[0:22]Thank you very much. I'm going to talk about people. I'm going to tell you a story about an experiment that happened on board a nuclear submarine in organizational design, where he created an organization that maximized the engagement, the passion, and the thinking of everybody on the team. Now you may be thinking, a nuclear submarine, that's kind of an unlikely place to run an experiment. In organizational design, and I would agree with you, it's isolated from the rest of the world. It's contained, no one can get more than 200 feet away from the boss. I can go to someone's bed, we call it a rack, and actually wake them up, and it's very risk averse. If an investor talks about getting the risk wrong, they talk about losing money. When we get the risk wrong, we die.
[1:24]What we're doing here is we're putting a SEAL team on board the submarine. Now, the SEAL team are our special forces guys, they're very fit individuals. They have to work out like 25 hours a day. And because of that, and there's really no room for them to work out on the submarine, when we need to do something with the SEALs, we rendezvous in the middle of the ocean, helicopter comes over, they drop a line down, the SEALs come down really quick, that helicopter stays there for 11 seconds, and then it flies away.
[2:00]A submarine is a toxic environment for SEALs because they can't get their workouts in, and so we have to start a timer and make sure we launch them on their mission before too much time goes by. Of course, it seems perfectly okay for me and my crew to live there for six months. This is a chaotic event. It's highly planned, but it's chaotic. The wind could shift, a rope may go in the wrong direction, a wave may come, and everybody on the team needs to know what they're going to do. Up here in the orange, that's where I'm sitting, quote, controlling this. This is what it looks like to me.
[2:44]I can't even see the people on deck. And that helicopter is pretty close. And I'm thinking, if that helicopter gets too close and it runs into the back of the submarine, it's going to be curtains for me. But the Navy is very safety conscious. I had to wear a hard hat. And I had this image, you know, they'd take my head and they'd give it to my wife and say, well, you know, his head's intact, he was wearing his hard hat.
[3:17]You can't control people, but this is the image I suggest you have when it comes to the most important thing that's in your company, which is the creativity, the passion, and the thinking of your people. You can't order people to do those things, and so it might as well be like you can't see them and they have, and you have to set, create an environment where they can just do what they need to do without being told. It didn't start like that for me, though. I went to the Naval Academy, and after 17 years, my dream was to become the captain of a submarine, and after 17 years, I was selected to be the captain of this ship, the USS Olympia. Even though I'd come up through the ranks of the submarine force, the Navy took me out of my job and for 12 months, sent me to school to learn only about this ship. I could draw all the wiring diagrams, I could draw all the piping systems, I could draw the internals of the pumps. I could, I read the dossiers about all the people, and I'd read how the ship had responded to problems. I was literally the smartest person on the planet when it came to that ship. Why? Because as the captain, I was going to give all the orders. We call it no-all, tell-all leadership. The captain or the CEO knows all the answers and then they're going to give all the orders. And here's the definition. My, when I graduated from the Naval Academy, this is the book that I had on leadership. Leadership can be defined as directing the thoughts, plans, and actions of others, so as to obtain and command their obedience, their confidence, their respect, and their loyal cooperation. Now I ask you, can you actually direct somebody's thoughts? Has anyone seen it? I have. Star Wars 1, Obi-Wan Kenobi comes out, these are not the droid. Right, there's no Obi-Wan Kenobi in here, you can't direct people's thoughts, and yet, this is the structure that we had, and this is what I believed in in terms of leadership. And although this may seem a bit archaic to you, when I visit companies now, this cultural image of leadership runs deep in the blood and the DNA of the leaders of many of our companies.
[5:34]Because of that, we got problems. Trust, organizational trust is at the lowest point, employee engagement is at the lowest point, and heads up for you techies, oh, it's so much better in the tech world, and it's actually worse. This just came out in this week's economist. 19%, only 19% are happy with their jobs, 17% feel valued at work, 28% only 28% even understand what their company's vision is. And it's because not because we're not doing that leadership that I told you about wrong, it's because it's the wrong kind of leadership. The plan for me all changed one day. After that 12 months of schooling, I flew out to Pearl Harbor, Hawaii. I was ready to take command of the USS Olympia. And there was another submarine out there, the USS Santa Fe. Now, the Santa Fe was the Enron of submarines. The Santa Fe was the submarine that we laughed at, we giggled at, we snickered at during that 12 months of schooling. They couldn't get underway on time, they had the lowest retention in the fleet, only three sailors out of 35 reenlisted. The captain was supposed to be there for another year and we sort of snickered and said, oh those poor bastards in Santa Fe. He quit abruptly and the Navy said, well, we can't have a submarine without a captain, so Marquet, you're going to Santa Fe. Now I was the poor bastard. And I only had two weeks. Two weeks. I thought my life was over, it wasn't the poor morale and it wasn't the poor performance. The issue was the Santa Fe was a different kind of submarine than the Olympia and all that studying I'd done, was basically irrelevant. How could I be a no-all, tell-all leader? That was scary. This is my crew. We have 135 men, we now have women on board submarines. Over here, those guys in khaki, those are the only people with college degrees. The rest of the crew are enlisted men, they don't have college degrees, the average age is 26, and this is the team I had to work with. Despite being scared, I get dressed up in my nice white uniform to take command in a very fancy ceremony. Let me take you on board the sonar room. Now, just like this room, there are no windows on a submarine. Everything we know about the outside world, we gain from some sensor, like a lot of it is through sonar, which is listening to the sounds in the ocean, analyzing the sounds and figuring out what they are. And say, ah, that over there, that sounds like a cruise ship, and we display it with these green lines. That sounds like an oil well, that might be an enemy submarine, and it's important to figure out which one is which. Over here, we have all the buttons for operating the equipment. Now, on board the USS Olympia, I could have reached over the sailor, the shoulder of the sailor and told him which button to push. I wouldn't normally do that, but I could have, because that's the level to which I was trained, but on the Santa Fe, I didn't know what the buttons were. But I had this habit of asking the sailors, hey, tell me about your equipment, you know, show me how it works. Well, captain, this does this and this does this and this does this, and eventually I said, well, what about this one? Yeah, I forget.
[8:59]They were cringing because they expected, well, I'll tell you, young man, you really should know. Yes sir, I should. That was leadership. Secret was, I didn't know either. Going into combat, not scary. Admitting you don't know something when you're the captain of a nuclear submarine, scary. I had this thing going in my head, what do I do, what do I do, what do I do, and finally I said, you know what, I don't know either. What, you're the captain. Yeah, I know, go figure. Hey, I have an idea, let's press it and see what happens.
[9:40]I think we attacked a cruise ship. No, that didn't happen. That was scary, but I now think these words, I don't know, are the most important words any leader can say, because those are the words that open the door to learning. All learning starts with the assumption that we don't know. And when the leader says I don't know, it makes it safe for the whole team to say I don't know, I don't know, let's find out, I don't know, let's run an experiment, I don't know, can we look it up. I find an opportunity every day to say I don't know. At work, I don't try this with my wife, by the way. I'm going to give you five things I learned about leadership, that's the first one. The next thing has to do with this knob. Now, this is how we controlled the speed of the submarine in the control room, we ring up the speed and send a signal to the engine room. Now, you, as you can see, it's got ahead one third, two thirds, standard, full flank, just like you see in the movie Titanic, we haven't changed the knob, it's the same. You ring that baby around a head flank, it is awesome. It sends a signal back to the engine room. There's a man with a wheel, he spins it open, opens these valves, steam heated by the reactor goes into these turbines. They're the size of two city buses, just barely fit inside of this 33-foot tube. And surges through the Pacific Ocean. It's cool.
[11:06]But here's the exercise we're going to do, it's our favorite exercise on a nuclear submarine. We're going to pretend the reactor is broken. And now we just have a battery. And so when we shut down the reactor, we have a race between finding the problem with the reactor and starting back up, and draining the battery. During that time, you operate on the electric motor, the electric motor is 300 horsepower. It's the same proportions, because we have a 6,500-ton submarine, as driving your car with your electric toothbrush. Slow, but it gets you home. So here we are, we're driving along, we start the exercise. Now this is the very first drill, now remember I just took over the worst performing crew in the fleet. So we're going to train hard, that's what I'm thinking. We just took over, now the officer of the deck, who's running, who's in charge, is doing the right thing, he shifted over to the electric motor, and he's going at a head 1/3, the minimum speed, he's conserving the battery. On the electric motor, on every other submarine I'd been on, there were always two speeds, 1/3 and 2/3. Not the other ones, but you did get the two. I started thinking, you know, we got to speed up on the electric motor. It's going to draw more current, drain the battery faster, it's going to put stress on my team. So I suggested, hey, why don't we speed up? The officer of the deck takes my suggestion and orders it, helm, ahead, 2/3. Nothing happens. I notice that. I'm looking at the four kids sitting at this panel. I say, hey, what happened? He says, Captain, on this submarine, there's only 1/3 on the electric motor. When the Navy went to the newest class of submarines, they went from a two-speed to a one-speed motor. Fewer parts, cheaper, doesn't break as much. But I was in trained, that was my excuse, blah, blah, blah, no one cares. I asked the navigator, I said, hey, did you know about this 2/3 thing? Yes, sir, I did. Riddle me this, why did you order it? What did he say?
[13:09]You told me to. Thank you. You told me to. We trained people to do what they're told. I got a meeting together and I said, man, we are in a bad way. I was trained for a different ship, you guys are trained to do what you're told. What are we going to do? For me, initially, it was like all out here, you need to be more proactive, you need to be empowered, and finally one of the kids says, no, Captain, it's you, you need to be quiet. I got this thing, again, my singing in my head. This kid has not seen too many submarine movies. But I think I said, you know what, I think he's right, because that's what I can do. So I said, I'm going to make a deal, I'm going to stop telling you guys what to do, I'm never going to give another order on this ship. Do we know what's it's going to look like? No. Do we know how it's going to work? No. Is it better than dying? Yeah, let's try it. So that's what we did, and that's the deal I made with my crew. For on their part, they said I intend to. They said, they stopped bringing me problems without solutions, they stopped saying I recommend, they stopped saying I would like to. They stopped saying I was thinking about doing this. They said, I intend to. I intend to load a torpedo, I intend to submerge a ship. And I would just, I would say very well. And it shifted the ownership to them, it was very, very powerful, cascaded down through the ranks. Number two, leaders resist telling people what to do. And that prompts responsibility from the team, because when you're the guy saying, I intend to do this, you own it. We get to blow stuff up sometimes. Now, in the movies, uh, you see the torpedo goes into the side of the ship, that's not how it works. The torpedo actually goes under the ship, detonates, creates a hole in the ocean, and then the ship falls into that hole and breaks in half. That sinks the ship. These torpedoes are big deals, you don't want to drop them, obviously. Here we are loading the torpedo, we're in Japan, that's the green thing on the on the bow of the ship there. Before we would do an evolution like this, we'd have what we called a brief, you do this, you do this, you do this, you do this. It was just another way of telling people what to do. We finally realized, you know what, we're just again, we're telling people what to do. We got to find all these rituals, traditions, patterns and habits of behavior where we're telling people what to do and stop them. So we stopped doing briefs, and we got better than any other submarine for loading torpedoes, because what we did is we activated thinking. And sometimes I I have a little game with myself, I walk around and I look for signs where people were just telling people what to do, and then we challenge people, hey, how come we write the sign where we don't, we're not telling people what to do. You can think about that. Things started going really well in the submarine. Number one, we got the highest score for operating our submarine in the history of the Navy that they had records for, 12 months later. Number two, over the next 12 months, 35 out of 35 sailors reenlisted. And so I got a phone call from Dr. Covey, the author of Seven Habits, which was huge for me, it was a big, it played a big role in my life. I, I idolized the guy and it's like, Dr. Covey wants to come and ride this submarine. And he came out, it was this beautiful day, off of Hawaii. We picked them up, and he watched the crew for a while, and we were sparring up on the bridge and we came up with this. He said, I know how you're doing it, and he called it the ladder of leadership. Down at the bottom, you have tell me what to do. People would come to me all day long. Tell me what to do, tell me what to do. Sometimes it was camouflaged like this. Hey, hey boss, I got a problem. That's camouflage to tell me what to do. We wouldn't tell him what to do, we would just say, what do you think? We'd level them up the ladder, one by one, by one, by one, by one. We wouldn't take them from the bottom to the top, that's too much. It's like weightlifting, just push a little bit more weights. And I now think this is a tremendously leadership hack, because this takes this nebulous, fuzzy concept of empowerment, and now makes it detectable, because I can hear it in the language, and measurable, and affected. Because I don't say, be more empowered, I just say, hey, why don't you just say this, I intend to. I've asked 10,000 executives across the planet, 17 different countries last year, what is the number one thing that keeps people at the bottom of that ladder, and this is their collective response. Again, this was eye-opening for me. And the lesson is, leaders don't add stress to their teams, they make it safe. The more cognitive the task is, the more complicated the task is, and the more creative you need your team to be, the safer you need to make them feel. We spent a lot of time focusing on language. Here we are, fighting fires on board the submarine. We have some fire exits here, I'm on board a submarine, you know how many fire exits a submarine has? Zero. If you don't put the fire out, you die. We call that motivation. And we weren't really very good, we would, we would train on this, we weren't very good, and we'd sit in the debrief afterwards and we'd say, hey, how'd it go, what happened? And I heard a lot of they, they did this, they did that, they didn't pressurize the hose. Finally I got upset and said, there's no they on Santa Fe. It rhymed, so they remembered it. I said, we're going to use the word we from now on. Now we had a lot of they's, right? Engineering was they to ops, supply was they to everybody, the officers were they to enlisted guys, chiefs were they to, you know, I was of course the biggest they of all. Why are you doing that? They told me. Well, who do you mean? Well, uh, you. Anyway, something really interesting happened. The engineer came up to me the very next day and he says, hey Captain, bad news, pump repair will be delayed because they, they ordered, he wants to say they, the supply department ordered the wrong part. But he can't say they, so he has to say we ordered the wrong part. He just walks away, that's all he, he's like, yeah, never mind. There's no blame, there's no blame.
[19:43]We were inspected, one of the senior officers said, this this team has the most powerful culture of teamwork I have ever seen. And I said, no, no, no, we don't have a culture, what we have is a rule that we use the word we. But what had happened is by saying we, we rewired our brains, we reconnected our brains in a different way, so that we started thinking of each other as we. You use the word we for our team. And if you want to understand where the boundaries are in your organization, just ask people to, hey, tell me about these guys. Oh, we're we're in marketing. What about them? Oh, they're in sales. I usually say HR, but. HR is very powerful, by the way, they have they write the code for the organization's culture. Yeah, they're in sales. Like, as soon as you get and I call that the we-they boundary, you got to expand the we. The lesson is, we act our way to new thinking, not think our way to new action to promote change.
[20:44]This kid in front wants to go on leave, he wants to go on vacation. He's got to put a form in that's got to go up through six levels of the submarine. We sign off on it at the top, it gets approved and it comes back down. We call that pushing information to authority, and every organization there's a gap between the people with the authority at the top and the people with information at the bottom. And the way we traditionally close that is push information to authority. You can buy a lot of software that helps you do that. What we did on the submarine is I lined it out and I just wrote in on my little form, I said, no, for the USS Santa Fe, even though Navy regs say, do this other thing, we're going to let the chief, the kid the guy sitting behind him sign the form. We're going to push the authority from making the decision down to the people with the information. Now, if you want to make some money, design some software that'll help people do that, because I don't, I don't know one. Leaders push authority to information, not information to authority. And finally leaders give control and they create more leaders. I ask executives, when you think about giving up control, how does it make you feel? And these are the kind of things that they say, and we have on one side, freedom and relief, and on the other side we have anxiety and fear. And if you're not feeling those things when you're work, you're not doing it right, because you're not giving up enough control. If you want to connect with me, it's my email, my Twitter, Pinterest, Instagram, Facebook, everything.
[22:16]I'm going to wrap it up. For us, it was great. I got awards, I got promoted, people would call me and tell me how great I was, blah, blah, blah. But it wasn't really about that for me. And the reason it took me 10 years to write the book is because it took me 10 years to figure out what we really did. What we really had done is we had created leaders. We created more leaders on that submarine than any other submarine by a factor of 3 1/2. And so it was officer after officer after officer was selected to promote, to to command his own ship over the next 10 years. And that to me is what was about, it wasn't success, it was significant. And the good news is, for you here in Switzerland, because of your geography, there's a political tradition. There's a little bit of skepticism about centralized control, and there's a tradition of balancing control to the outlining cantons versus the central government. And so I'm optimistic about you guys in the ability to give control in your companies. Thank you very much.
