Podcast transcript: EY Change Happens Podcast – Jason Pellegrino

Intro: Change happens how we respond to change can make or break us and our careers. Join us for an intimate insight in to how senior business  leaders face change. The good, the bad, and everything in between because whether we like it or not, change happens.

Jenelle: Hello Jason. Welcome back! It was only February when we recorded our interview. Gosh that seems like many life times ago. How have things been with you over the past five months?

Jason: Yeah reflecting back it doesn’t feel like a lifetime ago, it feels like a parallel universe. I’ve seen people talk about it as dog years and all sorts of things, but it feels like just a completely parallel universe. It’s been extraordinary.

Jenelle: It still feels surreal doesn’t it?

Jason: I think it’s clearly been the most challenging period of my professional life. The impact has been so broad, so quick and you step into such a chasm of uncertainty with so many people relying on you as a leader particularly for answers and you don’t have the answers. We’re all in the same storm but sailing different boats is probably the best analogy that I’ve seen reflected. In its extraordinary the breadth of the impact and how many people are impacted and yet the nuances of how everyone is individually impacted in very, very different ways.

Jenelle: An incredible time for you to have stepped into a new industry and a new organisation. Take me through the kinds of changes that you’ve had to make at Domain.

Jason: Yeah the day we recorded our original conversation things escalated very quickly. I remember that was the day that we had used as a test for our business. To test our remote working systems. We asked everyone to stay at home and we were just going to see if we could actually operate remotely. I remember by the end of that day, after recording our session and sending out a note to everyone to say “Well it’s not longer a test, this is now our norm for the foreseeable future which was uncertain as to how long.

The hardest thing to do at that point in time was to rapidly pivot to, not just a new way of working but also a new mode of leadership. Our teams wanted answers and clarity. They were scared. They were confused understandably. I was scared, I was confused. However, as a leadership team our role at that point in time wasn’t to provide answers, because we couldn’t possibly do that. It would be have been disingenuous to try to provide point answers.

Our role really was to protect our people and our customers first and foremost and to ensure the business was positioned to handle whatever lay ahead. It was around spending time and effort, putting confidence into our teams that we’re in a position to be able to meet whatever challenges lay ahead. That’s a very different mode of operating from what I call standard BAU, where it’s picking point estimates and having greater clarity on how to achieve those goals. This was around confidence and supporting our teams that we were prioritising them and we were positioning our business to meet whatever challenges lay ahead.

Jenelle: How do you inspire confidence when you used the word yourself Jason, you felt ‘scared’. How do you transcend your own personal fears, and what the hell is this we are dealing with and how long, to give off that level of confidence that others can then ride off of?

Jason: That’s a really interesting question. I don’t think it’s so much a new way of operating as probably an acceleration of what teams are increasingly looking for from leaders.

They’re not looking for the person who knows the most. The person who has the answer to every question. They’re looking for a leadership team where they have the confidence that this team can:

• come together,
• solve problems,
• take feedback,
• identify the best course of action or a range of course of actions to meet all forms of situations that lie ahead.

With rapid change and ambiguity, uncertainty, that increasingly becomes an issue. We did all the things that most organisations did for example. We moved to remote working. We increased the frequency of our communication using multiple channels, weekly all hands on Zoom, Q&A sessions on Slack, emails, blogs, all the things you’d expect to do. We prioritised our teams. I think we built confidence in a statement that we were prioritising our teams by backing that up with small efforts, like [4.16] and we provided some funds for them to make sure that they were safe at home. They were able to buy, for example, ergonomic chairs and set up a safe work environment. We provided some funds to help those people who needed to upgrade their internet plans for example, so they could actually work effectively. Just little things like that. Put some actions behind the words, that people matter.

I think the biggest thing and the thing I’m most proud of is we spent the time understanding the challenges that we faced and not just going to basic answers or running down well worn paths. A good example, and probably the thing I’m most proud of with our people, a thing we call ‘Project Zipline’ and that was our approach for employee costs. As a technology business nearly half that cost base is people. We couldn’t confidently or even genuinely say that we were setting up this business for whatever lay ahead without actually dealing with employee costs – which is the biggest cost line in our P&L base. We couldn’t avoid that. We couldn’t not talk about that. We couldn’t hide that from our employees. We really needed to understand what we were facing. We’re facing a few things and these are the facts that we established to start with. We didn’t know exactly what was going to happen. The facts we knew were the following:

• Firstly that COVID was going to be a short term impact. We didn’t the depth or length of what I call a ‘market ravine’ that we were heading into. But we knew there was going to be another side.
• Secondly the solution that we designed needed to match the problem. It needed to actually replicate the fact that it was a short term but uncertain depth and duration of the problem.
• Thirdly we just needed to recognise that as a technology business our biggest assets are our people and their ability to turn talent into product IP.

When you put that all together, pretty quickly redundancy stand downs, any form of action that reduces costs by reducing capacity is just the wrong approach. Particularly where it reduces capacity permanently.

Project Zipline what we did was actually offer our employees the ability to convert 20% of their cash salary to equity over a period of 6 months. What that did is, that allowed us to galvanise our workforce. We made a consistent commitment not to actually run redundancies and stand downs. There was a commitment that we’re all in this together.

Secondly, it was an approach that was in line with the nature of the problem. It sorted out our cashflow issue but retained our capacity to build and develop product and IP which was in demand in periods of disruption. Over 96% of our employee base accepted this and step forward. I’m really proud of that because it was a leadership team that went from concept to implementation in 3 weeks on that which is extraordinary given the complexity of doing that in a listed company environment.

Then over 90% of our staff stepping forward enthusiastically to support each other and our business when we needed it most.

That’s what I’m most proud of in terms of what we’ve done with our people and our business over the last few months.

Jenelle: What an achievement I think that Project Zipline is fantastic. I think the other thing that stands out to me in that Jason is it also gives the employees and everyone in the organisation a sense of control of what they can do in circumstances that can often feel completely out of control. No one has been through this before. They’ve got something they can do and contribute. It ignites a bit of collective action.

Jason: Yeah there was definitely a sense of collective action. We were very transparent about it. We didn’t hide the truth. The truth was if we didn’t get collective acceptance of this, which we call Plan A. Plan B was redundancies and stand downs because we had to deal with costs. I think that transparency and then explaining the ‘why’ and the benefit for everyone through that collective experience really won over the team. What we have, and this is why Zipline, this is about zipping across the ravine of unknown duration and unknown depth but getting to the other side with velocity and being able to not only accelerate out the other side but also reward our staff on the other side in terms of their ability to be rewarded as part owners of the business.

Jenelle: Sounds like a really powerful initiative. Its certainly a powerful metaphor as well with that zipping over a ravine, there is fear, there is uncertainty, there is adrenaline.

Jason: We’ll get there together.

Jenelle: Exactly.

Jason: It’s been extraordinary. I think one of the key learnings I’ve had is, it’s not only helped galvanise our teams, it’s fundamentally driven significant uplift in employee engagement. That’s just not anecdotal feedback. The last 3 months we’ve seen our employee engagement results lift by 30% to levels that we have never seen before. To achieve this in a period of such deep uncertainty. To achieve that in a period where the vast majority of our staff are dealing with a 20% cash cut to their salary is extraordinary. I think it just shows the quality, the resilience and the alignment of our teams.

Jenelle: Incredible. Much has been made Jason in the media about the impact that the pandemic has been having on the property market. I’m interested in knowing how you see the property business as a whole managing now and into the future. You think about buying, selling, borrowing, renting, showing, advertising. What’s that been like to be navigating amongst all the noise that we’re hearing around it?

Jason: I’m probably going to give you quite a dull answer to that question because I fundamentally don’t think that the property market or the process of buying, selling, or renting will change in the long run. But I think what COVID has done, like many other industries, is it’s given us a clearer picture of what the future of our industry looks like. It’s actually accelerated progress on the path to that future. Let me explain that.
 
Jason: Fundamentally the steps of buying a property won’t change from search, to discovery, inspection, settlement, moving in, all of those processes. However, what I think we’re starting to see is an acceleration during COVID of the use of digital tools and experiences, and the increasing normalisation of those both for agents and also consumers that are moving through those processes. They’re not replacing real world experiences but they’re being used as an enhancement. No one will ever buy a property without physically inspecting it. But virtual inspections for example open up the property to a much wider audience, they encourage more people to actively inspect and consider a list of property. They expose the agent to a much broader market. Digital will move from being seen as a side distraction or disruption or even a potential competitor by agents to actually a facilitator in a system. That has been happening slowly over time.

What COVID has done, I think it actually accelerated the acceptance and the adoption of that. It’s also shown the importance of the agent, for example, in the property market industry of what their role is in the future as really a service agent rather than a transactor. What we’ve seen for example, is a clear distinction in the performance of agents during this period from those who were able to really win the trust and confidence of their vendors and support them through a sales process versus those that weren’t able to actually earn or build that trust. The really great agents delivered fantastic results for their vendors in the last few months in a market where a lack of confidence has driven a lack of supply. When there is lack of supply you get great outcomes.

Jason: … And so, you know I think in the end like most industries is we will see an acceleration of existing trends that we’ve seen – digitisation, digital tools used as an assistant rather than as a disruptor. And we’ve got a clearer picture of what the future looks like, you know, the future role of agent, the future role of digital tools in that property market. And I think that’s consistent with most other industries if it’s based on the sort of discussions I have with CEOs across different industries.

Jenelle: I imagine that might have allowed you to accelerate areas that you would have wanted to have fostered anyway. So shift in relationships to the away from transactional and much more relationship-based would, I’m sure would have been high up on your agenda anyway. Do you think that this is affording you a level of adoption and impetus for change that you might not have otherwise had?

Jason: Yes, it’s definitely accelerating that, and that’s clear. What we’re also seeing is we’re having a lot more high quality conversations with our customers and partners as to what they really want and what they really need. That is manifesting itself in very different ways. So probably another area that I’m really proud of that our teams achieved or delivered in the last few months as an example, and this is a tangential thing. Yes, we’ve delivered a lot of new solutions that have allowed, for example, our agent customers to just continue actually working during, you know, social isolation and restrictions, which is fantastic. But the single thing that I get the most positive feedback was not that we stepped up and actually supported agents with new tools, not that we actually recognised the financial impact on their business and we provided discounts and flexible payment terms and all of the things that, you know, a lot of – any good partner would provide. But we actually extended our employee assistance programme externally to any agent in the industry who needed to talk to someone.

Jenelle: Oh, wow!

Jason: What we saw in discussing and getting closer to our partners was, it wasn’t just the financial impact but just like our staff and just like that fear that I spoke about, you know, that I felt personally, our agents were scared and it was having substantial mental health and wellbeing issues. But unlike Domain where we’re in a really privileged position to be able to provide access to, you know, employee assistance programme and, you know, to help and support our staff where they need to talk to someone or they need support, and many of these agents were working for small businesses or individual contractors or they just didn’t have that access, and opening up that programme was a solution to a real problem that was pressing. And, you know, it’s a simple thing on our part but it definitely came from understanding the needs of our customers better, being deeply empathetic and understanding what we could do to fundamentally make things better.

Jenelle: You know, that’s exactly the word I was going to use. To me, the empathy seems to be at the core of that. Like really recognising where the needs are and where the pain points are. You know, we talked before around the importance of the customer and, you know, there are precious few organisations who don’t talk about the need for proximity and intimacy with customer, what do you think has changed with this time around in really understanding customer needs? How are you – how have you been able to do that differently so that you’re getting closer to them and adapting to what their needs are?

Jason: Look, I think that they’re sort of extension of the employee assistance programme out through industries. A great example of this customer centricity – because it’s a little bit left field in terms of it’s not something that you would naturally, immediately prioritise. But understanding that health and wellbeing was probably a more significant need of the industry at a point in time than financial support or transaction support is an example of action rather than words. One thing that I take from it is in my experience, you know, I’ve been involved as a leader in, you know, a number of areas where there has been events that have unfolded that have required swift action - you know, bad times as well. And I spend a lot of time, and I repeat this again and again and again with my teams and they’ve heard this a lot in the last three months, and so you know they are telling me they’re a little bit bored of me saying it, and that means that I’m close to but not yet ready to stop saying it, one of my favourite quotes is that, you know, fortunes are made in good times and reputations are made in bad times.

Jenelle: So true!

Jason: Yeah, reputations are harder to build than fortunes but they’re a lot easier to retain if you do the right thing. So, I am spending a lot of time with my teams just saying that. Let’s do the right thing. This is a time where we are able to step forward and fundamentally build reputations. It’s a time to prioritise the needs of our people and it’s a time to prioritise the needs of our customers. We will deal with what we need to do to make that happen, but really this is the time that people will remember that you were on their side. And so I think that taking that into the way that you think about customer relationships, about partnership, are particularly in times of trouble or times of urgent need is absolutely the right way to think about prioritising the efforts that you make as a good partner.

Jenelle: I think I have heard that saying before but, gosh, it rings true now as we’re living and breathing these times. Never were truer words spoken. Jason, what have you found personally to be the toughest to be dealing with during this period?

Jason: That’s really easy actually. It’s dealing with the same uncertainty and fear that everyone is, but at the same time needing to focus on providing a level of confidence to our teams, our customers, our stakeholders, our shareholders, board that helps them with the fear and uncertainty that they’re dealing with. Yeah, it’s really, really tough. I found it very tough and I don’t think I’m alone in this.

Jenelle: No, you’re not.

Jason: But I find it really, really tough to say and continue to say “we got this”, but with an internal monologue that is constantly and silently chirping with, you know -

Jenelle: Do we?

Jason: It’s this, look, imposter syndrome revels in times like this.

Jenelle: Yeah. You’re obviously getting a heap of feedback from, you know, your partners, your staff, that it’s going well. Do that helping to quell the imposter syndrome? Is that – are you drawing confidence from feedback during this time? Or is it just a constant struggle?

Jason: My experience with imposter syndrome, and that’s something that I’ve dealt with for a long time, is it never goes away, you just learn to deal with it. And so it definitely is heightened in periods of uncertainty and it’s wonderful to get feedback from customers that you’re on to the right thing or that what you’re doing is helping. It’s wonderful to get feedback from staff, for example, you know, the increase that we’ve seen in our engagement score. But it never really quells that voice in the back of your head that says that you haven’t got this. You know, you’re overconfident or you’ve got the right answer, you haven’t thought of something or there’s another problem just around the corner. So I think it’s more about managing that rather than it managing you. And it’s not about silencing it completely, because it’s just not going to happen.

Jenelle: And the other thing, I guess, about silence that you wouldn’t want to silence it completely because it’s also what makes the positive aspects of you, yet the humility, the vulnerability, the accessibility – or at least that’s the talk track I tell myself who grapples with the same thing!

Jason: No, that’s a very, very good point. It is a key driver I think in empathy because it sort of allows you or forces you to think about, you know, where you’ve got things wrong or have you got things wrong or is there another point, is there another way? You know, someone else thinking about something differently. It’s where it becomes a barrier to rapidly taking action in a way that you should and focusing on what other people need. You know, I go back to what do teams need in periods like this? It’s not the answer but it’s a sense of confidence that there is a leadership team in place that will deal with whatever comes up. And where that imposter syndrome gets in the way of delivering that confidence it becomes a problem.

Jenelle: Confidence and trust, I guess, you’ve clearly instilled a high level of trust new in the leadership team, so I think the confidence comes when they’ve got trust.

Jason: Yes, absolutely. And a big element of that trust is transparency. You can’t focus on providing the exact answers when you don’t the answers because that’s not transparency, that’s disingenuous.

Jenelle: That’s right.

Jason: Transparency is about actually telling people where we don’t have the answers but providing all the facts that we do have and providing confidence on the level of work that’s going into mapping out every potential scenario that could potentially see ourselves in and positioning our business and our people and support our customers in a way that deals with all those scenarios. Transparency is about that level of depth in thinking and confidence in actions that will be taken and outcomes rather than, you know, the illusion of confidence that comes from assuming an answer when the probability of having that answer correct is so minimal.

Jenelle: So what are the positive learnings around change you’ve taken from this in the way that we’ve adapted during this time?

Jason: There are so many. I’ve said that the last few months have been easily the most challenging of my professional life. Easily! But I’m really energised by the extraordinary resilience, adaptability, ingenuity, I’ve seen this blossom around me. Look, I’m hopeful that one of the big positives that we’ll see out of COVID is an increased level of empathy and care for those around us. And I’m seeing that. You know, I spoke about that sort of image that helps me understand the situation truly, which is, you know, we’re all in the same storm but where each of us is sailing in different boats. And I’ve seen a lot more of that across my teams, across the industries I work in, you know, and even broadly outside of that a better understanding and acceptance of, you know, that people are in different boats. And I think that can only be a good thing for our society. But, again, that probably verges on this sense of optimism. That’s, you know, the optimistic viewpoint of that. I’m definitely seeing that. And I just hope that that is a change that is permanently embedded at least in the majority because I think that that’s a positive step forward for our society.

Jenelle: Do you think having that level of optimism is a criteria for success? And I ask that question because I have the good privilege of speaking to a number of people and optimism, you know, something like cautious optimism is something that seems to be a common factor here. Do you see that as being necessary as we navigate this to coming out successfully?

Jason: I think I do. I think that the approach the way that I see it is the effective leader in times of challenge like this, and the effective leadership team, is really all about hoping for the best but preparing for the worst. Though I think if you overly skewed it either side of that and forget the other, I think you’re in trouble. So if you’re just preparing for the worst it becomes really difficult for a team to galvanise around you in a confident way. And similarly if you’re just hoping for the best but you’re not preparing for any scenarios, whilst there might be a short-term sense of confidence pretty quickly that will dissipate once the first, you know, chicane comes up or the first roadblock. So I think it is absolutely about hoping for the best, communicating that hope, expressing that hope, instilling that hope in all of those that are around you but at the same time instilling the confidence that we’re preparing for the worst, that whatever scenario lays ahead we’ve got this. And there is a sense of hope in that as well.

Jenelle: Well on that, Jason, I want to thank you again for joining me and I want to go back to our conversation where we’re talking about your journey and other learnings in that original chat. Thanks again Jason.

Jason: Thanks a lot.

The ‘Change Happens Podcast’ from EY. A conversation on leading through change. Discover more where you get your podcasts.

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