Ep. 378: Michael Nagel - Harnessing Powerful Hidden Drivers for Breakthrough Business Performance
Welcome to Count Me In. I'm your host, Adam Larson, today we're diving into an exciting conversation with Michael Nagel, author of Flourishing Together and the founder of Collective Breakthroughs. In this episode, you'll hear how systems thinking and people centered strategies can help organizations not just survive, but truly flourish in a rapidly changing world. We'll discuss how the pitfalls of relying solely on the numbers think balanced scorecard and dashboards and why so many big ideas get trapped by silence in the workplace. Michael introduces us to his concept of Breakthrough Intelligence, revealing ways to unlock repeated, shared breakthroughs by tapping into both hard data and the often overlooked human dynamics at play.
Adam Larson:So you won't want to miss this wonderful conversation, let's get started. Well, Mike, thank you so much for coming on the Count Me In podcast. Excited to have you here. We're going be talking about things connected to your book, Flourishing Together. But I wanted to start our conversation kind of walking back to the beginning of your career.
Adam Larson:You know, what was what was it about studying social work that ended up shaping the way you kind of look at your organizations today?
Michael Nagel:Yeah. No. Thanks. Thanks for having me on, Adam. So, you're right.
Michael Nagel:I I started my career in social work. And the way that I kinda think about that now is that it's it's a it's a bridge between two worlds. Mhmm. Yeah. So I started my career in social work.
Michael Nagel:And social work, I don't know if you've ever thought about this, is is really the study of people in context. So you you look at the people, right? Or maybe it's a group of people. And and you think about, well, how do they need to be empowered? What capabilities do they need to have?
Michael Nagel:How can we better their situation? What kind of breakthrough are they looking to have? But it's the study of people in context. So you're also looking at the context. You're looking at the systems that they're in.
Michael Nagel:Maybe they need a policy change. A group of people may need a policy change, or maybe they need different partners. So what's going on in their context? And so as a social worker, you try to do that too. A lot of people have said, because I've spent so much time in accounting and management accounting in particular, how is that really relevant?
Michael Nagel:Why did you even do that? But social work is really it's really a systems thinking discipline. And so when people think that and they see that, they're like, I can see how that might relate to the... To, to what you're doing. And so then I took a...
Michael Nagel:I kinda took a hard turn into accounting, and I worked with with KPMG. And, the first project I ever had was a performance measures measures project. And I did a lot of that kind of work, and then I worked with, with Kaplan and Norton. Now that work was not people in context so much. That work was a lot of systems kinda work, a lot of structures kinda work that we did there.
Michael Nagel:APMG was like that, and that Balance CoreCard, Collaborative, Palladium, they both went by those names in the marketplace at the time. And and I did a lot of that kinda work. This was back when the Balance CoreCard was really taking off. And as I saw that work, I said, you know, there's something more going on here. So I went back to school, got my doctoral work.
Michael Nagel:Back in 2012, I finished my doctoral work. And that, again, that was the the question I was chasing at the time was, what are the behaviors that underpin the ability to implement a strategy? And so that question is, again, is people in context. That's the same kind of thing that the social work, but now I'm kind of studying that in a biz... In an organizational context.
Michael Nagel:And then after that, I took a job at Center for Creative Leadership. And again, that's the people side. So when I say the kind of work that I do is is a bridge between two worlds, there's complexity on both sides of those things. If you're if you're working on the people side of the equation, there's a lot of complexity there. And if if you're also working on the tangible outcomes, which is more kind of the accounting side, there's a lot of complexity there.
Michael Nagel:And so what I've done throughout my career is really kinda bring those two together, but I wouldn't be able to do that work if I hadn't started off, to your question, if I hadn't started off in the social work background. So, yeah, that's that's that's that's where social work has taken me.
Adam Larson:Yeah. It's interesting. I think what happens with a lot of... For a lot of people when they go into college, you know, they have to take a, like a sociology or psychology 101 course as a, you know, in your, in your college degree and then suddenly you're psycho, you're trying to psychoanalyze everybody just because of one class. And I think all of us kind of realize, oh, wait, this is how people think.
Adam Larson:This is... So you started making all these assumptions and kind of jump into it, but then not not many people take it all the way to study it in a full way. But I think a lot of us kind of see that human connection when we get into things like social study, like social work and psychology and how people think. It it definitely challenges you to say, okay. Well, how am I thinking about things?
Adam Larson:A lot of times, most times you're like, you're pointing at everybody else and not looking at yourself either.
Michael Nagel:Yeah. No. That's that's for sure. I mean, you pick up a lot just by being in some of those classes, but you kinda turn the mirror on yourself and say, how is this affecting me? Yeah.
Michael Nagel:Yeah.
Adam Larson:So, you know, what what kind of brought you into... Like, because you... You're you're look... You're studying social work, then you started working for a KPMG. How did you, like, make that transition from, like, social work to accounting?
Michael Nagel:Yeah. So now that's a great question. I was I was working in a social service agency, and I had a mentor at the time. And the mentor said, you know, you know, Mike, it wouldn't hurt you to learn some things about business. I hadn't really taken had taken an economics class or something or maybe a couple of economics classes.
Michael Nagel:But... So he said it wouldn't hurt you to learn some things about business. And so I went back, started taking some some classes, kinda your basic business classes. And the courses that really stuck that I really liked were the accounting courses, especially the management accounting courses. So, and the reason I like that was it was the usefulness of the information.
Michael Nagel:So it's this time, it's taking it's taking accounting information and using it for management purposes. And so that may be tied to working with management. It's certainly tied to goals and the achievement of goals. And it's also tied to maybe it's tied to the the creation of new futures. And I love that stuff.
Michael Nagel:And so I was hooked and and I wanted in. And so I pursued that. I I got my my CMA. I've been a member of IMA for twenty five, twenty six years now. And I got my my CMA back in in 2000.
Michael Nagel:So it's been a long time since since that since that interest. But no, that's that's what started me. And that's how I took the turn because it it hooked me. Didn't see how I'd come full circle on that, but, that's what got me started.
Adam Larson:Yeah. So you mentioned... You know, I wanted to touch on balance scorecards and scorecards because a lot of... When you're in management accounting, a lot of people, like... Especially when balance scorecards coming out and it's the biggest thing, you know, it was the it was the name, you know, the the flavor of the month per se as you will.
Adam Larson:But like when you were looking at those systems, obviously they don't tell the whole story. They only tell part of... They tried to tell the whole story. But what's... At what moment did you start questioning, hey, maybe these things aren't telling the full story.
Adam Larson:There's there's more to this than just the... These numbers on this sheet.
Michael Nagel:Yeah. No. That's... I I appreciate that. And you're right.
Michael Nagel:When I was working with with Bob Kaplan and Dave Norton with the balanced scorecard concept, this is when it was really becoming very popular. At one point, I think 60% of organizations in North America and Western Europe were using some form of a balanced scorecard. So you imagine how many organizations that really is. So it was hugely popular. And even today, it's it's still quite popular as a management tool.
Michael Nagel:So so I was working... I don't know. Did you ever hear of the company named Handleman?
Adam Larson:I haven't, but that doesn't
Michael Nagel:Well, I know that I know that you're a music guy. And so Handleman, at one point, 11% of all music that was sold in The United States was moved through hand through the Handleman company. And so so if you went to if you went to Target or Best Buy or Walmart, or even in those days, Kmart, and you got your music, a lot of times that music was being handled by handle men. So they knew the artists and they also knew the stores. And so they knew where Dolly Parton's music was gonna sell best.
Michael Nagel:They knew that down to the store level. And they knew where where spring scene was gonna was gonna perform best. And so they were this link between the artist and the stores that were actually selling the music. Now, I mean, you go on to Best Buy nowadays, and there's not even a music section, but that's not the way that it used to be. You know, that's that's where I used to go and get my my music.
Michael Nagel:So, anyway, Handelman was responsible for all that, and they were an exemplar. What I mean by that, they were an exemplar of using the balanced scorecard. So they were one of our bigger clients. And this is back when this this book came out, the Strategy Focused Organization. It was a Bob Kaplan and Dave Norton book.
Michael Nagel:And and in a lot of ways, it was a toolkit for what you could do as an organization with the balanced scorecard. And so when I say they are exemplar, there wasn't really anything that was in that toolkit that Handleman hadn't adopted. So, but you think about that. You... And and back in terms of the way that we were talking about the balanced scorecard at that time is that it was it was it was for a new era of management.
Michael Nagel:It was for an era where there was a lot of disruption and change. Think about that was back in 2000. You think about how much that has accelerated, but that was the promise back then is that this is gonna actually help you be able to better manage and and create value for your organization. Now, Hanuman knew. They knew the risks that were out there.
Michael Nagel:They knew that piracy was coming on the scene. There was a company named Napster out there. They knew that there was a lot of digital music plays being happening out there, and they knew this, and they were a publicly traded company. And the way they talked about that risk... So, you know, you think about it as an IMA person, you know, assessing risks.
Michael Nagel:They knew those risks. They talked at our conferences. One of the most popular questions that they got asked is, what's coming? And how are you gonna be able to sustain this? But the story they told to the street was we're gonna go from a 1,200,000,000.
Michael Nagel:We're gonna go to a $2,000,000,000 organization. We're gonna double down on our existing business model, because nobody else can do this the way that we do. And we think there's still a lot of value in this in this in this business model. So they had 19 objectives on their scorecard. 19 objectives.
Michael Nagel:One of those objectives was about the future. Three people out of 2,700 people, three people in the organization were dedicated to that future part of the business. And what I mean the future part of the business is, it's like, what are we gonna become next? Who are we gonna be? And so Handleman had gone through a number of changes in the past.
Michael Nagel:They weren't always a music distributor before they were in pharmaceuticals and, you know, go back seventy five years. They were in a number of other businesses. So they've proven the ability to be able to morph and adjust, but they had three people dedicated to the future. And most of that work was all M and A work. And so several year several years later, the company's gone.
Michael Nagel:You think about how how fast the the digital music trend accelerated. And they saw this coming for years. And they and then you ask yourself the question, how much energy should they have been putting towards creating a new future for themselves rather than those three people? And so what I started to see, and I had a hunch of this because even when I kind of first got into accounting, I had a sense that, well, where's the behavioral side? Where's...
Michael Nagel:I think we're not really doing too much with with some of this. And I think in in some ways with the scorecard program they... There did because it was so sophisticated is that kept people asleep. Mhmm. Kinda lulled them into this.
Michael Nagel:The train has left the station. This is the way we're gonna create value. Don't question it. And and then you begin to say, well, what's the question... What...
Michael Nagel:What's the conversation we should have been having? Why weren't we able to have that conversation? Why were we were we so locked in when everybody saw what was coming? So that experience... I was leading that, that project.
Michael Nagel:That experience made me really question just how how, how complete and how sufficient the, the solutions really were for being able to do that. And you think about, like, I know that the IMA just came out with the, the management accounting competency index. And Handleman was a company that had those capabilities in spade. They had a very sophisticated finance and accounting department. What else was going on there?
Michael Nagel:And that's great research that that I... That the IMA came out with. I mean, it's very developmental in terms of what what people need to be able to deliver on this capability. But there's something more that's going on there that that I begin to have a hunch of. And that's what took me back to to get the doc to do the doctoral work.
Adam Larson:Mhmm.
Michael Nagel:Long answer. But but that's... That that was that was kind of the that something something needed to change that there was more going on.
Adam Larson:Yeah. Well, and and it reminds me of, like, you know, the famous example of Kodak. Know, you can go up to Rochester, New York and see all the empty Kodak factories because they're like, oh, you know, you know, our our our, you know, 35 millimeter film isn't going anywhere. And then next thing you know, you have the digital camera and where's Kodak? You know, it's it's it's the same it's the same example as what you gave.
Adam Larson:You know? And it's funny because I I do have... Probably have books made by that company that you were just talking about because I was buying sheet music back in those days before the before the digital So I probably do. I just didn't think I just didn't recognize the name of the company. So, it's interesting how these companies were there and then now they're not because they didn't set up.
Adam Larson:And, you know, and and it just a little segue to your book, you know, your book is called Flourishing Together. And obviously it's a, you know, there's a nice tagline which I can't remember right now, but it's, you know, I think maybe we can start off by talking about what does what does it mean to flourishing? Like, does flourishing together actually mean, you know, from an organizational perspective as opposed to individual people? Because, you know, when talk about flourishing, usually you talk about like some of these individuals, like, I wanna flourish as a person and do all these things. Right.
Adam Larson:But you're talking about from an organizational perspective. So maybe we can kinda lay down the groundwork there.
Michael Nagel:Yeah. Yeah. No. That's that's good. So the book was called Flourishing Together.
Michael Nagel:The tagline is what actually drives breakthroughs? And that's with a question mark on it. Right?
Adam Larson:So Yeah.
Michael Nagel:What actually drives breakthroughs? And you can see just given the little bit that I've shared with you where I'm coming from with that question. The Handleman the Handleman story is a good is a good way to think about, well, what actually drives breakthroughs? And so the the title Flourishing Together, well, that's an importance. That's an important that's an important that's an important word in the whole thing because flourishing generally means out in the marketplace, it means well-being, individual well-being.
Michael Nagel:And that's really not where I'm that's really not where I'm coming from on that. Handleman Company is not dissimilar from a lot of other companies. In in management accounting, have, or in accounting in general, we have this this assumption called the going concern assumption. You know, and I know why that why that exists, in terms of being able to, to work with companies and to do financial accounting and management accounting. But in a lot of ways, the data doesn't support that.
Michael Nagel:Data doesn't support that you're gonna be a going concern for a long period of time. In fact, about half of US public companies have been there for ten years or less. And so the S and P 500, the tenure over the last sixty years has been dropping. I mean, it's gone from about thirty three years to about fourteen years, and it's continued... Continuing to decline.
Michael Nagel:So back to that going concern assumption, the idea that you're gonna remain relevant in the marketplace is the exception. It's not the rule. And so flourishing together, that together is important because where do breakthroughs come from? Do they come from a single person? Or where do they come from together?
Michael Nagel:And really kind of the... What the book talks about is that breakthroughs come from the interaction that we have between each other. So it usually doesn't come from just one person. So that ability to kind of focus on the interactions is important. And so if I were to give something...
Michael Nagel:Somebody wanted to write something down about the book, flourishing together flourishing together equals breakthroughs, repeated, and shared. Right? Flourishing together equals breakthroughs repeated and shared. What do I mean by that? So it's not a single breakthrough.
Michael Nagel:It's multiple breakthroughs. Organizations that they're actually gonna stay relevant in the marketplace. They can't just have one breakthrough. They have to have multiple breakthroughs. Right?
Michael Nagel:They have to have a set of breakthrough moments that continue. So it's repeated. So it's not a one off, but it's also shared. That means it's not coming from one hero. Usually, it's not coming from one hero.
Michael Nagel:It's coming from the collective. So, again, that's a long way of kinda answering your question about the book title, but I'm getting at what it means to to flourish from a collective perspective, from an organizational perspective if you were looking at a company, not individually.
Adam Larson:It... It's... I think one thing I appreciated about your book too was that you you kinda used songs to kind of help identify the point, you know, that you were making. And I just had to pull up the page that I was looking at the other day that I underlined because, you know, in the first section you talk about, you know, use the example of the song Sound of Silence. And you talk about the different versions of it.
Adam Larson:You know, you have Simon and Garfocal and then the group Disturbed did it in the two thousands. But I underlined the fact, you know, it says far too often that silence still defines the workplace. Organizations remain trapped by it, grappling both personally and collectively, and unrealized possibilities trapped the way or too often in organizations. Kind of like giving the point of how, so often, you know, when you're trying to have these breakthroughs, people are just stay silent for whatever reason. Like there's, you know, they're too afraid to share.
Adam Larson:They're afraid that there there's no trust built up. There's all these different reasons that you can't find those breakthroughs because of the silence that are in so many different conference rooms and boardrooms and all that stuff. And so you have the one person who says everything and then that one person who might have that breakthrough idea or that breakthrough moment, they're just sitting there silent. And I I I think that really stuck with me that that connection to how many times the breakthrough... Like, the breakthrough doesn't come because of just our own culture within our organization.
Michael Nagel:Yeah. Absolutely. So, no, I I appreciate you picking up on the song piece. I put the songs in there because they add a relatableness to them. Right?
Michael Nagel:So everybody's listening to that song that song, Sound of Silence, whether it's Simon and Garfunkel's version of it or whether it's disturbed versions of it. But I use that as a way to kinda analyze kinda what's going on in the organizations. And I've got... I've actually got, like, a playbook, you know, a playlist of of songs. There's 14 songs that I mentioned in the book.
Michael Nagel:So you can kinda go out, and then one of the things I'm doing is putting together that that playlist out there. But there's a lot of songs that kinda bring life to things. And so the book has a lot of science in it. So this is a way... This is one way.
Michael Nagel:I've got a lot of stories and also some of these songs as a way to be kinda break it down because everybody has felt that experience of being silent in meetings where they haven't talked before. And what the songs do is they bring a visceral experience to that in a way that just kind of prose or writing can't. And so when you listen to that version of disturbed sound of silence, you can't help but feel that sense of rage where I'm sitting on these ideas and nobody will listen to me, or I don't feel the courage to be able to speak up about these things. And so a lot of the songs bring life to that experience, and that's that's that's part of the reason why they're in there. So, yeah.
Adam Larson:No. I appreciate that because I think it really stuck with me because there's been so many times where I've had to be in a meeting and or I've had to facilitate a meeting and you realize there, you know, there's that one person talking and trying to get everybody to participate is is difficult. And then there's that there's that anger, that frustration because no one listens to me, but also there's no room for you to be listened to. And I think that's a that's a challenge that organizations run into.
Michael Nagel:And it's a it's a repeated thing. Most people can relate to that experience. So.
Adam Larson:Yeah.
Michael Nagel:Yeah.
Adam Larson:So, you know, we gotta talk about, you know, you have your breakthrough intelligence, your your your your framework that you created. Maybe you can paint a picture, you know, of why... Of what that is and, you know, why you felt organizations were missing it.
Michael Nagel:Sure. So in the book, I talk about something called breakthrough intelligence. So that's different than business intelligence. And so I use... I kinda riff off of emotional intelligence, you know, EQ.
Michael Nagel:So I've got a little handle that's BIQ. It's short for Breakthrough Intelligence. And to help people understand where I'm coming from on this, I tell the story. Let's say, Adam, you have been invited to be the keynote speaker for IMA's conference next year in, what, San Diego. You're gonna be the keynote speaker in San Diego.
Michael Nagel:So you go to the conference, you go to the ballroom where that's gonna be taking place, you open up the doors in the back, you open it up, and you go in, and you see way up front because it's humongous ballroom. You see way up front that there's the platform. That's where you're gonna be speaking from. So you say to yourself, well, I better make it up there because when they introduce me, I wanna be close to the stage. And so you look in the room and you quickly decide that there's two ways that you can get up front.
Michael Nagel:You can go around the perimeter of the room or kinda go around the perimeter of the room to be able to get the front, or you can kinda do a zigzag through the room. And it's got all these tables and chairs in there, but you can kinda zigzag through there, and, and you can get up front. So in that little story, what I've done is I've tried to explain some elements of Breakthrough Intelligence. Because business intelligence is just about what's going on on the surface. Business intelligence is about the tangible, the visible things that we can actually measure on the surface.
Michael Nagel:But what this story did is it actually kind of profiles three things. It tells you there's a goal, and the goal is not a tangible thing. You can't see it in the same way that I can see my computer right now. So it's an intangible thing, but a a goal is in that story. Let's get to the stage.
Michael Nagel:There's structure in that story. Those are the tables and chairs. Now those are physical structures, not social structures. And in my book, I talk about probably at least 20 different social structures that affect behavior. Mhmm.
Michael Nagel:So so a second part that business intelligence or breakthrough intelligence calls attention to is structures. And then there's also agency. Now when you were standing at the back of that room, you had a third choice. You coulda walked through that room, you coulda walked over top of the tables and chairs, and you coulda taken the most direct path to your goal. That would be absurd.
Michael Nagel:Nobody would do that. But you had the agency to do it. You coulda done it. Maybe. I mean, it depends where you're coming from.
Michael Nagel:What's that?
Adam Larson:I said, why not? Sometimes you just need to run right through and just bolt those right down the middle.
Michael Nagel:I mean, wouldn't that be refreshing in some ways? You know? Yeah. But... So what gets in the way of that is the structure and how strong those structures really are.
Michael Nagel:Right? And so what Breakthrough Intelligence is doing is is calling attention to the intangible. Those intangible things are really what's running the show. You think about you wanna understand the numbers, and you wanna understand where the numbers are coming from. What I just described there is the way people move through organizations and why people behave in organizations the way that they actually do.
Michael Nagel:Now there's more to the framework than what I just shared in that little story, but it gives you three of the causal forces that are constantly at work in the way that people work. And they're they're helpful in understanding why the numbers show up the way that they do. So that's that's that's that's breakthrough intelligence.
Adam Larson:So I I get what you're saying. But, you know, so many times we, you know, we make decisions around the data, the metrics, like, are our KPIs telling us? And sometimes at those conversations, they talk about what's underneath all those numbers. But a lot of times it's just like, me the numbers so I can make a decision. I need to move forward.
Adam Larson:I don't have time to think about the intangibles. You know, there's no I can't measure the intangibles. Why are you telling me about this? Like, I think that's the that's the the counterpoint of what you're saying. So what what happens when that's what...
Adam Larson:That's the... When somebody might be listening to what you're saying, they're like, but I don't have time for that. Or like, they're... I... Well, I can't measure that.
Adam Larson:So I I I can't do it. You know, how do you balance those conversations?
Michael Nagel:Well, no. You're right. I mean, so these causal forces are measurable, but they're not the typical surface measures that you might typically, typically call on. So, you know, another story. I use this story.
Michael Nagel:It's called the green light illusion. And so this is great for finance people because they relate to this. So let's say that you get your your dashboard back. And here's the situation. You have a mid sized company.
Michael Nagel:They they've decided to launch a new product. And so they're building a scorecard around their market expansion for this new product. And so the finance people, the rest of the business people, they they they come up with a set of measures. You know? So they're they're taking a look at, are we on on time with our product launch?
Michael Nagel:Are we having early sales? Are we beginning to fill a pipeline? What's our revenue beginning to look like? Are we shipping on time? So any of these metrics.
Michael Nagel:But one of the things that that happens, they build the scorecard around it and you have this green light illusion, that you understand what's really happening. But in this case, the market extent expansion is stalled. You just can't see it yet in that scorecard. So there's there's actually gonna be a lag coming in those revenues that you can't see yet. And you might say, okay.
Michael Nagel:So from a finance professional, how do I begin to kinda look deeper at that? And in this case, you've got a competitor who's coming in to the marketplace. It doesn't show up on your scorecard. They've got an offering that's somewhat similar to yours, is priced better than yours. And some of the salespeople on the front line, they've caught wind of that because they're talking to customers and they know that this other competing product that's out there.
Michael Nagel:But those salespeople have been told, stay focused on selling. You're more of a doer than a thinker. And so stay focused on selling. Those salespeople talk to the regional managers. Those regional managers also have a sense that this is going on, but those regional managers haven't been invited to that scorecard meeting where they're talking about what happened.
Michael Nagel:That channel doesn't exist for me to be able to get that information into that meeting anyway. And so with that story, what I've done is I've told you three things that are happening in that... In this Breakthrough Intelligence framework that are helpful financial... For financial people to to chase. I told you about the context, the external competitive context.
Michael Nagel:There's also internal context. I've told you about people's agency on the front line. Why couldn't somebody have actually just told the senior people that are attending that scorecard meeting what was happening? Why couldn't they, just like walking across those tables, why couldn't they have gone and do that? And why couldn't the regional managers have done that as well?
Michael Nagel:Right? Because there's structure in the way that's keeping them, and they're still beholden to that structure. So what we do to kinda fortify people's agency when they have information like this is something that's oftentimes not being addressed. So... And if you're able to go there as a finance professional, who owns performance management within a company?
Michael Nagel:Usually, it's in the finance and accounting department. And what you're really being charged with is why did the numbers show up the way that they did? What I've just given you is some ways to think about beyond kind of the typical way of thinking about what drives the numbers, other kind of causal foundational things that are really driving the numbers. And so why should finance people kinda take the extra time to look at this? Because these are the things that are really running the show.
Michael Nagel:Mhmm. And oftentimes, we don't have the language for that. What the what the BIQ framework offers is it offers a language for being able to have that deeper conversation about what's really happening, and it changes the conversation.
Adam Larson:It does. But how does things like... How do things like AI fit in all this? You know? Because is it helping us?
Adam Larson:You know, is it where... Because a lot of times people are just feeding information in AI, taking what it spits out and saying, okay. Here's what I found. But it... But, again, is AI really looking at all that...
Adam Larson:The BIQ either? Like, I don't... I... Like, how is that how is that fitting into this whole story?
Michael Nagel:So... No. That... I... You know, and it's just that you can't have a conversation now.
Michael Nagel:You can't open up your LinkedIn and and not see something about AI. Right? It's just a... It's it's just ever present. And so in my framework, listen, it's called artificial intelligence.
Michael Nagel:It's artificial. And so in my framework, it's not a sixth force. It's a very powerful tool. It's a very powerful capability. But AI is fundamentally extractive.
Michael Nagel:Right? It can extract information. It can extract it can extract patterns, but it's not perceptive.
Adam Larson:Mhmm.
Michael Nagel:It can't necessarily read your context in the same way. And so it may give you ideas. I tell the story in the book about this, this board member by the name of Austin. And Austin sat quiet in a meeting, and he sat quiet in that meeting even though he had a big idea about what could change the future of the organization because the rest of the room had begun to converge on a different strategy. He knew that he had this idea because I talked to him several days prior.
Michael Nagel:I couldn't get the idea out of him facilitating that meeting. And so AI doesn't know that Austin is sitting quiet in that meeting. It can't perceive that he has an idea that's there. That's something that that humans are much better equipped for being able to pick up on. So AI really kinda helps you with the surface.
Michael Nagel:Austin could have used AI to be able to surface this idea because it reduced the social heat. It reduced the social cost for being able to speak up in that situation. So AI is super helpful for being able to bring forward ideas that may not be popular in some context, but maybe are still winners. But it's still generating things on the surface. And so really what, what Breakthrough Intelligence is doing is giving you the ability to to come alongside this, but not forget what's what what's truly human and what really kinda causes causes things to move forward, which is things that, you know, really just people can pick up on.
Michael Nagel:So I see a real kinda synergy between these two. But there's really a there's really a difference between what human intelligence is bringing versus kinda what artificial intelligence is bringing.
Adam Larson:Yeah. I... And and you really can't have true artificial intelligence without human intelligence. And I think more and more people are realizing that you can't just put AI agents in place and expect them to interact with humans in a way that is beneficial to organization. I'm sure there's elements of those that can help, but you still need that human intelligence to keep things running smoothly and see the side of it that the robot cannot see, I guess.
Michael Nagel:Yeah. Absolutely.
Adam Larson:So let's say, you know, there's a leader, finance and accounting leader, FP and A leader, CFO, whatever somebody's title is, And they're listening to this conversation, but they're like, okay. It's Monday morning. I'm listening to this conversation because there are podcasts released on Monday. Let's say they listen to it on their walk. You know, what's one shift in their thinking?
Adam Larson:How should they think about it? How should they ask questions? You know, like, what... What's one shift in their thinking that could change, you know, that they could get them started in the right direction and start applying what we've been talking about today?
Michael Nagel:So there's another song that's that's that's in the book. It's by somebody by the name of Peggy Lee. It's all the way back to the sixties. And she's got this song called, is that all there is? And so for a finance person, if you're listening to this and you want something to work with on Monday, it's that question, is that all there is?
Michael Nagel:You get the numbers back. You get the numbers back and you have to tell the story around kind of what is driving those numbers. Let's say it's a sales story. Revenues are down 8%. Why why is that?
Michael Nagel:And typically, what we would do as a finance person is we would look at that, we would understand the gap that exists there, and we would begin to think about what the initiatives are, what the talent needs are, what the resourcing is. Maybe we've had a number of senior salespeople leave, that explains the 8%. So the fix, the in initiative, is we're gonna bring staffing levels back up to back up to where they need to be in our in our in our our org. What asking this question does is it takes you beyond that common way of understanding the numbers. It gives you...
Michael Nagel:And you could actually hold up the the BIQ framework and look at those five forces. And you can begin to ask, are any of these affecting performance? How many many how many levels does a salesperson need to go through before a sale is actually confirmed and contracted? It needs to go through four and it takes thirty days. That's structure.
Michael Nagel:Can we get it down to can we get it down to a week? And can we get it down to one person doing the approval? That's structure. Right? And so by holding up that framework, it allows you to go deeper in terms of understanding what's really going on in the organization and what may be behind that number.
Michael Nagel:So is that all there is? Helps you be able to ask the question, what's really shaping these numbers? And what else is going on beneath that? So that's the thing people can do on Monday morning. Ask that question.
Michael Nagel:Is that all there is? And then you can use that framework as a way to kind of prompt further deeper thinking.
Adam Larson:Well, Mike, this has been an amazing conversation. I encourage everybody to go online and pick up a copy of Flourishing Together. It's a wonderful book. I really enjoyed it and I appreciate you sharing your expertise with us. Check out the links in the show notes.
Adam Larson:And if there's a if there's a place that people wanna go to kinda continue this conversation, where can they connect with you, Mike?
Michael Nagel:No. I... Okay. I appreciate that that I'm in the shot out of the book. So it really depends on what people are curious about.
Michael Nagel:So if you wanna know what's shaping your team's performance or you wanna shape... Know what's shaping your organization's performance, I have an assessment. It's called the BIQ readiness assessment. You can take that. It'll give you a feedback on kinda what's happening there using the BIQ framework.
Michael Nagel:Maybe you just wanna go deeper into the research. Maybe you wanna understand these five causal forces. That's what the book is for. The book goes deep into each of those five causal forces and how to begin to use those. Or maybe you wanna have a conversation maybe coming off of this call or maybe you read something in the book, or you wanna bring this idea into your organization.
Michael Nagel:You can set up a conversation with us, and you can do that on our website. So our website is collectivebreakthroughs.com. Any of those paths work, And so you can find that again at that website. So
Adam Larson:Awesome. Well, thanks again for coming on, Mike.
Michael Nagel:Yep. Alright. Thank you, Adam. Yep. Good to, good to dig into this with you.
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