Meet the Exec: Professor George Feiger

Professor George Feiger: ‘The world isn’t ending, it’s changing’

Pro-Vice-Chancellor and Executive Dean of Aston Business School reflects on lockdown, video calls, and how interaction aids creativity.

There are two dimensions to lockdown, personal and work. The personal side has been strange, especially at the beginning when all the streets were empty, the air was clean and you could hear the birds. For me, I discovered that a lot of my management work takes place when I run into people in rooms and corridors. A conversation takes place, not necessarily one I might have planned, and that leads to other things. That’s how creativity works, right? Working in [Microsoft] Teams or Zoom, you have to plan and schedule and have a prior agenda. That is good for organising processes but not so good for innovation. The other thing that happens is that people get grumpy. It’s very tiring to do video calls. But you see yourself in the little window, in addition to seeing the other participants. And there is a lot to be learned from seeing yourself in action. I remember in my first year teaching, Harvard [University] got a grant to improve teaching quality. My first 20 classes were filmed, and a coach would play them back with me, telling me what I was doing wrong. When you watch yourself you see what everyone else is seeing, and you should ask, “Do I want to project myself like that?” My job is to help everybody else be successful. That means I’m constantly nudging and talking and suggesting and possibly criticising. I think that lockdown doesn’t make it harder to be an insurance adjuster, for example. You work with rules and facts, and, because you don’t have to commute, you can probably get more done. I have to read body language and faces, to see if there is something that I should be worried about. That is very difficult to do on a screen. Reading people’s body language is more important, the more judgment calls are being made on uncertain futures. In a prior life, in investment banking, this was absolutely critical. It’s the judgment that is written on a person’s forehead. The better you are at reading people’s faces, the better you are at managing trading risks. Whenever you have a decision which uses data to inform judgment, the judgment is the dominant thing. Of course you would be more than unwise to make judgments without data. But no set of numbers is going to tell you what to do about an uncertain future. The quality of decisions is partly driven by data and partly driven by people’s ability to process their own experiences and turn them into useful analogies. Education can prepare you for leadership roles but, thereafter, you need to be apprenticed to some good leaders to absorb those intangible skills. I don’t think we’ve learnt enough from the 2008 global financial crash. The underlying causality is completely different to Covid-19, of course. In the financial crisis, it was an explosion of the consequences of stupidity in the financial system itself. In contrast, the virus spreads everywhere, creating fear and reducing both economic output and the desire of people to buy that output. The similarity is in the process of trying to rescue the economy. During the financial crisis, many of the people who caused the problem were more than made whole by the bailouts while the rest of society bore the cost. Currently, and especially in the US, huge sums have gone to people and entities that didn’t need it to survive and who have profited greatly. There should be much greater economic and financial literacy in the public. They might then be able to put a stop to this type of institutionalised corruption.

During the financial crisis, I was deeply opposed to the central banks lowering interest rates effectively to zero. One of the reasons was that it destroyed the value of retirement assets. No one thought about the fact that to keep eating, a large proportion of the population had to eat through their savings. No one thought about the fact that low interest rates cause the present value of future pension obligations to explode, requiring companies to divert cash from investing to shoring up their pension funds. The same thing is happening now. The Bank of England has cut interest rates to zero. But who’s going to invest or spend just because rates are low? Whether your interest rate is zero or 50 per cent, you’re not going to borrow money to splurge on anything. You’re thinking “Am I going to lose my job?” You’re not even going into shops for heaven’s sake! What we need instead is more investment. Luckily, there’s a lot to invest in – green energy for example. If the private sector is afraid, the Government should be supporting the investments, not lowering interest rates. The investments would employ people; these people would spend some money, and things would get back to normal. Do I think some universities will close in the current circumstances? That’s really in the hands of the Government. I think there are a number of universities that are commercially bankrupt, in that they can’t generate enough revenue to cover their operating costs. The Government might try to merge them into larger entities to sustain them, but merging doesn’t change the economic situation. Having one vice-chancellor instead of two looks good in the tabloids but as a fraction of the cost base is inconsequential. The central question is the future balance between higher education, which I believe has expanded too much, and further education (and while-you-work education such as degree apprenticeships), which I believe needs to grow substantially. One area which I think will change permanently as a result of Covid-19 is what I call personal-service activities. We’re going to see much more automation. There are already hamburger-flipping robots. The only reason these things haven’t taken over is because people are paid so little; it’s actually cheaper to hire someone than to buy the robot! In places like Japan, where they don’t allow immigration and the population is ageing, you see a greater use of robotics in homecare, in care homes, in restaurants. You’re seeing the beginning of it in the UK now. Possibly the biggest response in the long run is that a number of people will be able to work from home for part of the time. That’s a big deal because it affects the real-estate industry. Who wants an office in a high-rise building where you mingle with thousands? How many people can you put in a lift if they have to be socially distanced? You’ll finally get to your desk at the time you have to turn around to go home! But every cloud has a silver lining. If people move to less dense areas, they will need more housing there, and new work quarters. Even in real estate, the world isn’t ending, it’s changing. The question for many will be: “How am I going to adapt?” The question for our shrewd Aston Business School graduates should be: “How can I profit from this change?”

Professor George Feiger joined Aston University in 2013, having run a wealth management business in the United States. Prior to this he held a variety of senior roles including Director of McKinsey & Company, Global Head of Onshore Private Banking for SBC Warburg, and Global Head of Onshore Private Banking for UBS. George started his career in higher education as a Lecturer in Economics at Harvard University, going on to become an Associate Professor of Finance at Stanford University. He has written and spoken on a wide variety of topics in international economics and finance and investment strategy.