Joe Navarro – Trust, Deception, and the Human Side of Leadership

00:00:00: One of the most important jobs for any leader is deciding whom to trust.

00:00:06: Every organisation is built on trust, boards trust executives, executives trust management and customers trust brands.

00:00:17: And every day leaders make decisions based on their assessment.

00:00:23: people The ability to identify talent build relationships put trust wisely is what separates exceptional leaders from average ones.

00:00:34: But there's an uncontrollable reality, the same qualities which allow organisations to move quickly innovate and grow can also create vulnerabilities.

00:00:46: trust can become complacency.

00:00:48: loyalty can discourage challenge.

00:00:51: confidence can obstruct your warning signs but in hindsight seems obvious And that rises an essential question.

00:01:00: Why do intelligent, experienced and well-intentioned leaders sometimes misjudge the people around them?

00:01:07: why do organizations occasionally enormous trust in people who later turn out to be their greatest source of risk?

00:01:17: today's guest has spent much of his professional life studying exactly those questions.

00:01:23: I don't think that it is overstatement.

00:01:26: A Joe Navarro is one of the world's most influential experts in human behavior, influence and deception.

00:01:35: During his twenty-five year career with the FBI he helped shape the FBI's behavioral analysis program And spent decades studying how people communicate, influence gain trust.

00:01:49: Many listeners will know Joe Navaro who has books including bestsellers such as what everybody

00:01:56: is saying.

00:01:57: I have followed Joe's work for years and what i particularly like about Joe's works, that at its core it's optimistic.

00:02:07: It's becoming a better observer A better listener And ultimately... ...a better leader.

00:02:14: Because the goal is not to eliminate trust.

00:02:17: The goal is Lay's trust wisely.

00:02:21: That's precisely why I wanted him on this podcast.

00:02:25: I want to discuss with Joe why smart people get

00:02:28: people wrong,

00:02:29: just as a leadership skill

00:02:33: and what it all means

00:02:35: in the age of AI.

00:02:38: The Gatekeeper inside.

00:02:41: risk and consequence...

00:02:44: The new podcast

00:02:45: on Leadership

00:02:45: Culture & Corporate Crime.

00:02:51: Joe welcome to our podcast!

00:02:54: It's a pleasure to be here.

00:02:57: So when bolts

00:02:59: Discuss risk.

00:03:00: They usually talk about strategy, markets and these days also cyber security regulation or financial exposure.

00:03:09: And this of course all makes sense.

00:03:12: Yet some of the largest corporate disasters I have worked on ultimately originated from one individual.

00:03:20: Not technology not markets not regulation One person only.

00:03:27: Obviously, you have spent a lot of time analyzing individuals who cause significant harm.

00:03:35: Do think that organizations systematically underestimate human risk?

00:03:40: That is a profound question and your absolutely correct.

00:03:44: every organization sort of gears up prepares for the cyber threat or cyber attacks even employee safety or the employees park, is there lighting cameras and all that.

00:04:03: But if we look at these statistically significant fact most of the harm comes to organizations are from within that it's usually individuals within the organization, that overwhelmingly do most of the damage.

00:04:26: And they do damage in two ways.

00:04:29: The one way that most businesses think about biggest threat They see is oh my gosh this employee has been embezzling money or this employee has been channeling our technology to our competitors.

00:04:48: And since I retired from the FBI in two thousand and three, uh...I've been in The Private Sector dealing with

00:04:56: corporations.".

00:04:58: So yes that's the first thing they think of is the money side.

00:05:04: what they often don't reflect on that the individuals that usually cause the most harm then also caused the most time.

00:05:14: in a second way, which is you have to deal with attorneys.

00:05:18: You have to do it law enforcement.

00:05:21: and then the amount of management time.

00:05:25: And this when I sit down with corporate heads and I said think about how much management time?

00:05:32: to deal with this, whether it's depositions.

00:05:40: Whether it is dealing with employees that are upset over these individuals who have fiduciary interests.

00:05:52: and so when we look at the big umbrella of damage yes its almost always from within but it's bilateral.

00:06:03: It is both a fiscal matter, money-matter but its also the emotions and amount of time.

00:06:13: One thing that we look at... I always ask executives to give me number And i say tell what you think your worth for one minute or hour.

00:06:28: Or, you know this is if you had an hour to devote something what would that be worth?

00:06:33: Some say well five hundred dollars seven hundred dollars others obviously much higher than That.

00:06:39: and I say okay now imagine.

00:06:41: You have to manage that one in problem employee but One person that Is not meeting expectations.

00:06:53: And Now you do the math and thats.

00:06:56: That's when people start to realize, oh my gosh.

00:07:01: There were signs that we might have difficulty with this person and now we're seeing the manifestation of it.

00:07:10: but from a management standpoint It is an inordinate amount of time.

00:07:15: One thing Joe has always fascinated me is intelligence and experience do not seem to make people immune deceptions.

00:07:25: In fact, some of the most sophisticated leaders I have met and I had been spectacularly wrong about character for my views that sometimes expertise often seems to create overconfidence in judgment.

00:07:46: so what do you take?

00:07:47: Why do highly accomplished people make such poor assessments?

00:07:54: So we're sort of mesmerized physically by the appearance or how fluidly they communicate.

00:08:01: Oh, she's charming and so forth until you ask... The number one question I have executives asked is the One Question They Never Ask And that question is this Give me five examples

00:08:21: Of Five

00:08:22: Things that you have fixed and made better.

00:08:28: Just give me five, and you would be

00:08:30: surprised.".

00:08:31: Well they said well I ran this company over here And i was a manager there Over the CEO of this hospital.

00:08:41: Fantastic Give me an example.

00:08:43: Give me five examples Of things That You Fixed And Made Better.

00:08:50: All of A Sudden the room gets quiet.

00:08:55: And you begin to realize that running things is managing things, but when you can take something and make it better... Ah!

00:09:09: Now we're looking at someone we want on our team.

00:09:13: I know a lot of organizations that just check-the box.

00:09:16: You went to school?

00:09:17: Yeah.

00:09:17: You went graduate school?

00:09:18: Terrific.

00:09:22: and they somehow seem to think that is satisfactory.

00:09:26: And it's not because in every organization, They hire for skill but the fire for attitude.

00:09:37: I understand Europe a little different sometimes if you have difficult personality and so forth.

00:09:44: You had different restrictions But certainly In United States The trend has been to focus on those individuals that will contribute, that we'll add and get along.

00:10:00: That makes for more success certainly a better communication.

00:10:06: so it keeps employees from leaving.

00:10:10: I see in the upside of asking for accomplishments.

00:10:16: or what have you fixed?

00:10:18: Now, I encounter or imagine a certain situation that there is somebody who indeed has made its achievements.

00:10:29: So and we clearly see the performance as observable but character i'm saying it's tested only under pressure.

00:10:40: now A common problem my belief Is?

00:10:42: That promotional hiring decisions are often based on The first rather than the second.

00:10:48: so We tend to ignore basically this pressure This character aspect.

00:10:53: Would you agree with this description?

00:10:55: Well, I agree with the characters.

00:10:57: important and what we do every day defines our character.

00:11:01: And now i'll say it again What We Do Each Day Defines Our Character.

00:11:05: and so When We Break That Down and Say well What do You Mean?

00:11:09: What We do each each day when you walk into your office Whatever Office You Are Wherever are You in The World?

00:11:17: Do You Say hello to the security guards?

00:11:20: Do you say hello to the receptionist?

00:11:23: Or are you too important to do that.

00:11:26: If there's a piece of, if somebody puts a coffee cup and leaves it there... ...do you pick it up so that the entryway remains clean?

00:11:35: or do you expect someone else to do this?

00:11:38: How do you talk with other people?

00:11:41: Do they have genuine interest in what I call benign curiosity?

00:11:48: Hey, how was your day?

00:11:50: How are the children

00:11:51: doing?".

00:11:51: He's getting ready to go A-levels now in England or graduating and high school.

00:11:58: We begin to see pro social

00:12:02: acts

00:12:04: define a character as well as ignoring people not talking to them.

00:12:10: One of things that I look for is when people walk down the hallway who's greeting Who?

00:12:19: Is there a lot of eye avoidance?

00:12:22: In fact, I'm getting ready to go to Greece here in a few weeks.

00:12:28: And what we're seeing is that character is made up of all these things.

00:12:53: Like I said, if it's a really good person you are going to see a lot of pro-social activities including

00:13:02: respect

00:13:03: for other people's times and then... You begin to have a sense of What Is This Person's True Character?

00:13:14: pro-social.

00:13:15: Now, one thing a lot of companies run into is say well on the surface this individual seemed this way but as it turns out he was actually very Machiavillian.

00:13:27: He had or she had a hidden agenda something that we didn't notice Or there was Something There That Was Happening Without Our Knowledge.

00:13:39: When We Go Back And Look At Those Situations What We Find Is that it wasn't, as Carl Sagan the physicist said.

00:13:50: It's an absence of evidence is not evidence of absence.

00:13:54: just because you didn't see it doesn't mean it was going on.

00:13:59: where are you observing?

00:14:01: Were a lot of executives come in and they sit at their office.

00:14:07: I know executive have there own elevator.

00:14:12: Okay, that's great.

00:14:13: That's beautiful but you're not going to run into anybody?

00:14:18: You are now gonna be able have eyes on what really matters and i find the best executives make it a point To observe everything.

00:14:30: one of most interesting interviews I did was this executive in New York And uh...I talked about it In my books Whenever there is an issue with shipping and deliveries, in this and that.

00:14:46: He said my managers had the least amount of

00:14:50: information."

00:14:52: And I say well how did you get to the bottom?

00:14:54: Of it?

00:14:55: he said i would go down to The Loading Dock literally where the trucks come In and I Would talk To the people That handle that and they Will would Say yeah Well You know There you can't double Park Here in New York City on This day and so couldn't deliver on time, or there was all of our things are stacked up.

00:15:17: There was no

00:15:18: room.".

00:15:18: And he was talking to the right people!

00:15:22: He's head-of-the-company—he just went downstairs and talked... I am big.

00:15:32: if you want loyalty in an organization….

00:15:34: If you want people Here's something that significant.

00:15:41: If you want people to tell you, look there is a problem going on here and you need be aware of it.

00:15:48: make them your friends at all levels.

00:15:53: but if they never see or hear from you, if don't respect him then he'll not ever see.

00:16:02: this character is the accumulation everything we do each day.

00:16:11: And if it's positive, fantastic!

00:16:14: If its all negative?

00:16:15: You know that is what we call sociopathy That how we establish ourselves.

00:16:21: I love the term Machiavellian or Machiavelli character What you used to say and we discussed arrogant behavior.

00:16:30: Let us talk about dangerous personalities because thats really a K-Waterdose scene.

00:16:36: Not people here in this case who commit street crime but the dangerous executive.

00:16:43: The person who is

00:16:44: brilliant

00:16:45: delivers results, commands loyalty and appears indispensable.

00:16:52: in my experience some organizations become almost emotionally dependent on individuals like this.

00:17:00: so what are they?

00:17:02: behavioral pattern that should concern a CEO or board?

00:17:08: You're one of the few people that have actually asked an in-depth question like that.

00:17:14: The number one thing too for an organization to ask themselves is what are our exploitable weaknesses?

00:17:25: Now most organizations don't ask a question.

00:17:28: That's the Number One Question I Have.

00:17:30: Executives Ask Themselves and i said look, Don't tell me I don't want to know because I'll figure it out.

00:17:40: But you guys need to figure what are your exploitable weaknesses?

00:17:44: Number one is, do we have people that just leave their password written under calendar or they put on the back of a keyboard and there's... Okay!

00:17:57: That didn't take much.

00:17:58: So What Are Your Exploitable Weaknesses?

00:18:03: Sometimes It Has To Do With How Much Trust and trust, and reliability.

00:18:10: And the biggest companies that I've dealt with had problems it turns out in fact these Machiavellian personalities and Machiavelli for those who are not familiar with this term.

00:18:26: So in psychology, This is a term that's been adopted it's really not in the clinical findings of the diagnostic and statistical manual mental disorder.

00:18:36: It describes someone Who can plan?

00:18:40: Can connive can influence others to do things that are either beneficial for one person or maybe illegal.

00:18:53: Invariably, one of the worst ones which was hundreds of millions dollars.

00:19:00: this company had brought people on board and said They were performing as they should, very trustworthy.

00:19:10: But they didn't have in place checks and balances to look at from an accounting standpoint what was really going on?

00:19:22: And it was that failure!

00:19:24: It was a failure to bring in an outside team... ...and go in there because what did they

00:19:31: do?!

00:19:32: These Maccabillion personalities co-opted one of the internal people that was supposed to keep an eye on those things.

00:19:41: And so they were able to hide their activities for a very long time, and I always say bring in an outside forensic team take a look at your numbers... ...and In one case A forensics team within three hours spotted what was going on?

00:20:02: It was simply this They had made the mistake of building a very exact number and i forget what it was but is like nine thousand dollars.

00:20:14: in each time there were nine thousand dollar.

00:20:18: But you never varied and should have vary because had to do with different products and services, the account said statistical probability that this company and this company or Coming in under nine thousand wide because ten thousand dollars had been the key number.

00:20:40: So they were, they created artificial companies to send in invoices but there we're all for the same amount.

00:20:49: and this account it was just brought-in one day.

00:20:53: he said you got a problem here You know And these are coming in every day.

00:20:59: They're being paid out everyday two, three years?

00:21:05: We're talking unbelievable amounts of money.

00:21:10: And so the old Russian saying which people think is an American saying but trust-but verify you have to have... and everyone in the organization needs to understand that every one has going to be trusted in place, the ability to check.

00:21:36: To make sure that nothing wrong is being done.

00:21:41: and once you understand it number one sends out a message don't even try but also makes everybody feel more secure because just ignore your work.

00:22:03: But I think if everyone is honest, you know Can you guarantee?

00:22:09: Absolutely that you will not be taken advantage of?

00:22:13: It's not possible.

00:22:14: Just just look at the statistics.

00:22:17: one percent Of the population both here in Germany England France One percent is psychopath.

00:22:23: now these are true psychopaths.

00:22:25: all right.

00:22:27: four and a half to five percent are what we call anti-social personality disorder.

00:22:33: These are individuals that live by criminal activity, so now we're talking about six percent of the population.

00:22:43: if you have one hundred employees You've got a good chance of having one of these.

00:22:47: but We know that for instance in In the general population About two percent our malignant narcissists, but as corporate heads and in certain professions it's as high as twenty percent.

00:23:08: And of course the malignant narcissist overvalues themselves takes advantage of others.

00:23:14: they're not bound by rules of personality.

00:23:22: So statistically, you're going to have someone in your organization that is going to be problematic?

00:23:33: The question is do you have everything in place?

00:23:49: a typical financial crime, scandals.

00:23:55: So the circumvention of internal controls but then also the manipulation feature or this very often caused by people with personality disorder.

00:24:08: and what strikes me?

00:24:09: I mean that one of their recurring observations from major scandals is seems to be that organizations often forgive Behavior, they would never tolerate elsewhere because the individual is perceived as commercially essential.

00:24:27: So in your experience what's the earliest signal that an organization has become captive to a personality rather than governed by principles?

00:24:39: Great question!

00:24:41: Last year I had three cases and it were all identical And they were in different parts of the world, and here's what interesting.

00:24:50: It was always the same thing people within the organization we're complaining about this one person who to the CEO at first seemed like well there are indispensable.

00:25:05: They know that business very.

00:25:11: they're very, as we say facile.

00:25:14: They do it very easily and have all.

00:25:16: the connection is so forth.

00:25:18: but people in your organization started to complain that this person was a problem to get along with.

00:25:24: you wouldn't listen to them were being ignored.

00:25:30: one of the first things I look at how are other people responding?

00:25:39: because it's rare to have a person that is flawed of character, that isn't affecting the people around them.

00:25:48: In fact I always find there just something about them and in these three cases.

00:25:55: as i said two were in United States one was Europe.

00:25:59: The same thing kept happening.

00:26:01: so when sit down with senior executive And in the one case, it was a woman CEO.

00:26:08: The other two were men and I said what is going on?

00:26:14: They say well we're starting people or they've filed complaints... What's interesting is that its always under sub-criminal.

00:26:27: It doesn't rise to.

00:26:28: this person has done anything criminal.

00:26:32: It's the way they respond to me.

00:26:35: They're lack of respect, it's...they don't respect boundaries.

00:26:40: There is always something that doesn't rise to a criminal level.

00:26:45: and in each case the senior executives said well there have been what?

00:26:49: In one cases everybody has here for thirteen years knows alot information.

00:26:56: if I fire them their gonna take all that information then i could be used again.

00:27:01: There's all sorts of argument.

00:27:04: Meanwhile, they have people that are leaving and said I don't need this...I've had enough of it!

00:27:09: I think a lot of executives exaggerate or overvalue certain people because they know how hard is to get someone who is really competent in a skill set.

00:27:25: but you sit there thinking You can talk.

00:27:30: Well, the question I always ask them is this sustainable?

00:27:34: How many more people are you going to have

00:27:36: complained?".

00:27:37: Is it sustainable?

00:27:39: and if its sustainable for how long?

00:27:42: How long are you willing to tolerate this?

00:27:44: but then i sit down and say tell me much of your management time that you spend dealing with one

00:27:51: personality.".

00:27:59: Because I don't need by the way, i dont even allow them to type it because we know it registers differently in their brain.

00:28:07: I compel with him write it down.

00:28:11: and When you're devoting two hours on this day?

00:28:16: Fifteen minutes on this date instead of okay.

00:28:19: And now what did you talk about over lunch?

00:28:22: or talked about this person?

00:28:23: ok when you got home and you're sitting there, having dinner.

00:28:29: Are you still talking about this person?

00:28:31: And then you realize... This is something that's not going to go away.

00:28:37: Look two of the greatest investors in the world The sage from Omaha.

00:28:45: You know who I'm talking about Munger and Buffett.

00:28:51: Every time you hear him talk The first thing they'll tell you, and you see this on YouTube.

00:28:57: They say get rid of toxic people as fast as you can.

00:29:02: No exceptions Dude that no one is so bright.

00:29:06: You don't know.

00:29:07: organization needs that.

00:29:09: Get rid of them as quickly as possible.

00:29:12: And I think part of the problem has been that Certainly in the eighties and nineties it was about all.

00:29:19: let's see what we can do.

00:29:21: Let's you know?

00:29:22: and so forth.

00:29:25: And I have to tell you those days are over, there's very few organizations that are willing to tolerate because in the end it works against your mental health as a leader.

00:29:42: It works against the mental health of everybody else who is trying to cooperate.

00:29:48: Going back to the story, I said of those three organizations one are the ones that i reached out.

00:29:53: I Said well what happened?

00:29:56: finally they got rid of this person and I say Well What Happened?

00:30:00: And I was told he said people literally walked in with happiness and joy on their faces.

00:30:09: And then you realize This affects Everyone In The Organization And you've probably never heard of, we call it the FedEx effect.

00:30:22: The FedEx Effect is... You got somebody that's a problem in your organization?

00:30:28: A FedEx driver comes to deliver their package and he talks with one other employee.

00:30:36: they sign papers then tell each others about the problem employee Tell it to another organization and then the word spreads that your Organization tolerates these Malcontents, and this pre people's lot of character.

00:30:55: And we call at the FedEx effect.

00:30:57: It is like the words spread how you don't want a work there?

00:31:03: It's not the kind of thing that That you wanna tolerate.

00:31:07: one

00:31:07: hundred percent say getting rid off toxic people which makes sense and is always true.

00:31:13: And you mentioned Buffett, Munger to brilliant people who however also put an emphasis on trust.

00:31:23: in most leadership literature celebrates just rightly so.

00:31:29: organizations cannot function without it.

00:31:32: but almost nobody talks about the skill of allocating trust appropriately.

00:31:41: as if we teach leaders how to inspire trust, but not how to evaluate what the trust is deserved through.

00:31:50: I mean you have worked with multiple leadership teams on highly sensitive matters.

00:31:56: yes Not only with the FBI But also for example With German intelligence

00:32:02: German intelligence

00:32:04: And based in your experience How do best leaders think about

00:32:08: Trust?

00:32:10: Well, I'm glad you asked because I'm one of the very fortunate people.

00:32:14: I was at Brigham Young University when Stephen Covey who wrote The Seven Habits Of A Highly Effective People Was One Of My Professors And iIm One Of The Beneficiaries Of His Wisdom.

00:32:28: and Number One That He Taught Is Trust is Everything You Can Negotiate Without Trust?You Cannot Be a Leader With Without Trust.

00:32:40: And certainly I saw it when you know, I entered into the FBI and You realize just as many soldiers do That you have to trust.

00:32:51: The person on your right On your left and behind you?

00:32:55: I was uh...I Was a SWAT commander in the Tampa office of the FBI and you Know that the SWAT teams are similar to your GSU nine, you know and you're going through that front door.

00:33:08: You don't know what's on the other side, and you've got to trust that people behind you.

00:33:15: That one is going go right?

00:33:16: The others are gonna go left or cover as they walk

00:33:20: in.".

00:33:21: What taught me was... One theory of trust is Stephen Covey taught.

00:33:34: Being in the FBI taught me that trust is performed.

00:33:40: Trust is performative and it is accomplished by things we do every day.

00:33:49: If I tell you, i'm going to call You...I better Call You!

00:33:54: If I Tell YOU I'M GONNA BE THERE AT NINE FOURTY-FIVE.

00:33:59: Well..i am gonna be there extra early.

00:34:02: If I say, ''I'm going to do something,'' it's performative.

00:34:07: And one of the things that executives need to realize is bringing good people on board is important but then we have to task them to see how trustworthy are they?

00:34:27: Do They Say What They're Going To Do and in a manner that we expect.

00:34:34: And you know, when you say well I've got enough things to do each day but it's in the daily challenges of the small things that we begin to see how trustworthy they are.

00:34:49: so in part its performative is also what we vocalize.

00:34:56: We've been assessing for this, for trustworthiness.

00:34:59: For tens of thousands of years and so it's what we think how we behave How we perform?

00:35:08: And What we say.

00:35:11: Now let's imagine a decision-maker or an advisor from DecisionMaker and decision makers frequently find themselves confronted with concerns that are difficult to quantify No proof no clear violation of any code of conduct, any policy.

00:35:31: Just a series of observations that collectively create

00:35:36: discomfort.".

00:35:38: So what would you recommend as senior decision-maker to think about such situations?

00:35:46: Those are the problems, the conundrums of the ages.

00:35:49: and one thing I always insist on is Not necessarily.

00:35:57: I mean, you always want to do things that are legal and obviously morals Are what they are.

00:36:03: but i asked him to think about?

00:36:05: What is ethical?

00:36:08: now here's whats interesting.

00:36:09: most executives Think that morals And ethics or the same thing They're not.

00:36:17: The definition of ethics Is That which is befitting another human being or that which is befitting another organization.

00:36:30: Or even the planet, what is befiting this planet?

00:36:34: And so when we think about ethics and I've... These are the calls I get late at night from all over the world.

00:36:44: We have a problem.

00:36:46: okay, two different stories, something going on.

00:36:54: Do we have something here that could benefit from the definition of ethics, which is what is befitting each of these individuals or collectively the organization?

00:37:06: And if you can sit there and answer that question using that very specific language.

00:37:13: What does be fitting this person right?

00:37:18: in some instances There's only so much.

00:37:22: There's only so much I can do.

00:37:23: The law can do, there is the institution and have we done it?

00:37:30: So not having any specifics but that one of biggest challenges when doesn't fit into this column or this column oh you know i went to Harvard Business School.

00:37:44: they didn't cover that.

00:37:47: let step back.

00:37:49: Let's talk about ethics and I tell them ethics is not morals And it's not the law.

00:37:54: It is that which is befitting another human being.

00:37:58: Can you answer?

00:37:59: That question, and then that's when they begin to reframe it and They began to ask oh okay.

00:38:07: I should consider this Because then we're talking about You know cause-and-effect cause an effect on other issues.

00:38:16: so yeah

00:38:18: in my professional experience, the misjudgment can starve this injuration.

00:38:25: So I say injuring is often a useful starting point but a dangerous end point.

00:38:33: The key challenge is converting injury into a testable hypothesis.

00:38:41: so which results in the question how do we prevent discomfort from becoming either silence on the one hand, or an unfair suspicion of other.

00:38:51: So if we feel unconfident but don't have to prove... We do not know as I said no clear violation.

00:38:57: so want be fair with people at same time when having discomfort and duty as senior managers To oversee things And guide an organisation which is a difficult challenge from time-to-time.

00:39:12: sometimes there's attention.

00:39:15: And because you want your demanded also to treat people fairly, equally.

00:39:21: Give everybody a fair chance and not being prejudice is not being biased.

00:39:25: so try do the very best.

00:39:27: I mean too work on your own biases which can create attention or conflict.

00:39:33: of course will say

00:39:34: it's this is a challenge for many individuals.

00:39:40: i can tell This question would be answered differently in the nineteen sixties, then it will be answered in the ninety eighties.

00:39:49: And is to be answer differently now because here's what we know.

00:39:56: so most people don't realize this but you can readily look this up.

00:40:03: We have what is called the enteric ENTE, the Enteric Nervous System.

00:40:10: The enteric nervous system is a...the nervous system that innervates the heart of lungs and stomach in intestines.

00:40:22: it follows very quickly down vagal nerve so its polyvagal matrix And it is in constant communication.

00:40:33: We have, and our stomachs the same neurons that we have on our brains.

00:40:40: This isn't voodoo or something Jonovaro invented this what science now can prove And that communication is going on.

00:40:54: So when you see something, it's very offensive to you and get a gut feeling.

00:41:02: Years ago I was gonna go in an elevator where there were bunch of young men who had all been drinking.

00:41:11: Subconsciously...I'm not getting into the elevator!

00:41:14: There are no way i'll be in the elevator.

00:41:18: They were taunting me like Are you afraid of us?

00:41:22: Yeah, actually I am.

00:41:25: Get over it!

00:41:26: But i'm not getting in that elevator and don't care if get offended.

00:41:30: What we now understand about the enteric nervous system is listen to it Listen to it because at a subconscious level The subconscious, the enterica system Is bringing terabytes of information per day that we don't actually think about, but it is registering at a very subconscious level.

00:41:55: We couldn't have answered that question in the nineteen sixties.

00:41:59: I'm not even sure.

00:42:01: maybe Joseph Ladoo who's one of the world's expert on human brain?

00:42:05: Maybe in the eighties he might've been able to answer.

00:42:08: We definitely now know that we have to listen to the gut feelings because subconsciously, we are processing more information than we are aware of.

00:42:21: Again this isn't voodoo This is just what it is.

00:42:24: but as you say...we have to be cautious!

00:42:29: I remember, you know...I was in Cuba.

00:42:31: I was born in Cuba during the Fidel Castro-Communist Revolution and i remember all of bearded men who came down from the jungle and they're assassinating people left or right.

00:42:47: And now for years we immigrated to United States as refugees that I was always apprehensive when i saw men with beards.

00:43:01: There, there is just this right?

00:43:03: And so you like to say You have to guard against Prejudice!

00:43:09: You Have To Guard Against Things That You Believe or Or That You've Seen.

00:43:17: and I think if you can If you can do two things, which isn't easy.

00:43:21: Which is one and I always tell people teach your children to listen to their gut if it says don't go there Don't get in that car or with the person absolutely Absolutely listening to your gut because our first line of defense we evolved To have as a first line.

00:43:44: but business setting You know, I always say if you can't go with facts.

00:43:50: You go with statistics.

00:43:51: If he can't do it with statistics He'd go with your gut feelings.

00:43:54: and if you doubt Your gut feeling's you're just going to have two.

00:43:59: Do more research?

00:44:00: You've gone to have to collect more information.

00:44:03: You're gonna have to work hard at it But if you have a very.

00:44:08: I had a call one day this is right after I retired from the FBI And I started consulting and they were on their way to Russia, Moscow.

00:44:21: This was during the time of Wild West in Moscow and he's calling me I think from Frankfurt saying we're having second thoughts because maybe these guys are linked up with the mafia or the mobsters... We just don't get a good sense out.

00:44:41: they do not seem know about business but You know, they talk a good game and I said to them how can you go into business when you don't have trust?

00:44:54: Your calling me from an airport.

00:44:56: And your body is telling that something's not

00:45:01: right.".

00:45:02: They got on the plane flew back in the United States... ...and were glad they did it!

00:45:08: They listened their gut but by then there was consensus amongst three of them.

00:45:14: Somethings Not Right Here.

00:45:15: These guys are talking too much and they're not sounding like real business people.

00:45:23: That's the subconscious, we shouldn't ignore... One of things that is coming up nowadays.

00:45:30: I get questions almost every week.

00:45:32: what about AI?

00:45:36: AI will never be able to do what we humans do because we don't even understand All the neuroceptors that we have.

00:45:46: yeah, we understand.

00:45:47: We have eyes but your skin has neuroceptor is the smell as you're accepted there's so many neurocepts are weak and i cannot replicate it.

00:46:00: so he can't take in all of information that if u and I were sitting in a room.

00:46:06: And just where our skin changes colors And our pupils dilate and the smells, the sense...the body-sense that we generate actually affect each other.

00:46:21: In effect trust!

00:46:23: Right?

00:46:23: So if you came in with a high level of let's say cortisol I would actually—and there are experiments that have been done–would sense the high levels of cortisol.

00:46:41: The chemistry is beginning to change in the brain, dogs can pick it up.

00:46:46: And just being in the presence of each other can affect each others.

00:46:50: so I know its a big story i'm telling but It's interesting that here you ask a profound question That would be answered differently thirty forty years ago than now because Now we have greater reliance and what Is known as the enteric nervous system and there's a great book out called the polyvagal theory which is.

00:47:17: Theory in science means that, that which science best teaches us it's not but its theory theory.

00:47:23: I'd love to continue discussing neurobiology with you But your brought an additional complexity into our conversation Which i enjoy very much.

00:47:35: by the way You mentioned AI For most of our careers Joe, deception involves human interaction.

00:47:45: Today we are entering a world of synthetic voices deep fakes AI generated communications and highly personalized manipulation And I strongly expect that technology is not replacing you with deception.

00:48:02: No!

00:48:03: It's scaling it.

00:48:06: We need to ask ourselves the question How are we going to prepare?

00:48:11: how We're getting to prepare leaders for such a world?

00:48:15: that is A very profound question.

00:48:18: That's one, which should see on the front page of a major magazines Is I don't know that were preparing for them and i dont Know that Were sensitizing people too.

00:48:33: then negotiations.

00:48:34: it just done through text messages.

00:48:37: apparently it's working.

00:48:38: We even signed documents that people literally sign the document on their digital phone, they don't need to sign... I just we're where i'm living now-we signed electronically!

00:48:51: We didn't meet one human through this whole process and were not prepared for that.

00:49:02: Were not prepared Through maybe their intelligence service to maliciously create documents harmless do all sorts of things.

00:49:16: and But it's not just that.

00:49:18: It's also the creation of fake information That somebody will come out and say well so-and-so said this online and we may not have the means to verify in a short period of time.

00:49:36: is that real person.

00:49:38: Did they really say was it taken out context i don't know if any country that's really prepared for this but this beyond corporate level, this is nation state actors having the ability to intrusively attack and succeed And in some cases, you may not know that you have been attacked for a very long time.

00:50:05: A hundred percent?

00:50:06: You're absolutely right because far beyond the corporate context it's much wider society and politics question.

00:50:16: Now Joe imagine an newly appointed CEO listening to us today intelligent well-intentioned surrounded by talented people but ultimately responsible for making difficult judgments about whom to trust.

00:50:34: So if you could give that CEO one lesson, any one lesson from your career but most business schools do not teach so what would it be?

00:50:45: You know... That is probably the most difficult question to answer because If there was like a pill And you had to take that, and then everything would be clear.

00:51:02: I think my best answer is... That if you do everything right Then continue set the high standards of who bring on board and test them and validate based upon what we believe to perform and speak.

00:51:29: That is the ultimate that you can do, And it's something that you must never stop

00:51:36: doing.".

00:51:37: That IS all we can do!

00:51:41: When the Greeks were defending Thermopylae they were betrayed by one person.

00:51:47: There is no guarantee but...that doesn't mean we give up.

00:51:54: We continue to do things that are pro-social, beneficial.

00:51:59: That are ethical and they're legal but we always are looking To verify... And thats all that we can say.

00:52:13: Thank you This has been a fascinating conversation.

00:52:17: One of the thing I take away from this controls matter Technology matters But in practice, governance is ultimately a human discipline.

00:52:30: The most sophisticated control frameworks in the world cannot compensate for poor judgment so the failers are very often failures of how people are assessed and our people respond to concerns.

00:52:45: So Joe thank you.

00:52:47: Thank you for having been with us today And thank you for sharing your insights and experience.

00:52:53: No, it's been my pleasure.

00:52:54: Thank you for asking really great questions.