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KP Unpacked
Join serial entrepreneur KP Reddy for conversations and discussions around innovation, technology trends, and AI for startup founders, innovation catalysts & investors focused on the built environment (and beyond!)
KP Unpacked
Empty Titles, Hollow Triumphs
Grapple with the real impact of 'strategy' and 'innovation' as KP Reddy, whose razor-sharp insights into the AEC and CRE landscapes are dissecting the buzzwords that often spell disaster for unsuspecting C-suiters. This episode peels back the veil on glorified executive roles that are all title, no teeth, revealing what it actually takes to steer the behemoth of established industries towards true transformative change. KP doesn't hold back, providing an unfiltered look at the perils of high-ranking positions sans support and the visionary approaches that distinguish genuine progress from mere corporate posturing.
Venturing beyond the surface, we dissect the symbiotic relationship between strategy, innovation, and the tangible outcomes they must drive. Through candid discussion, KP highlights how aligning executive compensation with real-world results can be the catalyst for a seismic shift in industry paradigms. We tackle head-on the challenges of transitioning from traditional professional services to scalable, productized solutions, and spotlight the outsized influence that even the smallest innovations can wield when given the proper ecosystem to thrive.
Want more discussions like this? You can connect with KP Reddy at https://kpreddy.co/ and follow him on LinkedIn https://www.linkedin.com/in/kpreddy/!
You are listening to the Shadow Network with KP Ready, your gateway to innovation and architecture, engineering, construction and real estate, with a sprinkle of startups that are making a difference. In between, check us out on YouTube at Shadow Partners. Never miss a live stream fireside chat or talk that we got going on with the industry's most interesting innovators and leaders every single week. You can connect with KP Ready and other innovators in the AEC and CRE industry in the Shadow Partners community. Go to bitly slash shadow partners community to learn more. Today. All it takes is a few clicks for you to make a difference. Welcome to the future and welcome to the Shadow Network with KP Ready.
Speaker 2:Every week I have the pleasure of sitting down with KP Ready, who's the founder and CEO of Shadow Partners and Shadow Ventures, and one of the things that KP does is post things on LinkedIn that are thought-provoking. They're based on conversations that he's had, things he's experienced, things he sees in the AEC and CRE industry, and ends up with a lot of engagement, a lot of comments, a lot of people learning from what he's posting on LinkedIn. And so I get to sit down every week and say, hey, kp, what were you thinking when you posted that on LinkedIn? And so we've been recording this for some time now. We publish it as KP Ready, unpacked under the brand of Shadow Network, the podcast. You can find that wherever you listen to podcasts, wherever you can see podcasts, and so obviously we're joined by KP today. So, kp, welcome, glad you're here today.
Speaker 2:Hey, jeff, how's it going? It's going well. It's going through your LinkedIn and I saw this post from a couple of days ago now, I guess. But you said, strategy roles, when done well, are magic. Unfortunately, too many people throw the term strategy around as efficiently as they throw the term innovation around. We talk behind the scenes about innovation a lot. Obviously that's part of the ethos of Shadow, obviously, but interesting that you're connecting efficiency and innovation. Maybe just on the level of the ease of use, maybe lack of meaning in that use, but what were you thinking when you posted this? What inspired?
Speaker 3:that. So I think the trend I see in highly established industries like AEC and any other industries, that the chief strategy role and the chief innovation role have become placeholders. When we run out of C-suite titles to give people In other words, hey, steve's been here for 30 years and not CEO, not the chief innovation, not the chief information officer, not the CTO, however, let's make him Chief Strategy Officer, let's make him the Chief Innovation Officer. Right, and you can always and you saw it sometimes with the Chief Sustainability Officer in the past right, the C-suite role with no P&L, not a lot of resourcing, and that kind of tells you a lot. If you think about those two roles and even if you want to throw Chief Sustainability Officer where, that actually has a little bit more definition around it.
Speaker 3:Many of these roles don't have great job descriptions and the unfortunate thing is for a Chief Strategy Officer to be successful, for a Chief Innovation Officer to be successful, the company has to have resources to support them, ie money, right, lots of capital on the balance sheet, and secondly, they have to have a time horizon that does not fit in a single fiscal year.
Speaker 3:In other words, if you're gonna measure, you can measure activities on a weekly, monthly, quarterly basis, but as you think about actually delivering on a sound strategy, that can be game-changing. It might be a multi-year, five-year, 10-year approach. Same thing with the Chief Innovation Officer, and I think that's where the big miss is. So the people in these placeholder positions don't actually know what strategy is and they don't know what innovation is, because they're set up for failure in many ways. And I always ask people with those titles did you get this job from someone else? Was there an existing job description? And almost 90% of the time in established industries, they're like no, actually my boss had me write up my own job description, which is kind of telling.
Speaker 2:It is telling and it's coincidental or not right. We've just launched our Innovation Leaders Mastermind Group, which I think what you're saying now really kind of touches in that realm. Right, some of the people that we've had discussions with about joining the Mastermind Group have had strategy titles. Most of them have innovation type titles. But one of the things that struck me and you touched on this a second ago was, as I'm going out and I'm having conversations with these people about joining the Mastermind Group, it is just the right fit for you. What could you contribute? What would you want to get out of a Mastermind Group like this?
Speaker 2:A couple of things that you touched on really came to light. One yes, many of these people are the first in their organization to have that title, to have that role. As you say, this was the placeholder role, and then one of just completely honest about it. One of the frustrations from my point of view is here's somebody that I'm talking about, or talking to about the Mastermind Group that I think would be a fantastic fit for the Mastermind Group the knowledge that they have, the firm that they're in, the industry that they're in. They would be a great contributor.
Speaker 2:I think they could get a lot out of being in this group and they come back and they say, yeah, my CEO, or whoever it is that they're asking, that they're answering to, won't fund this. And yes, there's a cost to the Mastermind Group, but in the grand scheme of things, it is a very, very small cost, and what that says to me, beyond the actual dollar figure, is that that organization is not investing in the development of this person. They're not investing in the development of this role and, by extension, strategy, innovation, et cetera. So there's a couple of things that you touched on. I'm seeing absolutely in these conversations with people that were approaching and now getting into the Innovation Leaders Mastermind Group.
Speaker 3:Yeah, I think you're also hitting on a point specifically to the AEC industry, right, if it was not required to get continuing education units to keep your architectural registration or engineering registration, how much investment would the industry actually make into the skills development of their employees? You know that there's a big question and I think you know you don't have to have continuing education units for being a chief innovation officer or chief strategy officer. It's not a requirement and, to your point, it's a nominal cost with a huge benefit. I think part of it is this strategy. You know we get to benefit of bouncing between the big corporates and the startups and you know startups don't have chief strategy officers. That's called the CEO, right. That's called being the founder. And they understand the bumps in the road of developing a strategy, trying to execute the tactics against that strategy and how it doesn't always work and that iteration of it doesn't always work, and so they have to be really good strategists because they don't have resources and a 10,000 person engineering firm.
Speaker 3:If the chief strategy officer doesn't execute, it doesn't affect the numbers, right? These are roles that I consider to be asymmetric roles, right. If they don't execute, it probably doesn't affect anything. If they do execute. It has to be game changing. Unfortunately, a lot of these strategic roles tend to be pretty symmetric in their nature, in that if they lose a million bucks, it doesn't matter, and then if they get a million bucks, it doesn't matter, right, it's all around the air. And so it then becomes more about a marketing exercise, and a true chief strategy officer has a very asymmetric role in terms of how they execute. And you just can't. You know that's the job, and I think teaching people and people understanding what an asymmetric role looks like is something that our industry doesn't really talk about much.
Speaker 2:Yeah, I think that's an excellent point. I mean, here we are, we're an AEC, cre, you know, we're a built environment and I just sat in on an interview that Ian was doing yesterday and it was interesting being a fly on the wall, because this is the industry I grew up in, this is what I know, this is where it's been since I started college, and it was very interesting to me to sit in on this interview and hear another professional from the industry talk about the lack of true innovation and you know from their perspective and, of course, we dip into digital transformation and you know another other aspects of how we get the work done, etc. But I think the point that we really don't know what to do with these people is exactly right. So if I were to wrap it back around and maybe play devil's advocate, I would almost ask why?
Speaker 2:Why do we even have these roles? If we're? You know if I'm talking to someone and says, yeah, I'm the chief innovation officer, but you know one person actually said I don't have a team, okay, how does that work exactly? The organization doesn't want to fund the, as you said, nominal cost of this mastermind group. You know the different versions of this? Why do we even have the roles? Why are why are firms naming chief whatever's when we may not even know what to do with them?
Speaker 3:Yeah, it's the same reason why a forestry company has a chief sustainability officer. It looks good, Right, they're cutting down trees left and right, but we need a chief sustainability officer, right? So I mean, I think the optics in the market are probably a good part of it, right, but I think I always try to take the you know, you take the startup view of the world and you know a lot of people don't get these.
Speaker 3:Sometimes I probably spend more time talking people out of starting startups than encouraging them to start startups, because they don't understand. They see the benefit on the backend. They rarely see the sausage being made right and one of the exercises I have them do is say look, you know how much do you make at Home Depot? Right now I'll make 150, great, you're probably getting. If you're successful at Home Depot, you're gonna get a raise every year, right? Oh, yeah, 10% or so, okay, cool.
Speaker 3:So if you're startup, if we look at the investment of your salary over the next five years, it's about 700 grand At the end of your startup in five years. If you can't net 7 million, then what's the point? Right, because part of taking on the risk. You know you have to have the reward. Staying at Home Depot for five years and getting a 10% raise every year, there's no risk to that. If you're gonna take on startup risk, you have to think of your own time the same way us venture capital people look at it. Now, in five years, you may make $0, that's fine, right. But if you didn't have the chance to make 10x, ie that 750 in salary I'm foregoing isn't gonna net me personally 7 1⁄2 million, then what was the point of it all? Like?
Speaker 3:There's no path to that, and I think that's where a lot of founders, especially highly compensated I get a lot of executives that are making half a million dollars a year at some big corporate wanting to use up their savings and go do a startup and we start looking at the math and what the risk quotient is and what the return expectations should be to them personally. They generally opt out, cause now I was saying you're saying, oh, five years, that's like $3 million. If you can't net $30 million, there's no path to right, obviously no guarantees. But if there's no mathematical path to you netting $30 million in five years, stay in your day job, dude. Like what are you doing? It's nonsense. It's like playing roulette with one-to-one odds, right. If roulette paid out one-to-one, what's the point? Right? When it's a 32 to one odds, right? So you have to match up the odds against the payouts, so to speak, and just like Vegas, the house does win most days. So I think it's.
Speaker 3:I think the chief strategy officer and chief innovation officers have to take that asymmetric math into view, that it's not the. Oh, the company's paying me 250 as the chief innovation officer. So if I deliver 10% profit, like the rest of the business does, that I'm doing a good job. Actually, you should be delivering 10x what they pay you, and what's your strategy to do that? And I generally think most of them do not have a strategy, right? If you look at a five-year comp plan for a chief strategy officer or chief innovation officer God forbid they make 10 times what the CEO makes right, that's the yeah.
Speaker 3:Right, because that would be an ideal outcome, cause if you can pay your chief innovation officer 10x what the CEO makes, god knows what they delivered to the bottom line right, and I think it's that kind of thinking that starts to really inform executives on how to think about strategy and how to think about innovation. I'm telling you like. I have friends that are fantastic chief strategy officers at large companies and they do make more than the CEO Because they the idea things that are very important and change the game for the company.
Speaker 2:I think culturally that's a huge shift and you would not you know, we're obviously talking about AEC. You know this is sort of the lane, but that's not a culture that we're used to in the AEC world at all.
Speaker 3:Right, no, and I think a lot of that stems from, quite honestly, is not being in a product-led business. Right, we're in a RFP-led business. The market is used to buying phase one environmental side assessments and they draft an RFP and you respond to that, you know. So part of really the chief innovation and chief strategy officer has to think about new product development, new service development, new market development and not just like, oh, I'm going to go talk strategy, so to speak.
Speaker 2:Yeah, yeah, that's a really important point. I mean, this is probably a conversation for another day, but the shift from professional services to productizing, you know, whatever productizing services, that's a big shift, that's a big mindset shift. But that's where the innovation has to come from, doesn't it?
Speaker 3:Yeah, but I think you know we think about these like big ideas, right, and of course I love big ideas. But I'll give you an example. This is years ago. I was out with these lawyers, so it was a terrible evening. But it was three law firms here in Atlanta and the partners all started a courier service together. They own their own courier service and they all were shareholders in it. And each of these large firms, the default standard of courier service was this firm, was this company, and guess what? They kind of named whatever price they wanted to because they were passing on the costs to their customers.
Speaker 2:Right, right. And they use couriers all the time.
Speaker 3:All the time, right All the time, they were making essentially more money off their courier business individually than they were in their day job as partners at a law firm. Right, that's strategy, right that's right. I think of strategy. I think of other words like cleverness and inventiveness, and not everything's writing code or building a robot. I mean, there are other ideas that come out of this, and I think those are the type of things that chief strategy officers should be kind of looking at.
Speaker 2:Yeah, yeah, and we can obviously keep talking about this, and you know we do this every week, we unpack these posts, but there's a lot of things to explore here, so I'll just review for those of you that are listening. I'm with KP Ready today. I didn't introduce us at the beginning, so KP Ready is the CEO and founder of Shadow Partners and Shadow Ventures. My name is Jeff Eccles, chief or a Senior Advisor what's called myself a Chief Strategy Officer that seems dangerous in the context of this conversation. Senior Advisor at Shadow Partners, and every week I get to get together with KP and ask him what were you thinking when you posted that on LinkedIn? If you're not following KP Ready on LinkedIn K period, p period, ready R-E-D-D-Y on LinkedIn, you're missing out, because he posts.
Speaker 2:A lot of his posts are very thought provoking. They come directly out of innovation and specifically in the context of AEC and CRE, built environment industry, and this particular post that we're unpacking today for the Shadow Network podcast is strategy. Roles, when done well, are magic. Unfortunately, too many people throw the term strategy around as efficiently as they throw the term innovation around, and if you missed, if somehow you jumped in at the end of this, you need to go back and listen to this whole conversation, because KP really unpacked this Well. Great examples here, and this is something that we see on a day-to-day basis in the firms that we work with, the people that we talk to, the firms all around the AECD industry. So, kp, thank you for unpacking this post today.
Speaker 3:Thanks, Jeff. By the way, this was done in front of a live studio audience.
Speaker 2:This is live.
Speaker 3:And we'll do Q&A after we hit the stop button on the record button.
Speaker 2:Yeah, yeah, we're gonna do that. This is gonna be sort of a new experiment for us. We've typically record this and just KP and I, and sometimes the dogs that are in the background now, but we're doing this live inside the Shadow Partners online network right now. If you are listening to this and you wanna know more about that, hey, how do I find out? How do we get into the Shadow Partners network? Reach out to KP on LinkedIn. Reach out to me on LinkedIn. We'll get you hooked up. Get you in a training session, get you into the Shadow Partners so you can participate in these now weekly live conversations. That won't just be KP and I anymore. We'll include the live audience. So join us. Reach out to us on LinkedIn. We'll get you into the network and you can participate in these conversations live. So again thanks KP for joining me today to unpack this post.
Speaker 1:Thank you for tuning in to another episode on the Shadow Network here with KP Ready as always. Remember you can connect with KP and other innovators in the AEC and CRE industry in the Shadow Partners community. Go to bitly slash Shadow Partners community to find out more today. Until next time.