Strategy Meets Reality Podcast

Value as the Compass: Hunter Hastings on Systems Thinking, Autonomy, and Organising for Impact

• Season 1 • Episode 21

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Most organisations measure success by profit. Hunter Hastings says that’s the wrong compass.

In this episode of Strategy Meets Reality, Mike Jones is joined by Hunter Hastings—strategist, author, and leading voice in systems thinking—to challenge the way businesses define and deliver value. They unpack why profit maximisation blinds leaders to opportunity, how autonomy unlocks creativity, and why removing barriers is the real work of leadership.

From shifting the paradigm away from efficiency to focusing on effectiveness, to breaking down the power structures that stifle action, this episode offers a practical roadmap for leaders who want to organise for adaptability and meaningful impact.

🔍 In this episode:

  • Why value creation should drive strategy—not profit targets
  • How autonomy fuels speed, creativity, and innovation
  • The limits of efficiency as a business strategy
  • Rethinking power dynamics in modern management
  • Removing barriers to action across the organisation
  • Why systems thinking is essential in a boundaryless business world

🎧 Keywords: Systems Thinking, Value Creation, Autonomy, Organisational Design, Leadership, Efficiency vs. Effectiveness, Power Dynamics, Strategy, Adaptability, Empowerment

📘 Learn more about Hunter: Hunter’s LinkedIn

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💬 Connect with host Mike Jones → https://www.linkedin.com/in/mike-h-jones/

Hunter Hastings (00:00)
we're training people in business education to do something called business administration, And administration is the worst way to run a business because in this new model, it's got to be fluid and adaptive and as we say, self-organizing.

So if you make speed your style, then people aren't going to say, hey, there's something holding me back or I can't do this. They're going to say I have to move faster. Even if you're not going to be 100 % right all the time, speed.

becomes the solution to that constraint of administration

leadership requires followership and that's not the way that we...

We want to be in business today. So people are examining different forms of organization.

Mike Jones (01:14)
Welcome back to the Strategy Meets Reality podcast today. I'm glad to be joined by Hunter Hastings. It's great to finally get you on the podcast Hunter. How have you been?

Hunter Hastings (01:25)
Excellent, thank you. Thanks for the invitation.

Mike Jones (01:28)
Oh no, my pleasure. Just for our listeners, do you mind giving a bit of a background about yourself and a bit of context about what you've been up to lately?

Hunter Hastings (01:34)
Well, today I'm in the field of business education and I'll be happy to talk about why and what we're trying to do and the revolution that we're trying to make. I was born in your country in Hartlepool in the UK, got my education there, joined a multinational company called Procter and Gamble there. That led to a...

Mike Jones (01:46)
I can see why you got out.

Yes, yeah.

Hunter Hastings (01:56)
corporate career in multiple countries. I eventually found my way to Silicon Valley. was a CEO there of a company actually that Procter & Gamble was funding as part of their corporate venture back then in 2000. Started another couple of companies, got into venture capital, and now today I'm in business education.

Mike Jones (02:16)
⁓ nice, sounds great. Definitely an interesting background, especially working in Silicon Valley back in the, you know, was in the glory days of growth.

Hunter Hastings (02:24)
Yeah, I in,

it was just, I got there just before the dot com crash as they call it here. But you're right, there was a mindset that if you put enough computers, MBAs and money into a room, you could achieve anything. And that was the spirit of the times.

Mike Jones (02:36)
Hahaha.

I'd love to you said you're creating a revolution. What do you mean by that? What revolution you trying to make?

Hunter Hastings (02:46)
Well, I think there's a big discontinuity in thinking about business today and business education hasn't caught up. In fact, it's causing a lot of damage. So let me try and explain that. We have this old concept of how to manage, how to run corporations. Organizationally, it's a hierarchy with a CXO, know, a C-suite at the top.

Mike Jones (02:58)
Mm, I agree.

Hunter Hastings (03:12)
layers of management, lots of process and rules and methods. It's divided into parts, different functions. It's a mechanistic point of view. It's an engine. You can fine tune it to make it better. And that developed really in the 19th century with the great entrepreneurs back then, like Standard Oil under Rockefeller and all the standard examples. they...

the companies grew so big that the entrepreneurs couldn't control them and so they started to put in professional management as a means of control. And that was very valuable at the time, it was an innovation, but it's become very restrictive now. And today we think of companies in a different mental model which is a living system, a systems thinking as they call it, where the function is not control, it's adaptation. So in systems,

Mike Jones (03:41)
Mm.

Yes.

Hunter Hastings (04:04)
Thinking, you look at systems, they adapt themselves to changes. They run lots of experiments to see what changes they can provoke. And then they constantly change and proceed on that basis. It's not management. It's system constraining. How do I direct this system, which is to great extent self organizing and self managing? How do I point it in the right direction? And we think that's what's going on.

Mike Jones (04:27)
Yes.

Hunter Hastings (04:29)
in Silicon Valley and the Magnificent Seven and a lot of other companies who might talk about some things that are going on in China. the old, we're training people in business education to do something called business administration, right? You get an MBA, master's of business administration. And administration is the worst way to run a business because in this new model, it's got to be fluid and adaptive and as we say, self-organizing.

Mike Jones (04:42)
Yeah, that's the NBA.

Hunter Hastings (04:55)
So we're trying to create a new form of business education that can create that entrepreneurial mindset, thinking about systems as opposed to thinking about managing.

Mike Jones (05:05)
Yeah. One thing I always thought about with the business education or leadership education that we have at the moment is that it's very, loads of models to tell you what to do. And, you know, they're quite simplistic to work out as long as you aim for the top, normally the right corner, you're winning. And they

Hunter Hastings (05:24)
All right.

Mike Jones (05:27)
They're very static and linear. They don't really get to grips with, like you said, a living system that's adapting the self-organizing and some of the old truisms aren't really that true anymore. And it feels like there's ⁓ a big disconnect, a drag happening where you've got thinkers like yourselves working with organizations and work organizations are caught in on to the fact that these things aren't really

working as they used to, but the education field is still anchoring it back. And we're still shoving all our leaders and that through this education system, that's telling them the stuff that we know not to be true anymore, but we don't have anything else to show them.

Hunter Hastings (06:08)
Yeah, so you're exactly right, Mike. A couple of words to pick up on there. One is linearity. So the concept of management is exactly as you say, it's a linear idea. If I do X, Y will happen. It's a cause and effect. Whereas what we're learning in the science of systems now, and this is science, there's been a lot of scientific exploration work done in these kinds of areas, is that they're non-linear, that they're about interaction of different components, especially people.

Mike Jones (06:15)
Mm.

Hunter Hastings (06:38)
that produce what they call emergence. Something emerges which wasn't predicted in terms of cause and effect or non-linearity. So how do you manage that? Well, you don't. You try and shape it, observe it, maybe point it in a certain direction. And so that's, as you say, we're trying to teach leadership. And that's another term that I think we have to question because leadership requires followership and that's not the way that we...

Mike Jones (06:44)
Yeah.

Hunter Hastings (07:06)
We want to be in business today. So people are examining different forms of organization.

So you've heard all the discussion about small autonomous teams where you get a bunch of smart people, each with different specialists, you put them on a team, and you don't tell them what to do. You give them the exploratory freedom to go and identify a new outcome, and then you figure out how to fit it into the system.

I think linearity and leadership are two of the words that we're trying to find new alternatives to.

Mike Jones (07:37)
Yeah. And even with this leadership point, it's coming and I reckon it's the proliferation of coaches and stuff. It's all about mindset and people are going on about, you know, just we have the mindset to do it and you know, if we can believe it, we can do it. But they forget the fundamental element is what we're talking about, that structure. And we're constraining people too much. We're not allowing people the freedom of action because we're constraining them too much.

which means they don't have that freedom to make decisions or be exploratory or sense-make.

Hunter Hastings (08:11)
Yeah, well exactly,

and so the mental model, the approach to that is not to try and give somebody a mindset or shape their mindset, it's to unleash, to find out the barriers, you you called it freedom, so the other side of that is barriers and blockages, take those away. I like the word unleashing a lot, let's unleash that talent. It'll be collaborative, they'll work together because that's a very human trait.

Mike Jones (08:19)
Yeah.

Yeah, yeah.

Hunter Hastings (08:36)
It'll be motivated because they're trying to be successful and create something new. But don't try and direct their mindset, try and give them more degrees of freedom is the term that we try to do. And then see what happens, that's the emergence part. So that's really an anathema mic to the whole system of management and business education, everything we're talking about. It's really hard shift to make.

Mike Jones (08:57)
Yeah, yeah.

It is. There's so much years of doctrine that is gone into this way of thinking. It's hard then when, you I find that I write a lot about this stuff and you get challenged by it because they're like, well, it's just chaos. And we're not advocating chaos. We're, I like your term unleashing. We're just removing unnecessary barriers so that they're spending more time with the capacity.

to think about outcomes and explore outcomes in the external environment rather than trying to appease internal inertia, which tends to happen.

Hunter Hastings (09:37)
Right,

yeah, exactly, it gets locked in. So one of the questions that is not clear is whether an established corporation can change or is all of this new form of organization and self-organization, is it only gonna happen in new companies? I'll get a slight bit academic on you for a second, Mike. There's a concept, an old concept of the scientific revolution by Thomas Kuhn.

And his idea is that this can't change gradually. You've got people locked into the old conventional wisdom, and that's where the word paradigm comes from in his writing, the old paradigm. And the people in that paradigm can't see the new paradigm. They can't understand it, they don't get the language, they think it's crazy. As you say, they see chaos. And so only new thinkers can...

Mike Jones (10:14)
Yeah, yeah.

Hunter Hastings (10:29)
develop the new paradigm. People don't move, it's a revolution, a leap. So, you know, that's a challenge. Can standard corporation or business education, can it adopt the new paradigm or does it have to be a revolution? I lean to the revolution side.

Mike Jones (10:45)
Well, talking about revolution, you mentioned China earlier. What does China have to do this?

Hunter Hastings (10:52)
Well, there's a couple of things that we've seen. There's a famous article in Harvard Business Review, which gets right over here, it's called Are the Chinese Reinventing Management? Well, there's a couple of examples in there. One is a company called Handoo, a pretty big company, generating hundreds of millions, probably billions of dollars by now. It sells fast fashion, and it's not...

Mike Jones (11:04)
right, I've actually seen that.

Mmm.

Hunter Hastings (11:17)
managed in the way that we think about it. There's a front end, which is a thousand or maybe 10,000, I don't know the number, but thousands of websites that are approaching consumers directly, offering different fashion and designs and so on like that. There's an entrepreneur, a designer and a webmaster there, know, a technical individual, and they're given a small amount of resources and then turned loose. Do what you like to try and build revenue and sell units and so on like that.

Mike Jones (11:47)
Mmm.

Hunter Hastings (11:47)
That's

connected to a middle layer which is entirely software. It's the payment systems and the inventory management systems and the communication systems and so on like that. And in the back end is the physical assets, the warehouses and the servers and that kind of thing, the databases. And there's a little layer of senior executives on the top, but you turn these thousands of teams, these small teams loose.

If they do well, they generate more revenue, the system will give them more resources. If they don't do well, you close them down or you fold them into another one. It's self-managing, it's self-organizing. And the Harvard Business Review tried to call it digitally enhanced autonomy or something like that, which is, it's an exploration, it's an interesting concept. And then,

Mike Jones (12:23)
Yeah, yeah.

alright ⁓ yeah yeah but that's that

mean sorry guys

Hunter Hastings (12:37)
Well, I was just gonna give you one more example, if I may. Earlier this year, there was a big fuss when DeepSeek, the new AI model came out of China, which surprised everybody. But if you dug in underneath that and you read about how they organize, there was an entrepreneur, a founder, he'd made money somewhere else in running hedge funds. But what he did was recruit smart people and...

Mike Jones (12:46)
Yeah.

Hunter Hastings (13:05)
especially young people, because he says, experience brings baggage. And we didn't need any of that. We just wanted new young minds and just said, do research. There was, you know, to get to better AI, but a very nonspecific goal, lots of experiments, tons of computing power that they could had free access to. And eventually DeepSeq came out of that. There was no strategy. There was no purpose. was no process. It was just undirected research. So those are two examples.

Mike Jones (13:09)
I'm a chicken.

Yeah.

Yeah,

yeah, but just pick up on your point where you said there was no strategy, there was no purpose and stuff like that. But I think there probably was, it's just not the orthodoxy that we're used to in a sense of organizations. Organizations seem to now have this bit on their website where they're going, strategy, and you look at it it goes, our purpose is to save the planet or, know, and I think it gets, it gets,

voided into this ism of stuff that we must have, rather than that was very clear and a bit like your first example. I love the simplicity of what he says, what they said was that, do what you need to do to make revenue. And you think about organizations, they're gonna get wild out here at the moment, like ISIS and stuff like that. They were self-organizers. They...

grew rapidly in their area because the simplicity around do what you need to do. Obviously you can argue the ethical dilemmas that that can bring, but it simply, it gave them the space to self-organize. And that's what Stafford Beer was talking about in systems, to make things self-create and self-organizing so that the teams that are adding the value have maximum freedom of action to adapt to the needs rather than

to worry more about filling in spreadsheets and metrics and stuff and reporting outwards.

Hunter Hastings (14:58)
Yeah.

And the binding force, gives it the morality or the ethics is value creation. So one of the things that we've realized coming from the old model, which was about profit maximization, we've shifted to value creation. Value is for customers, but also for colleagues, people that you're working with. And value is in the eye of the beholder. So am I creating value? Let them decide.

Mike Jones (15:05)
Mmm.

Yes.

Hunter Hastings (15:24)
you monetize it through payments, right? Value has a price in the marketplace that generates revenue, but the point is about creating value. The customer decides if they like it, you do more of it. If they don't, you don't. And so that's the moral drive that ⁓ binds this together. So that's the other big difference is value creation versus profit maximization.

Mike Jones (15:39)
Yes, yeah, yeah.

Yeah, I mean,

we know that's when, you I said the example of simplicity about the intent that those were given around making the revenue, but it's like you said, it's more about the value exchange. Are they increasing that value exchange than people are willing? And you see where it goes wrong, where they don't have that value idea and maximizing value. Over here, we have water companies and fortunately our water company is not nationalized, it's privatized.

and they're very much on revenue. So they've been trying to make massive amounts of revenue. But if you speak to people that they should be serving, people don't get the value because we have to go through water bans, hose pipe bans we call them. So we can't use water. They haven't built any infrastructure for the last probably over a decade. We lose something.

ridiculous like three billion liters of water a year through leaks. So you think they're all about profit maximization which then leads to eroding of trust instead of they thought about value maximization either would make sure that the people they're serving are really happy with results they're They're getting served, they feel like they can get what they need. Yeah, so I think it's a

definitely a better way of looking at how our business maintains viability.

Hunter Hastings (17:10)
Yeah, and it would change behavior. One of the ways I like to think about that is you talk about your water company, they're focusing on the P &L, the revenue side of things, and they're letting the balance sheet, the asset side of things, the infrastructure decline. If you're in the value creation business, you don't do that because you understand that it's the assets that generate the value experience for the customer. If I let my assets decline, I'm going to create less value. And so I don't want to do that. That's a negative approach.

One of the things that I like as a development is that valuation process are looking longer and longer term now. So the stock market worries about quarterly earnings, but when we think about value creation, it's sometimes expressed as EVA, economic value added, but there's many forms of it. But it looks at not only today, but also the future. And am I improving that asset base?

the infrastructure or am I letting it decline? And there's a whole field of looking at. So you look at companies like Amazon that we love over here. I think it's global, so you like it over there too. ⁓ They're constantly investing in their asset base and it went from the delivery system to the cloud computing and now they're looking at AI models. Tons of investment, always improving that asset base. So this thinking about value creation actually creates

Mike Jones (18:11)
Mmm.

Yeah, yeah, yeah.

Hunter Hastings (18:35)
better economic behavior by the corporations are the ones who own the assets.

Mike Jones (18:39)
Yeah,

it reminds me of time. I worked for Amazon at one point as a client, as a consultant. Yeah. And I remember being at their headquarters in London and suddenly all the, alarms went off and then an announcement came over because they had just managed it the first time. I don't know if it was worldwide or not, but it was probably just UK because I was in the UK part. They managed to deliver a parcel from the point someone pressed pay.

Hunter Hastings (18:44)
good.

Mike Jones (19:10)
to their door within an hour. And they put it over the whole tannoy, the whole business to celebrate this thing. Because that comes back to your point about they're investing in their infrastructure, their ability, their capability to add more value. Because before Amazon came, you wouldn't dream of being able to get one in that day, let alone within an hour.

Hunter Hastings (19:12)
Wow.

Yeah, so Andy Jassy, who's the CEO now of Amazon, talked about that. He talked about running his company like a giant startup. You're to think like a startup, which includes getting rid of all that bureaucracy and management layer that we've talked about. I like to call that venture mode. Every company's got to run in venture mode, which doesn't tolerate any waste and everything's got to be directed at the customer. He said they've got to love innovation. So that's your...

your alum company going, hey, we've achieved an innovation, we have a metric for it. And they've got to love to build things, build systems and create a system that can achieve that. that venture mode is our contrast to administration mode. It's that different way of thinking. And that's ⁓ the biggest corporation, right? A giant corporation, but they can do it.

Mike Jones (20:04)
Yeah.

Yeah.

I know,

yeah, and you see even smaller organizations where it's like, want to be inventive and do something, but I can't, or you you see a lot of organizations that get themselves in this position where it's easier not to do something than it is easier to do something. So that just reinforces them to just do nothing and just accept the status quo.

Hunter Hastings (20:48)
Yeah, and so that's a really interesting challenge that just to continue about Jesse said that's a decision. People decide whether they can do things or not. There's nothing constraining them. It's just a decision and his way of overcoming that is speed. So if you make speed your style, then people aren't going to say, hey, there's something holding me back or I can't do this. They're going to say I have to move faster. Even if you're not going to be 100 % right all the time, speed.

Mike Jones (21:00)
Mmm.

Hunter Hastings (21:17)
becomes the solution to that constraint of administration

or tradition or I can't do this. And so that's an interesting observation. Speed was not part of the old management technique and speed is part of the new self-organizing technique. He said that they built a delivery system the size of UPS in two and a half years. And it took decades for

Mike Jones (21:31)
Yeah, yeah.

Wow.

Hunter Hastings (21:45)
the original network to be built that way.

Mike Jones (21:47)
Well, look at like DeepSeek, that was built relatively quickly compared to, yeah, yeah, yeah, that's ridiculous. That have that much power, but speed is crucial. Time is crucial. Often I look at people's strategies, you know, I had to look at people's strategies and what they're doing. And rarely do I see time in there. You say you want to make these choices and make these decisions, but by when and for what reason?

Hunter Hastings (21:53)
Yeah, I think 18 months or something like that.

Mike Jones (22:15)
And we talk about the viability principle that an organization must be able to adapt as quick as the environment or its competitors or quicker. Otherwise it will cease to be viable. So I think that speed is really important to encourage that, that adaption that let's not malaise and let's do something.

Hunter Hastings (22:35)
Yeah, and in startups, Mike, as you know, the thought about speed is in the J curve. So if you look at the investment that you, when you invest in a startup company, you're underwater, right? You put money in before there's any revenue coming. You got to increase that J curve as fast as you can to minimize those investment losses until you get into the black and then drive it from there. So that if you think of every project that a...

corporation is doing as a startup venture, then you're in the J curve, and then you got to accelerate that as fast as you can, as opposed to preservation or not taking risks and so on. So speed is really strategic element.

Mike Jones (23:15)
Yes, yeah, yeah, I like it. And you see in this way, this new way of thinking about organizations and management, we talk about, we break these to small autonomous teams, or autonomous teams, not necessarily small, but relative to size, so they can maintain adaptability. That also helps with the organization to adapt, as long as you've got good coordination amongst them.

That means that if you're trying to adapt, it's only parts that are adapting at any one time, rather than what you see traditionally, because you're so centralized, or alignment became the new word for centralizing, I think. Yeah, yeah, they didn't want to call it centralized anymore, so they called it alignment and think that was a good thing. any change meant that you had to try and create change over this vast thing that became slow.

Hunter Hastings (23:54)
Right.

Mike Jones (24:09)
and arduous and probably accounts for why lot of transformations don't really achieve the full objective that they set out to do.

Hunter Hastings (24:18)
Yeah, you gotta get approval from the layer above, right? There's an interesting case that is used a lot over here of a company called Morningstar, which is in a very conventional business. They make tomato paste out of tomatoes. And the number one in their business, it's a over a billion dollar company. And they had a principle of no management. They called it no coercion.

Mike Jones (24:21)
Yeah, yeah.

Alright.

Hunter Hastings (24:44)
The second principle is everybody keeps their commitments to their colleagues. So their mechanism for this autonomy, an operating system for autonomy is, they call it the colleague letter of understanding, which is everybody signs literally a letter of understanding, says, here's what I'm gonna do. Here's my commitment. Here's what I expect from you. And you negotiate that, it's an agreement. And then off you go on your

Mike Jones (24:49)
Hmm.

Hunter Hastings (25:12)
autonomous team or your collaboration. So this letter of understanding replaces all of the managerial processes. Hey, I commit to what I'm going to do. I'll let you know later how I did it, but I'm going to do it. And you're committing to me. It's a really interesting innovation in management systems.

Mike Jones (25:31)
Yeah, I like it. Well, that comes a lot to, again, come back to Stafford Beer when he first sort of thought about system three, the management. wasn't what we call traditional management. It was about that bargaining. So this is what I want you to do. I achieve the outcome, not how to do it. This is the outcome I you to achieve. This is resources I've got. It's a bargaining. So you go, well, if you want to do that, I need bit more of that or.

I could actually do a little bit more for you, but I need that. And it was a bargain in a relationship. And then they went off and delivered it rather than, I don't know what it's sort of coming to now where it's just fixed. I want you to do this, but you're not getting any more resources. There's no value. I think that I've come back to the point, is that value exchange? There's no value exchange. It's a case of, I just want you to do lots of this and I'm not gonna give you the decision rights and resources.

or support to do it, but I still want it done. Do more or less.

Hunter Hastings (26:29)
Yeah, so

part of the concept in the Colleged Letter of Understanding and systems like that is between you and me, there's a value pi. We're creating this value pi through our exchange and collaboration. How can we make that bigger through each of our actions and what we learn and the new knowledge and so on like that? So everybody wins. It's an everybody wins concept of the bigger and bigger value pi.

Mike Jones (26:41)
Yeah.

Yeah, yeah.

Yes, yeah, And you see that, that can work really effective in angel investing or investing into business about that. You know, I'm gonna take this bit, but together we can grow this pie. can, you know, and there's a mutual, well, it should be, hopefully, if you've got a good investor. There's a mutual respect there to grow together and to build something together and...

Hunter Hastings (27:04)
And.

Mike Jones (27:20)
each get a win-win out of it rather than I'm to take a massive percentage of your business and I'm just going to take what I want back. Yeah.

Hunter Hastings (27:30)
Yeah, and

part of that is specialization. So letting people be really, really good at what they do and figure out the way to put them in a community where those specializations are complimentary, they expand the value pie. So the investors bringing capital, hopefully that will attract talent. The talent is all specialized, but we put it together in the best possible way and we create more value for the.

Mike Jones (27:49)
Mm.

Hunter Hastings (27:55)
for the customer. Again, it's the opposite of management. It's an assembly process certainly, but it's not a directing process.

Mike Jones (27:58)
Yeah, yeah.

Yeah, and you brought on a real novel idea when you talked about DeepSeek, was that they got clever people in and let clever people do what they needed to do. And I think that's a novel thing with organisations. We get these clever people and then we don't let them use their intelligence. We can constrain it.

Hunter Hastings (28:24)
Right,

well you used another great word Mike, which is intent. And I love that for how to give direction to these companies. So the intent is, it's not as grandiose as a vision, and it's not as precise as a mission. It's, boy, this is the direction I want to go in. So this idea of a Chinese AI that would compete with the great models in the world, that was an intent, it wasn't highly specific. And then,

As you say, let people do what they need to do to get there. And maybe I'll define that intent better while I'm on the path.

Mike Jones (28:58)
Yeah, yeah, I think that's that. You want enough clarity to give them direction to go, but you don't want it too constraining that it removes that ability to adapt and to... Otherwise you're gonna lose opportunities. If it's too fixed and you go, want this, it's never going to meet reality.

Hunter Hastings (29:19)
Yeah, and the way I like to think about that is fitting into the system. So at some level, the system already exists. I've got to find through intent my rightful place in it where I can contribute. And that might move around. I might collaborate with different people to create that uniqueness. So I think the other element is finding that uniqueness. How can I contribute to the system by fitting into it, but making it better?

You know, it's all very positive in value creation.

Mike Jones (29:49)
Yeah, I like that. We often talk about the value exchange when we're doing strategies and not only do we look at the relationship of the actors, they're in the external environment, but we also look at the value exchange. What value exchange do you currently, from your perception, do you currently get and what do you think that they currently get from you? And when you look at that, go, well, what do you think they need more of? What do you think they want less of to try and make sure that you get that value?

Hunter Hastings (30:17)
Yeah, understanding that is really, really important and it's dynamic. the value exchange is important, but it's one part of the cycle. So after the value exchange, there's a value experience. I'm not in that experience. I'm the provider, but the customer has the experience. They're gonna assess that afterwards, valuation.

Mike Jones (30:26)
Mm.

Yes, yeah, yeah, yeah.

Hunter Hastings (30:41)
and then decide whether they're to come back for more or whether they're going to go to a different place. So the value exchange is really important, but you've to monitor it through the subsequent experience and then try and enhance that. So it's dynamic more than static.

Mike Jones (30:53)
Yeah, yeah.

Yeah, it is going to be dynamically changed because as the context changes, people's needs change, their expectations change. So maybe still getting the same value, just thinking about your tomato puree paste company. know, probably back in the day, it was fine that they used a lot of plastics or stuff in their neighborhood. It's still the same substance inside. It's just being packaged and delivered the way to maintain that value.

⁓ experience for the customer, meet their needs.

Hunter Hastings (31:26)
Yeah, good.

That's a great example of adapting to the environment, right? The environment is consumer perceptions of what's safe or what's reasonable to use in packaging it. That's definitely changed. There's a really interesting process going on over here now about food and what is healthy food. So food's gone from fuel to healthy, and we're starting to question all of that, and the corporations have to change their ingredients and get the dyes out and things like that. That's a great example.

Mike Jones (31:43)
Yes, yeah, yeah.

Yeah.

Hunter Hastings (31:53)
And I

Mike Jones (31:53)
Yeah. Aha.

Hunter Hastings (31:55)
think that adaptiveness is also the opposite of the old style of management. I produced a strategy which was trying to control what's gonna happen for the next year or the next five years. And I had a plan and it's got 12 columns for the 12 months. You're trying to inject statics into something that is inherently dynamic. So I think we've overcome that as well.

Mike Jones (32:10)
Yeah.

Yeah. Yeah. And that, movement from RFK and you know, he's maha. They make America healthy again thing was, was interesting long, long with USAID and stuff. They're both, interested because they've, they've changed the regulations. They've changed the external environment, which people are operating in, but a lot of people didn't see that coming. And I've just had a, ⁓

a podcast before and there several people I spoke to now that are in the third sector environment. They were so wedded to the fact that America was always going to fund them. And that was it. And then suddenly Trump's come in, taken away or heavily restricted USAID. And they're like, what do we do? But there's no sense of adaption. They're not used to that adaption. They haven't looked and thought.

Hunter Hastings (32:51)
Mm-hmm.

Right.

Mike Jones (33:07)
Well, what could change? What are we, what's our fundamental risk? If that took away, what would happen? Where could we go? Where could we emerge to? It's just a static thing of, it's gone now. What do we do?

Hunter Hastings (33:19)
Right, right, so the concept we try and think through is uncertainty, that's the term in economics, which is I don't know what's gonna happen. So I've gotta take that as reality. So always examine those assumptions and premises. What assumptions am I operating on, like I'm always gonna be funded? And create that possibility space. What are all the things that could happen?

Mike Jones (33:26)
Mm.

Yeah, yeah.

Hunter Hastings (33:45)
Try and narrow it down a little bit. that's, I'm gonna play in this space and it's got some narrower possibilities. I'd like to turn it into a probability space. can be more confident, but you've gotta understand and feel for and accept that uncertainty at all times. And something might change drastically, as you said. I've gotta be ready, gotta be adaptive.

Mike Jones (34:05)
Hmm.

I love that thing you said then about what assumptions are we working on? Because I'd question a lot of leadership teams and organizations that do they really understand the assumptions that they're working on?

Hunter Hastings (34:17)
Mm-hmm.

Mike Jones (34:26)
how fragile some of those may be.

Hunter Hastings (34:28)
Yeah, and understanding that you are operating on assumptions, everybody is. And so putting those under the microscope, do I really understand what assumptions I'm making and then are they valid? You're right, that's a great contribution. Elon Musk calls that first principles, right? First principles thinking. And his famous example is about the reusable rocket. So we had the assumption that airplanes

Mike Jones (34:32)
Yeah. Yeah, yeah.

Yeah, yeah, yeah, yeah.

Hunter Hastings (34:55)
Are you reusable? But rockets aren't. Well, why? Why is that an assumption? And that eventually got him to the reusable rocket, which has changed the economics and dynamics of space exploration incredibly.

Mike Jones (34:57)
Yeah

that's a great

Oh yeah, hugely impactful. Even think about DeepSeek, the assumptions they were doing, the assumptions that you needed this massive computing infrastructure and they, well, you don't need it. They worked out, you don't need it. So it's, then that's made it more accessible for entrants to come now into the AI space, which is making a lot of pressure on, what's his name, Sam.

Hunter Hastings (35:21)
Mm-hmm.

Mike Jones (35:37)
He's a chat GBT guy for Sam something in it.

Hunter Hastings (35:40)
Yeah, ⁓ OpenAI, right.

Mike Jones (35:42)
Altman. That's it.

Yeah. Yeah. Yeah. It's showing the fragility now of OpenAI really in the business model there. I did read something quite interesting about, you we've had the, you mentioned earlier, the internet crash of Silicon Valley, but they're sort of starting to predict the startup crash because you've got all these startups are putting money in and they're actually only, they're not making any money. They're just getting invested with loads and loads and loads of money.

but they're not returning anything.

Hunter Hastings (36:12)
Yeah, well, they're in the J curve still and you've got to figure out to your point, what's the time element of the J curve and will some of them or all of them get through the J curve and get into positive returns? But what they're trying to do is, like any startup, you've got the economic value add that you're going to make after you've completed the J curve and discount that to the future, so to the present. So it's an estimate.

And because of uncertainty, we have no idea whether that estimate is gonna be right or not. So there's a lot of big bets going on and we'll see what happens. mean, if you estimate the potential value of that future growth of AI, you can certainly discount it back and justify today's expenditure, but you don't know whether the estimate is right. So big bet.

Mike Jones (36:47)
Yeah, yeah.

Mm.

Yes, yeah.

Yeah, yeah, I just really like that idea of really challenging the assumptions that we hold to be true. And how true they are and actually how much businesses like we talked about third sector, how their whole assumption around that America would continue to fund them. They just sort of ignored everything else rather than thinking about how could we derisk this by

finding other sources of investment or different ways that we can get funding. They just shoot.

Hunter Hastings (37:32)
Yeah, ⁓

we've got a couple of giant universities here in the US that have had to totally rethink their business model for that very reason. The funding is withdrawn.

Mike Jones (37:41)
Yeah,

I think a lot of our universities are really struggling. Definitely when the government here constrained foreign students to come in, they constrained some of the rules, it made it harder for foreign students to come to some of the universities. But the universities were so reliant on it, it was the assumption that they could always get that in. And I think there's the assumption that people will

Hunter Hastings (38:03)
Mm-hmm.

Mike Jones (38:08)
always go get a degree.

I think that starts to disappear slowly.

Hunter Hastings (38:14)
Yes, that's another fundamental difference, Mike, in the new way of thinking about management and organization. So the assumption tends to be that the next period will be like this period, right? I'm gonna do a straight line projection. Yeah, that's exactly the assumption. The assumption in self-organization and complex systems is that that's not gonna be the case.

Mike Jones (38:26)
Yeah, plus or minus 10 percent.

Hunter Hastings (38:38)
new stuff is going to happen that I can't predict, therefore how can I be prepared for that? How can I be an adaptive corporation? And so that's a big change in assumptions.

Mike Jones (38:38)
Yeah.

Yes, and then you sort of start thinking that way, then it makes sense why you'd want agility. It makes sense why you would need to make sure you've got the, you actually spend more time looking at the future and innovations and how we bring that into the organisation, rather than the assumption is that it is always going to be quite stable. So as long as we're efficient.

Hunter Hastings (39:10)
Mm-hmm.

Mike Jones (39:11)
and we've got lower cost per head count than any else, then that's it, we'll be fine.

Hunter Hastings (39:17)
Yeah, and that's another big change, think. Mike, in economics, they introduced the idea of efficiency, which is always translated as reducing cost, so I can increase my margin. Whereas today, we don't think in efficiency, we think in effectiveness. Can I create value? I'll manage the costs later. The question is, can I be effective in creating value? So that, again, is a huge margin. Economics is my...

Mike Jones (39:26)
Yes, yes.

Hunter Hastings (39:43)
my ⁓ academic track and I think efficiency is one of the worst ideas that economists have introduced to business. And it's very damaging.

Mike Jones (39:49)
Yeah, yeah, yeah. It is,

yeah, is. it was always about just reducing costs rather than, and it's normally blind. It's not looking at, you know, what, where can we add value and how do we add that value? It's just straight away. We just need to cut costs and it's just blind. just go, we'll just cut it from here, cut it from there. There's no actual understanding about what, what's that going to impact on how we merge value.

Hunter Hastings (40:17)
Right, and the other thing that happens there is people become cost, right? Their payroll costs or their customer service is a cost and therefore I'll try and reduce that because it's a cost and then the damage that I do can be many, many multiplications of just the accounting line of reducing dollars.

Mike Jones (40:36)
Yeah, we've got a company called Octopus Energy. They're like the fastest growing energy company in the UK. And they, so what traditionally happens is that the first thing that goes is we outsource our customer service or we automate a customer service. So anyone wants to phone up, they have to speak to AI or they speak to...

a machine for ages until they eventually may get to someone and that someone then can't help them. Where Octopus Energy, for real, is not novel, but it's a really useful idea that actually, why don't we actually have people? So that if someone needs to phone up, they could phone up straight away and they will get hold of a person pretty quickly. But not only will they get hold of someone really quickly, because there's nothing more frustrating than waiting, is that that person has all the autonomy

Hunter Hastings (41:12)
Mm-hmm.

Mike Jones (41:27)
to make decisions. So they can actually, that one person can actually solve their problem rather than then, ⁓ you need to speak to this person and then you spend all your time trying to get to the right person that can help you. And I think that's an idea of how do we add value rather than cutting costs.

Hunter Hastings (41:39)
Yeah, they f-

Well, I was going to say exactly right. That's a great example of value adding. So what is the custom of value? Well, obviously they value talking to people. They value getting a good decision. They don't value talking to a telephone tree and they don't value yet talking to an AI quite so much, but they do value people and responsiveness and being nice to you and getting you to the right answer. So that's good value analysis, I think. I hope they're doing well.

Mike Jones (41:57)
Yeah.

Yeah, yeah, it's good.

Yeah, yeah, they're doing really well. It normally traditionally, and again, I think it's the assumption that the traditional energy companies had, they're still very much like back in the days where you had IBM and the seven dwarfs, they just locked in, there was no space for incumbents. But now the assumptions have changed and you've got these incumbents coming in that are dominating.

So their assumptions that they will always dominate is starting to fall apart. So that's quite good.

Hunter Hastings (42:41)
Yeah,

that's another thing that's changing a lot is this idea of industry structure that you can point to the boundaries of an industry and then there'll be three dominant firms and that's how much profit can be made in that industry space. And now there's nothing like that. You look at Apple, you can't say that they're in any industry. They're in movies and healthcare and computers and all kinds of services. You can't put them in an industry box. That's no relevance to today.

They're in the service business and many, many services.

Mike Jones (43:10)
No, no.

Yeah, it's even like Google, you know, they've been so good at data analytics. were like, well, well, pharmacies now, fair game. Pharmacies, like, well, what are you doing here? You're a, you're an internet search thing, but they go, we've got vast amount of experience in data analytics. So pretty much that's where we're going to go. And so all these things now it's, it's, it's boundaryless. It's all about actually where, where can you.

Hunter Hastings (43:23)
Mm-hmm.

Mike Jones (43:43)
Where do you feel you can add value? And people emerge into that. Like you said, it's not so strict that, you know, we've got these people that just do this and that. And that's why I think the paradigm needs to change for leaders when they're looking at an environment, is to not be constrained by the assumptions that they're in this market, in this market only.

Hunter Hastings (43:55)
Yes.

Yeah, so I think the analysis comes, who's my customer? Who do I choose to be my customer? And then developing deep, empathic knowledge of that customer and then figuring out how to serve them. Which again, I think is the opposite of strategy. It's starting with the customer, starting with their needs, and then responding to those needs where that's analytics of.

healthcare variables or whether it's delivering parcels to their doorstep in an hour. It's all about the customer and what they value. It's a very positive change for business, I think, if everybody can make the leap.

Mike Jones (44:34)
Yeah, yeah.

Yeah, there's definitely opportunities. And I think those that make this leap sooner rather than later will definitely benefit. What advice would you give to leaders now, thinking about this? How would you get them started on this journey?

Hunter Hastings (44:56)
Well, our approach is very much unleashing, to use that word again, removing barriers and removing constraints. there's a lot of science behind how systems flow. So we're talking about how value flows and how knowledge flows and how people can interact together in a network to achieve great outcomes. So look at the...

the barriers, what is stopping people from moving fast or from creating new things or from running an experiment or giving better service or like your people on the phone, is there anything stopping them from giving the best answer or giving a decision? So ⁓ it's an interesting place to start to look at the barriers and then remove them and then watch what happens, what are the consequences and then keep on doing that. And then there are certain...

constraints or guidelines you can put in. So speed is one. So if I tell people, hey, we want you to move fast, it's okay if you make mistakes sometimes, but move fast. That's the kind of injected constraint, not a purpose, but it's a way of operating. So what are the positive influences that you can put in there? And then stand back and see what happens, which is the great challenge for managers and leaders, right? That's a hard thing to do.

Mike Jones (46:09)
Yeah.

Yes. Yeah. Even though you always tell them to, you know, eyes on, off, like keep away. there seems to be this excessive need to, to get into detail and you see the organization, Constatini to, you know, the people are in the wrong places. Decision rights aren't right. And I'm glad you mentioned about the constraints. So I wrote this week about

Hunter Hastings (46:16)
Hmm.

Mike Jones (46:35)
an organization must protect its ability to act. It's all about that. What's stopping people from acting and trying to get the loop from observation to decision or observation to act as small as possible. We don't want this elongated.

Hunter Hastings (46:39)
Mm-hmm.

Right.

And that's another great insight, think, of yours, Mike, which is action is the variable here that we want to maximize. So strategy is not action. It's thinking about the possibility of maybe acting in the future and at the same time we're planning. Let them act and then see what the results are. So as you say, freedom to act becomes the big influence on that. So action then turns into results.

Mike Jones (47:10)
Yeah, yeah.

Hunter Hastings (47:23)
and then I can adapt to the results and then I can create more action in a positive loop like that. So you're right. So we think about action more than planning and strategy.

Mike Jones (47:33)
Yeah, yeah. Because, you know, the strategy is just that it's a hypothesis. It's always going to be a hypothesis. If it doesn't, if you're not doing anything to understand if that's true in any way, if you're just staring at it, it often does. Or they spend all this time trying to make a perfect plan that when it eventually meets reality, when people go to act, it just falls apart because it's so constrained, so linear.

is never going to survive that first test.

Hunter Hastings (48:05)
Yeah, exactly, but it's also a hypothesis I'm trying to impose on others further down the organization. the other variable that we've got to understand, I think, is the human desire for power. And there's power over other people, and we can probably investigate that. But there's also power over future events, which we think we can get through strategy and planning. Why do we like that?

There people who study it and one of the hypotheses is that, you know, I start up my company, I start a job in my career, I get better and better, I climb this ladder, I get power. And, ooh, I like that. And so I'm gonna start leveraging that power. I've just lost all the reasons why I climbed the ladder, which is about creativity and intuition and collaboration and so on like that. as I get...

better and better or stronger and stronger in power, I lose all the reasons why I succeeded in the first place. So it's an interesting thought. one of the things we've got to drop is the idea of managers as having power over others, the hierarchy of authority. We've got to lose that idea.

Mike Jones (49:18)
Mm-hmm. Yes. ⁓

Hunter Hastings (49:21)
And that

may be very hard. It may be an intrinsic human desire for all I know, but we've got to think about it.

Mike Jones (49:28)
Yeah, and it's where you got to look at really what a manager is there for. it's interesting when we look at organizations, we think about decision rights. It's like, well, you know, these can make these decisions. They can't make these decisions. it could be reasons why they can't make those decisions, i.e. there's constraint, they don't have the visibility of those things. But when you think about leadership, it's thinking, well,

is about deciding what needs to happen and ensuring that it does.

Hunter Hastings (49:57)
Well, think managers are there for two things. One is a power relationship. It's this idea of the folks at the top transmitting power down through the organization through the levels of management. And the second is it's a control function. I only want certain things to happen and the way to control that is through authority and supervision and so on. And that is the old concept of the corporation. And so we've got to attack both of those concepts, both.

both control and power.

Mike Jones (50:26)
Yeah. And

you see it play out because after my business, they go, well, when we go to a meeting, we must have this person here because the person they're talking to is of this band or this hierarchy and they won't speak to someone that's not either higher than more on the sameism. I'm like, well, that's just a waste because it's this person doesn't have the answers that person does.

Hunter Hastings (50:35)
Mm-hmm.

Mike Jones (50:52)
who's several layers down. So why can't they just speak to that? Would it be a lot easier? But again, it's that power.

Hunter Hastings (50:57)
Right, meetings are an exercise in power relationships. One of the things that you hear Elon Musk say, and we study Tesla as one of the examples of this new form of organization, he hates meetings. Meetings are not useful. He wants to talk to the engineers, the people at the front line, directly, because they're doing the important work, they're running experiments, find out what happens, find out what's in their way, and he's got the ability to remove a lot of those blockages.

and as few meetings as you can possibly have, and know, Xero would be a good place to start. And you can replace it with technology, with Slack and other kinds of things like that, but no meetings.

Mike Jones (51:33)
Yeah, yeah, yeah.

Yeah,

because they spend all their time on meetings rather than doing what you say. I always talk about the Conan Ashman theory, you the ability to regulate the systems only goes to the model you're using to regulate the system. But lot of that comes from my ability to go several layers down or not even layers, but to the edges of my organization, to the engineers and speak to them because they're the ones closest to things. The more that I understand

what they're doing, what they're struggling with, what barriers they have, then I have a better sense of how my organization is actually working rather than what's the organizational chart that we've got, because that's useless to me. I want to know how the thing's working and if there are barriers or constraints that are preventing them from taking action, then I want to know about that and I want to remove them.

Hunter Hastings (52:32)
One of the ways Musk has described his management technique is to, he goes to each of his companies once a week. He talks to the engineers and tries to identify what's the one most important problem or barrier that we're facing. They work around that. He calls it sleeping at the bottleneck. know, stay there until you've solved that problem. And then you move on to the next company and you come back next week. So at the end of a year, he solved the 50 biggest problems.

Mike Jones (52:39)
you

Hunter Hastings (53:01)
remove the 50 biggest barriers that that company is facing and then let's see what happens, see if it grows, see if it succeeds and so on. That's an interesting way of looking at the management challenge.

Mike Jones (53:11)
Yeah, I like that.

Yeah, Steve, the bottleneck. I like that. But again, that comes back to the point about protecting the ability to act because it's a natural thing of like you talk about the law of thermodynamics and all this stuff that there's a there's there is a sense that we go into internal inertia around all these policies we make. And some of them seem like a good idea. We just don't understand the full

Hunter Hastings (53:20)
Mm-hmm.

Mike Jones (53:37)
consequence of what happens because it's an emergent system. We could do something with good intentions, but we don't know how it's gonna interact with something else and who then that's going to constrain. having that ability to identify those at the front line and seeing how that is disproportionately impacting their ability to act and then how do we remove it. I like it.

Hunter Hastings (53:57)
Yeah, and

that's a lot of the penalty of administration of the layers of management. They create policies, right? They're trying to generalize and standardize. Here's our policy. They create processes, and that becomes restrictive. That becomes constraining. And so hacking away at those policies and that administration and those levels is one of the ways that you get to this more dynamic system.

Mike Jones (54:12)
Mm.

Well, I'm glad you're fighting the good fight for the revolution. We're trying to do that here too. So hopefully we can start the revolution and get people to entertain a new paradigm shift where we can create organizations, management leadership and strategy that can meet the new reality that we find ourselves in. But it's been a pleasure having you on the show. this?

Before I let you go, is there anything that you want to leave leaders to think about from this podcast?

Hunter Hastings (54:55)
Well, I think the purpose of value creation, so think about that, creating value for customers, creating value for colleagues, and how that changes your thinking, and then do that from a systems thinking perspective. How can I get the system unleashed by removing its barriers? I mean, we've talked about that a lot, but those are the two concepts, I think, value creation and systems thinking.

Mike Jones (55:20)
I like it. As a systems thinker, I definitely applaud that. Yeah, that's awesome. And I think that is really true. I think that really brings the essence of that. Let's understand the value and then understand the system, the constraints. I think that's a great value for our listeners to go away and think about. But Hunter, I'm so glad that I finally got this opportunity to speak to you. It's been a pleasure. And I hope that we can continue this conversation and continue the revolution. But it's been a pleasure to have you on the show.

Hunter Hastings (55:46)
Thank you, Mike. Thanks for the invitation. And I will try and keep up with you because you're leading the revolution.

Mike Jones (55:51)
Thank you. Yeah, and I'll put your details in for the listeners to get in touch and join you because a lot of the stuff you put out is fantastic. And for the listeners, if you really enjoyed this and you found it valuable, then please like and subscribe and share to your network so that other people can get value from it. But that's what we have for today. And it's been great having you on. Speak to you soon, Hannah.

Hunter Hastings (56:17)
Yep,

thank you Mike.