Welcome to Higher Order. We talk to creative people with ambitious ideas that are out to change the world. Today we’re hitting the books with Rishad Tobaccowala, futurist, innovator and business soul finder. With more than 40 years of insight, learnings, and musings on the state of business he has distilled the must to do’s for leadership into actionable lessons for every company in his new book, creating growth, retaining health, and restoring the soul of business.
Josh Coon: Rishad, thank you so much for joining us.
Rischad Tobaccowala: Thank you for inviting me.
Devon Higby: So, Rishad, you have been a leader in the advertising industry and a clear voice for change and evolution, but what led you to the advertising industry to begin with?
Rischad Tobaccowala: So I grew up in India and I did a degree in mathematics. I came to the University of Chicago for an MBA and when I graduated in 1982 one company hired me, it was called the Leo Burnett Advertising Agency. And the reason people didn’t hire me is because I did not have working papers so they decided to take a risk on me and get my working papers. And I said, all right, after three years of doing that, I’ll go get a real job somewhere. And when I see myself 38 years later, I’m still in the Leo Burnett Building.
Rischad Tobaccowala: Part of it is I was interested in marketing because to me it combined culture and creativity along with business. And I thought that was something that would be good, it would be fun, it would also allow me to learn about America and lots about different things, but in many ways they selected me because it was the only job I got. It may be the only job that I’ve ever had because sometimes, I don’t know whether it’s a testament to loyalty or unemployability that I was still there, but there it is.
Devon Higby: Is the appeal still the same for you then?
Rischad Tobaccowala: It is, I’ve evolved into sort of over the years, the key thing that I did was the last time my business card said Leo Burnett was 25 years ago. So 25 years ago I launched a company along with a couple of colleagues called Giant Step, which was interactive agency, one of the first ones. We left the Leo Burnett Building went to Greektown in Chicago. And since then I have evolved into 10 different companies like StarCom and Digitas and then over on the Publicis Groupe. So while I have stayed in one company and in one city, I’ve actually worked across a lot of different industries so that has been very interesting.
Rischad Tobaccowala: And about two-three years ago I decided that my next reinvention was going to be… almost evolving my career into one of being a writer and speaker and advisor whilst a full-time employee. Though I’m still very connected with the Publicis Groupe where I remain a senior advisor, but I’m now a company of one. And it’s both very intriguing in these times that we are recording, but also somewhat less pressurized because I don’t have to deal with payroll and staff and revenue, which all of us are struggling with.
Josh Coon: So Rishad was being an author, something you’ve always aspired to?
Rischad Tobaccowala: I always have. As I was growing up in India, I used to be taken to a bookstore by my parents every week and I said I wanted to be a writer. They basically suggested that I not be a writer then for two reasons. One is they said, “You have nothing to write about, you’re just a 17 year old.” And the second was they said they didn’t believe I could make a career and support myself being a writer. So I said, “All right, what should I do?” And they said, “Why don’t you do the exact opposite, do mathematics,” which is what I did. And so I’ve always wanted to be one. And so here I am, I actually have a book just 40 years later.
Devon Higby: So the first thing that actually jumped out to us is the cover and the title, Restoring the Soul of Business. To us that implies that the business had a soul at some point, when was that and where did it go?
Rischad Tobaccowala: So business, had a soul and some businesses still retain the soul, but broadly business had a soul till about the 1990s and that is where businesses prior to that understood that they were serving two sets of constituencies. One, what I call the spreadsheet constituency, which is the customer to make sure that they were delivering what they wanted for the customer and the other was the shareholder, which is whoever owned the company. But at the same time they also recognize they have this other set which was basically the employees and the society that they lived in or the communities that they lived in and that balance is what I call the story and the spreadsheet which makes the soul of the business.
Rischad Tobaccowala: In the 1990s because of three key things. One is globalization, second is seven or eight years into the Reagan administration and free markets, there was basically a belief that A, markets were the only thing that mattered and two, companies only existed to make a profit. As a result, every other thing that wasn’t market-driven or profit-driven was removed. And it eventually yielded companies like Wells Fargo that began to open fake bank accounts, Boeing that shipped a plane that wasn’t ready because it was, let’s keep the share price up, let’s ship, let’s make the numbers. And that is, for the last 20 years, more and more companies have followed only the spreadsheet, only the markets, only the data.
Josh Coon: When you talk about the soul of business and what the soul of business is and how people can regain it. For the advertising industry, it’s something that I’ve seen a lot of people lately talking about like how it’s lost its way a little bit. Maybe it’s not as glamorous as it used to be or not as well respected as it used to be. Has advertising lost its soul a little and how can we recover?
Rischad Tobaccowala: So I believe that advertising has, like all other businesses, has begun to face and has over the last five or seven years, maybe last decade, has faced some very significant challenges. I think every category has faced challenges so often when we’re in our own category, we think we’re the only ones that are having trouble. But I see it happening everywhere. But for advertising, we’ve had three big challenges which has questioned the soul of the business.
Rischad Tobaccowala: So the first one to great extent is the relationship that we have tended to have with clients, which is we used to, in the best days, be junior partner, now in many cases we basically are a transaction. Basically, we’ve gone from a medium to longterm horizon to a short-term horizon. And that is not because our clients are bad or our clients have become shortsighted, it’s because business has become that way, which is the point of my book, which is business has basically become almost completely data-driven, business has become almost completely short-term, business has become speed over anything else.
Rischad Tobaccowala: And when CMOs lasts for 18 months, when companies live or die every 12-14 years, when someone basically says, let’s think about six months to a year, people say, what are you talking about? And as importantly, a lot of our business is now online, which is the biggest media happens to be digital and because digital can be optimized in real-time, you see that.
Rischad Tobaccowala: You see that when you go to even some of the best newspapers and magazines or newspapers, you see all of them being incentivized, not all of them, many of them being incentivized on how many people read their article, where was their rank order. So in effect, everything is now basically built on a number. So it sort of makes it very transactional, very short-term. And that has really hit our industry.
Rischad Tobaccowala: So our industry was basically built on things that weren’t immediately measurable, like ideas and creativity and relationships and brands. Some of them, like Leo Burnett, basically said you need advertising that builds business in the short-term and builds the brand in the long-term. We now basically are how was our daily close? And that has taken a lot away from our industry.
Rischad Tobaccowala: And the other thing that has taken some stuff away from my industry is… I think it’s across all industries but it’s to a certain extent in our industry. One of the things I worry about is two or three types of diversity. The first type of diversity is the diversity that we all talk about, which is do we have enough women, do we have enough people of color? That’s important.
Rischad Tobaccowala: But there’s two others I think that we don’t talk about enough, a third type of diversity. Do we have enough people of different ages? Because part of what’s happening in advertising, we don’t have enough older people. Now I happen to care about that because I’m an older person. But my thing is, I had to remind people not all of us can change our color like Michael Jackson attempted or change our sex like Bruce Jenner did, we basically… but all of us are going to grow old. So there’s one -ism we should care about is let’s make sure we aren’t ageist. And so one is that type of diversity.
Rischad Tobaccowala: The second kind of diversity is the diversity of backgrounds, which is, do we have people from different backgrounds because you could have people of different color and ethnicity, but if you go to the same schools and hire them, you have the same background. And in a world where we’re supposed to provide clients with different perspectives, but we are somewhat vanilla in background, that’s a problem.
Rischad Tobaccowala: And this is the third one, which is the one that I miss the most in our industry and which is the one I’m hoping comes back, which is chapter four in my book, which is the diversity of voices. The chapter four of my book is basically called the Turd on the Table. A better way of writing it is basically diverse faces is not the same as diverse voices, which is, can we speak up? Can we tell truth to power?
Rischad Tobaccowala: One of the things that people found amazing when I was working was I would go to very senior management and basically tell them that they were full of shit, both inside and at my clients and I didn’t get fired. And because my whole stuff is, I’m going to… because I’m not just going to basically kowtow to you, but today people are A, very insecure about their jobs and clients can be very, very brutal.
Rischad Tobaccowala: And so part of what we have to basically do is restore even the soul of our business by basically saying, you know what? We do add value, we are special. And creativity, and ideas, and business, and math and spreadsheets all combined, which is what our business does matters.
Josh Coon: A tough balance to strike as we see every day. And it’s choices that must be so difficult for the people that have to make them.
Rischad Tobaccowala: They’re extremely difficult and it’s one of the reasons why companies began to lose their soul because to keep a soul you have to basically make difficult decisions as a leader. And there are always trade-offs, there isn’t a number or two or three numbers you can look at and basically say, this is all that I’m optimizing for. And part of why we’ve got ourselves globally into the issues we have is I do believe that leaders have absconded, they’ve basically said… My whole stuff is when someone says times are uncertain, I have to explain to them, life is uncertain and these days we now understand how uncertain it is. And why the hell are we paying you as a leader if you can’t make continuous difficult choices, communicate and inspire, why are we paying you?
Devon Higby: Well? And in your book and in another podcast you’ve done, you’ve talked about how 70-80% of people… it’s true today as it was 30 years ago, that people are looking for the same things, the purpose and how we can connect and how we can grow. And that at the center of the answer to those questions are that science and truth and facts matter. Given the state of affairs in the world today, those things seem to be super-important even more so, why are we seeing some of them erode at a time when we need the most and how do we get them to be important again?
Rischad Tobaccowala: In some ways, I believe that this COVID-19 misfortune that we all are struggling with over the world is actually going to bring back some of the things we have lost. It’s very easy to have an imaginary world until you start seeing people dying around you. If you do a split-screen between the briefings that we hear from our president and we see what’s going on in New York City hospitals, it’s almost like one person is writing the story of a comedy and the other the visual of a tragedy.
Rischad Tobaccowala: Eventually, that wakes up everybody because you and I can say we don’t care about science, and we don’t care about math, and we don’t like government and we don’t care about anything until what happens has happened. So if you’d explain to people that something like a pandemic, which people like bill Gates did five years ago, people would say, forget about it’s either you’re dreaming stuff.
Rischad Tobaccowala: So similarly when we come back, people are not going to say we don’t need government because if we don’t need government then why are you waiting for a government check, which all of us are. Well, not all of us but many of us are, which is number one. Number two, if you don’t believe in science, then don’t go to a hospital. And now all of a sudden you begin to realize that fake news is all fine as long as you live in a fake world. But when reality strikes you wake up and I think that’s what’s going to happen to society.
Rischad Tobaccowala: So I think we also got to come back much more into this because whenever an economy is extremely well off which we have been for the last eight or 10 years as an overall economy, obviously there are lots of people who haven’t been well off, but overall as an economy you begin to sort of do this. Just before 9/11 some of the stuff that was basically transfixing the United States was Shark Week. We were basically making up stuff because we were so okay, now that’s going to change.
Josh Coon: One of the things you talk about in your book is how much data we have… I think one of the things you talked about in your book is how much data we have available to us and how there’s lots of math but it’s not necessarily helping. I think the current output that you cite is 2.5 quintillion bits of data a day, which I don’t even know what a quintillion is. That is such a huge number. So we have all this data, but to the point you just were making science, truth, fact, those things are eroding. So can you talk a little bit about the amount of data that’s available to us and how it is or isn’t helping?
Rischad Tobaccowala: Yes, so I believe that facts matter and truth matters and data-driven decisions are important because you need to look at the data to make your decision. And as a result, I am pro math and pro data. However, where I stop is the three areas that we have forgotten. One is we have lots of data, so now it becomes extremely important for us to figure out how to actually get insights and information and wisdom from the data.
Rischad Tobaccowala: The way we get that is, I sort of explain, we integrate the data with reality. We interrogate, we question where did it come from? We figure out whether it’s valid, we basically include different people to look at it and then we come up with a perspective and that perspective is both a combination of what the world shows us, what we have learned and what the data implies and combined them, which is sort of an integrated, holistic take on what needs to be.
Rischad Tobaccowala: What has begun to happen is because A, there’s so much data, we don’t know how to think about it. The other is much of the data is invalid or not relevant at that particular time. And the third is we truly believe that the data will give us the answers. And I believe that data happens to be a signpost that you interrogate and that can lead you in things that you want to consider but data itself rarely gives you the answer. And if the answer was completely data-driven in most companies, then most companies should not have any employees because the machine can do it better. So my basic belief is you start with data but you bring in other things you interrogated and you move on but don’t believe that A, all data is good or B, the data itself can answer the question.
Devon Higby: So we’ve heard you say that changed sucks, but irrelevance is worse. Can you tell us a little bit more about the data behind that?
Rischad Tobaccowala: Yeah, so the data behind that is the human reality that I have seen, that I have experienced and I have seen over four decades. So I’ve had the optionality obviously of working… while I worked in one company, but it’s across lots of different industries, but as importantly across hundreds of clients. And over the last 20 years, overall at least 15 to 20 countries. So there was a time I used to be going to China four times a year, for instance. And I’ve been to Wuhan twice last time, three years ago. And I… grown up in India.
Rischad Tobaccowala: So this perspective is what I began to realize is everywhere around the world people talked about how important change was. But when I thought about change I truly believed it sucked. And I began to realize that everybody also found it sucked. Because if you think about it when people come to you, what do they say? They suggest that you change and they tell you it’s good. My answer to them is I’m happy, if you think change is so good, why don’t you change?
Rischad Tobaccowala: And it’s really interesting that management or somebody else tells you to change is good but change sucks because whenever you do something new, you don’t know what you’re doing. Because you grow usually when you’re changing but that’s often when you don’t know what you’re doing. And a lot of our growth came when we were younger and we learned new things and we didn’t really know what we were doing. We’d fall when we start walking or ride a bike, when we learned a new subject, we didn’t know it was happening.
Rischad Tobaccowala: So change is difficult because human beings find uncertainty and mistakes something that either people laugh at or that they’re not particularly comfortable with. To see how much change sucks just think about how our society is absolutely frozen with the changes in just our life. We have to work from home. We can’t go to a restaurant and the place is frozen. I could tell people, “Hey, this is fantastic, think about the fact that you can spend time at home. Think about the fact that you didn’t have to spend hours transporting. Think about the fact that you can save a lot of money and you’re not eating out.” And you say, “That sucks.”
Rischad Tobaccowala: And so my basic belief is everything I’ve seen across organizations, companies, and people around the world is people have a very big problem changing. On the other hand, what I’ve also realized is the more you want things to stay the same the more you will have to change because the world keeps changing and the world really doesn’t care about any one of us. It’s really hard when I tell people you have to adapt to the future, the future will not adapt to you. So when someone basically complains, I say, “That’s really interesting, I can basically buy you a drink and talk about how you should think differently.”
Rischad Tobaccowala: But the reality of it is if you’re going to get eaten up by change, it’s going to happen so you better change yourself. But recognize it’s going to be difficult. So key thing I tell management in companies is recognize that when you are telling people to change, you have to deal with three things. A, you have to recognize how difficult it is for them and empathize.
Rischad Tobaccowala: Two, you have to give them time because change is a human condition. And third is you have to incentivize change by basically either providing them with promotions or money or something to change. But most management says change is good for your change, thank you very much. And my whole stuff is, you know what, you could keep your press release, I’ll keep doing the same thing.
Josh Coon: Oftentimes for businesses, proactive change is really important. To stay ahead, you have to look out to what the business needs to transform into in order to not become irrelevant as you mentioned. So how can leaders take on that? Like a change that maybe the organization at large doesn’t see the need for yet but needs to happen in order for you to kind of stay in front of what’s happening in the world.
Rischad Tobaccowala: So in doing that, I’ve found over the years, many companies, my own, many other people I’ve benchmarked, this for my book, I did a lot of studying of other people besides my own experiences. And I figured out there were three or four things that people did when they had to get organizations to change and make them see things that they may not see particularly well.
Rischad Tobaccowala: So one of them is to basically go outside your own industry. People basically don’t see change happening in their own industry because they are very defensive. So if I go to a management person and told them how to do their work better in their company, they’ll say, screw it. If I basically show them how somebody else at another company is struggling and it’s fixy, they don’t see that as criticizing them. They basically see me showing them some other person and saying, “I wonder why they’re doing that.” So one is make sure that people aren’t defensive, then you take them outside and showed those changes affecting other industries.
Rischad Tobaccowala: The second is by telling stories, by stories about how change has happened, when change did not happen, et cetera. And that could be the typical ones like, “Hey look…” and everyone talks about these famous ones like there was Nokia, Nokia was making tires and then they basically made phones. But then for some reason this company that changed from basically being a rubber and tire company or rubber to mobile phones decided that mobile phones had to basically be hardware and had to have keys. And so they refuse to acknowledge that something like smartphones existed and they lost.
Rischad Tobaccowala: So even a successful company… When someone says, “Hey, I’m really good at changing, we’ve changed, don’t you worry.” I’ll say, “Well, Nokia changed and then one day they said, don’t you worry and they didn’t change.” So one is looking at, second is explaining to people who don’t want to change that they’ve changed enough that they may not be enough. The third one on sort of getting people to sort of see and think and feel differently about these things, is to show them examples of dramatic change driving simple companies.
Rischad Tobaccowala: So for instance, one of the examples I use is this, which is if you had a dollar of money to invest 10 years ago, what would be your best investment in? And most people would say, I should put it in Apple or Amazon or Google or Facebook, the answer is Domino’s Pizza. Yes, if you had invested in Domino’s Pizza, you’d be better off because Domino’s basically changed and they changed in three ways.
Rischad Tobaccowala: First is they decided that their pizza sucked. So they told everybody it sucked and they were going to improve the product. So the second thing that they basically did was once they did that and communicate that and improve their product, they decided that they were not actually a pizza company they were a company that was a logistics company that happened to deliver pizza. So there are 25 different ways you can order and get Domino’s pizza distributed to you, including basically in the days when there used to be football games, you could sort of wait at a football stadium and they would tell them, “Let’s do GPS.” It would come to you.
Rischad Tobaccowala: But third is as important, what they basically have sort of done is they have proved that by opening more and more Domino’s next to each other, like Starbucks, they actually drive Domino’s sales of the neighboring ones so they use math and data to show basically that, but they… because they were growing it at their competition, but they did things that were ludicrous.
Rischad Tobaccowala: Like for instance, they would give you a coupon if you bought pizza in any form. So you would get a Domino’s pizza if you bought a pizza from your grocery store they would basically give you a discount on a Domino’s pizza. And people say, “Why did they do that?” I say, “Think about what they’ve just done.” Number one is they know everybody who likes pizza because the fact you’ve raised your hand and said, “I like pizza.” I might not buy your pizza, but I like your pizza so they found that, that’s number one.
Rischad Tobaccowala: And number two, they have become the default pizza company of the world. So they say anytime you eat pizza, you have to think about Domino’s. And that is dramatic out of the box thinking. So by having examples like that, by showing people in other industries, by telling stories are three ways. And the last and most important way is this, which is this is going to be good for you.
Rischad Tobaccowala: Because when most people don’t want to change and don’t see the future, the reason is we forget to tell people how they will fit in the future. And I tell you this, if my company is successful in the future but I’m not successful in the future I really don’t care. But that’s not true because I happened to be very senior. But that’s, most people don’t care.
Devon Higby: I love that example. Your book is actually filled with a ton of examples so they just jumped out at me not only because of the authenticity of the actual change and the innovative approach that those companies were taking, but they were real examples of appropriate and true creative destruction, which is a term I feel like gets tossed around and misused and misappropriated and miss packaged when change is being rolled out at a company. But also those stories really stand out because there’re companies that are disrupting their own methodologies and their own products to get ahead and be innovative. So what’s next for those companies? The leaders, the Amazons, the Apples that blew up iPod in order to make iPhone. The Domino’s, is it working? How do they stay ahead?
Rischad Tobaccowala: So in fact, there’re two sets of companies, there’s one set of company which are the Googles and Amazons and Apples. And the issue there is less how they stay ahead because I’ll give you at least two or three ways that they stay ahead. But the question is, should they stay so much ahead? Because they have now got such amazing both technology capabilities in a world that we entering AI. So much financial capabilities either because they’ve got lots of money or the ability to borrow money.
Rischad Tobaccowala: And three is they’ve got such amazing network effects, which is once you use them, you keep using them. That in many ways there are people who believe that they have killed all innovation and killed all competition. Prior to this current COVID-19 crisis there was some real hunger for people to either suppress them or break them up. So give you an idea how they would go.
Rischad Tobaccowala: Apple is going to basically move increasingly to a service based company versus a hardware based company and you’re already seeing this and the service will simply be the following, which is they’re going to say to us, pay us $150 a month, every month and we’re going to do the following. We’re going to get you a new iPhone every year. We’re going to upgrade you with a new iPod every year. You’re going to have Apple+, Apple music, all of these things all the time. We basically are going to own your entertainment, your technology, and your movie at your home and don’t you worry about it, it’s all taken care of you get the latest software, the latest everything. So that’s basically sort of revenue per user moving to a subscription model.
Rischad Tobaccowala: And that is really one of the reasons why Amazon became so successful because we all got hooked onto Amazon prime. Similarly, the case of basically Google, what they’re going to basically do is intrude into your house with things like Google Home, with AI, they’re going to provide more and more technology and so they’re going to be unstoppable. So those companies are fine, the question is whether they should be as successful as they are because no one can catch them, which is number one.
Rischad Tobaccowala: And they would basically say, hey, they’re good for the consumer but people say they’re not good for the competition. And they’re saying, “Hey, we’re good because we can offset China.” And people say maybe that’s not the exact example. But for most other companies, the way to basically sort of do it is to think about these three key things. In addition to the fact that the future does not exist for your company, but your company must adapt for the future are few things that I do tell people who are successful and established, which I mentioned in the last chapter of my book.
Rischad Tobaccowala: One is, future doesn’t fit in the containers in the past, which is every organization is optimized for today but not for tomorrow, which means we are going to basically have the wrong structures for where the world is basically going. So one of the reasons why Gillette had problems is outside of having a very expensive razor, they were not set up for an age where you could advertise on YouTube and you could deliver via the mail and people could sample while on Facebook, which Dollar Shave Club and Harry’s did. Because they were not set up for that because they could not sell directly because it would compete with Walmart.
Rischad Tobaccowala: They had people who knew how to manufacture and buy television they didn’t have people who basically knew about subscriptions. So the world changed and their containers remained the same. And the other one is the future comes from the slime and not the heavens, which is we always look at other people. So every company is benchmarking other famous companies or companies in their category but the future always comes where you don’t expect it. So Microsoft… IBM did not see Microsoft, Microsoft did not see Google. Gillette did not see Dollar Shave Club. L’Oreal and Coty didn’t see Kylie Cosmetics.
Rischad Tobaccowala: And so my whole basic belief is if any company that is successful needs to recognize A, you have to adapt because the future does it adapt to you, you have to adapt to the future. Number two, the future doesn’t fit in the containers of your past or mindsets of the past and the way you’re thinking about your category and your organization might be wrong. And three, you don’t really know who your competition is because the future comes from the slime and not the heavens.
Josh Coon: Before we move off the creative disruption and some of those things, this is more of a leadership question and kind of as you’ve led big organizations as people are betting on change. They’re looking at what they think the business needs to be, that’s a risk. You may not know you’re making the right choice. So as a leader you know you’re making a choice that could affect a lot of people. Do you feel… have you felt the weight of those choices and how do you help navigate that? Like this is the chance we need to take right now.
Rischad Tobaccowala: One of the key things that I learned long time ago was to slide because the difficulty in life is the choice. Every time you make a choice there are three things that you are doing. The first is you are giving up on your other choices often, that’s number one. Number two, you’re making a decision about the future which is uncertain. So one is you’re closing a door usually. Second is you’re stepping out and making a choice based on information that you did not have. And the third is there’s always a case for potentially you’ve made the wrong choice.
Rischad Tobaccowala: So one is to recognize and to share with people that there are no easy choices when there’re difficult choices. But what I have done, which have led me to make better choices for my company or help my company make better choices, not that we haven’t made bad choices, but we’ve tended to make good choices 75% of the time, which is great, better than 50-50. So one of the things, it’s very simple, number one is when you are making decisions, include as many people in the decision making, including people who provide you with an alternate point of view. Because usually the best choices integrate different people but in the process of making the choice, people are brought along.
Rischad Tobaccowala: So when you make a decision, you don’t just basically say, “Here’s what’s happening.” People know that they were involved in it and they have made a decision. So one is involve lots of people when you’re making hard choices because it helps you. The second one is build a case once you’ve made your choice as to why before you make your final choice is why your choice is wrong. So one of the things I say in my book is build a case for the exact opposite of what is true and that’s extremely important.
Rischad Tobaccowala: And the third one is to let people know that as you start making the new decisions that you will make some mistakes, you will learn, you will get some stuff but people should constantly provide information so you can adapt. Because usually, even if you make a good choice, it usually is directionally correct but not precisely correct. You should have been heading Northwest but you start off North, you need some input to go Northwest.
Josh Coon: That’s great. One of the things too I wonder, do you feel like people at theaters organizations are more receptive to change now or recognize they need it more? Because we’re in such a rapid cycle of innovation all the time and there’s so many new things happening.
Rischad Tobaccowala: Yes, so what we have is this, I believe that all of us recognize that we need to change to remain relevant. I have absolutely no doubt that that’s… almost anybody I’ve worked with, whether it’s a client, colleague, a partner recognizes it. My basic belief is people are not stupid so whenever I basically hear people saying people are stupid, my whole stuff is the only person is stupid as the person who thinks people are stupid.
Rischad Tobaccowala: So my stuff is let’s assume that they… it isn’t that people don’t do stupid things, they do, but that’s probably because they’re not informed or they’re making some wrong decisions. So one is people want to make change, but here is the problem, which is the reason I wrote this book. Number one is they’ve been told that it’s a good and easy thing to do and my stuff is the fact when you feel terrible about it is okay, that’s number one.
Rischad Tobaccowala: Number two is they don’t know exactly what to do because they have to do two things. They have to change themselves, which is they have to learn how to learn a new things. But as importantly they basically start working in a new working environment with new partners, new people. And so a lot of my book in addition to providing examples is specific things that people can do.
Rischad Tobaccowala: And one of the reasons my book has so many pointers and every chapter has a summary, is people who read it said, “Shit, I can use this so much.” In fact, when I see people who’ve read my book, they’ve usually marked up at least a third of it. And so I suggest that they buy two books, one to mark up and want to keep it in their library so I get two sales for one. But one of the key things is okay, what should I do?
Rischad Tobaccowala: Which is I feel… I know I need to change but I feel terrible about this. So what is, feeling terrible is fine, here’s what you need to do. Second, what should I do? Which is here’s what you should do. And third is, when does this stop? And my whole stuff is, unfortunately it doesn’t stop. Change is continuous and the reality of it is when you stop changing it means you are dead. That’s when you don’t have to worry about it.
Josh Coon: One of the things that I wanted to just quick come back to is I know when you talked about Apple in particular, but I think there’s other examples, Amazon’s another one, where companies are really starting to… they’re delivering the mechanism to consume content but now they’re also becoming publishers. And I know you have thoughts about content is king, but a lot of the people like Facebook as an example, aren’t actually making any content, they’re just facilitating it. So could you talk a little bit about this kind of merger of what would have been a totally other business of creating content? How all this stuff’s kind of swirling around and coming together?
Rischad Tobaccowala: So it is… so a term that I basically used many years ago was that digital is like hydrochloric acid, it burns through all barriers. Everything basically becomes gooey that it’s very hard if you’re in the marketing business today to completely separate media from creative from research. It’s really, really hard in the digital world because the digital world is multimedia. Zeros and ones can be expressed as words, zeroes and ones can be expressed as music and zeros and ones can be expressed as video and zeros and ones can be expressed as numbers.
Rischad Tobaccowala: And so it’s no longer in the analog form where things could be distributed. As a result, all digital companies are boundary less, which is one of the reasons why the book company today is the everything company, which is Amazon. That Google makes its money from search but you spend a lot of your time doing lots of non Googly things.
Rischad Tobaccowala: So coming to your content thing, it’s very difficult to basically separate the hardware from the software because once we got to… people have began to understand is it’s integrated vertically and then it’s very difficult to separate what is video and words and everything else. And very quickly these companies also recognize that friction is bad. For them the only thing that’s bad is friction, so they’re trying to make it as frictionless as possible.
Rischad Tobaccowala: And the second is they make their money by basically making all of us highly engaged and we engage in things which are simple and easy. And so the way to do it is by integrating as many things as possible which is what we’re basically seeing. So it’s one of the reasons why you are now seeing companies that are succeeding are companies like yourselves, which are small so that y’all can work quickly together or the larger companies like mine try to succeed by integrating things again which were separated. Everybody calls in different things but we sort of try to integrate it.
Rischad Tobaccowala: In the world of content I do believe that there are two things we have to understand. The people who are really good at creating unique, amazing content, and that might be a particular writer, it might be someone like Steven Spielberg, it might be someone who’s a great musician. They will always have… they will basically obviously have content but the way they will monetize it is very different.
Rischad Tobaccowala: One of the reasons if you think about the music industry, musicians are as hurt by this shutdown, almost as hurt by the shutdown as people who run restaurants. And you should ask why? In an age of streaming, in an age where I could basically broadcast, I can sing a song if I want to right now and destroy this entire podcast and everybody by croaking like a frog. But what happened is… and people would basically, in addition to say, “Oh my God, that’s a miserable human being. No one’s going to pay me for this.” Because I could basically get music relatively cheaply on Spotify and everything else.
Rischad Tobaccowala: So the way musicians now make money is through touring, but where do you go? So this… the biggest thing that happened when Southwest was closed is the restaurants went crazy in Austin but all the performers, where do they make money? And so what basically is going to happen is in a digital world we pay particular attention to analog things. It’s really strange. And this entire thing about COVID-19 has proved what I was telling people. I’m telling you don’t hope for an all digital world, you will miss the real world. Guess what we’re missing, the human connection.
Devon Higby: So I’ll let Josh pick you up on the analog thing because that’s totally his jam. But before I let him loose on that, just a quick question. So is intellectual property the most valuable resource in the world right now?
Rischad Tobaccowala: I believe that what is the most valuable resource in the world is Differentiated Intellectual Property that can be delivered in unique ways. It’s a very strange way of saying if I think of something as intellectual property, but most people will say, “We don’t care to share what you’re thinking go away.” So I’ve got to think about things uniquely. So the reason, one of the reasons my book supposedly resonates is because I’m framing things in ways people haven’t thought about. And so that’s what I would call let’s say unique intellectual capital or unique capital of some sort and then I deliver it in different ways.
Rischad Tobaccowala: So I basically today delivering it via updated articles. So every day, every two, three days I write an article that came off my book but optimizing for the times that we’re in and making it very relevant for what people really want to know about right now. They may not want to know about certain things in my book because it is not relevant, but there are other parts of it which is relevant, but they’re at home and they don’t want to buy my book. And if I go and say, “Buy my book,” they’ll say like, “You’re an idiot.”
Rischad Tobaccowala: So instead I basically write an article about how to manage teams in distributed work spaces and then people say, “Okay, this guy’s not an idiot maybe I’ll look at his book.” So you have to do both and that’s the key, which is that oddly, it’s very hard even for a superstar, like a Madonna or other people to make money just by making music, that’s why they have all these tours. This is why the Rolling Stones, who should all be in a nursing home are still on tour.
Josh Coon: Just to swing back to the analog for just a second. One of the things that I think is become so important is that real tactical human experience and it’s part of what just driven the return of board games and vinyl and analog film and so many other things because people miss that tactical kind of human connection that you get from analog.
Josh Coon: So one of the themes Rishad, we talk about a lot on our show, Higher Order, and truth as an agency we believe in is noble ambition. And the idea of that ambition when coupled with nobility, with trying to do more for people can be a really powerful force for transformation. And it seems like this is kind of spiritual aligned with a lot of what you talk about in your book. So I’d love if you had any thoughts on how that’s important, how people could potentially leverage it in their work and their business.
Rischad Tobaccowala: Yeah, so here’s a key thing which is I believe noble ambition is important on a variety of fronts. The first is as human beings, it’s actually the right thing to do. So if even no one was watching, you will feel better as a human if you do things that help other people. And I was reading a book this morning about when someone gives you a gift, let’s say I do something, I often do something, I’d help people for free or I could do things where I charge people and the person who I charge they are happy, I over deliver and everything’s fine, but the person I give a gift to it’s a relationship which is a transaction. And human beings like relationships and so helping people and thinking more than yourself and the higher purpose is good even if nobody was watching and there was no books about this, that’s number one.
Rischad Tobaccowala: Number two, when people are watching, they’re watching companies and really they’re looking for the purpose and values of companies. And this is particularly true not only across the world, but particularly true for younger people who are the next generation. So millennials do care about the purpose and values of the company. And that’s one of the key things I’m advising companies today in today’s environment, which is all the stuff that you said about authenticity and purpose and values, every employee, every person in your community, every client is now watching you and they’re watching how you’re basically making terribly difficult decisions. There are no easy decisions. You’re going to do stuff that’s going to basically hurt people, but how are you doing it?
Rischad Tobaccowala: So the second thing is purpose and values matter for companies. Third, the interesting thing about higher ambition in addition to having individual and basically it’s good for a company in an odd way is what humans are all about because I actually basically believe that the day you stop growing you die. And interestingly after a particular point, growth of assets… When I look at people who have like lots and lots and lots and lots of money, as far as I figured out after a point, it was a point where you don’t have to worry about money and then after that you still have lots of lots of money, what do you actually have? You actually have more real estate, that’s it.
Rischad Tobaccowala: As far as I can understand, you either have a private plane which is more real estate or a yacht, which is more real estate or you’ve got 12 homes and more real estate, nothing has actually changed. So the only way you actually grow is by basically having greater purpose and ambition and self control. And there’s nothing as ambitious as not only doing the right thing and by helping your company, but the most ambitious thing is being the best person you could be.
Devon Higby: Well, that I think we all need to hear in these, in what’s going on in the world right now, that is I think the absolute takeaway. Hopefully what we’re all going through together right now ends up showing us our best selves and not the opposite.
Rischad Tobaccowala: I hope so and I think what will happen is I think as a society that’s what will end up. But I think there will be some individuals that will rise to the occasion and other individuals whose reality will be shown and let’s hope we are the ones who rise.
Devon Higby: For that and all the other incredible takeaways and nuggets from your book, where can people find you?
Rischad Tobaccowala: So they can find the book anywhere, including on Amazon where they type in R-I-S-H-A-D. I would have also sent them to bookstores, but who knows when the bookstores will open, so R-I-S-H-A-D on Amazon or anywhere you buy online. They can also find me @Rishad on Twitter and it’s rishadtobaccowala.com is my website.
Devon Higby: I hope they go because the book is fantastic. It really, really is.
Rischad Tobaccowala: I hope so too. As someone basically told me two things. One is it’s an operating manual for modern work, that’s number one. But the second is companies are buying my books for their entire companies. That’s the way I’m say… the people are basically management. One CFO basically told me, “I read your book, I was 5% more productive. I figured out that that meant every person in my company if they paid an average of $50,000 will be worth $2,500 more. Your book only costs 20 bucks, I’m buying one for everybody.”
Devon Higby: They’re focused on the spreadsheet though, there’s that data.
Rischad Tobaccowala: You know what I said? You know what I said is I’m focused on sales, if that’s the way you’ll justify it, go ahead, thank you very much.
Devon Higby: Go right up, whenever gets the story to them, right?
Josh Coon: Buy some extra copies for future hires.
Rischad Tobaccowala: Exactly, exactly that’s what it is, perfect.
Josh Coon: Awesome, all right, thank you so much. It’s been such a pleasure to talk with you.
Rischad Tobaccowala: Fantastic, thank you very much.
Devon Higby: It really has. Thank you for your time and be well, stay safe.
Rischad Tobaccowala: Likewise, bye, bye.
Josh Coon: Bye.
Bye. Well, that’s our show. We hope you are inspired to pursue your noble ambition. Let’s chase it together. This has been a Truth Collective production.