Israel Beck: Culture as a Lever of Organizational Transformation

Israel Beck is Founder and CEO of Cratic AI and an advocate for the power of culture to transform the success, productivity and profit of the business.

See below for episode links, timestamps, contact info and transcript:

EPISODE LINKS:
CraticAI Website: https://cratic.ai
Israel’s LinkedIn: https://www.linkedin.com/in/ipeck/

CONTACT NATHANIEL:
Feedback – https://forms.office.com/r/mAHmTU1eeP

PODCAST LINKS:
Apple Podcasts: https://podcasts.apple.com/us/podcast…
Spotify: https://open.spotify.com/show/5K5jj9n…
YouTube Playlist: https://youtube.com/playlist?list=PLvi4c35PeqnmiuDt4tycVE9FUnXLMt5IG&si=6QWqDuR9tpYJhARv

SOCIAL LINKS:
LinkedIn (Nathaniel Leies): https://linkedin.com/in/nathanielleies
LinkedIn (Predictum Inc.): https://linkedin.com/company/predictum
LinkedIn (CoBaseKRM): https://linkedin.com/company/cobasekrm

(2:24) A conversation that changed Israel’s life

Nathaniel Leies:

So Israel, I’m very happy to have you on the show. Thank you so much for being here. I want to ask you just a very preliminary question because you’ve had conversations with so many people throughout your career. I’d like to turn it back to you. What for you is a conversation that changed your life?

Israel Beck: 

Okay, starting off with a simple one. Well, I’ve had several I’d say that immediately come to mind. Most of them have always been with bosses. I’m a guy that grew up on a ranch. I grew up working as a kid. And so, my life is intertwined with my work a lot.

The one that comes to mind quickly for me, it was actually a mentee that I worked with. I’ve had the privilege of working with some amazing bosses and from all of them trying to figure out how to be a good boss. And I have had that opportunity with a few people that I’ve worked with. And I had this young guy that I worked with who was…. he was like a second or third year out of university. And he was one of my clients. He was actually at a client site and he was assigned to me to be a, we called him a scribe. So I was going in and interviewing all these people around the organization. had to interview like 80 of the managers and directors and VPs and EVPs. I just like went up the whole hierarchy and he came in to be a scribe with me and that meant he was supposed to just take notes so I could focus on the interview.

And back then we didn’t have like AI interpreting everything. Plus we couldn’t have used it because it was kind of sensitive interviews that we were doing. And it was so sensitive that it turned out being this interesting dynamic because all of a sudden this really junior guy at their company was getting exposure to all of these kind of important conversations that were happening at leadership levels.

And he was so junior that he was starting to get like overwhelmed a little bit. And so what was interesting is I started coaching him about how I wanted him to act in these meetings. And one of the things was that, you know, sometimes like the leaders would make jokes, or they would like interact with him. And I started coaching him that I said, you know, I really want you to play down your role as much as possible. I want you to try to be as like, you know, quiet as you can, and just really try to watch what’s happening in the room.

And he was like, okay, that sounds good. Like, I’ll take the notes. And what was fascinating, the way that relationship went was that finally I started realizing this guy was picking up a lot of signals about what was happening in the room. And so we started, after the first couple of interviews, I started turning to him and saying, like, what did you notice about that interview? And before I would even tell him any of my opinions, I would ask him, like, what did you think was going on? Like, what did you observe?

And he and I then ended up working together for probably a year and a half after that. So we continued to kind of develop this relationship and work together for a long time and still someone that I really respect. And he and I started talking about like, how do we talk to each other in order to get on the same page as quickly as possible? How do we pick up sort of subconscious signals from each other?

And I have to say that relationship over that year and a half really led me down the road to where I am now because I started realizing all the different ways that people actually communicate information, whether they say it with words, whether they say it with the emotions behind the words, whether they say it with their intonations, whether they say it with their body language and their movements. And we would literally have like sometimes a 15 or 20 minute conversation about the body language of the person that we have been, I had been interviewing.

And so we’d say like, do you remember this part where you asked him this question and he moved this position and like crossed his arms, then uncrossed his arms. And I don’t try to like interpret too much from like someone crossing their arms, like maybe crossing your arms doesn’t mean anything. But we tried to study people’s movement and their, their tone and their emotions. And like mostly to try to become very empathetic with the people that we were talking to, to understand like, what did they really need?

And besides just the answers that we were getting on paper, what was going on in the room? And I would say that that took me to the next level in my life because before that I had really just focused on, you know, I finished my master’s degree in finance. Before that I did an undergrad degree in psychology. So I was thinking about like the different psychological frameworks that people are operating off of. And I was thinking about business from a, from a finance standpoint.

But all of a sudden I started seeing that there were so many different layers to what was happening in human interactions. And that led to a number of frameworks that he and I started developing. We spent hours on the whiteboard talking about how to create really clear communication patterns with people, how to really ask, really specific questions and get really detailed on those. I really loved it. I just have to say like it was one of the most interesting working relationships I’ve ever had. And fascinating to me that he was such a junior guy and like started picking up, know, and created an enormous value for me and I still think about it to this day.

Nathaniel Leies:

What was it about the relationship that you had that in your eyes allowed you to have that trust and develop what you just detailed for me?

Israel Beck:

Well, so it’s fascinating because like originally I had four scribes because I was doing so many interviews. They gave me four different scribes. They were all juniors, first or second years. And I think most of them were engineers, although he was not an engineer.

And you’re asking, guess, like what happened in that relationship that allowed us to get to that level. It’s strange. We both had a, yeah, we had a really, somehow we developed trust that just kept going deeper and deeper. And I started realizing that too, that like relationships could keep going deeper and deeper. I mean, in that way, I mean, obviously I’m like, it’s a very professional relationship. weren’t like drinking buddies or anything like that. It was mostly all happened inside, you know, our office conversations.

But I somehow I found that like he was interested in my technical skills and I was an outsider. I was a strategy consultant. I’d done lots of transformation work. So he listened to me. He was really trusting of my experience and knowledge. And then I found in him someone who was very curious, trying to develop in his own career, trying to really answer some of the same questions. And he’s told me after the fact.

He wasn’t sure where his career was even going until he started the scribe role with me. And then all of a sudden, once we started trying to dig deeper and that became like kind of the principle of our relationship was like, how do we create more trust between ourselves so that we can quickly create trust with the people we were interviewing? And to add onto that story, originally I went around and just interviewed these like 80 people in the business and we put together a perspective on where the business needed to develop change.

And it was like, there was all these priorities and like these things that needed to change. That, that young guy ended up being kind of one of my right-hand guys when we rolled out the program, which then lasted, like I said, over a year. And during that program, we would continue to go around and interview those same leaders and ask them about the progress of, of the program. And so it ended up being a technique for us to be as transparent and honest and authentic as we could and to build trust that just kind of went deeper and deeper and deeper. And like, how can we be as trustworthy as possible with every single one of these stakeholders?

And that became literally an obsession that we joined in on together. was like, how do we become the nucleus of trust that people know when we go into these. One of the things we did was we would collect all the data from all these interviews. We would anonymize all of it. And then we’d organize it into helpful reports and send it back out to all of them. So, you know, they would see their own words like in these reports, but it would be anonymous. It would just say like, you know, we got this from this level of the organization or we got it from this department. We were careful to make sure it was anonymous. The whole point was to try to accelerate trust in the organization and doing that through our own dialogue as a starting point.

But yeah, I don’t know if that answers the question, but that’s what comes to mind.

(11:58) What companies get wrong about culture

Nathaniel Leies:

What in your words is the thing that companies get wrong about culture?

Israel Beck:

Well, so culture’s a new thing. It’s relatively new. I didn’t really learn about it much when I was in grad school, and I finished grad school in 2011. So what is that, 14 years ago? There was no culture class. There was a leadership class, which I would say is getting close to culture, but I think it’s a new discipline. And so to say people are getting it wrong is hard because I think a lot of people are trying, which I’m glad to see, but I think the next evolution is coming, which is where we’re actually able to see it as an economic driver of value in a business.

That has not happened, in my opinion. I have talked to a few people who are really on the cutting edge, who have ran these programs and seen value, but oftentimes it can be very cumbersome and annoying and cringy and unmeasured and like un-healthy in some other ways. One of the examples I’ll give is that culture surveys, I want to kill culture surveys completely. I want to wipe them off the face of earth. But partly because I think that they’re actually damaging the cultures.

And they’re part of a really archaic model, which is, you you run an annual survey, from the annual survey, you collect some priorities of those priorities, you segment them and choose low hanging fruit and then you put programs in place, you move those programs forward for eight or 12 months, and then you run the survey again. And so that’s a process. That’s a culture transformation process. That’s probably right now the mainstream one. There’s pieces of it, like they have something called exemplars and pride builders and like different roles that people play in that overall process. I’m Canadian, so I’m in Canada, so I say process sometimes. There’s different roles there, but by and large, that is the process.

Collect some data, choose some programs, execute those programs, and then rerun the survey again to see if it worked. I have lots of problems with that process, but what I’ve done is basically tried to figure out a way to use the same elements and speed it up and try to fix it by creating a more simple process that’s a lot faster and works a lot better. So I think what companies are getting wrong…

I’ll say it in two levels. There’s the process level that I just described, which is unfortunately too long, very uncomfortable. The surveys are bad because they raise tons of problems. They ask lots of questions that I don’t think are appropriate questions like, you know, how good are we doing in aligning ourselves to our mission? And most people sit there and go, well, I’ll give us a five out of 10, or I’ll give us a four out of 10, or give us a seven out of 10.

But the overall psychological experience of the employee is they’re sitting there thinking, and trying to do this weighing in their heads to try to decide like how good are we doing? That’s not really productive to me because you’re trying to collect the data from the employees, you’re ignoring the fact that the employee is having an experience just sitting there answering that survey. And I was a part of collecting a lot of the survey data in my former job. So I ended up having lots of conversations with employees after the fact and discovered that it was a bad experience for most employees.

Let’s say there’s a lot of disagreement about what the right approach is. That’s part of the reason I think of it as a new part of the business, is there’s still so much disagreement about how it should be done. Most of the other functions of the business, finance, IT, HR, they all have standard processes and ways of doing things. That methodology I just described is by and large the accepted methodology.

If you step back and look at it, but I think a lot of people are caught up in the day to day and just kind of doing the steps and like, oh, we should do a culture survey. When was the last time we did one? Well, it’s probably time to do another one.

And they’re operating off of a kind of like hypothetical philosophy of like how we think it should be done as opposed to a very scientific approach that says no this is actually exactly what we do and this is exactly how it works and this is exactly the outcomes we expect and so I the sad part I’ll say right now is that I think culture is a seen mostly as a nice to have and that’s how that’s part of the reason I’m so interested in it because in my experience it can be a complete game changer it can totally put the fuel into a transformation program, can, I mean, according to the numbers, know, high performing cultures are three times more profitable than low performing cultures.

Then it comes down to the question of how do you define high performing and low performing, and then it comes down to the question of how you go from low performing to high performing. If you can answer those two questions, all of a sudden, it’s not a nice to have anymore, it’s a business imperative.

(16:49) Culture eats strategy for breakfast

Nathaniel Leies:

We can also contrast it with a statement that you’ve made many times in the past, which is that a strategy will be eaten by culture. If culture is not there, or I think the phrase actually is culture eats strategy for breakfast. If the culture cannot accept a new strategy or a pivot, there’s absolutely no way it’s going to go through.

Israel Beck:

Well, we already know that I think the numbers like 73 or 70 some percent of integrations don’t achieve the target benefits. And if you ask people around the room, they’ll explain how every single one of the initiatives fell down or broke down. And then if you ask them why, they will always say culture.

So why isn’t there an answer to that? It’s okay. So why didn’t we fix the culture? Because there’s no set methodology to do it. I came from a PE background with the kind of work I used to do. We used to call private equity lens assessments. And my bosses, several of my former bosses are working in private equity and they’ve told me, I mean, I’ve had this conversation with them, like, why is culture not a lever for change?

Process rebuilding, automation, cost cutting, headcount reduction, re-organizing. These are the main levers. If you want to go cut costs in a business and make it more efficient, those are what you do. Everybody that works in this space already knows that. But why is not culture? We know that culture is the reason that those things won’t work. As the saying goes, culture eats strategy for breakfast.

In bad situation where the culture is really bad. And I can measure that now and say, yeah, this is a culture where your strategy is not going to work. Why? Because we can tell. You don’t have the buy-in from your workforce. They won’t do it. And what are you going to do? Fire everybody? I had a boss tell me one time, he was like, you have to, I asked him, how long does it take to change? Well, I asked him why we were going down this line of questioning, like why is culture not a lever of change? And he said, well, it takes usually five to seven years.

And I was like, why does it take five to seven years? And he goes, well, actually that’s only if you have the right leadership team. So normally you have to fire the leaders first and then get the right leaders in and then they can change the culture. And then it’ll take five to seven years. Now we’re talking about pretty large companies. You can do this in a 20 or 30, 40 person organization pretty quickly. But we’re talking about companies with five to seven layers of organizational hierarchy. We’re talking about companies with 50,000 employees or more.

You can’t just change that culture on a dime. It’s incredibly difficult to do. That’s why it takes a special technique. And I think it takes software and it takes a specific scientific approach that you can prove in a few steps to starting to work. And then you can eat the whole company and spit it back out with a new culture.

(19:32) Cratic’s origins

Nathaniel Leies:

You’ve been working in strategy and consulting for some time. 2016, something changed for you. Take me back to that moment when you knew Craddock AI had to exist.

Israel Beck:

Okay. Yeah, okay, this is a vulnerable question, but I’m gonna talk about it. Okay, because it came to me in a sort of almost spiritual sense. You know, I’ve been thinking a lot, I’ve been studying a lot, I’ve been interviewing a lot, as you said, I had sold several large projects that were huge, out of my tech, you know, from my background, it would have been out of my reach.

To this day I think are still some of the biggest projects I’ve worked on were projects I sold because of this technique. You described that I was trying to understand people’s values and motives, but I would almost say that the more core thing is I was trying to understand how do you unlock people’s interests in a way that connect to the business. Right, like how do you unlock someone’s interests in a way that connect to the business interests?

And I had a couple of big leaps in my real in my own logic where I realized that companies are not at odds with humans and humans are not at odds with companies. Humans and companies are meant to work together. I started realizing that companies are an evolutionary product of the planet. They’re designed as organisms, they’re meant to live and they require humans to operate them and sustain them and support them.

But I was really, so it’s interesting because I was working with this guy that I mentioned at the beginning of the podcast and we were going down this road of really trying to build trust. And at one point I started, so I believe, you know, we mentioned culture eats strategy for breakfast. I have another spin on that phrase, which is the great culture serves strategy for breakfast.

So I started working on this technique, this trust building thing. I did not call it culture, okay? Back then, I only knew culture teams as people that provided birthday cakes and thank you cards. I didn’t see them as like a key part of a business operations. I was a finance guy. We cut culture teams. Innovation teams and culture teams are the first head count that you take out of a business when you’re trying to drive quick.

Like P.E. Lens value because they don’t have a metric. Every other part of the business is tied to a metric and a deliverable. And when we get that deliverable, we know that they’re creating value for the business. But number of birthday cakes does not have any clear scientific alignment to the value of the business. Number of ping pong tables, you can’t scale that, which is different from every other function. Like think about marketing, number of leads.

More leads, more businesses, think about sales function, more closed contracts, more business, think about operations, like more invoices, more change orders, more revenue. Every one of these has like a really pragmatic piece to it. What about culture? And so I wasn’t thinking about it as culture. I was thinking about it purely as like, how do we get deeper into helping people unlock their passion and align it to the value of the business?

And then I, as I say, it’s sort of strategy for breakfast, serve strategy. I started having clients show up to me, walking up and saying, Hey, I have this problem. I was already running. was personally running about a $5 million program as a pretty junior person, but I had direct relationships with all these senior people. I started having clients come up to me and with questions. And I was like, well, that, you know, I think we know how we can fix that. And I would like, do you want a statement of work? And they’d say, sure.

I sold two more multimillion dollar projects while I was running this big one and this all happened within six months. So I had been really already dialing into this technique and then started seeing strategies show up to me like people wanting to do things. It wasn’t me forcing anything on anybody. I’ve been asking the questions, trying to get on the same page, trying to make sure we were clear. Similar, mean, the technique is not that different than what you’re doing with me, right? That’s why I know this conversation is creating value. Like you talking to me this way is creating value.

I’m not totally sure what the value is, but I know it’s creating value. I know value’s gonna come out of it for both of us because this is what I saw happen over and over. And then once a check started showing up and a contract started landing on my desk, it was like it’s undeniable this is creating value.

So that’s what mean by the strategies, the culture can serve strategy for breakfast. And what I’ve seen in good companies is you have leaders coming forward who are like, Hey, wait a second, we should be talking to this client. Hey, we should be pitching to this. Why don’t we put this together yet? You know, we should do this offsite for these guys. should do all of sudden the ideas start flowing out.

And if you’re the kind of leader who’s like, ready for that, it can be an amazing experience. And then all of a sudden, once you put the pieces together and go, wait a minute, we’re making money at this, then it becomes so cool. You’re just like, wait a second. Like I’ve been thinking about business all wrong. Like I’ve been doing it like a school assignment, but that’s not what it is. You know, it’s actually a living thing. then when I, I, and I call it sometimes like put it turning on the turbo is like getting the company to breathe.

Getting it to say words, what does a turbo do? It puts oxygen, forces it into the fuel so that you get greater combustion. I’m doing the same thing when I’m asking people questions and getting their ideas out and getting the words out. Like they are breathing into the spirit of the business and you can feel those cylinders start firing and like once the light bulb comes on for you as a leader and you’ve seen that and I know other leaders who’ve done this, like I’m not alone, it’s an awesome thing and you can’t wait to do more of it. But I realized that there was no product.

There was no product that was doing that. There was no software product. There was no way to accelerate this. wasn’t culture surveys. I was like, this is not the right thing. It’s a different type of closed loop process that we are driving where we’re getting people to think, we’re pulling those ideas out, we’re taking a break and then we’re going back and we’re doing it again. And we’re taking a break and then we’re going back and we’re doing it again. And every time from a foundational belief that we are creating trust and getting ideas on the table, getting them out of people’s minds and getting those ideas to grow.

As a group, getting them to blossom and getting them to take on an organic growth of their own so that all of a sudden it becomes like wildfire and like that guy gets excited about it and then that guy and that guy and they all start pouring their pieces into the same idea and then you see the idea start to explode and then all of sudden like a biggest sale ever lands in your lap.

And I’ve seen that happen with my clients. So I’m like, this friggin’ works. Like, why is it so confusing? But it is confusing. It seems like it is confusing. Like, you have to have the humility that you’re displaying right now to sit and ask these questions. It takes a lot of humility. It’s a practice once you learn it and see how it works. It doesn’t feel like humility anymore. It feels like awesome. But it takes getting over that hurdle. And then there’s a few other hurdles. But then once you get there and you see it start to unlock something,

You’ll be so addicted, you’ll be wanting to do it forever.

(26:35) Was AI in the original Cratic product?

Nathaniel Leies:

When you first started doing this around 2016, did AI feature into what you were trying to do or was that something that developed organically as you went along?

Israel Beck:

Okay, another, yeah, there’s another story there. I, so at the time I was still working. if I, do you want me to talk about where we were at, where I was at in that, that space and time, right?

Nathaniel Leies:

Absolutely, please.

Israel Beck:

So I was running this program. I’d had a few huge sales land in my lap. I was starting to see that things were moving. I was starting to go, wait a minute, like, this is something bigger. I originally pitched this idea of making a software product to one of our clients and they loved it.

For some reason, I took a trip out to San Francisco. I had been working on a different startup with some other guys and we went out to talk to some investors in San Francisco. And at the time I was working in Calgary in Alberta. And so I flew down to San Francisco for like a week to meet with a few investors and talk about this other project that we’ve been doing. And this would have been 2015.

So all these ideas were going on in the back of my head and while I was there, one of my old classmates from Notre Dame said, hey, you know, this guy is in town. I’d like to take you out to get drinks with him. His name is Ryan. He’s like, I want you to go out and meet Ryan. And my friend is like a super connector. He just knows all these different people. So he’s like, I think you two should meet. He’s running a startup in Canada and you’re also working in Canada and you’re running a startup. So he saw the pieces. So he put us together.

We go out to get drinks. I think we’re in Dogtown, Dogpatch, forget the name of the place. It’s like south part of San Francisco.

So we’re sitting at the bar. He asks me a bunch of questions about my startup. I explain it to him. I’m all excited. It’s this idea that I now hate, you know, years later. But at the time I was all excited about it. And he goes, oh, this great. And so I was like, okay, like tell me what you’re doing. And basically he started explaining to me what is now chat GPT.

But it was in 2015, way before that technology was known or broadly known by anybody. And it was amazing, like he said something, because he was saying, I’m basically working on AI. And at that point, there had been this idea of AI, but it hadn’t really taken off. Around that same time, Mark Zuckerberg and Elon Musk had a series of articles that had come out about both of them debating AI.

And there was a lot of argument about what AI actually is, what the definition is. There’s something I call Zuckerbergian AI. I’m not, we can go into it if you want later, Muskian AI, different philosophies about what AI actually is and what it means to the world. But because of the difference in their points of view, I think a lot of people became very distrusting of AI and what it was. I think the distrust started, you know, it’s been going on for quite a while, but it really kind of picked up around that time. So this guy started explaining to me what he was doing.

And he explained that it had to do with text, with language, and with a layer inside of language that was allowing them to follow logic through word patterns and sentence structure and conjugations and all these different patterns that most of us just read, we don’t even think about. But he said for computers, with machine learning, there’s something called emergence, which is this idea that these macro like meta patterns have started appearing in data that before we just thought was benign data. Now all of a sudden we’re seeing that there’s these massive sub patterns taking place. And he said a statement at the time that stuck with me, which was that AI isn’t here to give you what you want. It’s here to give you what you didn’t know that you need.

And by the end of that conversation with him, we went out drinking all night. It was like three in the morning or four by the time we ended. And I spent the whole time asking him about his technology and just, won’t out him on this podcast, but I’ll explain like what the technology did. It never ended up hitting mainstream, because it got, bought by the government. It’s a, it’s a deep search technique that goes deep, like way deeper than Google crawlers.

Nathaniel Leies:

That’s incredible.

Israel Beck:

Um, and he says that their search returns would take sometimes three or four weeks. So if you can imagine creating a search query, hitting send and waiting for four weeks for it to come back. Because Google only searches like one, 2 % of the internet and their crawlers can search like 80%. So they were getting behind closed doors. They were doing all kinds of stuff.

Nathaniel Leies:

Wow.

Not necessarily every website will be available on the worldwide web. You might have intranets, might have areas where people are. I mean, think that’s sort of the idea behind the dark web that you have servers or places that in theory are connected, but you need to be able to get granted access to that area. So a company who has their own internal intranet might be one example of connected computing, but only certain people can be there. So yeah, no, I just haven’t thought about that for a while, but that’s, that’s fairly interesting. Three to four weeks, huh?

Israel Beck:

Yeah, and he said they were getting returns like they were finding weapons technology that had been previously undiscovered by the government. So they ran this a few times, found some things, took it to the Department of Defense, Department of Defense, them.

Nathaniel Leies:

That’s quite a story. And here you are, San Francisco, early in the morning, just you starting to get the, if I may say, inspiration or inklings of how you can transform your idea, your friend sharing these things, which are just frankly mind blowing.

(26:35) Evangelizing an AI product in 2016

Nathaniel Leies:

I’m curious to know when you first started publicly sharing that your product used AI, when you first started actually making that a proposition of your product, what were some of the reactions that you got? Did people find it interesting right away? Was there skepticism? I’m really curious to know, pitching AI at that time, what was the read in the room?

Israel Beck:

Yeah, so during those conversations, I didn’t connect the dots. It took, I still think like three to six months later before I realized that I wanted to bring these two ideas together, culture and AI. I thought the culture thing had unlimited potential and I thought this is something I could spend a lot of time on. And I thought somehow I believe AI is the answer.

And I believed it was based on AI that didn’t even fully exist at the time. At that time, there wasn’t that much, you know, in terms of APIs you could just tap into and start doing language analysis or transformation, language transformation work or whatever. There wasn’t that much out there. IBM Watson was the main toolkit that I started playing around with back then. And now I forgot what the question was.

Nathaniel Leies:

Oh, was quite, um, you know, let’s chat. GBT really took the world by storm around 2022. So you’re talking about a product which–

Israel Beck:

— You mean like how was it received?

(33:33) – “AI is a lie”

Nathaniel Leies:

Like you’re actually pitching an AI product years before anybody. I mean, some people cared about AI, but a lot of other people just say, well, there’s Watson and I guess they’re working on that. Like think about how little people knew or cared about at that time. If you weren’t in those circles. How did you, how did you sell that to people or how did you interest people in it?

Israel Beck:

I don’t think I really did interest people. The main response I got from people was AI is a lie. That was the quote back then. That’s what all the venture investors that I talked to said. They’re like AI is a lie. And I came to find out that most of the venture community had been ripped off by an AI startup at some point. They continue to be ripped off. It’s not the fault of the founders or the innovators. I think it can be the fault of greedy people who think there’s a quick buck to be made.

But AI is a lie was the term I heard a lot. And, then when I started going to clients and explaining it, just, it still kind of goes over people’s head. Like now when I explain AI, they just assume I mean chat GPT. I actually think of AI as like a capital A lowercase I, like it’s a whole family of technology that’s coming out. I think it’s a new, new, entirely new universe of technology that’s going to hit us in the same fashion that, you know, in terms of different eras of technology coming out, like… I think it was the television, the radio and the refrigerator all came out near each other. In terms of they’re just like electronics, like as soon as electricity became available, like all of sudden all these weird types of technologies showed up that don’t even directly, they’re not totally directly related, like a TV and a refrigerator, like don’t seem that well associated from like from a you standpoint, they’re very different.

But I think AI is in the exact same place. I don’t think we’ve seen it yet. Actually I think the real AIs that are going to change the whole world are just starting to show up and I think those are gonna be the future refrigerators that all of a sudden make our food last way longer than we ever thought at a fraction of the price the future TVs that become you know 80 % of the entertainment for most people’s lives those types of massive life-transforming technologies I think are just starting to happen

With my AI, I have a hard time explaining it to people because it is a very transformational thing. Even when people experience it, they sometimes are like, what is happening? Like, this is really strange because it’s operating on a subconscious level in many cases. Once we see the results from the metrics, it’s like pretty undeniable that it’s doing what it says it’s doing, but it’s happening in a way that’s subtle to people, know, subtle in the moments that they’re doing it, but actually transformative over the course of two or three or four weeks. And so once you see those then it starts to be like, wow, like this is actually doing something. And then once you do it for six months, it’s pretty, pretty insane. But I would say that that’s just one class of a type of AI, this family of new technologies that’s coming out.

(36:30) – How Cratic Works

Nathaniel Leies:

You’ve explained in other places exactly what Cratic AI does, how your platform works. I would like to maybe just give you an opportunity, since you’ve shared this before, maybe hit the highlights of for somebody who’s never heard of Craddock before. What is it? What does it do? What value do they get from it?

Israel Beck:

I’ll explain it two different ways. I’ll explain it as the business solution and then I’ll also explain it from a more nerdy technical standpoint. So from a business standpoint, it’s a culture transformation tool. So it shifts the emotional well-being of an organization, helps employees like each other, communicate better, solve problems faster. We measure all that. It also shifts personality types and exposes and expands different personality traits. So there’s particular personality traits we know are more valuable for the workforce. Conscientiousness is one of them.

Conscientiousness is very valuable. People saying what they mean and doing what they say is very valuable as opposed to certain other traits like extraversion, which is people just being really, really friendly. A lot of companies think extraversion is culture, but it’s just a personality trait. So once you, so we have a way of, of choosing personality traits that you want to pull out and then pulling them out. And then as you do that, happens on a system level. It’s very foundational. So all of a sudden you start to notice conversations are going better. Relationships are a little bit better.

All of sudden sales conversations go a little bit better. Big opportunities start to show up. Great things start to happen. And that’s what we all know happens in a great culture, right? It’s like, if we’ve ever been a part of a team like that, it’s like, lots of good things kind of pop on our show up in our way, as opposed to a bad culture where it’s like, Hey, we’re all just showing up, punching the clock, getting our basics done, moving on behind closed doors. We’re complaining about the boss and everything else. And we’re all sort of looking at career jobs.

Nathaniel Leies:

The way that you do it is so I would say really genius. You’ve created a place where people can answer questions. The questions that they answer are, you know, helping them to learn about themselves. They have a space in which to do it. So if, as I remember, you facilitate huddles with small groups, people get to answer questions that invite them to be open, to maybe be a little vulnerable.

And then as they answer the questions, again, they get the feedback on what their response was. They also are getting to see the responses of other people. So what I personally witnessed is like, you have that mix of, okay, we have a system of meetings and times when people can respond that doesn’t take a lot of time out of people’s day-to-day work, their day-to-day routines. but you’re also giving them a chance to interface with others and you’re giving them a way to actually grow over time.

And as they continue to answer questions, as they continue to participate, they are seeing changes in, I think the main metric that you used in using was the eNPS, the net promoter score, but the employee net promoter score. All of this was done through, is it a web-based platform that people are answering questions and participating together? Or how exactly are you facilitating that conversation?

Israel Beck:

Yeah, so that what you’re describing there is what I call the user layer of the experience. And so yeah, that’s all done through a web app and a mobile app. And it sits on top of a system service that sets it up and runs these little programs for the teams. And then just like you said, they get emails. It’s like, here’s questions that you need to answer.

Then the cool kind of nerdy part in the background is that we’re analyzing their language, picking up on the different emotions and personality trends, and also picking up on the language usage. And we’re finding mathematical gaps in their knowledge, and we’re targeting those gaps by asking follow-up questions. And so each week to them, they’re just getting a question that they answer, a few questions that they’re answering, and then going into a little huddle, which is basically we’re trying to sort of undo the social media damage of people talking behind closed doors and never actually talking to each other.

And so we forced these interactions. They are not that forced. set it up. We teach the team how to do it. And it becomes just like a 30 minute, 45 minute check-in that they do once a week, 18 weeks out of the year. And so that’s the basic user experience. so it can take over the course of the year. It is taking between nine and 14 hours, depending on how long they want to spend in those huddles. We recommend at least 30 minutes. So that’s nine hours a year, which is, you know, like a one day off site, basically. So I’m not, I’m not the guy that’s saying, Oh, you need to totally rewire every single business meeting and every single process to be culture sensitive? No, I don’t think of it like that. I think those processes are all in place for a good reason. I think they probably all work once people are engaged and feel that they can talk about it. And so our tool is basically a little ride along that you set up with the rest of the organization and they just set it up, run these little quick sprints. The users get a lot of cool feedback. They win stuff and get badges and get all kinds of feedback, but they also get anonymous access to each other’s information. So they can see like, do they, how do they compare to the rest of the team? They get to see answers from other people to these kind of weird thought provoking introspective questions. Questions are designed to be very different from like a engagement survey. They’re designed very different. They’re meant to be talking points and they ask usually about the gaps in people’s knowledge. Like I was saying.

(41:52) Understanding users v. solving problems

Nathaniel Leies:

You’ve said before that great products deeply understand the psychology of the user. And so you’ve studied psychology. You’ve also shown throughout your career, a great affinity for well-designed systems and being pragmatic. So what do you think is the more important consideration? Solving a problem? Or understanding the user?

Israel Beck:

That’s like that question, like what’s more important the journey of the destination, right? And the answer of course is the company. I think both so closely related that you end up toggling back and forth between them. I mean, I think ultimately all of the psychological frameworks, all the research and reading that I’ve done has been about self discovery.

I want to become a better person. I want to grow. I want to evolve constantly. I want to see what’s next. I used to really think, you know, that like living fast and hard and dying young was the, was like the way to live. Like I want to be a rock star and then totally burn out by the time I’m 25. Now I’m thinking about it very differently. I’m 40. I, I, I hope to live to be over a hundred. And the reason for that is because I’m seeing the technology that’s coming out and I’m just like, things are getting really interesting. I want to be around for it.

(43:14) Asking personal questions

Nathaniel Leies:

You’ve said you ask in interviews with people that you talk to every question that you can think of. This translates to your Cratic platform where the software also asks literally every question it can think of. You ask every question you think of, even the really personal ones. Why do you go into that personal realm?

Israel Beck:

Yeah, let me back up and save myself a little embarrassment on this, because I don’t think I ask every single person every single question. I would say that over the course of my career, I have asked every single question I could think of to every single person that will answer them. But I’ve had to get more strategic over time. And so my tool is quite strategic, I think, in the solutions and the questions that we ask. People just don’t have forever to talk on certain topics. And as you know, because we both have that insatiable curiosity, you can go for quite a while.

I do like to get personal. don’t really know why. I think I do know why actually. I found that people’s natural emotions are leading them somewhere. And now I believe that they’re usually good. If you’re able to get to the core of it, I think people a lot of times hide from themselves and from everyone else their true intentions. I don’t know why.

But I think a lot of those true intentions are actually totally reasonable and good, or at least worth exploration. so, one of my favorite questions, I have what I call question chaining, which is where I have an anchor question and then the next question, a follow on and a follow on and a follow on. I call it chain because it just keeps going. And one of the ones I like to do, especially with team members, employees and even consultants that I work with, is I ask them, like, what do you care about here?

What do you care about here? And that, and like, you have, have like, like, I’ll lay out a whole tapestry of like, here’s all the different problems I’m dealing with. What do you care about? And I ask that intentionally, because I think that their instincts are gonna lead us somewhere important. And not only is it gonna lead us to a problem that they think they can solve, but it’ll actually lead them somewhere to a problem that they want to solve. And that’s gonna unlock some intrinsic motivation for them.

(45:26) – Surprising Replies

Nathaniel Leies:

So when you ask, like when you ask somebody out of these, let’s say four or five possibilities, what do you care about most? Do you ever get surprised by the ways that people answer or maybe can you give me an example of how, what would that question look like and how might somebody respond?

Israel Beck:

I’m surprised all the time. Yes, that’s actually part of the reason I probably asked the question originally is because I’m intrigued by the way that their heads go. But I have a lot of things are happening in that question. One of them is I’m diagnosing whether they’re actually paying attention. So there’s an auditing aspect to it. So when I do this with a team member, I say, here’s the five priorities we have, which one are you the most interested in right now? And if they say something way off here, I might ask a couple of follow up questions to see if they actually are going somewhere with it. But if I realized like, they were actually like checked out.

The whole time I was describing the five things. So then I’ll start over and say, okay, here’s the five things that I think we need to focus on. Which one of these do you want to focus on? Now you will find, I think a lot of people’s intrinsic motivation has never been tapped into. And so they get really confused when you do this. It’s never been tapped into.

Nathaniel Leies:

Because now they’re in the driver’s seat and they get to say, okay, you get to lead for a day. What do we focus on? That’s like a little disorienting for some people.

Israel Beck:

Yeah, it can be terribly disorienting. Like they don’t even know what to say, like, and they get confused and, but it’s okay, cause like you do it two or three or four times and pretty soon they start to figure out, I can actually steer this. Okay. And then, I mean, the hard part there is you usually, what I’m finding is that like, when I have five things in front of me, I don’t necessarily know the sequence of those five things. Sometimes I think I do.

But if I want them to do it, I can trust their natural instincts to say, well, I think we need to work on A for a little while, and then I wanna go over to C for a little while, and then back to A, and then to D, and then back to C, and then to B. You know, like, I didn’t think about all those different intersections, but if I ask them enough questions and they explain how it all fits together, so I say, well, why do you wanna do it that way?

What do you think is the ultimate outcome? What’s the next step you’re gonna take? Who else needs to be involved? What are gonna be the checkpoints along the way? And if they can answer all those things, I’m trusting them. They can articulate all that. I think articulation is a super important thing. It’s the first step to accomplishing something. If you can’t articulate it, how are you gonna do it? And so I require people to articulate what they think and how they expect things to happen and where they want it to end up. And if they can articulate it, then my experience has been that very often it happens.

(47:46) – “How does your family feel about your job?”

Nathaniel Leies:

Israel, you ask some other questions too that sometimes maybe are questions people don’t expect to get asked. When you want to learn from somebody and you ask them, how does your family feel about your job, what are some of the reactions you get?

Israel Beck:

Again, it’s like a diagnostic question, because some people will just immediately start spouting off how much they love their family. Some people will say, you know, I don’t feel comfortable talking about that.

Some people and of course like I want to be very sensitive to where they’re at So I’m trying to be comfortable like hey if I sense a boundary I might test the boundary once to say is that actually the boundary or did I misunderstand? But if I get a boundary twice, I’m like, okay, this is they don’t want to talk about this And so that’s fine because it doesn’t that’s not because partly what I’m trying to do is figure out where their motivation comes from Where are they actually?

Where does their interest come from? Because I think it’s organic and I think it fits into my view of whatever’s gonna happen. And I care about the future and in the future, all these organisms are growing together if you allow them and encourage them. It’s like a garden in that kind of way. And so if you think about ideas in the growth mindset and you think about people in the growth mindset, it all sort of starts to reinforce itself. So yeah, I don’t remember exactly what the question was, but that’s where I’m ending up with it.

Nathaniel Leies:

No, you would, it’s one of the diagnostic questions was how does your family feel about your job? And what really struck me about that question is that can require that high level of trust and vulnerability because depending on the person and how long they’ve been at their job and, frankly, just how happy they are. Everybody’s spouse, I would say knows their frustrations with where they’re working. Everybody’s let’s say maybe children or close immediate family know when one of their family members is not happy or struggling or something isn’t clicking in their personal life.

So that question, when you asked, how does, how does your family feel about your job is so deceptively simple. It’s really anything but that it really can open up such a wide variety of answers. I was just curious. mean, I guess my question is, do you get that level of vulnerable answers?

And maybe, sorry, I’m rambling a little bit —

Israel Beck:

Well, this is really curious to hear why this question stands out to you, actually. I think it’s really interesting, because I’ve actually never had someone dissect the question the way you are. So let’s see where this line of thought is going for you. Like, where’s it going? Cause you’re unpacking something about this question. Does it, is it frustrating to you or is it like, especially out of place in the workplace? You know what I mean?

Nathaniel Leies:

I don’t think it’s out of place. I think that we don’t have spaces for that type of getting to know somebody. The closest thing I could kind of think is like, let’s say in a virtual team, the five minutes or two, three minutes before everybody joins the call, your water cooler talk. And then moments when you get to ask a colleague, how was their weekend? If you get to know a little bit about their life outside of the workplace, you know, did you get to go to see this match over the weekend, did you get to a chance to hang out and to, and to do your meal prep? You know, that’s the sort of outlet for these sorts of personal relationships when you’re actually bringing in a little bit of a deeper element, like trying to understand how somebody feels about the culture through the lens of how does your family feel about your job? That could really give you some very interesting insights. And I don’t think there’s a space for that conversation to happen. I guess I’m just, did you feel the same way or.

Was there another motive for designing that question?

Israel Beck:

Okay, I’m trying to reflect on my motives here. think, yeah, I think it comes back to this idea I have of like people’s lives only having a few main boxes. Your family, your home life, your love life, your intellectual pursuits, your sports pursuits, and your downtime and your work.

Like that’s a huge, that’s like most, that’s pretty encompassing. There’s a term we use in consulting called MISI, mutually exclusive, collectively exhaustive. It’s like, can you make a list of five things and more or less capture everything in those five things? That’s a MISI list. So yeah, mean, family is one of those and family is very complicated too. So I would definitely say that I reserve those kinds of questions for. Mostly one-on-one conversations. I would not break that out in a group setting, although I will admit that that is, we have a group of questions in the tool that relate to family. And those are sometimes the most controversial questions. I have been chewed out by HR people who say these are bringing up things that people do not wanna talk about.

And I think a couple thoughts about that. I don’t want to apologize for them having a conversation that’s a little bit uncomfortable because I think, family is a big part of life in general. So, I mean, we can’t totally avoid the topic. But what I’m trying to get at is this important discussion that I think needs to happen in every organization around whether we’re a family or a team.

I am not comfortable with organizations where they call themselves a family. I’m more comfortable with organizations where they call themselves a team. And so, but I want that conversation to come up a bit organically. Like I want a group of people that are having this conversation around the room to go, what is family? Like, do we call ourselves a family and have someone say, that doesn’t make me feel comfortable because I’ve had hard relationships with my family.

So I don’t come to work because I want a family. I have a family a home or I have a chosen family My workplace is different. I’m looking for something else here Sometimes they do have a family dynamic. I’ve met organizations that have had the same employees for sometimes 20 or 25 years

At that point, yeah, like they are literally a family. Like it is pretty undeniable that they know everything about each other. And it’s funny cause some of those companies don’t really connect with our product. They think it sounds great. And then they start having the conversations. They’re like, we’ve already talked about all this stuff. And I’m like, really? That’s crazy. Like good for you guys. And that’s true. Like there’s not everybody needs a needs a culture transformation tool. And I understand that. Um, but there’s a lot of other, and we’ve actually now just bringing back to the product, we’ve segregated these questions out between easy, medium, and hard.

And so now family questions are always in the medium or hard category because we realize they’re not easy questions for people to talk about. And in fact, there’s so much different drama that comes up that it’s better to be at a place where you understand that we are in a trust building exercise. And that is the point of what we’re doing. And that doesn’t really happen until you get to those harder levels. And then it’s intentional. It’s really intentional.

(55:48) – Being honest in work and in life

Nathaniel Leies:

Is it harder to be open and honest in your opinion in the workplace or in real life?

Israel Beck:

That is a good question. fact, it’s funny because we actually have a question similar to that in the tool that I’ve seen come up a bunch of times. It is definitely harder at work in the sense that you have to develop dynamics with certain people where certain topics are allowed to be discussed. Like when you start at a job, usually you’re just meant to show up and create value and do that in the way that you’re told. It takes time and experiences to build pockets of what I’ll call trust or vulnerability where you can open up more.

Most of us, I think, have matured our personal relationships to the point where we have different relationships we’re able to do that with. Either people that have seen us through university or careers or family or all kinds of life experiences. And work typically doesn’t do that. And so I think there’s a lot of value in finding ways to talk about those things at work. Not necessarily all things. And the biggest thing that I worry about for…leaders that I try to coach into become into embracing this more vulnerable, open idea of leadership is getting stuck in like trauma dumping, where they unlock a box and the employee starts just really like, you know, it turns into a therapy session, you’re trying to not quite go there, mostly because most of us are not qualified to have that type of conversation. And so it does take work to try to find the right dynamic. And so yeah.

I think it’s valuable to go that direction, but there is definitely still a line. And I think a lot of people stay a long ways away from that line when they should actually try to find ways to get a little bit closer, bump up against the line from time to time, and then also be comfortable with the pushback and saying, hey, you know, I understand that I won’t ask. And I’ve had that happen with people who are like, I don’t really want to talk about family. And I go, that’s perfect. Thanks for letting me know.

Ask you about other things and they’re like, yeah, sure, let’s talk about other things. And then I can ask more open and like, what kinds of things would you like to talk about? And it’s not like a bad thing that we’ve had that little experience with each other. If it’s not handled in a bad way.

(57:04) -Being present as a leader

Nathaniel Leies:

Being present as a leader, showing up for others as a leader. What does that mean to you?

Israel Beck:

Well, so first of all, it’s structure. I think as a leader, you have to provide structure. And that means the this is a foundation of every one of our culture programs. We have a four point diagnostic we run where we’re asking like, what is your weekly meeting schedule? Are you giving positive feedback to the team or not? So there’s a few elements of structure that you as a leader have to provide. So it’s like, hey, we need to meet once a week. I need each person to go around and explain what they’re working on. And then I as a leader, I’m going to try to create neutrality.

In that experience so that ideas can start flowing out onto the table. The first thing is structure. The second thing is for sure, being the first to do something. Like as a leader, you’re literally leading and the leader is in front and they do it first. And so, you know, if you ever catch yourself maybe being extra vulnerable in a moment and then look around and nobody else is being vulnerable, guess what? You’re the leader. You are vulnerable.

Before everyone else and everybody else is watching you, scared, because you’re vulnerable and they’re not ready to be. And then that’s okay, it’s a little bit lonely to be a leader. And then I think the third thing that comes to mind is absolutely trying to figure out how to align people’s innate passions to the work that you’re doing. That can be easy or hard depending on what you’re given. I know some leaders are, that’s why I said I’m empathetic to people who grow up in an organization a lot of times are given a team where they didn’t get to pick all the team members.

I’ve had that experience, but I’ve also been able to build my teams from scratch. Definitely prefer to build them from scratch. That gives me the chance to have a huge influence on who’s around the table. But when you don’t have that, you need to still try to understand these people, even personalities you don’t really like that much, and figure out like, how does this person really fit into my scheme of what I need to get done? And then the last thing I’d say in there, probably the fourth one, is making those harder.

Decisions like pushing back on leadership when they’re demanding something that you know your team is not ready to deliver or they’re demanding something in a certain timeline that you don’t think is reasonable or appropriate or Requiring requesting lead changes in your team, which is all uncomfortable saying we need to we need a different person that this person needs to go They’re not appropriate for our team I think those decisions are absolutely impossible to make if you haven’t started doing those first three that I mentioned like providing the structure.

Really digging into people. It’s very, very uncomfortable. And most leaders I don’t see ever get to that fourth step of feeling comfortable pushing back, feeling comfortable requesting someone be off their team. That is probably the pinnacle of being a great leader.

(59:44) – Managing Up

Nathaniel Leies:

I’d quite agree. Managing up is in my mind, one of the hardest skills to build because I think it starts with an assumption that you see yourself as a member of a team and not necessarily the quote unquote leader.

Israel Beck:

Oh yeah, oh yeah. I had someone, he’s now an executive at a Fortune 500 company early in my career, he told me the first thing you have to do is learn how to say no. And now I realize he wasn’t just saying that you have to say no sometimes to do the right thing. Like you literally, someone’s like, oh, I need that report in 10 minutes. Like I can’t, it’s gonna be terrible. I’m not gonna give you crap.

I need time so so no there’s that piece but there’s the other piece which is like actually learning how to navigate it and navigate the note into a But I want to do this and this and this so that was what happened I mentioned before that I had that organization where I was supposed to cut a bunch of headcount and We were trying to cut the costs and I was not willing to do it So I had to spin the story differently to say like wait a minute I actually think we can get all the value over here. Like why don’t we do this? I’m still gonna get you the value that you need.

We’re gonna do it in a slightly different way. That’s another whole way to say no and going back to what I was getting at with leadership I want to say it one other way because I realized while you were talking that part of what I’m talking about is learning how to create and collapse hierarchy Create a hierarchy and then collapse it you create the hierarchy by distinguishing. Hey, I’m the leader I need you to do something I call that direct and correct. It’s like hey, you need to do this fix this don’t do this do this do that then collapsing the hierarchy in times to have an open conversation where everybody’s ideas suddenly are valid and anybody can talk about anything and then recreate the hierarchy again. And say, okay, now I need you to go do this. I’m gonna go back to my job and being able to create and expand and contract hierarchy I think can be a very powerful leadership skill.

(1:01:32) – Managing on bad days

Nathaniel Leies:

Israel, you’ve said in the past that leadership is about being present. And you also mentioned that even as a leader, you have to still show up on bad days. What does it mean to be present on a bad day as a leader?

Israel Beck:

Well, I have lots of bad days, so I can answer this with some experience. That’s interesting because it has changed. I’m still evolving on that. I would say that there are deaths. So I really believe in maintaining your meeting schedule. But I also believe in telling people when you’re not in the right frame of mind. I have definitely started a lot of meetings by saying I’m not having a great week. So I’m a little frustrated right now. So I’m going to do my best to just do a good job through this meeting. And I trust you guys to tell me what I need to know. And let’s move forward.

And so I am a human and I allow myself to have emotions. I allow myself to have good days, I allow myself to have bad days, but I really judge myself by how bad those bad days affect other people.

So there are times when I have had a really bad day and I will just say, I don’t think I’m going to be productive in this meeting. I’d really like it if you guys could run the meeting without me. And I rarely would say I do that, but it is a preservation of the image that I still want to be having. I want to be a certain type of person. And when I realize I absolutely cannot be that person some days, I try to be open about that.

But I would say you need to be 90, 95 % like dead on the money consistent. That means you’re at least a minute early to almost every meeting. You rarely reschedule meetings, especially coaching meetings. I think coaching meetings are way more valuable than almost any other meeting. I’m more likely to reschedule a client meeting than a coaching meeting, because my team and my relationship with them is every single day all the time. Customers come and go all the time.

But the people that I work with, those relationships, I hope they last years. Most of them do. I hope they last decades, actually, and some of them do. And so that dynamic is critical to me. And so, for example, if I ask someone if we can set up a, what I call a drain the swamp, like coaching series where I’m going to sit down with them five or six times, I’m extremely careful not to reschedule those. As I say that, I’m thinking about one that I had to reschedule because my wife was having a baby and I was literally like, can’t, I got, I got, I’m sorry.

Like I’m not gonna be able to be there. And like that’s a person that I’ve gone through this down the rabbit hole so many times that I’m like, okay, they understand exactly who I am and what my intentions are. But when you’re trying to build that early trust with people, it’s so important that they’re able to rely on you.

(1:04:03) – Researching organizational psychology and behavior

Nathaniel Leies:

Cratic AI is a platform that helps people to build trust. It helps people have conversations and to connect and to bring out the best attributes that bring value. You also are an organization that does research, and you’re really understanding what drives humans, what drives their passions, what drives their behavior. So in the past you’ve mentioned AB test, behavioral signals. I’d really just love to understand the full picture. When Cryotic AI does research, what does it actually look like inside of your team?

Israel Beck:

Okay, so first of all, we are considered an experimental research company by the Canadian government. So we receive a lot of grants and support from the government because what we do is considered experimental. It’s like we’re working on a problem that nobody else as far as we know of is working on, which is how do you get groups of people to bond through a software tool at scale? And so that idea requires us to tap into the psychology of the participants analyzing their language, picking up on their personality traits and behaviors through language purely, and then being able to craft a conversational narrative that leads them somewhere and doing all this using natural language processing, machine learning, neural net technology, and now we use large language models. And so all of that kind of fits into a system and a program that our teams go through. And so there’s multiple stages of it. We try to provide as much scientific rigor to it by doing before and after kind of studies, I am not a researcher. In fact, it’s interesting because when I was thinking about going back to coding school, I had considered going and doing a PhD instead. And I thought, you know, I’m gonna still get to do awesome research. I won’t understand the research methodology and philosophy as well, but I will be out with the people. And so we’ve done hundreds of studies with teams where we do before and after.

Assessments, gauging their dynamics in the team, and then we’re tracking their language scores as they go through these programs. And so the programs are also designed with, like I said, a neural net that has all these different nodes on it. And the language signals drive the movement around the different nodes. And so as they are talking, it’s like bouncing around to this node, this node, this node, creating a waiting that decides like, which nodes do we think they need to talk about? Which ones should they go to next? And so that creates a picture for us, but also guides them into a more what I call the common ground algorithm. It’s like a common ground discussion where it’s like we try to really find the gaps between their knowledge base. I mean I think it’s fairly well known that most people have somewhere between like 70 and 80,000 words in their vocabulary and as you go on to grad school and PhD you get more words and so most people can end up if you’re really educated around 90,000 words or more. But in a world where we have almost a million words in English there’s going to be huge gaps and so trying to find those gaps and move people those gaps is a big part of our technique. I literally couldn’t cite all the research that I’ve read on this journey. It’s been absolutely overwhelming.

But the main framework that we lean on, one of them is the Ocean’s Big Five Personality Framework, which has been exhaustively studied. And we just use that partly because that’s what IBM Watson used starting out with. We have only published online. We don’t have any peer-reviewed research. I’ve tried to find partnerships with different organizations that would do the peer-reviewed research for us and then found that they always require funding. And so I haven’t done the work to put together a grant for that yet. It is something I would love to do.

If any of your listeners are interested in that, can certainly reach out to me.

Nathaniel Leies:

I think we might know a few people.

Israel Beck:

I’m trying to find a way to do it. I spend most of my time working directly with customer teams and employee teams. so my big, we know that the technique works and that it moves these metrics for the organization and language scores and dynamics and like favorability scores like ENPS did a large study for one student, we ended up with I think 14 teams or something and we saw something like 40 average points of ENPS improvement per team, which is insane. It’s like almost 25 % on the scale, which is a huge shift. According to all the research like Mercer Gallup, Gartner and McKenzie, this is like… somewhere on the order of 10 to $25,000 of value per employee. So it’s incredibly valuable.

is to show which organizational metrics are moving. So we’ve seen, we’ve got anecdotes about all types of things like turnover going down, HR complaints going down, people shrinking some of their support service teams because their operations teams are so much more efficient. We think that’s happening because of language symmetry is being kind of harmonized in those groups. So we’ve seen things like that.

We’ve seen companies have their largest sale that they’ve ever had in history of the company after like six weeks of using our product. So we have all these little anecdotal things that are adding up to like a really powerful business picture. But I would say that’s the next big thing. We have a few big companies we’re approaching about doing a holistic program across their entire organization. And if they do that, we want to be able to tie it back to our metrics. We see our metrics move, but will our metrics be predictive or, know, preliminary indicators, leading indicators of all of their metrics going the right direction? That’s what we want to demonstrate.

(1:09:34) – Understanding eNPS

Nathaniel Leies:

What does a raise of 20 points actually mean for somebody who’s hearing about ENPS for the first time?

Israel Beck:

Okay, so first of all, explain it’s a 200 point scale. It goes from negative 100 to positive 100. Negative 100 means everybody in the company is a detractor. That’s what they call it. That means everybody doesn’t like it here. This is a bad place to work. Positive 100 means everybody’s a promoter. This is a framework that was invented by Bain and Company, which is a large global consulting company. And they did it with Apple when Apple was rolling out their stores.

Now the idea was if our employees love our company, then our customers by default will love our company as well. And so they wanted an internal framework to use for that. And that’s what it is. So it’s a publicly used framework. It’s now being done in many, publicly traded companies, but a lot of people haven’t yet put together that this is a really powerful metric for understanding your culture. If this score goes up, people like being at your company. It’s based on a question that you ask in surveys. Most of you have already done it.

It’s on a scale of one to 10 how likely you’re to recommend this place to work to a friend or a colleague. It’s assessing people’s feeling of buy-in, connection, loyalty, trust, like all these different things. We unpack it with a few other questions to ask about some of these other aspects, like how vulnerable, familiar, and trusting you feel you can be in this group of people. We ask those three separately because we want to figure out, because some people think like, we’re really trusting, but we’re not that vulnerable.

And so for me, that’s kind of a, that weights into the factorization of like, are they actually that trusting? Are they just saying they’re trusting? Cause that’s one of our values. We have to try to, the way we structure our surveys is literally try to get to the roots of that. But the whole point of this, this scale, what’s powerful about it has been done now so many times by so many companies that the publicly available benchmarks are all out there. So for example, we know the North American average is 12.

And so on this scale, most companies are 12, half companies are 12 and above or 12 and below. And so if you’re above 12, automatically you have a slightly better culture than other companies. But then you can get more specific going down to your industry level. So for example, consulting companies, think the average is 22. And so you need to be above that if you want to be competitive for talent. So it becomes a really quick way to kind of sense check where are we at as a culture. Now, what my company does that’s powerful is not only do we measure it, we figured out how to move it.

really fast through this technique, through this common ground algorithm, these discussions, these huddles, the questions that people are asking, all the philosophy we’ve been talking about, we found that we can move it like 40 points to the right really quickly, which is insanely powerful for companies, especially companies in the negatives. I’ve seen teams go from negative 60 to plus 40 in eight weeks, which is incredible. According to the research, means it’s something, it depends, so there’s a math equation you have to do that’s based on the margin of the business, the fully loaded cost of the employees, but if we know those numbers, we can guesstimate that somewhere between $10,000 and $25,000 per quartile, per employee, per year of margin dollars, like actual margin to the bottom line of the business. And so if we can move an expensive group of people 80 points to the right, that’s easily worth $30,000 per employee per year and it’s perpetual. So you’ll continue to make that money every year after that. And it seems to be incremental, it seems to be growing. So in other words, like you get bigger and bigger and bigger opportunities as your culture gets better and better and better.

(1:13:00) – Arguing for culture’s importance as a transformation lever

Nathaniel Leies:

For me listening to this as a compelling argument about why culture should matter and how you can actually realistically link culture to a measurable outcome, ENPS is quite a powerful metric.

For me listening to this as a compelling argument about why culture should matter and how you can actually realistically link culture to a measurable outcome, ENPS is quite a powerful metric.

Israel Beck:

Yeah, I mean, you asked at the beginning about pushback that I’ve received and we talked about the AI is a lie thing. To be honest, like I come from a finance background and the finance community is still really struggling to accept this. Really struggling to accept. And I came into it that for that very reason, I was a finance guy. I suddenly started having breakthroughs and realizing there’s something to this and then realized that it’s sort of like a black hole. Like nobody knows how to make this happen. So providing a framework around it simplifies it. It also is nice. It’s a tool. It’s fun and easy. People enjoy it. And once you see these metrics move, it’s a leading indicator of other really good things happening and then when those good things happen if you can connect the dots then I’d say we’ve solved the problem.

(1:13:54) – Thoughts on legacy

Nathaniel Leies:

What do you hope people will remember about the way that you lead?

Israel Beck:

I would definitely say that they are going to remember that I’m a very vulnerable person. I am very open with people about what I’m struggling with. I actually believe that expressing yourself in the full sense, like getting it out of yourself is a healing technique. And so I guess I really hope that people think I don’t waste their time. they know that I’m going to be emotional and exploring and like getting into those, those, corners. And so I hope that they don’t feel that that’s a waste of their time.

Nathaniel Leies:

I mean, as, as you mentioned, there is a balance between when is there time for open exploration and when is it that it needs to be eye on the prize? We have directive, we need to move. That’s what struck me in talking that, you know, leadership that can balance open exploration and focused energy. quite a, quite a good skill to have.

(1:14:58) – “Have you ever not liked someone?”

Nathaniel Leies:

What’s one question that you wish I had asked that I didn’t?

Israel Beck:

Have you ever not liked someone before? That’s my opening question for most of my introductions because I think that we’ve all not liked someone before and not liking people is actually a really interesting signal that there’s something to learn, something to grow. It can’t always happen though. I’ve started to notice that like there’s a lot of relationships that are really, really, really difficult to build even if you want to. So I think it’s a challenge worth working on. So I’m gonna keep working on it.

Nathaniel Leies:

Israel, our new common connection, Baman Radnijad, who was my professor of business strategy when I was an undergrad. One of the things that he did, which was one of the most powerful experiences for me and directly related to your question is have you ever not liked somebody is he put us on teams for our business strategy capstone. We had a team of three people every week. You had to do a case study and it would be something like Apple versus Samsung or I don’t know.

Let’s say Alibaba versus Amazon. So you’d have two companies, you’d have to analyze the company, and then you’d have to come back with actionable business strategies that these people could do if they want to be the leader in their particular space. I had such strong dislike for one of my team members and it was so hard and so difficult, but what Bauman had told me, and that resonates with what you’re telling me right now is you cannot always choose the people who you work with.

And no matter what happens, you have to work with them and you need to make something happen. When you ask, when, when you’ve started some of your, appearances or, or different videos I’ve seen and you ask, have you ever not had somebody, excuse me, when you start some of your videos and you ask, have you ever not liked somebody? Everybody’s been in those shoes. And so I just wanted to personally reflect. Yes, it cannot be avoided.

Israel Beck:

Yep. I do think, I mean, if I can leave it on a big hairy aspirational goal here, you know, I do want to see that we’re moving towards a world where we’re all getting better at figuring it out. We’re all getting better at even identifying when we don’t like someone feeling that feeling and then kind of processing it and moving on to another feeling, which is like, you know, how do I work with them in a productive way?

And how do I take the feeling out of it maybe somewhat? I loved feelings. Like I like going into those feely conversations, but I also like getting things done and not having too much drama. And like at the end of the day, we go into those conversations so that we can be more productive, I think. So all of that to me is part of that journey of like self discovery and becoming a better and better person, which I think we’re all trying to figure out.

Nathaniel Leies:

Israel, thank you so much for your time today. Such a pleasure and such a joy to speak with you.

Israel Beck:

Thanks, Nathaniel. This was awesome, Amazing questions. I really appreciate it. It’s the deepest one I think I’ve had. So it’s been a pleasure. Thank you so much.