Organisational design best practice for early stage startups.

David Ding: So welcome everyone. I've got Sarah Durlacher with me. Sorry if I pronounced that wrong. She's an expert in change management and she's joined us recently at Callaghan Innovation and she has a very interesting background in the Web3 space. So I'm here to talk to her and maybe do some story time so we can perhaps learn from her stories in the Web3 space and yeah, see what we come up with.

Welcome. Thanks for coming in.

Sarah Durlacher: Thanks for having me.

David Ding: So do you wanna just do a quick intro, maybe explain what your background in Web3 is and, and just your, a synopsis of your career to date.

Sarah Durlacher: Sure. I got into Web3 back in 2016.

David Ding: Wow, that's way back.

Sarah Durlacher: Yeah. Way back. I, is it like 2016 or early 2017? I can't quite remember, but I was studying for my MBA at London Business School and I was doing a lot of research into alternative business models, so. Okay. Like yeah. Taking the typical business classes, like PEVC, how to value business, how to, how to evaluate businesses and how to value businesses.

David Ding: Interesting. And, and so what was the thing that got you thinking about alternative business models?

Sarah Durlacher: Yeah, I was just always like, well, why do we just assume profit and perpetuity? Why do we, you know, I just had a lot of why's. Yeah. That weren't really getting answered.

David Ding: So you were thinking about problems to solve even before Web3 was a thing.

Sarah Durlacher: I think Web3 was already a thing.

David Ding: Yeah. But that, but that's But you, you weren't lured by the trends?

Sarah Durlacher: No. Yeah. No, I came at it from thinking about like wanting to be in the tech space and wanting to work with startups, but finding values aligned startups. And that took me to the blockchain space.

Okay. So the values around decentralization and like distributed systems and, and all of that.

David Ding: And so, so could you see that solving a problem that you saw or was it more curiosity?

Sarah Durlacher: I think I was, More, I was interested in the question, like, how do you grow and scale a business but value things beyond just profit? Yes. Right? And or like how do you grow and scale a business but not just assume x growth rate in perpetuity just because that's what you do. Yeah. Like so...

David Ding: So it's valuing the intangibles.

Sarah Durlacher: Yeah. And, and, but like the, how I was interested in how do you actually bring the people together to make that happen effectively? And so I, that's how I got into the blockchain space. I was just searching around for my own little like, sort of blockchain thing to invest, plug into and invest myself into invest, invest those questions.

David Ding: And, and so was there a, was there a business problem that you're trying to solve or, or was it more, you were more intrigued about the process and the ecosystem around a business problem?

Sarah Durlacher: Not, I wouldn't say it was that active or intentional. I'd say it was more like, Hmm, I wanted to just figure out the next best step after business school for me. I had been, like prior to business school, I'd been working in the aerospace defense industry before that. So something that was like huge and really slow.

And I was focusing on change management stuff there and the, the change space in that sort of industry is all about cutting costs. Mm-hmm. Right? And so when I went to business school, I was kind of like, okay, I'm either going to go. In order to get out of that space. Like I love the change part, but I wanted to get out of that industry.

In order to get out of that, I'm gonna have to either like go the consulting road that like a lot of people do, go into the big consultancies.

David Ding: That would've been an easy thing to do. I bet. Easy. Easy. As in, in some ways the obvious thing to do.

Sarah Durlacher: The obvious thing or I wanted to, so the roads were like that or kind of tech.

David Ding: Yeah. We'll swing the pendulum the entire other way.

Sarah Durlacher: Yeah. So it was more of like a deductive reasoning that got me into this space. But yeah, rather than like an intentional sort of business problem I was trying to solve. But like, always holding those questions, like how do we, how do we grow and scale the, an organization but not take on all the, the assumptions. Yes. Yep. That are given to us by the market and the nature of like how businesses are funded.

David Ding: Yeah. And I, I suppose working in an industry like that, it's, it's an extremely linear thing. If it doesn't fit in the box and with a label on it, it doesn't exist kind of thing. Yeah. So what what research did that lead you to, to do what, what, for your MBA?

Sarah Durlacher: Yeah. I remember reading, oh, there's, there's, I have to dig back into a dusty box of my memory, but one book that really stood out to me was called Reinventing Organizations by Frederick Laloux. Okay. That there's, there's a couple books, and I'm not remembering them all right now, but that one stands out as a top, a top book that I read.

And it presented this concept of a Teal organization. It just kind of created a rainbow scale. And, and kind of showed, you know, at it showed like what a red organization would be, what an orange all the way to this teal. And it's kind of like, it kind of pulls in concepts from spiral dynamics and

David Ding: Yep. Like holacracy and

Sarah Durlacher: Holacracy. Holacracy was Yeah. One of the prescribed sort of business models that relates to the teal paradigm. Yeah. Yeah. So that's what I was doing back in 2016.

David Ding: Wow. Interesting. Yeah, my, I've been fascinated a lot of what's driven my curiosity has been biomimicry and I think I can see a lot of those principles within, you know, holocracy and I think, you know, a teal organization is probably the zenith of all of that stuff coming together.

Like, like a giant organism. Yep. So what, what are your thoughts on how we could utilize these principles better in, in the formal economy? Or perhaps with startups, if that's where your curiosity lies, you know, is what, what did that lead you to your, your discoveries there?

Sarah Durlacher: Well, I mean, the discoveries around teal and reading that actually led me to, you know, the blockchain industry overall and Web3.

Because a lot of the values that were presented in the teal sort of movement and paradigm and holocracy were a lot, there was a lot of parallels between that and, and the blockchain industry. So yeah, that's why I was curious there. And it's actually what, it's funny cuz it's actually what brought me to New Zealand in the first place.

David Ding: What, what holocracy?

Sarah Durlacher: Yeah. Kind of. When I started working in this this blockchain venture studio back in, yeah. Early 2017 or late 2016, I can't remember now, my God. I was researching like, you know, because this organization was growing and scaling and I was thinking, okay, I need to bring in different partners to help me, to help me support the growth of these startups that are just in, that are in this organization.

Mm-hmm. And so, I found an organization called Enspiral, which is actually based, it's a global network, but it's based out of Wellington. Okay. And I, yeah, and I, I connected in with the Enspiral Network. They've been written about in, in some books for, you know, being a teal organization or, you know what, maybe, maybe they are talked about in Laloux's book as well.

I can't quite remember. But that led me to this organization Enspiral and various other organizations that I started reaching out to and interviewing. Like, what, what do you do? Like, you know, what are the scenarios that you face? What are the challenges you face? What are the, what are the what are the things you're trying to do and how are you navigating it through this lens of like working in a different way. So I don't, I don't know if I, I didn't really answer your question.

David Ding: Yeah. Very interesting. You, you went from an environment that's totally binary, right. Into a, and you gravitated towards a non-binary way of working, which is, do, do you see, like, obviously when you went into those environments, like in Enspiral and holacracy. Mm-hmm. You can see there are flaws in it. Yeah. There are inherent challenges. Can you talk to that?

Sarah Durlacher: Yeah. And I think, I think there's, there's so many and it really depends on what's, what are the challenges you're sitting with uniquely?

I think one, one big challenge that, I could talk about two specific ones. One big challenge that I see is. Now I'm trying to pick which one to talk about first. One challenge I saw in the, I'll talk about industry overall, but then like internally in, in an organization. So overall in the blockchain space, organizations are getting funded and it's, it's growing like crazy in 2017. And. You know, you're seeing like massive funding rounds. We saw a big wave of that in 2017, and then we also saw another wave of that in 2021. Right. Just like huge stages of, of growth. With that, the organizations are unable to keep up with that level of growth. So, so everybody's just kind of like chasing their tail to try and just keep up with Yeah. What's going on. And then you see it like the converse effect where like the market, something happens and then the market goes, like takes a big dive and then oh, all of a sudden we're in this bear market and like nothing's getting funded.

And then, and then, and then everybody gets laid off and like, nobody can pay for the people that they've just spent all this time hiring. It's just this like, Real push and pull. And there's really no ability to create like a stable, like, living organism. So if you, if you take, you said you spent time thinking about and researching like, you know, biomimicry and things like that.

So organisms don't really work that way. I mean, not really. Right. So, so like the growth rate was greater than the ability to actually put in place the systems to support the people to be able to do the work, to actually move the thing forward. Yeah. So that's one challenge that I was seeing in the industry.

And I mean, it's still probably...

David Ding: Everyone is at the You know, at the behest of Yeah. Whether it's bear or bull market. Right. And it's kind of like, it, it's so hard to create some, a structure. Yeah. That's that dynamic.

Sarah Durlacher: Yeah. And so, and everybody's either like, running for the bus to like, you know, going one way or then retreating and going the other way.

And it's just this chaotic, like there's just like this chaotic Yep. Energy going back and forth. The second thing that I would note, so that's kind of like industry, like an industry or higher top level reflection. But then if I think about like, what was going on internally in these organizations I think well there's, there's kind of two things.

The, the main, the main thing that I am interested in is, decision making. And there's a big default to consensus based decision making in these groups of people. So so everybody like, wants everyone to kind of like hold hands and be friends and be, be equal. Say, we, we wanna flatten the organization. We don't want any managers.

And that's, that's really nice on an on one level, right? To think like, oh, we can all kind of like come to a consensus and do a thing. But when you're actually trying to run an organization and you're think about like, you're facing these crazy growth rates and you're, you're buying this startup and parts of that startup and the organization's growing from like, you know, has grown from 300 to a thousand in the last year. Yeah.

And then you can't make any decisions because everybody needs to be involved in every decision. Yeah. It's just paralyzing. It's just paralyzed. Right. And so I found that that environment to be really, really challenging. Yeah. There's almost a an avoidance of wanting to be, to step into that level of power and wanting to be able to make a decision.

And there was also a level of, even if someone did do that, no one would respect it. Yeah. So it just created...

David Ding: I think that revelation alone is, you know, the elephant in the room in the Web3 space. Yeah. Because consensus decision making does not work. Right. The fragmentation of authority and consensus decision making does not work.

And I think culturally, if we can get over that hump in the community today and get back to accepting that there has to be consolidated authority. And, you know, delegated agency and that the will of the people is a separate thing to the agency of the, of the people. I, I think if we can all agree that that's a way something we can build upon, I think the transformation that has to happen could begin to happen.

Do you have any thoughts on that?

Sarah Durlacher: Well, I don't have any thoughts on it, on how to address it in terms of, you know, the Web3 industry now or the blockchain industry now. I think for me, The way that I kind of work from a change management standpoint. So I, I usually use the words change management when I'm working with, with like bigger organizations or ones that are focused on cost like, like Callaghan, right?

But I use the term sort of organizational designer when I'm working with a startup or you know, someone who's focusing on growth and whatever. So, so when I look at it through the change management lens or really any of the clients that I'm, that I'm working with yeah, I guess it doesn't really matter.

I think it's, I'm always on the hunt for like finding people in leadership who are decisive. Yep. Who are aligned to the other leadership around them who are able to translate the strategic needs and goals of the business into what has to happen operationally, but be open to others ideas. Yeah.

Right. And like kind of toeing that line of like being decisive and standing firm in what they want to do, but being open for suggestions or being open on how that actually ends up getting done. And I haven't found in the Web3 or blockchain space evidence where that leadership. I just haven't encountered leaders that I would say Oh yeah. Strong leadership personally, right? Yep.

But in other spaces like at Callaghan for example, there are, there are like many leaders who I think have those attributes and characteristics and I kind of just come in and help them do the things.

David Ding: Okay, so you kind of marry up the more nebulous stuff, the more non-binary stuff with the binary, linear stuff of do this then that, then that, you know, I, because this is part of the challenge that I see is that, and this is why I think the innovation spaces is the perfect place to demonstrate how it could work. Because you can have you can have consensus upon an idea. So some, anyone can come up with an idea in an organization.

I've got an idea if you capture it. And then you say, Hey, I think that's a really good idea, that's a great thing to have consensus on. You give that idea gravity, and then the gravity pulls it forward. But I don't want, you know, if I, like I'm doing this podcast right now, I don't want to have to have consensus with a whole bunch of people and how I do it, where I set it up, what volume do I put the thing on?

You need to, that authority needs to be delegated and I need to be entrusted to be sovereign in that scenario. Mm-hmm. So given that you are in the change management space now, and I, I've seen Agile attached to your job title as well, can you see a way for a Web3 organization to become agile given that so many of them are paralyzed by consensus decision making?

Sarah Durlacher: Yeah, I think, I think it has to come down to a couple of things. There has to be a level of pain point, right? To start with. Right. The leader of that organization or the leaders of that organization need to want something different, right? Yeah. Like maybe they're not growing fast enough or they're not aligning. I don't, I don't, I don't know what their, their problem might be or their challenge might be.

Yeah. But they need to kind of acknowledge there's a problem, and I think like accept help, like know that they need help. And I think there is another sort of problem in the Web3 space or blockchain space that I didn't really talk about, which is I think there's an overweighted assumption or belief that everything can be solved with a technical solution. And I think there has to be a level of knowing that like, maybe I can't calculate the perfect solution or I can't code trust. Yeah. Maybe we actually have to build it. And that takes a level of openness and vulnerability and also at like a mirror.

Yeah. Right. And you know, obviously like my opinion being in the change management space and coming from business background and like wanting to see businesses run differently. I think the human level is the most important level. Because there is no business without the people. Yeah. In the, and I mean, I could go on for days and days and say why, that's what I believe.

But I think there needs to be less emphasis on the technical and more investment on the human side. And just helping like humans work together better. Like it's, it's kind of that simple. Yep. But everybody has to be ready to do that. And there needs to be a commitment from leadership, but then also like walking the talk as well.

And that alignment I, I wouldn't say like Agile is the solution for everything. Like, I know Agile is in my title, but that's what Callaghan hired me for. I think Agile principles and tools can support, like I, you know, I, I use them to support helping teams go from A to B. And I think you can take anything and make it work and make it useful, but there's a lot, there's a lot of other sort of tools and structures that I, that I bring in as well.

David Ding:

A little outside the box.

Sarah Durlacher: Yeah, a little bit outside the box. And I think like just helping people take themselves a little bit less seriously is much needed, especially in these spaces. Like everybody's so wrapped up in the technical thing and how serious their thing is. I'm sure I'm, I'm wondering if you, like, what are the problems that you are, you're seeing in the space?

Like, because I've been out for quite some time and I think when you and I spoke first, you talked about like burnout. Yeah. Yeah, I, I'm curious what problems you are seeing with founders.

David Ding: I would say, I don't know if it's so much a Web3 thing, but I think new New Zealander's are notoriously not great at asking for help or acknowledging that, you know, perhaps they do need help, you know, as a first step.

And I think, I think if you are a founder of bleeding edge innovation and you've been through a capital raise, you've got investors, they may be friends and family. I think the sense of obligation to make it work on your own without that help is, can be crippling. And, but, but I think some of the, I, I see this issue of ventures being crippled by consensus.

And that's not agile in any way, shape, or form. But, but I also think it cripples innovation and I, and so I would love, I think there's white space for a really simple framework where the individuals are wholly responsible for their reputation and increasing the gravity of their reputation and reconciling conflicts as a self-responsible human being within an organization that's not trying to coddle them and prevent them from taking any risk whatsoever.

But I think fail fast is a huge part of what needs to come into it. And, and I think everyone talks about agile being lean and agile and I think part of being agile is that you embrace fail fast as well as, you know, lean, agile principles. Some how, if they're, there was a way to marry that up. And it was simple so that you could plonk anyone, my grandma, someone with a disability into that framework, and they'll be able to navigate it pretty much using their own common sense and their own mana.

So, you know, that's the white space I can see, but I think there's a long way to go because the culture in Web3, they, they think that consensus decision making is they think that's what it's all about, the decentralization of authority.

Sarah Durlacher: Are you still finding that even today, like is that still as prevalent of like a mindset as it was maybe back in 2017?

David Ding: It's, it's improving. Yeah. It's definitely improving. And I think, you know, we had a brief chat before we started recording about the concept of web 2.5.

Sarah Durlacher: Yeah. What, what does that mean?

David Ding: It basically means that, I'm gonna take the best of binary, well, I call it binary, but what I mean is a, a typical company, like a typical company structure where there is delegated authority and consolidated authority and distributed authority, but where you separate the will of that entity out from the agency.

So collectively, we all agree that this is our vision and these are our values. This is what we stand for. This is what we agree not to do. And then you give free agency to the individuals to decide who and how they want to collaborate. And but I think it's very difficult to explain conceptually unless you've experienced that paralysis from consensus decision making.

And and it's, it's brutal. You know, I've, I've been in, I've been in scenarios where everything's ground to a halt and it's felt like things are going backwards because zero innovation's happening. So I'd love to get your thoughts on, you know, is there a way to create some form of momentum towards something like this?

Would you start with a Web3 company or a web two company and step it up to web 2.5?

Sarah Durlacher: I think I'd be on the hunt for the right person.

Yeah. Yeah. I think one of my, one of the things I learned maybe five years ago was that I was too wrapped up in the, the mission of the organization. And what the organization was trying to do and stand for. And the people are the, the key, you know, finding the right person who's willing to help you.

Whatever frame you're bringing in that web 2.5 frame you know, it's like, it's almost like you're a VC and you're on the hunt for that perfect. Yep. Not, not Web3 company or Web2 company, but like that person who's, who's maybe running a Web2 company but like has an idea for something like something more and then you're gonna help them, help them get there.

Or maybe they're not even running a web two company at all. Maybe they're running anything. Yeah. Or maybe they're just, maybe they're an employee somewhere and they're, you know, they haven't even started their own thing yet. But it's like the mindset and the openness to, to try something, to try something different.

Yep. It's probably not a good answer.

David Ding: Well, it's simple, you know, find the right people and, and I think part of the challenge is to create gravity that attracts those people. You know, how, how, what is it that attracts the right people to an organization? Like the one perhaps you and I can envisage that doesn't yet exist.

Sarah Durlacher: Yeah. It's attract the right people. And then I think, like, without thinking about the other side of it is how, how is this funded? You know, it's, it's only half of the, half of the equation. Right? So like you've told me about you told me some stories about people who've been funded. You know, people's Web3 startups have been funded, but they just burn out, burnt out completely from that process.

And so how do you, how do you actually give access to the capital that they need to, to like fail fast? Yeah. Or try that, try that thing and then what's the next level? But you don't make it hell for them to get there. You like partner, like funding organizations can partner Yeah. Alongside and support and be like energetically side by side rather than just like slamming them with the hammer.

I love that. And then telling them like, oh, well you're, you're the diehard founder. This is how you use it and this is all the reporting requirements you have now. And this is. Yeah. And this is what we own. That's, that's your idea now.

David Ding: Yeah. I love that. And, and I think this, I was having this conversation with someone recently about the concept of a diehard founder.

It's, it's a brutal expectation to have of a single human being. But to your point, I think the white space is at that moment where the injection of capital comes in. How can we diffuse it into people instead of infusing it in, you know, diffusing it into the founder to then figure out what to do with, how can we assemble, like design an organization around a founder and then diffuse capital to bring in those people side by side.

And so someone like you who's an organizational designer, is there a scenario within which you come in a bit earlier with a founder before that capital raise to create those buckets to say what you need is you actually need a CEO. You need a COO you need this framework. We design it before the capital even comes in.

Yeah. I mean, you and I work for Callaghan Innovation, we possibly could influence something like that. What, what are your thoughts?

Sarah Durlacher: Yeah, I actually was testing out that as a hypothesis last year with my, the founders of my startup president of work back in the States. Okay. And we talked to a lot of like Web3 and blockchain founders.

We scanned the market and tried to understand if that was well we tried to understand what the needs were and like, can we actually help with some of those needs? And one thing that did come up was helping the founders understand what sort of skills and people they, they need and helping them figure that out beyond just like the technical.

Yep. And. There's definitely a need. The, I mean, so last year was 2022. In terms of like us being able to say, yes, we can meet that need based on the funds that were available from these startups and organizations. It, it was kind of a no. So it wasn't financially viable for, for my, my team, to make those investments. Yeah. In, into, into the Web3 space.

David Ding: Yeah. But someone with surplus could, could, could there have been a scenario within which it was viable, you know, with the right kind of, you know, with, with a with a principle of a fund who's got the right appetite?

Sarah Durlacher: Yeah. If there was, if there was money and that could be paid for or we could take on volunteer projects.

Yeah. Like we took on one project that was nearly a volunteer project just to test it out. Cool. And it was, it was good, but like that's not something we can just lean into fully as a, as a business strategy.

David Ding: Wow. If, if the only omission is that there's no money flying around. Right. Then you could almost argue that you've validated a commercial scenario.

Sarah Durlacher: Sure, yes. Validated a scenario, but like to have it funded would be the.

David Ding: Well, you are certainly, you would certainly fit the archetype of someone I would entrust to test that.

Sarah Durlacher: Yeah. I think something we had talked about was oh, there's like a conversation from a while ago, so I don't remember the details, but like, are there ways for funding.

You know funding agencies to then provide those, that type of support for the, for the startups. So yeah, I just, I've just been out of the space for so long. I don't know, like what exists now, but you know, if, like, if the funding agencies are giving them capital and stuff Yeah. Like, like it would be cool if my team and I were just like, partnered with those funding agencies and then we're just the startup needs some help and we're kind of on deck to support for, you know, either a, a month or six months or a certain amount of time.

That we did talk about that as a possibility, but we didn't keep digging into it.

David Ding: That has so much merit. Yeah, and I mean, one of the, one of the privileges I have doing the job that I do is, you know, I'm constantly scanning the ecosystem and the value chain and so, I know it intimately and have a lot of individual relationships even so I understand the nature of the human beings that are influencing the value chain.

And what I, what I can say is, what you are describing would be transformational, I think for the, for the innovation ecosystem is, is particularly around Web3 ventures who are getting more and more involved in traditional companies, but that have been governed by a DAO or an intentional community.

So why this company that you formed, it's based, whereabouts is it based?

Sarah Durlacher: It's based in California.

David Ding: Okay. Yeah. And so you're still you're still active in that?

Sarah Durlacher: Yep. Okay. Yeah. I do like half my time with Callaghan and then I do half my time with, with my partners in the States.

David Ding: Okay and have you got any plans with this company to, you know, dabble in other markets?

Sarah Durlacher: Other markets other than the United States? Well, right now most of us are based in the States and then I'm based in New Zealand. I think the focus is in the US right now, and US and New Zealand. I think other, this is another learning from Web3 blockchain days. Working across time zones is infinitely added, just adds infinite complexity.

It does. So we're trying not to look too far out, although open to, to different configurations and things like that. But we've, we haven't really been focusing in on the Web3 space pretty much since probably September of last year. That was, that was a, yeah. Fail fast, right? Yeah. Okay. We, we learned what the market needs.

We learned that the market isn't. Able to like, pay for that Yep. At the moment to the level of what we, we need to, to do things. So kind of moved on. But yeah,

David Ding: So, so except for institutions that provide grants and stuff like that.

Sarah Durlacher: Sorry.

David Ding: Except, so there's no money other than institutions that provide grants or are there no grants available for that particular problem.

Sarah Durlacher: Oh, I didn't check, didn't look into grants. Okay. Per se, just was going direct to the, the organizations.

David Ding: Okay. Very cool. So I'm interested in your approach to change management within Callaghan Innovation. So how do you How do you diffuse some of that more out of the box, more of that out of the box philosophy into what you're doing now?

Sarah Durlacher: Ha ha ha. Insert evil laugh. Well, I think, yeah, at Callaghan I came in, at the beginning of 2021. I had a conversation with Stefan and he said, you know, we're going through this, really, we're preparing to go through a big reorganization. One of the big pillars of that reorganization is to move the organization towards working in a more agile way.

Can you help teach the organization to be more agile. And I was like, yeah, sure. What do you want me to do? He's like, go figure it out. I'm like, oh, okay. Got it. He like, put it back on me. No, but like.

David Ding: That's his favorite one. Make it so

Sarah Durlacher: Yeah. But like presented me with a couple different projects options. And I took a one project, which was an RDS delivery project being like the Agile project manager on an RDS delivery project. Okay. And we basically brought a cross-functional team together to de to deliver a client facing project. And the client was like a multifaceted. So it was like, wow, that's cool.

It was government, it was unions. It was, it was, it was pretty, pretty nutso and fun. And yeah, it was, it was a really fun project, but for me, I guess the way I've been. The way I, the way I see or believe that change management works is not by running a training like high level but it's, it's actually like project based.

And experiential. Yeah. And learning through doing. So that was like the first example of a project that I got myself into that's learning through doing. Okay. And then once the reorg happened, I came back to Callaghan to start setting up the navigation function, and now I'm supporting the marketing and comms team on getting their stuff, getting, helping them kind of build their service orientation to the business and like making sure that runs really well. Okay.

And so, so for me it's learning through doing and experiential. And then I also try and bring a lot of consistency through the way I work with, with the teams. Yeah, because there's always like different things coming in, right?

Oh, now this is a priority. This is change. There's change, change all over, right? Yeah. Oh, we're, or changing the organization. But if you can actually like, create rhythms and like this sense of like, oh, there's a heartbeat to this thing and it's consistent and this is our team. And like after a while, like everybody just kind of gets comfortable with that.

And I think it's something familiar and really nice and calming for people. So I try and bring some level of consistency. And routine. Yeah. Because people thrive on that. Absolutely. Some to some degree, right? Yeah. You can have routine that's just becomes over overkill. Yeah. Right. But just having the right level of that.

And then I think the last thing I do is I try and make it sort of fun. Yeah. I try and just, but not even try, I just am kind of myself and I do funny, weird stuff with the groups when I can. And we've been something that's been really nice in the teams of Callaghan with that I've been working with as we've been doing quarterly in-person, offsites.

Offsite. I don't know why the term offsite, because it's onsite. Or like in person Offsite. An onsite offsite, yeah. Getting people together physically every quarter to do things. And I've really enjoyed that and I'm really grateful that Callaghan is investing in that time and space. Just having one day to bring the teams together.

Yeah. To invest in just getting to know each other as people. And, you know, that might seem frivolous, right? Oh, why are we spending all this money to like, bring everybody together? But actually we work hard all the time and there needs to be space for celebration and fun and connection and of course we do our OKRs and other than we, we sneak in that kind of stuff in those meetings as well.

But like the core of it is about just, just upholding the relationships because that's And deepening the relationships and welcoming in the new people. Cause we've had a lot of new people joining as well. Yeah. And making sure they feel like cared for and included and, and, Yeah. So it's just, it's just creating those spaces for people to feel like they have time to connect and it's okay and they can take a breath in between all of the, the work that we've had our heads down collaborating on and doing. So.

David Ding: Yeah. I, I love, I love that stuff what you're saying about rhythm.

Yeah. And, and in my mind I see it you know, cause I always relate things back to organisms. So it's kind of like the autonomic nervous system. You know, what, what's the stuff, what's the rhythm of keeping everything alive? And then everything else is kind of like innovation, you know, potentially. And, and I think that baseline of, of the routine, it, it's everything.

It doesn't have to be, you know, monotonic, but, but consistent. Mm-hmm. You know, and, and I think if you can just bring that into a, into an environment where there's a lot of change. It can have a big impact. Yep. You know, so I, I'm very keen to get your thoughts on how would you lay out designing an organizational change through the lens of a startup, doesn't have to be a Web3 startup, but let's say it's an early stage.

They've done their market validation. How would you design the org? Could you just walk us through how you might approach that? It's probably not typical from each one, but you know, what's a typical rhythm that you would set up for something like that?

Sarah Durlacher: Yeah, A typical rhythm. I think this is, this is a hard question, but like the, the main things I could like point to at this moment would be I mean, assuming it's a startup and assuming there's maybe just a couple, a couple, a handful of people.

Yep. Maybe less than 10. Yeah. Or yeah, something like that. I think I would do some sort of, well, the main thing is doing like a discovery, right? And understanding what their main challenges and pain points are, and really prioritizing like, okay, so what are the main challenges you have? And then also like what are you trying to do in the next timeframe, right?

Yeah. And then basically coming up with a prototype of an organizational model to be able to solve those things. But not everything, just like maybe the top. Top two challenges and then the top two or three things you want to achieve and like, almost like throwing everything else off the table.

Like not, not throwing it off the table, but

David Ding: Yep. So something to get traction now.

Sarah Durlacher: Getting you to, because I think one of the main problems is there's so much to do and like no one really knows where to start. It's like getting the starting point, designing the, for the next three months we're gonna operate in this system and we're gonna agree to these priorities.

And so I would just, I would just help, like, help take the noise away and like focus in and then design whatever system you would need for those things to happen in. And it's not like, oh, this is gonna be our operating model forever. It's like, can we commit to this for the next X amount of time and just try this.

Yeah. So it'd be something, something around that. So I wouldn't have a prescriptive organizational design or operating model. Yeah. But yeah, it's more of, it's, it's probably a deeper discovery process than, than just like one conversation here. One conversation there. Right. Cause you wanna get to the bottom of really what's going on.

Bcause sometimes people present their challenges, but it really means, you know, like root cause, right? You just, you dig, dig, dig, and then it really comes down to something else.

David Ding: Yeah. So, and that makes a lot of sense and I think, you know, one of the challenges people have in the early stage is that they have to pivot all the time because the, there, there's so much discovery, there's so much insight and they have to constantly adapt to the emerging truth. Right?

And so if they discover something and, and it invalidates a hypothesis, They have to pivot regardless of some North star that they've set for themselves. How, how do you recommend people navigating their way through those kinds of changes?

Sarah Durlacher: My real answer is the real answer that I would give is that it's a process of letting something die. And yeah. I'm like, how...

David Ding: To allow something new to be reborn.

Sarah Durlacher: Yeah. It's like, how, how deep do I wanna go into it? But I think Overall, like what, what I'm seeing and what my, my business partners in in California are kind of coming to is you know, like what, like, we're like, what, what are the main challenges organizations are facing?

Doesn't matter if you're a startup or like, or like big organization or like, what are people, what does it really come down to? And I think people are afraid of death and people are afraid of impermanence and people are afraid of letting things go and, and because they don't really know how. So we don't really know how to let things go. And I'm not sitting here saying that I'm, I've got it all figured out, but, but I just like, it's a pattern that I'm seeing.

So, so if you're in a business that's pivoting constantly, it's like, it's like, If you don't know how to let go of that thing, you're basically dropping it and then jumping to the next thing, but not actually acknowledging the death of something or acknowledging like you have to let go of something.

And I don't know, like, maybe it's a bit simplistic, but I think that, I think that rather than skipping over, we need to learn to be, with the process of letting go. And how that plays out, I'm not sure, but I think it's a big, a big missing piece. And a big area of avoidance. Like so I mean, you even see it on the flip side.

Like, we need to keep, keep producing, keep going, keep, you know, like nothing's ever enough. Like we finish a thing and we go on to the next thing and we don't even acknowledge like, oh, that's finished. Like, yay. You know, it's just, okay, next set of priorities. And it just goes faster and faster and faster and faster.

Yep. And yeah, it's kind of like a positive feedback loop cycle. Like we work faster, we just have to keep working faster and then faster. And then faster and faster. And you see that's like what happens in like these growth. And then you also see that in like when agile kind of goes wrong, right?

And it's like we just go faster and faster and assume that we'll just keep improving. Keep improving. And like there's always something better that we're like reaching for tomorrow, right? But I think, yeah, there's, there's something really important in the, the letting go and letting things die and that that's okay.

David Ding: Yep. I think you've touched on something quite profound actually, because one thing I see a lot in owner operators of small companies that are like, you know, maybe up to 5 million dollars revenue per year, get into their seventies, the companies totally dependent on them and they haven't even thought about their exit strategy or their transition plan or their legacy because of the grief of, you know, the loss of their identity.

Identifying as the owner operator not being able to trust someone else to come in. And I think it's the resistance to the grief, putting off the grief, and I see that in the environment I'm in, I see it frequently whereby people are resistant to innovation, which is the thing that could leapfrog people, like catapult them into a new paradigm because it renders the plan obsolete. It renders this renders our current North Star obsolete.

All the time that went into designing that vision and the strategy. And we went offsite and someone's come up with an innovation. And if that were to be true, it means all of this is now obsolete. And I, a lot of what I do is I try and help lubricate that with grace.

And I think if you can find that sweet spot where you, you're constantly innovating in some small way it can really help. It's an ongoing challenge. I don't know if you can solve it really.

Sarah Durlacher: Yeah. And I think something you just shared I wanna highlight as well, which is the intertwining of your identity and what you're doing in the world.

And that's hard to, hard to not do. And anytime you fail at something, right? Like it hurts because you believe that like, part of you is that thing, right?

David Ding: Yeah. Yeah.

Sarah Durlacher: So I think the, the yeah, I just wanted to highlight that you brought up the identity piece because I think that's also really important.

So it's not just like the letting, letting go, but it's actually like acknowledging and, and being aware, like self, like aware enough to know what parts of your identity are wrapped up in the thing that you're doing. Yeah. And acknowledging that.

David Ding: Absolutely. I, I see it. I see motherhood, like I've got friends that are mothers and, you know, they have a newborn and they immerse themselves into that.

And then all the person that I knew them as, when I meet them again later, they just identify as a mother. And I'm like, well, you, you're so much more than that to me. And I think it's, it's very easy to just put yourself in a box that's mm-hmm. That's not even close to what you actually are. And so that's why I'm big on, you know, rhythms that include you know, variety.

So I still see my friends. I am still a mother, I am still a brother and a sister and all those kinds of things. And I think it's important to have a baseline that does have variation in it, rather than my baseline is I'm just a mother or I'm just an entrepreneur, and everything else has to weave in around that, you know?

Mm-hmm. So, yeah. And, and, and I think part of the reason people get burnt out and maybe a bit bitter mm-hmm. Is because they come to realize that what they've had to sacrifice to be a diehard founder. Yeah. Relationships, health. Hobbies.

Sarah Durlacher: And then there's resentment for all of those things.

David Ding: Big time. Yeah. And it's how do you reconcile that?

Sarah Durlacher: I don't know.

David Ding: Have you got a framework for that or?

Sarah Durlacher: For me, lots of meditation. Yeah. And it's, yeah, my framework is lots of reconnecting to myself and actually being able to sort out what's me and what's not my identity, like what is me and what's not. And I think also choosing for my work, it's choosing to work with people who are on that level as well. Like understand that more deeply. Yeah, because I even find, you know, my ability to support a team or a group of people is directly related to my ability to like, stay regulated and like, stay myself. Right? Yeah. And not panic or get thrown by, thrown by things. And so yeah, I work with the people that I know I can work with rather than pushing myself into situations that which is where I've kind of burned myself in the past, working, working with chaos.

David Ding: Yeah. Yeah, me too. It, it, it took having to experience the depths of chaos for me to cherish rhythms. And I won't let go of those rhythms for anyone or anything now because they're my handrail, you know? Yeah.

So, and let's say magic wand. Mm-hmm. You had a magic wand looking at the innovation ecosystem in New Zealand and, and even the wider economy, what, how do you think you could be most impactful in terms of, if, if your knowledge was able to, and your wisdom was able to seep into these organizations?

Sarah Durlacher: How do I think I could be the most impactful in New Zealand

David Ding: in terms of sharing your knowledge and wisdom? Hmm. And experience?

Sarah Durlacher: It's hard cuz I, I'm not, I'm not quite sure. I think. Yeah, that's really, it's really hard for me to answer.

David Ding: It's a big question. I, I get that. Yeah. But I, I think if you looked at you, you've experienced the problems of working for Yeah. Military. You've seen the problems of working for fully teal organizations.

Sarah Durlacher: Try wannabe teal.

David Ding: Yeah. Wannabe teal. There's, there's some middle ground there somewhere.

Sarah Durlacher: Mm-hmm. Yeah. I've also worked in like big high growth tech as well. Okay. And then now yeah. Government agency in New Zealand.

David Ding: Maybe you are in the right place.

Sarah Durlacher: I do feel like I'm in a good place. Mm-hmm. I, I think. Yeah. I, I feel like I'm working with good people and I'm able to have impact. Yeah. In the work that I do. And I, I feel supported in the work that I do. I feel happy and proud to be part of the Callaghan team and I am grateful that I'm able to like, live and support myself in New Zealand and work with my colleagues in the States.

I wish, I wish that we could, that I could do a little bit more cutting edge kind of work. Yep. Here. And I don't know if, like the question I hold for the Web3 community and blockchain in New Zealand is like, Can we actually create an ecosystem in New Zealand and be on the world scale of like, oh, new Zealand's doing some great stuff in this place. And look at, look at the projects that they're investing in.

They're, they're, they're investing in really groundbreaking like Web3 technology that isn't just, you know, the latest, greatest defi app Yeah. For whatever, but, but actually has utility, like actually making lives for New Zealanders better, or like connecting, you know, like I, I have like eight different sign ins for government websites.

Like if some of that stuff could actually be, be sorted that would be really cool. So, so yeah, like my dream would be to be like a cheerleader for New Zealand to actually have, have a stage for like that, but a, a real one. Yeah. Not just lip service. Yeah. And to be like, oh, projects want, people want, like, talent wants to come to New Zealand because they can, they can get their projects invested in and they can work on like, some really good stuff.

And that's, that's where I would be happy to be connected with the New Zealand ecosystem around Web3 and Callaghan. And if Callaghan could support all of that, that'd be really, really cool. And I think for me yeah, if I had more space to do more passion projects that would be, yep.

That would be also, also really cool. Yep. But yeah, making, making New Zealand dollars I come from the US like, you know not there yet. I got a ways to go. Yeah. Yeah.

David Ding: Yeah. Yeah, I totally get that. And I think you know, some of the stuff that Hewlett Packard used to do with their employees, whereby they'd give them time to work on their own passion projects, they'd give them a specific allotted amount of time.

And what they would do is it would just date in their minds and they'd create 90% of it in their, in their mind. And then the whole thing would come to fruition in a very small space of time, cuz that's all the time they get allotted and that they're free to be able to do work on those projects as well as work at Hewlett Packard.

I think that is a great opportunity for Callaghan to do some cool stuff like that. But to your point around the Web3 community on the world stage, I think, I think the ideation and the concepts coming out of New Zealand are, especially the innovation around business models. Not necessarily some groundbreaking new technology necessarily, but the gestalt of collaborative efforts coming together to create something unique and special. And, but I do believe that Web 2.5 is the solution. I don't think if you're solely Web3, I think you're gonna have challenges. If you're solely web two, you're not gonna realize potential that you could have.

And I think a hybrid of both is how we could leverage that potential. Mm-hmm. And I think you could be a real fulcrum of that kind of progress.

Sarah Durlacher: I'm wondering are there, like, do you have any examples of organizations you've been working with who are like, you know, not Web3, but not web two, but you see poten, like some good potential, like, I don't know if you wanna mention here, or like, what, what are they doing roughly and why are you excited about them?

David Ding: Okay, I'll, I'll give you a classic example. Okay. So I've got a web two company. I call it my portfolio, but I'm just used to that. That's what I've come from. So I've got a portfolio of founders. And I, they're all under capitalized, so I'm constantly trying to get 'em to collaborate together to fill some of the capability gaps.

So I work with web two and Web3, although I'm a specialist in Web3. So one of my founders is a an AI based company. They built an AI matrix that has developed into an Oracle and it uses, has an adversarial AI protocol that is perpetually becoming better and better at defense in response to a perpetual premeditated attack.

And they've used a game of rugby to demonstrate it's prowess. So their issue is they've got this incredible tech, no one understands it. It's even got potential to be used in quantum crypto cryptography down the line. And so the solution is, I brought through another two founders from the Web3 community.

One of them is an expert at bundling up shares in web two companies and NFTs, and then making them tradable on an exchange, but also activating intentional communities to onboard people and facilitate the exchange. Another person who is the head of a, of a massive company in New Zealand, the Web3 manager, she's developed a protocol for within a smart contract that actually goes and pull prevents carbon from being mined but absolutely gifted in terms of you know, understanding the potential of smart contracts and things.

So we came together, we said these are all the problems that we are having. And so now the Web3 people who are experts in smart contracting and stuff are helping them come up with a solution to activate a rugby based DAO to get product market fit on their rugby product.

Now they, they don't know, they, they don't know what an NFT is. They don't know what a DAO is. But now all of a sudden you've got a web two company that's leveraging the potential of what Web3 are the masters of. And that is activating communities around an idea to get traction in a scenario within which whatever product you put into that community doesn't have to be perfect, it can be imperfect, and you can start getting feedback.

And I think I'd love to see more of that kind of stuff going on. You know, Web3, the masters of Intentional Community and rallying the troops. And then Web two, who are the masters of commercializing stuff. Okay. Yeah. So, and this is just beginning to happen. I've been orchestrating a lot of stuff behind the scenes just to get them to come together and start connecting. Mm-hmm. But there's definitely momentum in that area.

Sarah Durlacher: Mm-hmm. So did you see like the potential for this connection and you were just trying to facilitate, facilitate that happening? Yeah. Okay. Yeah, so I'm, I'm, I'm assuming then this is maybe a, a theme of like, of what you do.

David Ding: Yeah. It's pretty much what I do. Okay. Yeah. Well, I'm trying to solve all, help solve all their problems, whatever it is. Yeah. Okay. You know, a lot of what I do is workshop based facilitating workshops. Right. Helping them become investor ready. But if I can get them collaborating to overcome those obstacles as well, I definitely facilitate that.

Sarah Durlacher: Hmm. Yeah. So, okay. I think I understand a little bit more what you mean around the web 2.5 now and how yeah, you can take like the commercialization or, or those, the bright spots in one or the other and then combine them and like what, what forms out of that is something greater than. What, what they each two have alone.

David Ding: Yep. Yeah, and the, the thing I'm not a fan of is, I'm not a fan of the stuff where people are just following trends based on what the market's doing, you know the opportunistic stuff that's gonna, you know, arise one day and vanish the next day. And, and I think yeah, I I, I I'm into legacy, you know, how can we build legacy companies for New Zealand that create a legacy not only for the founders, but for the nation and leveraging Web3 technology.

Sarah Durlacher: Mm-hmm. So, so you see a lot of opportunities like that?

David Ding: Oh, for sure. Yeah, for sure. But there are far more than I can handle. So.

Sarah Durlacher: The harvest and the replanting.

David Ding: Yeah. Yep. So I, I, my biggest challenge at the moment is I want to spend time with the founders moving the dial for them. I, I'm, I'm not great with anything that pulls me away from that.

There are lots of other things pulling me away from that. So yeah. I, but I think we are making progress. A lot of progress.

Sarah Durlacher: Great. Yeah. Good. Magic wands, I like

David Ding: Yeah. Yep. Our magic wands combined. Yeah. Pretty good.

Sarah Durlacher: Yeah. Yeah. Magic room.

No it's really good to, to talk about this because yeah. Like it's this has all been kind of dusty on a shelf Yep. For a while. So it's good to like, Yeah. Talk about Yeah. Thank you for, thanks for the, the questioning and helping me dust off some things. And then also it's good to bring it, bring it to now where we are in reality.

Like we're here in, in Aotearoa working for an innovation agency. Like, okay, yeah. Like where, where are we at? What's, what's your dream for, for this space? Like, what would my dream be for and or what would my dream be in this space? And yeah. It's good to, it's good to, good to think about that. Yep.

Good to, Yeah. I, I'm kind of like, oh, am I kind of a distressed asset?

David Ding: Aren't we all.

Sarah Durlacher: I feel like I'm a distressed asset sometimes.

David Ding: I need an intervention.

Sarah Durlacher: Yeah, yeah, yeah. Yeah. But that, that works really good. Interesting too cuz there's, there's there's not just like what you do with the asset, but then like what about all of the other parties involved and that whole process I was always really curious like, and turnarounds and

David Ding: Yeah. I, I'm big time into turnarounds. My, my career just lent itself to that. I found myself in turnaround scenarios and I ended up thriving off it. You know, it's because of the, because I'm a, I'm quite disruptive in my thinking and I like quite a lot of disruption going on around me. And I think that environment, I mean there's things about turnarounds that are horrendous.

Like the wind down is horrible. You know, if someone's burned down rates are just through the roof and then having to, you know, the layoffs and that's, yeah, that's not cool. But those are truths that the market has to come to, come to know and accept themselves. And so we can do that with grace, with enough advanced warning. So, yeah, that's where I like to play. Nice. And I, I have a feeling you're probably quite comfortable there too.

Sarah Durlacher: Yeah. I always find myself in the change, the pop, the, the things that are moving from one thing to the next. Yeah. Right. And like helping steward the people through that in different ways. Yeah. So yeah, find myself there, whether it's growth or costs or I mean something.

Yeah. Okay. It's a change. Yeah. We've change.

David Ding: Yep. Okay. Well that, that feels like a good place to finish. Great. Okay. Thank you so much. I really enjoyed that.

Sarah Durlacher: Thank you David.

David Ding: And I look forward to more discussions.

Sarah Durlacher: Yeah, same.

David Ding: Okay. Cheers. Cheers for now.