Align Structure and Strategy with Stratified Systems Theory

Cole Abbott (00:00:00 -> 00:00:00)

Good morning.

Mark Abbott (00:00:00 -> 00:00:01)

Good morning.

Cole Abbott (00:00:01 -> 00:00:08)

Alright. So today we're getting into our frameworks series.

Mark Abbott (00:00:08 -> 00:00:08)

Yeah.

Cole Abbott (00:00:08 -> 00:00:20)

And I say series, like it's a thing that we're gonna be doing, but I mean, that's the point of this channel <laugh>. So, uh, yeah, we're, we're getting into that rhythm, I guess. Yeah.

Mark Abbott (00:00:20 -> 00:00:23)

Starting to produce episodes on frameworks.

Cole Abbott (00:00:23 -> 00:00:34)

Yes. And so we're starting off with one that we've alluded to before. Yeah. In our, yeah. Uh, what state? Which one was that? I'm having a blank.

Mark Abbott (00:00:35 -> 00:00:40)

Several different episodes. Yeah. I mean, it's, it's, it's a core framework for me, so it's hard not to, well,

Cole Abbott (00:00:40 -> 00:00:54)

Yeah, I was trying to, I was like, I know we refer to it specifically and I'm forgetting which ones they were. Yeah. But yeah, we've alluded to it before in, uh, in the podcast and I'm sure in a lot of our writings. Yeah. Yeah. Uh, and that is Stratified Systems theory, right?

Mark Abbott (00:00:54 -> 00:00:55)

Elliot Jacks.

Cole Abbott (00:00:55 -> 00:01:07)

Yeah. So would you like to give a brief overview of Right. What, when you think about Stratified Systems theory, what comes to mind? What's the Yeah. What's the Spark Notes there? Yeah.

Mark Abbott (00:01:07 -> 00:05:38)

The, the, the, the big idea behind Stratified Systems theory is that, um, as, uh, as, as systems get more and more complex, right? Uh, you, you'll, you'll find strata within them, uh, in order to hold the system together. So as a system evolves and becomes more complex, obviously we're talking about companies, and one of the ways that the company controls itself is through creating structure, um, the system becomes more and more complex, and it develops hierarchies, right? And so the, the hierarchies that we believe really are important in terms of structure have to do with the time span of objectives associated with the seats as you move up the organization, and we talk about this a lot when we talk about structure, and we also incorporate Elliot's work when we talk about stages of development, right? And so, um, the big idea is that the first strata of a company is focused on sort of day-to-day, week to week, month to month, um, work. It has objectives. Um, it's relatively simple problem solving. It's, uh, you know, typically line work, um, situations where people are responsible for producing a certain quality and a certain quantity and, and, and, and, and, and following processes and showing up. And so that's sort of the first strata. It's the simplest strata within the organization. And the next one has a time span of objectives. Or if you're sitting in that seat, you have time spans of responsibility anywhere from three months to, to one year. Typically, our leaders, they don't need to be people leaders per se. They could be team leaders, difference between people, leaders and team leaders. In my, in this, in, in this formatting is that the people leaders are responsible for developing and coaching and, and growing the people as opposed to the team leaders, like on a Tiger team. They're just responsible for making sure that a team that's got a 90 day project, um, uh, that's involved in a 90 day project that that team performs well. And, and so you don't need to necessarily be a traditional manager, quote unquote. Um, stratum two leaders could also be people who are just overseeing projects, um, and, uh, tiger teams and things like that. Stratum three, as we've talked about a lot, right? Tends to be people who are running departments. Um, so, you know, sales versus marketing versus data versus, versus product versus engineering, versus versus finance as an example. Um, customer service, et cetera. And so they tend to have objectives that are associated with the timeframes of anywhere from one to two years. Um, and then you move on to the next strata, which is two to five years. And that's typically, they're occupied by one of three types of humans, could be, uh, a founder, right? And, um, and who has all the departments reporting to them. It could be like, you know, an EOS speak, an integrator, um, or lots of people call them second commands. I've been, I like second in commands or a Chief operating officer, um, or like in our organization is comprised of a C-suite, right? Um, and that c-suite oversees obviously various departments. And so in our organization, we have a CMO, uh, we have a Chief Revenue Officer, CMO being chief marketing officer, chief Revenue Officer, a Chief Technology and Product Officer. We have a Chief people officer, and we have a Chief financial officer. So we have five c-suite members who report to me. And then I'm at Stratum five, which is, you know, responsible for where the organization's gonna be in five to 10 years. Um, and so, um, and then you can go to Stratum six, which is someone who's overseeing multiple stratum five organizations, and then Stratum seven, uh, and that's anywhere from 10 to 20 years. And then start seven is 20 to 50 years, and that's overseeing multiple companies, overseeing multiple companies kind of a thing, right? So it gets pretty, um, sophisticated. That's not what we're typically focus on. We're typically focusing on sort of the stage five companies that have the, you know, the five layers or stratums, if you will. So that's the big idea behind, um, uh, stratified systems theory is thinking about the system in terms of sort of, not just objectives, but the competencies that are required in order to meet the objectives. Um, and it's really, you know, competencies, uh, uh, you know, we can dissect the word competencies versus experiences, right? But the experiences and the competencies and the capacity capabilities to be able to execute, um, those seats at that level.

Cole Abbott (00:05:39 -> 00:06:06)

And then given, I guess we're on the topic of stratum. Yeah. Right? Given those stratums those levels, what, what do you see as the, like, primary mode of thinking for the different stratums, right? Yeah. In terms of day to day, right? Because if you go higher up, you're getting into more principled thinking Yeah. Versus more surface level, right? How does that depth work as we progress through the stratums? Yeah.

Mark Abbott (00:06:06 -> 00:08:14)

So, so think, just think about the, the sort of the nature of the work or the function, right? So, uh, stratum one is just producing, right? Stratum two is implementing the production, right? Stratum three is creating the systems and improving the systems. Stratum four is all about integrating the system. So I'm sitting here making sure that marketing and sales and customer service and product and all that works really, really well together. And then obviously Stratum five is strategic vision, right? Um, and, and, and so, you know, not only do you have, like I said earlier, you know, competencies and, and, and, and capacity and capabilities become more sophisticated as you move up, uh, the time span of the objectives expand, expand, expand. Um, and just the, the, the nature of the problems that are associated with the work at that level, uh, you know, it sort of moves from, you know, being, you know, early on stratum one's trial and error. It's just Right. Um, you know, figure out how to, how, how, how to get a good solve. Um, number two is, you know, experiences and best practices. 'cause they've been doing that, that's how they can lead the people, right? And then the next up is, okay, so root cause analysis, trying to figure out why things aren't working. Then next level up stratum four is systems analysis, and then Stratum five is really, where's the world going? So it's like market analysis. And, and, and I even, I don't even like market analysis actually, because, um, for a lot of, you know, this gets into a topic recently, like founders mode, right? You know, it's, it's, it's not just market analysis. It's a intuitive sense for where the market's going to be in five to 10 years, right? So it's vision, right? Yeah. Um, so, you know, so, you know, the, the, the issue with problem solving, quote unquote, looking at it through the lens of problem solving is, um, as you move up the stratums, the problems you are solving are go from being real problems that exist today,

Cole Abbott (00:08:14 -> 00:08:15)

Very tangible Yes.

Mark Abbott (00:08:16 -> 00:08:25)

To problems that we think are going to exist, right? In a year or two years, or five years, or 10 years, right?

Cole Abbott (00:08:25 -> 00:08:39)

Well, if you're solving, if you're trying to solve a problem with that method at Stratum five, the complexity of the problem and the time it takes to solve it, yeah. By the time you've already solved it and addressed the issue, it's either evolved, changed, or there's just an entirely new problem.

Mark Abbott (00:08:40 -> 00:08:40)

Yeah.

Cole Abbott (00:08:41 -> 00:09:19)

And so, when you get to, right, and it'd be interesting to see if there's a framework on this. Yeah. But when you get to those levels, you have to be, uh, very aware and, and in tune with the logical issue at hand, right. Then the intuitive side of things, like, how does this work? And then what is the basically projection for it? And then Right. All of those things inside. And you have to have that experience to inform that intuition. Yes. And all these things come together to Right. Make those marginal gains to build out that whole picture and that informed worldview that is useful in that circumstance.

Mark Abbott (00:09:19 -> 00:12:02)

Yeah. And, and worldview is a really interesting, you know, word to throw into this discussion. But, you know, I I, I do think as you move up the strata, the, the importance of having a broader worldview, not just in terms of where the world is, but where the world's going is pretty darn important, right? Because at Stratum five, you know, you are, you know, the old Wayne Gretzky line, right? I skate to where the puck's going. You are, you are saying, this is where the puck's going. Right? Um, and you know, it goes back to, um, you know, it's, I have a, a lot of people in the company know this, right? But I have a Prezi from 2012 talking about when AI gets here, how we're gonna incorporate it into the platform. So, you know, there's an example of what a perspective that, you know, I didn't know exactly when it would get here, but I knew it was coming. And so now if you know it's coming, you, you're doing work in anticipation of that. Um, so you're not ignoring it. You're like saying, okay, so if we're ultimately gonna be having ai, um, in our lifetimes, in the co in especially as me as a leader, if I think AI is gonna be here within a, you know, some certain period of time, what are the implications? And am I doing the work that's not going to all of a sudden be, in hindsight, ridiculously bad use of time knowing that this is where the world's gonna move? Right? And so, um, so the, so that sense of worldview, sense of how the world's evolving, the sense of what the nature of the markets, the nature of the technology is going to be in five to 10 years, it's not right. This, this is not something that everybody's, you know, uh, not only, I, I don't wanna say capable 'cause that sounds so whatever, arrogant, right? But I, but you know, I think some people are really fascinated by it and go and willing to do the hard work to think about it and invest, investigate in it. And, and, and, and think about it like a lot. I mean, if you, if you think about it from my perspective, and this, it gets a bit into founder boat stuff, right? I mean, I've been thinking and working on, you know, anticipating AI for over a decade. Um, and, and it's not like, what I mean by that is literally, you know, reading and thinking and, and, and, and, okay, so how is this going to impact what we're doing? And, and, and, um, and so I've got, you know, I don't know, thousands of hours invested since 2012 and thinking about this stuff, right?

Cole Abbott (00:12:02 -> 00:12:52)

Yeah. And it's, to your point of capable isn't the right word. Yeah. But it's really challenging to get to that point, right? Even if you have all the personality things in your favor, right? So you have to be on, you have to be willing to embrace that discomfort of developing your worldview. 'cause there's gonna be a lot of things that challenge it. Yeah. And you have to figure out what's good, what's bad, what works, what doesn't work. Right. And really fill in and, and seek out all those blind spots, right. 'cause where something's a little dark and, and fuzzy. Yeah. It's like, that means that's not like, oh, we're gonna avoid that. 'cause that's a little bit, that's not as much fun. Right. You know, from whatever perspective. Yeah. It could be an ego thing, could be a, um, a time thing, could be a comfort thing, whatever. Right? Uh, but that's where you have to look because that's where you're gonna get caught.

Mark Abbott (00:12:52 -> 00:14:51)

Well, and there's, there's so much more we can get into this. I was, what was it just yesterday? Um, I was working on a piece and, uh, oh, once again, it was, it was, someone shared some stuff with founder mode. 'cause that's so, so topical right now. Right. And what are the, you know, characteristics of, you know, of a visionary founder, which is really what founder mode's all about. And you know, I, and, and you and I have had a lot of conversations on, on visionaries and, and, and, you know, sort of exceptional founders, um, in terms of all these different attributes, right? And I, and I, I came up with someone, I was reading someone else's stuff, and I came up with like 15 different characteristics. But, you know, one of them to state the obvious is, you know, is if you don't have an optimistic perspective about where the world's gonna be in five to 10 years, why the hell would you be doing all this work? Why would you be reading? Um, you know, 'cause most, one of the other characteristics of most founders, and I, and I, and I, I think founder mode is actually not perfect. It, I think it's really more visionary mode. 'cause it's someone who's got a strong vision of where the world's gonna be in five to 10 years, or 10 to 20 years, and they're willing to like, you know, put their money where their mouth is, you know, quote unquote. Right. And so, you know, by definition, you know, you gotta be, you gotta be optimistic. You've gotta have a point of view about how the world's evolving. Um, and, and, and, and, and, and, and, and what you tend to see, I deeply believe is that those visionaries, like there's some of the hardest working people out there because it's not just a nine to five job by any stretch of the imagination. As, you know, I'm reading every single day seven days a week and thinking and writing and, and, and trying to understand where the world's going. Because as part of it, you know, we've got 190 people who are, you know, who are, who are with me on this journey, and I care deeply about doing the right thing for them and for all of our clients. And so, you know, it's not a, you know, playing the long game, um, requires a lot of different characteristics.

Cole Abbott (00:14:51 -> 00:15:04)

Yeah. You almost have to enter it, and we kind of talked about this a little bit, but with like a cynically ambitious optimism Mm-Hmm. <affirmative>. Whereas you have to have to be like, I see the problem and then it's up to me to solve the problem, and then it will be better if I do that.

Mark Abbott (00:15:05 -> 00:15:13)

And, and, and, and there's, and, and you mentioned discomfort earlier, and you have to have some, and you have to be at peace with the fact that you don't have all the answers. Right.

Cole Abbott (00:15:14 -> 00:15:17)

And there will be times where you feel like you have even less answers than you did at the beginning. Yeah, yeah.

Mark Abbott (00:15:17 -> 00:16:11)

Right. And it's, and you Yeah. 'cause you, because you know, it's not like this, right? Uh, the, the way sort of companies evolve and, you know, societies evolve and individuals involved, we, you know, we, we go like this and all of a sudden, oops, something that we thought was real or that we completely understood is not what we understood. And so, you know, we go backwards a little bit because it's like, Ooh, now I've gotta revise the way I think, which is part of the worldview stuff, right. Gotta revise the way I think. And now, you know, what are the implications? Does it have big implications on where I was we were taking the company? Or is it like, okay, yeah, it's no big deal. And so you gotta, you know, you gotta be comfortable with the ambiguity associated with, you know, getting from here to there. Um, and just sort of have confidence in, in not just your own ability, but you and your team's ability to navigate the unknown pieces. Does that make sense? Yeah.

Cole Abbott (00:16:12 -> 00:16:50)

And I, and I think huge piece is consistency. Yeah. And I think it's, it's being disciplined in the sense that you are dampening the volatility within yourself as forces external or within your team or whatever. Right. Right. Act upon it and make you doubt things or make you a little bit overexcited about things. And it's like, no, we just have to keep holding the course. And then when it comes to the worldview, it's Right. You have to have <laugh>. The better developed your worldview is the better off you are because if you have a fragile, incomplete worldview Yeah. And something comes in that just destroys it, that leaves you, I mean, that's traumatizing. Yeah. Right? And that's not gonna be good for you or the people that you're leading.

Mark Abbott (00:16:50 -> 00:18:38)

No. And I think we've had the discussion in one of the earlier podcasts about, you know, my favorite version of a story around that destruction of one's worldview is the last episode of mash. Right? Um, and so where, you know, Hawkeye's worldview is completely, is disintegrated. And, um, and he goes insane for a while. And, you know, the whole episode is part of it, is trying to figure out why the heck Hawkeye's gone, gone mad. But you can go check that out on your own. Um, but, uh, but you know, the, the, this is why I believe that really, really strong sort of stratum five or higher visionaries, you know, they, this consistency thing is really super important, right? Because it's compounding. Right? I could talk about scalers versus scalers. Scalers are very clear on where they're going. And you know, the things that I think you need to be really clear on are your forever agreements, right? Who you are, right? What's your compelling why, what's your compelling value proposition? Who do you serve? Um, and, um, and who are you culturally speaking? 'cause if you can keep all those things, like, if, if you, once you nail those things in, it makes it easier for you to be consistent, right? And, and, and staying consistent gives you the power of compounding, right? If you're going all over the place, you know, you're, you're basically not taking advantage of the power of compounding. And worse, you're ending up, you end up, um, frustrating the heck out of a lot of your ideal stakeholders. Your employees are like, well, you know, last week we were doing this, or last quarter we were doing this, and now we're doing this. And everybody feels whipsawed all over the place. So consistency, um, clarity of vision, pretty important.

Cole Abbott (00:18:39 -> 00:19:23)

Yeah. And there's things that you really need to be consistent on, and there's things where you can swerve a little bit. Yeah. Right. There's times where you gotta be, you gotta exploit the thing, you gotta stay 'cause it's none. There's times where you gotta be more exploratory. Yeah. And we have, I think it's whatever we're working on that framework right now. Yeah. Uh, and, and talking with our CMO, we're trying to figure out what black and white and then figure out that hierarchy and, and make sure that we're all aligned there. Yep. Uh, so that's something we're working on. Yep. And probably won't be sharing anytime soon, but in the future. Yeah. Uh, so yeah, it, I think yeah. Figuring out, and I think it's really important at, at Stratum five for those individuals to figure out Right. Those forever agreements Yeah. But also

Mark Abbott (00:19:25 -> 00:19:25)

As it

Cole Abbott (00:19:25 -> 00:19:54)

Relates to their professional life as it relates to the company, but also who they are inside and being, uh, being wise in that sense. Because if you are all over the place, it's that volatility is going to affect the consistency with which the thing that isn't black and white. Right? Right. If you're consistent and the things are consistent, and though it's much more easy, it's much easier to align those things Yeah. And keep that holistic system consistent. Yeah. Well,

Mark Abbott (00:19:54 -> 00:21:40)

And and, and it gets back to if you're confident, right? And you really deeply believe in your vision and where you're going in your forever agreements and how you're gonna get from here to there, um, it makes it easier to deal with. One of the other things I've been writing and thinking about recently is sort of the, you know, we, we, we've talked about entropy within organizations, but there's also another couple things within organizations, um, any any complex adaptive system, which obviously a company is, which is, um, anarchy and chaos, right? So, um, anarchy is, okay, so we have these forever agreements, but you have leaders below you or individuals below you who are basically like, no, right? We're that they're not bought into those agreements. They're not embracing those agreements. They're, you know, they're basically saying, yeah, I hear you, but, right. Um, and so that's, you know, that's a part of that creating a, a stratified, you know, stratified systems theory is, is you're aligned all the way down. Right. Everything you're doing is consistent. And, and, and, and because of that consistency and because of that alignment, when things get out of alignment, it's, you know, just like with agreements, right? If agreements aren't being met, then it's pretty straightforward conversation. You know, was it you, was it me? Or is there some other force that, that made it impossible for us to live up to the agreements? Um, obviously, you know, if people below you are not living up to your, their agreements, then that's kind of anarchy, right? Um, and then you have chaos, right? Which is a sister or brother of anarchy in, in a lot of regards where it's, it's not where chaos exists is where we haven't entered into a formal agreement that we should have

Cole Abbott (00:21:41 -> 00:21:42)

Just the unknown. Yeah. Yeah.

Mark Abbott (00:21:43 -> 00:21:49)

Um, and it's, it's, it's the un it's, it's, I don't know always if it's the unknown or if it's the, we

Cole Abbott (00:21:49 -> 00:21:55)

Just in, in that situation. It is, yeah. And, and they are similar, right? They're sisters in that sense. Yeah.

Mark Abbott (00:21:55 -> 00:22:42)

But sometimes it's, we just haven't, you know, we haven't had, we, we hadn't, we hadn't thought about this. Yeah. You know, because it wasn't necessary to think about it or we hadn't thought about it because, but we should have. Right? And, but, but because something is obviously relatively material that we hadn't thought about or should have thought about, um, and now we have this noise, this friction right. This chaos within the organization. And, um, and, um, the good news is if, you know, if you're doing, if you're, if you, if you do structure first, people second, your structure's strong. Everybody understands who's responsible for what. When the chaos comes up, it's like, okay, it is what it is. Right? I always say we're exactly where we're supposed to be learning the lessons we're supposed to learn. Now let's just deal with it.

Cole Abbott (00:22:42 -> 00:24:18)

And ideally, you have a valve on the chaos. 'cause you always, chaos is an essential element, right. 'cause it's how you explore. It's how you learn. Yeah. It's where you learn. Yeah. Um, and there's a difference between having that valve, having that tap on, on chaos and, and having it, right. 'cause we think what you should be succeeding 85, 90% of the time. Yeah. And in order to do that, you really have to be 20% of the time in that chaos Yeah. In order to learn and, and figure out what works, what doesn't work. And I think that when that becomes uncontrolled Right. Uncontrolled chaos, then that turns into anarchy. Yeah. And you see issues with that when you, people aren't living are, aren't in line with the forever agreements. Right. So if you have way too many things that are out there and everyone's supposed to be on it Right. Then there's less of an adherence or respect for the rules that are there. Right. Or rules isn't the right word, but Right. Right. It's like the, the agreements. Yeah. Agreements, yeah. It's what's a saying of bad rules, drive out respect for good, good rules. Yeah. Right. And so if you have too many, or you have stuff that doesn't really make sense, isn't explicit, coherent and resonant, right? Then you start to just lose a whole lose grip on everything. And there's a little, and, and that's a good thing, right? Right. Because I mean, that's, you're getting into tyranny a little bit there and Right. That's not good. Right. So it's a really delicate balance between those things. But once you, you do it right, right. Ideally, what does it look like? And have it really distilled to what's super important. Yeah. That keeps it easy. Yeah. And then that allows you to, to filter in the, the right amount of chaos for your organization because it's gonna vary from industry to industry team to team. Yeah.

Mark Abbott (00:24:18 -> 00:25:41)

And, and you know, it, uh, another, an idea that's related to chaos is stress. Right. Um, and I was at a, at a, at a Vistage, um, talk earlier this week. And the, and, and, and the speaker's topic was stress. And, you know, what was interesting is that, um, I, I forget, I think it's like 80% of the people think stress is bad. And it's like, no. Right. Actually there's, there's, there's not enough. Stress is bad. Too much stress is bad, but there's actually an optimal level of stress. And, you know, one of the, one of the concepts that's out there's called the Ys Yorks Dotson, um, framework. And it shows you sort of, you know, more and more stress. Um, and, and at some point, and, and then you have productivity. Right. Not enough stress and, you know, don't have a lot of productivity 'cause people are just bored and then too much stress, and obviously everybody's overwhelmed. Um, so, you know, just like there's a certain level of chaos within an organization, there's a certain level of stress. So there's a healthy level of chaos. Right. It, it, it enables us to explore, it enables us to learn. Right. And, and, and so if we think that no chaos should exist, then we've got, this is, I don't know if the right word is ified or Right. It's just Right. It's just,

Cole Abbott (00:25:41 -> 00:25:45)

It's static. It's, and then it's, and it's, it's in that sense, it's decaying. It's

Mark Abbott (00:25:45 -> 00:25:49)

Decaying Yeah. Entropy. Right. It's not growing. Right. So, so you want to, it's

Cole Abbott (00:25:49 -> 00:25:57)

Also Right. And these are usually antifragile structures. And so when you do not stress any, there's so many tangents go here. Yeah. If you don't stress in antifragile structure, it's going to atrophy.

Mark Abbott (00:25:57 -> 00:25:58)

Yeah.

Cole Abbott (00:25:58 -> 00:26:01)

Right? Yeah. Like if you don't exercise, if you don't work out your muscles Yeah.

Mark Abbott (00:26:01 -> 00:26:02)

They're

Cole Abbott (00:26:02 -> 00:26:03)

Gonna atrophy. Gonna atrophy. Yeah.

Mark Abbott (00:26:03 -> 00:27:37)

Yeah. And, and it's, and it's the whole concept of flow as well. Right. Which is, which is like you, you want, you want a a like a nice level of challenge based upon your level of skills and experiences. Right. Um, and you know too much, you're gonna freak out not enough. You're gonna be bored. Right. Too much. You're anxious. And so, you know, helping everyone in the, in the company understand sort of the, the, the nature of adaptive, you know, complex adaptive systems, the nature of growing systems, um, the fact that, you know, stress is actually, there's op there's good stress, right? There's bad stress. Um, there's good chaos. There's bad chaos. Right. And, um, and, and, and, and part of what I believe makes that not only understandable, but cool, is when you help them understand that we're dealing with all this stuff because that, that, that place we want to be in five to 10 years, isn't that gonna be awesome? Right. And then, and then, you know, and then, then we're gonna be here in three years. We're gonna be here in two years. We're gonna be here in one year. You can see us actually making the progress there. Um, and so it's like, hey, you know, like we say, we're learning, you know, we're exactly, we're supposed to be learning lessons we're supposed to learn. So, um, it's all good. Let's not freak out about it. Stuff happens. And, um, um, and it's just, it's just the nature of of, of building and, and, and, you know, starting, building, running and scaling a damn good company.

Cole Abbott (00:27:39 -> 00:28:20)

I think it's some, well, we're talking about the stress thing Yeah. And saying something more actionable. Actionable about it. Mm-Hmm. <affirmative>. Right. There's the, as I would look at it, and I think the, what scientific way of thinking about it is hermetic stress versus chronic stress. Hermetic stress is, is dosing the right amount of toxicity or stressor or whatever Right. In order to reduce, in order to induce an adaptive response. Right. And you do that just little titrating things, right? You do it with, uh, um, everything from working out to I think, or studies. That's like if you drink half a cup of alcohol a week, right. That's technically good for you. Right? So that's not advising anybody Isn't that do

Mark Abbott (00:28:20 -> 00:28:22)

That, isn't it Brian Johnson? Doesn't he have a little bit of water every

Cole Abbott (00:28:22 -> 00:28:40)

He It's little, little bit. Yeah. Yeah. And it's because you wanna induce that, that stress response. And there's a lot of evidence that vegetables a lot of the things in there, the real value there is hormesis, um, and Right. But then we get into chronic stress, that's where something stressful happens. It's overwhelming. Right. And it just continues over and over. Right.

Mark Abbott (00:28:41 -> 00:28:49)

Uh, and 'cause what's happening is it's releasing, constantly releasing cortisol. And cortisol is literally just sort of eating away at, you know, a part of your immune system, right?

Cole Abbott (00:28:49 -> 00:29:58)

Yeah. I mean, it's good and lot you need it, right? Yeah. It's essential. Yeah. But, uh Right. If you get, you push it too far and then it get like Cushing syndrome, we don't need to get into all that sort of stuff. Yeah. Uh, but yeah, over in overabundance it is bad. Right. It's the same thing with the Uix Dotson, right. Where you have that curve Yep. And the Hermes curve would look more like, uh, right. In terms of overall health. It's like it goes up and then it just goes right back down. Yeah. Goes straight, right? Yeah. When you keep pushing it, it's really bad. Yeah. Um, yeah. And then so the, the point there being, when you do have those stressors, right, you wanna make sure that you are more or less in control of them. Yeah. But also that you're, you're adapting them, you're adapting to them properly. And for the most part, especially in the, in the business sense that you're facing the things that you fear and are uncomfortable, you're facing, facing those head on. 'cause if, when you do that, when you're taking on the challenges proactively, you're activating the part of your brain that is meant for growth and exploration. Right. But when you are reactive, right? That's a prey response. And then you freeze and then that's, that's bad.

Mark Abbott (00:29:58 -> 00:32:12)

Yeah. And, and, and this is a system thing, not just like, this isn't responsibility, you know, a, a great leader in my opinion, helps everyone in the company understand that they're, they're actually a part of all the feedback loops, right? Every one of them is a feedback loop helping us understand what's working, what's not working. And that's why, you know, I, I think culture is so bloody important. It's, people are comfortable saying, Hey, right, there's an issue here. And you know, these are, this is what we, we, you, you think's happening, but this is not what's actually happening. And so we need to work on things and we need to be able to talk about things. And, you know, um, I like to say that, you know, when you look at whether it's a, a company or society, right? You've got a leader, um, you've got a leadership council, you've got culture, right? Culture should be strong so that everybody's, there's a lot of feedback loops running all over the place. So you're hearing what's going on. And then the visionary that, that, in this case, sort of that stage five leader has a strong point of view, but you know, they've gotta be really making sure that they're living up to all the things that every, that, that, that they've all agreed to. And so the leadership councils there to make sure that the leader is not going off, you know, and doing bad things or not listening. And, and so in some respects, you can say the leadership council or the C-suite or the senior leadership team, you know, part of its job is to protect the entire company from the leader. Because like, you know, we're all less than perfect. And sometimes, you know, when you're sitting at the top, you think, well, you know, you're the smartest, most knowledgeable person there. But the reality is, is, you know, everybody below you collectively is significantly smarter than you. You just have to have a strong point of view about where you want to take things. And hopefully you've done a decent job articulating that as an example in the Forever Agreements. So people are like, Hey, look, you know, this is not consistent with, you know, what we've all agreed to. And so there's feedback loops all over the place to help us, you know, navigate the chaos and navigate the stress, um, you know, uh, address the entropy and keep this thing sort of moving forward towards the longer term vision.

Cole Abbott (00:32:13 -> 00:33:02)

And I think that at the top of whatever system it is, you know, company state doesn't really matter. Yeah. There's a, there's a tyrannical element that's in the shadow. Mm-Hmm. <affirmative> of the thing. Mm-Hmm. <affirmative>. And Right. If a left to its own devices, it will usually deteriorate to its own at its own accord. And so, right. What in really distilled fashion Mm-Hmm. <affirmative>, what are the essential things that you need, right? That a leader needs to know to be comfortable, make sure that they are being properly guided and listening to those feedback loops across where the organization, team, system, whatever, to make sure that they are maintaining the right course and not becoming too mentally isolated and decaying

Mark Abbott (00:33:02 -> 00:34:44)

Well, at the risk of stating the obvious, um, I believe great leaders surround themselves with people who are capable of, you know, saying no, people who are capable of pointing out things that they don't know. You know, there's a lot of, a lot of people say, you know, you hire people that are better than you. Um, and um, and, and I definitely, you know, you definitely want to do that, you know, across your c-suite, every single one of them should be better. You know, Greg's obviously a hell of a lot better at technology and and product than I am. And Meg's amazing at people, and, and Chris is amazing at revenue, and now we've got Sean right on the, on the CMO side and, and, and obviously, uh, Tim on the CFO side, and, you know, so all of them by at what they do are better than I am. And what I want is for, and we talk about it a lot, right? Is, you know, they need to be able to push back at me. And they do. We have a lot of, you know, laughter about some of these moments where it's like, Hey, dude. Right? Um, and it goes both ways, but, um, you need to create that environment where, you know, people are competent and confident in, and, and it goes all the way up and down in terms of, you know, what your domain of expertise is. You know, you know, you know, you're in a company where they're gonna listen to you and they're gonna respond. They may not always agree with you and, but hopefully they'll explain why they don't. And then, um, at least you have that insight as to why, you know, something you think makes sense was not embraced. So the systems, you know, that's what's a healthy system, right? It it works all the way up and down

Cole Abbott (00:34:45 -> 00:35:00)

Yeah. I guess to, to bring it home. Yeah. Right. <laugh>, so we went a lot of different paths there. Yeah. To, because I think stratified systems theory is a, is a complex overall thing that is useful

Mark Abbott (00:35:00 -> 00:35:00)

Yeah.

Cole Abbott (00:35:01 -> 00:35:24)

But isn't really the most, uh, viral kind of thing. Mm-Hmm. <affirmative>. Right. So to make it right to, if you were to try to pitch it in a way, in your own words, that would be most valuable for someone that needs to understand this or needs to know, right? Yeah. Leaders in an organization. Yeah. Uh, how would you do that?

Mark Abbott (00:35:24 -> 00:37:37)

Um, number one, structure first, people second, right? So, um, you know, if, if you don't do that, you end up with, um, a structure that's not scalable, a structure that, um, is going to break eventually because it's not built to, you know, to help you go from day to day to week to week to month to month to, you know, quarter to quarter to year to year, to five years out to 10 years out. So to me, you know, you, you get the Forever Agreements. Um, and then on top of that, you know, some of the other core agreements, like, you know, where are we gonna be in 10 years, right? Your compelling audacious goals as an example. And now it's, okay, so now how do we, how do we get from here to there? Well, let's focus on getting a structure that's not just about today, but because it takes time to hire and onboard people, you want to have a structure in place that makes sense six to nine months from now, right? And then you want to be thinking about, okay, if we hit our numbers, this, this is how the structure's going to evolve, and is this structure going to continue to evolve, um, and be consistent with this stratified systems theory, right? It really simplifies structure. Um, and it really makes it simple for you to understand what each layer is. It helps you avoid having excess layers because there's so much pressure within organizations for people to say, well, I wanna promotion, even though it's like, but, and so you get all these interra layers, um, and all of a sudden now that's called middle management. And then of course when things get tight, there's layoffs of, because these people are really genuinely in seats that don't fundamentally make sense. So to me, structure first people second is like, if you wanna become a damn good leader, you need to understand structure. You just need to understand structure. There's no better system for understanding structure than I've, that I've found than stratified systems theory, right. So, um, and it's not complicated. It really is not complicated. You know, we've written a lot about it. Um, there's a lot of good stuff written out there. Elliot's got a bunch of books that are out there. His are very thick. You don't need to go there. There's some good stuff. Um, you know, we'll be putting

Cole Abbott (00:37:37 -> 00:37:47)

Out an article on it, huh? We'll be putting out an article on this. Yeah. Yeah. I don't know if it'll be out at the same time as this. Yeah. But eventually, uh, we can link it in the description. Yeah.

Mark Abbott (00:37:47 -> 00:38:33)

But, you know, all tools are equal. Some tools are more equal than others. I, I think if I think that, you know, I like to say it's not complicated. Yeah, it is hard, but it's not complicated. Getting structure right is not complicated. And so this is like, this is a core competency if you genuinely want to be a decent leader and you, and, and by that not only just creating the company, but attracting and retaining people and making it clear as to how, you know, how progress, how they can progress in their careers. It just makes it so much simpler. Less is more until it's not right. So, um, you know, for me it's, it's, it's, it's part of the 1 0 1 of learning how to become a, a, a great company builder. At least a damn good company builder, if not a great one.

Cole Abbott (00:38:34 -> 00:38:35)

Stratified systems theory.

Mark Abbott (00:38:35 -> 00:38:36)

Stratified Systems

Cole Abbott (00:38:36 -> 00:38:38)

Theory. Thank you. You're welcome.