Lia DiBello Professional Reinvention: Rethinking Your Work After Thirty Years

Nigel Rawlns (00:00)
My guest today is Dr Lia DiBello Bello, a cognitive scientist who studies how people become intuitive experts. She found the people who stay successful hold one picture in their heads of how business works, money, operations, and supply and demand, all in balance, pivoting to whichever part the moment demands.

Nigel Rawlns (00:21)
She calls it the triad, and it forms an important part of my work. In Lia's simulations, people run three years of business in a day and get it wrong. They come back the next morning asking, how come it's so easy today? Her point: people don't learn anything new. They reshuffle what they already have. Your own picture of how a business works can still run on autopilot. When it narrows, you become a one-trick pony.

Nigel Rawlns (00:49)
With all your skill in one corner of the triad. Thirty years in, you have more to reshuffle, and you're better on the second try. This is the Wisepreneurs Podcast, I'm Nigel Rawlins.

Nigel Rawlns (01:01)
Leah, welcome to the Wisepreneurs podcast. Can you tell us something about yourself and where you're from?

Lia DiBello (01:08)
sure. I grew up in upstate New York and

Lia DiBello (01:11)
I'm a cognitive scientist. I I'm one of the first people to to work in cognitive science. I've been doing what I've been doing since I was nineteen and I've been obsessed pretty much my whole life with how the brain works and how people think and how people make decisions based on what is now recognized as intuitive expertise or a kind of gut feel

Lia DiBello (01:37)
understanding of the world. So what I'm known for is basically studying how people become intuitive experts and the characteristics of intuitive expertise in different domains and the neurophysiological mechanisms underlying that.

Nigel Rawlns (01:54)
I'm very happy to have you on the podcast because I I first heard heard you speaking with Cedric Chin many years ago. So my listeners may be hearing you for the first time. So one of the things that Cedric Chin spoke to you about is that you found that people who are really good at running a business and also in other domains all share the same picture, say for how a business works, the money, the market

Nigel Rawlns (02:22)
and the operations. Can you

Lia DiBello (02:24)
Right.

Nigel Rawlns (02:24)
tell us how you came to that, please?

Lia DiBello (02:27)
well basically I've worked with more than fifty companies, fifty commercial companies, and I've worked in other domains too, such as medicine, military and some that are not businesses. I think that

Lia DiBello (02:41)
What I started to notice as I was doing field work in these different places is particularly in business, businesses are much more alike than not. That there's a common sort of mental model of people who are successful in business. Now remember, business is made up. It's not like physics, right? It's it's basically a social system of agreements. Money is only

Lia DiBello (03:07)
worth what it is because we agree that it's worth something and we assign value to things. And I noticed that no matter what business you were working in, whether it's mining, selling donuts, or any you know, commercial real estate, there were these I call organizing forces for how you would organize the way that the system worked and whether or not you were successful.

Lia DiBello (03:34)
So for for business it was the triad. Basically, you know, finance operation, supply and demand of finance, basically. Now how that manifests has changed over time. So now finance, which might have been just how many shells you have in your pocket two thousand years ago, is now you know, capital management.

Lia DiBello (04:00)
So in other words, how good are you at understanding the availability of capital, the uses of debt, the uses of you know investor and investors and so on. So it it's gotten more complicated over the years, but as a basic category it has not changed. Now supply and demand are kind of simple. there is no business without somebody wanting what you do and being

Lia DiBello (04:25)
Willing to pay for it or be being willing to do something to get it. And operation is basically the execution or delivery of what you do and the efficient execution and delivery.

Lia DiBello (04:38)
so operations is has changed probably

Lia DiBello (04:42)
the most radically over time. Because now we have enterprise technologies, we have AI. You know, the way to get the work done changes dramatically. It changed dramatically with the Industrial Revolution. But the fact that you have to do it is always true. And the fact that you have to take advantage to be competitive of the best way to do it is always true. Does that make sense?

Nigel Rawlns (05:06)
Yeah.

Lia DiBello (05:07)
Now yeah, now some people we call them one-trick ponies. Some people have made incredible careers because they're good at one of those triads. Usually sales. You know. people who are tend to look very successful are people who really understand demand.

Lia DiBello (05:25)
They know who wants the product, they know how to sell it, they know where the buyers are, they know what the buyers want to hear, and they really understand where the markets are. But they may be very poor with capital management, and they may be very poor with operations. We saw that a lot. So I started to look at people who were what we call repeat successes.

Lia DiBello (05:49)
People who no matter what was going on with the economy were very good at being successful, even in a down market.

Lia DiBello (05:58)
So we started to look at what was different about them and we realized that they have what's called a balanced triad. They can pivot to emphasize the part of the triad that's going to make them successful given what's going on culturally and economically.

Lia DiBello (06:14)
So my grandfather was one of those people. So for example, during the Depression and during the war, in the United States, all of the materials for for automobiles were being used for, you know, to make planes and things like that. So what he realized is that there are always going to be people who have money who want to buy a car.

Lia DiBello (06:37)
car and there are no cars. So he took advantage of that and bought every every car and every car part that he could find, pennies on the dollar, because all these car manufacturers were going out of business, or dealers were going out of business. And he was the only game in town during the Depression. And so he made a killing.

Lia DiBello (06:59)
because he understood that you know there are even during the Depression there were wealthy people who would pay anything for a car. And he made sure he had it.

Lia DiBello (07:08)
so he was very good at all three parts of the triad. He also used not his own money to fund all this. again be he took advantage of the fact that cars and car parts were so cheap and he was able to get financing for such a you know bare bones operation. He became the largest luxury car dealer in the upstate New York area.

Lia DiBello (07:33)
at the time. Very well known for that.

Lia DiBello (07:37)
He had the cars on tripods, or on turnstiles, and then people would come in and they'd dress up and they'd be served, you know, cappuccino and and treats and they had to dress appropriately to meet the new cars. He had a whole market niche, never discounted anything. and was very successful at that.

Lia DiBello (07:58)
Now what's interesting about him is because he was an immigrant, he probably would not have had that opportunity unless there was this financial crisis in the United States. Because he wouldn't have been considered a good risk. You know, he had a sixth grade education, etc. But he saw that this was the window of opportunity for someone like him.

Lia DiBello (08:20)
And then of course he executed excellently, in terms of repairs and so on.

Nigel Rawlns (08:25)
Isn't that interesting? And you said he only had a sixth grade education. education's probably only recently formal now, but even if you have a university education, it still doesn't guarantee that you can run a business. And there are a lot of entrepreneurial courses out there where, you know, I was working with somebody who said he was being an entrepreneur by doing an entrepreneurial course because he wanted to know how to run a business. But I'm not too sure if that would really help, would it?

Nigel Rawlns (08:52)
your your great

Lia DiBello (08:53)
No, no.

Nigel Rawlns (08:54)
grandfather there. He he instinctively knew and and my mentor, the late Dennis Hitchens, used to say that business look at the tradesperson, the concrete, and and look at the steps that he's got well he mostly has got to do. He's got to quote the job, he's got to do his materials, do his work.

Nigel Rawlns (09:18)
pay for his petrol, pay for his stuff and at the end of the day he's got some cash left in his hand. And and

Lia DiBello (09:23)
Right.

Nigel Rawlns (09:23)
that that's basically how simple business is. But obviously now in terms of the high end of your framework, it's it's a lot more complicated.

Nigel Rawlns (09:32)
And obviously so hard for somebody to have all three.

Lia DiBello (09:35)
Mm-hmm.

Nigel Rawlns (09:36)
one of the people I had on the la episode ninety nine was Alex Hayes and and she does sales training and she says their biggest issue is to stop the salesperson discounting because it it it actually makes a big impact on the bottom line. But they they say they they like to give discounts because, you know, they want to be friends with their customers.

Nigel Rawlns (09:58)
but it's working against their own company.

Lia DiBello (10:00)
Yeah,

Lia DiBello (10:00)
we had a we had a medical device company where there were Harvard MBAs in executive positions who were

Lia DiBello (10:08)
losing money for the company and their way of fixing it was to was to sell more at a loss. To just increase the volume and they lost money on every order. And they were losing money at the speed of light and they couldn't understand why, because their sales were so high. And we had to we had to fix that, you know. they they didn't have understanding of the operations corner of the triad, basically.

Nigel Rawlns (10:35)
I think in your talk with Cedric you you mentioned that often when you work with a company, the the right person who's got the understanding often is not working in that particular job or or role.

Lia DiBello (10:46)
No. That's very common. Yeah, that's very

Lia DiBello (10:48)
common. Yeah.

Nigel Rawlns (10:50)
All right, so one of the things you talk about or write about is the fact that being lectured doesn't work, that you have

Lia DiBello (10:57)
Right.

Nigel Rawlns (10:58)
to build the understanding yourself. So, what would you put people through if if trying to teach something doesn't work? So I I think you talk about the strategic rehearsal. So could

Lia DiBello (11:09)
Right.

Nigel Rawlns (11:10)
you talk something about that? How that may be a better way to learn something?

Nigel Rawlns (11:15)
And understand yourself?

Lia DiBello (11:18)
I actually think it's the only way to learn.

Lia DiBello (11:20)
I I think that when you go to a course and you listen to a lecture, all you're really doing is memorizing what's it it's kind of like a large language model. You you memorize words but you don't necessarily understand what they mean. and the first person that I became aware of who who may help me understand that is, you know, Vygotsky, who was a a Russian psychologist who understood

Lia DiBello (11:46)
That he could he called it something a little different because he was in the he died in the 1930s. This is not somebody any of us could have known. He noticed that what people do is they memorize stuff that's socially created, like a narrative of how things work, and they share that with each other through language and through cultural exchanges. And that's kind of what school is.

Lia DiBello (12:13)
In

Lia DiBello (12:13)
order to really understand it, true understanding happens when they start actually using that knowledge and then filling out what those words really mean. So we've all had that experience taking science courses into high school where you know you learn about biology and then you dissect the frog and you start understanding how all these concepts fit together. I think that as a species we were we have evolved.

Lia DiBello (12:41)
to learn from doing and through constructing our our understanding of the world. Because we've, you know, for many years we weren't necessarily even didn't even necessarily have language and we certainly didn't write anything down. And yet, you know, our species has not changed biologically in over 200,000 years. But we've gone from, you know, the same biological animal that was living in caves now goes into space.

Lia DiBello (13:10)
And how we do that is that we we have this sort of dialectic process where we we have a a linguistic representation of ideas as a placeholder, but it's only through activity that we really understand what it means. And I I think that's pretty universal. So what is strategic and we certainly don't become intuitive experts in anything without doing that. There's no intuitive expert

Lia DiBello (13:37)
That's the result of reading a book or taking a course. You you have to run a business and fail, basically. You have to have some spectacular successes and spectacular failures to be a real entrepreneur. And I think or anything, actually. and I think that we also

Lia DiBello (13:56)
We're we're wired to learn that way. That's why games and puzzles are fun for us. We like iterative trial and error and figuring things out and constructing the underlying rules of games and puzzles. That's part of our DNA. And I've noticed that even with babies.

Lia DiBello (14:17)
Babies are, you know, if you want to get a baby to stop crying, to give it something interesting to focus on that it can't figure out right away. And it's very attractive, almost irresistible to people. So so what we do is we take advantage of that.

Lia DiBello (14:34)
And we develop what we call strategic rehearsals. And we we now have a technology platform that makes it easy to make these new experiences. Most of them are in a virtual world, but they can also be a website. We also have done them with physical models that works just as well. And the idea is to practice your future. Practice of the future of your company, kind of in miniature, in in compressed time.

Lia DiBello (15:03)
Very important, so that you can go in, run it the way you think it's gonna work, and then learn that what you learned in the course may not be something you actually understand. you discover that, and then you keep iterating until you finally get it right. And then once you've done that, we believe that because you've learned it that way, when you go back out to

Lia DiBello (15:27)
the real world, it automatically transferred as your intuitive and gut way of behaving.

Nigel Rawlns (15:34)
So in a way you're changing their mental models in a in in

Lia DiBello (15:38)
Mm-hmm.

Nigel Rawlns (15:39)
a sense there. My former mentor used to run pen and paper simulations over multiple quarters. So in business we have four quarters a year, so so to speak. And his whole point was it's safer to do it in a simulation that he called. Yours is quite a different approach, to to play in a business.

Nigel Rawlns (16:01)
than to actually muck the business up by

Lia DiBello (16:03)
Right.

Nigel Rawlns (16:04)
failing. But then again, as you're saying, if you failed, as long as you've learned something from it, it's all right. So could we go a little bit more into that strategic rehearsal? How does it change their mental models? How how do they actually fail? Because I mean, if somebody is, you know, considers themselves quite brilliant and and they go into a into a rehearsal like this, how does their ego function in there?

Lia DiBello (16:28)
we don't really understand why it works so well. I think it goes back to what I said before, where instinctively, you know, we're hardwired to our brain does not like to be wrong. So even when we're just, you know, programming a new appliance

Lia DiBello (16:44)
that we bought, if it doesn't work, we keep we keep at it until it does work. When when your theory of how something works doesn't it turns out to be wrong, to your brain, to especially to your primitive brain, it's a threat to your survival.

Lia DiBello (17:00)
brain does not like to be wrong. So it will it will you'll be driven to keep trying. And what you know, in the early years when I was doing strategic rehearsals, I would try to have these, you know, after action reviews and these come to Jesus moments where people okay, what are we learning? You know, that kind of people just ignored me. I was in the way. They were kinda in the zone or in the flow of understanding, well, why isn't this working? And

Lia DiBello (17:28)
I would just be in the way.

Lia DiBello (17:29)
So typically a strategic rehearsal has to be done more than once. And the first time people go through, particularly because our time is artificially compressed. So for example, we did a a business simulation with a biotech company. And during an eight hour day, they had to run a business for three years. It was three years of business. The the company was suffering in its stock price and it had a

Lia DiBello (17:57)
A back order of products, about $800,000 worth of back order at any given moment. Now their product was not particularly special. In other words, it was an important product, but it wasn't something that other people couldn't make. But it was very important to the people buying it that they had it on time. So the fact that they were on back order was very destructive to their business. But because it was a

Lia DiBello (18:25)
Biological product, they said, Well, we can't control how fast it grows. So we basically said to them, Well, okay, you know, in lecture mode, we said to them, you have to control how fast it grows, or you're gonna be out of business. Your business is already suffering. There's other companies already looking to make the same thing and solve that solve that constraint.

Lia DiBello (18:51)
So they said, okay, so what what we did was we said, okay, they so they decided that what was wrong was the forecast. The people who did the forecasting were wrong about the forecast and that's why they were always late. So we did a simulation with them. We set up a a factory floor, you know, where they would actually make product, and because their product is is microscopic, we blew it up in size instead of miniaturized it, and we used

Lia DiBello (19:21)
Used

Lia DiBello (19:22)
restaurant food additives to replicate different chemical reactions, you know, growing, you know, changing in viscosity and all the different things to replicate their products. But we used the same test tube vials, the same boxes, and we said assume that the forecast is perfect.

Lia DiBello (19:43)
The forecast is perfect. If you make a product according to the forecast, you will sell it, you will get money for it. End of story. And then so they said, okay, well this will prove that the forecast is wrong.

Lia DiBello (19:57)
They not only replicated the same stock price in market cap in the simulation that they were experiencing in real life, they were losing money at the same rate, but they had the same $800,000 a day back order. Exactly. It was one of the most amazing things I've ever seen. And this is, you know, 50 people in a room working together. So I said, obviously you have a shared mental model that is driving you into the ground.

Lia DiBello (20:26)
And they were very upset that this happened. And I said, Okay, well tomorrow when you come in you will see the solution and you will execute on that. And they didn't believe us. they came in the next day and they said, How come it's so easy today? We see what we were doing wrong, we have to centralize filing and packaging. And once we do that, we're never late with anything.

Lia DiBello (20:51)
And we said it's not easier. If anything, we've changed the forecast.

Lia DiBello (20:56)
We used our software to replicate a more difficult and problematic forecast with more demand. And it's actually harder today. And they they they didn't believe us. And the and the the theory is, and again, this is a little bit debatable with my cognitive science and you know neurological colleagues. You know, what I think happens is you have a rigid mental model of how things work and it's on default, it's on

Lia DiBello (21:23)
autopilot and then what happens during a strategic rehearsal is it gets disequilibrated or perturbed or disrupted and your brain learns that this is not going to help you survive and it starts to increase the spread of activation. So when you come back the next day you see all of these, it's like a gestalt switch. You see all of these opportunities that you couldn't see before.

Lia DiBello (21:49)
And it's easier. you you have a reorganization at an intuitive level. I've done this with now 9,000 people, and it's the same every single time. There is no group that has been an exception. And it's amazing every time. And sometimes, depending on the domain, we get two or three years of of change in just two eight-hour days.

Nigel Rawlns (22:15)
That's incredible and it's probably very scary to some people, but it's an intervention, isn't it? In into their their their

Lia DiBello (22:20)
Yeah. Yeah.

Nigel Rawlns (22:22)
you're perturbing their mental model. But having that sleep and going away and then coming back, something's obviously happened. But, you know, eight hour intensive, that that's going through three years, so twelve quarters. So they're continuously making decisions, aren't they, in there? Yeah. Yeah. So, yeah,

Lia DiBello (22:37)
Right. Yeah. Bang, bang, bang, bang, bang. Yes. Yeah.

Nigel Rawlns (22:41)
and and that's

Nigel Rawlns (22:42)
probably quite stressful in a group of fifty and they're all looking around at each other. So that's quite incredible. So what about the person, you know, who has spent thirty years building their expertise and know how and they're they're wondering, well, if it's so easy to go and do a strategic rehearsal, that's going to undercut what I know because we're we're compressing all those years.

Lia DiBello (23:03)
it's it's actually very similar. What happens to the person who has thirty years of experience is they just have more in their closet. So their their mental model may not be appropriate either.

Lia DiBello (23:16)
Because they've landed on something that's working for them now. And they may need to do some reorganizing and pivoting. But because they've been working for thirty years, they have more to work with. So when the brain tries to s do a little bit of a search and find a better path, they have actually more choices. And they tend to be better on the second t try than people with much less experience. And I think it's because they have more content. But it's not any more

Lia DiBello (23:45)
available to them the first time than it is for anyone else.

Nigel Rawlns (23:50)
Yeah, that's the issue is what does thirty years of experience still buy you?

Lia DiBello (23:55)
I I think it it buys you a lot. I think the only reason that I'm able to do what I do is because I've worked with fifty companies and I have that body of experience. But I'm constantly surprised. And one of the things that I always say to myself when I go into a new situation is assume that y you know, you don't know anything and work with the people as if you are an apprentice, not an expert, and try to understand

Lia DiBello (24:24)
And the job the way they see it.

Lia DiBello (24:26)
When I did my dissertation I actually worked as an air brake apprentice in a train shop that remanufactured air brakes for trains. And I realized then that this is the only way to do field work. You cannot, you know, up above observing people. You've got to get down with them and say, let me work with you to understand how what it's

Lia DiBello (24:49)
like to be you.

Nigel Rawlns (24:50)
I think that's a really important point because I think what happens and for example the the situation where they were losing money the more they sold at what

Lia DiBello (24:58)
Right.

Nigel Rawlns (24:59)
what point do they say we need somebody to come in? Now if they say to a big consulting company, well we've got this problem, here's what we think's wrong, come in and fix it,

Lia DiBello (25:09)
Yeah.

Nigel Rawlns (25:10)
which you often hear, come and fix the problem, I don't care about it, fix it.

Nigel Rawlns (25:14)
Whereas what you're saying is you've got to get in there and you've got to make a proper diagnosis in many ways and then then come

Lia DiBello (25:20)
Right, right.

Nigel Rawlns (25:21)
up with with some sort of solution or somewhere

Lia DiBello (25:24)
Yeah.

Nigel Rawlns (25:24)
to go with it.

Lia DiBello (25:26)
Yeah, we do our own. usually when a company asks us to come in,

Lia DiBello (25:31)
They think the problem is in a particular area and we always tell them that we're gonna do, you know, we're gonna do some field work as if we're anthropologists, and we're gonna see if maybe the problem is somewhere else. So the biotech company thought that the problem was resistance with the bench workers. It actually wasn't. It was it was a very simple constraint. the benchworkers were when we worked with them

Lia DiBello (25:57)
we realized that when they had a big weekend plan, they were very good at getting the bugs to grow at the rate that they needed them to. They weren't really aware of it. But, you know, they had a way they had ways and knowledge about how to be on time. they just had a theory that you can't get the bugs to grow faster.

Lia DiBello (26:17)
the biological materials to grow faster than than they wanted to. so we kind of resolved that contradiction. It in fact it's a very interesting story because as I said they had eight hundred thousand dollars of back order at any given moment. I went back and did some field work with them about four months after we fixed everything. And it was fixed in four months, by the way. They were they sold for sixteen billion and they were only worth three hundred

Lia DiBello (26:45)
million when we started.

Lia DiBello (26:47)
We went back later and we interviewed people and we said, so tell me when we first started working with you, you guys were about eight hundred thousand dollars in back order on a given day in your ERP system. And they said, no, no, that couldn't have been that can't be right. We're eleven hundred dollars maybe now we'd be out of business if we we were doing that. That that can't be right.

Lia DiBello (27:11)
And the same people, four months earlier, not only told me that that was the case, but thought it was okay. And they had no memory, none. That that's how what they thought. So their default mental model was completely replaced. And that and these are educated people, they're biologists. And this happens all the time.

Lia DiBello (27:32)
Another time I was working, I did a card sort with some workers. I said, show me how this complex part that you build is organized. You know, use these cards like I'm four years old and kind of lay it out for me. And they laid it out, and it was obvious by the way, they laid it out that they were doing just in case material management. They were buying as much as they could, more than they could use in case they need it, right? Which is very

Lia DiBello (28:00)
expensive. And one of the the goals of their survival was to go to just in time, inventory management. So after we were done with them, I went back and I said, you know, I I I'm I was in school at the time, I need, you know, I need to do a little follow-up. Do you mind if you just help me with this by rearranging the cards again? And he arranged them in the way that showed just in time inventory management. And I said

Lia DiBello (28:27)
You do realize that you didn't do it this way before. And he said, no, no, I I this is the way to do it. I would always do it this way. I showed him a video of himself doing it the old way, and he goes, I don't know what I was thinking. You would never be able to, you know, manage with your inventory that way. You'd never know what you have. You just have all this stuff. And I thought, this is amazing. It's like

Lia DiBello (28:55)
his default mode of you know his a priori assumptions about how to organize material were completely changed and the old way was gone. So I realized then that strategic rehearsals actually reorganize people. And I started to realize people don't learn something new. What they do is reorganize what they have. They don't add.

Lia DiBello (29:19)
They reshuffle.

Nigel Rawlns (29:21)
what's so fascinating about that is and I hope hope the listeners are actually understanding what you're explaining there, that when you've made an intervention and you've actually solved an issue, the client doesn't always acknowledge that your intervention was what worked. I was gonna come that was my question my last question

Lia DiBello (29:40)
No. Yeah.

Nigel Rawlns (29:43)
with you was this issue, that they've spent all this money on a consultant.

Nigel Rawlns (29:47)
or or your organization and then they say, but this is all common sense. We knew this all the time.

Lia DiBello (29:54)
Right.

Nigel Rawlns (29:54)
And it's a bit concerning, isn't it, that they start questioning whether the money they spent on you was actually worth it. Was in fact

Lia DiBello (30:01)
Yeah.

Nigel Rawlns (30:02)
this change in themselves they actually deny the intervention. And and that intervention

Lia DiBello (30:07)
Yeah.

Nigel Rawlns (30:08)
is often a question.

Lia DiBello (30:10)
Yeah. So so what we started to do, because that was a push that's an issue for sure, is we we measured financial outcomes.

Lia DiBello (30:20)
So for one large financial institution we doubled their market cap and stock price and they didn't think mathematically that was possible. and and the biotech company, you know, they went from being worth three hundred million to sixteen billion and we actually tapped into their ERP system so we could track the back order changes. So we don't rely on their opinion of whether or not they're different. We rely on these extra

Lia DiBello (30:48)
Measures. in part because we need to know. We need to know did the rubber hit the road? Were we right? Did we fix the right things? And it was really kind of for our own research purposes that we did that, but we did get pretty good at it, but there's no question that you know

Lia DiBello (31:09)
that people are not necessarily aware of how they've changed. That said, one of the side effects of strategic rehearsals is we started to hear from people after we had left that they that they were changed.

Lia DiBello (31:24)
that they had a lot more confidence, that they were much more willing to make mistakes, to try things. They felt released in a way. so the whole process of iteratively making mistakes and learning from it, they it had a very significant effect on them. And they did report that. That that was very empowering. And

Lia DiBello (31:47)
We thought, we should probably make a mental health strategic rehearsal so people could rehearse their lives, you know, and learn that making mistakes and learning from them is is a good thing. But we're not clinicians, so so we Yeah.

Nigel Rawlns (32:02)
It's fascinating, isn't it?

Lia DiBello (32:04)
But but there's definitely we we we did get reports. And and there's always somebody in the group who

Lia DiBello (32:11)
sees what happened. And certainly the person who hired us, the CEO or the chairman, they see the difference from above, right? So so that's who usually hires us. We're never hired by the HR manager, ever. We're always hired by somebody in the C suite who's gonna lose his job if things are not turned around.

Nigel Rawlns (32:33)
gotta have that skin in the game. Well, that's the other issue too, that they've actually allowed you to look at the financials and to look at the systems inside. So I I I guess that's also part of how you'd want to work with somebody. You're gonna say, Well if you're not gonna give me access to that, we're not gonna work with you.

Lia DiBello (32:54)
Well, we do if they're publicly traded there's a lot we can find out.

Lia DiBello (32:58)
and we can certainly compare them to their competitors. my my colleague, Dr. David Lehman, who works with this on the financial modeling piece, he's got a list of about seven items that he looks at that are like almost like, you know, blood markers as to what's really wrong with a company. And he starts with those. And one of them is profits per employee, for example, which is hardly ever looked at, but he said

Lia DiBello (33:25)
That is a real indicator of the health of a company. So we do some scattergrams showing how they compare to their competitors on these seven items. And that's actually part of our secret sauce. And we we often present that to them and say, We know that you think this is your position in the marketplace, and we know that this is you think this is your problem, but we this is where we see you from the outside looking in as if.

Lia DiBello (33:54)
if

Lia DiBello (33:54)
we were the stock market and we also do a simulation or Monte Carlo simulation to show where they would be if that constraint that we found was moved. And then it shows their their potential upside.

Lia DiBello (34:10)
if they could fix that constraint. So for example, with the Foundry, we discovered that because they're in the United States and most common automotive parts are cast overseas

Lia DiBello (34:26)
The way that they could make a killing and have a very good business if is if they made unique multi-ton castings that cannot be made overseas. So, for example, the engine block for a locomotive, how many of those do you need? You're not going to do those in China. And also they require a lot of customer witness. a locomotive manufacturer wants to be able to visit the foundry and be involved when you're making.

Lia DiBello (34:52)
something that huge, right? So we realized that because they were very skilled craftsmen, their market was really multiton one-offs.

Lia DiBello (35:03)
that had to be perfect, end of story. They could do that very well. What they weren't good at is making five thousand small things. but once they realized that that was their market and that they could be good at it, they could also charge a premium. Because they could also get it done in a week instead of several months. And they could charge for that. The customer would pay for that time the savings in time.

Lia DiBello (35:30)
So we simulated what their business would be worth if they got very good at the at the current demand of those kinds of items in the rust belt. And it was enormous. And that's how they're making their money now. And the the biotech company, what we realized about them is the only thing they really could sell that would be competitive is being on time.

Lia DiBello (35:56)
it's like a band-aid. You need it when you're bleeding, not a week later. So because they made something that had to be on time, if they could they already had a quality product. It was just always late. And we did some simulations to see where their market position would be given the other things they had to leverage, which were quality, if they could just be on time and that's where we got to the sixteen billion

Lia DiBello (36:22)
Yeah.

Nigel Rawlns (36:23)
And the interesting story I can hear in there too is as we're talking about the the triad, about the financials, that you've obviously got quite a lot of intellectual power financial power or thinking in your organisations when you look at an organisation like that.

Lia DiBello (36:38)
Mm-hmm.

Nigel Rawlns (36:39)
And the seven questions that your colleague uses. I mean, again, this is expertise, but that's not something that's just happened overnight, is it? That's

Nigel Rawlns (36:49)
That's again many years.

Lia DiBello (36:49)
No, no.

Lia DiBello (36:51)
Yeah, no. David Lehman has built billion dollar businesses for GE and Caterpillar. And he's one of the you know, he's got the triad. he helped us identify the triad and develop actually a cognitive test for it that we used that the National Science Foundation funded. We have a cognitive agility assessment that measures that.

Lia DiBello (37:14)
measures how people are distributed on the triad. and this does not help you figure out the upside of a business. We have other tools for that that that he's been involved in. But it all goes back to a business is not successful unless it's successful in the competitive market space. I mean if everybody's late then you don't need to be on time.

Nigel Rawlns (37:37)
And that really is changing. Now you used the phrase cognitive agility there.

Lia DiBello (37:42)
Yeah.

Nigel Rawlns (37:43)
can you tell us actually what that is and how you might train for that, or is that how the strategic rehearsal works on it?

Lia DiBello (37:50)
The the strategic rehearsal, one of its cognitive agility is the ability to change your working theory of the problem space as you learn or experience that what you have is not working. And people vary in how cognitively agile they are, how quickly they can pivot.

Lia DiBello (38:11)
But what I've noticed with the strategic rehearsals is that one of the side effects of strategic rehearsals is cognitive agility in general. Like I I wouldn't have claimed that a few years ago. I would have said, no, you can only develop cognitive agility in the situation that the strategic rehearsal addresses. That does not seem to be true.

Lia DiBello (38:34)
we're working with the military now and anecdotally we've had a couple of uniformed officers test our military missions a number of times. You know we know that when they go through once they make a lot of mistakes. When they go through a second time, they do very well. that that's what a strategic rehearsal is supposed to do. But we've had people volunteer to go through missions three and four times to

Lia DiBello (39:01)
To

Lia DiBello (39:01)
help us, just design the, you know, tweak and refine the scenarios because these are literal war games and sometimes the details matter. So we've had people volunteer to do that. A side effect in their data has been that they are becoming better at pivoting and making decisions in uncertain situations, even if it's a mission they never rehearsed before.

Lia DiBello (39:27)
And we see that in business as well. we think it's actually might be true of us because we test all of our strategic simulations and we've done it with more than 50 companies and now the military and some medical domains. We think that our cognitive agility and our ability to design and see these things might be because we're we're taking our own medicine.

Nigel Rawlns (39:54)
Yes, I can see that. So

Lia DiBello (39:55)
Yeah.

Nigel Rawlns (39:56)
how does somebody, for example, as I've been talking about, the independent professional who's had thirty years of a career, how do they tell that they're going stale? A and and what can they do about it?

Lia DiBello (40:09)
well, I mean they could if they're in business they could use our cognitive agility assessment tool to

Nigel Rawlns (40:14)
Mm-hmm.

Lia DiBello (40:15)
see if they're if they're becoming a one trick pony or if they're starting to have all their expertise in one corner of the triad.

Lia DiBello (40:23)
w we may develop a simulation where people which is more fun than our cognitive agility assessment tool. Our cognitive agil agility assessment tool is a kind of simulation, but it's a 2D type of thing. We may we have a a mining simulation right now which is pretty good

Lia DiBello (40:44)
you don't really have to have a lot of expertise in mining. You really have to have the triad to do well in it. we just developed it for fun, but we are thinking of letting people try it to see what they learn from it about themselves. So they could do that.

Nigel Rawlns (41:00)
Well, that was interesting thing about the simulations my late mentor used to do. He used to do them outside of the area of expertise of the person so that it would shift their thinking But as I said, it was pencil and paper and stuff like that. Okay. An interesting thing now, obviously AI has entered our world in a very, very big way. You've said that AI is just another tool. Where does AI do the work?

Nigel Rawlns (41:27)
Where does the professional and where does the human still come in and and make some decisions there?

Lia DiBello (41:33)
Well, I I don't think AI will replace at least large language models will not replace human beings. and I I mentioned this

Lia DiBello (41:41)
earlier and I've been talking about it a lot, the large language models are and there's a way in which they're very similar to us. The reason people have a default mode that gets them in trouble and they need to, you know, the reason strategic rehearsals work is because people do get stuck into applying a pattern that they've learned through the years that's become kind of hardened, kind of like an autopilot, and they apply it

Lia DiBello (42:10)
to new situations even when those situations are not the best. Their way of thinking or the mental model is not the best. Large language models do that entirely. They just have more to apply.

Lia DiBello (42:25)
But they don't have experiences and they can't learn from experience. Whereas human beings can, which is why large language models, in my opinion, can never be intuitive experts. And human beings can never know as many things as a large language model, but they can make better use of it. So I think the marriage is that the large language model knows a lot more stuff, but the human being will always have to.

Lia DiBello (42:53)
Make the j the final judgment. And I think that that's how we use AI here in the lab. now we also have this other product called Truth Layer, and it in part is meant to address that problem.

Lia DiBello (43:09)
and it's also meant to help the expert be more of an expert or amplify their expertise with large language models. Where instead of prompt engineering or after the fact reactive correcting, because large language models are very often wrong. It's a it's a big problem. And the more difficult problem that you give them, the more likely they are to be wrong.

Nigel Rawlns (43:32)
what I was thinking about from there is that an independent professional wants a level of expertise that they can help some people with. But, you know, not all firms can really come to you, but they might call in this professional and they've used AI and

Nigel Rawlns (43:49)
Can say, well, AI's gonna solve it. It's told us this. Whereas a professional coming in who's got the intuition and the experience can say, I I think you've got it wrong.

Lia DiBello (43:58)
Yeah.

Nigel Rawlns (43:58)
And and see, there's a a bit of a conflict there where some people are beginning to trust the the AI, whereas your truth layer is is saying, Well, you know, this is not quite right. So how do we sort of say to people that you you need to be a little bit careful here?

Nigel Rawlns (44:16)
But at the same time, whoever you bring in has to trust their intuition and bring something to the the table and see what they're seeing that the client doesn't see.

Lia DiBello (44:26)
Yeah, it is a big problem. It is why we made our new product Truth Layer. what it what it does is what people need to do, which is and I'm not sure how they can do this without our product, but what our product does, just as a way of method,

Lia DiBello (44:43)
it uses basically the science of expertise and it says that everybody has a working mental model that might be wrong. And so,

Lia DiBello (44:53)
In some ways it's a kind of strategic rehearsal for large language models. but it's automated in a product. And what it does is it causes the large language model to expand its breadth and its depth of of thinking and find all the ways that it's perhaps not confident or that it can't have a verifiable conclusion.

Lia DiBello (45:15)
you use Chat GPT or or Claude and it says that you should do this blah blah blah. If you use our truth layer, on Claude or or Chat GPT, what it will say at the end is I actually don't know, and I'm not qualified to tell you what to do, but here are some things you might try, and here are some people who've tried.

Lia DiBello (45:38)
Yeah.

Lia DiBello (45:38)
So it's and this is just for very wicked problems and as and some of the problems that we're dealing with are very, very wicked. There there is no answer. and what we do is we use Truth Layer to get to at least testable claims and testable approaches for things that in fact, you know, like curing cancer, that are not easily resolved, but large language models can sound like they are easily resolved.

Nigel Rawlns (46:06)
That's an interesting point you've made, is to have testable claims, whereas what I'm

Lia DiBello (46:11)
Testable claims, yeah.

Nigel Rawlns (46:13)
hearing is that somebody's saying, Well, ChatGPT or Claude or whatever says do this and and yet they're not taking that thing to say, Well, is that testable? is this reasonably available or is this a product for

Lia DiBello (46:28)
it

Nigel Rawlns (46:29)
large companies?

Lia DiBello (46:30)
No, no, it's it's gonna be available. We're it's in the lab right now and and we're doing test in fact if people want to try it, we'd love to have people test it for us. we're doing testing now basically to tweak the interface. You know, we wanna make sure it's easy to use and easy to to to get your results and when you're developing something in the lab, you not only get, you know,

Lia DiBello (46:54)
the answer but you get all the the analysis that went into it what the algorithm is doing. So we're trying to put that all in the background so you don't have to muck through that to get your answer. But it is working and if people want to try it they can contact me. Because we'd we'd love to have the data.

Nigel Rawlns (47:11)
So what's

Nigel Rawlns (47:12)
what sized firm are you talking about for that? Yeah.

Lia DiBello (47:15)
Well, we don't know. Our investors are looking at possibly an AI firm incorporating that into their product. or, you know, a large firm could just require employees who make mission critical decisions to use Truth Layer before they have confidence in the answer. You know.

Nigel Rawlns (47:35)
Filip

Nigel Rawlns (47:35)
Drimalka who's on episode one hundred,

Nigel Rawlns (47:38)
He he works in the Czech Republic and he has found that a lot of Czech Republic companies are not letting their their workers use AI. So they're using it themselves, outside and they're having to learn it themselves. So a lot of companies aren't actually using AI to the extent that they might want to. And he's encouraging, he said, You've got to use it to see where it goes. But

Nigel Rawlns (48:03)
he had a couple of companies and now he is training companies and the workers to use this but he himself says you've got to be using it to see what it can actually do. But but that's going

Lia DiBello (48:15)
And what it can't do, yes.

Nigel Rawlns (48:17)
to be the danger is willy-nilly using it. You you

Lia DiBello (48:19)
Yeah, yeah.

Nigel Rawlns (48:20)
have to I use a bit of Claude and I use a bit of ChatGPT but I use a completely different system now. and I I do spend a lot of money.

Nigel Rawlns (48:27)
And and Filip is saying, you've got to spend a couple of hundred and it is US dollars. In Australia, two hundred US dollars is three hundred Australian dollars, so it's quite expensive. But

Lia DiBello (48:37)
Right.

Nigel Rawlns (48:38)
unless you go down that rabbit hole, you're never gonna get those iterations and

Lia DiBello (48:42)
No.

Nigel Rawlns (48:42)
learn how to do what what your product is going to do. And

Lia DiBello (48:45)
Right. Yeah.

Nigel Rawlns (48:47)
I'm gonna say the learning curve for some people is just too much. That it would be easier if they are already an expert to use a product like this.

Nigel Rawlns (48:56)
So that they don't have this learning curve that I'm going through and that Filip Drimalka is miles ahead of most of us

Lia DiBello (49:02)
Well,

Lia DiBello (49:04)
I I think that it's safe to use large language models for routine tasks. Like for example, you know, I have to do a lot of reports for some of my government clients and I write the report, but I'll say, Can you go find the template, you know, the form that it has to be in with the boxes and the numbers and it'll put it in that form for me. Well that's a no brainer. You don't need

Lia DiBello (49:29)
an expert for that. so what we say around here is anything an intern would do, an undergraduate intern would do for us. Go verify a a a source on a paper, check the grammar in a paragraph. that we do we don't mind using even doing in a market analysis we we we can use it for. because it's not does not require

Lia DiBello (49:55)
An expert. You know, a market analysis for a new product, for example. Nobody knows, right? But you can get a good guesstimate from a, as you say, an expensive subscription to an enterprise large language model. But the kind of things that we have TruthLayer doing are things like how should we resolve an international conflict overseas between these two countries? Or how would we resolve

Lia DiBello (50:22)
the rare earth supply chain issue for the Department of Defense for ourselves and our allies. Because right now we're all dependent on China, who is not an ally with all of us, right? So how do we resolve that? Well the first time you asked Chat GPT, it says the US government has solved that problem. They're putting in so many hundreds of millions of dollars to to no longer rely on China.

Lia DiBello (50:48)
China. China owns a percentage of almost every rare earth mine there is in the world. So that that's not that's not a solution. If you put money into these mines, you're putting money into the Chinese government. but you know, Truth Layer did come up with some very nice testable approaches. In fact, some of them are being used in Australia now and being very successful. So

Lia DiBello (51:13)
Because some of our colleagues have studied that issue for a couple years, we knew what the right answer would be, and what one of the ways we tested Truth Layer is to see if it could find it, and it did. So for those types of issues, I think products like Truth Layer or similar ones will have to be something that experts rely on as they increasingly make critical decisions, like diplomatic decisions.

Lia DiBello (51:42)
using AI or medical decisions like should this person this person has cancer, should they have surgery, should they have radiation? You know, those are you know uncertain wicked kinds of issues that are not easily resolved. But AI acts like they are.

Nigel Rawlns (52:01)
It's now part of our work in many ways, but but not the free version.

Lia DiBello (52:03)
Yeah. No, no, I

Lia DiBello (52:07)
I know, I I was yes, no y the free version is not gonna it's not gonna get you there. Yeah. Yeah.

Nigel Rawlns (52:12)
I know, I know. Well, coming

Nigel Rawlns (52:14)
back to that issue where, you know, they almost deny that your intervention came and and solved their issue and th they've changed their mindset, how do you sell the second engagement?

Lia DiBello (52:27)
Well, it's one of the reasons we now have a product company. because it is it is very difficult to sell the engagements.

Lia DiBello (52:35)
It ta it's a a very long lead time. We we sell them through distribution partners. But they're very difficult they're they're just a lot of work. we did a project for Rio Tinto mining and for their rehearsal we actually built a model of an underground block cave mine with a processing plant that filled a ballroom.

Lia DiBello (52:56)
And the whole thing went into a dumpster after two days, but it did save the company. It did save that operation, which was losing money and then became very profitable afterwards and was sold for billions of dollars. but you know, we had to build the model.

Lia DiBello (53:15)
So what we're doing now is with our future view platform, which is software, you can create those models in virtual worlds like a like a video game. It's an immersive video game. You're an avatar, you go in, you see other people. And we first experimented that with that with a a a biotech company and then we worked with project management and the latest thing we've done

Lia DiBello (53:41)
is mining. And it actually works better than the physical models because you can take a wireframe of the whole actual mine operation, like you know, several square miles, put it in a virtual world and have people log in and work on the mine where wherever they are in the world. It's in the cloud.

Lia DiBello (54:03)
So if you go on our website, you'll see screenshots of that. And that's what we're doing with the military. The people actually do missions in a virtual world in huge environments with aircraft, ships, everything, it's all in there, and they they can actually rehearse more realistically. But it took a few years to build the platform because we don't want to build these simulations from the ground up each time. So now we have

Lia DiBello (54:31)
a platform that's a toolkit for making very complicated strategic rehearsals very quickly with no code editing.

Nigel Rawlns (54:41)
That is so amazing. And at the start we talked about how early early humans might have had a few shells and they'd trade them. And here we are looking at simulations where you can actually go in as an avatar. Isn't that amazing?

Lia DiBello (54:56)
Right. Yeah.

Lia DiBello (54:57)
Yeah. And it feels like you're there.

Lia DiBello (55:00)
And it's it's interesting to hear people talk about it. they they say you know, they say, Well, I went in, I went left, I went right, I I took the air, you know, I I flew here, I drove here, and I still got lost. They're not saying I logged into a computer, I moved my avatar, they're saying I drove, I walked, I did this. And one of the ways we know that it's working is a few years ago we did some EEG studies to see what level

Lia DiBello (55:28)
of brain engagement there was with people who were in our worlds. And in traditional simulations, which are used for schools and stuff, we saw, you know, brain activity only in the left hemisphere and maybe the prefrontal cortex. But in our simulations we get total brain engagement, including the motor cortex, when people are walking. So we know that the brain believes it's there. It's in there.

Nigel Rawlns (55:55)
Yes.

Lia DiBello (55:55)
Yeah.

Nigel Rawlns (55:56)
And isn't the brain fascinating?

Lia DiBello (55:56)
But it yeah, yeah.

Lia DiBello (55:59)
So but but you know, the reason and I this sounds like a little bit of a commercial plug, but it isn't really. We we worked with other simulation environments.

Lia DiBello (56:08)
other digital twin environments trying to do this for about ten years. And what we finally realized is that to get the accelerated learning effect that we know a strategic rehearsal gives you, and we know why, we know what has to happen in the brain, we really had to build our own platform that that that's purpose built to accelerate learning and to improve performance in organizations. Other simulation platforms

Lia DiBello (56:37)
We're never going to be wrestled into compliance with that. So we gave up on that, and now we have our own. And it's purpose-built for a cognitive transformation.

Nigel Rawlns (56:48)
That's just amazing. Well, Lia we've probably come to the end now. Is there something else you'd like to say or we should explain how people can find you?

Lia DiBello (56:57)
I guess I should tell you that the name of the platform is called Future View and they can look that up. But

Nigel Rawlns (57:01)
Future view.

Lia DiBello (57:02)
yeah, Future View at U they can look at our website, acsi labs dot org. And you know, we would love to hear from people if they think we're doing something wrong and they have ideas about how to do it better. You know, we're we're always open to that and we are looking for people to try truth layer. And

Lia DiBello (57:21)
If there are people who want to increase their cognitive agility, we are looking for people to try our mining executive management sim. It's the only one we can let people try because it's the only one we own. You know, when we make something for our customers, we can't share it, obviously. But we have decided to make something that we can share just so people can learn about what we do.

Nigel Rawlns (57:45)
I think that's

Nigel Rawlns (57:46)
brilliant and I I think it's important and I think everything you've said, the independent professionals need to think through this stuff 'cause this is how the world is now. And

Lia DiBello (57:53)
Yeah. Yeah.

Nigel Rawlns (57:55)
it's come to a fairly sophisticated level. So Lia do you want people to find you on LinkedIn or anything like that?

Lia DiBello (58:02)
They can find

Lia DiBello (58:02)
me on LinkedIn. They can also write to me at Lia at acsi labs dot org and I will answer. And as far as independent professionals go, you know, we are always looking for distribution partners. If they have customers that want to use our platform and they want to learn how to make their own simulations, it's purpose built for like for example, we're working with the US Marine Corps.

Lia DiBello (58:29)
War fighters are creating the simulations, we are not. And it is built so that a person with intuitive expertise can make their own experiences for their own clients. And that's the purpose of it. We want everybody to have access to e accelerated learning, the cognitive science of accelerated learning. We don't think it has to be expensive or hard to get.

Nigel Rawlns (58:53)
an opportunity there too for for particular people out there who've got that level of expertise and that

Lia DiBello (59:00)
Yeah.

Nigel Rawlns (59:00)
network. I think that's spot on. Lia thank you very much for being my guest. You are my hero because I do write about the the triad on my website and I

Lia DiBello (59:09)
Thank you. Yeah. Yeah.

Nigel Rawlns (59:12)
and it it it's made quite an effect on me because as I said with my former mentor

Nigel Rawlns (59:19)
We we have a a model that we use and it fits in the financial thing. But because I've been working in in marketing for a long time, all of these things come together. I I don't think I'm an expert in those, all three areas, the triads, but my late mentor was and I was very

Lia DiBello (59:30)
Uh-huh. Yeah. Uh-huh.

Nigel Rawlns (59:34)
lucky working with him. So Lia thank you. It's been wonderful speaking to you.

Lia DiBello (59:38)
Well, it's been a lot of fun for me. Thank you for inviting me.