Jeremy Utley: 0:00

Alright, so I am looking at the results of this vote and thinking, Oh, no. Oh, no. Oh, yes. Oh, yes. And that's when I realized this team was the exact wrong team to be making the decision. I'm, I'm Jeremy out Lee and by day I'm a professor at Stanford University, but by night, and an insurance do

Craig Pretzinger: 0:31

it shirts dudes are on a mission to escape be handcuffed by our agents

Jason Feltman: 0:37

out by uncovering the secrets to creating a predictable, consistent and profitable agency Sales Machine.

Craig Pretzinger: 0:45

Hi, I'm Craig Pretzinger.

Jason Feltman: 0:46

I am Jason Feldman. We are agents. We are insurance.

Craig Pretzinger: 0:57

Welcome to the show. So for folks that aren't familiar with you, why don't you tell us a little bit about your background? How you got to be in a fresh story? Oh, well. I was gonna digression I was gonna go in a little than weave the hook, then then come back to it. I don't think you were classic storytelling form. Yeah, yeah. That's fine. That's fine.

Jeremy Utley: 1:22

I believe him. So I'm Jeremy le author, co author of IDEA flow, the only business metric that matters, which was recently, actually cool story just last week was named by thinker's 51 of the top 10 innovation books. It's very exciting. And I've been teaching at Stanford University for the last 15 years or so leading executive programs and entrepreneurial accelerator and leadership labs for students from business school, Medical School of Law School of Engineering, and then professionals that want to bring some of the stuff that we call design thinking into their organizations. And the moment that I brought you into was a moment at the faded Silicon Valley Bank, where a group of high performing leaders that we had brought together were pitching their innovation ideas to a particular team, and I realized the team who was selecting the ideas was completely unequipped to make the best decision. Hmm.

Craig Pretzinger: 2:21

I'll talk more about that.

Jeremy Utley: 2:23

Yeah, so. So basically, what we do when we go into organizations is we're seeking to build capacity, think about innovation, not so much as an event like a hackathon or a sprint, where it's like, we get the idea, then it's back to business, we think about innovation, as it's a capacity that you have to build. It's not only an individual capacity, but it's an organizational capacity. And so we teach students at Stanford, you know, grad students at Stanford primarily, but then we get brought into organizations to cultivate that capacity in the organization. And years ago, Greg Becker, who's a CEO of Silicon Valley Bank had brought us in to do that. And he said, Hey, I want I want you to work with my 30 kind of senior, most leaders who report into the C suite where we want to develop them as high potential leaders, we've got nine or 10, different strategic areas of inquiry, and we'd like for them to use the process that you've pioneered at Stanford. So let's choose one of the projects is kind of a learning vehicle. I think we chose something like debt financing for startups, everybody admitted, hey, we got to reinvent this thing. Let's all in parallel. And that's something we can come back to if you want, but basically, nine teams in parallel all trying to solve that problem. And then at the end of two or three days, we're going to pitch solutions, we co developed with entrepreneurs, to the team that's responsible for shepherding this work forward. Now that's the exact wrong team to be making the selection. And it's it's there's a lot of cognitive bias at play, which we can nerd out however much you want to. But the basic gist is, there were you know, a call it a spectrum of with any portfolio, right, there's a spectrum of outcomes. There's some kind of wacky stuff, there's some low hanging fruit, obvious stuff, there's some really high potential, but potentially a little bit more risky stuff that comes out of these nine teams. And I had pulled the members of the kind of startup debt financing team out of their respective teams, we've mixed them up into to be the jury, and they're going to select the ideas and move forward with you think this is obvious, right? They're the people whose job it is to do this stuff. And I'm watching I haven't done this for a bunch of years, I kind of have a little bit of an intuitive sense of what is high potential, what's not, etc. And I'm watching the jurors and my first thought is they're grading the nine ideas in the portfolio. Honestly, my first thought guys was they don't understand the grading criteria. Yeah, they don't speak English. It's like it was so backwards. I'm like, surely there's something wrong because they're selecting the worst ideas. Right, objectively, you know, and I'm objective in this situation, the worst ideas, and then I realized, no, this is going to be awesome. rather than rescue them, I'm just gonna bring him in and we're gonna unveil the wind make the train wreck happen are watching. I mean, that's my job. I'm basically like, I'm not a train conductor on the train record, right? So we come in to the, you know, all of the leaders there all of the senior leadership team, Greg Becker, the former now CEOs there. And I say, Alright, folks, jury, let's hear what the what the two ideas that you selected are, and they say the two ideas, and there's just you can hear a pin drop in the room. And I said, actually real quick, would you raise your hand, just raise it high? If you would have selected either of these two ideas? Nobody in the entire room raise their hand, and one of the members of the debt financing team goes, Are you serious? And then multiple people in the crowd go? Are you serious? Wow. It was just this amazing moment you realize the people whose job it is to innovate, are not the people who can select the most innovative idea because they're thinking in terms of Is it doable? Is it going to meet our budget? does it align with what we already think the answer is, right? All this stuff, it's they bring all of those biases to the selection moment. And they're not they're fundamentally the wrong people to making the selection. It's

Craig Pretzinger: 6:17

the is the epitome of round of putting the round peg in the square box, right? Like they're in a square and and you're talking entrepreneurs. Bank is just soon as banks involved, you know, it's just like, they can't do it.

Jeremy Utley: 6:32

But I mean, I can't tell you all the time, I remember I'll tell you another story, just you know, for kicks, maybe 2012. We're working with one of the world's largest hospitality companies in the hotel space 1000s of locations around the world, which now you know, it's like one to five people. And we are, we're standing with the senior management team talking about our kind of area of expertise, which is disruptive innovation. And the chairman of the board and mind you this is now 12 years ago. So if I look young now imagine how I looked then he patronizingly put his arm around me. He said, Jeremy, I don't think you understand. We haven't had a disruptive innovation in hospitality and 50 years. And I had happened to just randomly as it were. But I had checked Wall Street Journal earlier that day, and Airbnb had just closed round of fundraising for something like a valuation of like $12 billion, this company, the entire company was valued at a fraction of that. And I said, to the chairman of the board, I said, What about Airbnb? And you know, he said, Well, that's not a hospitality company.

Craig Pretzinger: 7:43

That's like, that's like Blockbuster, saying Netflix isn't a movie company,

Jeremy Utley: 7:47

a movie company? Yeah. Right. We find ways to conveniently define our market in a way that we're the only one right. And that's, that's part of Canada institutional bias. But anyway, I've, you know, idea flow is largely about our adventures and misadventures trying to drive innovation in organizations. Thankfully, we've had some successes too, but what you see is human beings, with all of our faults, and cognitive bias and things like that, we just, you bring a bunch of people together, it doesn't make us better, sometimes it actually just amplifies some of that underlying stuff. And you read a bunch of that in the pages of the book.

Jason Feltman: 8:22

I love it. What an interesting conversation. Our audiences is primarily we have an awesome community of insurance agents. And I think a lot of times the insurance business as a whole gets stuck in a box, then even our agencies, you know, we get kind of like in a box to the way things that were done and, and the way things always have been. So it's really hard. When we're talking about innovation in general, to just think outside the box, think about, hey, just because it's been done this way doesn't mean like this is the only way like, what about all these other things that are happening? Right?

Jeremy Utley: 9:02

Well, and what I would say there, just to kind of put a fine point of what you're saying is when the world is static expertise is an asset. When the world is changing expertise becomes a liability. And most folks don't appreciate is the extent to which the world is changing, right? And so what you see like one of my favorite examples of this historically, I'm a super nerd, you have to be a professor at Stanford. So I read a lot and things that I love is the story of the of the skunkworks at Lockheed Martin. So this is like, they're responsible for tons of the big time innovation in aviation over the last, you know, half century. And famously, in the Cold War era, the US government was seeking to develop a aircraft which had a lower radar signature. The problem is, you know, we're flying bombers over and the USSR is really gifted at shooting down our bombers. You So we need a lower radar signature, and there's not a lot of progress with kind of conventional approaches. Well, this young guy, Dennis Overhauser, reads an obscure Russian math paper that the Russians hadn't bothered reading. It's been out for over 10 years. Overhauser reads it and he's, and he tells Ben rich who's running Skunk Works, you know, it seems like there are formulas in this paper that would inform a new design, Do I have permission to explore a new design, bit enrich? You know, it's a young guy, you know, is relatively, which is to say his time is not super expensive. I have at it. So he takes like six months, and he comes out with what would become the stealth bomber. By the way, it's a it's an aircraft that registered 1/1000 of the radar signature, the next batch ever been designed? Yep. And at Lockheed Martin at skunkworks. They called it the hopeless diamond. That was the internal name because everyone was convinced this thing had no hope of flying. And actually one of the head aeronautical engineers, jokes. I mean, someone jokingly said, Dennis Overhauser, should be burned at the stake. Because I have I have slides wrong. In this kid. I have slide rules older than this kid. And what does he does he not know what flies right? And you know what? It's true. It's it's technically true, that the stealth bomber is unstable, not on one axis, not on two axes. But on all three axes. It's unstable. Interesting. So if the world doesn't change, that means it can't fly. Now, that's in the same time period that computer stabilization was coming into being and all of a sudden stability, the definition of what makes for stable is changing. And the conventional paradigm of what makes for airworthy is changing. And so you end up with this radical innovation, but it had to come from somebody who was you could say unfamiliar with prior art, right? And the challenge for a lot of folks as you rise, the ranks for the organization in your in your credibility is built upon your expertise. And where the challenge is where the disruptors usually come from, as someone who's questioning a fundamental premise, what if unstable, is okay, you know, I mean, and there's tons of examples of breakthroughs coming from basically somebody with a novices mindset. And so for a lot of leaders, the question is, am I am I the kind of leader that a young person or that A can have a stupid idea with? If stupid ideas aren't safe around me, we have no hope of innovating.

Craig Pretzinger: 12:26

Well, every innovative idea starts off stupid, right? Like Copernicus said, No, we're not the center of the universe. And all of a sudden, you know, he's got problems.

Unknown: 12:36

He pissed off a lot of people examples. Yeah, absolutely. It's the best, right? It's like

Jason Feltman: 12:42

it it's funny, like, like, the the line between crazy and genius is so thin, right? Like, you know, everybody's crazy until they do it. And then they become genius.

Jeremy Utley: 12:57

You know, I mean, one of my favorite examples to just historically is, I think, Lord, Kepler he, he, he was I think it's Laurie Campo, whoever it is. He was presenting at the kind of worldwide association of physicists in 1900. This is four or five years before Einstein's annus mirabilis, right, it's like, major breakthroughs. And he proclaimed from the stage, the only thing left for physics is more precise measurement. There remains nothing left for physics to do. world leading authority over two equals MC squared prior to general relativity prior, like foundational theories now that have changed how we understand the world as we know it, and the world leading expert at the time says there's nothing left to know. So

Jason Feltman: 13:39

crazy. Okay, so I want to get more into innovation. But now I want to go back. What got you started? How did you get into Stanford? And and what what started this curiosity? Well,

Jeremy Utley: 13:54

I think how did I get it was an admissions oversight. We

Craig Pretzinger: 13:58

also need to know your LSAT score real.

Jeremy Utley: 14:02

I don't even know my LSAT score. But I, you know, my my background, I'm in finance. I was a management consultant, doing kind of very conventional management consulting kinds of things. I had my heart set on moving into economic development I had spent when I was in college, I had spent a summer in Bolivia, we're setting up a accelerator for university there. After you know, before going to business school, I spent a summer in Zambia, working in an AIDS orphanage and my heart was really set on doing economic development. I decided because I hated my management consulting job so much, I decided to sign up for two more years of it following business school because that's, you know, the smart thing to do, and which gave me kind of very much a kind of a free summer so to speak, whereas a lot of folks in business school got to use that middle summer as it's got to be their pivot moment. For me. I couldn't be more entrepreneurial, a little bit more liberal in my search. So I ended up at a startup in Delhi, India, just outside of Delhi and Noida. India, doing solar lighting. And I'm, you know, spreadsheet monkeying. You know, I love a pivot table as much as anybody else, even to this day, I'm in recovery. My name is Jeremy. And while I was there, there are these amazing designers building these revolutionary products for people in poverty. And I didn't know about design as an approach to the world as a worldview as a problem solving methodology. I knew about design, my wife's a fashion designer. So I knew about design is like a capital D kind of design, not like this lowercase d way of viewing the world. And that summer in India really changed my life. And so I came back to Stanford that second year business school thinking, I'm going to take every class I can at the design school just to learn about this stuff. And ultimately, it ended up derailing my life. And what was supposed to be kind of a one year faculty extension, ended up being, you know, 14 years of teaching graduate students and professionals basically,

Craig Pretzinger: 15:58

what's cool. So for people like Jason, who don't understand the concept of design, why don't you go into that a little bit? Ah, yes, thank

Jason Feltman: 16:05

you. Yeah,

Jeremy Utley: 16:07

you strike me as someone who doesn't get adjacent. Does I mean, the fundamental premise of design is basically put the human being, who you're seeking to innovate for, at the center of your work, understand them deeply care about, I mean, you know, imagine this actually care, care about a person who you're designing for could be your client, or your you know, whatever that might be. And then generate an enormous volume of ideas fueled by the sense of care and passion you have for this person and their problems. And then rather than kind of deciding on which one's the best admit, you probably don't know, and try a bunch of stuff in a scrappy and low resolution and low cost and high velocity a manner as possible, with the people for whom you're designing in order to determine which of your directions is worthy of further investment of time, resources, etc. So it's like a very rapidly iterative, high empathy, high divergent thinking where collaboration, diverse perspectives are valued. And you know, a lot of people can think in terms of a sprint, they go, Okay, let's do all of those things in tight sequence. And now let's all get back to our jobs. And what my belief is, is that there's actually a can imbue your life and these these mindsets in these orientations can be something that becomes a part of your existence, not just a part of a product development cycle, but actually a part of your existence. So that's really the premise of IDEA flows. Innovation is not an event, it's a practice and despite being overhyped to the nth degree, it remains yet under cultivated as an individual competency and as a, as a team based capability. And so we are seeking to create a change in organizations where folks actually just like, they monitor their, you know, FICO score, or just like they monitor their BMI or their hoop, you know, SleepScore are their steps, they're as mindful of their creative health, as they are other aspects of their health. It's crazy.

Jason Feltman: 18:12

Two things that can be very hard for a business owner is to a, be highly empathetic of either our team or our, our customers, clients, right? Because you get so involved with the daily business stuff, right? But it's just like, how can we have How could like what tools help can help us get there? And then the other one is following up on that. One is the the idea of being okay with a bunch of failure, right? It feels horrible. A lot of times innovation is terrifying in our own business, because like, you're watching the dollars, kind of back to that whole empathy thing with our clients. And our team is like, you get so in this box that you're like, scared to try stuff and you create a culture of the, you know, don't fail. You know, instead of like, let's try stuff. Let's innovate.

Jeremy Utley: 19:10

Yeah, yeah, I think the trying stuff is really critical and recognizing the world is just is changing so quickly. And it's, it's the, as Darwin says, right? It's not the strongest or the fittest, but it's the one that's most adaptable to change that survives. And so, having that sense of adaptability that if we're not changing, we're probably if we're not progressing, we're probably regressing, you know, and creating rewards and incentives and a culture that appreciates experiment. You know, as Jeff Bezos said, failure and invention are inseparable twins. I love that expression. If we're trying to make something we're going to fail. It's that's part and parcel of the even the scientific method, right? That hypothesis driven testing, you're gonna fail a lot of times and that's fine. It's in science. It's not failure. It's Learning and it's refining the hypothesis. In terms of your question around empathy, I mean, one of the things that we teach people to do is, it sounds crazy, but it's go where your customers are talk to your customers, then don't have an agenda per se, but be willing to be surprised and allow them to take you in unexpected directions. You know, like one of my favorite stories, one of my you know, now teaching partners, Carrie Kelly, Garrett Ziegler. KGC, is what we call her. So amazing woman, amazing designer who was at vans. And now she's at Pearson, but she told the story of the time, she was at Mattel, and said they wanted to create a product for for parks. And their goal was we want to create something that families take out into the world, maybe to playgrounds and kind of, because you're always looking for ways to expand your footprint of your product. And they've got kind of Hot Wheels and things like that they're in the living room or the bedroom. But man, what if they get in the park? And she said that we started talking to parents in their homes. And we were asking them about when do they feel relief? When did they feel like they're, they're able to let their kids explore. And she said, for whatever reason, we ended up in the bathroom, over and over and over again, we're in the bathroom, because the bathroom is actually the place where finally when the kids in the bathtub, mom and dad can chill. And it's actually not at the park. And we said all of a sudden, we have this huge, it's like we can either insist on No, no, we have like we've mocked up some outdoor designs. Or we can say like, what can we do in the bathroom? I love it. And because if it's actually about one of their kind of design directives was creating more bandwidth in the life of a parent and engaging a child. How do we how do we extend bathtime in a way that gives space to parents, right? And so they, they allowed themselves to kind of be taken off track, if you will. Another example, just because I think it's something, if you're not interacting with the customer, and you're not trying somebody with the customer, you're never gonna learn this stuff, right? So foundational thing is you got to interact with them, you got to try stuff with them. But then the question is, are you so married to or wedded to your idea that you can't hear, you know, disconfirming evidence, in which case you're toast? Or are you holding it loosely, and you go will take me off road, you know, like, my friend Felipe runs the innovation lab at Michelin, and he said, they wanted to get into kind of off road space tires. And they had this really cool prototype where basically, you know, folks who go off roading need to adjust their tire pressure. And he said, we had this really cool kind of, you know, remote control thing, like you just pop it in into the dashboard display, and it would adjust your tire pressure. He said, What we learned is people actually enjoy needing to be the guy who's got to get out and kind of like, you know, and like relieve the pressure like that was there's something about the tactical experience, tactile experience that was really satisfying to them. So he said, we kind of this, we built this technology, but it didn't really matter. But he said, one of the things we started hearing over and over again, was they feel like they don't know where the best trails are. And they're kinda on trails that other people are already off roading, but their skills are kind of going beyond this trail. And they ended up in this space where they're developing a product that we're basically you unlock the ability to discover new terrain as you improve your ability to do with automated kind of tire inflation or deflation. But it's true to where the user is taking them. Yeah. But again, they're putting themselves in front of the user, uh, trying something I would argue they would never have discovered the trail opportunity if they hadn't been attempting with the tire deflating opportunity, right. But if you're not willing to allow your vision to kind of go off the rails, you're never going to discover the real opportunities.

Craig Pretzinger: 23:54

Yeah. And I think the way that it's set up, you become with big bigger companies, right? Like the as the expert advances, they're going to be more set in their ways, because it's what got them there. Yeah. So there's that that bias, and they don't want to hear it. That's more work. Man. I already did all the work. I want to sit up here and collect my floor.

Jeremy Utley: 24:13

How to deflate tires, but like, what do we know about trail like, right? Let's just try to find somebody who wants their tires deflated. Right? Yeah,

Craig Pretzinger: 24:22

right. Yeah. Yeah, let's not let's not do something new. Let's just do the thing that we're doing and find the right people know exactly. Exactly. There are people we already have them. Like that's one of our favorite

Jeremy Utley: 24:32

just while we're talking about Felipe, shout out to Felipe, if you hear this, by the way, you're an insurance dude, Felipe. One of the things that he said that I that I really love is he said, You know his lab, if you think about getting back to this question about failure as well, Jason, he said, one of the primary services is Innovation Lab offers the organization as they kill things cheaply. He said that the organizational instinct is to spend a lot of money on something that ultimately doesn't work. And one of the really great things they do is they learn quickly and cheaply. We shouldn't fund that. He said that and that's everybody appreciates failing for $100,000 rather than a million dollars, that's great. He said, The problem is, a lot of times like a executive will come with a billion dollar post it right, they've got like this one, this is the billion dollar, right? The price or we will show them empirically, that's not a billion dollar idea. And he said, The problem is, that's my only posted, right? And so how do you build that sense of we got, we got loads of other possibilities, what we need to do is turn through them quickly, not just put all of our eggs in this one posted basket and really hope it's the right one, it's, it's

Craig Pretzinger: 25:40

very similar to the concept of MVP, right? Minimal Viable Product, this is like minimal viable idea. And you just bring as many as possible, because then you're gonna be able to funnel them into the minimal viable product.

Jeremy Utley: 25:51

Yeah, we were inspired by this research by His name is Dr. Dean key assignments and out of UC Davis. And one of the things that he studied breakthrough thinking across disciplines, across domains across geographies and time periods. And what he found was the single greatest determinant of the quality of your ideas is actually the quantity of your ideas. So if you want better ideas, you need more, and very few people are thinking in terms of quantity. So here's it here's a fun example Jerry use mint is the user assistant to the late great Ansel Adams, the American photographer, and you'll spend teaches photography at the University of Florida. And he'll, you'll basically he'll divide his class in half. He says, Okay, you want to get in at the end of the semester, and everybody does right to half of the class, he says, You've got to turn in a truly world class photograph, I'm going to bring in a distinguished jury of my photography peers, they're going to evaluate the quality of your work and to get an A, you got to have a spectacular photo to the other half. He says, okay, quality doesn't matter. But I'm going to count it's about tonnage, I'm going to count how many photos you take. And if you take over 100 photos in a semester, you get an A it doesn't matter how bad they are. If you take over 90 You get a B et cetera, et cetera and then he brings in the jury but importantly the jury is blind to the condition they don't know that the jury is evaluating the quality of the photos all of them and the thing that shocks the jury and a shock students to it doesn't shock Hillsman because he's seen it for so long. Yeah, the students whose job it is to get an A can't do it. No A's are awarded the students whose job is to turn in a bunch of photos get lots of A's and it's it's going back to this Dean key assignments and stuff but it as Eisenhower said, I think quantity has a quality all its own. And you start to orient around quantity you end up generating much better ideas but but how you approach the market and collaborators and everything and problems changes a lot when you think in terms of volume rather than than quality.

Jason Feltman: 27:53

I love that because how do you get good at anything you do reps? That's just that.

Craig Pretzinger: 27:58

You don't buy 10 leads you buy 100 Raise everything