Author: Kathleen

IBM is synonymous with technological innovation. Under the stewardship of Ginni Rometty, the organization faced a period of profound transformation. She steered the organization through the complexities of shifting towards cloud computing and artificial intelligence, a mission that demanded vision and resilience.

In our exclusive interview with IBM’s former Chairman, President, and CEO, we delve into her experiences at the helm of this tech giant, exploring the realities of leading a legacy company through rapid disruption and the lessons she gleaned from her time there. She offers insights to business leaders navigating today’s ever-evolving landscape.    

Ginni offers these key insights to the modern business leader:

1. Embrace Discomfort to Achieve Growth

 

“Growth and comfort don’t coexist.”

 

At every level – individuals, companies, countries – change is uncomfortable. Rometty stressed the necessity of reframing risk, noting that risk can lead to growth despite how uncomfortable it can be. She explained that the discomfort of being in a new challenge is often temporary, and that thought gives her the courage to take bigger risks.

Rometty’s advice for business leaders who want to grow:

• Actively seek out new challenges and opportunities.
• Reframe your perception of risk; see it as a path to growth.
• Cultivate a mindset that views discomfort as temporary and a catalyst for improvement.

 

2. AI to Augment, Not Replace

 

“For AI, particularly Gen AI, to be successful, you’re going to have to live at the intersection of the business and technology.”

 

On AI deployment, Rometty noted that leaders must live at the ‘intersection of business and technology’ to be successful. Paramount to this is trust. The goal should be using AI to augment and improve the human workforce.

To achieve this, Rometty stressed that leaders must prioritize transparency in AI systems to build trust among users – noting that people often have less tolerance for error when it comes to technology.

 

“If I’ve ever met a technology that you have to learn by experience, it’s this one.”

 

Rometty said leaders should encourage employees to engage with AI technology through hands-on experience by adopting a co-creation approach involving diverse teams and prompting experimentation with the technology. She cautioned against just adding AI to existing workflows. Instead, she advised leaders to look at how they can make the most of AI solutions for their specific challenges.

Rometty encouraged business leaders implementing AI to:

• Prioritize transparency in AI deployments.
• Encourage employees to engage with AI technology through hands-on experience and create diverse teams to develop AI solutions.
• Rethink processes to maximize the potential of AI solutions.

 

3. Focus on How People Work, Not Just What They Build

 

“People are a reflection of the processes and all the things leaders put around them.”

 

During a transformation, the most critical aspect is how people do their work, not just what they create. Rometty explained that people’s work reflects the processes and systems in place. Leaders must ensure that these processes facilitate efficiency and productivity and adopt agile work practices to drive change and serve as role models for the organization.

Rometty urged leaders to:

• Pay close attention to the processes and systems that shape how people work.
• Adopt agile work practices to drive change
• Be an agent of change and role model in the organization.

 

4. Risk-Based AI Regulation is Key

 

When it comes to AI regulations, Rometty opined that a risk-based approach is appropriate, with more stringent regulation for high-risk applications like healthcare and finance, and less for lower-risk applications. Referencing the EU AI Act, she said Europe has the right answer here with its ‘precision regulation’.

Internally, she stressed that companies should self-govern based on potential financial liabilities. She explained that if leaders were to be held financially responsible for a decision made as a company, there would be better self-governance.

 

“In other words, if you’re going to use this technology and you’ll be held financially responsible if it’s wrong, I guarantee you’ll put it in the right places.”

 

Rometty’s advice for business leaders worried about the risk in AI is to:

• Support and adopt risk-based regulatory frameworks for AI.
• Implement internal governance practices that align with potential financial liabilities.

 

5. Believe There Is Always a Way Forward

 

“The role of a leader is to paint reality but give hope.”

 

On the subject of leadership, Rometty noted that one of the most important qualities a leader can possess is the belief that there is always a solution, no matter how challenging the circumstances. Leaders should cultivate a resilient mindset that is solution-oriented, drawing from past experiences to overcome adversity. They should remember to speak to people’s heads and hearts during tough times to give them hope while being honest about the reality of the challenge ahead.

Rometty encouraged leaders to:

• Cultivate a resilient mindset.
• Learn how to communicate with logic and empathy during difficult times.

 

6. Prioritize Learning from Setbacks

 

“The only regret you should have is not learning from something.”

 

Following that, Rometty also emphasized the importance of learning from setbacks. Acknowledging that difficult decisions are a necessary part of leadership – such as layoffs and shutdowns – she said that leaders must have the fortitude to make difficult decisions for the long-term benefit of the organization.

She added that during her time with IBM, they had to shrink before they could grow. In a world demanding growth, she started selling businesses and shrinking. However, she had to have the strength to stick with that difficult decision so that they could invest in the future.

Rometty stressed that leaders should:

• View setbacks as learning opportunities.
• Develop fortitude to make tough decisions for the future of the business.

 

7. Build Skills, Not Buy Them

 

“It’s not about buying skills. It’s about building skills.”

 

When it comes to talent, Rometty said that it’s more effective to focus on people’s readiness to learn rather than their skills alone. After all, current employees will have an invaluable operational understanding but are challenged by tech, while new hires may be more familiar with new tech but have no understanding of how to apply it within the business.

Leaders should adopt a skills-first talent strategy by investing in upskilling and reskilling programs for existing employees and hiring candidates with a high readiness to learn.

Rometty advised business leaders challenged by talent concerns to:

• Invest in upskilling and reskilling programs for employees who are willing to learn.
• Prioritize candidates with a high readiness to learn when hiring.

 

*The insights have been edited for length and clarity.

The most employable skillsets in the next decade will be creativity, intuition, curiosity, and imagination, predicted Duncan Wardle, the former Head of Innovation and Creativity at Disney.

Why? Because these skills are the hardest to program, and the most difficult for AI to replace.

Renowned speaker and best-selling author behind The 5 Second Rule, Mel Robbins, thinks it will be empathy.

Wardle and Robbins addressed some of the biggest challenges leaders face today in connecting with their teams and fostering a culture of innovation and creativity.

Sharing what he learnt from his decades with Disney, Wardle highlighted some of his best tools to foster design thinking and spark creativity by finding ways to make innovation less intimidating and more approachable.

Creativity is the ability to have an idea. Innovation is the ability to get it done.

Duncan Wardle

 

Let’s look at five useful takeaways from Duncan Wardle and Mel Robbins:

1. Be Consumer-led

 

One of the biggest barriers to innovation is that companies are led by quarterly results, instead of consumers and clients. This often leads to ideas getting stuck, diluted, or killed as they move through the approval process. If team leaders and decision-makers approach innovation with the mindset of satisfying only quarterly results, they set themselves up for disappointment.

Wardle notes that one way to foster innovation is to be consumer or client-led when problem-solving, troubleshooting, or brainstorming. Noting that this is the mindset that led Disney to introduce some of their highest revenue-generating ideas such as their MagicBands which guests can use to make purchases, reservations, orders, and move around seamlessly. This improved customer experience which, in turn, led to record revenue growth.

Wardle notes that a key to being consumer-led in mindset is to retain a child-like curiosity and to always ask ‘why?’

2. Engage in Creative Behaviors

 

Innovation relies on creativity. However, the current definition of creativity, which means to come up with big new ideas, can be limiting. Instead, Wardle recommends redefining ‘creativity’ to mean the habit of continually doing things in new ways to make a positive difference in our working lives.

As leaders, there are certain behaviors that can be adopted to create such an environment in a professional setting, starting by Signaling or creating physical signals that you are there to nurture ideas. Some examples include delivering a presentation outside of the boardroom instead of behind a conference table.

Another behavior leaders can adopt is to nurture ideas. Wardle emphasized the importance of nurturing contributions from team members during the ideation stage. The point is to grow the idea, not approve it. One way to do this is adopt the ‘Yes, and’ technique during brainstorming sessions to build upon ideas instead of judging them or shooting them down.

As for how leaders can set the stage for creative thinking among their team members, Wardle notes that playfulness and mindfulness go together. Usually at work, people are focused on accomplishing active tasks, or they are bogged down by urgent matters. Wardle calls this the river of thinking. It is when the conscious brain is in charge.

To tap into the subconscious part of the brain where creativity lies, he recommends starting a session with fun and energetic exercises. The goal is to bring out laughter. Creativity can flow better once a person is relaxed enough to access playfulness.

3. Use tools to foster innovative thinking

 

 During his talk, Wardle presented several tools that leaders can use to get people out of their river of thinking and foster innovation. The chief among them is asking “What if?” This is especially useful for leaders in a heavily regulated industry or surrounded by people who are stuck with tradition and ‘how things are always done’. A simple way to practice this is to write down the rules of the challenge or issue that is being worked on without judgment. After that, simply pick one and propose solutions by asking “what if…”. The more audacious the solution, the better.

Wardle also suggests involving naïve experts in every brainstorming session. A naïve expert is someone who does not work in the same field but is an expert in their own field. The reason for this is that they tend to be more comfortable asking seemingly silly questions that others in the room may be too embarrassed to ask. A naïve expert is there to suggest audacious ideas ungoverned by your river of thinking and to move you out of your river entirely.

Noting that “diversity is innovation”, Wardle emphasized that if someone doesn’t look like you, they can help you think differently. After all, their silly questions and audacious suggestions may end up sparking a truly ingenious idea in someone else.

Some other useful tools to foster innovation according to Wardle is to re-express a challenge from a consumer’s perspective, to tap into empathy, to dig into data and challenge it while being guided by your intuition, and to ensure that team members have time to gather inspiration, stimulus, and fresh ideas.

4. Flip negatives into positives

 

Mel Robbins introduced her highly popular 5-second rule as a tool to help leaders turn thoughts into action. Explaining the mechanism of it, Robbins notes that counting backwards from 5 interrupts the autopilot loop of your subconscious mind and activates your prefrontal cortex, the part of the brain that is essential in creating behavioral changes and allowing you to think strategically. Leaders who tend to overthink may benefit most from this method.

Crucially, Robbins noted that once an old pattern of overthinking or old behavior is interrupted, it must be replaced with a new one. Here is where the negative ‘what ifs’ should be flipped into positives instead. Thinking about all the ways an idea might fail is a thought pattern led by anxiety and uncertainty. Flipping into a positive mindset paves the way for more fruitful and productive thought processes, which is essential in fostering creativity and innovation.

<H2>5. Leaders must be self-aware

 

Robbins also stressed that the most important skillset in a leader right now is empathy, according to a McKinsey study on leadership. This is critical given the current state of the workforce – as well as the Great Resignation and Great Reshuffle – in which most employees are burnt out, stressed out, and feeling the weight of uncertainty.

However, for leaders to be empathetic, they must first have a sense of self-awareness. Robbins defines this as a leader’s ability to remain clear about an organization’s direction, confident, and manage their own anxiety and stress. If leaders are not able to manage their own stress, they will not be able to empathize with their employee’s stressors in these uncertain times.

Your ability to be effective in leadership is directly impacted by whether you’re ok with yourself. Your own self-awareness.

Mel Robbins

 

Robbins also mentioned trickle-down appreciation and a leader’s ability to create a safe and encouraging space for people to speak up and feel like they belong. Here, she noted the importance of identifying the unique needs of different team members. Some may feel comfortable contributing in a big meeting, others may need to a smaller crowd to feel comfortable voicing their ideas.

Either way, it is up to the leader to find ways to model to their team that everyone is appreciated, heard, and welcomed. This then trickles down to the entire team, fostering an environment that is more motivating and inviting to new ideas.

Nowadays, leadership is about more than results. Today’s leaders are expected to align business and societal values, inspire trust in their employees, and contribute meaningfully to business transformation and resilience. It’s not enough to master technological advancements, leaders need to also manage with compassion while driving business growth and success.

In our fireside chat with Indra Nooyi, former CEO and Chairman of PepsiCo, we explore the concept of performance with purpose, the importance of purposeful leadership, and the inevitable challenges of pursuing a career in the highest echelons of business.

Here are six key insights from Indra Nooyi:

 

1. Embrace Curiosity and Continuous Learning

 

Nooyi emphasized the importance of being a curious, lifelong learner, especially during rapid change and disruption. She advised leaders to approach new challenges and technologies with excitement and a desire to understand their impact. Stressing the importance of approaching changes with a thirst for knowledge and a love for disruption, Nooyi explained that leaders who continuously expand their understanding can better navigate the rapid transformations shaping the business landscape.

“Look at the next decade or so as a glorious time for the curious, learning individuals, and people who love disruption.”

She also stressed the importance of fostering this culture of curiosity and learning within teams, as it builds a solid foundation for future resilience.

“Everybody has to have a shared understanding. And for those who are not willing to study and get that shared understanding, they don’t belong, because the world demands that everybody invest the time to develop that shared understanding.”

Nooyi advises leaders to:

• Approach new challenges with a desire to learn, rather than fear.
• Continuously expand their understanding and knowledge within their field and beyond.
• Encourage a culture of curiosity and learning within their organizations.

 

2. Align Purpose with Business Outcomes

 

Nooyi introduced the concept of ‘performance with purpose’ during her time at PepsiCo, significantly transforming the organization and generating incredible success. This idea highlights the need for an organization to directly link its purpose and social impact activities to tangible business results. This strategic alignment helps drive real change and ensures that purpose-driven efforts translate into sustainable value creation.

“If you didn’t work on environmental initiatives, there would be a cost to the company, because we’d be denied a license to operate in certain markets, and somebody would penalize us for using too much water or having a carbon footprint that’s too intensive.”

“I think it would be prudent for everybody to link purpose with business outcomes – short-, medium-, and long-term. If you do that, it’s performance with purpose, not performance or purpose.”

Nooyi advises leaders to:

• Understand how purpose-driven actions can impact the company’s operations.
• Approach purpose-driven strategies with a focus on performance, outlining clear business cases and value creation.
• Link purpose initiatives directly to business outcomes.

 

3. Develop a Supportive Ecosystem

 

Nooyi credits much of her success to the support structures she built, including a dedicated spouse and family as well as mentors who were invested in her growth. She advises aspiring business leaders to build a strong support structure to enable their career advancement and lean on those who are generous with their support. She did caution that building this structure may be more challenging when balancing a career with personal goals. Especially for women, cultivating this type of ecosystem can be game-changing.

“If you want to rise to the top, think of the support structure you’re going to build. If you’re not able to build a support structure and you still want to have family and kids, just know the rise may be harder to come by.”

“I was lucky that my bosses were not political. They were just straight shooters. So, I think you’ve got to pick your boss carefully if you have that choice.”

Nooyi advises leaders to:

• Find people who can be your support structure, including friends, family, and professional peers.
• Carefully choose the company and managers you work with because the right environment makes a big difference.
• Recognize and accept that even with a strong support system, the path to the top may be tougher for women.

 

4. Focus on Output, Not Gender

 

Speaking directly to women in leadership, Nooyi reiterated the need to focus on delivering high-quality work and contributions rather than getting distracted by gender-related discussions. While it is inevitable in business spaces, Nooyi encourages women to position themselves as capable, competent professionals first and foremost. The work will speak for itself.

“I think the bar for women is higher than men only because everybody knows the leadership model for males. They didn’t know what the female model was for leadership. So, anybody new coming in would have to outperform the men to earn a seat at the table.”

Nooyi was also candid about how tough it is for any leader the higher up the ladder they go. Leaders who want to reach the top must be prepared to sacrifice and forget “balance”.

“If you want to be in the top two or three layers of a company, all bets are off when it comes to balance because the effort it takes to get to the top of a big company is enormous. On the other hand, if you want to have a good job and maintain it, you can have a decent balance. You have help at home, predictable hours, not too much travel, not too much stress. But you should also realize that somebody from below might want to take your job.”

“Especially with technology changing, you must remain updated with everything. As you move to the top of the organization, the whole ball game changes. It’s a punishing schedule, and anybody who thinks it’s not can think again.”

Nooyi advises leaders to:

• Focus on delivering their best, high-quality work, and making an impact.
• Be mindful of how your mannerisms and behaviors might distract from your message and competence.
• Be prepared to make sacrifices as you climb the corporate ladder.

 

5. Embrace Tough Decisions for the Greater Good

 

Nooyi shared that she had to make many difficult decisions during her time as CEO of PepsiCo, such as workforce reductions, that were ultimately necessary for the company’s long-term success. She emphasized the importance of making these tough calls with plenty of compassion and focusing on the greater good.

Elaborating on this painful decision of layoffs, Nooyi said: “For the sake of productivity, especially when you introduce new technology, there is going to be a reduction in workforce. Now you can approach it objectively and say, ‘Hey, tough luck, I want to reduce the workforce’, or you can look at it with a little bit of compassion and say, think about how to retrain the workforce for new jobs.”

“Don’t sit here wringing your hands about the 10,000 who have to leave the company. Think of the 145,000 people who are left behind; they have to be successful too,” she added.

Nooyi stressed that tough decisions must be made when running a company and delivering financial results. These decisions are painful and not everyone will like them, but a leader must focus on the bigger picture.

Nooyi advises leaders to:

• Approach tough situations with compassion, and a focus on supporting impacted team members.
• Accept that leaders must make tough decisions that may not be popular but are necessary for the organization’s success.
• Maintain a focus on long-term goals rather than getting bogged down by short-term pains.

 

6. Leave a Lasting Legacy Through Mentorship

 

Mentorship features heavily in Nooyi’s professional narrative. She places great emphasis on finding a suitable mentor and being a mentor to others. Nooyi takes great pride in the leaders she has personally mentored and developed over the years. Many of them have gone on to become CEOs themselves. Nooyi sees this as a key aspect of her legacy.

She pointed out that leaders who want to be effective mentors must be ready to let their mentees outgrow them and possibly take over their jobs – it is, after all, a form of succession planning. Nooyi also advised that leaders who want to be mentors should be generous with their time. This led her to stress the importance of mentors choosing their mentees. If they’re going to spend the time and effort to mentor someone, they need to be selfless about it.

“Mentorship is an unselfish act because if you mentor somebody very well, they could take your job. When you start thinking about mentoring people, which is your job as a leader, approach it with the company in mind, not your job security.”

Leaders can create a lasting impact far beyond their tenure by investing in the next generation.

Nooyi advises leaders to:

• Take pride in mentoring and developing the next generation of CEOs.
• Be unselfish in their mentorship, invest time, and provide honest feedback to help mentees grow and succeed.
• View mentorship as a key element of your legacy and responsibility as an experienced leader.

*The insights in this article have been edited for length and clarity.

Storytelling has become a powerful tool in modern business, playing a pivotal role in shaping vision, building trust, and guiding organizations through the complexities of digital transformation. As businesses increasingly turn to digital solutions, strong leadership is critical to ensure successful transitions. Research shows that only 20% of organizations achieve more than three-quarters of expected revenue gains, while only 17% achieved more than three-quarters of expected cost savings from digital transformation projects (McKinsey).

 

Markus Gull, founder of The New Story Academy, is a renowned expert in storytelling and leadership, with decades of experience helping businesses craft narratives that drive change and innovation. In this interview, Markus shares his insights on how great storytelling and effective leadership can drive effective digital transformation and empower businesses to thrive in an evolving digital landscape.

 

What should leaders keep in mind when crafting a story in a business context?

 

First, a story is the natural way humans think. It’s how we explain the world and our relationship to the world and each other. We even build stories when we sleep – we call it a dream. Stories create images in our mind which feeds our growth because we always believe the stories we tell. So, if you have an internal story of a wonderful future, your brain will grow a positive view. If you have a dystopian picture, your brain will grow into that. We also always tell the same stories from different perspectives.

Leadership is about story. It’s about decisions and transformation because if you don’t move, you don’t need a leader. As the philosophers say, leadership is about potestas and auctoritas. Potestas is your title – chief, hero, C-suite. Auctoritas is the skill, charisma, and power of story; how you can get people excited for something. Stories are the best way to explain, engage, and make an endeavor part of everyone’s life. This is the pivotal point of why leaders need stories.

 

Plato said, “Those who tell the stories rule society.”
If you have the right story, you can bring motion into people, and people into motion.

 

Another giant, John Steinbeck said, “If the story is not about the hearer, he will not listen.” Make your audience the hero of the story, not the company. Make the goal you want to achieve and the meaning behind it part of your team’s lives. That’s leadership.

As a leader, you are not responsible for the outcome, you are responsible for the people who are producing the outcome. You are responsible for setting their potential free, being the interpreter between the goal and the team, and telling the big story.

Antoine de Saint-Exupéry wrote, “If you want to build a ship, don’t drum up the men to gather wood, divide the work, and give orders. Instead, teach them to yearn for the vast and endless sea.”

Success is not about building ships; it’s about using our tools and skills to leave the island and sail towards freedom. Great speakers and leaders like Barack Obama and Steve Jobs know how to frame a purpose and make it everyone’s purpose to lead them into a better future. They were good storytellers.

 

How can good storytelling help with digital transformation, particularly with AI?

 

Digital transformation is huge, including AI and the problems we have with it. The principles are universal and apply to digital transformation as much as anything else. The overriding principle is to turn those affected by change into participants of change. They are not victims but drivers of change for their own good. Make them a hero in their own story and your mutual story.

Another principle is that change never happens by fighting the status quo, but by always offering a new option that makes the current one obsolete. It’s about framing. People hate change for a simple reason: change is always dangerous. Our brains are programmed to keep our bodies safe, and we are safe in what we know. That’s why people are averse to change.

The next principle is that the story changes before the change itself happens. For example, if you get a new job, you are telling a different story about this new job before you start. In other words, the story you must change is: What will be better for me as the participant? What will be better for me if I jump on the train of transformation? How will my status improve? What can I do about it?

There are 10 parameters for status improvement including possibility, economic status, sense, and intelligence. Choose at least one and frame the change around it.

 

If you can’t enhance a status, you have no change, no transformation, no story.

 

It’s the core of every story. If you don’t have a different picture at the beginning than at the end, then you have no story. Storytelling is simple but hard to do.

 

You’ve said that AI teaches us about the importance of questions. How does that relate to business?

 

AI is a blessing and a curse, like Pandora’s Box. What we can learn from AI as humans is that when we use it as a tool, the better our outcomes. However, the quality of questions defines the outcome.

That’s a wonderful metaphor for leadership because the best leaders lead with questions. We have many answers but ask too few good questions. This is what we can learn from AI: how to ask good questions.

In my company and workshops, we use the technique of questions when giving feedback. People giving feedback are not allowed to comment or make suggestions. They are only allowed to ask questions. Those presenting are not allowed to answer the questions. Instead, they have to go back and think about it. That enhances the outcome of a project.

 

In one of your articles, you wrote that the direct path to self-inflicted immaturity is a dependence on profit as a purpose. Could you expand on that?

 

There are two big schools on how to run a business. One is driven by shareholder value and the other is driven by purpose. To clarify, the latter is not about charities or philanthropy. I’m talking about a business-driven purpose.

Businesses are about profit, but if you are directed and driven only by profit, everything goes astray. Anyone – and every company – whose only goal is profit will sooner or later have an exhausted soul – also known as burnout. You no longer know why you’re there because there is no sense of purpose anymore.  You’ve lost your meaning – if you ever had one – and are looking for happiness on the outside. People buy things or distract themselves with pleasure, companies look for a substitute for meaning in growth. Neither works. There’s nothing wrong with consumption and growth, but as a substitute for meaning they are extremely dangerous. This is how the poison of the unlived life arises – for people and companies alike.

We see it everywhere – people have more money. People have never been better off, material-wise, than they are now. But the numbers of mental illnesses are exploding. It’s because our world started to become profit-, money-, and material-oriented. We lost our meaning and purpose.

The story is wrong. We have a lot of wrong stories and one of them is that we must grow every second, every day, every year. It’s growth for the sake of growth – like a cancer.

An effective brand or company story has a positive effect, both internally and externally. The company has a deep, important purpose that is not only profit. People we admire so much for their careers, be it Steve Jobs or Jane Goodall, had no career. They had a purpose that they fulfilled and that fulfilled them.

 

Profit is never the goal but a result of meaning, purpose, and excellent work.

 

*The interview answers have been edited for length and clarity.

In today’s world of business, every small action and decision carries the weight of success or failure. For business leaders, both personal and professional habits require careful consideration to maximize their own potential and that of their teams.

In this article, bestselling author and renowned speaker James Clear shares practical insights and strategies to help leaders form habits that align with their goals and unlock the power of tiny gains for a sustainable future.

 

James Clear is a world-renowned speaker and bestselling author of the Atomic Habits, one of the most consequential books on habit formation in recent history. Focusing on habits, decision-making, and continuous improvement, Atomic Habits has sold over 15 million copies worldwide and has been translated into more than 50 languages.

 

James is a regular speaker at Fortune 500 companies and his work has been featured in TIME magazine, the New York Times, and the Wall Street Journal.

 

THE AGGREGATION OF MARGINAL MEANS

 

This idea was put forth by the performance director for the British Cycling Team, Dave Brailsford. When he was hired in 2003, the team had never won the Tour de France, which had been around for 110 years.

What set Brailsford apart was the idea of the aggregation of marginal gains – the 1% improvement in nearly everything the team was doing related to cycling. This included getting lighter tires and more ergonomic seats, finding the right massage gels, painting the inside of the bike tire white to better spot dust that would get into the gears, hiring a surgeon to teach the team how to properly wash their hands to avoid getting sick, and even finding the best pillow for each rider.

The British Cycling Team ended up winning the Tour de France 3 years later. They then won another 4 times over the next five years.

James notes: “1% improvements are not just nice to have, they’re not just a bonus on top of your performance, but they can be the pathway to unlocking exceptional levels of performance and elite levels of success.”

 

Excellence is not about radical change; it’s usually about accruing small improvements over time.

 

Visualizing this power of tiny gains, James explains the compounding effect that small behavioral changes can have over time.

 

 

It’s important to remember that habits are a double-edged sword – they can build you up or cut you down.

 

Time will magnify what you feed it. If you have good habits, time becomes your ally. If you have bad habits, time becomes your enemy.

 

Emphasize Trajectory Rather Than Position

 

James notes: “The idea of getting 1% better each day is about emphasizing trajectory rather than position. Ask yourself, ‘Am I getting 1% better or worse? Is the arrow pointed in the right direction?’ Because if you’re on a good trajectory, all you need is time. But if you’re on a bad trajectory, even if you’re in a strong position right now, it’s not going to end well.”

James also emphasizes that if you’re struggling to improve, the problem isn’t you; the problem is your system.

 

You don’t rise to the level of your goals; you fall to the level of your systems.

 

The difficult part isn’t the goal itself; it’s building the system of behaviors or a collection of habits that would inevitably carry you to that desired outcome. When there is a gap between a goal and the collection of habits, habits always win.

Accounting for the possibility of luck and randomness in life, James’ advice is that habits are under our control whereas luck and randomness are not.

James adds: “So the only reasonable approach in life is to focus on the elements of the situation that are within your control. You want alignment between your desired outcome and daily habits.”

 

How to Identify 1% Improvements

 

On how to identify where to make these 1% improvements, James explains that it’s usually the things that seem trivial or a waste of time. However, it’s important to remember that these small improvements and adjustments accumulate and can compound to make a meaningful difference over time.

The questions to ask are:

• Does this action accumulate?
• Does this action layer on top of a previous effort?
• Will this action persist throughout time?
• What will keep working for me once it’s done?

James elaborates: “If you take that [last] question seriously, you start to realize where you should be directing those 1% improvements or little adjustments. You should be directly pointing them toward the things that accumulate.”

 

THE FOUR STAGES OF HABIT FORMATION

 

On how to change a habit, James walked through the four stages of habit formation. Understanding these foundations will inform the process of making and breaking habits.

 

 

An addendum about reward: Not every behavior is rewarding. Some things come with a cost or consequence, sometimes it’s neutral. But if a behavior is not rewarding or doesn’t feel positive or enjoyable in some way, it will be difficult to sustain it as a habit.

 

The Four Laws of Behavior Change

 

Each stage of habit formation comes with a corresponding law. This is how each stage can be operationalized:

 

 

These laws will help you form a habit. However, if you’re looking to break a habit, James suggests inverting the four laws:

• Obvious -> Invisible
• Attractive -> Unattractive
• Easy -> Difficult and full of friction
• Satisfying -> Unsatisfying consequences

 

Never Miss Twice

 

When asked about how to deal with set backs when it comes to habit formation, James pointed out that falling off course of a habit is usually indicative of something – perhaps you’re in a different season or different place in life. This could mean adjusting the habit a little to accommodate.

However, if you still want to stick to a habit but just happened to be distracted for a day or two, James offers this mantra:

 

Never miss twice.

 

He notes: “If the reclaiming of a habit is fast, the breaking of it doesn’t matter that much. I think we have all seen this in our lives, which is it’s very rarely the first mistake that ruins you. It’s the spiral of repeated mistakes that follows. It’s letting slipping up become a new habit. That’s the real problem. So if you can reclaim a habit quickly, then mistakes doesn’t matter that much. So never miss twice.”

 

THE POWER OF PHYSICAL AND SOCIAL ENVIRONMENTS

 

James outlines the importance of creating a physical and social environment that would sustain your desired habits because the spaces in which you live and work each day influence your actions.

James suggests: “One interesting thing you can do is hold a habit in the back of your mind that you’re trying to build, and then walk into the rooms where you spend most of your time each day. Look around those spaces and ask yourself, ‘What is this space designed to encourage? What behaviors are obvious here? What behaviors are easy here?’”

 

If you want a habit to be a big part of your life, make the cue a big part of your environment.

 

In terms of social environment, James suggests that you consider the people you surround yourself with.

He says: “From a practical standpoint, join groups where your desired behaviors and habits are normal. Because if you join groups where your desired behavior is the normal behavior, you’re going to be much more likely to stick with it yourself.”

He points out that people have a need to fit in, so we tend to stick to behaviors that are “normal” for our social environment. If that is in opposition to the habits you want to build, it is less likely to stick.

James explains: “A lot of the time the desire to belong will overpower the desire to improve. So as best as possible, you want to get those two things aligned.”

 

THE TWO-MINUTE RULE

 

As James explains in his book, The Power of Atomic Habits, scaling it down is key. This means taking a habit you want to create and scaling it down to something that takes two minutes or less.

For example, wanting to read 30 books a year can become reading one page. Trying to do yoga four times a week becomes taking out the yoga mat.

James explains: “Something that often gets overlooked is that a habit must be established before it can be improved. It has to become the standard in your life before you can scale it up and optimize it.”

It’s often said that the heaviest action is the first one and the hardest step is the first movement. The two-minute rule pushes back on the perfectionist tendency or desire to have it all figured out ahead of time. It encourages you to master the art of showing up, scaling down, and getting started today. Once you’ve gained that foothold, you can use it to advance to the next level.

 

IDENTITY-BASED HABITS

 

The core to the idea of atomic habits is that it’s not about little habits – it’s about believing in something new about yourself. It’s about shifting the story you have about who you are, what is normal for you, and why you do the things you do.

 

True behavior change is identity change.

 

James points out: “Where we’re trying to get to is this place where you take pride in being that kind of person. We want to get to this point where you feel like [you] want to embody this identity with [your] behavior.”

While it’s true that habits can be driven by external results like making money or being more productive or losing weight, James argues that the real reason habits matter is that every habit is a vote for the type of person you want to be.

For example, writing one sentence won’t finish a novel, but it casts a vote that you’re a writer. Individually, these are small actions but collectively, you start to build up this body of evidence that shifts the weight of the story of you.

James adds: “My suggestion is to let the behavior lead the way to start with one sales call or one-minute meditation, or one email or one page, or whatever it is, and let that small action, be evidence that at that moment you are that kind of person.”

 

BONUS: IN BUSINESS, ALIGN THE INCENTIVES

 

When it comes to implementing these insights toward collective habits and tapping into the power of tiny gains within the business environment, James suggests getting the incentives aligned.

Giving the example of Boeing’s strategy in the early 90s requiring software engineers to be on the first test flights, James explained the power of having the outcome of someone’s work impact them in a certain way.

The questions to ask here are:

• Who is doing the work?
• Who bears the consequences?
• Who reaps the rewards?

James notes: When the incentives aren’t that well aligned, somebody else is doing the work, somebody else is bearing the consequences, and somebody else is reaping the rewards. So, you have to think about how your business is designed and adjust the model so that the incentives are aligned. If they are, people’s behavior naturally falls in line. People naturally want to do the same things because that’s how they get the incentives and avoid the consequences.