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Today I'm interviewing Ray Peloso, CEO of Katabat,a software company that helps clients collect more dollars and reduce charge-offs by helping them deploy collection strategies, omnichannel strategies and synchronize and orchestrate offers across the entire collection spectrum.Ray truly embodies the theme of this series because he is indeed a different thinker. Watch our interview (or read it below) about deep thinking, collaboration, and how to minimize distractions to make your team as productive as possible.

Stephanie Eidelman:

Hi, I'm Stephanie Eidelman, CEO of The iA Institute and insideARM. I'm here today with Ray Peloso, who is the CEO of Katabat. Ray was recently here with me, but now he's back for a different kind of conversation. This one is under the banner of our Innovation Council Think Differently series. And let me tell you, Ray is a different thinker. So this will be very interesting.

Ray Peloso:

Great. Well, as always, Stephanie, it's a delight to spend time with you. So hopefully we can have a bit of a controversial conversation today.

Stephanie Eidelman:

We'll do our best. So we agreed to talk about two topics that we'll weave together. The first one is, What book or of any genre really has expanded your thinking the most and how and why? The other is, Do your best ideas come from collaboration with others or deep thinking on your own, and how does this process work in your organization? I'll leave it to you to get started on your thoughts.

Ray Peloso:

Great. I think the setup is important here, which is we are a software company and for years we've had a distributed workforce. We've been able to recruit and hire people offshore as well as onshore. We've had headquarters in Delaware, but we've always over the years supplemented with hiring talented people wherever they live. All of which becomes really interesting in the post COVID world of do you bring, people back into the office, or do you allow people to live where they want to live? So it unpacks a whole bunch of interesting questions. To tie that together, as a backdrop with the book I read, it's a book called Deep Work and the author's name is Cal Newport. For any of your listeners, I'd be delighted to talk a lot about it. We read it as a management team probably two years ago and we've had controversial, but I think really productive, discussions and even practices around some of the key lessons that came out of that book. When I saw your list of topics, I thought it'd be fun to talk about.

Stephanie Eidelman:

I love that. What are some of those key lessons?

Ray Peloso:

I'm going to start with one quote and then we'll make the rest of this conversation. In the introduction, what he writes is, "In the age of network tools, knowledge workers increasingly replaced deep work with shallow work, constantly sending and receiving emails and texts like human network routers with frequent breaks for quick hits of distraction." I remember reading that thinking, wow, that sounds like how I spend a lot of my days. And I'm pretty sure it's how a lot of my team spends a lot of their days. There are a bunch of fundamental ideas here, but a core idea is that in a knowledge economy, none of us manufacture anything. I don't manufacture cars or widgets. Your brain and your individual contributions ultimately are what create value and differentiate you.

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Ray Peloso:

So how you think about how you manage your knowledge and tap into your talents is critical. This will weave into collaboration and I'll let you leave me with a couple of questions, but to throw out a little controversy, there has been a lot of research in the last decade or so around workplace design looking at whether collaborative open table structure is productive, not productive, more effective, less effective, etc. That's too long a topic to go through, but there is a body of thinking that Deep Work presents that says if there is a wild amount of distractions, it actually erodes the ability of the individual in a knowledge economy to be productive. I'll stop there so you can guide me from here.

Stephanie Eidelman:

I would say a number of things. First of all, I think you're right. And I have been both in those big open offices in the mid-1990s, I worked for an internet startup and we had balls and we had stuffed animals and people throwing things and yelling and having fun. And meanwhile, you had to have business development conversations on the phone in the midst of it. And it was just all part of it. And as a business owner, I have created that open space as well. And I think you're right. I have learned that you need that place to do deep work. Now in our company, what happens is you walk into a space that's open that has people there, but it's silent. Everybody has headphones on and they're doing their work. And sometimes, you know, we have collaboration, but that's why, because of this challenge you raised.

Ray Peloso:

So let me give you two thoughts and then we can unpack. First is it goes well beyond ambient noise. There's absolutely distraction of somebody walking by or talking. The book really drills into all of those IMs all day, all of those emails that happen all day...the sort of "environment of distraction." And they tell anecdotes that are always helpful in book writing. Carl Jung and great inventors by and large went off and spent time alone to allow their minds to focus on the big problems.

New Speaker:

The second point I would make is that they sort of articulate the chemical costs of your brain constantly getting distracted. In a nutshell, every time your brain is distracted, it takes a few seconds to refocus. When you do the math of how many times an hour, a day, a week, you're distracted and then how long it takes you to refocus. So the book really goes through the costs of collaboration. Because if somebody just swings by your cubicle with hey, I've got a great idea, it actually has distracted you.

Stephanie Eidelman:

Yes. It rings true for me. I'm one of these people who does get distracted by the task. I like to keep things moving. I know that if somebody asks me a question and for me, it typically happens on email, but it might be an IM as well, I want to answer it. I want to keep them moving. I'm very conscious of not stopping their progress. So whether it's me reminding them to answer their own question or me answering for them.

However I see that I advance my company most when I do that deep thinking work, those are the times that I have really pushed a ball forward. What I wonder though is that the noise people have, you mention the constant IM chatter, for instance, which definitely happens in my world. I know that my team is often chatting with each other. But you can't dictate though that they can't do that. It won't stop the mind from wanting to do that.

Ray Peloso:

Right. Gosh. So the first thing I'll tell you is that doing what we talked about is really hard. So I don't want at all to suggest that we're perfect because we struggle every day with how to take these ideas and put them into practice. I empathize with your comment which is that very often I think my best contribution to the company is keeping things moving. But I've actually learned that my personal discipline to stop trying to move things along and to actually think through what I want to move along and why can actually be quite more impactful. This leads to the classic point of one or two things done really well is probably a lot more valuable than 35 things done simultaneously and rapidly. And so we continue to try to think through those lessons.

I'll pull in one other concept to give the listeners some practical applications. There's this infamous thing called the Bezos memo.

Ray Peloso:

So Amazon (you can go Google this) around, forcing people not to use PowerPoint decks, but to actually write out their arguments in long-form memos. Part of the practice we're adopting is to take a few hours each day or one hour each day, and articulate your thoughts and organize your thoughts in written form in the form of deep work. And we have found better ideas, more well thought out, more persuasive. So there's something that Jeff Bezos and Amazon really tapped into. So we're not making up new ideas. We're sort of stealing good ideas that we're reading about elsewhere. But it ties into deep work, which is you can't write a thoughtful coherent argument if you're constantly distracted.

Stephanie Eidelman:

I think that's very true. Here's another thought that's related. Something I've noticed in our company is that when we have a management meeting and we've got five people there and somebody brings up a topic, I noticed that discussion is not necessarily as productive with five people as it is with two people. Although you think five people, five minds, you get more input, but people I think are reluctant to step on each other or say something that somebody else might think is stupid or inappropriate or whatever the barrier is. It's interesting that getting that unit down to two people -- and I see it over and over again -- and maybe even one person in certain circumstances, is even the better unit. It's probably for the same reason.

Ray Peloso:

Yeah. Two thoughts. Number one is... I think it might be Bezos or maybe Elon Musk...somebody has this pizza pie rule, which is any meeting that requires more than one pizza pie is probably too large a meeting, which is just kind of a small team rule which we find to be useful. And we use the Bezos memo. So I'll work with my chief product officer or my engineer and we'll actually have small group discussions with these -- my second point, which is having a straw man. So again, this topic sort of bumps into collaboration. And how do you collaborate? How do you make collaboration effective? There is absolutely a great role for collaboration in the workplace, but "Hey, here's an open topic, let's just go around the room for an hour and a half" is less productive in my opinion than somebody going off doing a first draft. Here's what I think we should go do and why. And then using that strawman in an iterative way, over a period of time to collaborate. That's what we try to do.

Stephanie Eidelman:

A hundred percent. That rings so true from our work in the Innovation Council. We can't possibly bring an open-ended topic to the group. There's got to be a straw man that people are asked to respond to or at a minimum, small groups are assigned specific questions to answer.

Ray Peloso:

Right. So there's a point in the book because I think this whole thing started around this book where they talk about the perfect physical architecture of the workplace. And it's a theoretical point, but it's like hub and spoke, which is Stephanie has her office because it's really important for her to have quiet deep work time, but she can leave her office and go into the common area to get a sounding board, to get a reaction, to pull someone in and say, Hey, critique my thinking, critique my work. Again, it's an academic book, but it reinforces the point that there is absolutely a critical role for collaboration. People shouldn't be working in isolation, but designing collaboration is what's important.

Stephanie Eidelman:

It'll be interesting to see how that comes about in this world where many people are working remotely; how do you design that common area? It's of course, when you say, "Okay, on Thursday we're all going to get together, or once a quarter"...Creativity and collaboration don't happen on a schedule like that. But if you did have a physical space where everybody had an office, and then you had this cool collaborative area, would people be in that collaborative area at the same time?

Ray Peloso:

Going through the logistics of it is hard. That's why these guys are college professors writing books.

Stephanie Eidelman:

And that's where the IM actually comes into play. To some degree, maybe there's a combination of calendar management and that kind of disruption or mechanism for disruption. Because if I want to ask something of someone on my team, I try to look at the calendar first and make sure that they're not on a call or in a meeting. Of course, they may be doing deep thinking at that time, in which case we'd have to have the discipline to mark that on our calendar too. Maybe there's a clue in there as to when people are interruptible and when they're not.

Ray Peloso:

It's logistics, but how each of us manages our calendar and how each of us manages our calendar with our coworkers is a huge part of all this because there's randomness and chaos throughout the day unless tribal rules are established. And we struggle with that. We want our colleagues to carve off time. One of the things we're doing very tactically, by the way, is we're creating office hours. We're basically saying the product managers are available every day from 8:30 to 9:00 to answer questions. And in exchange, we're going to ask you to leave them alone from 9 to 12 so they can work on their work. So we're trying a lot of things to figure out a way within an ecosystem of lots of moving parts and people and activity to reinforce this idea.

Stephanie Eidelman:

Have any of the things that you've tried stuck?

Ray Peloso:

Yeah. So one of the points I was going to make as we wrap all this up is that deep work is really hard. You know, you're left with your private thoughts, you're left with your own ingenuity. And it is hard to turn off all of those stimuli that now we've all become so used to and actually train the brain. So I feel like there's a lot of days where I sort of fail. I want to focus on a topic and my brain gets tired. So it's really, really interesting for anybody interested in trying it. It's actually easier to read the book. It's a lot harder than you realize to practice.

Stephanie Eidelman:

That's an excellent point to end on and give people some food for thought. We will continue because it's always wonderful to hear your thoughts.

Ray Peloso:

If any listener wants to chat about it, have them call me directly. I think it's a great topic and we really are trying all of these things to be a great company.

iA Innovation Councilis a collaborative working group of product, tech, strategy, and operations thought leaders at the forefront of analytics, communications, payments, and compliance technology. Group members meet in person (and lately, virtually) several times each year to engage in substantive dialogue and whiteboard sessions with the creative thinkers behind the latest innovations for the industry, the regulators who audit and establish guardrails for new technology, and educators, entrepreneurs and innovators from outside the industry who inspire different thinking.

2021 members include:

2nd Order Solutions

AllianceOne Receivables Management

Alorica

Arvest Bank

Attunely

BBVA

BC Services

Beyond Investments

Capital Collection Management

Cedar Financial

Citizens Bank

Collection Bureau of America

Crown Asset Management

CSS Impact

Dial Connection

ERC

Exeter Finance

Firstsource Advantage

Healthcare Revenue Recovery Group

Hunter Warfield

Imagined.Cloud

InDebted

Katabat

Livevox

MRS BPO

NCB Management Services

Neustar

Numeracle

Ontario Systems

Phillips & Cohen

PRA Group

Professional Finance Company

Radius Global Solutions

Resurgent

Revenue Group

RevSpring

Spring Oaks Capital

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Thinking Differently: The Most Important Thing You Need to do to Advance Your Company - insideARM.com