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Why we need to rethink intelligence in a world of constant change
In this Innovation Realized episode, Beau Lotto, neuroscientist and entrepreneur, explores the need for openness, curiosity, and adaptability in today’s world.
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In the sixth episode of the Innovation Realized podcast series, we are joined by Beau Lotto, Professor of Neuroscience at the University of London, and CEO of Lab of Misfits. Alongside host Will Travis, Lotto discusses the importance of embracing uncertainty and complexity in a rapidly changing world. He shares his views on the need for leaders to be open, curios and adaptable, as well as the importance of creating a culture that encourages innovation and learning.
Exploring the role of artificial intelligence (AI) in transforming industries, Lotto suggests that businesses should focus on creating meaningful and relevant experiences for their customers. He highlights the value of curiosity, compassion and courage in driving success, encouraging leaders to reward and celebrate these qualities as our world is increasingly characterized by more forceful changes that appear quicker, trigger widespread impacts, and often strike all at once.
This episode is part of the EY Innovation Realized podcast series by Elevation Barn. It is also available to listen to on Apple Podcasts.
Key takeaways:
- We can only respond to complexity, not predict it – create a culture that is agile and adaptable to inevitable change.
- Leaders must become adaptable, to lead by example and embody the need for change.
- There is tremendous power in not knowing, it is the first step to seeking and achieving understanding.
- There is selective advantage in understanding – it makes you agile, flexible and more creative.
- The best leaders know when to be creative, and when to be efficient.
- Customers want to invest in buying a product or things that have real value in terms of humanity – to have relevance.
For your convenience, full text transcript of this podcast is also available.
Narrator
Hello and welcome to the EY Innovation Realized podcast series by Elevation Barn.
Our world is characterized by more forceful changes that appear quicker, trigger more interconnected and widespread impacts, and often strike all at once. Some call this the poly crisis or perma crisis. Whatever you choose to call it, the bottom line is a business climate that has become far more complex. This environment requires leaders to rethink core assumptions, challenge to establish assumptions, and rethink best practices that no longer work.
This Elevate series will bring you inside the 2024 EY Innovation Realized Global Summit to hear the new ways of thinking our complex world requires. Each episode is a provocative one-on-one conversation between a leader exploring these vital topics and impact leader, Will Travis, founder and CEO of Elevation Barn.
Elevation Barn is an international community of world leaders and experts focused on unlocking a purpose-driven legacy for sustainable personal and business growth. To learn more, visit elevationbarn.com.
And now to your host, Will Travis.
Travis
Beau Lotto is a professor, neuroscientist, and entrepreneur. He is the founder and CEO of two companies, Lab of Misfits, the world's first neuro design studio, and Ripple, which holds several patents in augmented reality. He is a three-time mainstage TED speaker with over nine million views. He’s spoken around the world, helping people act differently in the face of change.
Beau has been a professor at the University College London for 20 years and is now a professor at [the] University of London, as well as a visiting scholar at New York University.
Beau and his lab have published over 70 peer-reviewed articles across a wide range of disciplines. He has published three books and was the first creator-in-residence at Viacom.
Welcome, Beau.
Lotto
Thank you. lovely to be here.
Travis
So, tell me a little bit about your journey. How did you move into this connection with humanity, and bring science at such a level that you've inspired so many people? What was your calling to go down this route?
Lotto
What was my calling? Good question. I suppose my calling is that I just feel we need more compassion. We need more people to come together more. We need people to be more humble. I think one of the biggest challenges we face is our certainty. And so, for me, the power of science is the ability to ground certain principles of ways of being, in evidence of how your brain works. But, also, my lab works on complex adaptive systems. So, this is actually how nature works, so let's shift the argument and the debate, and then say, how can we actually implement these things in a way that actually can create the opportunity to expand yourself, not shift yourself, but expand yourself. And I think that there's tremendous significance and potential in that.
Travis
And you talk quite heavily about your brain has evolved not to see the world as it is. Unpack that a little bit for me.
Lotto
Well, so this is not postmodern relativism. There is a physical world, it's just that we don't see it. Nor would it actually be useful to see it in any literal sense, because the world doesn't come with instructions. It doesn't tell you what to do. And, because there's so much possibility in any one, either moment or physical aspect, and what might be useful in one instance, might change in context, might change with time. So, rather than evolving to see the world the way it is, we evolved a brain that is able to make meaning from that world. And more than that, is able to change that meaning according to context and over time. And that's what empowers us to survive, you know, not all meanings are the same. Some meanings are better than others, right? Contextually. And so, that's why we didn't evolve to see the world as it is.
The other aspect of it is that the information we get from the world, we're forever physically separate from that world. So, we have no direct access to the reflectiveness of surfaces, other than through the light that falls onto it and then reflects onto our eye. You change the light, you change the information coming from that surface. Which means at the most fundamental level, the data that your brain is receiving from the world is completely ambiguous. It could literally mean anything. It could be something that's large and far away or small and up close or, if we were to turn off the lights here right now, the light coming from this black surface would probably be lighter than the amount of light coming from this white surface if we were to turn off the lights. And yet we'd still see this is light and still see that as dark, and yet the information is completely different, it changes as the light changes. So, it's like we're presented with this impossible mathematical problem. You know, x times y equals Z, and we're given Z without ever knowing what x or y is. So, your brain has to solve this problem, and then it has to layer meaning on top of it.
Travis
And if you go back to childhood, are we more accepting of those diverse thoughts? Or is it something we're born with? To actually compartmentalize, to make sure that we think what we see is what we need to see?
Lotto
Both. So, we do come into the world with certain meanings, certain histories, like light comes from above. We have that assumption, or that we're on a ground plane and those have fundamental influences on how we see the world, but we also evolved a brain that's plastic and my PhD is actually in neuroplasticity and how the brain changes with raw experience which means that we can continually expand our perception, expand our brain and change those connections according to that trial and error history. Your brain is inherently empirical, but it has a substrate on which is operating, but then it can change according to that experience.
Travis
So, it's absolutely critical, like the people that you hang out with, you're in Ibiza, some of the time I'm in Bali, the people that we're mixing with is probably very different than the people that are stuck in New York City, or in London all the time. Does it get as confined as that? Or are we still very open to take influence from wherever it comes?
Lotto
Well, not everybody is open to taking influence from wherever it comes. In fact, I would argue that maybe very few people are, though every brain has that possibility. There's an element of choice and how open you want to be. So, yes, you're definitely influenced by those around you. We know this to be true, as much as you also influence them, which is also one of the really important aspects when thinking about, if we think about the context of business, that the leader and the personality of the leader is really important because the personality of the leader can actually become the personality of the company, and without pulling examples, our relationships between who that person is and the kind of organization they create. In terms of being open to influence, there can be tremendous fear in that, because if I'm open to influence, it means that maybe I have to let go of what I thought to be true before. In order to shift, I actually have to let go sometimes.
Travis
So, lean into unpack that a bit. So, I love that, seeing is not knowing like you do not know or you may be wrong, or let's presume that that person could be right. I loved when you were chatting earlier in the day, or yesterday, just about let's move from not seeing to not knowing. How has that been a leading philosophy for you as a scientist?
Lotto
Hugely, I mean, it underpins science. In fact, I would argue it underpins anything that's innovative, creative, or expansive. Why? Because anyone listening to this, I mean, nothing interesting in their life ever began with them knowing something. It began with them not knowing something, by definition. You can't learn from a place of knowing. Not that you don't build on what you knew, but if you're going to expand yourself, you literally don't know it yet. So, there's tremendous power in not knowing. In fact, not knowing, I would argue, is your first step to seeking, to achieving understanding. You start with knowing, and, knowing is great. It's efficient. I know this thing, but now I want to expand what I know. I want to understand. Well, my first step is, as I suggested, the first step from A to B is not B. Your first step is from A to not-A, to let go of what you thought to be true before. So, I call it doubt. We should celebrate doubt in businesses and in our lives. But not just in of itself because now I don't know, I need to deviate from what I knew. Now I need to diversify my experience, to be open to those new kinds of experience, and then from that I can distill a principle. And then from that principle, I can decide to do something and then I do it. And now I get a deeper understanding.
Travis
Yeah, more respect.
Lotto
I would suggest, we also get intrinsic reward. So, what's an intrinsic reward? We have at least two kinds of rewards. You have extrinsic reward: you do something, and you get a reward for doing that thing, which is different from what you are doing. You work and your reward is money. Money is different from what you're actually doing. What's the reward of skiing? It's skiing. The reward is from the activity itself. And why do we get this intrinsic reward is because evolution said, well, whatever you're doing, that's a good idea. We need them to do that more. So, an orgasm is an intrinsic reward because it's nature saying, we need to keep them doing that. Let's give them some motivation here. And so, they keep doing it to propagate. So, when you achieve understanding, you get the same kind of hit. It's an intellectual orgasm. Why? Because understanding something made you agile, made you flexible, made you more creative. And there's a selective advantage to that. So, when you get that understanding you get this moment of closure, and you get that good feeling, and that propagates you wanting to do it again.
Travis
So, I’ve got friends, I’ve climbed many the world’s highest summits, I’ve driven the Dakar, I live in Bali. I’ve got mates who have not left the town I grew up in and are not interested in a lot of other things, maybe a pint and rugby. Why do people not go down those paths? What makes the difference between us that are insatiably hungry and curious from those that aren't?
Lotto
Well, first of all, I can't speak to how they're, well, in some sense how they're different insofar as them personally, of course, but there are different personality types. Some people are more open, some people are more closed, but I'd also suggest that stepping into uncertainty, stepping into the unknown, evolution was a really bad idea because it literally increases the possibility of death. That's one. So, it would have been a disadvantage to say, like I said yesterday, let's go see what's on the other side of that hill because now the possibility of death increases in the short-term. Ironically, it could actually increase your possibility of death or the community survival, sorry, increased probability of survival in the longer-term, at least of the community, because now you have a bunch of foragers, and then one of them finds the good thing, and all the others die, but now everyone else benefits. So, there's an advantage there, but to do that step into uncertainty, that is really scary. People hate, often, change. And it seems to me, when I ask audiences, which I always do, I say, how many of you want to change? They all put their hands up. I say, come on, let's be honest. How many of you want the consequence of the change but not the process of the change? And it’s like, yeah actually, right? Because that process of change can be really scary and really hard. They want to get the end of the benefit of it, and because we see the world through our evolutionary ancestors, we then experience that cortisol release, that stress, that fear our brain cells start generating, our immune system starts generating, especially over time. And yet, the irony is, that's the only place we can go, if we are to expand ourselves, if we are to learn, if we are to achieve understanding.
Travis
And do we, by leaning on people that also take risks and get there, like you're helping a lot of leaders as well. Do you position them with other leaders that are used to taking risks, to give them the confidence to get there? Or do you just encourage them through process?
Beau Lotto
Both. But let's imagine that possibly the most, in some sense, the most powerful one is when they have the motivation to do it themselves.
So, one of the ways I try to engage with that is, first of all, everyone's a leader. Ultimately, they're the leader of their life, and so I think that's really important. First of all a more general point, that if you're going to work with just leaders of an organization, really, really important, but if you only work with the leaders of an organization, then you're not really going to be able to create that culture, ultimately, because it requires everybody interacting. And the metaphor I use [is], it's a bit like an empath having a relationship with a narcissist. It's not gonna work. So, first of all, everyone needs to be in that place of wanting to evolve. But the way I tried to do it is to tie it back to the personal life, that it is not a mindset, it's a way of being in the world, and it's not just when you walk through the doors of your corporation or your organization. It's when you walk through the doors of your life, with your partner, with your children, with yourself. And if we can show through evidence that you're going to do better by being better, and this is how you are better as a being, personally. Now they're more likely to embody that and bring that with them to the organization.
Travis
And does better mean happier?
Beau Lotto
That's a really good question. And I don't have the answer to that because we know that the pursuit of happiness is one of the worst ways to achieve it.
We did a study asking people, imagine you're on your deathbed, and people can do it as they're listening. So, imagine you're on your deathbed looking back. What is it that you want to see? What's a word that you want to define your life? And I don't necessarily mean your purpose, it could be to have a purpose, and most people say, happy. Okay, the next most popular answer was meaningful. And then another one was authentic. And our hypothesis was that not all purposes are equivalent, some are better than others. Why? Depending on the context.
So, the second part of the study is how did you fare during COVID, as a proxy for uncertainty? And those whose life wanted to be defined by happiness, they did the least well, they had the most stress, the most anxiety, the least creativity. But those who pursued meaningful or wanted their life to be in the pursuit of meaning and authenticity, did the best in times of uncertainty, they had the most creativity, the most connection, the least amount of stress, and possibly you'd argue, possibly the most happiness or maybe most joy. So it could be that that's very individual. But you could argue that there are some pursuits that are better than others. In terms of that sense of well-being, and that might be in relation to meaningfulness, and authenticity.
Travis
What's the word that you look back? You would look back at life from your deathbed and say, that's the word that I need?
Lotto
So, I'm really torn. So, I'll throw this out there because [it’s] more of a hypothesis, but I wonder if we're too much in the pursuit of meaningfulness as opposed to just kind of being relevant and being useful.
Because then you could argue that maybe that's where we find meaning, is when we're actually useful and supporting others, and then also whether or not you're aligned, in your words, and intentions and actions because you got a lot of people in Ibiza in Bali, for instance, a lot of words, “these are my intentions, I'm a very spiritual person”, but you look at them, and they look at their behaviors like, but are you? A lot of mental health comes from being aligned in what you say in what you do. I think that's where authenticity lives. I think that's where meaning can come from. So, then it's, I intend to be useful. I speak to being useful and am I actually useful? And so, that's, I think, maybe why I get a sense of meaning.
Travis
It's funny, though, because when you say, I think love. But then I think, I want the love because I lost my dad at six months, I lost my mom at 18, away at boarding school, blah, blah, blah. And then when I get lots of love, I actually don't want the love, it’s too much. And I wonder, you know, we talked about ayahuasca and where people are going on journeys to rediscover who they naturally are, or maybe who they are? How do you avoid the confusion of these different influences, to be able to try and give a clear path of rational thinking of how to get somewhere?
So, like, for me, I've got this confused dichotomy of, is it me or is it an emotion? Am I leaning on the past? Can I be celebrating the future? I'm not sure what I could lean on. So, I sometimes don't know how to make a rational decision on what's best for me. So, there's a fear of going down the wormhole of ayahuasca or whatever platform. But then there's also, is it a fear because this could be a huge celebration, and a transformation of where things are going.
Lotto
So, there could be a fear of taking ayahuasca. It might reveal something that you don't actually want, because once it's revealed, you're kind of like screwed, because your brain wants to remain aligned. Like, “I gotta do something”. And if I don't, then I'm becoming aware that I'm deluding myself, and there's so many of us who are like that, and I would argue that possibly we all have that different aspect. So, I don't think that anyone has any one thing, but I think we're all contextual, first of all, so there might be places where you love uncertainty, and so you could be seen as [a] very open and, you know, adventurous person. But I could also imagine there are places in your life where you hate uncertainty. So, does that mean you're no longer an open person and all that? And, you know, I think when we truly pursue self-honesty, which I think is one of the most fundamental aspects of living a life, is to become honest with oneself, because with that honesty comes, I hope, humility, and humility, to me is the engine of creativity. Because you need to say, I don't know, which is, as you know, is, I think where creativity doesn't begin, but it's a necessary step. Part of that self-honesty is to understand how I'm contextual, and to understand that actually I can be complicated, which is diverse, but not interconnected, versus complex, which is also diverse but now connected. And when people are diverse, but they find that common thing that holds it all together, that gives them that sense of, I think, well-being. Where someone is diverse, like, I'm all these things, but I have no idea what's holding it all together, now I'm complicated, like many businesses, siloed. So, finding that common principle that holds it all together, I think, is a wonderful thing as a leader, as an organization, as an individual.
Travis
So, take this on the other end of the spectrum, where as a neuroscientist, the difference between human and machine intelligence, how are you seeing this world of merging into a new source of rational thinking, and a new source of data? And how with that knowledge should companies rethink how they engage with talent as a vehicle for transformation?
Lotto
We've been doing artificial intelligence (AI) for about 20 years. We've been doing it for quite a long time. We had the first neural networks that saw the same illusions that humans see. This is long before the type of AI that's in the world now, which in some sense, is, in principle, no different. It's different in scale, but not necessarily in terms of concept. You know, they're almost like MATLAB (MATrix LABoratory) perceptrons, and so, we used to do what we call ecological modeling. So, we used to evolve our artificial neural networks, and then we would treat them as little critters. Then we would do behavioral experiments and neuroscience experiments on their brains, and so, basically, it was a complete, open-ended system. So, we were seeing what would emerge. We actually evolved color vision in our little neural networks, and it turns out the color vision processing was not unlike the color vision processing in our brain. But now we're God in the system, which means we can actually understand that whole history and look to see how does history, and experience, and architecture fit together, and behavior. So that's how we were using them. So, we're using neural networks to help us better understand the brain.
Another potential use of AI is it can also help us understand society. So, the current systems are basically giving you answers according to what's normal because it's harvesting information that's present now. So today, I asked ChatGPT to give me an answer as to whether a certain behavior in the world, a certain way of being, was good or bad. And I said, give me an answer as if you're an average person 2024. And then I said, give me the answer as if you're an average person, normal person, in 1824. And the answer for the person now is like, “it's neither good or bad. It's just normal”. The answer as if I was from 1824, “it's bad”. Now, you can imagine what question was asked. And so, in other words, the problem is people will take these answers, and they think that they're true. But they're not necessarily true. They're what's normal. Now there are some aspects, especially for looking at physics or something like that is, you know, it's true for what we currently know. So, I think there's tremendous possibility in helping us actually become wiser because we see it as a tool, we don't see it as a replacement of things.
So, we use AI all the time. We're creating platforms for AI, knowledge bases, and all this. It's an empower, possibly, to help us achieve what we think is far more important, which is not knowledge, it's understanding. AI systems are knowledge-based systems, but they're not necessarily understanding-based systems. So, data is meaningless. It's useful, but it's not meaningful. It's the person who's making sense of the data that makes it meaningful.
Travis
So, how do business leaders design their products and messaging to address this tech anxiety that comes from this?
Lotto
So, I don't have an answer to that question because it's very specific. And you could ask the question more generally. Like, how do we position our products and services, according to people's sense of anxiety more generally, whether it be tech or the fact that there are wars going on and all this other stuff? And I think one way of addressing that is, people want to invest, whether buying a product or a literal investment, into things, increasingly that are seen to have real value in terms of humanity. And again, I'm moving away from the concept of purpose, I'm not actually so wedded to this concept of purpose that brands focus on. It's more about how are you relevant? And how is your product or service relevant to the person? And have you ever evidenced that they're actually improving their life? And when you do that, the loyalty of your customer increases, because it's like, “oh my goodness, you're decreasing my uncertainty”. And I think every business is, in some sense, one way or the other, in the business of uncertainty. They're either increasing it, or they're decreasing [it]. Take Game of Thrones. Game of Thrones is in the business of uncertainty. They ramp it up, just like a DJ like in Ibiza. You go to the nightclub, what is it we work with DJs. The DJ is ramping up the music, and they're holding you there, and then they drop the beat. They give you closure, but sometimes they drop it on a minor chord and it goes on and they ramp it up again, and they're playing with you, because they know you need that closure. So, Game of Thrones, the same thing. They ramp it up, but they don't drop it to a final to major chord. They drop it to a minor because they know your brain needs closure. They're brilliant at knowing the level of uncertainty they can drop you to so they give you a little bit of closure, but not enough because they know as soon as they give you full closure, the show's over. So, they're in the business of uncertainty.
Pharmaceutical companies, they're in the business of uncertainty. I have uncertainty about my health, my current health, my future health. Let me help you, let me decrease that uncertainty. Investment company, accountancy, it's all really about uncertainty. These are just different mediators of uncertainty. How am I therefore decreasing the uncertainty of the person, and how is what I'm doing relevant to that? And have I ever measured it? And if I do measure it, and I can evidence it, why am I not sharing that? And that's what my Lab of Misfits does as a business, we help businesses better understand what they're actually in the business of in terms of the minds and the brains of their audience. And then evidencing that and then using that as actual content for earned and paid media, to share it.
Travis
How is the receptiveness to that? Because many organizational leaders don't want disruptive thought. They don't want to think in a different way. It's like I want to go from to A to B. How do you convince the benefit of this journey?
Lotto
Ultimately it has to be relevant to the fact that they're a business and they're there to survive and make a living. And ideally make as good a living as possible.
The argument here is to say that, actually, there's a better way to make that living, and better in multiple ways. First, we can have a more complex value function. It's not just money, there could be other ways of valuing your output. But if we just restrict it to money, well let's take recruitment and retention. What is it? If you have a company that's 50 people, you're spending one a million dollars a year on retention recruitment? Well, if you can say, actually, we're improving the lives of our audience in this way. First of all, those companies that do that outperformed the stock market by 150%. But only 2% of companies are perceived to be in the business of that. So, there's a huge opportunity. That's one. The possibility for retention recruitment is massive, because again, if we go back to the beginning, what do I want to see in my life? When I look back, meaningful? If I'm coming into work, and I'm actually improving people's lives, I feel meaningful. Now I'm loyal to the company. And, also, my audience, they're now loyal to me because now I'm more meaningful, because that's where the brain lives. The brain lives, not necessarily in data, it lives in meaning.
Travis
And can you flip that the other way around for your customers? So, the customers have more meaning to the companies not just in purchase, but in feeling and philosophy toward the business?
Lotto
Well, that’s interesting, I suppose. Yes. I mean, insofar as it becomes a relationship. And in some sense, you can argue that's what, at the most fundamental level, that's what branding is. It's about deepening the relationship with my audience. That's what all brands are trying to do in their branding. But almost always, unless they've actually evidenced it, it's just a slogan. Look at all the brands, it's like, we do this. How do you know you do that? We're in the business of compassion. How do you know you're in the business of compassion? It’s just a slogan. Until they evidence it and then share that evidence, not only to update and evolve their products, but also share with the audience and also to share with the audience in a way that transcends their product. For instance, when we worked with a business which was about awe and wonder, and we said, that's what you're in the business of, is facilitating awe and wonder. When we went back to their employees and said, look, this is what you're doing on the brains of us, they were like, oh, my God, I thought I was doing this. I didn't realize I was transforming the people who I'm engaged with.
Travis
It wasn't just about the talents of the artists, impact to the people.
Lotto
And then vice versa. Now you have a relationship.
Travis
Yeah, you have that friction. So, with increased complexity, what behaviors no longer work?
Lotto
Certainty doesn't work. And as we were talking about yesterday in the panel, it's about complexity. But it's actually, the significance of complexity is interconnectivity. Why does that matter? Because if everything's connected. Let's take the opposite, imagine nothing's connected. If I disrupt the system a little bit, I disrupt two elements. I only disrupt those two elements of the 100 that I could have disrupted, only two. That's a linear system, I disrupt two and I only get a consequence of two. Now, if those two are actually connected with all the others, one is a complicated system, lots of different elements completely non-connected. A complex system is diverse, but they're all connected to each other. So, if I disrupt those two things, that disruption affects all the others. Now, that's what's called a nonlinear impact. Now, everyone here, everyone listening will know exactly what that is. Which is in the form of an avalanche, right? You have the small weight of a skier, and the whole thing gives way. It's because that snowbank is completely interconnected. So, you get this small input, huge effect, which means the future is completely unpredictable. That's why the weather can only be predicted accurately within a certain narrow time window because it's a chaotic, nonlinear system. That's nature. That's life. That's the stock market. That's human behavior. So, what we tried to do is we try to make our life simpler by breaking off those connections, rather than embracing the fact that that's actually the way nature works. So, then the question is, how can we thrive in that complexity? Well, the answer is therefore not in predicting it, because that's impossible. The answer is in responding to it. Creating a culture of your organization that is able to be agile and adaptable to the inevitable change that's going to happen. Because you're going to make a choice. You have no idea if it's a good choice or a bad choice, it's a reasonable choice, but you don’t know if the consequences can be good or bad, but you're going to disrupt the system by making that choice. So, the best choices happen within an agile organization, because now they're going to respond to the disruption that they just made.
Travis
So, it's being in flow, or dancing.
Lotto
Dancing. It's like jazz. It's not playing to a script, because, you know, it's a really good idea. And businesses are sort of constantly trying to maximize efficiency, which is brilliant, except the world continues to change. So, then they try to buy creativity and all this stuff [when] what they really need is to have a system that can move between efficiency and creativity. So, like I said in the talks, you know, I don't want you to leave the room and if a bus is coming at you, think, oh, I wonder if I can see this differently. No, you get out of the way. So, the best leaders are those who can move and say, now this is the time we need to be creative, this is a time we need to be efficient, and they create the teams and the culture that is able and embraces that ability to move when the world moves.
Travis
And it becomes one of the key values of the business.
Lotto
And then what are those values? What are those ways of interacting that facilitate that? We call them the 10 C's, they're things like commitment, curiosity – curiosity is essential – what your business is actually in the business of, what you care about, all this type of stuff.
Travis
So, by celebrating the uncertainty of the unknown, how can leaders create an environment to welcome this into their corporate culture? And how can they start a process of sharing the understanding of what the benefits will be to their employees?
Lotto
First of all, to realize that is fundamental to their survival. That if they don't do it, they're going to get selected out. Because this is literally what happens in nature. Movement is life. Things that don't move die. Why? Because the world moves. So, if you don't move with it…but that doesn't mean you always move, that's where wisdom lives. That's kind of what's happening right now with AI. Everyone's now flooding into AI, and it's almost like must-have technology, we must do something with it. Really? Do you have to? So, there isn't necessarily a lot of wisdom that's happening now with AI, but surely it's going to transform things. That we know, bout how and in what way? So, if they don't move, they're going to get selected out, and the top CEOs know this, that their current business models are not going to work. So, they have to create adaptable organizations, but that means the CEO themselves need to also embody this. The leadership team has to be part of their way of being, they have to lead by example, and that's what will infect the organization, but then they also have to share that way of being with the organization themselves. Otherwise, you get into this, the empath with the narcissist type metaphor. So that, to me, is one of the most fundamental things, but that's a real challenge for leaders, because leaders think that they have to lead with certainty. Like, this is the way we're going. Look at Hollywood films. We celebrate the hero that says, I know all the data. I know, everyone's saying I should go this way, but I'm going this way. And then why? “I just feel it.” And there's some truth in that, but also, the worst things in life have also happened that way. The best things in life don't make sense. What makes sense is normal and average. But it's creating that space that enables us to basically be creators, be scientists, to be a lab, to turn your business into a laboratory.
Travis
So, the overarching thing is to keep it simple and go back to being human.
Lotto
Interesting. Tell me what do you mean?
Travis
We're born into this ecosystem of dance, celebration, and interconnectivity. Yet, we often fight against the benefits of flow by making things more rigid and complicated. Why do we do that?
Lotto
It's so true. And I think you're literally right when we say born into. So, I have four gremlins, you know, 25, 23, 22, and a one-year-old. And to me, they're, like, wonderful experiments. And I, because my background is actually in developmental neuroscience, I just find it fascinating how this little guy, how he's learning and everything, and how he has this insatiable curiosity, something new is like, he's crawling for it. We come into the world with these skills. We come into the world with curiosity, with compassion, and with courage. Confidence is not interesting, but with courage, you know, to do something, knowing that it might fail. The problem is our society, our education system and our corporate structures teach it out of us. We don't reward curiosity, we reward answers. And yet, we know that the cash lives in brilliant questions, but we don't reward questions. Why? Because now, especially as a leader, your question might be doubting me. How many leaders create this hierarchy [and say] you don't doubt me, I know what I'm doing. So much of that, and the more strongly they feel that way, actually more insecure they often are inside. Could also be historical, like, “I've brought us to this point, so, you know, I must be doing something right”. They don't acknowledge the fact that a lot of that is circumstance, contextual, and happenstance, the luck that was involved in any of us being successful, and yet we will reward ourselves and think that we did it all. So, to let go of that can be really, really difficult.
Travis
Get rid of so much stress.
Lotto
That’s right. And so, we reward these things, so now our curiosity is dampened. Our courage is dampened, our willingness to ask questions is dampened. And, instead, we reward things that are, in fact, relevant to narcissistic behavior because that's often what we reward. So, then it’s no surprise we have that type of leadership. But what would happen if, instead, we rewarded curiosity? Like, “that's a brilliant question, I didn't think of that!” Celebrate it, reward it, because your brain is constantly looking for feedback. Everything we do we do for feedback. You text message, why? To get a text message back. Otherwise, you don't exist. Your brain has no idea it exists. It's called the ghost effect, if I push on something, and nothing happened, I have no effect. Do I even exist? And one of the greatest gifts you can give to a person is the gift of existence. To be seen. The power of listening to someone, to entering conflict with the ideas, with actually, maybe, I'll learn something from you, rather than I'm going to convince you of something. Now you exist. And we don't do that in education. We don't do that in corporate worlds. And to our demise.
Travis
What a note to end on, to rethink at EY Innovation Realized with that philosophy. I think everyone can go home with a backpack of solutions. So, thank you for taking time with me today, Beau. We could talk for hours. Absolutely awesome. Thank you so much.
Lotto
Thank you. I enjoyed the conversation.
Narrator
We hope you’ve enjoyed this episode of the EY Innovation Realized Podcast Series by Elevation Barn.
If you would like to learn more about Beau Lotto, please visit beaulotto.com. To learn more about Elevation Barn, please visit us at elevationbarn.com.
To find out how EY leaders are helping clients rethink their business approach to unlock value for their organizations, visit ey.com.
To report accessibility issues with this podcast, email connect@elevationbarn.com.
Hello and welcome to the EY Innovation Realized podcast series by Elevation Barn.
Our world is characterized by more forceful changes that appear quicker, trigger more interconnected and widespread impacts, and often strike all at once. Some call this the poly crisis or perma crisis. Whatever you choose to call it, the bottom line is a business climate that has become far more complex. This environment requires leaders to rethink core assumptions, challenge to establish assumptions, and rethink best practices that no longer work.
This Elevate series will bring you inside the 2024 EY Innovation Realized Global Summit to hear the new ways of thinking our complex world requires. Each episode is a provocative one-on-one conversation between a leader exploring these vital topics and impact leader, Will Travis, founder and CEO of Elevation Barn.
Elevation Barn is an international community of world leaders and experts focused on unlocking a purpose-driven legacy for sustainable personal and business growth. To learn more, visit elevationbarn.com.
And now to your host, Will Travis.
Travis
Beau Lotto is a professor, neuroscientist, and entrepreneur. He is the founder and CEO of two companies, Lab of Misfits, the world's first neuro design studio, and Ripple, which holds several patents in augmented reality. He is a three-time mainstage TED speaker with over nine million views. He’s spoken around the world, helping people act differently in the face of change.
Beau has been a professor at the University College London for 20 years and is now a professor at [the] University of London, as well as a visiting scholar at New York University.
Beau and his lab have published over 70 peer-reviewed articles across a wide range of disciplines. He has published three books and was the first creator-in-residence at Viacom.
Welcome, Beau.
Lotto
Thank you. lovely to be here.
Travis
So, tell me a little bit about your journey. How did you move into this connection with humanity, and bring science at such a level that you've inspired so many people? What was your calling to go down this route?
Lotto
What was my calling? Good question. I suppose my calling is that I just feel we need more compassion. We need more people to come together more. We need people to be more humble. I think one of the biggest challenges we face is our certainty. And so, for me, the power of science is the ability to ground certain principles of ways of being, in evidence of how your brain works. But, also, my lab works on complex adaptive systems. So, this is actually how nature works, so let's shift the argument and the debate, and then say, how can we actually implement these things in a way that actually can create the opportunity to expand yourself, not shift yourself, but expand yourself. And I think that there's tremendous significance and potential in that.
Travis
And you talk quite heavily about your brain has evolved not to see the world as it is. Unpack that a little bit for me.
Lotto
Well, so this is not postmodern relativism. There is a physical world, it's just that we don't see it. Nor would it actually be useful to see it in any literal sense, because the world doesn't come with instructions. It doesn't tell you what to do. And, because there's so much possibility in any one, either moment or physical aspect, and what might be useful in one instance, might change in context, might change with time. So, rather than evolving to see the world the way it is, we evolved a brain that is able to make meaning from that world. And more than that, is able to change that meaning according to context and over time. And that's what empowers us to survive, you know, not all meanings are the same. Some meanings are better than others, right? Contextually. And so, that's why we didn't evolve to see the world as it is.
The other aspect of it is that the information we get from the world, we're forever physically separate from that world. So, we have no direct access to the reflectiveness of surfaces, other than through the light that falls onto it and then reflects onto our eye. You change the light, you change the information coming from that surface. Which means at the most fundamental level, the data that your brain is receiving from the world is completely ambiguous. It could literally mean anything. It could be something that's large and far away or small and up close or, if we were to turn off the lights here right now, the light coming from this black surface would probably be lighter than the amount of light coming from this white surface if we were to turn off the lights. And yet we'd still see this is light and still see that as dark, and yet the information is completely different, it changes as the light changes. So, it's like we're presented with this impossible mathematical problem. You know, x times y equals Z, and we're given Z without ever knowing what x or y is. So, your brain has to solve this problem, and then it has to layer meaning on top of it.
Travis
And if you go back to childhood, are we more accepting of those diverse thoughts? Or is it something we're born with? To actually compartmentalize, to make sure that we think what we see is what we need to see?
Lotto
Both. So, we do come into the world with certain meanings, certain histories, like light comes from above. We have that assumption, or that we're on a ground plane and those have fundamental influences on how we see the world, but we also evolved a brain that's plastic and my PhD is actually in neuroplasticity and how the brain changes with raw experience which means that we can continually expand our perception, expand our brain and change those connections according to that trial and error history. Your brain is inherently empirical, but it has a substrate on which is operating, but then it can change according to that experience.
Travis
So, it's absolutely critical, like the people that you hang out with, you're in Ibiza, some of the time I'm in Bali, the people that we're mixing with is probably very different than the people that are stuck in New York City, or in London all the time. Does it get as confined as that? Or are we still very open to take influence from wherever it comes?
Lotto
Well, not everybody is open to taking influence from wherever it comes. In fact, I would argue that maybe very few people are, though every brain has that possibility. There's an element of choice and how open you want to be. So, yes, you're definitely influenced by those around you. We know this to be true, as much as you also influence them, which is also one of the really important aspects when thinking about, if we think about the context of business, that the leader and the personality of the leader is really important because the personality of the leader can actually become the personality of the company, and without pulling examples, our relationships between who that person is and the kind of organization they create. In terms of being open to influence, there can be tremendous fear in that, because if I'm open to influence, it means that maybe I have to let go of what I thought to be true before. In order to shift, I actually have to let go sometimes.
Travis
So, lean into unpack that a bit. So, I love that, seeing is not knowing like you do not know or you may be wrong, or let's presume that that person could be right. I loved when you were chatting earlier in the day, or yesterday, just about let's move from not seeing to not knowing. How has that been a leading philosophy for you as a scientist?
Lotto
Hugely, I mean, it underpins science. In fact, I would argue it underpins anything that's innovative, creative, or expansive. Why? Because anyone listening to this, I mean, nothing interesting in their life ever began with them knowing something. It began with them not knowing something, by definition. You can't learn from a place of knowing. Not that you don't build on what you knew, but if you're going to expand yourself, you literally don't know it yet. So, there's tremendous power in not knowing. In fact, not knowing, I would argue, is your first step to seeking, to achieving understanding. You start with knowing, and, knowing is great. It's efficient. I know this thing, but now I want to expand what I know. I want to understand. Well, my first step is, as I suggested, the first step from A to B is not B. Your first step is from A to not-A, to let go of what you thought to be true before. So, I call it doubt. We should celebrate doubt in businesses and in our lives. But not just in of itself because now I don't know, I need to deviate from what I knew. Now I need to diversify my experience, to be open to those new kinds of experience, and then from that I can distill a principle. And then from that principle, I can decide to do something and then I do it. And now I get a deeper understanding.
Travis
Yeah, more respect.
Lotto
I would suggest, we also get intrinsic reward. So, what's an intrinsic reward? We have at least two kinds of rewards. You have extrinsic reward: you do something, and you get a reward for doing that thing, which is different from what you are doing. You work and your reward is money. Money is different from what you're actually doing. What's the reward of skiing? It's skiing. The reward is from the activity itself. And why do we get this intrinsic reward is because evolution said, well, whatever you're doing, that's a good idea. We need them to do that more. So, an orgasm is an intrinsic reward because it's nature saying, we need to keep them doing that. Let's give them some motivation here. And so, they keep doing it to propagate. So, when you achieve understanding, you get the same kind of hit. It's an intellectual orgasm. Why? Because understanding something made you agile, made you flexible, made you more creative. And there's a selective advantage to that. So, when you get that understanding you get this moment of closure, and you get that good feeling, and that propagates you wanting to do it again.
Travis
So, I’ve got friends, I’ve climbed many the world’s highest summits, I’ve driven the Dakar, I live in Bali. I’ve got mates who have not left the town I grew up in and are not interested in a lot of other things, maybe a pint and rugby. Why do people not go down those paths? What makes the difference between us that are insatiably hungry and curious from those that aren't?
Lotto
Well, first of all, I can't speak to how they're, well, in some sense how they're different insofar as them personally, of course, but there are different personality types. Some people are more open, some people are more closed, but I'd also suggest that stepping into uncertainty, stepping into the unknown, evolution was a really bad idea because it literally increases the possibility of death. That's one. So, it would have been a disadvantage to say, like I said yesterday, let's go see what's on the other side of that hill because now the possibility of death increases in the short-term. Ironically, it could actually increase your possibility of death or the community survival, sorry, increased probability of survival in the longer-term, at least of the community, because now you have a bunch of foragers, and then one of them finds the good thing, and all the others die, but now everyone else benefits. So, there's an advantage there, but to do that step into uncertainty, that is really scary. People hate, often, change. And it seems to me, when I ask audiences, which I always do, I say, how many of you want to change? They all put their hands up. I say, come on, let's be honest. How many of you want the consequence of the change but not the process of the change? And it’s like, yeah actually, right? Because that process of change can be really scary and really hard. They want to get the end of the benefit of it, and because we see the world through our evolutionary ancestors, we then experience that cortisol release, that stress, that fear our brain cells start generating, our immune system starts generating, especially over time. And yet, the irony is, that's the only place we can go, if we are to expand ourselves, if we are to learn, if we are to achieve understanding.
Travis
And do we, by leaning on people that also take risks and get there, like you're helping a lot of leaders as well. Do you position them with other leaders that are used to taking risks, to give them the confidence to get there? Or do you just encourage them through process?
Beau Lotto
Both. But let's imagine that possibly the most, in some sense, the most powerful one is when they have the motivation to do it themselves.
So, one of the ways I try to engage with that is, first of all, everyone's a leader. Ultimately, they're the leader of their life, and so I think that's really important. First of all a more general point, that if you're going to work with just leaders of an organization, really, really important, but if you only work with the leaders of an organization, then you're not really going to be able to create that culture, ultimately, because it requires everybody interacting. And the metaphor I use [is], it's a bit like an empath having a relationship with a narcissist. It's not gonna work. So, first of all, everyone needs to be in that place of wanting to evolve. But the way I tried to do it is to tie it back to the personal life, that it is not a mindset, it's a way of being in the world, and it's not just when you walk through the doors of your corporation or your organization. It's when you walk through the doors of your life, with your partner, with your children, with yourself. And if we can show through evidence that you're going to do better by being better, and this is how you are better as a being, personally. Now they're more likely to embody that and bring that with them to the organization.
Travis
And does better mean happier?
Beau Lotto
That's a really good question. And I don't have the answer to that because we know that the pursuit of happiness is one of the worst ways to achieve it.
We did a study asking people, imagine you're on your deathbed, and people can do it as they're listening. So, imagine you're on your deathbed looking back. What is it that you want to see? What's a word that you want to define your life? And I don't necessarily mean your purpose, it could be to have a purpose, and most people say, happy. Okay, the next most popular answer was meaningful. And then another one was authentic. And our hypothesis was that not all purposes are equivalent, some are better than others. Why? Depending on the context.
So, the second part of the study is how did you fare during COVID, as a proxy for uncertainty? And those whose life wanted to be defined by happiness, they did the least well, they had the most stress, the most anxiety, the least creativity. But those who pursued meaningful or wanted their life to be in the pursuit of meaning and authenticity, did the best in times of uncertainty, they had the most creativity, the most connection, the least amount of stress, and possibly you'd argue, possibly the most happiness or maybe most joy. So it could be that that's very individual. But you could argue that there are some pursuits that are better than others. In terms of that sense of well-being, and that might be in relation to meaningfulness, and authenticity.
Travis
What's the word that you look back? You would look back at life from your deathbed and say, that's the word that I need?
Lotto
So, I'm really torn. So, I'll throw this out there because [it’s] more of a hypothesis, but I wonder if we're too much in the pursuit of meaningfulness as opposed to just kind of being relevant and being useful.
Because then you could argue that maybe that's where we find meaning, is when we're actually useful and supporting others, and then also whether or not you're aligned, in your words, and intentions and actions because you got a lot of people in Ibiza in Bali, for instance, a lot of words, “these are my intentions, I'm a very spiritual person”, but you look at them, and they look at their behaviors like, but are you? A lot of mental health comes from being aligned in what you say in what you do. I think that's where authenticity lives. I think that's where meaning can come from. So, then it's, I intend to be useful. I speak to being useful and am I actually useful? And so, that's, I think, maybe why I get a sense of meaning.
Travis
It's funny, though, because when you say, I think love. But then I think, I want the love because I lost my dad at six months, I lost my mom at 18, away at boarding school, blah, blah, blah. And then when I get lots of love, I actually don't want the love, it’s too much. And I wonder, you know, we talked about ayahuasca and where people are going on journeys to rediscover who they naturally are, or maybe who they are? How do you avoid the confusion of these different influences, to be able to try and give a clear path of rational thinking of how to get somewhere?
So, like, for me, I've got this confused dichotomy of, is it me or is it an emotion? Am I leaning on the past? Can I be celebrating the future? I'm not sure what I could lean on. So, I sometimes don't know how to make a rational decision on what's best for me. So, there's a fear of going down the wormhole of ayahuasca or whatever platform. But then there's also, is it a fear because this could be a huge celebration, and a transformation of where things are going.
Lotto
So, there could be a fear of taking ayahuasca. It might reveal something that you don't actually want, because once it's revealed, you're kind of like screwed, because your brain wants to remain aligned. Like, “I gotta do something”. And if I don't, then I'm becoming aware that I'm deluding myself, and there's so many of us who are like that, and I would argue that possibly we all have that different aspect. So, I don't think that anyone has any one thing, but I think we're all contextual, first of all, so there might be places where you love uncertainty, and so you could be seen as [a] very open and, you know, adventurous person. But I could also imagine there are places in your life where you hate uncertainty. So, does that mean you're no longer an open person and all that? And, you know, I think when we truly pursue self-honesty, which I think is one of the most fundamental aspects of living a life, is to become honest with oneself, because with that honesty comes, I hope, humility, and humility, to me is the engine of creativity. Because you need to say, I don't know, which is, as you know, is, I think where creativity doesn't begin, but it's a necessary step. Part of that self-honesty is to understand how I'm contextual, and to understand that actually I can be complicated, which is diverse, but not interconnected, versus complex, which is also diverse but now connected. And when people are diverse, but they find that common thing that holds it all together, that gives them that sense of, I think, well-being. Where someone is diverse, like, I'm all these things, but I have no idea what's holding it all together, now I'm complicated, like many businesses, siloed. So, finding that common principle that holds it all together, I think, is a wonderful thing as a leader, as an organization, as an individual.
Travis
So, take this on the other end of the spectrum, where as a neuroscientist, the difference between human and machine intelligence, how are you seeing this world of merging into a new source of rational thinking, and a new source of data? And how with that knowledge should companies rethink how they engage with talent as a vehicle for transformation?
Lotto
We've been doing artificial intelligence (AI) for about 20 years. We've been doing it for quite a long time. We had the first neural networks that saw the same illusions that humans see. This is long before the type of AI that's in the world now, which in some sense, is, in principle, no different. It's different in scale, but not necessarily in terms of concept. You know, they're almost like MATLAB (MATrix LABoratory) perceptrons, and so, we used to do what we call ecological modeling. So, we used to evolve our artificial neural networks, and then we would treat them as little critters. Then we would do behavioral experiments and neuroscience experiments on their brains, and so, basically, it was a complete, open-ended system. So, we were seeing what would emerge. We actually evolved color vision in our little neural networks, and it turns out the color vision processing was not unlike the color vision processing in our brain. But now we're God in the system, which means we can actually understand that whole history and look to see how does history, and experience, and architecture fit together, and behavior. So that's how we were using them. So, we're using neural networks to help us better understand the brain.
Another potential use of AI is it can also help us understand society. So, the current systems are basically giving you answers according to what's normal because it's harvesting information that's present now. So today, I asked ChatGPT to give me an answer as to whether a certain behavior in the world, a certain way of being, was good or bad. And I said, give me an answer as if you're an average person 2024. And then I said, give me the answer as if you're an average person, normal person, in 1824. And the answer for the person now is like, “it's neither good or bad. It's just normal”. The answer as if I was from 1824, “it's bad”. Now, you can imagine what question was asked. And so, in other words, the problem is people will take these answers, and they think that they're true. But they're not necessarily true. They're what's normal. Now there are some aspects, especially for looking at physics or something like that is, you know, it's true for what we currently know. So, I think there's tremendous possibility in helping us actually become wiser because we see it as a tool, we don't see it as a replacement of things.
So, we use AI all the time. We're creating platforms for AI, knowledge bases, and all this. It's an empower, possibly, to help us achieve what we think is far more important, which is not knowledge, it's understanding. AI systems are knowledge-based systems, but they're not necessarily understanding-based systems. So, data is meaningless. It's useful, but it's not meaningful. It's the person who's making sense of the data that makes it meaningful.
Travis
So, how do business leaders design their products and messaging to address this tech anxiety that comes from this?
Lotto
So, I don't have an answer to that question because it's very specific. And you could ask the question more generally. Like, how do we position our products and services, according to people's sense of anxiety more generally, whether it be tech or the fact that there are wars going on and all this other stuff? And I think one way of addressing that is, people want to invest, whether buying a product or a literal investment, into things, increasingly that are seen to have real value in terms of humanity. And again, I'm moving away from the concept of purpose, I'm not actually so wedded to this concept of purpose that brands focus on. It's more about how are you relevant? And how is your product or service relevant to the person? And have you ever evidenced that they're actually improving their life? And when you do that, the loyalty of your customer increases, because it's like, “oh my goodness, you're decreasing my uncertainty”. And I think every business is, in some sense, one way or the other, in the business of uncertainty. They're either increasing it, or they're decreasing [it]. Take Game of Thrones. Game of Thrones is in the business of uncertainty. They ramp it up, just like a DJ like in Ibiza. You go to the nightclub, what is it we work with DJs. The DJ is ramping up the music, and they're holding you there, and then they drop the beat. They give you closure, but sometimes they drop it on a minor chord and it goes on and they ramp it up again, and they're playing with you, because they know you need that closure. So, Game of Thrones, the same thing. They ramp it up, but they don't drop it to a final to major chord. They drop it to a minor because they know your brain needs closure. They're brilliant at knowing the level of uncertainty they can drop you to so they give you a little bit of closure, but not enough because they know as soon as they give you full closure, the show's over. So, they're in the business of uncertainty.
Pharmaceutical companies, they're in the business of uncertainty. I have uncertainty about my health, my current health, my future health. Let me help you, let me decrease that uncertainty. Investment company, accountancy, it's all really about uncertainty. These are just different mediators of uncertainty. How am I therefore decreasing the uncertainty of the person, and how is what I'm doing relevant to that? And have I ever measured it? And if I do measure it, and I can evidence it, why am I not sharing that? And that's what my Lab of Misfits does as a business, we help businesses better understand what they're actually in the business of in terms of the minds and the brains of their audience. And then evidencing that and then using that as actual content for earned and paid media, to share it.
Travis
How is the receptiveness to that? Because many organizational leaders don't want disruptive thought. They don't want to think in a different way. It's like I want to go from to A to B. How do you convince the benefit of this journey?
Lotto
Ultimately it has to be relevant to the fact that they're a business and they're there to survive and make a living. And ideally make as good a living as possible.
The argument here is to say that, actually, there's a better way to make that living, and better in multiple ways. First, we can have a more complex value function. It's not just money, there could be other ways of valuing your output. But if we just restrict it to money, well let's take recruitment and retention. What is it? If you have a company that's 50 people, you're spending one a million dollars a year on retention recruitment? Well, if you can say, actually, we're improving the lives of our audience in this way. First of all, those companies that do that outperformed the stock market by 150%. But only 2% of companies are perceived to be in the business of that. So, there's a huge opportunity. That's one. The possibility for retention recruitment is massive, because again, if we go back to the beginning, what do I want to see in my life? When I look back, meaningful? If I'm coming into work, and I'm actually improving people's lives, I feel meaningful. Now I'm loyal to the company. And, also, my audience, they're now loyal to me because now I'm more meaningful, because that's where the brain lives. The brain lives, not necessarily in data, it lives in meaning.
Travis
And can you flip that the other way around for your customers? So, the customers have more meaning to the companies not just in purchase, but in feeling and philosophy toward the business?
Lotto
Well, that’s interesting, I suppose. Yes. I mean, insofar as it becomes a relationship. And in some sense, you can argue that's what, at the most fundamental level, that's what branding is. It's about deepening the relationship with my audience. That's what all brands are trying to do in their branding. But almost always, unless they've actually evidenced it, it's just a slogan. Look at all the brands, it's like, we do this. How do you know you do that? We're in the business of compassion. How do you know you're in the business of compassion? It’s just a slogan. Until they evidence it and then share that evidence, not only to update and evolve their products, but also share with the audience and also to share with the audience in a way that transcends their product. For instance, when we worked with a business which was about awe and wonder, and we said, that's what you're in the business of, is facilitating awe and wonder. When we went back to their employees and said, look, this is what you're doing on the brains of us, they were like, oh, my God, I thought I was doing this. I didn't realize I was transforming the people who I'm engaged with.
Travis
It wasn't just about the talents of the artists, impact to the people.
Lotto
And then vice versa. Now you have a relationship.
Travis
Yeah, you have that friction. So, with increased complexity, what behaviors no longer work?
Lotto
Certainty doesn't work. And as we were talking about yesterday in the panel, it's about complexity. But it's actually, the significance of complexity is interconnectivity. Why does that matter? Because if everything's connected. Let's take the opposite, imagine nothing's connected. If I disrupt the system a little bit, I disrupt two elements. I only disrupt those two elements of the 100 that I could have disrupted, only two. That's a linear system, I disrupt two and I only get a consequence of two. Now, if those two are actually connected with all the others, one is a complicated system, lots of different elements completely non-connected. A complex system is diverse, but they're all connected to each other. So, if I disrupt those two things, that disruption affects all the others. Now, that's what's called a nonlinear impact. Now, everyone here, everyone listening will know exactly what that is. Which is in the form of an avalanche, right? You have the small weight of a skier, and the whole thing gives way. It's because that snowbank is completely interconnected. So, you get this small input, huge effect, which means the future is completely unpredictable. That's why the weather can only be predicted accurately within a certain narrow time window because it's a chaotic, nonlinear system. That's nature. That's life. That's the stock market. That's human behavior. So, what we tried to do is we try to make our life simpler by breaking off those connections, rather than embracing the fact that that's actually the way nature works. So, then the question is, how can we thrive in that complexity? Well, the answer is therefore not in predicting it, because that's impossible. The answer is in responding to it. Creating a culture of your organization that is able to be agile and adaptable to the inevitable change that's going to happen. Because you're going to make a choice. You have no idea if it's a good choice or a bad choice, it's a reasonable choice, but you don’t know if the consequences can be good or bad, but you're going to disrupt the system by making that choice. So, the best choices happen within an agile organization, because now they're going to respond to the disruption that they just made.
Travis
So, it's being in flow, or dancing.
Lotto
Dancing. It's like jazz. It's not playing to a script, because, you know, it's a really good idea. And businesses are sort of constantly trying to maximize efficiency, which is brilliant, except the world continues to change. So, then they try to buy creativity and all this stuff [when] what they really need is to have a system that can move between efficiency and creativity. So, like I said in the talks, you know, I don't want you to leave the room and if a bus is coming at you, think, oh, I wonder if I can see this differently. No, you get out of the way. So, the best leaders are those who can move and say, now this is the time we need to be creative, this is a time we need to be efficient, and they create the teams and the culture that is able and embraces that ability to move when the world moves.
Travis
And it becomes one of the key values of the business.
Lotto
And then what are those values? What are those ways of interacting that facilitate that? We call them the 10 C's, they're things like commitment, curiosity – curiosity is essential – what your business is actually in the business of, what you care about, all this type of stuff.
Travis
So, by celebrating the uncertainty of the unknown, how can leaders create an environment to welcome this into their corporate culture? And how can they start a process of sharing the understanding of what the benefits will be to their employees?
Lotto
First of all, to realize that is fundamental to their survival. That if they don't do it, they're going to get selected out. Because this is literally what happens in nature. Movement is life. Things that don't move die. Why? Because the world moves. So, if you don't move with it…but that doesn't mean you always move, that's where wisdom lives. That's kind of what's happening right now with AI. Everyone's now flooding into AI, and it's almost like must-have technology, we must do something with it. Really? Do you have to? So, there isn't necessarily a lot of wisdom that's happening now with AI, but surely it's going to transform things. That we know, bout how and in what way? So, if they don't move, they're going to get selected out, and the top CEOs know this, that their current business models are not going to work. So, they have to create adaptable organizations, but that means the CEO themselves need to also embody this. The leadership team has to be part of their way of being, they have to lead by example, and that's what will infect the organization, but then they also have to share that way of being with the organization themselves. Otherwise, you get into this, the empath with the narcissist type metaphor. So that, to me, is one of the most fundamental things, but that's a real challenge for leaders, because leaders think that they have to lead with certainty. Like, this is the way we're going. Look at Hollywood films. We celebrate the hero that says, I know all the data. I know, everyone's saying I should go this way, but I'm going this way. And then why? “I just feel it.” And there's some truth in that, but also, the worst things in life have also happened that way. The best things in life don't make sense. What makes sense is normal and average. But it's creating that space that enables us to basically be creators, be scientists, to be a lab, to turn your business into a laboratory.
Travis
So, the overarching thing is to keep it simple and go back to being human.
Lotto
Interesting. Tell me what do you mean?
Travis
We're born into this ecosystem of dance, celebration, and interconnectivity. Yet, we often fight against the benefits of flow by making things more rigid and complicated. Why do we do that?
Lotto
It's so true. And I think you're literally right when we say born into. So, I have four gremlins, you know, 25, 23, 22, and a one-year-old. And to me, they're, like, wonderful experiments. And I, because my background is actually in developmental neuroscience, I just find it fascinating how this little guy, how he's learning and everything, and how he has this insatiable curiosity, something new is like, he's crawling for it. We come into the world with these skills. We come into the world with curiosity, with compassion, and with courage. Confidence is not interesting, but with courage, you know, to do something, knowing that it might fail. The problem is our society, our education system and our corporate structures teach it out of us. We don't reward curiosity, we reward answers. And yet, we know that the cash lives in brilliant questions, but we don't reward questions. Why? Because now, especially as a leader, your question might be doubting me. How many leaders create this hierarchy [and say] you don't doubt me, I know what I'm doing. So much of that, and the more strongly they feel that way, actually more insecure they often are inside. Could also be historical, like, “I've brought us to this point, so, you know, I must be doing something right”. They don't acknowledge the fact that a lot of that is circumstance, contextual, and happenstance, the luck that was involved in any of us being successful, and yet we will reward ourselves and think that we did it all. So, to let go of that can be really, really difficult.
Travis
Get rid of so much stress.
Lotto
That’s right. And so, we reward these things, so now our curiosity is dampened. Our courage is dampened, our willingness to ask questions is dampened. And, instead, we reward things that are, in fact, relevant to narcissistic behavior because that's often what we reward. So, then it’s no surprise we have that type of leadership. But what would happen if, instead, we rewarded curiosity? Like, “that's a brilliant question, I didn't think of that!” Celebrate it, reward it, because your brain is constantly looking for feedback. Everything we do we do for feedback. You text message, why? To get a text message back. Otherwise, you don't exist. Your brain has no idea it exists. It's called the ghost effect, if I push on something, and nothing happened, I have no effect. Do I even exist? And one of the greatest gifts you can give to a person is the gift of existence. To be seen. The power of listening to someone, to entering conflict with the ideas, with actually, maybe, I'll learn something from you, rather than I'm going to convince you of something. Now you exist. And we don't do that in education. We don't do that in corporate worlds. And to our demise.
Travis
What a note to end on, to rethink at EY Innovation Realized with that philosophy. I think everyone can go home with a backpack of solutions. So, thank you for taking time with me today, Beau. We could talk for hours. Absolutely awesome. Thank you so much.
Lotto
Thank you. I enjoyed the conversation.
Narrator
We hope you’ve enjoyed this episode of the EY Innovation Realized Podcast Series by Elevation Barn.
If you would like to learn more about Beau Lotto, please visit beaulotto.com. To learn more about Elevation Barn, please visit us at elevationbarn.com.
To find out how EY leaders are helping clients rethink their business approach to unlock value for their organizations, visit ey.com.
To report accessibility issues with this podcast, email connect@elevationbarn.com.
Presenters
Will Travis
Founder and CEO, Elevation Barn