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Why adaptability is so important for investing and scaling business

Adaptability
Episode:

30

2021-03-02
Decoding AQ with Ross Thornley Feat. Jay Jacobs

Show Notes

Jay is the Co-Founder of paperlessPARTS, Manufacturing Technology Expert and Investor. He has also recently colaborated with Ross on the mini documentary: Adaptability and the Future of Work: Seeing The Invisible. AQ


Ross and Jay talk about  adaptability, entrepreneurialism, scaling and core values. The pair also discuss de-risking the future, working together on Adapt AQai and their journey. 

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Timestamps

  • 0:58 Jay's background and examples of early adaptability
  • 04:33 Jay's employees adaptability
  • 07:16 Sticking points and failures during the adaptation process
  • 11:02 How would Jay personally describe adaptability and why it's important
  • 14:12 If Jay could have measured adaptability how would it of effected his businesses
  • 23:17 Jay's adapting personal journey
  • 27:38 Predicting adaptability in 5 years time  
  • 30:59 Why did Jay invest in AdaptAi
  • 35:28 Final thoughts

Full Podcast Transcript

Episode 32- Decoding AQ with Ross Thornley Feat. Jay Jacobs - Why adaptability is so important for investing and scaling business

Intro

Hi, and welcome to Decoding AQ, helping you to learn the tools, mindsets, and actions to thrive in an ever-changing world.

Ross  

Hi, so I'm here with Jay Jacobs, who is just an all-round, great human being. And I got to meet him through Strategic Coach and Game Changers. And I'm absolutely delighted to be able to spend as much time as I can with him. And we've got him here today to have a bit of a conversation about adaptability. So perhaps. Hi, Jay, it's great to see you again.

Jay  

Good morning, at least it's morning here in the US.

Ross  

It's just gone half-past one in the afternoon here in the UK. So still bright and nice outside. So do you want to just give us a little bit of context for people in terms of maybe a little bit of your story and background, and perhaps what brought you also two Game Changers as well?

Jay  

Sure. So I am a born entrepreneur. And I have been starting and creating businesses since I was probably 10 years old or so. And that culminated with the company which I created starting in 2001, and exited in 2017, a company called Rapid, which was in the business of producing very quick turn prototype sheet metal and machine parts for primarily product developers. And why that is important in regards to our conversation today is that we were typically growing at 30% to 40% a year. And as I thought about how adaptability applied to my past, it became pretty clear to me that adaptability was an important part of our organization, because we started out and producing these parts and very manual effort. And at the end, we had over 325 team members, we were producing over 30,000 unique part numbers a year and quoting over 100,000, unique part numbers.

So the scale changed dramatically. And many of the people though, who were on the team, in the beginning, stayed with us. And they adapted along the way. So it showed me that adaptability is very possible. For the company and for an individual, because the types of people involved in Job Shop manufacturing, particularly at the level of actually making the parts, they are very resistant to change. But what I noticed over time, was that because change was so constant, that it became normalized for them. So in a sense, they change their adaptability. And it wasn't intentional. We didn't do this setting out, it was out of necessity. Because as our business grew, we had to automate and bring in new tools, and change the methods of how we made part. So as I look back, very excited on how we created a team that did adapt.

Ross  

Yeah. And I think that's really interesting. And what a great story to go from, humble beginnings to a point where adding complexity in a business often happens as you scale it, and whether that's complexity, a number of team members, different processes, different systems and tools, and to adapt to those things, to keep it still manageable and possible, and how we can use all of these things without, getting ill sick and pulling our hair out and having a horrible time. We have to adapt and change to that. Would you say it was more a case of their tolerance of so much change gave them, it became normal? Or would you see it more as it was maybe more like a muscle and they became stronger at dealing with change. And they had an appetite for that adaptability that they saw. How would you describe that?

Jay  

I think it was both, Ross. I think that some people are just not comfortable with change, but we just made them, change was normal so they just became comfortable. However, there are others within the organization that I definitely think didn't realize that that was something that was innate within them that they enjoyed. And so we gave them the freedom to embrace that and to the permission to say, “Okay, it is you, we want you to try new things, we want you to take what we are giving you and move beyond it if possible.”

And as I was thinking about this, one of the ways that we estimated a lot of parts and a way that we changed our systems to adapt to the volume of parts was we gamified a lot of the estimating. And in fact, we hired, it was typically young men, there weren't a lot of women, but there were some, but we said, “Do you like to play computer games?” You’d be potentially a great fit for rapid in our estimating and engineering department because our CAD system was essentially a computer game. And we gamified different aspects of that. And we kept score of say the number of quotes and number of parts engineered. And as they got to certain levels, we recognized and celebrated that

Ross  

That's really interesting. And I guess, finding ways to successfully adapt is part of it, whether it's mindset or finding something that somebody enjoys, and building that in, whether that's gamification or just the culture of an organization. I want to change tax slightly in terms of the dark side of adapting. And, sometimes it doesn't always work. And we fail to adapt. And I'm interested in that history of such rapid growth 30-40% year on year, relentlessly changing the market, changing how you estimate, how you're doing things. Was there a point at which things didn't go right, either in the business or the systems or certain people? And what happened from those kind of sticky points or failures? And what did you learn from that in their sort of adaption process?

Jay  

Well, there were definitely many, many failures along the way. But one of the core values that we had was to a sense of urgency. And I specifically would tell the team members that I would rather have you make a hundred decisions a day, and get hopefully 80- 90 of them right. But understand that there's going to be failures and then say that is okay. And we had a culture that it was okay to fail, and come up with a plan B or necessary a plan C, rather than have you make 25 decisions a day and get them all right, because that meant you didn't make 75 decisions a day additional. And those were what allowed us to move at the speed that we did.

Ross  

That’s interesting. And I guess this, you are called Rapid. And approaching things in that way of having a rapid experimental mindset allows you to move at pace rather than I've heard others say all the job is to just make three good decisions a day. And for you it was more about let's make lots of decisions and learn from them. And that will help us move beyond our comfort zone perhaps and extend that edge.

Jay  

So there was also a couple other, there were employees who did not just were not comfortable with this, and our organization was built on speed. So if you are not comfortable, and what I mean by that is really comfortable. We tried to be accommodative, but there were just people whose “This is not the place for us.” So if you want to call it a failure, I don't know if I call it failure is just a different mindset that couldn't be overcome. But interestingly, we over time would make production parts for companies, they would be lower volumes, so they weren't of interest to most of the production sheet metal shops, but we would be making the same part three, four times a year.

And you do need a different mindset to make production parts versus prototype parts because the production parts need to be made the same way that they were six months ago and they need to be made the same way in six months from now. So although we had people in a different, more structured mindset, they still had to be open to adaptability, because our production methods changed rapidly as well. And so I think that that's important that it wasn't just a particular type of mindset, whether you're open, whether you prefer less structure, whether you prefer more structure, both of these types of people were adaptable from what we saw.

Ross  

And I guess, the niche that you owned, and you found yourself in and chose to be in, gave grounds like you said, of urgency and this high appetite for adaptability. How would you actually describe adaptability? Because it's one of these words that the more we've talked about it in our context, the more enriched we get of our understanding of different views of it, how would you describe it?

Jay  

Great question. And I look it as simply as the ability or willingness to change. 

Ross  

Okay. Interesting. And why would you think that would be important for an individual or a company to think about and look at?

Jay  

Well, the reality is with the technology that is occurring today, and the convergence of technologies in different areas, that change is just happening faster and faster. They've been many published studies, that there will be millions of jobs in the US, if not tens of millions, eliminated over the next five to ten years because of automation due to technology. And there will also be a lot of jobs, which are created as a result of technology. So the ability for the workforce in a macro sense to change is very critical to the ability to adapt to the new skills and tasks that we will be asking of them, not only so they will be gainfully employed, but so they will enable our economy to continue to grow. Because without those people adapting, there will be jobs that just won't be able to be done.

Ross  

It's interesting, I was listening to a podcast run by another couple of friends of ours, Dan Sullivan and Peter Diamandis and they were talking about that same thing of a convergence of different technologies. And its effect on corporate world and especially in retail, and they were discussing the fact of Sears going bankrupt. And not many companies make it past the century mark, and Sears did I think they were 130-132 years on and filed for bankruptcy last year. And they were discussing this kind of series of events that we're going to face in the future, where it's going to be so relentless this change, the viewers, well everyone's going to be going bankrupt.

Every company will at some point, and therefore, reinvention and pivoting and adapting to continually ride that wave of change is going to be a critical component for the future of work and the economy. So I'm interested in terms of what we're trying to build here at Adapt.AI is a way of being able to measure adaptability and improve it. What sort of value could you see in that bringing to organizations? If this was a conversation we were having, perhaps five years ago? How might that have affected your business? If you could measure adaptability?

Jay  

Well, if you are a corporation, I won't be as specific as rapid, but I'm thinking of a larger organization. I think it's important for the company to understand both on a macro and a micro level, the adaptability and at the larger level how adaptable is the company? What is their resiliency to change so that then it's not good or bad, it's just if you don't know that then you can't plan for the future. So if you have the ability to measure adaptability, and score that against other companies, then you will know whether you need, how fast you can move, and whether how much training your workforce needs to become more adaptable. And it just may be that you recognize from a scoring that your company just can't make the changes that you want. And that, if we look back historically may actually explain why some companies failed in initiatives is they pushed for adaptability when their workforce was not ready for it.

But I also think, so that's more of it may be an executive-level, but I also think it goes down to the micro. And you understand at the individual level, who needs training and who is actually highly adaptable. And you can put the highly adaptable people in the right roles so they can propagate the change. If you put somebody who's not adaptable in that role, chances are that you will have less opportunity for success. And as you are thinking about hiring, it becomes potentially a component as well. So it may not be important to have a lot of adaptability in some of the roles, other roles, it might be very critical to be successful.

Ross  

I think it's fascinating in terms of, the semantics of language. And when we talk about change, I think inertly as human beings, there's kind of a couple of camps, ones which are extremely excited by the sense of change, another that really fear that. And this kind of dynamic that Tony Robbins talks about of certainty and uncertainty, we need both, we crave both. And I guess change can be the same in certain ways of that you want some certainty and some uncertainty in there. But if it balances out to a different place to what your own expectations are, that's when you get friction points, and you get potential, downsides of things. I'm interested in…

Jay  

If I can jump in there. So, that comment Ross made me think that when companies are introducing uncertainty, then they also need to ensure that there is certainty. And so I look back, what I commented on with Rapid is we created a culture where it was okay to fail. And if you have a culture where failure is punished, but you're asking people to change, then that's in my eyes a recipe for disaster. You’ll have a lot of frustration, and probably employee turnover.

Ross  

For sure. And another favorite quote of mine is about gradually then suddenly, and it works for exponential technologies. And they're deceptive until they're disruptive for companies when they were doing well and then they've gone bankrupt. Well actually it was gradual than suddenly, and I guess this highlights what we're wanting to do is bring data and insight early in that stage so that you can make better decisions. And ultimately it's about building confidence for the future. And if adaptability is a key component for change and future, the earlier we can get that insight to know where you're benchmarked and who's in the right places where you are as an organization can help make those better decisions about the confidence that you're facing tomorrow in the right way.

In terms of you,right at the very beginning you opened up in the belief that adaptability is something that can be improved, that can be learned, that can be curated and coached and supported. And is that your belief? And is that some examples that you've seen that really happen? You mentioned right at the beginning that it is but I just like to unpick that and expand that a little bit about, “Okay, it's one thing getting a score and getting some insights. But then what do you do about it, and can we improve that measurement?

Jay  

Well, I think it is a muscle that can be exercised. And that's one of the things that excites me about Adapt.AI. Is that not just the opportunity to measure adaptability, but to create the tools that will exercise that muscle. And I don't I think anybody's done that. The two are the two that need to work together. But the ability to formally exercise that muscle to expand the capability and then measure the progress along the way. And as Adapt.AI grows, your ability to measure the tools that you implement, across different groups and say, “Okay well, this is a common tool, perhaps it's used in the workplace to make employees comfortable with change but it really doesn't work.” So you have the opportunity and the ability to be a game changer in understanding whether existing tools work today and then define a suite of tools that are the best to help a person and overall an organization. Learn how to adapt.

Ross  

I think it's really interesting because we often look backwards to help us move forwards, we look at the past data, we look at information, we look at how we've become successful today to help us predict how we might be successful tomorrow and we look to make it leaner, more efficient, look to scale it grow it, go into a different market, or a different geography of these things. And I think what's interesting in the era that we're living now, is so much more of that is uncertain, that what came before isn't perhaps as helpful as it might have been in the past. So we're looking at new ways of doing things. And if we want to survive in that place, but even better still thrive in that new area, then we've got to embrace this rapid adaption of things.

And when you were talking there, it made me think of some of the conversations we've had in the past about one of your personal ambitions and goals and an area where perhaps humanity is more familiar with measurements, outcomes and interventions to improve it. And that's in sports. And we measure our sports we have stopwatches, we have timings. We have league tables, we have Olympic Games, we have this variety of ways to understand our performance. And we then have loads of ways of intervening that from nutrition, to coaches to different tools to different things to improve our performance and ability.

And that's been going on for decades and years. And we build off each other in a kind of open source community from something that works in one area, we apply it to another area. But I don't see that happening in the context of businesses very much, we tend to be much more silo-based, we protect our IP when we discover something well. And so I just wanted to let our listeners hear about your story and your absolutely wonderful moonshot and ambition personally in the sports field and how you’re adapting on that personal journey. So just share a little bit about that Jay, that'd be great.

Jay  

Sure. So I have decided that I want to win at the National Senior Games this June, the 400 meter race in my age group. So something that I have been thinking about for a while, and I started embracing and jumping into wholeheartedly about a year ago. And it's tough. I have not run sprints since high school. But I am changing, adapting my body from running trail races and ultra-marathons to running a quarter of a mile essentially, once around the track. And so there's a lot of adaptability in the body, but a very specific adaptation that I had to make and I hired a elite sprint coach to help me in this journey.

One of the first things he's done is change how I run my running style. And what I mean by that is that when you are running a 5k or a longer distance, you tend to have more of a forward lean in your body. Whereas the correct posture for a sprinter is to be almost completely vertical, so that when you are striding in your foot hits the ground, you are pushing off with as much force as possible, which is what you need to do to move very, very quickly. So I have, I'm in the process of I can't say, I've completely adapted my running style, I'm still learning and being coached on the correct form, but my running style is adapting from that longer distance to the sprint form.

Ross  

I love that analogy. Because what we're considering in the marketplace is our marketplace is changing on our work and company and corporation basis where you just described everything being different when it was about long distance. And the style, the processes, the training, the way you ran, all of those types of things, perhaps even the food you eat, the way you do everything, right. And now you're saying, “Oh, I need to, and I want to compete a different game,” I'm changing the game, I want to now win this kind of thing that happens much quicker, much faster. And I've got to take some of the things that I had before. And I've got to unlearn certain stuff. So I've got to adapt my styles, my processes to compete in a different style and a different game. And I guess that's really what we're fundamentally talking about is the styling game is changing out there. And all of these technologies, the barriers for entry, the connectedness of everybody globally, is shifting how business is being done. So we've got to change our posture, we've got to change the way we distribute our weight, the way we invest, the way we train and do things. And I think that's just critical. I don't know if you agree in that kind of same thinking and analogy.

Jay  

That's actually a great analogy. Yeah, I hadn't thought of it like that. But it does make a lot of sense.

Ross  

Yeah. And so in terms of we've got to know each other. And we've shared this view of what the world may look like with this huge amount of transformation and disruption. And if you could vision out and see in five years time as a future, and we've managed to crack how to measure and improve adaptability. And we've started getting this sort of industry benchmark for AQ, this adaptability quotient, we've had IQ for intelligence, we've had EQ for emotional, we're now setting this fundamental of now, it's important to measure our adaptability. What do you think that world might look like as a result of that in, say, five years time?

Jay  

Well, I think that it will be a metric that is reported or at least discussed by corporations. And it will, as they think about change, it will be a way that they can measure their ability to execute on the change that they desire. I also think though, from an individual level, that it may take a little longer than five to 10 years for the majority of the people. But for people who have a growth mindset, that you will want to know what your adaptability is. And it's not necessarily that it's important whether you have high or low adaptability, but that you recognize what your propensity for change is, and understand that if you have a low adaptability score, that it's something that you probably want to spend some time exercising that muscle improving, and recognizing that that is important for your career, and for your ability to contribute to the team neuron.

Ross  

I think it's interesting because for me, adaptability covers all areas from our work performance to our mental state, our emotional state, it's as relevant at home. We go through changes as we survive through life. We have relationships, we have dependents, we have children, we have families that all go through change through health challenges, and adapting to those new situations are really, really important.

So I think there's a there's a big side of what we're trying to do to help organizations de-risk the future and be able to adapt and change to where there's energy of new value, and perhaps intervene in the way in which there innovations happen, the speed of those innovations, but also to ensure that perhaps this opportunity of disruption could also leave some people behind. It could leave some people in a terrible situation. You talked about losing jobs that can be wrapped up in your identity, can really have a knock-on effect to families and whole industries can be a state of seeing the world look very dystopian. And you're right, I think it's the new sea that we're going to be swimming in this rapid change.

And so being prepared for that, you want to make sure that you've got the right oxygen pack, the right breathing material, the right things to really thrive in that environment. And so, in terms of perhaps what you're most excited about, and why I feel very privileged that you've joined us as a founding investor in Adapt.AI. What were really your, what led you to choosing to do that and come on board and be part of that founding investor group? What did you see as the key opportunity at what we're working on?

Jay  

Well, a couple things, Ross, first of all, I'd have to say it's you. As we've gotten to know each other over the past year or so the success that you've had, and how you approach the I don't want to say problems, but the just how you wrap your arms around and very, very thoughtfully look at and, and very introspective in how you look at the issue at hand. So I've just been impressed with the mindset you carry. And I have the confidence of you, that you will lead a team that will be able to solve this interesting opportunity. And also, I think that you've just opened up such an exciting field. And it's one of those ones that sometimes the simplest things are the most elegant. And yours has been hiding in plain sight this whole concept, I think, and you have the foresight to say, there's something here that we can expand upon and make useful to humanity, and also build a business around it. So that's exciting to be part of it. But it takes the right person to lead the effort to build a team to make an idea. Yeah, that's part of why I'm very excited to work with you.

Ross  

Well, that's really great to hear. And I mean, we as two entrepreneurs, chatting, have had successes, we'll have some more successes, we'll have some failures along the way. And we keep, we keep getting up. And we look to make as many good decisions as we can, experiment and embrace those. And sometimes, this balance of some certainty and some uncertainty is what gets us up in the day. And I'm super excited about how we might be able to affect humanity in terms of uniting humanity, accelerating the best parts of it, and helping people show up and be present in a way in which is not victimized, because this has happened to them.

And they sort of react to that, but how can they respond to it with better tools and equipment to do that in their, their thinking, their approach, how they ideate, how they solve problems. We might be surprised of what we uncover, right? this is an area where at the moment is kind of defining some new ground, it seems really, simple and obvious. But we might find, I was talking to somebody the other day about how this could become potentially a new asset class for investing in organizations or loaning organizations money, we have credit scores, and we have various things that give information to make decisions about the future of that business. Are they viable to be able to pay back? Or are they viable to be able to get a return on their investment that they put in? What if AQ was a new asset class that helps predict that, helps predict that future success that you're placing your bed in the right place of that security?

So there'll be all sorts of ways that we're excited to transform a number of industries, whether that's in recruitment that you mentioned, in HR, or whether that's in how companies are financed or how they innovate. We just know that the timing is right to do something about adaptability and measuring and improving it. So I'm super excited to share that journey with you. I want to say it's been a real pleasure to get to know you. I look forward to June and celebrating your win of the 400 meters. I think that will be great. And perhaps learn a little bit more about your adaption story and your process that you went through for that would be absolutely great. So thank you. If there's any other final thoughts that you want to share? I'll give you a moment to do that.

Jay  

I think we've covered a lot of ground Ross. So thanks for the opportunity to chat with you. And I again, to be part of this journey. This is a lot of fun. And I think one of the things is we're both members of the Strategic Coach Game Changers program, maybe this is my final thought is a lot of the tools that we are introduced to are designed to make our businesses better. But Dan is very cognizant that the tools, perhaps have even more impact in our personal lives. And that's one of the things that adapting the ability to become more adaptable to grow your ability to accept change in, as you said, the life situations that one's presented with, I think that that's really cool and will be a tremendous side benefit. And really bring something to improve humanity. So congratulations on coming up with this concept. 

Ross  

Well, thank you and I want to create a world of abundance and thriving, not one of collapse, or just on the edge of surviving. And I hope that together and what we're doing at Adapt.AI can help move the needle in that direction, which would be great. So thank you, and I look forward to seeing you in a few weeks time at mid-April.

Jay

Yes. Great. All right.

Ross  

Yes, take care, Jay. Thank you.

Voiceover  

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