So, hopefully, people are watching the show, and they're thinking to themselves, I need to go away and rethink how I'm doing business. So what's the starting point for people? What what do they need to do first to start to get an idea and and think about how they can do these things differently?

Sid Mohasseb [00:27:27]:

Again, an excellent question. So the starting point first of all, you know, some of your audience may say, what is this guy smoking? You know, it's not possible. It it is possible. It is possible. You will see a lot of if you really look at various organizations, whoever you like, you will see traces of this. Maybe they practice in one area or another for a period of time for, and I think going back to, to Ralph's question, and I think this is the core of capitalism where we started. This is what we did. We built companies to deliver value.

Sid Mohasseb [00:28:07]:

We didn't build companies originally to optimize profits. It just happened. And at the at the end, we said, oh, but that's the core of capitalism. Capitalism is about creating value. It's not about maximizing profit. If you define value as as as profits okay. Now there is a definition, and I'll I'll get back to you, Adam, to to your questions. I didn't forget.

Sid Mohasseb [00:28:36]:

But but there is a there is a fundamental difference in how you view who is an entrepreneur. An entrepreneur and this is the definition that happened in in in originally in France who who defined somebody named Jean Paul Say who defined the word entrepreneur. An entrepreneur is not one who has something, who wants to exchange it with something of higher value. Now, an Irishman added about 50 years later the element of risk saying someone who has something, who wants to exchange it with something of higher value knowing that there is risk. Someone who has something. There is no indication of what that something is. It may be it may be your time. It may be your product.

Sid Mohasseb [00:29:22]:

It may be your idea to exchange it with something of higher value. And no nobody says what that higher value is. You decide as the entrepreneur what the higher value is. The definition you provided is the higher value as defined by as profit. That that that he sees that as higher value. Okay? A one dimensional a one dimensional measurement. Now if the higher value is, is is, is is defined as feeding the the the poor, then you become mother Teresa, who is an entrepreneur, who who had something, who wanted to increase something, wanted to exchange it with something of higher value. So going back to your your question.

Sid Mohasseb [00:30:09]:

So the thing is this is not against capitalism. This is actually a 100% capitalism, a 100% capitalism. We do want outcomes, but we want sustainable outcomes. We want outcomes that are episodic, not episodic. If those, if you go to 1957, when S and P was created and you look at now over 85% of the companies that were the best and the brightest in 1957, that's about 6060 some years ago, are not there anymore. What happened to these? Yeah. Some of them got bought out and but they went away. And of the ones that are there, only 2% 2% beat the S and P average.

Sid Mohasseb [00:30:55]:

These were not dumb people. These were not bad companies. They were great companies at the time. We, we picked them as the S and P 500. So what happened? They eroded. They eroded because they were one dimensionally their value and, and mapping to what the reasons are did not match over time. They declined. So if you optimize against one profit dimension, you would begin to erode.

Sid Mohasseb [00:31:21]:

Now how do we do it? 1st, realize that we're all entrepreneurs, and the definition of what is success and what is satisfaction and what is the outcome is up to us. It's not up to the society, and it is not up to Sid or some other guy who defines what capitalism. You define what you are exchanging for what. So clarity of, of, of, of that is, is, is pretty critical in, in the success. Then it's the realization that really they are making me money and they are give, they are giving me the boats that I, I, that, that I, you know, sail on. They are giving me the house that and and it is because I have provided some exchange, and I haven't figured out what that is. So if that realization is there, we're 90% of the way there. 90%.

Sid Mohasseb [00:32:12]:

Because then we look at we begin to look at the world in an entirely different way. We don't look at this as, you know, you have, like, ESG stuff and all that stuff that came in from the World Economic Forum. Oh, we have to give back to the society. We're not giving back. We're just realizing it's it's not that we owe them something. It's that they're part of the formula. They are a pillar. It's not this, oh, I have to put something to do a and b, and it's it's not an imposing element to our performance.

Sid Mohasseb [00:32:44]:

It's part of our performance. So realizing that all these pieces are key, it's not that I'm giving an employee, the power to do something. It's not that I'm giving him money out of my own pocket. No. Without, without their satisfying the reason I will not be who I am. I will not have the business that we have. So I'm not doing any favors for anybody. They are doing the favor and I'm harmonizing this.

Sid Mohasseb [00:33:13]:

And as as as our friend French friend said, it's pretty tough to do this. How do you change? One step at a time. One step at a time. We we are addicted to the sameness of how we've operated. Our MBA courses are defined based on outcomes. We have people like me who love KPIs. I'm I'm on the board of a company, and this is fascinating. And when he talks with the CEO and the team sit in the room and they talk about KPIs, they're talking about targets.

Sid Mohasseb [00:33:45]:

They're not talking about numbers that they are following to improve, enhance. They're saying my target is to make X, the profit, the margin, whatever those numbers are. So their part, there are things to race against, not the things to improve against, not the so the targets that we have to define has to shift. Meaning as the margins are going to be created if my exchange of value is optimized. So let's go to the reasons first. So if we begin with understanding the customer, not because we send out in a survey and it says, do you like my product? Don't you like it? This is not a customer support 360 nonsensical, hey. Here's the value. Let's let's see what the it's really understanding why who they are and why are they here, and how are they changing.

Sid Mohasseb [00:34:44]:

Call it psychology of people. Call it whatever you wanted. There is people do what they do because of their own reasons, not because we want them to do those things.

Tim Hughes [00:34:54]:

Sid, thanks so much for this. Way back at the beginning, you you described the 5 pillars as being the employees, the buyers, partners, society, and investors. Can you explain to me the part that society plays?

Sid Mohasseb [00:35:10]:

The the which place? Society. Okay. So I I think the partners are are clear. These are maybe our supply chain guys. Here's the thing. They may do business with us because they like our logo on their site. Okay. If I'm Apple and I I'm I'm, you know, I'm selling something to you know, it's Apple, is my client.

Sid Mohasseb [00:35:32]:

Yeah. I like their name on I might that's a good, you know, that's a good name to have. So I may give them a better deal. I may compromise on price. Or if I care about my cash flow, I care about the guy who pays me on time. I give him better quality. And so there is there's more than how much there is. Hey, you and I both went to school.

Sid Mohasseb [00:35:52]:

We're both Christians. We're both, Germans. We're both French. I have an affinity for you. We're both Democrats, Republicans. We hate this guy. We love that guy. So we, we both connect on a sport.

Sid Mohasseb [00:36:03]:

So the partners relationship is based on more than price. It's the people connecting and those reasons that they would do business with us. If you look at the investors, people don't don't just invest because they want to make a return. If some people invest because they care early stage companies, most of that we see money is because somebody sees a vision. Because my mother-in-law had cancer, I am I have an affinity to invest in in companies that drive for solutions for cancer. And my expectation is always changing. 5 years ago, I was happy with 3% return. Now I'm not happy with 7.

Sid Mohasseb [00:36:45]:

So you see how I'm changing? The same thing with the partners, the same thing with with with others. Now let's go to society. So we have to operate as a company. No company operates in a vacuum. We operate in an environment where where where employees are provided to us, a crime free is provided to us, an environment to excel is provided to us. We pay taxes. The tax benefits are provided to us. We operate within an environment that if we violate certain rules, we would have a problem.

Sid Mohasseb [00:37:22]:

If the society is not being taken care of or the reasons are not being met, we would have consequences that would impact our employees and our business. So there is an exchange there. It's not because we're, we're just philanthropic people who go out there and it's not a nonsensical thing that, Hey, I'm gonna pay something to, you know, to get rid of the, to the bombs or the closures or the, you know, the the the the the the homeless. It's a matter of if you if you wanna operate in a healthy environment, you have to consider that society is a component, the pillar of your of of who you are.

Tim Hughes [00:38:06]:

Yeah. I remember when Lehman's went down in London, and it was the it was the dry cleaners and the coffee shops and the, and all of those things that were affected, because people weren't going there and buying their coffee on their way to work and getting their dry cleaning done, etcetera.

Sid Mohasseb [00:38:23]:

The guys at Lehman had already taken their bonuses.

Tim Hughes [00:38:26]:

Absolutely. Yeah.

Rob Durant [00:38:30]:

As you talk about the the 5 pillars and the harmony and the balance, I'm reminded of the fixed mindset versus the growth mindset. Mhmm. And I think for those of us that only want to focus on that one pillar, again, I come back to the the shareholder value and investors. That is sounds more like a a fixed mindset, a a fixed pie, if you will. Whereas that harmony seems to speak to growing the pie for all parties. Is that about right?

Sid Mohasseb [00:39:07]:

That's about right. That's about I've never had it explained that way, but I love it. Yes. The absolute thing is some people negotiate, and this is one of those things about negotiation that, hey. If I've got, if if you want 51%, then I want 51%, even if we say, hey. Let's split the difference. You didn't get what you wanted. I didn't get.

Sid Mohasseb [00:39:26]:

So it's not a win win. It's a lose lose. This idea of, hey. You and I are negotiating. Say, hey. Let's split it in half our differences. You wanted 51%. I wanted 51%.

Sid Mohasseb [00:39:36]:

So if you split it in half, you didn't get what you wanted. I didn't get what I want. It it's lose, lose to create a win win. You have to increase the size of the pie. So I get what I wanted and you get what you wanted. And the 51% is more than what it used to be. So you're absolutely right. If you optimize against 1 dimension, you may get that one dimension.

Sid Mohasseb [00:40:03]:

But for how long? Questionable. Is that sustainable? Questionable. Now the other thing is this. So if you go back to the Michael Porter and and and his his approach of 20 some odd years ago and then, you know, there are other people who have come up with the end of competitive advantage and so forth. The key is this idea that I have a 10 year strategy is no longer valid. It just doesn't work. I mean, the world is changing too fast. There's too much knowledge across the globe flowing through Internet.

Sid Mohasseb [00:40:37]:

And now with the AI and all that, there's too much speed in in in productivity gain that, that the assumption that I, you know, I sat in a field room and maybe looked at some charts and graphs and decided the path for the next 10 years. And I'm not gonna, you know, I'm not gonna be wishy washy. We're sticking to it. That doesn't work. So if the longevity of a strategy is no longer 10 years, what is it? It's a shorter timeframe. That means that we have to be able to always look at the parameters, look at the changes and evolve in one direction or another direction. So when do we evolve? Going back to your first question this minute, when do we stop? Never.

Rob Durant [00:41:25]:

How do you foster adaptability within your organization if your team is is resistant to change?

Sid Mohasseb [00:41:37]:

So let's talk about change. So there there are a few factors. That's one of the things that I talk about a lot. I write a lot about. I've got TED Talks about it. So we have to look at change from from 2 perspectives. First of all, imagine gentlemen and the audience that's sitting there for a minute. Imagine with me that if, I don't know, if it's, 72 degrees outside, the birds are chirping, it's absolutely beautiful.

Sid Mohasseb [00:42:04]:

Everything is just absolutely wonderful. You're you wanna be a scientist? You are. You wanna be, Kim Kardashian? You are. You wanna be, the president, the whoever you wanna be, the the ultimate thing, and you are. Imagine everything is absolutely perfect. Now imagine nothing changes. Absolutely nothing. You have a 5 year old, you will never see your grandkids.

Sid Mohasseb [00:42:27]:

That 5 year old will forever stay at 5 year old. You have, you have McDonald's for lunch. You will always have McDonald's for lunch. There is no change. It's zero change. That's a horrible, horrible place because you have absolutely no options. You'll have zero options. The only friend that we have that provides us with options to progress, to grow, to change, to evolve is change without it.

Sid Mohasseb [00:42:52]:

We are as stagnant as we can.

Adam Gray [00:42:57]:

But that's that's simultaneously, very heartening, but also very scary, isn't it?

Sid Mohasseb [00:43:03]:

Yes. It

Adam Gray [00:43:03]:

is. Particularly because, you've you've swept away all the cornerstones of of a belief system. You know? This is how things are. This is how you need to this is what you're trying to achieve. And all of a sudden, that's all gone now. And and I I think that a lot of people are looking out into the world, and they're they're finding it very difficult to chart a course. So 40 years ago, you would go and start work at IBM, and you would work there until you retired, and then you would leave. And, you know, you had a job for life, and there would be developments within that environment, but you would basically be doing the same thing unless you consciously made the decision to do something different.

Adam Gray [00:43:47]:

Now whole industries are born and and come up overnight and and are swept away overnight. And, and the idea that you will go to university, you will learn to do something or or a trade, you will learn to do it, and then you will do that until you retire. That just makes no sense in the modern world. So peep people are likely to be scared by the fact that many of these barriers have been removed. So so how do people kind of I guess, how how do you meditate and and think about your place in this new world where everything is different?

Sid Mohasseb [00:44:26]:

Yeah. So so this is again, Adam, I think you you and I could have a conversation for another 3 hours with the questions that you come up And we will. Open up the bag of words here, my friend. So, so, so here's the thing. The fact of the matter is, Is is let's go from the change. So the change that we talked about, people change for two reasons. A, they believe in the severity of the problem or the opportunity, the severity of the problem or the opportunity I'm working here. I change in one direction or another, because I think if I stay here, I'm gonna lose my job.

Sid Mohasseb [00:45:09]:

I'm gonna lose my life. I'm gonna, this is gonna be horrible. Or I think over there it's better than here. So I, I change. So it's, there have to be a severity. It's not marginal, it's severe. And then the second is the direction of change, which goes with trust. I trust my, my leader and I will follow him in that direction because I trust that that's the right direction.

Sid Mohasseb [00:45:34]:

I would trust him only if he has originally trusted me. Trust is a three way thing. It's not a two way thing. 1st, I have to trust myself as a leader. 2nd, I have to trust people, and then they will invest their trust in me. Only then. So change comes in, in, in that package. Now going back to, we are, whether we want it or not, the AI environment is creating a $15,000,000,000,000 15,000,000,000,000.

Sid Mohasseb [00:46:04]:

And this is an estimate that was given by McKinsey 3, 4 years ago. That number is bigger now. $15,000,000,000,000 of economic impact every year, starting 2 or 3 years every year. Now I want you to put that in context, 1,400,000,000 people work in China and they do 16 or 17 trillion. This is equivalent of a GDP of China. It's 3 times the GDP of India. This is it's 10 times the GDP of Canada. It is amazing.

Sid Mohasseb [00:46:40]:

This power will not will not change. This this will move where we're gonna go. So either we're onboard, we we get onboard, and getting onboard means mentally we're onboard, or we will suffer the consequences. Part of the reason that the IBMs of the world aren't there anymore and those environments aren't there is exactly because we we the companies where folks were forced to focus on only on profit. Why do we have the jobs go to China? The Chinese didn't come in and put a gun to our head in in Detroit. That's ludicrous. We we were optimizing profits, so get rid of these things. We were ignoring the environment.

Sid Mohasseb [00:47:23]:

So now we have to suffer the consequences. Nobody came in with a gun. Nobody nobody forced our jobs to go to China or any place else. Now for that reason, we have come along this way. So what I'm suggesting is if we go back to how we built companies, how that IBM became the IBM that you wanted to stay with was because they satisfied the reasons that people had because they were building something that made some sense because they were not optimizing like Boeing their their their profits and, and and make all this mess. So if we go back to the course and evolve together and believe that there is more than what is a media, that the world is gonna go to an end because AI is gonna be the master and we the follower. I believe we can get where we wanna get. But we have to believe that we have we have to believe that either the the the opportunity is severe, and we have to trust that this is the right direction.

Sid Mohasseb [00:48:26]:

It's the the the the fact that they're scared, people are scared, is there. So the severity is there. Now they may not see the severity of the opportunity, but they certainly see the severity of the problem on the other end. But the trust isn't there.

Adam Gray [00:48:39]:

But but isn't isn't part of the problem with with this scenario that, when IBM was founded, it was created with the dream that this would be around for a 1000 years, that the people would build their lives, communities, families around my business. And the same with General Motors and the same with Kodak and the same with all of these massive, massive conglomerates that were built. And, yes, the company was built we we had in this country, Port Sunlight, where there was a a village built for the workers in the factory. And, you know, because the the the rich mill owner decided that, actually, I need to give a better quality of life to the pit. So he got incredible loyalty for from his workers. They worked really hard. They were really committed to the company. They had security and health care and all of those things, and this was a a 15, 200 years ago.

Adam Gray [00:49:36]:

Remarkable. But now companies are driven by profit and, more importantly, by short term profit. So I come in as an investor to your business, and I say, if we lay off those 10,000 people and we move that that development or that, that manufacturing to insert developing world nation here, you know, China, India, Indonesia, wherever it may be, you know, we we move the work where I'm paying people not $500 a day each. I'm paying them $50 a day each. I've got a 10 x increase in my profit on the manufacturing portion of my business. And for most investors and for most directors of businesses, that's a very beguiling thought. You know, I'm compensated based on how much profit I can make for the business. All of a sudden, I I now have the opportunity for me to to do one of these things, which I'm sure all of us would agree is the wrong thing to do.

Adam Gray [00:50:39]:

You know? It is

Sid Mohasseb [00:50:39]:

For who, Adam? The wrong thing. See, this is the thing. If we have made the if we've made the leaders if we've made the leaders short term thinkers, and they're in it for themselves, for them, it's not the wrong thing to do. We have given we are incentivizing them to do that.

Adam Gray [00:50:54]:

Yeah. But but that that's what I mean. It's it's you and I would see that as being morally wrong. You know, I'm gonna lay off 10,000 people. I'm gonna turn that lovely town into a ghost town because I'm the main employer in that town. And, you know, we've seen it in every country in the western world happen this way. Those things have been outsourced to a a cheaper manufacturing place. People have been laid off.

Adam Gray [00:51:16]:

And then all of a sudden, the company falls from favor. People don't wanna buy the products because of how they've behaved. But the the the chief executive, the managing director, the board, they don't care because I've gone from earning $500,000 this year to earning $25,000,000 next year, and then I'm I'm on a beach. I've got my you know, it's it's like a scene from Trading Places. You know? Tim Tim's out on the yacht. How are you doing, Tim? And and we're having a great time because we've profiteered on the back of people's misery. Now until we put in place a longer term thing, we'll continue to have Lehman Brothers type situations and companies going under because you I'm gonna make a killing today. I'm gonna retire tomorrow.

Adam Gray [00:51:59]:

It's not my problem. So so how do we how do we change this?

Sid Mohasseb [00:52:04]:

I mean, that's a that's a great question. I mean, there are examples from here to think about too about that. You know? I think during COVID, Hertz, the car company was, filing bankruptcy the day before the bankruptcy. The CEO got a $10,000,000 bonus because he thought about going to bankrupt the company. I don't I don't know. I'm not I'm not smart enough. I don't have enough influence to say, how do we get people to, to come out and have and put their, put their personal interest aside and think of those 10,000 people and all all those all those things. Now before I can become a son or any one of us can become a son or even a central heating agency that that that that that warms up a 20 story or a 50 story building.

Sid Mohasseb [00:53:10]:

I gotta warm up, be able to do warm up my own room. I would say, if we begin to think, each one of us, as the entrepreneur, whether whether whether, our what we exchange our life and and things with is a or b or c as an entrepreneur, as a small company, if we begin to practice based on logic, I mean, what I'm saying is just simple common sense. I didn't come out from this. You know, this is not the result of a 17,000 variable optimization. This is obvious. It's obvious If we practice common sense and the obvious, practice it. Then we will have the trust of the people. We will have companies that would stay a lot longer.

Sid Mohasseb [00:53:55]:

And maybe and maybe if I warm up my room and you warm up your room, one day, we'll have a city that is warmed up.

Rob Durant [00:54:04]:

Wow. Right. Sid, this has been great. Where can people learn more? How can they get in touch with you?

Sid Mohasseb [00:54:14]:

Obviously, my name, if they search Sid Mohaseb, they will find a lot of my books and my writings and stuff like that. My email is sid@mohaseb.com. It's pretty it's pretty simple. And one thing that, I'm I'm contemplating and if they wanna send me an an email, we'll we'll I I am thinking just I mean, just to finish off based on what I just said. I am starting an academy that that that's called Anabasis. Anabasis means moving the base upward, which is a company I started 40 years ago. And the objective of this academy is to get as many people exposed to as many of these ideas as possible, to to work on entrepreneurship and the mindset of people, because I do believe in capitalism. But what we have now is elitism.

Sid Mohasseb [00:55:07]:

It's not capitalism. We have confused capitalism because a group do this and it's the it's upside down pyramid. I believe that, that there is tremendous amount of opportunity, and I believe it begins with people realizing in their mind that they have something and they can exchange it for something better, and they can make that decision of what that better is, not the society. And the drivers are not what success is defined by others. It's what the satisfaction that they define themselves. The trick is being able to define that satisfaction. The trick is how do you have your authentic self and authentic way of being a leader, and and building trust in yourself and in others.

Rob Durant [00:55:54]:

Excellent. Thank you.

We now have a newsletter. Don't miss an episode, guest show highlights, beyond the show insights, and reminders of upcoming episodes. You can scan the QR code on screen or visit us at digital download dot live forward slash newsletter. On behalf of the panelists, to our guest, Sid, to our audience, thank you all for being an active part of today's digital download, and we'll see you next time.

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