Dialogue Q4, 2018

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Q4 2018


Freelance by choice The reinvention man TONY O’DRISCOLL DIALOGUEREVIEW.COM


The complexity chasm

Into the wild Blair Sheppard seeks rapid remedies to the consequences of the footloose world







Humane capital

The learning game

Cash for chaos

The write stuff

Positive nutrition

The power of good

Sharing knowledge since 1993

India’s demonetization gamble

Success is in the details

On leaders’ plates

BEYOND THE WRITTEN WORD AUTHORS WHO ARE EXPERTS LID Speakers are proven leaders in current business thinking. Our experienced authors will help you create an engaging and thought-provoking event.

A speakers bureau that is backed up by the expertise of an established business book publisher.



Digest 14 FOCUS



Everybody cut footloose


The asymmetry puzzle


The wealth shift


Fit for the future


Scale up, skill up



My edit

News nation

Ben Walker on the footloose world

North Korea – the rogue state


Spark What you need to know


Great minds Michael Chavez meets George Kellar


Reviews Books and apps recommended for you




Michael Canning on tapping into your power to energize

Jay Williams, reinvented

Karina Robinson on sermons to do business by


The big interview

Last word

Q4 2018 Dialogue



.druc erforum.org

management . the human dimension SPEAKERS ROSTER INCLUDES Alex Adamopolous

Gary Hamel

Rosabeth Moss Kanter

Linda Hill

Paul Polman

Tim Brown

Jim Keane

Zhang Ruimin

Clayton Christensen

Isabelle Kocher

Dave Ulrich

Dorie Clark

Roger L. Martin

Ricardo Vargas

Marshall Goldsmith

Mariana Mazzucato

Martin Wolf

CEO, Emergn Limited CEO, IDEO

Harvard Business School Fuqua School of Business Business Educator

London Business School Harvard Business School CEO, Steelcase Inc. CEO, Engie

Martin Prosperity Institute The Institute of Innovation

Harvard Business School CEO, Unilever

CEO, Haier Group Ross School of Business CEO, Brightline Initiative Editor, Financial Times











Kate Cooper: The leadership column Humane capital

Vivek Wadhwa: The innovation column The invisible classroom

The complexity chasm

Telecoms in the perfect storm





Phil Young: The finance column

Giles Lury: The marketing column



The tech branch

A recipe for insight



Cash for chaos

The spin myth


The write stuff



Patrick Woodman: The strategy column


The principles of success


Goodbye, fat cats

Q4 2018 Dialogue





Professor Vlatka Hlupic is chief executive of The Management Shift Consulting, professor of business and management at Westminster Business School and visiting professor at Birkbeck, University of London. Her new book Humane Capital will be published in October 2018. Her groundbreaking book The Management Shift was listed by Forbes as one of the top eight business books in 2014.


Beginning as a lecturer in web design at University of California, Irvine at the age of 24, Olga Mizrahi today inspires change in companies around the United States, creating her position in each one from scratch, each time. Holding an MBA from Pepperdine University, California, Mizrahi is founder of creative agency, ohso! Design, and creator of the online guide to the gig economy, www. ChunkOfChange.com. Mizrahi is also author of Sell Local, Think Global and The Gig is Up. Dialogue Q4 2018


Sharmla Chetty is president, Africa, and global managing director, Europe, for Duke Corporate Education. In her role, she leads Duke CE’s client relationship management, advisory work, and the building of client organizations’ strategic capacity and capabilities. Chetty has in-depth experience working in a range of industries, including financial services, healthcare and mining.


The 2017 #1 Global Voice for Education on LinkedIn, Heather McGowan prepares leaders to react to rapid and disruptive changes in education, work and society. McGowan works as innovation strategist with corporate HR managers and university presidents to prepare charges for jobs that do not yet exist. McGowan was also the strategic architect of the Kanbar College of Design, Engineering, and Commerce at Jefferson University.


Serving as professor emeritus and dean emeritus of Duke University’s Fuqua School of Business in addition to his role as global leader for Strategy and Leadership at PwC, Blair Sheppard is founding executive and former chairman of Duke Corporate Education. He has advised companies and governments in the areas of leadership, corporate strategy and organizational relationships.


Describing herself as a “proud member of the gig economy”, Marion McGovern founded human capital consultancy M Squared before embarking on a ‘gigging’ career of consultancy, executive education and facilitation. Retiring in 2010, today McGovern is a director at The Alliance of CEOs and CPP, Inc, and the author of A New Brand of Expertise and Thriving in the Gig Economy. Previously, she has also taught for seven years at the University of San Francisco Business School.



My edit

The late, legendary film critic Roger Ebert didn’t much like Footloose. “A seriously confused movie that tries to do three things, and does all of them badly,” he wrote at the time. Film reviews aren’t always good predictors of box office performance. Footloose went on to gross over $80m in US cinemas alone. The danger of the footloose world, this issue’s Focus topic, is that it is economically successful in terms of overall global wealth, but fails in other respects. Globalization, as Ebert might have had it, risks being a seriously confused idea that tries to do several things – unshackle businesses, liberate workers, and open up markets – but does all of them badly. Our cover star, Blair Sheppard (page 20), fears that an increasingly footloose world is a catalyst for an exacerbation of inequality and a collapse in fairness. Sheppard is not opposed to inequality per se – indeed he makes the case for it – it is the structure of the new inequality that concerns him. Rapid solutions are required, he argues. His suggested remedies are required reading for those at the top of companies, public bodies and governments. Yet some will succeed in the footloose world. Olga Mizrahi shows how talent is going freelance by choice (page 16). For many professionals, the gig economy isn’t a merely bearable replacement to a full-time job, it’s a clear preference. This poses challenges for employers. The best freelancers can pick their clients. Employers that make themselves freelance-friendly, and embrace suppliers as part of their corporate family, will secure the best talent. Heather McGowan and Chris Shipley (page 26) suggest that life as a freelancer might prepare you better for what’s next. Certainly, they say, freelancers are much more likely to invest in updating their skills than are full-time employees. Learning, McGowan

and Shipley contend, is the key to the future of work: companies must institutionalize learning – by making it a core goal of the organization. Set out to discover your employees’ hidden talents – in a changing, footloose world you might soon need to use them. One man who discovered his own hidden talents is the basketball-pro turned leadership-speaker Jay Williams (page 34). I first encountered Williams at last winter’s Training Conference & Expo in Atlanta. I found his ability to captivate an audience remarkable. There, I learned of his story, a traumatic ordeal that began with a career-ending motorcycle accident. Yet his reinvention inspires others to their own renaissance. When I challenged Williams that few people will endure a similar ordeal that forces them to change, the former Chicago Bulls point guard countered with a profound response: “Many people have their own accidents,” he told me, “they just choose to suppress them.” Tony O’Driscoll’s superb exploration of the complexity chasm (page 44) begins with an accident that would have been infinitely worse had the hero of the hour acted differently. Chesley ‘Sully’ Sullenberger’s expert ditching of US Airways Flight 1549 in the Hudson River – saving the lives of all 155 people on board – became known as the Miracle on the Hudson. It was no miracle – it was down to the skill and competence of the pilot who found a moment of clarity amid the complexity. O’Driscoll exposes the need to reframe, rewire and reconfigure as complexity grows. That’s great advice to leaders looking to make sense of, and succeed in, the footloose world. Many futures are possible. Enjoy the issue. Ben Walker is editor of Dialogue

Q4 2018 Dialogue




The digital age belongs to women The Global Female Leaders Summit remains resolutely optimistic in the face of disruption and AI The fifth annual Global Female Leaders Summit gathered 60 speakers and 300 representatives from the fields of economics, science and politics to discuss the future of the workplace and the global economy when it met in June. Affectionately known as ‘the female Davos’, this year’s programme topics ranged from transformation technologies and ethical issues, to the energy crisis and mobility. Keynote speakers included Afghan IT expert Roya Mahboob, State Street Global Advisors’ Lori Heinel, Fosun’s Lan Kang and the French ambassador to Berlin, Anne-Marie Descôtes. The event culminated in the presentation of the L’Oréal-UNESCO For Women in Science Awards, given to exceptionally qualified female doctoral students in Germany. This year’s recipients were Dr Sara Wiethoff, Dr

Malgorzata Wlodarczyk-Biegun and Dr Anne Wuttke. Consulting firm KPMG also presented the results of its survey into women in leadership in the digital age, where more than three-quarters of the 700 female respondents said they were optimistic about the growth potential of their companies. Especially proud of the positive outlook was Summit organizer and chief executive of Management Circle, Sigrid Bauschert, who added: “The Global Female Leaders Summit once again demonstrates the self-belief held by women in top positions for their roles in the economy.” — For more information, or to book your ticket to next year’s summit, visit www.globalfemaleleaders.com — Dialogue is media partner of the Global Female Leaders Summit

Bright lights of digital on display in Madrid Digital mindset accolade awarded to a Twitter campaign that sparked one billion impressions AXSChat’s live Twitter interviews won the 2018 European Digital Mindset Award for best European digital campaign after its ‘Tuesday chats’ generated more than a billion impressions in a single year. The awards took place at the Digital Enterprise Show (DES) in Madrid on 22-24 May – the world’s largest international digital transformation event. The awards recognize innovative projects, leadership and digital transformation cases that present a disruptive and innovative approach to customer experience, IT management and new digital business models. Other 2018 winners of the prestigious awards, now in their third year, included Liberbank chief digital Dialogue Q4 2018

officer, Joaquin Sevilla, who successfully integrated numerous digital channels into the bank; and Broadcaster Group’s head of digital, Pipo Serrano, who accepted the award for Best Journalistic Work in Digital Transformation after his company succeeded in implementing a 100% digital and mobile tech strategy, connecting audiences with news, 24/7. NH Hotels were also recognized as the Best Digital Transformation Enterprise for their work to connect 350 of the

More than 20,000 delegates from 51 countries attended DES Madrid

group’s hotels, resulting in hyperefficient service. The biggest nods of the night went to sustainable motorsharing platform, eCooltra, which attracted over 250,000 registered users in just two years; and Cristina Ruiz, vice president of digital transformation solution centre, Minsait by Indra, who accepted the award for Best Digital Leader Executive of 2018. More than 20,000 attendees from 51 countries applauded award winners at DES Madrid, which explores the future of digital transformation and showcases enterprises from around the globe. — Dialogue is media partner of DES Madrid and the European Digital Mindset Awards for the third year running. Join us for DES Madrid 2019 on 21-23 May



A human-centred approach has led a San Francisco Bay Area hospice to become a leading healthcare innovator


Global Female Leaders Summit / Telegraph Business Events

What governments can do to help businesses go digital “I’m sorry things are so uncertain right now,” said Margot James, UK minister for digital and creative services. Following a question about unstable politics, Brexit and skills shortages at The Telegraph Leaders of Transformation Summit, James was keen to address the responsibility of government and leadership in the digital potential of business around the globe. Amid the need for international trade in the tech sector, James and the gathering of business and transformation leaders pledged to work towards building new bridges – and keeping the established ones clear of blockages. With the UK reporting a 20% increase in international digital trade in the last 12 months, the country is quickly becoming known for its digital enterprise strategies, enabled – says James – by improving infrastructure, increasing digital skills and government action. — Dialogue is media partner of The Telegraph Leaders of Transformation Summit, which takes place every summer in London, UK

The purpose pioneer Can a clear business purpose help you innovate? Yes, if it’s human enough. Two months ago, I accompanied a group of US financial executives on an immersive journey in the San Francisco Bay Area. Our objective was to find external inspiration in a variety of tech and non-tech companies on how to innovate strategically. We were fortunate enough to meet George Kellar, executive director of the Zen Hospice Project in San Francisco. A former software engineer, this Great Mind showed us around the beautiful Victorian mansion located in a quiet neighbourhood where his residents – note, not ‘patients’ – live out their remaining days. According to Kellar, there are over 43 million unpaid caregivers in the US today who struggle with a healthcare system designed around curing, not caring. Given this focus – contradictory in a hospice – imbuing caregivers with their own sense of purpose is a complex challenge. As well as the core role of serving the terminally ill, Kellar spoke of the need to empower those who give the care: “We serve caregivers by helping them build resilience and self-care skills and habits,” he revealed. This core idea drove them to make a tough call: asking visitors to go home after 9pm to ensure family and friends, as part of the caring system, look after themselves. This clarity of the caregiver’s role is enabled by core beliefs that guide the human-centred purpose of the hospice. Using ancient principles, Kellar has helped build purpose among his team. “We base our approach on three principles that emanate from Zen Buddhism: selfawareness – being present; non-judgment; and acknowledgment of suffering,” said Kellar. This Buddist triptych offers guidance on behaviours, adding clarity to the otherwise fuzzy picture that a simple purpose statement might deliver. Yet the success of Zen Hospice Project’s purpose project goes beyond internal

accomplishment. It has enabled Kellar’s team to invent new business models. Because of its focus on holistic caregiving, the hospice now offers educational programmes to export its unique caring approach to caregivers and healthcare providers around the US. “Our focus on a human-centred approach ...makes us uniquely positioned to teach emotional skills to all caregivers – whether professional, family or volunteer caregivers,” said Kellar. “So we imagined a way to meet this need and provide it to people beyond our four walls.” A human-centred purpose is equally imperative in business. The good news from the Zen Hospice Project is that by tapping into basic human empathy we can more easily reimagine human experiences in a way that delivers greater value. Here are some lessons: The ‘customer’ should be at the centre of your purpose – whether your customer is your staff, your clients, or both Your product or your company is secondary to purpose development. They come in later – don’t start there To do this, ask: “Who are we serving and why?” At its core, purpose is about service to others See your customer in context. By building empathy, you’re more likely to see other opportunities to serve the customer, and maybe even other stakeholders Look for hard trade-offs. If your purpose isn’t forcing tough choices, it’s not clear enough Kellar’s story contains an important lesson: if we stick to what is quintessentially human, meaningful innovation is within reach. — Michael Chavez is chief executive of Duke Corporate Education — A version of this article originally appeared on Forbes.com Q4 2018 Dialogue


To win in today’s world, filling knowledge gaps is no longer enough. Yesterday’s wisdom won’t help leaders prepare for what lies ahead: more volatility and less predictability. Leaders must do more than simply learn. To be able to grapple with the unknown, they have to reorient and rewire. As our challenges become more global, social and complex, leadership is becoming more and more critical to business success. Duke Corporate Education is the premier global provider of custom solutions that enable leaders at all levels to adapt and move the organization forward. With delivery in over 75 countries, we work together with clients to understand their context and craft the right educational solution for any level of leadership — executives, high potentials, directors or managers. We’re here to help leaders get ready for what’s next.





There is a power that is open to everyone

Energizers are made, not born Michael Canning is global head of new businesses at Duke Corporate Education

Ever wondered what makes you light up after interacting with some leaders, while others zap the life out of you in seconds? It is often referred to as ‘energy’. Some believe leaders are born ‘energizers’. But, as the scholar Rosabeth Moss Kanter points out, energy is a power that can be cultivated: “Energy is a neglected dimension of leadership, and a form of power available to anyone, in any circumstance.” In today’s hypercompetitive, complex and fast-changing business environment, having more leaders capable of connecting with and unlocking the energy, ideas and potential of people is an imperative. Networking expert Robert Cross’s extensive research in organizations shows a direct correlation between the highest performing leaders and their ability to energize those around them. According to Cross and his collaborators Michael Arena, Jonathan Sims and Mary Uhl-Bien (MIT Sloan Management Review, summer 2017), energizers trigger the interest and engagement of others, unleashing the passion necessary for bold innovations. They connect with people, fully engage in interactions, and inspire others to devote more time and energy to initiatives. We need more energizers in organizations. What they have is contagious. It drives co-creation, elevates engagement and performance and raises our collective game. Here are four things energizers do:


Be fully present and connect with others

We need more energizers in organizations

As Cross points out, one of the defining attributes of energizers is their ability to connect with people and be fully present in the moment. In a world where continuous partial attention is the norm, it takes practice. In addition to Cross’s research, there is also brain science to support this. Duke Corporate Education faculty and neuroscientist Srini Pillay call this neural process synchrony, where the frequency and scale of individuals’ brain waves are in sync. Pillay explains that to truly connect with someone you must tune out the noise consciously and decide to synchronize. Energizers excel at tapping what Pillay calls “feeling for” and “feeling

like” brain networks of empathy. They see and seize opportunities to connect with what others care about. Once done, they then translate this empathy to introduce real opportunities at work – engaging people’s imagination and minds in a personal way.


Be responsive and reciprocate

Energizers demonstrate a can-do attitude. As Moss Kanter describes, “Energizers don’t dawdle, they don’t tell you all the reasons something can’t be done. They just get to it.” Yes, they take time to think and make connections, but they are action-oriented. And because they are, more people go to them for information and connections. They reciprocate and maintain a good balance between what they ask for and what they contribute to others – and their network grows along with their influence.


Stand for something larger than themselves

In their book Full Steam Ahead!, Ken Blanchard and Jesse Stoner observe that shaping a compelling vision begins with a sense of “significant purpose”. Today, with so much disruptive change, concrete visions are harder to attain. But understanding and conveying your organization’s bigger purpose – beyond making money for shareholders – is critical.


Infuse humour

A sense of humour builds personal connection. It also relaxes people. By taking ourselves less seriously, we open an opportunity for others to relate. As John Zenger and Joseph Folkman found in their study of innovative firms, “in organizations led by energizers, grimness was replaced with kidding and laughter. An energized organization bubbles over, not only with enthusiasm, but with humour and collaboration.” Some of the practices above may come more naturally than others. Yet all can be learned. The laws of physics tell us that energy can be neither created nor destroyed. Success comes to those who learn to harness it. Q4 2018 Dialogue




The footloose world No more will employees be shackled to their desks, their city – even their nation. As technology cracks open borders, education crosses divides and employment takes on new fluid forms, routine and rules could rot. Where do leaders stand in a footloose world? And what limits are there to our creativity in a world without boundaries? Will the new open landscape help level playing fields – or create deeper wealth inequalities?



Everybody cut footloose

Fit for the future


Scale up, skill up

The asymmetry puzzle

Discovery path Learn more…


About your place in a world without limits


The wealth shift






Everybody cut footloose Talent is going freelance by choice WRITING


Charlie Davis




What does it mean to be ‘footloose’ in today’s working world? Well, in 1984 it was a film about a big city teenager, played by Kevin Bacon, moving to the fictional small town of Bomont, where rock music and dancing were banned. Bacon’s character’s rebellious spirit shook things up – literally and figuratively. Beyond just the dancing, a very traditional way of life was replaced by a new paradigm. And that’s exactly what we’re seeing today in business. While we’re on the subject of Footloose, you’ve probably also heard of Six Degrees of Kevin Bacon, the parlour game wherein everyone in Hollywood was said to be less than six degrees of separation away from said actor. It soon came to apply to all us non-celebs, too. These days, with new technologies and social platforms, we’re more like two LinkedIn degrees away from one another... and from Kevin Bacon himself. These factors, among other things, have brought us to the modern day gig economy, where gig is shorthand for project-based work. Freelancing is not new, but the technology that drives the contract and on-demand labour market is. The fast pace of technology is cited in leadership studies, again and again, as one of the biggest sources of anxiety. But we can’t put our heads in the sand and not deal with it. It’s here. And it’s time to accept that newfangled way of dancing. No matter what you’ve known until now, the current gig economy probably isn’t what you think it is (i.e. just Uber and Airbnb). In 2017, Upwork and Freelancers Union conducted their fourth annual study Freelancing in America: 2017, which surveyed 6,000 US workers, and predicted that, by 2027, the majority of the US workforce will freelance. As of 2017, 36% of the total US workforce freelanced and a whopping 47% of Millennials choose to gig over fulltime, traditional work. Gig workers contribute approximately $1.4 trillion annually to the economy – an increase of almost 30% since 2016. Results also show a progression of fewer moonlighters and part-time freelancers, and more full-time freelancers (17% in 2014, up to 29% in 2017). In fact, the US freelance workforce has grown three times faster than the overall US workforce since 2014. It’s not because they aren’t full-time positions. Rather, freelancers are leaving traditional employment because they want to. Asked about whether they started freelancing more by choice or through necessity, 63% of freelancers said by choice, up from 53% since 2014. Compared with traditional jobs, freelancers Dialogue Q4 2018

We used to say, “It’s not personal; it’s just business.” That’s just not true anymore

report that “freelancing makes me feel… free, independent, in control, good, and empowered.” Furthermore, freelancers increasingly think that having a diversified portfolio of clients is more secure than one employer (63% agree, up ten points since 2016). In turn, employers are looking outside of traditional recruiting methods. Thanks to social media, companies are now crowdsourcing leads. It’s not unusual for a private Facebook group to solicit talented folks. A recent posting on a female executive group I belong to called for recommendations for a director of public relations. The poster requested a direct message with full details, so that she could put the referral directly into her Bay Area software employer’s pipeline, skipping the typical recruiting rigmarole. Just as the town of Bomont had to let go of its old social contract and embrace dancing as a force beyond its control, we too must change our perspective in order to be successful in the future of work. It used to be that an employee would trade their hours and loyalty for a pension and gold watch. This wasn’t true for freelancers, of course. But, today, without pensions or gold watches for anyone, there isn’t as much of a dividing line any more. Workers cannot control whether their job will actually be there in the future (whether the company they work for is gone by then, or a robot takes over their tasks). In fact, 54% of the US workforce said they’re not very confident that the work they do will actually exist in 20 years. What these individuals can control is their own skillsets. As work changes, reskilling is critical. This is exactly why 55% of freelancers participated in skill-related education in the last six months. There is tremendous opportunity ... but not for everyone. Freelancers have to position themselves as the very best choice in a sea of options. They must uncover their unique value proposition (UVP) and broadcast it to the world, on a variety of platforms. In the past, UVP is something that only corporations had to think about. On the talent acquisition side of the equation, we must also take a hard look at what we are offering the candidate. It is no


times the revenue growth than the less inclusive companies. I think companies can agree that this ‘for all’ leadership is good for business, period. Clearly, it’s time to start treating freelancers like full team members. Consider the following changes:

It used to be that an employee would trade their hours and loyalty for a pension and gold watch

longer an extra to offer training, on-the-job skill enhancement, and having workers really feel like they add value and make a difference. If they don’t feel they are getting value (regardless of salary), they will move on. So it’s obvious: freelancing is the future. Even so, education and government haven’t yet caught up to this reality. How can we progress? Well, we need to teach problem-solving skills – especially when the ‘problem’ is undefined. Decision-making today happens at lightning speed. And, as you know, not making a decision is, effectively, a decision. There will always be things we don’t know, but we have to know how to take action. With this swiftness of decisionmaking comes more risk than corporations have historically had. We have to let our people (both employees and contractors) try – and potentially fail. As always, fear flares up in the face of uncertainty. We want to hold on to our old ways, but we simply cannot. What about the other side of the table? Employers, too, must take a new tack. As an employer, you must change the way you look at the collective. Everyone has to be on the team, employees and freelancers, without any sense of who is better. There must be less authoritarianism and more collaboration, which means letting go a little more, too. Micromanaging just doesn’t work with gig workers. For its annual ‘Best Companies To Work For’ survey, Fortune magazine has a brand new metric for 2018: how well companies create a consistently positive experience for all employees, no matter who they are or what they do for the organization. It’s not a toothless feel-good ‘diversity and inclusion’ metric. This ‘for all’ standard proved companies saw three

Make gig workers feel like they’re part of the pack. Invite them to meetings. Loop them in on relevant email threads Give them the tools they need to succeed, like key cards for the office, their own software licences, real offices or cubicles, and materials and fitments that work (a colleague of mine contracted with a company who didn’t bother to get her a working chair for the entire 18 months she was onsite) Offer tangible benefits typically reserved for employees, such as performance bonuses and company swag Make remote teams that see each other regularly the norm. Use tools like Zoom and WebEx to bring people together. Utilize collaboration and chat tools, like SmartSheet and Slack, to make distance communication easier

When we presented tough news in the office, we used to say, “It’s not personal; it’s just business.” That’s just not true anymore. The paradigm has been completely turned on its head. When workers learn to swim in this new sea of insecurity, and they continue to hone their talents to become the very best, they need a bigger reason to be part of your team than money. If you make it about an hourly wage, at some point you’re going to become priced out by competitors and lose out on top talent. You have to make it personal and give gig workers a reason to choose your team. They must feel valued and be seen. Genuinely ask them to dance, and maybe you’ll enjoy the freedom and flexibility as well. Everybody cut footloose. — Olga Mizrahi’s new book The Gig is Up: Thrive in the Gig Economy, Where Old Jobs Are Obsolete and Freelancing Is the Future is reviewed by Dialogue’s expert books columnist Piers Cain (page 83) Q4 2018 Dialogue



The asymmetry puzzle We need quick solutions to the consequences of wealth disparity, writes Blair Sheppard

Dialogue Q4 2018


There has been much recent discussion about disparities in wealth. Disparity has been used as the explanation for much of the world’s ills – and is at the heart of a growing chorus of concern that the ruling elite is managing the world to line its pockets at a cost to others. In theory, liberal democracy, pluralism and a well-governed market, as we understood them, were designed to mitigate this. Yet, the tenor of this chorus is often seen as a direct threat to our form of government, the role of business as we know it, and the institutions designed to make the world work. In fact, all institutions, at a global, national and local level, from multilateral global institutions, to multinational corporations, to our local police forces, are being questioned. The strength and direction of this chorus has caused an interesting reaction in some circles. The reaction often begins with the refrain that there has always been disparity, which is what a meritocracy and market necessarily create; or it proposes we give everyone a basic living wage to appease those feeling most harmed. I worry this discourse does not understand the basis of these disparities well enough, nor sees their interdependence with other forces in the world clearly enough to appreciate the structure of the disparities, how serious they are and what solutions could be proposed. I worry that we are looking through a 20th-century lens at a 21stcentury problem. I approach the topic in three distinct parts. First, I examine a few elements of the structure of the disparity that are important for us to understand. Second, I explore the factors that have significant interdependence with these disparities. And third, I suggest the beginnings of approaches to managing the issues.

The structure of inequality has changed

Inequality is a consequence of any economy and is arguably essential to motivate people to learn, work hard and take risks. As such, disparities between individuals are part of life and a positive force, providing it is fair. It creates the conditions for innovation and growth, which make society generally better off. The qualification of fairness, though, given the structure of the inequality we see today, is a real concern.


Something darker

Perhaps most important is that today’s inequality has two features that are particularly worrisome. The first is that the disparities are not just between individuals, but between locations. Some parts of cities are extremely poor and becoming more so, either because people in those sections of a city


have no good means of transport, and the local work, educational and living conditions are much worse; or because particularly disadvantaged people have aggregated to that section of the city, often for identity-based reasons. Some parts of countries are extremely poor and becoming more so, typically because their economy was based upon one or a few industries that were especially hard hit by globalization or automation, and they did not have the will or resources to adapt. Consider parts of the central US versus the coasts, or provinces such as Uttar Pradesh in contrast to Hyderabad in India. Then there are some regions of the world that are extremely poor and becoming more so, for example, Latin Europe in contrast to other parts of the EU. Some parts of the world are extremely poor and at risk of not getting better; consider Central Africa. The problem is that when whole parts of a city, country, region or the world are badly off, it becomes harder for people located in that area to escape disadvantage. Schools are worse, access to good jobs is generally worse, access to money is harder, subsistence costs are often higher and escape difficult. The second worrisome structural issue is illustrated by the graph on p23. On the X axis is the starting position in wealth, and the Y axis growth in wealth over time. The grey line represents the relation between those two variables over the 34 years leading up to 1980 (following the Second World War), and the red line the 34 years from then until 2014. The differences are striking and suggest a significant shift in the structure of growth. Growth created benefit for people at all levels of wealth, especially the poor and lower-middle class, prior to 1980. Since then, growth has benefited the wealthy. One example of the result is the erosion of the middle class in the United States. While this graph represents the US only, the phenomenon is global. As an economy shifts from a manufacturing, labour-intensive economy to a knowledge-based and service-based economy, without some form of intervention, the tendency is for the wealthy to get wealthier and the middle class to erode. Think about how many people the growth of the car industry employed and the small businesses they supported, versus the growth of web-based IT giants today. This structural change is even true for countries that have had a massive growth in the middle class in the last few years, because of tremendous economic growth. As they shift to a knowledge and services-based economy the same structural challenges will occur. Q4 2018 Dialogue



A permanent underclass

Why are these two phenomena dark? First, we risk creating a permanent underclass who live together increasingly worse off than their neighbours, countrymen or human beings. Or, if people are able to migrate, we hollow out whole sections of cities, regions or countries. Greece lost nearly 1/20 of its entire population over the last ten years, and those who left were primarily the youngest and most employable. The country that gave much of the world its basis of culture and thought is being hollowed out by a dramatic regional disparity exacerbated by its relationship to the EU. Neither a permanent underclass nor ghost towns are attractive options for these regions. Second, as the middle class erodes, the wealthy risk eating their tail: without a middle class there are no customers to buy the products and services the wealthy create. Clearly more very expensive luxury goods will be purchased, but wealthy people do not spend anywhere near the proportion of their wealth as the middle class. And, since wealthy people keep significantly more of their wealth in the form of capital, they pay significantly less tax proportionate to their wealth, even in progressive tax systems. Without taxes, governments fail to provide the safety net essential for the increasingly worse-off.


Inequality is a consequence of any economy and is arguably essential to motivate people to learn, work hard and take risks Dialogue Q4 2018

Distressingly, there are also a couple of factors that act to multiply the consequences of disparity: age and disruption. The world is generally getting older, but in two very different ways. Around half of the world – Europe, Russia, Japan, Canada, the US, and increasingly China – have a significant number of their population reaching the normal age of retirement. The rest of the world contains a massive number of people about to enter the workforce. As an example, consider India, which needs to find between 8 and 14 million new jobs a year for the next 15 years. These two aspects of age multiply the problems of disparity in quite different ways. For countries with massive disparities that are getting older, there is likely to be too much of a burden on those continuing to work, mixed with a significant number of people who are simply unable to support themselves in their older years. For those who are disadvantaged in countries that are significantly younger, the prospect of finding good work is very slim and the level of wealth in the country too little to provide sufficiently for those who cannot find work. Both circumstances are pretty miserable. The other major interdependency is disruption, or the dramatic reconfiguration of business. Inevitably, the advantage in disruption accrues to regions and people with resources and education. Technologically based companies require fewer, more skilled workers,

infrastructure and capital. Poor regions have none of those. Disruption also displaces workers. Those displaced first will be the ones who are just beginning to get out of disadvantaged circumstances, or those who have been at the same job for a long time.

The multiplier effect

Taken together, the two interdependencies are especially pernicious. Older countries are likely to have a set of people not yet at retirement age forced out of their jobs by disruption, but still deemed too old to retool or redeploy. Younger countries will not have similar access to the labour arbitrage that gave Japan, Korea, China and India their start. All of these countries began by providing lower-cost labour to outsource lower-end manufacturing and services. With the advent of technology, emergent labour in lower-age countries with massive job-creation requirements will be competing with robots that never sleep, do not get sick and get smarter and cheaper everyday.

Where should we start?

These outcomes seem dire – and they are – unless we change the way we think about the problem. Outlined below are a few ideas on where to begin, but just that: each of the ideas will require a real partnership between the public and private sectors and civil society.


Focus on local economies

If a significant portion of the challenge of disparities in wealth concerns disparities across regions or locations, then focusing efforts on enhancing local economic activity is critical. From farm to table, to ensuring a percentage of all expenditures are local, to creating a local microcurrency, to local entrepreneurial initiatives – we need to find a wide array of ways to drive local economic activity and trade. A major portion of the focus of national governments should be to find ways to help local economies thrive. And every firm should look at all the towns in which they operate as their local town.


Create conditions to facilitate many start-ups

Given that disruption will take jobs out, and it is essential for competitive survival for large firms to become increasingly efficient, the solution has to entail massive creation of new firms. In addition to creating work, it has the additional advantage of shifting more people from employee to owner, creating motivation to invest and grow. The key will be to adapt successful strategies to the starting conditions of an area. For example, it will not work to port the practices of Silicon Valley to start-ups in Uttar Pradesh. National policy, state policy and the



OUR BROKEN ECONOMY US INCOM E G ROW TH Over previous 34 years +6%



But now, the very affluent (the 99.999th percentile) see the largest income growth

The poor and middle class used to see the largest income growth

99.99th percentile 3%


99th percentile

IN 19 8 0


IN 2 014 99th percentile

5th percentile

0 10th



Lower income









Higher income

©David Leonhardt. Note: Inflation-adjusted annual average growth using income after taxes, transfers and non-cash benefits

behaviour of large organizations should support the creation and scaling of many new businesses, especially in the areas where that does not naturally occur.

by the circumstances of their parents. Equal opportunity has no meaning if a significant percentage of the population in a city, country or region is handicapped from the beginning.



Redefine the role of the wealthy

Given that sustained disparity of the kind described above eventually hurts those who are best off, and given that with enough disparity the risks are far greater than just lost business, it behooves the wealthy to engage the issue directly. This requires more than giving money in a traditional manner, because the present options are clearly not helping. It requires a more active and targeted effort. This could mean actively engaging in projects to enhance education, create new businesses, or develop a significant tourist trade.


Redefine charity

We also need to rethink how charity should function. First, because of great regional disparities, charity does not and cannot only start at home. Second, we must focus on things that really address the causes as well as the consequences of disparity as it exists today, not as it has historically. Finally, charity needs to engage actively in partnership with companies and the government to have proper impact.


Work to address disparities early in life and sustain through school

The fundamental way in which regional disparity and a dissolving middle class become worse is when the next generation is trapped

Find ways to turn disadvantage into advantage

As an example, consider the challenges of disparities in India. The sheer speed, scope and scale of the challenge require completely new solutions. To address the problem in a traditional manner would require building 2,000 new universities over a ten-year period to meet the educational demands of the 8-14 million people seeking new jobs a year. This approach will not work, but the youth still need to be able to contribute. It demands a radically new, creative approach. Each of these suggestions is difficult to implement and, while each is being tested in some way in parts of the world, we do not have long before the problems I describe become extreme. If anything needs to change most from today, it is the speed at which we address our problems. I am considered, by everyone I know, an unbridled optimist. It is this last concern that makes me less so every day. I trust humanity to find the right answer - I just worry whether it will come soon enough. — Blair Sheppard joined PwC in June 2012 as Global Leader, Strategy and Leadership. He is also professor emeritus and dean emeritus of Duke University’s Fuqua School of Business — See also: Ben Walker on the global wealth shift, p24 Q4 2018 Dialogue



The wealth shift Globalization is levelling the playing field between rich Western nations and the rest, says Ben Walker

The striking thing about the global financial crisis of 2008 is what little it changed. Before the maelstrom, the global economy was growing rapidly, globalizing quickly and becoming more egalitarian. Meantime, the economy of the United States was growing rapidly, globalizing quickly and becoming less egalitarian. After the crisis, all those trends continued. In the wake of the crash, Professor David A Moss, an economic historian at Harvard Business School, was confronted by a colleague, who demanded he overlay two graphs. One plotted financial regulation and bank failures, the other income inequality. Moss wondered whether the global economic settlement was causing income equality to grow. “I could hardly believe how tight the fit was — it was a stunning correlation,” Professor Moss told the New York Times at the time. “And it began to raise the question of whether

there are causal links between financial deregulation, economic inequality and instability in the financial sector. Are all of these things connected?” But Moss’s suspicion that the correlation implied causation was immediately challenged by other economists. “Cars go faster every year, and GDP rises every year, but that doesn’t mean speed causes GDP growth,” R Glenn Hubbard, dean of Columbia Business School, retorted through the pages of the same newspaper. What was undeniable was that income disparities in the United States were growing before – and after – the crash, triggering theories that it is globalization itself that is causing the wealth gap to grow. Although some experts speculated that the crisis would ‘reboot’ the US economy, the wealth gap grew further following the great recession of 2008. In a 2017 paper, New York University economist Professor Edward





Growth in global real incomes by income decile

China’s advancing upper-middle class

Cumulative growth rate %

80 70 60 50 40 30 20 10 0 5 10


30 40 50 60 70 80 Percentiles of the global income distribution

90 95 99

Y-axis displays the growth rate of the fractile average income (in 2005 PPP USD). Weighted by population. Growth incidence evaluated at ventile groups (eg bottom 5%); top ventile is split into top 1% and 4% between P95 and P99. The horizontal line shows the growth rate in the mean of 24.34% (1.1%pa).

Dialogue Q4 2018

Household per capita income in real terms

— US second decile — China’s eighth urban decile

Global growth incidence curve, 1988-2008


Wolff found that the period 2007 to 2010 – which spanned the crash and the following recession – “saw a sharp elevation in wealth inequality”. Between 1983 and 2016, he wrote, “the largest gains in relative terms were made by the wealthiest households”. The middle class saw no change in wealth, while the average wealth of the poorest 40% of the population fell by $15,800. Globalization seems to suit the US elite but not the average American. “Two familiar stories are crucial to understanding modern American capitalism,” writes Duncan Weldon in Prospect magazine. “The great rise in inequality that took off in earnest in the 1980s, and middle America’s fourdecade income stagnation.” But if footloose capitalism has failed the American middle class, its effects elsewhere are different. Evidence suggests that globalization is leading to the world’s wealth being shared among more countries, and among a larger





2000 Year





Globalization seems to suit the US elite but not the average American

spread of the world’s population. Christoph Lakner, a World Bank consultant, and Branko Milanovic, senior scholar at the LIS Cross-National Data Center, discovered that the fifth and sixth income declines of the world population – the global middle class – had seen their real incomes double in the 20 years preceding the crash (Figure 1), and that nine out of those ten winners

were from Asian nations. Since 2008, they say, the trend has largely continued, albeit in a “slightly less dramatic” form. “Income inequality has surged as a political and economic issue – but the numbers don’t show that inequality is rising from a global perspective,” Tyler Cowen writes in the New York Times, citing Lakner and Milanovic’s research. “Yes, the problem has become more



The transfer of wealth from the West to the rest Share of the world economic output by groups of states and the US based on GDP

1 1995 1 2015

31% 25% 18%


20% 17%

Rest Of The World

*Brazil, Russia, India, China and South Africa


20% 17%



United States


Other G20 States Source: IMF

acute within most individual nations, yet income inequality for the world as a whole has been falling for most of the last 20 years.” The diverging fortunes are charted by Lakner and Milanovic by comparing the growth in real wealth in the second income decile in the US to the eighth income decile in urban China (Figure 2). Lakner and Milanovic justify the comparison – the second poorest group in the US to the third richest in China – by way of benchmarking the world’s richest nation against a relatively poorer peer. While the second income decile in the US saw their real incomes grow 20% between 1988 and 2011, the urban eighth income decline in China saw it multiply by a factor of 6.5. In short, the Chinese upper-middle-class saw its wealth shoot up, while for poorer Americans it was virtually flatlining. “The absolute income gap, still significant before the onset of the [2008] Great Recession, has narrowed substantially,” write Lakner and Milanovic. This duality of outcomes from globalization presents major challenges for leaders, both of businesses and governments. The transfer of global wealth from richer nations to traditionally poorer countries is not a victimless shift (Figure 3). “Policies on immigration and free trade sometimes increase inequality within a nation, yet can make the world a better place and often decrease inequality on the planet as a whole,” argues Cowen. The wealth disparities within nations are profound. Yet it is far from clear that globalization has exacerbated inequality, from a global standpoint. “The economic surges of China, India and some other nations,” says Cowen, “have been among the most egalitarian developments in history.” — Ben Walker is editor of Dialogue Q4 2018 Dialogue



Fit for the future

The key to success in the footloose world is learning, write Heather McGowan and Chris Shipley

For centuries, we have prepared citizens to work in linear fashion. Identify needed skills, create a training programme or post-secondary curriculums, transfer knowledge to potential workers, and – voilà – a workforce is ready to meet an identified market need. This model worked well when change came slowly. Businesses could forecast future needs reasonably accurately, and students could train to fill those needs with assurance that a good job would reward focused academic preparation. No more. The rate of change is simply too swift. Where once an economic paradigm shift could be absorbed over multiple generations – consider the shift from agriculture to manufacturing work – we can now expect to absorb multiple shifts


Three simultaneous interconnected climate changes

T ECH NO LO G Y Moore’s Law Exponential Change


Interconnected to Interdependent

CL I M ATE Later to Now

RE -S HA PIN G My Focus





Dialogue Q4 2018


in a single lifetime. We have arrived at the Age of Accelerations, as New York Times columnist Thomas Friedman’s theory has it. The Age of Accelerations comprises three exponential growth and change trends: technology (Moore’s Law), the market (interdependent global markets), and the climate (climate change, biodiversity loss, population growth). Technology is measured by the relentless march of Moore’s Law, which has delivered computing power at low enough cost that now anything mentally routine or predictable – perhaps half of all work – can be replaced by technology. The market has moved from being connected, to hyper-connected, to interdependent – forcing failures and successes to be absorbed by all. Climate change not only drives shifts in energy markets (driving down the cost of solar to compete with cheap coal, for example), but also changes in human migration, as super storms, drought, and other conditions drive people from their homelands to seek safety and economic advantage elsewhere. Friedman argues that these three interlocking accelerations are redefining geopolitics, politics, community, ethics and –perhaps most of all – learning and work. Change runs blindingly fast up an exponential curve, demanding that we think differently about work and learning. That single dose of education stockpiled in our twenties will barely last into our thirties (see Marcelino Elosua interview, page 50). And that 40-year career arc is stretching to 50 or more years, as we live longer, healthier, and more engaged lives. Where we once jumped on the career ladder and climbed to retirement, workers now navigate a complex maze of ever-changing possibilities. Traversing this maze will require




Pension 5+ years

Job Ladder 45 years

25 years

not just stored knowledge and experience, but a flexible and ready ability to learn, adapt, collaborate and create.

Corporations become learning leaders: the shift from scalable production to scalable learning

All graphic data © @cshipley @heathermcgowan www.work-to-learn.com

L IF E E XP E C TA NC Y 9 0 New focus: agile learning mindset

Remain engaged

Engagement Engagement Engagement

Higher Education

Where the academy once sat at the centre of learning, corporations must now move into that pivotal position. John Hagel, who leads Deloitte’s Center for the Edge, raised the alarm to corporate leaders that the Age of Acceleration required a fundamental shift in business objectives, one he describes as the move from scalable business to scalable learning. In short, it will be far more important for a business to rapidly and continuously learn and adapt than it will be to push more product through a cheaper pipeline. The impact of Hagel’s directive becomes clear when we look at the five most valued US companies by market capitalization, past and present. One hundred years ago, the most valuable companies created wealth by extracting value from natural resources. Think steel, oil, gas and meat production companies. To succeed in these markets, these companies need access to capital. Fifty years ago, the most valuable companies were automotive, telecommunications and chemical companies that scaled production capabilities with skilled labour. This shift toward production of manmade goods in the postwar era drove people en masse to seek higher education, filling the pipeline from classroom to factory with workers trained to specific roles. Today, our most valuable companies create and leverage digital technology. These companies create value by learning faster than





LI FE EX P EC TAN C Y 6 7 Focus on expertise and starting salary for career success





the competition. Every product or service offered is merely a data collection vehicle from which to learn more about the customer. We believe, at its core, every product or service is simply the exhaust from a learning exercise. As we dive headlong into the future, a worker’s capacity for learning will be the fundamental skill since any routine or predictable task will be delegated to an algorithm. So how does an organization screen, develop and organize its workforce to meet this emerging challenge? Enter the moonshot.

The moonshot mindset


Freelance or gig workers are often perceived as lesser contributors to organizations than employees. Yet the opposite might be true

When John F Kennedy challenged his country to send a man to the moon, NASA was unable to just go out and hire an experienced moon-walker. Indeed, the parade of ‘firsts’ needed to realize the challenge meant that NASA had to rely on capacity and capability, rather than experience, to build the infrastructure, machinery and programmes that would send a man to the moon. Just as importantly, the programme assembled collaborative teams across disciplines and organizations in order to first figure out what had to be done, and then do it. In other words, the questions emerged in concert with the answers, and often the answers suggested researchers were asking the wrong questions. Navigating so many unknowns required a nimbleness of thought and real learning agility. Today, business finds itself in a new era of economic productivity defined, in part, by rapid change and technology-driven creative destruction and reinvention. Like NASA, business can’t depend on experience to develop and exploit new opportunities. To tackle the ‘firsts’ that will present themselves in the Age Q4 2018 Dialogue



T H E M O S T VA LUA B L E C O M PA N I E S Largest companies (market cap) of the last 100 years 19 17


$46 billion

$258 billion

$898 billion

$14 billion

$201 billion

$719 billion

$10 billion

$177 billion

$644 billion

$7 billion

$171 billion

$543 billion

$6 billion

$106 billion

$518 billion



of Acceleration, businesses must build learning agility into their organizations. Companies must continually adapt and upskill capabilities so they can discover and deliver new products and services. We need to think differently; we need a north star and a handrail to the future. Enter purpose and culture.

The purposeful business

In the swirl of accelerated change, a strong culture holds the centre of any organization. Too often lumped into a pile with employee benefits or workplace perks, culture is the operating system of every organization. With a clear sense of purpose, clarity of values, and wellarticulated operating principles, businesses can sustain disruptions, reinventing themselves to take on new challenges. Leaders ready to take on the Age of Acceleration need to shift their focus from the outputs of an entity – the brand and products – to the inputs, namely culture and capacity. Culture is an expression of the brand and product (or services) is the evidence of capacity. In the Age of Acceleration, a product or service – or any value created by the entity – is merely evidence of the company’s learning. Companies that will thrive in the Age of Acceleration focus on nurturing their culture and increasing their capacity by continually expanding and upgrading their capabilities. Capacityfocused leaders hire workers for their cultural and purpose alignment, learning agility and workplace adaptability. To attract capacitymatched workers, organizations must lead with their purpose and make clear their culture principles, and they must hold to these truths. It is interesting to note that while freelance Dialogue Q4 2018

2 01 7


or gig workers are often perceived as lesser contributors to organizations than employees, the opposite may be true. An extensive study, Freelancing in America 2017, by Edelmen Intelligence found that not only do full-time freelancers feel their work is already impacted by rising automation (49% for freelancers vs. 18% for full-time employees), 65% of fulltime freelancers report they invest regularly in updating their skills vs. 45% of full-time employees. As the Institute For the Future’s Marina Gorbis proposed, “As we close the digital divide, the next divide to emerge will be the motivational drive. Those motivated to continuously learn and adapt will thrive.” This is a tectonic shift in identity from external validation (for example, a degree or a job title) to internal validation, tapping into intrinsic motivations to learn and adapt for life in pursuit of our aspirational selves. Studies have shown that recovery from a job loss today can take twice as long as the grieving period for the loss of a spouse. This indicates a vulnerable sense of self subject to the whims of the market. We see a brighter, more adaptive and resilient future by tapping into internal motivation and passion.

How to do it

Few dispute the increasing rapidity of change, and the impact of that change on jobs and the future of work. A focus on trends in the gigeconomy or retooling with robots is too narrow an answer. Here are four things you can do now to build a foundation for the future of work.


Be deliberate about culture and purpose Every company has a culture, often not well-articulated. Take time to examine your


Building a learning culture is a deliberate and ongoing process, which only happens when leadership puts it front and centre


organization, and document your purpose and your operating principles. Ask: Why do we exist? How is the world different/better because we exist? What will we do – and as importantly, not do – to achieve our purpose? How will we process and learn from failure? How do we acknowledge and celebrate success? As you explore the answers to these questions, test them with colleagues at every level of the business. And then act on those beliefs. This is not a one-time or annual discussion; culture requires daily nurturing. Make a habit of framing tough decisions and difficult conversations through the lens of culture and purpose.


Identify your personal purpose and passions as a leader and team

Just as you document the culture of your organization, document the culture of your career. What do you value in yourself and your relationships with co-workers? What makes work worthwhile? How do you want to be evaluated by others? Which values do you bring to your work? Think of this as a sort of ‘operating manual’ for your work, explicitly stating your preferences in work style and in interaction with co-workers. Once documented, discuss them with your team and encourage every team member to create an operating manual for themselves. This exercise is the first step toward creating alignment that runs through the workforce, your leadership, and ultimately to the company’s purpose. It may lead to hard decisions if it uncovers poor alignment in some people or areas.

T H R E E O U T D AT E D Q U E S T I O N S We must retire these questions WHAT DO YOU WA N T TO BE WHEN YO U GROW UP ?


jobs that do not exist yet


tasks automated by 2033

2 7%

work in their major




jobs across




End every major project with a postmortem

Most businesses do postmortems all wrong. They quickly dismiss all that went well, then berate themselves (or worse, each other) over what went wrong. They promise to do better next time, then quickly fall back into business as usual. A learning postmortem looks at a project differently. It asks: What happened that we did not expect? What did we learn from that experience? What were the unexpected successes and how will they affect our future practices? What were the unexpected failures and how will they affect our future practices? What did you discover about your colleagues during this project? Which knowledge obstacles did we need to overcome? How did we do that? And what will that enable us to do in the future? Based on the experience with this project, what are we now prepared to do?


Institutionalize learning

Make learning an explicit goal of your organization and build learning into your organizational practices. For example, you might organize your teams around ‘learning tours’ that use work assignments to give your team exposure to different parts of the organization. Learning tours move individuals around the company in a manner that institutionalizes learning-as-outcome. Add collaborative learning days into your company calendar. Set a challenge for work teams to develop, prototype and present a new product/service concept in a single work day. Don’t expect to identify your next billion-dollar line of business, but do watch, and have your employees report on, how these intense days spark new learning and insight. Make talent discovery and sharing a part of your employee experience. Your people come to work as interesting and complex humans with many hidden talents. Use team meetings, ice-breakers, or explicit events as a means of drawing out these capabilities.

A learning culture

Building a learning culture is a deliberate and ongoing process, and it only happens with leadership committed to putting learning front and centre. Develop a learning plan for your organization that includes employees, contractors, gig workers and partners alike. Where we once learned to work, now we will spend long careers working continuously to unlearn – and relearn. — Heather McGowan and Chris Shipley are soughtafter thought leaders in the education and technology innovation sectors Q4 2018 Dialogue



Scale up, skill up A new talent model is needed in a footloose world, writes Marion McGovern

Dialogue Q4 2018

a tube. Various efforts are being pursued, one of which – Hyperloop Transportation Technologies (HTT) – now has 800 people working on their version of the innovative new transit system. There are 40 partnerships with universities, 50 teams on six continents, and only 12 regular employees. HTT may be the epitome of the agile organization, where workers combine for oneweek sprints, complete their work and move on. These examples may seem extraordinary, but they are happening. And right now, 28% of the Fortune 500 are active users of online talent platforms to meet their demands for expertise. According to the Oxford Internet Institute in August 2017, they are looking for: Numerical flexibility The ability to rapidly adjust the size of the workforce Functional flexibility Being able to add new or different skills as needed Financial flexibility Adjusting the cost of labour as needed


There is much talk about how companies need to become more agile. Firms need to be able to quickly prototype, test and refine not just new products but whole new strategies. This calls for a new approach to deploying talent, one which Workforce 2025, a 2015 study by Randstad US, called the agile workforce model. It defined it as “the strategic ability to meet talent needs through the real-time use of contract, temporary, consulting or freelance workers”. It also found this practice grew 155% from 2014 to 2016. This idea is being endorsed by leading companies. For example, GE has launched GeniusLink, a crowdsourced expertise platform that serves up challenges to the knowledge market with the goal of developing novel solutions. One such challenge is developing new nut assemblies for aviation engines to mitigate failures. These critical projects historically would have been done by in-house R&D teams, but no more. Or, consider the Hyperloop, a proposed mode of passenger and freight transportation where a sealed pod travels at high speeds through


More than outsourcing

Too many companies don’t yet ‘get it’ and view the agile workforce as just another spin on the contingent workforce, contractors and temporary workers that large firms have historically controlled through vendor management systems (VMS). The VMS, typically controlled by procurement, helped rein in spending on these outside services, slotting them into understandable categories of staff augmentation or statement of work (SOW) projects. In some cases, knowledge work that failed to fit neatly into one of those slots would create issues for the hiring managers. In many organizations, the needs of the unit would win out, resulting in ‘rogue spending’, where managers would sidestep the VMS system, and finagle a way to procure the requisite talent outside the confines of the VMS structure. As more and more specialized talent needs are emerging, companies are realizing that the VMS model is not meeting its requirements, since it increases the time it takes to bring in the talent, and it is highly transactional, focused on the cost of specific labour for specific outcomes. In the new world of work, cross-functional teams of knowledge workers need to come together quickly to launch projects that may have uncertain outcomes. Teams need to ‘scale up’ with external skills, or ‘skill up’ by adding the expertise needed to round out the team. As Sandra Pinnavaia, chief knowledge and innovation officer of Business Talent Group (BTG), says: “There is a difference between task-based outsourcing and businessproblem insourcing.” The lines are now blurring between contingent labour and consulting. According to Upwork, one of the largest digital talent platforms, in 2017, major Fortune 500 company clients were wrestling with this issue and viewing it as a change management problem: how do they get the organization to adapt to a new talent model? This year, the discussion is dramatically different, reports Zoe Harte, senior vice president of human resources and talent innovation at Upwork. Now the conversation is about how to create agile talentpilots within the organization, which can then be replicated at scale.

Many senior management have no idea of the breadth of expertise that is available on a just-in-time basis

Getting started

If your organization is not wrestling with this question, it risks being at a disadvantage in the marketplace. How can you jumpstart your efforts? Here are three key steps.


Do your homework – educate yourself on the marketplace

Despite the fact that independent talent has been thriving at the professional level for decades, it is surprising that many in the senior

management ranks have no idea of the breadth of expertise that is available on a just-in-time basis. Many still just think of the ‘gig economy’ as those drivers for Uber and Lyft, and fail to recognize the many levels of skills that can be found in the independent work marketplace. There is a pyramid structure to the workplace, where commoditized on-demand services make up the base, while skilled workers across various disciplines populate the middle tier, and credentialled professionals operate at the highest levels. These highly educated, highly specialized independent workers were dubbed by Deloitte as ‘off-balance-sheet workers’, and they represent a cohort that is increasingly in demand. The independent expertise market is only becoming more robust. The Gerson Lehrman Group (GLG), one of the first expert marketplaces, believes the expert end of the gig marketplace will reach $1 billion in revenues by 2022 (The Rise of the Expert Economy, Civic Research 2018). There are many different types of players who offer a variety of service levels. Zintro, for example, allows clients to contract with an expert for a project for just a 30-minute phone call. Platform companies, like Spare Hire, allow clients to specify a particular project with a self-service model. Specialist firms like BTG handle the vetting for you, providing clients with various screened professionals for any given project. Additionally, there are specialist firms like Experfy, which is a platform for data scientists, or Life Science Hub Wales, a site for consultants involved in drug discovery and clinical trials. This marketplace allows companies to bring in talent on a just-in-time basis. But, there can be hindrances.


Assess the hurdles – understand your organizational obstacles

The starting point is to work out who looks after this relationship: is it HR, the line manager, the C-suite or procurement? Is it a strategic asset carefully managed, a service that is curated or a cost that is controlled? Your attitude here will affect how attractive you are as an employer of just-in-time talent. MBO Partners, a firm that helps companies easily engage independent contractors, recently published its 2018 Client of Choice Report. The study notes that 96% of senior independent workers viewed having an efficient onboarding and contracting process was a key point in choosing the client. Take note, in 46% of the situations, the talent is choosing with whom they work. In another 36%, the talent has some input, so companies only have complete leverage with top independent talent 18% of the time. In his 2015 book, Lead the Work, John Boudreau and his co-authors argue that “leading the work means creating engagement with your Q4 2018 Dialogue



The truth of the matter is that job descriptions are irrelevant

culture among a workforce that exists beyond your boundaries”. This has a few implications. First, firms must realize that they are creating the freelance talent of the future. The future of work is likely to become portfolio-like, where workers will work for an enterprise, gain skills, move on and freelance, and then potentially take another employed position. Along the way, as they build more skills, they may return on a consulting basis to some of their prior employers. Your company should want to be in that cohort. Given this, some of the time-honoured HR functions are not appropriate for a structure where talent is highly mobile. Just as there are processes for hiring and separation, there may need to be some for rejoining, whether as an employee or a contractor. Existing talent acquisition structures can be problematic. HR is very involved in the hiring of key employee talent but often uninvolved in the vetting of senior freelance talent, some of which may come through the VMS. Many would argue they do not have the bandwidth to vet freelancers. Since a great deal of independent work is sourced based on a project specification, this creates additional tension for HR, since HR is often highly tied to job descriptions. As the world of work becomes more projectized, the role of job descriptions needs to change. Kristen McAlister, president of Cerius

Executives, a specialist talent provider, likens job descriptions to the proverbial junk drawer. People just keep throwing things in it, so after a while there is no sense of the real content. The truth of the matter is that job descriptions are irrelevant. Finally, organizational biases can hinder adoption. The Oxford study listed overcoming internal resistance as a key obstacle. Line managers may see new, innovative approaches as C-suite rhetoric and view such ideas with skepticism. Alternatively, some people only trust those who have risen through the ranks of the organization, not recognizing the value of that outside perspective. Others often dismiss independent workers as people who couldn’t get “a real job”, thereby discounting not just the functional skills but the entrepreneurial skills of independent talent as well. This is most harmful for those freelancers who work as part of internal teams. The research on high performance teams at Google has stressed the primacy of psychological safety. To have that safety, team members must be viewed as peers, so any caste structure imposed on freelancers would impair the efficiency of the team.


Experiment – use pilot projects as testbeds In a recent Upwork study, The Future Workforce Report, hiring managers expected



Lawyers, consultants, data scientists, interim executives

Freelancers/independents, Human capital firms, i.e. Business Talent Group


Digital talent platforms, i.e. UpCounsel

Freelancers/independents Drivers, handymen, cooks, web developers, editors, writers


Staffing companies, i.e. Accounttemps Digital talent platforms, i.e. Uber

Staffing companies, i.e. Manpower Dog walkers, errand runners, car valet parkers, grocery delivery workers, shipping assistance, servers

U N SK I L L E D W O R K E R S Source: The Expertise Pyramid: Thriving in the Gig Economy, Marion McGovern, Career Press, 2017

Dialogue Q4 2018

Digital talent platforms, i.e. TaskRabbit





Regular and contingent labour

Regular, contingent and agile workforces

Independent work is task-based for staff augmentation or statement-of-work-based projects

Independent work is also problem-solving where outcomes may not be known at the start

Managed by a VMS to control cost, limiting access to certain types of talent and adding time

Need for speed and access to the highest end knowledge workers

HR manages recruitment, but not freelancers

Increasing sophistication of independent talent requires an internal vetting process

Discrete onboarding and separation structures for employees only

Policies to onboard independent talent and recognize returning talent, working as freelancers or employees

Potential bias toward independent workers as less capable or qualified could impact team performance

Clarity on role, contribution and competency

Talent acquisition managed by procurement or HR

Talent managed as a strategic asset by the C-suite

the use of flexible workers to increase 168% in the next 10 years. The Freelancing in America: 2017 study, a joint project of Upwork and Freelancers Union, reported that half of all freelancers would not take a regular job regardless of how much compensation was offered. Unlike smaller firms, very few large companies have an enterprisewide model for bringing in independent talent effectively. The ones who are leading the pack are those who recognize that this world of talent needs to be approached differently, so they are experimenting with pilot programmes to build a new approach. The Oxford Internet Institute, in its study of Fortune 500 firms in 2017, recommends having a “safe environment” for trying the approach – safe meaning that failures could occur and would be viewed as learning experiences for the organization, rather than blemishes for the project team leaders. Here are some of the observations of successful pilot initiatives from both industry experts and talent intermediaries. Being able to point to the ROI of an approach is a powerful way to give it proof points. The Oxford report points to a Samsung pilot programme where 15 project managers were asked to source ten projects each. That pilot programme had real data on outcomes. Projects which have rhythms that are determined by outside forces are prime candidates for spot expertise. For example, a drug commercialization project for a BTG client called for several experts to assist with global licensing. In many jurisdictions, the process involved a lot of waiting, so there was a natural ebb and flow to the project. The talent ebbed as well, working only when it needed to.

Certain expertise needs are episodic. Being able to call upon the same resource six months later for a similar need – and quickly deploy that individual – is a competitive asset. For example, on M&A due diligence, a team of internal and external experts would assemble as a deal was reviewed, disband when the work was completed, and reconvene when the next deal came to the fore. Some firms create a bench of on-call experts to manage capacity variability. An executive champion is critical. To the extent that creating a new talent model is a strategic move, it needs to have C-suite support. Along the way there can be legal issues, budgetary hurdles and other potential minefields to resolve. Creating frameworks for how internal and external teams work together can add to the effectiveness of the project.

Get smart

The world of work will only continue to evolve to a much more dynamic model where resources – both internal and external to the firm – will come together to achieve a result, do so, and disband. If you haven’t prepared for this, it is time to do your homework, assess your organizational pitfalls, and begin. You can and should begin small with pilot projects, as these enable firms to become smart users of talent. The talent itself is attracted to smart companies, so it is a virtuous circle. In the Client of Choice study, being part of client environments where the work was valued and the freelancer was treated as an equal team member encouraged the workers to work with such clients. Smart attracts smarter. — Marion McGovern is a chief executive, entrepreneur and author of Thriving in the Gig Economy (see reviews, page 81) Q4 2018 Dialogue



Bull’s eye Former NBA basketball star Jay Williams is living proof that self-reinvention is possible



Matt Greenslade

Dialogue Q4 2018

The telephone cuts out. Jay Williams’ car is winding its way to New York City through the mountains of West Virginia. It’s the day after the Independence Day holiday and Williams is driving back to town through this precious landscape, the glistening Shenandoah River cutting a blue line through the majestic Appalachian chain. A while later, the phone buzzes back. “Ben, I’m sorry, a tunnel appeared.” No problem, I retort. Williams is sanguine about my overrunning my interview time: “I’ve got nothing in front of me, my friend, but road.” It wasn’t always that way. The golden highway upon which Williams was riding ended abruptly when he was just 21. Williams, who played for Duke University Blue Devils, was the standout player in US college basketball. He won the 2001 NCAA National Championship with Duke, earning NABC Player of the Year. He broke the club’s record for points scored in a single season. When he graduated from Duke in sociology in 2002, his jersey number – 22 – was retired in his honour. A few months later, he was drafted as a professional by the Chicago Bulls. But one summer night, a year after he turned pro, fate struck. The young point guard climbed astride his Yamaha R6 motorcycle. He didn’t bother with a helmet. Williams lost control of the machine as it started up and tore into a streetlight on Chicago’s North Side. The main nerve in his leg severed. His pelvis fractured. Three ligaments in his knee dislocated. Realizing he would be unable to play for a long time, if ever again, the

Bulls released him. By riding the bike, Williams violated the terms of his contract and, for that reason, the club was not compelled to pay him off. It nevertheless waived him with a voluntary $3 million goodbye to help finance his healthcare and rehabilitation. In his autobiography Life Is Not an Accident, Williams says that the payoff helped fund and fuel a dangerous addiction to prescription-only painkillers. Hooked on drugs, depressed and twice suicidal, Williams had run out of road. “I spent a while, four or five years, feeling sad and depressed and angered,” Williams tells Dialogue. “I was angry and depressed at the fact that I had lost an opportunity to provide a life for my family that they deserved; to repay the sacrifices they made for me to be in the position I was. My ego was my worst enemy.” After a series of attempts to revive his basketball career foundered, Williams had to re-evaluate his life. It wasn’t easy for a man who tended to dwell on the downside. “Particularly in my professional year, if a negative thing happened on the court I would let it consume me,” he says. “But after going through depression I was forced to focus on where I was going rather than where I was. I had been tricking myself that things weren’t as bad as they were.” I suggest to him that many people struggle with that approach to life – making the original choice of deciding who they want to be, rather than being happy with what they are. He’s unmoved by the concept of being happy with


your lot. “Change your terminology and say, ‘I choose to be this’,” he says. “Don’t just run with the copout version and say, ‘well this is who I am’. You have the capacity to be better, but you have to want that for yourself.” Does he think that your peers can play motivator instead? “If you don’t want it for yourself then who can you find in your life that wants you to be a better version of yourself?” he asks. “For me, my wife helped me be better. There were some issues that we had to face early on in our relationship because I had some tendencies from my past and she forced me to address those head on. I could have said, ‘well this is who I am’ but I said ‘how do I find the tools to be better?’” I put it to him that most people lack a seminal moment that forces a change upon them: Dialogue Q4 2018

mercifully, few businesspeople have to endure his ordeal. But Williams demurs. “I think lots of people have accidents,” he says. “It wasn’t until I was talking to one of my friends – I won’t say his name – about my own struggles that he started relaying to me that he’d lost his childhood sweetheart. She filed for divorce out of nowhere. That was his accident. Yeah, so I had an accident on a bike. But my friend was having a very similar experience. It was much the same: I was watching him go through so much pain, hurt and anger, similar emotions to me. It was the first time that I thought, just for a second, that he had an accident just like I did. Many people have their own accidents, they just choose to suppress them.”


Today, Williams, a basketball analyst with ESPN, is a big name on the speaking circuit. I witnessed his powers first-hand at a global training conference in Atlanta. He was the highlight of the day, holding a mesmerized audience in the palm of his hand as it shared his journey from road crash to renaissance. It’s vanishingly rare to see someone command the imagination of a crowd like that. What’s the secret? He answers the question indirectly by recalling a video he made for his babysitter at the behest of his wife’s family, to thank her for the positive influence she had had on his daughter. His sister-in-law was surprised that Williams nailed a touching video message with minimum fuss. “I automatically went to this place where I said, ‘thank you for being a supporter of Nikki and me, you have done an incredible job’.” His aunt-in-law was stunned by the rapidity, precision and warmth of his delivery. She said: “You can just do that?” Williams told her it came easily. ‘I said, ‘well I’m just thankful to someone who has shaped the person who is the most important person in my life’. By doing that she has also shaped me, so I found myself talking about how she had shaped me too.” Honesty and authenticity, he says, are the key to storytelling – talk from the heart and you will bring people with you. “That would be my advice to anyone doing public speaking,” he says. “Talk about something you are passionate about. Talk to yourself about those experiences. When you are public-speaking, you are not talking to anybody except yourself.” Williams will this year use his considerable gift to help improve the lives of young people from troubled backgrounds. He is teaming up with LA Lakers basketball star LeBron James, producer of Best Shot. The show documents Williams’ training and mentoring of an inner-city basketball team. What drove him to the project? “Being an African American male has a different set of challenges,” he says. “It was more convenient to act one way and speak another. Being one of just ten African Americans in the Catholic school my parents had sent me to, I was deemed in certain ways. I was deemed ‘athletic’, or I was deemed ‘hood’. When I went back to my hometown, speaking the way I am speaking to you now, it was, ‘you are an Uncle Tom’ or, ‘you sound too white’ or, ‘you are a sell out’. So how do you find your own voice through those different experiences? One of the things I become more passionate about as I get older is how I take those lessons forward. “On Best Shot, basketball is just the way I talk to the kids, it’s just the way I grab their attention through the vehicle of sport. There are so many challenges the kids are faced with – parents who aren’t around, brothers, family members who are incarcerated. We use the hook of basketball to grab their attention and change how they think.”


Williams speaks with the freedom of a man released. At Duke, he was mentored by the legendary Mike Krzyzewski, known as Coach K. Krzyzewski was his mentor, a man he credits, along with his mother, father and wife Nikki (they married this spring), as being a key influencer in his life. After leaving Duke and Coach K, Williams suggests that he suffered from stardom, the sycophancy of the professional sports circus, the hero worship. “The only way to get better as an athlete – or anything in life – is to have someone be frank with you,” he says. “When someone tells you what you have to work on, then it is really up to you what you decide to do with that. I was in the NBA and all of a sudden I was surrounding myself with ‘yes’ people … and I saw what happened to me when I did that.” His accident proved a turning point. He began to surround himself with people who were more honest. “Being able to recalibrate and finding that

The only way to get better at anything in life is to have someone be frank with you sweet-spot again was important to me,” he says. “When you have that in your life, you are forced to see things from different perspectives. I am lucky to have people now who will tell me what they think. I don’t always agree with them, but what it does is force you to stop and be a bit more introspective. That better equips me. Too many people have those experiences and shun them, saying, ‘that’s not who I am’ and, ‘that’s not what I am going to be’. Instead they should say, ‘this is helping me shape my perspective of people’. Why would you want to push anyone away?” At the end of the call, the phone crackling as the Williams family winds its way through the West Virginia hills, Williams brings up soccer. “I hope you guys win the World Cup,” he says. In the end, the England team didn’t quite make it, but they reached the semifinal for the first time in nearly three decades. Gareth Southgate, their coach, was an inspiration, espousing team spirit, and telling his players to “write their own stories”. Williams rewrote his own story, when it looked for all the world that it might culminate in tragedy. “I read this great quote once,” he says, “‘throw yourself off a cliff and assemble a plane on the way down’. Mortality puts priorities into sharper focus. The things I have struggled with, other leaders have struggled with. We all have something that we are battling through. Some people deal with that privately. But I prefer to deal with it openly.” — Ben Walker is editor of Dialogue Q4 2018 Dialogue



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Contemporary slang makes problems less daunting

A wicked way to lead Kate Cooper is head of research, policy and standards at the Institute of Leadership & Management

If we view VUCA environments as being comprised not of opposing but complementary forces, everything seems rather more manageable

Keith Grint’s popularization of Rittel and Webber’s notion of wicked problems has captured many an imagination. At last, it seemed, someone had described the complexities, ambiguities, contradictions and general messiness of the challenges of leadership. Key to its widespread adoption was Grint’s taking advantage of the slang inversion of ‘wicked’ – which carried with it positive connotations rather than the more traditional associations with evil, treachery and sorcery. Grint had in 1997 attempted to make sense of the evolving field of leadership in his book Leadership: Classical, Contemporary and Critical Approaches. It challenged much leadership thinking. Crucially, Grint supported the post-heroic dominant discourse which rejects an essentialist view that leaders have an underlying and unchanging essence. Instead, he embraced a non-essentialist standpoint, where leaders are constructed and interpreted through different lenses. Yet it was the application of this nonessentialist perspective that was the radical leap: we cannot accept an unchanging definition of a situation or context – they too are described and constructed subjectively. So, not only do we have to relinquish ideas of the ‘born’ leader, we must also accept that the volatility, unpredictability and novelty of a situation is also a matter of personal interpretation and judgment. The acceptance of the definitions says more about the relative power of the definers than the reality of the situations that are being defined. So, according to Grint and his followers, we have wicked problems; we have no certainty in the definition of what makes a leader or how we define the situations and contexts that leaders find themselves in. Grint presented his analysis as two intersecting continuums rather than as binaries – and it is this approach which is probably most helpful now. In today’s world – so frequently characterized as VUCA (volatility, uncertainty, complexity and ambiguity) – we are beset with wicked problems. We are less able to draw conclusions about

cause and effect. We are at the mercy of technology’s increasing capability to disrupt all manner of industries. We must sustain the collision of cultures as we work across continents in a globalizing world. The challenge to certainties and objectivity from post-modernism means we have never been further from ‘optimum’ solutions to problems. In the untidy world of organizations led by people who are increasingly made aware of how much they don’t know, optimization – did it ever exist – is no longer an option. It is the very acceptance of volatility, uncertainty, complexity and ambiguity that means we must also recognize that predictability, certainty, stability and clarity are the other ends of the continuum. Neither end is inherently bad or good – indeed each supports the other. Leadership decisions will need to be made knowing that we experience both. Instead of being anxious about the unpredictability of the situations and contexts we find ourselves in, we can learn from understanding the complementary nature of what are not opposites but two sides of the same coin. This recognition of ‘two sides of the same coin’ and what some might consider paradoxical situations underpins Dilemma Theory. Charles Hampden-Turner’s work across cultures – and his intent to reconcile rather than separate cultural differences –led to the development of Dilemma Theory. Drawing on Hampden-Turner’s work, we recognize two ends of the continuum not as mutually exclusive either/ors, but as there being merit at both ends of the continuum. This challenges our tendency to think in terms of ‘right’ or ‘wrong’ and be fearful of difference – and encourages a more thoughtful response to conditions of uncertainty and ambiguity. If we use the contemporary meaning of ‘wicked’ as ‘excellent’ to define our problems, they become immediately less threatening. If we view VUCA environments as being comprised not of opposing but complementary forces, everything seems rather more manageable. This quells the anxiety that – as neuroscience has it – impedes effective performance. Q4 2018 Dialogue



Dialogue Q4 2018



Humane capital Companies are doing well by doing good WRITING

Professor Vlatka Hlupic ILLUSTRATION

Cajsa Holgersson

The conventional way of doing business no longer works. The financial crash, corporate scandals, environmental crises – from climate change to plastic waste in the oceans – have caused leading business thinkers to consider new approaches to commerce. Until recently, it was assumed that the business interest was on a collision course with social and environmental concerns. Yet recent research findings challenge this assumption. It turns out that you can secure superior financial returns through highly engaged staff displaying social and environmental responsibility. I have had the privilege of interviewing 58 business leaders at the forefront of this change for a forthcoming book, Humane Capital. It validates, and builds on, the research I completed for an earlier work, The Management Shift (Dialogue, Q1 2016, page 36), which identified five levels of engagement and

performance of staff, from Level 1 – actively disengaged, to Level 5 – passionately committed. It also explained how to align engagement initiatives with strategy and processes to harness this commitment to serving customers. The new book features 35 case studies from the corporate sector, public sector, non-profit and small- to medium-sized enterprises; 50 strategies for making the shift for each sector, some 200 in total; eight pillars for creating a humane, high-performing organization, based on a total of 272,000 words of research transcript. The links between being a great employer and securing better business results may appear to apply mostly to young dynamic companies in the creative sector. For example, the UK digital marketing agency Propellernet, one of the case studies in Humane Capital, has a waiting list for individuals wanting to work there. FounderQ4 2018 Dialogue



entrepreneur Jack Hubbard offers benefits that include making an employee’s dream come true. Every month, as the company achieves the revenue target, a lottery is held to send a staff member on their chosen prize, such as a safari or a trip to the World Cup. Since making the shift, engagement and financial returns have soared, and the small company registers £1 million net profit on turnover of just £4 million. The bigger challenge is: can the principles apply in more grown-up companies, with tens of thousands of staff, operating in regulated industries? This is where the results from the research described in Humane Capital get really interesting. The lessons are equally applicable, and some major companies are making the shift. For the past eight years, the global consumer goods giant Unilever has reoriented itself around social and environmental goals, rather than quarterly earnings targets. Its mission is to enhance the welfare of its customers, double its turnover, while reducing its environmental footprint. Between 2010 and 2017 its employee engagement scores went from the mid-50s to the 80s. It became the third most sought-after brand to work for, according to LinkedIn, after Google and Apple. Far from compromising commercial performance, returns have been impressive: the share price has more than trebled, from £11-12 to £38-40 by mid-2018. In a similar way, the pharmaceutical giant Roche is switching its mission from purely financial targets to ones based on wellbeing and quality of life of the patients that they ultimately serve. In my work with large companies, I find that high trust and engagement helps compliance with regulations such as health and safety and data protection, so there is no trade-off. And the high-engagement approach is equally applicable in the government and nonprofit sectors, as many case studies in Humane Capital illustrate. There are multiple benefits to making such a shift. As my interviewee Karin Tenelius, chief executive at Tuff Leadership Training, puts it: “Efficiency goes up, profitability goes up, there is a high quality of service and happier customers. Innovation happens.” Some interviewees reported returns on investment that run into the millions, while stressing that the benefits extend

The biggest barrier is in the mindset of those leading the change. Despite the evidence, many people refuse to believe it is possible Dialogue Q4 2018

Jack Hubbard offers benefits that include making an employee’s dream come true. Since making the shift, financial returns have soared

beyond the financial, using terms like ‘priceless’ and ‘magic’. Some credit the switch to a highengagement, high-performance workplace with the very survival of the business. So why is such an approach still comparatively rare? The barriers fall into two main categories: at a practical level, and to do with mindset. Practical problems can occur when an attempt is made, but the effort is halfhearted, so the initiative loses credibility. Or there can be a lack of an overriding sense of purpose, for example where the company has grown by acquisition. Leaders sometimes devote insufficient time to communication. Or the employees may have had a negative experience of change programmes, and are mistrustful of a new initiative. Yet my research persuades me that the biggest barrier is in the mindset of those leading the change. Despite all the evidence, many people refuse to believe it is possible or necessary. In an interview for the book, Steve Denning, former programme director for the World Bank, said: “If you don’t have that [empowering] mindset, it doesn’t matter what methodologies or what practices or what systems you put in place, everything goes astray.” The shift isn’t just a set of best practice tactics, it’s a radically different philosophy of what an organization is, what sustains it, and how it can be led and managed. In the successful cases, the people leading this business transformation ‘get it’, deep down. They understand the enterprise as a network of intelligent people, not a set of inanimate departments or resources. They know that they can’t know everything as a small elite, and so they have to harness the collective inventiveness of all. They know that they are a part of society and the environment that ultimately sustains the business. For all the threats and disruptions in the modern world, there is cause for an optimistic take, in that the more participative, enlightened ways of work do bring lasting competitive benefits, as the case studies in Humane Capital show. So what happens if we don’t shift? Some change is happening through market pressure. A top-down approach to management



AT T H E H E A RT O F C H A N G E Six key barriers to building humane capital



Insufficient or partial effort

There is a perception of work and life as being separate



Lack of a sense of purpose

The effort is perceived as too great


Poor communication

results in organizations that are slow to adapt to rapidly changing technology and business models, the digital transformation now known as the fourth industrial revolution. Mark Esposito, professor of business and economics at Harvard University, said that Humane Capital “pushes an open door in the direction of how the fourth industrial revolution envisions the role of organizations in the 21st century”. Paul Polman, chief executive of Unilever, said in an interview for the book that the financial crisis of 2007/08 raised profound questions. “I think a lot of people started to realize on a micro level not only that companies needed more of a purpose, but that we needed to also transform our economic system ... The overconsumption, the environmental stress and climate change being among them … If you don’t tackle it [the environmental crisis], the cost will be higher.


Leaders or employees are not ready

So if we don’t address these issues, we will challenge our own existence, ultimately.” Humane Capital is a practical handbook, containing proven models that align beliefs, strategies and resources, summarized in eight pillars of the humanized organization. It is a challenge, but one with considerable rewards. Ultimately, it is less problematic than ducking the issues the business world faces. — Professor Vlatka Hlupic is chief executive of The Management Shift Consulting, professor of business and management at Westminster Business School and visiting professor at Birkbeck, University of London — Humane Capital by Professor Vlatka Hlupic, with a foreword by His Holiness the Dalai Lama, will be published by Bloomsbury in October 2018 Q4 2018 Dialogue



How to fly the complexity chasm The 'Miracle on the Hudson' contains lessons for us all, writes Tony O’Driscoll

On 15 January 2009, Captain Chesley ‘Sully’ Sullenberger found himself in a frighteningly complex situation that no commercial airline pilot had previously experienced: he was sitting at the helm of a completely disabled Airbus 320 a mere 3,200 feet above one of the most densely populated places on the planet. In that same instant, Sullenberger had a flash of insight that helped save the lives of all 155 passengers onboard US Airways 1549. The skyscrapers of New York City agonizingly close, Sullenberger’s moment of clarity was the realization that he was no longer flying a powered commercial aircraft. Instead, he recognized he was piloting a 70-ton glider. Drawing upon his US Air Force experience flying gliders, Sullenberger immediately lowered the nose of the plane to change its pitch and maintain optimal glide speed. The maneuver allowed him to create maximum forward momentum as the aircraft’s wings sliced through the air, creating lift and buying him the precious seconds he needed to clear the George Washington bridge by less than 900 feet, before successfully ditching the aircraft into the Hudson River. Insights like Sully’s represent moments of clarity that emerge serendipitously from a seemingly endless cacophony of complexity. Insights are non-obvious and unexpected, qualitative and profound, and relevant and constructive. They lead to a discovery that momentarily clarifies the complex by revealing Dialogue Q4 2018

something that previously went unnoticed, or by recognizing something familiar from a different perspective. This revelation or recognition – in turn – leads to an unexpected decision or course of action that can yield an unexpected positive outcome. Sullenberger’s ‘glider’ insight momentarily clarified the complexity of his operating context, allowing him to identify a positive progressionpath of decisions and actions that avoided almost certain disaster. The pilot’s ability to reframe what he saw, rewire what he thought, and reconfigure what he did in response to his moment of clarity culminated in what became written into US national history as the Miracle on the Hudson. Many leaders in organizations today find themselves dealing with complex situations that are strikingly similar to the one Sully faced on that fateful day in 2009: the environment within which they are operating is uncertain; the outcomes they are striving to achieve are unpredictable; and the consequences of the rapid-fire decisions they make, and actions they take, can lead to the sudden demise of their enterprise. Like Sully, leaders captaining their enterprises must learn to successfully navigate complexity by reframing what they see, rewiring what they think and reconfiguring what they do to ensure that their organizations operate in a perpetual state of readiness for the unexpected. But where do we begin?

There is a complexity threshold above which attempting to maintain control inevitably leads to failure


As the connectedness and complexity of an organization’s operating context increases exponentially, leadership’s ability to anticipate environmental shifts and predict outcomes plummets precipitously. In navigating an increasingly volatile, uncertain, complex and ambiguous (VUCA) business environment, organizations find themselves vacillating violently between complicated and complex operating contexts, with many plunging perilously to their demise in the gaping chasm that exists between them: more than half of the Fortune 500 have disappeared since the year 2000. In complicated operating contexts, the connection between cause and effect is knowable. Decision trees of possible outcomes can be identified, risks and probabilities around these outcomes can be calculated, and contingency plans for each path can be predetermined, controlled and de-risked. In complex operating contexts, by contrast, the relationship between cause and effect cannot be predetermined. Patterns of relationships and interactions emerge and recede in unpredictable ways, momentarily revealing possible progression-paths to pursue that vanish as quickly as they appear. Both the outcomes themselves, and the paths to get there, are emergent and cannot be predicted, controlled and de-risked ahead of time. The two operating contexts could not be more different from one another: complicatedness is like chalk, while complexity is like cheese. Each operating context requires its own unique leadership response.


Different contexts, different response

As leaders navigate back and forth between complicated and complex operating contexts, they must repeatedly identify which side of the complexity chasm they are operating in. Then they must immediately apply the leadership response required within that context. The leadership response required in a complicated operating context involves indepth analysis of known possible outcomes to determine an optimal course of action, identifying risks to this optimal path and isolating trigger points that would invoke contingency plans to minimize these risks. To avoid being derailed in this operating context, leaders must counteract their desire to over-analyse, avoid placing too much stock in the advice of subject-matter experts, and overcome the blindness of their own biases. In so doing, they can effectively and efficiently deliver against a given expected outcome. Leaders learn – often the hard way – that there is a complexity threshold above which








The Complexity Chasm


COMPLEX ∞ Unknowable ∞ Unordered ∞ Unpredictable ∞ Uncontrollable

COMPLICATED ∞ Knowable ∞ Ordered ∞ Predictable ∞ Controllable High



attempting to maintain control inevitably leads to failure. Leaders seeking to successfully navigate complex operating contexts must first and foremost unlearn the lessons of experience they adopted in successfully navigating complicated ones. Attempting to navigate a complex operating context by applying a complicated leadership response often exacerbates the situation, culminating in devastating unanticipated outcomes. Complex operating contexts are unordered, unpredictable and uncontrollable. They consist of polarities to be navigated, not problems to be solved. And they require a much more agile and adaptive leadership response. The leadership response required in a complex operating context involves ongoing iterations of test-and-learn experimental cycles to identify patterns, develop insights and discover high-leverage progression-paths. To avoid being derailed in this operating context, leaders must overcome their temptation to control the situation, delay their desire to problem-solve, stop seeking facts and start uncovering patterns. Once a potential progression-path is identified within the complex operating context, leaders move back across the chasm into the complicated operating context by taking swift action to test the progression-path and learn whether or not the course of action it revealed will achieve the desired outcome. Q4 2018 Dialogue



Leaders must learn to reframe what they see, rewire what they think and reconfigure what they do




Assumes ORDERED universe

Assumes UNORDERED universe

Deterministic (can predict outcome ahead of time)

NON-deterministic (cannot predict outcome ahead of time)

Whole EQUALS sum of INDEPENDENT parts

Whole GREATER than sum of INTERDEPENDENT parts





PREDICTABLE environment and outcomes

UNPREDICTABLE environment and outcomes



Behaviour EXPLAINED by PROPERTIES of components

Behaviour EMERGES through INTERACTIONS of components



F I G U R E 3A

C O M P L I C AT E D O P E R AT I N G C O N T E X T Analysis of possible known outcomes to determine optimal course of action

CONTEXT CHARACTERISTICS ∞ Multiple cause-effect relationships ∞ Requires expert analysis / diagnosis ∞ Multiple possible 'right' approaches

ACTIVITY-BASED RESPONSE Identify outcomes, contingencies and triggers ∞ Create decision tree of possible outcomes ∞ Identify risks and develop contingencies for each possible outcome ∞ Identify trigger / decision points for invoking contingency plan(s)

CONTEXT DERAILERS ∞ Analysis paralysis ∞ Overconfidence in expertise ∞ Bias blindness

RELATIONSHIP-BASED RESPONSE Increase risk / contingency awareness ∞ Engage experts required to identify and address contingencies ∞ Increase stakeholder awareness of risks and contingency plans ∞ Prepare stakeholders for consequences of contingency plan execution

F I G U R E 3B

C O M P L E X O P E R AT I N G C O N T E X T Conduct multiple small and diverse experiments to uncover progression paths

CONTEXT CHARACTERISTICS ∞ Cause and effect cannot be foreseen ∞ Patterns emerge from interactions ∞ Pattern structures reveal progression paths

ACTIVITY-BASED RESPONSE Identify patterns, develop insights and conduct progression-path experiments ∞ Scan the context for signals of unanticipated influences ∞ Probe the environment to surface patterns emerging from signals ∞ Develop insights ∞ Identify progression path experiments to test

Dialogue Q4 2018

CONTEXT DERAILERS ∞ Temptation to control the situation ∞ Desire to solve the problem ∞ Looking for facts, not patterns

RELATIONSHIP-BASED RESPONSE Work the human network ∞ Engage partners in the network who can support pattern-recognition activity from their vantage point ∞ Protect time and space for patterns to emerge ∞ Maintain flexible and strong communication channels with all stakeholders


Avoiding fatal leadership errors

There are two fatal errors that leaders commit in navigating back and forth across the complexity chasm. First, they misdiagnose their operating context, often assuming it is complicated when it is actually complex. Second, they apply an incompatible leadership response for the context they are operating in, often applying a complicated leadership response while operating in a complex operating context. Einstein is widely credited with the quip “everything should be made as simple as possible, but no simpler”. As human beings, we naturally gravitate towards the comfort of simplicity and clarity, and away from the anxiety of complexity and ambiguity. This natural tendency to seek stability, coupled with our innate desire to quickly resolve a given problem, often causes us to underestimate the novelty and complexity of the situation at hand. Our strong desire to bring a situation back into control causes us to oversimplify the operating context and apply the wrong leadership response, resulting in unanticipated and, sometimes, catastrophic consequences. To avoid peril in traversing the complexity chasm, leaders must learn to overcome their natural proclivity to commit these errors by reframing what they see, rewiring how they think and reconfiguring what they do. First, leaders must learn to reframe what they see by relinquishing control and adopting a beginner’s mindset. Instead of launching headlong into solving an unanticipated problem or deciding upon a critical course of action via traditional command and control, leaders must learn to connect and collaborate openly around the issue at hand. Successfully navigating a complex operating context is dependent on synthesizing multiple diverse perspectives in order to develop a collective holistic appreciation for what is actually going on. In complex contexts, none of us is as smart as all of us, and breadth and depth of perspective in making sense of the complex operating context increases the likelihood of survival. Second, leaders must learn to rewire how they think by applying an iterative insightdriven cognitive approach, as opposed to a linear hypothesis-driven one. An insight-driven approach requires that leaders recognize patterns that emerge from the complex web of relationships and interactions occurring within the complex operating context, develop insights around the underlying structures that cause these patterns and identify possible progression-paths to move back towards stability and control. In complex environments, there are no mistakes. Instead, every unsuccessful progression-path is reframed as an opportunity to learn and adapt. Tolerance for making mistakes and resilience in recovering from them lies at the very core of the collective sensemaking process required to successfully to navigate complexity.



T H E C O M P L I C AT E D / C O M P L E X INFINIT Y LOOP Contingencies

Progression paths




Insights Outcomes




LEADERSHIP RESPONSE ∞ Outcomes ∞ Triggers ∞ Contingencies

Error 1 Underestimating the complexity of the Operating Context

Error 2 Applying a complicated leadership response to a complex Operating Context ∞ Patterns ∞ Insights ∞ Progression paths

Navigating a complex operating context is dependent on synthesizing multiple diverse perspectives

Third, leaders must learn to reconfigure what they do. The more connected we become, the less control we have. The reality today is that organizations are a complex and interdependent amalgamation of people, processes and technologies. To successfully navigate back and forth across the complexity chasm, leaders must reach beyond traditional organization boundaries to bring together disparate and diverse sets of people, processes and technologies, and reconfigure them in real time to synchronize with their operating context. It is only through collaborative engagement and agency around a collective shared perspective that organizations can seize opportunities for growth that will sustain them. So, when you next find yourself facing a frighteningly complex situation, remember to reframe what you see, rewire how you think and reconfigure what you do to ensure you do not commit a fatal leadership error. Try to be a little like Sully and, as you glide to safety, always remember that navigating complexity is definitely not complicated! — Dr Tony O’Driscoll is a professor at Duke University’s Fuqua School of Business Q4 2018 Dialogue







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The liberal arts are now as mighty as engineering

STEM is not the only fruit

Vivek Wadhwa is distinguished fellow at Carnegie Mellon University’s College of Engineering and author of Your Happiness Was Hacked

I used to fly the flag. Back in 2004, I was a democratized it into tools that changed the patriotic engineer, bemoaning those who world. When I met recently with Logitech showed a preference for the liberal arts. chief executive – and English literature major I was convinced that developing human – Bracken Darrell, he echoed Jobs’ views. capacity in the STEM subjects – science, He said that it was by focusing on design – technology, engineering and mathematics making his products people-friendly – that – held the key to global competitiveness. I he had turned the company around. Its stock was a fully paid-up subscriber to Bill Gates’ price has increased fourfold in half a decade. view that governments should spend The clue to the power of the humanities their limited public education budgets is in the name. Human. The key to designing upteching our children, as such disciplines great products is to understand how humans commanded greater premiums and act, think and learn. Artists might not volumes in the employment market. naturally gravitate towards software and But that was then, and this is now. By the digital graphical tools. But they can acquire late-2000s, the winds of change were already those skills. It is infinitely more difficult to blowing. When, in 2008, my research teams teach an engineer to be an artist. at Duke and Harvard universities surveyed None of this is to say that the STEM more than 600 American chief executives subjects have lost their value. They remain in the technology sector, they discovered critical in a world where the companies something counterintuitive. Only around a that succeed must be at the vanguard of third of those interviewed technological development. held degrees in engineering Yet where I once vaunted or computer science. For STEM subjects above The older I get, mathematics degrees, the all others, I now take a the more I realize figure was vanishingly low more nuanced view. An the power of words in – just 2%. The remainder – engineering degree is making you think the majority – held degrees valuable. But a psychologist –Bracken Darrell in the social sciences, might have a better idea of humanities and arts. Having what motivates humans to a degree per se was a good use a product. An artist is a predictor of entrepreneurial success, but the powerful asset when 3D printers can realize subject it was in, and university it was from, anything that can be imagined. And English were not significant factors. In fact, there was majors hold the levers to the most powerful some anecdotal evidence that arts subjects tool of all – language. might serve better – YouTube chief executive “The older I get, the more I realize the Susan Wojcicki majored in history; Slack power of words, and the power of words founder Stewart Butterfield read philosophy; in making you think,” Darrell told Business Airbnb pioneer Brian Chesky holds a degree Insider in 2013. “The best CEOs and leaders are in fine art. extremely good writers and have this ability As was often the case, the late, great to articulate what they’re thinking.” Steve Jobs had it right when he touted Darrell added that he actively recruits the importance of the liberal arts while students of the liberal arts, believing them to unveiling the iPad 2. “It’s in Apple’s DNA be an “endangered species” in the technology that technology alone is not enough,” he space. We are all guilty. Ten years ago, said. “It’s technology married with liberal when parents asked me what their children arts, married with the humanities, that should study, I recommended the sciences yields us the result that makes our heart in a heartbeat. I now advocate that children sing – and nowhere is that more true than in should pursue their passions. STEM is not these post-PC devices.” It is science’s fusion the only fruit. In fact, as the tech sector with the humanities and philosophy that humanizes, gifted readers of the arts are ripe dragged computing from a niche pursuit and for the picking. Q4 2018 Dialogue



Sharing knowledge Marcelino Elosua’s global learning business has innovated as technology has moved on – but its core goal has remained constant, finds Ben Walker

The secret was wrapped up inside an olive. Before he founded his LID Publishing empire, Marcelino Elosua spearheaded the eponymous family food company. “We grew it into the number one olive oil bottler in the world,” he recalls. “We were very successful at selling its health benefits.” Elosua faced a battle with sellers of polyunsaturated fats – chiefly seed oils and the spreads that are based upon them. His competitors’ message was simple – ‘our fats are the most effective at reducing cholesterol’. “But there are two kinds of cholesterol,” says Elosua. “These are now known as good and bad cholesterol – because of us. Polyunsaturates reduce all cholesterol. But olive oil reduces the bad cholesterol and not the good. We considered that to be a powerful marketing message – that olive oil was the only fat that reduces the bad cholesterol without reducing the good cholesterol. We owned the story – and we built the good image of olive oil, which at that time was hidden by the seed oil producers.” Today, olive oil is recognized worldwide as the ultimate healthy fat, contributing to long life expectancies in countries where it features heavily in the diet (Italians and Spaniards enjoy some of the longest lives in the world). The experience taught Elosua a lesson for life. “It was a huge learning about PR,” he says, “about how important it is to build an image based on wellresearched facts.” Following a hostile takeover, Elosua left the food business and applied his core learning to publishing. His first book was a dictionary of terms for his alma mater Stanford, for whom he was then chair of the alumni association. “The dean of the business school told me that Spain was one of the few countries where Stanford suffered a high rejection rate – Spanish people who were Dialogue Q4 2018

admitted by both Harvard and Stanford were choosing Harvard. I said it was because of image and profile – Stanford was simply not as well-known in Spain. The dean asked me, ‘Well what can we do about that?’ We suggested a Stanford dictionary, aimed at Spanish people but based on the knowledge coming out of the United States. If you create a book for a person or organization that has a lot of value – in this case defining new business terms – you improve the image of that client by positioning them as a knowledge leader. You are helping them share their ideas with the world. Again, it is about building an image based around clear facts.” The innovation worked: LID is now among the biggest publishers of business dictionaries in the world.

There is no point stopping work at 60 or 65 if you are still in good shape and can do things

B E N WA L K E R What drove you to switch from the food sector to the business publishing space? M A RC E L I NO E LO SUA I think we devote

too much time and public life to the words of politicians and journalists, but too little time to businesspeople and their ideas. I think we should show respect to people who have built important companies and I wanted to give a voice to people who want to create new thinking. We are not in the business of finding good ideas and turning them into books; we are in the business of finding good thinkers and having them say their good ideas. And we do this over time, not just once. So it is very important that we do

good PR – not just selling the book but disseminating those ideas, developing new ideas and new examples, and doing a second book two or three years down the road. BW How have the ways you convey those ideas changed since you founded LID 25 years ago? M E The core concept is exactly the

same, it is the formats that have changed. In our London office we have been very innovative with LID Radio and podcasts; whereas in Madrid we offer e-learning. E-books have been an important development, but they are still embryonic, the equivalent of blackand-white cinema. If you had asked theatregoers at the time what they thought of such films, many of them would have told you they were boring compared to the colour and vigour of a stage play. The e-book is very basic –it is just a printed book in black-and-white, in a digital format. BW Do you expect such e-books to endure? M E No. The next generation of books

won’t be downloaded at all, they will be read on the cloud, and people will use tools to interact with the books, customize them, comment upon them and discuss them with other readers. People will still enjoy printed books, just as they still today enjoy printed photography. But, like MiniDisc and VHS, downloaded e-books will die out – they are obsolete technology. BW More recently, you founded the autonomous learning platform BlueBottleBiz. Your businesses share a common theme. Why is ongoing education and self-improvement so close to your heart? M E Technology is changing at a rapid

rate. It’s impossible for a university


since 1993 to prepare you for your whole life, so lifelong learning is becoming more important. My theory is that companies will empower people to do lifelong learning and perhaps pay for it, but it will be the responsibility of each individual to teach him or herself where they want to go. B W Do you see dangers for those that fail to keep up? ME We can already see them. If you

don’t keep up with technological change you develop anxiety. That anxiety is behind the surge of populism. There are always local shades of populism, but it has a common root, even if it manifests in a different way. B W You think lifelong learning can alleviate those feelings, that anxiety? ME Yes. Two hundred years ago, Thomas

Malthus said that we were going to die from overpopulation as life expectancies increased because of advances in medicine and diet. There was a fear that industrialization would starve people of work, of their livelihoods. Yet the compulsory education of children helped people learn basic skills and become able to take new, more advanced jobs. Today, we are going to have to work longer – there is no point stopping work at 60 or 65 if you are still in good shape and can do things. But to do that we need to keep learning. We need to empower people. That’s why I started a second company. I thought that LID was doing a very good job of disseminating the ideas of key thinkers, but we needed to go further to improve the lives of people. We needed to develop new ways of learning. B W What will be the core to those learning innovations? ME There will be a change from physical

spaces to more digital gatherings. We

have only seen half of that change. Yes, we are working digitally, but only in one direction – we have information in the cloud and we access it. We are not yet really interacting in the cloud. Through artificial intelligence you will identify resources – and find people. You will meet your intellectual soulmates – the brothers and sisters who help you develop the ideas that you need. This is

the way networks work; this is the way that our brains work. Biotechnology is the name of the game – because the way we learn digitally will follow similar systems to those already operating in the human brain. — Marcelino Elosua is chief executive of LID Publishing, which publishes Dialogue Q4 2018 Dialogue



Telecoms – the perfect storm MTN Group is taking on the challenge of turbulent and uncertain environments, write Paul Norman and Sharmla Chetty

Arguably, the telecoms industry is seeing more change than any other. There are four major forces for change: technology, regulation, increased competition and heightened customer expectations. On the technology side, there has been a huge shift from voice revenue to digital and data over the last five years. Over the coming five years the next big shift will be automation, to streamline processes that currently rely on multiple and often incompatible data sources from network providers, engineers, sales representatives and customers. Telcos are placing great emphasis on developing analytics skills to gain a better understanding of the huge amounts of data they collect daily. The industry is beginning to see significant investments in customer and business analysis, to understand revenue and net promoter score (NPS) drivers and to improve customer value management. Dialogue Q4 2018

Each market shift requires new skills, new ways of working, a new operating model and a new culture. Transforming your business every five years is no easy task. Moving on to regulatory changes: these are frequent, inconsistent and region or countryspecific, often a challenge for an international company operating in dierent geographies. Regulators are also struggling to keep up with the pace of technological advancement. In some markets, industry taxes can be a hefty source of revenue. Some governments continue to issue new operator licences, while other regulators are reducing the number of licences in markets where only one or perhaps two operators are viable. Other governments are keeping a close eye on customer demands and acting on their behalf. In South Africa, for example, the regulator is seeking to change the rules, so that unused data cannot be sold again to



Q4 2018 Dialogue



Jack Ma’s tech giant Alibaba is working on a neural chip capable of carrying out AI functions Dialogue Q4 2018

the same customer at the end of the validity period. In short, the sands are idiosyncratic and constantly shifting. Competition is particularly challenging. Intense between incumbents, the industry is also suffering from new entrants in mobile communications and adjacent businesses who do not need to play to the same rules as the telcos. These new entrants are referred to as over-the-top (OTT) players, as they ride on top of the network. Telcos need to obtain licences and meet a range of obligations in order to operate, for example cover the whole population including rural areas. They need to meet regulatory standards and undertake considerable expenditure to do so. OTTs enter and disrupt the market, offering services which are often in direct competition to those provided by telcos, without the requirement of operating licences and investment. OTTs include the likes of Facebook and WhatsApp. Recent reports also show that technology companies are developing vertically integrated models to try to inoculate themselves against supply chain disruptions. Jack Ma’s tech giant Alibaba is working on a neural network chip capable of carrying out artificial intelligence functions such as facial and speech recognition with substantially less power, and reportedly pouring $15bn into R&D. Such developments only serve to make competition between traditional telecoms operators and tech companies increasingly one-sided, as they will not only continue to grow faster than telcos, but also attract the cream of the talent. Lastly, and in common with many other industries, customer expectations are on the constant rise. Owing to their easy access and availability, OTTs have significantly influenced user habits and changed customer expectations around mobile communication services. Just think about the real-time sharing nature of Facebook, which suggests connections for you among a network, tailors adverts to your search history and, above all else, is free. If Facebook can understand a customer so well, why not the telcos?

MTN challenges

MTN currently operates in: Botswana, Cameroon, Cote d’Ivoire, Nigeria, Republic of Congo (Congo-Brazzaville), Rwanda, Kenya, South Africa, Swaziland, Uganda, Zambia, Iran, Afghanistan, Benin, Cyprus, Ghana, Guinea Bissau, Guinea Republic, Liberia, Namibia, Sudan, South Sudan, Syria and Yemen. There are certain challenges that are peculiar to the social, economic and political environments of these countries. Some of these markets are sanctioned countries, for example, whilst others are experiencing protracted civil and political unrest. In Nigeria, the fine imposed on MTN’s local unit in 2015, the biggest ever given globally to an operator, is a matter of public record. In response, MTN has had to fortify its controls and create dedicated functions to centrally and regionally provide guidance and support to its operations. MTN drove mobile and, with it, the adoption of mass communication on the continent. The next revolution is bringing the internet to the mass market in Africa and the Middle East. The switch from voice to data, which raises less revenue, and packaged digital services including much-discounted voice, has required the company to undertake a fundamental re-think of the business. MTN has made certain choices to compete in the data and digital space, by extending its offerings to include mobile financial services, e-commerce and so on. This means they now compete directly, for example, with banks (mobile money), in addition to the OTT players. And the stakes are rising all the time. There are new opportunities for 4G data and the demand for connectivity is skyrocketing across Africa – in both urban and rural areas. This is happening at a time when early 5G networks are already being rolled out in some US cities. The Tokyo Olympics in 2020 will reportedly present the very first showcase of the full range of what 5G technology will be able to offer.



Intermediation and spiralling demands

Meanwhile, in the emerging world, lack of spectrum remains the Achilles heel. Spectrum is the highway for data that operators use. As customers’ insatiable appetite for data continues to grow, there’s massive competition for additional spectrum across most of MTN’s markets. The situation is getting dire. In some markets, spectrum issues, rather than strong business fundamentals, are driving key telecoms consolidation deals. While the industry awaits clarity on spectrum policy, operators and new entrants are taking advantage of regulation which allows sharing of passive infrastructure, and trading and refarming of spectrum (selling it back to operators). Similarly, with towers (towers are base stations placed all over the country to get coverage), intermediate specialist tower companies are emerging, investing in towers, terrestrial fibre and data centres, and leasing the services back to the operators. Satisfying spiralling customer demands has led MTN to define and deploy customer blueprints across the group’s companies, to further streamline key functions and embed a common platform. Mobile connectivity is also improving access to essential health, social and financial services. Last year, for example, MTN renewed its partnership with Unicef to provide Ghanaians with essential information about health and social issues. The initiative was established in 2015 to alleviate the anxiety of Ghanaians during the outbreak of Ebola and cholera. Through a digital platform known as Agoo, Ghanaians had the opportunity to call and receive responses to their queries in critical moments during health epidemics. Now, over 2,000 calls are received per day, providing information to over 725,000 callers per year. The service is free for MTN subscribers. Similarly, in Iran, following a regional earthquake, MTN maintained the network without any outages, and activated free calls for subscribers in surrounding cities. Other operators’ subscribers were also able to roam on MTN’s network if they faced issues with their own services. MTN has also expanded its mobile money service, including high interest-bearing savings accounts, increasing access to micro-insurance, collecting and disbursing retirement grants and enabling payments for water and electricity services. MTN continues to work with stakeholders both inside and outside of the traditional MTN subscriber base, such as governments, social enterprises, healthcare providers, and others, to explore new areas of need and to support relevant initiatives. And MTN has placed a significant portion of its shares in its local entity in Ghana through public share offers, to ensure greater participation by the Ghanaian people. A similar process is underway in Nigeria and expected to conclude by end of 2018.


MTN Group is a mobile operator with licences to offer voice and data services in 24 countries in Africa and the Middle East. The company was founded in South Africa in 1994, and has grown through a series of greenfield or start-up ventures, as well as specific country acquisitions of existing operations and buy-outs of existing multicountry operations. It employs almost 19,000 people and services nearly 220 million subscribers, including almost 22 million Mobile Money customers.


People – the core goal

To meet the challenges outlined, MTN must source new tools, technologies and skills. Sometimes the new skills benefit the customer or enable MTN to comply with regulatory requirements, but don’t bring new revenue; they are the increasing cost of staying in business. For MTN, finding and attracting the new required skills is no small feat, as its markets span countries operating under sanctions, civil unrest, and deflated economies and currencies. New skills are needed to drive the data adoption model and deliver on this strategy. New capabilities are also required to address changing customer needs; and greater systems’ agility is necessary to deal with transforming markets and Big Data. The culture and leadership style have to be agile to respond to these turbulent times. Leaders need critical skills, such as self-awareness, openness to feedback, communications and the ability to lead leading in culturally diverse environments. The culture has to be founded on values and behaviours that will drive an adaptive, flexible, innovative and resilient company. MTN needs to respond with speed, be flexible and drive innovation. To this end, they have been building flatter structures based on customer needs, piloting cross-functional projects and building global communities of practice.

A whole new talent model

MTN and its learning and development partner, Duke Corporate Education, are painfully aware that revising and refining existing roles is woefully inadequate to face the coming tsunami of change in the world of work. Competing with OTTs for new talent is the first small ripple on the shore. At the generic level, people need to be trained to be creative, adaptive, problem-solvers. Yet as more and more jobs are automated, more specific, completely new roles are emerging, such as scrum master (able to assemble multifunctional teams and disband them once the task is completed and move to the next team); and perception engineer (tracking and sense-making virtual behaviour). There is no blueprint for hiring or training for these new roles. So, what’s the answer? Alongside improving current and generic capabilities – a refresh - MTN and other African companies need simultaneously to start imagineering the new jobs of the future – a restart. Employers need to get comfortable with the gig economy and work with a variety of employment models, not all full time and not all forever. And the time to start is now. MTN challenges? This is just the beginning of the next phase. — Paul Norman is group chief human resources officer of MTN Group. Sharmla Chetty is president, Africa, and global managing director, Europe, at Duke Corporate Education Q4 2018 Dialogue

Immediate impact, growing advantage. At A.T. Kearney, we pride ourselves on our uniquely collegial culture and care passionately about our work and our people. We offer our clients a range of global capabilities anchored in our heritage of essential rightness. The same promise we make to our clients—immediate impact, growing advantage—we offer to our people. Working together, we drive immediate results and help build lasting, transformational advantage. Consulting Magazine has recently named A.T. Kearney as one of the Best Firms to Work For 2014 and honored the firm with an Achievement Award for Excellence in Diversity. For more information about A.T. Kearney and to read some of our latest thinking, please visit www.atkearney.com.

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Value is being added in inventive ways in the digital age

Juice bar in a taxi cab Phil Young PhD is an MBA professor and corporate education consultant and instructor

Between the driver and front passenger seats was a multitiered rack full of beverages and snacks for sale

There are numerous meanings and usages of the term ‘value-added’ – depending on the context in which the term is being used, i.e. finance, accounting, microeconomics, macroeconomics, or marketing. But in finance and – in particular – accounting, the concept has its roots in the industrial age when labour and capital added value to raw materials and natural resources to produce goods and services. Indeed, when I checked to see what a trusted source, the MerriamWebster Dictionary, had to say, I found a definition that is most appropriate for the manufacturing sector: “Of, relating to, or being a product whose value has been increased especially by special manufacturing, marketing, or processing.” Thus we can see that an auto manufacturer takes raw materials, ‘adds value’ with the use of labour and capital assets such as property, plant and equipment and, voilà, cars appear as finished products. But what kinds of value-added activities are there in the business of providing services? To be sure, a service was long thought to be a way to add value to the physical product. For example, notice the difference in after-sale service provided by car dealers of luxury marques versus those who sell the more economical brands. But what kinds of value-adding activities are there in the service itself? There are many examples of value added in retail merchandising and places that serve food and beverages. Some years back, Nordstrom, the US department store chain, hired piano players to provide live music as its customers were eyeing the latest fashions. Starbucks provides its customers with a comfortable place to meet or do some work while sipping their coffee. These customer experiences help to add value to the basic service provided. Nonetheless, I have observed over the years, that the inception and development of digital technology – which includes the internet – have led to innovative and amazing ways to add value to services. Early innovators in the use of digital technology to add value to services were of course Amazon and other online shopping

services. Shortly afterwards came priceline.com and other online aggregators that added the value of easily accessible price information in the travel and hospitality sector. Going beyond this aggregation service, Airbnb showed how value can continue to be added in the hospitality industry by using digital technology to create a networked supply of rooms and homes for rent by individual property owners around the world. Just when we think we have seen it all, there is no doubt that applications of artificial intelligence (AI) will continue to keep the party going in the adding of value in service businesses. In the meantime, I am still amazed at ways that innovative companies continue to add value in service businesses. We are all familiar with the way Uber has added value in the ride-for-hire business by providing passengers with a mobile phone app to hail and share rides. But have you heard about the latest wrinkle in ride-hailing services? On a recent trip to Shanghai, I took my first ride in a car using the network of Didi Chuxing, China’s leading ride-hailing service and Uber’s main global competitor. To my surprise, when I sat down in the Didi car, I thought I had just got into a mobile mini convenience store! Positioned between the driver and front passenger seats was a multitiered rack full of beverages and snacks for sale. I was told by my Chinese colleagues that this service had just been introduced a week or so before. On the lower left side of the rack was a QR code, which enabled passengers to pay for the items with their mobile phone. From a financial perspective, the real question is whether this ‘value-added’ service will result in an adequate return for Didi, its drivers, and the companies that manufacture and distribute items for sale. But whether a value-added service is digital or traditional, the answer of course depends on the consumer demand. By the way, if you’re wondering why anyone would want to buy an unchilled bottle of juice – then be reminded that the Chinese do not like to drink cold beverages. Value means something different depending on where you are. Q4 2018 Dialogue



The bank machines

With more than half of all consumer transactions now done digitally, Kirsten Levermore considers what’s next for retail banking

Glass doors swoosh lazily on to the hushed lobby. Lined with counters, desks and squat, square offices, you approach a customer service ambassador for directions. “Good to see you again,” they say. They remember you from your last visit – and all the others since you first joined the bank. Handing over your bank card, you explain the reason for this trip. Smiling, the ambassador ushers you towards a security gate. Striding straight through the barrier, you emerge to a second, smaller room, with agents waiting to deposit your money. Picking an empty booth, the whole transaction takes less than two minutes, and you’re back on the street. And you haven’t interacted with a single human being in all that time. The world’s first robot-run bank branch, the Shanghai outpost of China Construction Bank (CCB), prides itself on efficient, amiable service – all without the need for flesh-and-blood staff. Stuffed with the latest in facial recognition, virtual reality, machine learning and financial technology, CCB’s robotic branch ‘employees’ dramatically cut labour costs whilst significantly speeding up the in-person banking process. Led by branch ambassador bot, Little Dragon, this crack-team is the focal point of CCB’s strategy to future-proof the bank branch model. In a world where 52% of all consumer banking transactions now take place digitally, and bank branches are closing at a breathtaking rate, saving the traditional branch model is no small task.

Rooted in one place

If you store your money in a traditional bank (or possess a Visa credit card), it is highly likely you have at some point found yourself on foreign soil with no access to cash or credit. When you were unfortunate enough to discover your bank had no branches in that strange land, you faced exorbitant phone bills, SOS calls to faroff customer service reps, furious, jetlagged, sunburnt, even diarrheic, attempts to explain the issue – and several stressful cash-strapped hours. And whether you’re away on business, vacationing, working abroad, living in an isolated area or simply unable to reach a branch during office hours, digital banking can be a whole lot more convenient. Digital-only banks aren’t just good for current-account management, either. According to the Way We Bank Now survey, conducted by EY for UK Finance, customers are increasingly using apps to access services such as savings, credit cards and mortgage and investments accounts.

Growing up so fast

Digital banks hold one further convenience for customers: it’s considerably easier to get an account with digital-only banks than with traditional banks. Forget, as you download an app or click a link, the days of proof-of-address, birth certificate and employment contract – digital banks need only a quick facial recognition scan, a snap of official identification and, hey

FROM HUMAN TO ROBOTIC Bank branches of 2018 take on many forms



‘Pull up a chair’ boutique and Mini-branches, inc. ATMs, coffee-house environments, computer terminals for often complete with online banking and cheque refreshments and activities depositing machines

Dialogue Q4 2018


Drive-through tellers and ATMs


Virtual branches (via mobile and online platforms)


presto, you’re a valued customer. The drive for frictionless, speedy service, say analysts, can be traced back to innovation in the retail space. Worldwide director of the Innovation Group Lucie Green told The Independent, “[Banking] consumers are expecting the seamless, efficient, mobile-first and digital experience they already get from online retailers such as Amazon in their banking.” Whatever the spark, the fire has spread: today, digital banking is so popular that the UK saw a sky-smashing 350% increase in usage over the last six years. And for apps in particular, in 2016 that meant 159 banking app logins occurring every second.


The human touch

Why, then, do 34% of consumer transactions still take place in bank branches? Humans are unwilling to trust robots, notes associate professor of psychology and neuroscience at the University of North Carolina Dr Kurt Gray (Dialogue, Q3 2018, page 48). “The problem comes from empathy, or perceived lack of it. My research shows that humans are almost universally disinclined to credit machines with any notion of ‘feeling’.”


Defined as ‘retail locations where a bank, credit union, or other financial institution offers a wide array of face-to-face and automated services’, the bank branch is thought to have originated in Europe between AD 1100 and AD 1300, in response to growing international trade

And this lack of feeling, says relationshipcentric bank, Metro Bank, is why human-staffed bank branches will always succeed. “Digital technology and new forms of automated service offer many exciting opportunities for financial services to become more tailored and convenient,” offers the bank’s chief commercial officer, Paul Riseborough. “But there will always be a role for face-to-face service when it comes to banking. Money issues are complex and emotive. Customers like to talk through what it all means with a real human being.” And though a far cry from Metro Bank’s seven-day and late-night coffeehouse environment, the robot-run CCB branch, too, acknowledges this emotional connection, offering – for more complex transactions – inbranch conversations with human relationship managers via video chat. But with rocketing rent and labour costs forcing record branch closures across the globe, it seems customers – and financial service providers – will soon face a choice: learn to trust fintech, return to traditional relationship banking, or seek a happy medium. — Kirsten Levermore is assistant editor of Dialogue Q4 2018 Dialogue



Cash for chaos Will India’s demonetization be worth the pandemonium it caused? Nikhil Raval reports Dialogue Q4 2018


On 8 November 2016, at about 8pm Indian Standard Time, Prime Minister Narendra Modi of India gave an unscheduled television address in which he informed the nation that, from midnight, the country’s two largest denomination notes – rupees 500 and 1,000 – would be ‘demonetized’, withdrawn from use. These notes accounted for 86% of the country’s cash supply. The government’s goals were multifaceted – to eradicate counterfeit currency, fight tax evasion, eliminate black money (income illegally obtained or not declared for tax purposes) from money laundering, attack the financing of terrorism and promote a cashless economy. The declaration that 86% of currency had in the blink of an eye become illegal tender created chaos at every level of society.


What is demonetization?

Demonetization is the act of stripping a unit of currency of its status as legal tender. There are multiple reasons why nations demonetize local units of currency, from combatting inflation and the black economy, to simply replacing worn-out and damaged notes or coins. The process of demonetization involves either introducing new notes or coins of the same currency or completely replacing the old currency with a new currency. Usually, warning is given and time allowed for old currency to be exchanged for new. Demonetization has been used in countries from North Korea to the US, sometimes successfully and sometimes not. It has been used before in India also, for example, in 1946 the pre-independence government hoped demonetization would penalize Indian businesses that were concealing fortunes amassed by supplying the Allies in World War II. However, the 2016 demonetization differed markedly from earlier episodes in its vast scale and in the surprise nature of the announcement: according to some reports, only six people in the entire country of 1.25 billion people were aware of the plan. Also, earlier demonetization drives affected only the highest-value notes in the economy, whereas 2016 targeted fairly moderatevalue notes. It was a surgical strike by the government to reduce black money in the economy. The announcement

was made by Prime Minister Modi in the evening, rather than the central bank in the morning – the Cabinet were briefed earlier in the day but not allowed out of the building. Most businesses were shut for the day and banks remained closed for the next day, paralyzing the country.

The fallout

The announcement immediately triggered a mad scramble to unload the expiring banknotes. Although people had until the end of the year to deposit the notes in bank accounts, doing so in large quantities could expose them to high taxes and fines. The government hoped that people would be forced to deposit their black money into the banks to get new currencies, bringing the black into the white economy. In reality, they also rushed to gas pumps, foreign-exchange counters, ATMs, jewellers and to creditors to repay loans. Several deaths were linked to the dash to exchange cash. There was a spike in donations of the demonetized notes in temples. People started making multiple transactions at different bank branches and also hiring people to exchange large amounts of defunct currency at banks. Indian Railways found that a large number of people started booking tickets for the longest distance possible to get rid of unaccounted cash. People used the demonetized 500 and 1,000 notes to pay outstanding and advance taxes, so revenue collections jumped. Black money hoarders did everything they could to find a way out. To make matters worse, the banks didn’t have enough newly designed banknotes to exchange for the cancelled cash. Trade was disrupted everywhere and consumer goods sales were reported to have dropped by a third. So was the short-term pain worth it? Black money, corruption, terrorism, espionage and counterfeit currency were choked. Bank deposits increased by a huge margin, generating interest

Even a street-side chaiwala will transact small amounts of rupees electronically


and a corresponding fall in inflation; banks were able to lend more and accelerate towards a cashless society, increasing financial inclusion. Ecommerce companies saw a 30% decline in cash on delivery orders, cutting costs and increasing digital payments. There were also downsides, with a negative impact on GDP because of the disruption to trade, with particular harm to cash-based sectors such as agriculture and construction. Once demonetization was announced, Prime Minister Modi acknowledged that peoples’ lives would be disrupted. He invoked civic duty and patriotism: citizens should accept the challenges of demonetization as a “sacrifice”, he urged, and “face difficulties for the benefit of the nation”.

Was the chaos worth it?

In an already complex, inter-related and volatile world, adding more disruption into the system was a bold move. Looking back from 2018, the undoubted winner was the almost overnight digitization of financial transactions. Data released from the Reserve Bank of India (RBI) from January 2016 to August 2017 show a multi-fold jump in all forms of digital payments. The National Electronic Fund Transfers (NEFT) jumped from rupees 7,086 billion to rupees 12,500 billion. Debit card, credit card and Immediate Payment Service transactions all went up significantly. Perhaps the biggest notable change was the use of electronic wallets for day-to-day purchases. The volume of transactions went from rupees 22 billion to rupees 84 billion by January 2017. The change was visible. Even a street-side chaiwala (tea vendor) will transact small amounts of rupees electronically. Demonetization has generated massive debate among economists, media and politicians. If it all works out as planned, it will kill the large shadow economy in India, bring transparency, boost tax intake, recapitalize banks and ultimately shrink the fiscal deficit. Given mixed results from the ongoing state elections, whether it will see PM Modi re-elected is another matter. — Nikhil Raval is managing director of Duke Corporate Education India

Q4 2018 Dialogue




Simplicity is often wrong

What’s in a love letter?

Giles Lury is director at The Value Engineers and author of How Coca-Cola Took Over the World: and 100 More Amazing Stories About the World’s Greatest Brands

I am a firm believer in the power of stories. I tell tales all the time. As a marketer, I’m a professional storyteller. Stories come in many shapes and forms and cover a wide variety of genres. But I have a predilection for the parable – the marketing parable. I tell short stories about brands and how they go to market, how they came into being, how they tackle challenges. Each ends with a moral which – in my case – is normally a thinly disguised tip or technique which the reader can use in their day-to-day work. Occasionally the stories are a little more personal. This story combines a personal tale with a marketing moral. In 1979, over 20 years after they were married, my father gave my mother a Valentine’s card. It was an old 1920s style illustrated postcard of a boy giving his girl a big envelope with ‘To my Valentine’ on it. It was originally mailed in 1923, but Dad had bought it at an antiques fair. Both Mum and Dad loved antiques. I found the card sorting through my mother’s things after she died many years later. Along with the card, there was a piece of paper on which my Dad had lovingly typed an imaginary discussion between an aspiring poet and creative writer. It concerned the matter of what salutation should be used on a Valentine. It bought a smile to my lips, and tears to my eyes. “Be mine, Be mine, Please be my Valentine.” “An ardent lover would not bother with please.” “Be mine, Be mine Be my Valentine.”

In a drive to become single-minded, a brand can become narrow-minded

“As your poem will arrive on 14th February, you reflect adversely on your recipient’s intelligence by referring explicitly to Valentine.” “Be mine, Be mine” “Poetry should concentrate and distil. Why this repetition?” “Be mine.”

“This possessive attitude is outmoded; an unpleasant residue of male chauvinism.” “Be.” “Ah, I like this. Concise, but full of implications. Yes, I think this will do.” Message sent:“Be mine, be mine, Please be my Valentine.” In the end, the lover chose not to oversimplify. The morals for me were on a personal level, a little more thought in choosing gifts shows just how much you care; and on a marketing level, you should simplify as much as possible, but not any more. Too often in marketing there is a tendency to oversimplify, to try to distil and distil and reduce everything to just one word, one thought. If I think of my father I can’t sum him up in one word; he was my father, a husband, a university professor, a lover of jazz, a knowledgeable lover of wine. Human behaviour is not simple, and – as it is the basis for much of marketing – there is a real danger in oversimplification. Today’s brands are no longer ‘one product, one brand’ – they have portfolios of products and services. They need to cross boundaries of category, country and audiences. They need a broad emotional repertoire. Brands that can do this are complex – not complicated. Brands that manage this multiplicity can talk about different things to different people at different times, without being seen as schizophrenic. They have depth and sustainable appeal. I believe that there is a real danger that, in a drive to become single-minded, a brand can become narrow-minded. So to finish and to simplify – but not oversimplify – I’m not a fan of marketing gurus Al Ries and Jack Trout’s famous suggestion that, “In an over-communicated society you need an oversimplified message.” Rather I prefer the more realistic thought of US satirist HL Mencken: “For every complex problem there is an answer that is clear, simple …and wrong.” Q4 2018 Dialogue



Recipe for insight Mix four ingredients, and stir, writes Anthony Tasgal

Insight. Everyone wants it. Track it, hunt it, snare it and display it proudly on the wall: “Got this one in the field. Tough one to track down, but now it has pride of place on the Insight Wall.” Sought like the legendary unicorn, holy grail and philosopher’s stone: marketers, researchers and blank-paper-to-gold-dust creatives are desperate to identify, control and monetize insights. But how do you find insight? Where should you look? And, most importantly, how can you think about it?

Worshipping at the altar of data We are all insight-blind. We live in an a society increasingly obsessed with measurement and analysis, striving for control and prediction, enthralled by KPIs and metrics. Too often, the predominant mode of thinking in business is rational, thoughtful and logical. It is, in the language of behavioural economist Daniel Kahneman, System 2 thinking – the conscious brain trying to analytically think its way out of holes or into pastures of disruptive fertility. System 2 does not lead to insight. To be clear: I am not against data. But, especially at a time of Mr. Robot and Westworld-inspired fear and awe, data should not be worshipped at the expense of human characteristics such as emotions, humanity and storytelling.

Putting up walls Compartmentalization is one of the most implacable enemies of insight. And, unfortunately, as companies grow and evolve, departments are increasingly fragmented. These fragmented ‘compartments’ tend to become self-reinforcing in-groups, patrolling their boundaries against all outsiders.

Taking shortcuts to frozen wastelands Our individual brains require constant challenge. This is because the brain relies very heavily on steadfast shortcuts, called ‘heuristics’, it – unconsciously – develops to minimise the burden of having to think for ourselves at every turn. If we let heuristics go unchallenged, however, our brains quickly become home to frozen assumptions and insight-barren tundras. Taking into account that we are so inherently and culturally ill-equipped to seek out the mythical beast of insight, I instead propose a new practice: insightment. Dialogue Q4 2018

The most exciting phrase to hear in science, the one that heralds new discoveries, is not “eureka!”, but, “that’s funny!” – Isaac Asimov, science fiction writer and biochemist



The solution

Divined from the words ‘incite’, ‘riot’ and ‘excitement’, insightment is the practice of allowing failure, naivety and surprise to mix, muddle and stew in the brain until we attain true insights. The recipe for insightment has four ingredients:

1 PART FAILURE + 1 PART NAIVETY + 2 PARTS SURPRISE a) Accept failure The word ‘error’ find its roots in the Latin, errare – which is curious, because errare doesn’t have anything to do with ‘mistake’ or ‘failure’. Errare, in fact, means ‘to wander’. Pulling a negative connotation from a word describing magnificent meandering, and applying it to everything that doesn’t go 100% according to a plan has furthered humanity’s failure-fearing frenzy. But with a fan base ranging from scientific geniuses Charles Darwin and Vilfredo Pareto, to modern creative giants such as Being John Malkovich writer Charlie Kaufman, failure and error have crucial – and liberating – powers. So we need to wander more, safe from a fear of failure, and idly daydream whilst unconscious System 1, with its myriad experiences, memories and imagination, works playfully and serendipitously.

b) Be naive Hemmed in by groupthink. Frightened of going against our tribe/team/company. Trapped, bouncing around the echochamber of our own frozen assumptions and conventions. Insightment will mean ‘unthinking’ and liberation from the prison of logic, and extending cognitive diversity. There is strong evidence that the accuracy of experts in all fields is disconcertingly mythical. Much has been written by the likes of University of Pennsylvania Professor Philip Tetlock about our over-reliance on our narrow expertise. Tetlock and others have explored how it is a hindrance to genuine new thinking of all forms.

N OTA B L E N A I V E T Y Michael Ventris decoded Linear B

European exiles founded Hollywood as we know it

So we need to resist the lure of seeing things only from the inside, and act like outsiders, making new connections, seeing new links and creating genuinely disruptive ideas.

c) Seek surprise Of the six universal human emotions named by psychologist Paul Ekman, ‘surprise’ is perhaps the least appreciated. Identified by a shock or twist of recognition, surprise moments (known as ‘external serendipitous influences’) penetrate our consciousness and cue an emotional “aha”, “eureka!” or “that’s funny” response. Without that emotional cue, insightment is doomed to fail.

To insightment and beyond

So, let’s go out of our way to decompartmentalize our thinking and work, and flood our human, colourful, intuitive System 1 with cross-cultural, inter-disciplinary randomness, serendipity and spontaneity. Let’s seek out the challenging and the quirky, the eclectic and the arcane. Let’s create insightment. — Anthony Tasgal is the author of The Inspiratorium and 2016’s Marketing Book of the Year runner-up, The Storytelling Book. He is a trainer, lecturer, speaker and brand strategist. Tweet him @taswellhill Q4 2018 Dialogue



The spin myth Message integrity is fundamental to great PR, writes Sandra Stahl

Dialogue Q4 2018


Fake news. Alternative facts. Lies. These phrases have, regrettably, rapidly become part of the vernacular. No wonder there is a crisis of public trust in business, institutions, government and political leaders. The need for ethical communications has never been stronger. Public relations is the discipline to lead the way. Ethics has always been a critical tenet of the PR profession, and practitioners draw on a set of principles that guide clear, consistent, compelling and credible communications. Some might be surprised to learn that the core value of PR is honesty – followed by advocacy, loyalty and objectivity. This might be because, for too long, PR has been associated with spin – a derisive term. The fact is that PR cannot and does not make negatives – situations, actions or deeds – sound like positives. For example, PR would not be employed by a company as part of an effort to spread intentionally false statements. To do so would compromise the integrity not only of the PR professionals involved but, equally importantly, anything that company wanted to say in the future. A PR practitioner would instead counsel a company to face a negative situation: own it with communication that reflected its values and conveyed care and respect for those who may have been directly impacted. There are very few second chances once trust is compromised. Message integrity is fundamental to PR, and key to trust.


The ethics dividend

Think about the primary characteristics of any positive relationship, whether business or personal. What really matters to you? Trust, satisfaction and commitment are typically at the top of the list. These are all outputs of communication that have shared roots in ethics. PR professionals embrace these as part of the duties of the discipline because, at its core, PR is about helping a company, institution or even individuals relate to the public or to specific stakeholders in ways that address issues, solve problems or, at the very least, open a dialogue. Success requires communications based on serious thought, research, understanding of the audience targeted, and true reflection. These steps enable PR professionals

to suspend judgment and walk in the shoes of an audience to see things from a point of view that may not be their own. The availability of data makes a significant difference, particularly in strategic planning, as it might reliably reveal the preferences of a target audience and their behaviour based on their past actions. This information is powerful because it allows the PR effort to begin from a position of understanding.

The community factor

Honest exchange and a desire to contribute are foundational to corporate social responsibility (CSR) and strategic partnership initiatives. While there is no doubt that some CSR efforts also burnish the reputation of the sponsoring company, it is also unquestionable that they provide significant benefits. There are countless examples of

“To solve real-world problems, you need realworld dialogue. That is what PR does best” – Mike Fernandez, former chief executive of PR agency Burson-Marsteller community programmes created, undertaken or underwritten by corporations that have led to muchneeded improvements. The one that always stands out for me is an effort called Give Kids a Smile (GKAS). Launched by the American Dental Association in 2003, and sponsored by Henry Schein, Colgate and KaVo Kerr, Give Kids a Smile began as a way for dentists to partner with aligned oral health professionals and others to provide dental services to underserved children. According to the press release distributed last year for the GKAS 15th anniversary, more than 5 million underserved children have received free oral health services from approximately 40,000 dental professionals since the programme’s inception. Give Kids a Smile has now grown into the largest children’s oral health charitable programme in the US. The cynic might ask whether it was primarily an ethical decision by the sponsoring companies to fund GKAS or whether there was another, more self-serving agenda at play. Stanley Bergman, chief


executive of Henry Schein, a founding partner of GKAS, addresses that type of question best in his explanation of his company’s philosophy of ‘enlightened self-interest’. “Strong financial performance and services to the greater good are mutually reinforcing objectives,” he says. More detail can be found in the 2014 Harvard Business School case study Henry Schein: Doing Well by Doing Good? PR is as integral to GKAS as it is for many successful CSR efforts. As Mike Fernandez, former chief executive of the PR agency Burson-Marsteller, says, “To solve real-world problems, you need real-world dialogue. That is what PR does best.”

The principled profession

While ethics are and have always been fundamental to PR, the unfortunate state of the overall communications environment has prompted international PR organizations to emphasize ethics in foundational PR classes as well as professional development courses. This is a good thing. More, in this case, is better. The Commission on Public Relations Education, for example, released a major report this spring based on three years of research conducted in the US and abroad. It called for the enhancement of codes of ethics and an agreement on an overarching set of principles to guide the PR profession, from students to PR instructors and those who hire them. The goal, the commission says, is to enhance and elevate the reputation of PR as the guardian of trust. There are many resources available, including case studies, guidance or courses of study, about ethics. These are valuable for anyone operating in today’s complex, noisy and sometimes confusing communications environment, whether a newcomer to PR or a seasoned professional. Our contemplation of, and adherence to, formal PR codes and, more importantly, our own moral conscience, enables PR to keep companies and organizations on the high ethical plane that instills pride across the business and withstands external scrutiny. Jean-Paul Sartre once mused that “words are loaded pistols”. Communication is and has always been powerful. An ethical focus is PR’s protection against a damaging misfire. — Sandra Stahl is founding partner of the PR agency, jacobstahl, and author of The Art & Craft of PR Q4 2018 Dialogue



The write stuff

A great customer experience can be found in the quality of written artifacts, says Jon Picoult

More and more companies are working to enhance their customer experience. But they might be focusing on the wrong thing. In their haste to make quick improvements, firms neglect to step back and truly understand the universe of touchpoints that comprise their total customer experience. Instead, they target the usual suspects, such as the physical design of a product, the soft skills of sales and service people, or the answering speed on a freephone line. Those are all legitimate areas for attention. The problem, however, is that companies tend to overlook parts of their customer experience that appear unimportant and mundane, yet actually exert a meaningful influence on customer perceptions. A great example of these oft-ignored interaction points are the static, written artifacts that accompany the customer experience. These include sales proposals, contracts, instruction sheets, correspondence, account statements, and invoices, just to name a few. Many companies view such documents as mere administrative details. From the customer’s perspective, however, these materials often are the experience – or at least a significant part of it.

The real experience

A great example of these oft-ignored interaction points are the static, written artifacts that accompany the customer experience Dialogue Q4 2018

A classic example of this dynamic comes from the ‘explanation of benefits’ (EOB) statements sent out by US health insurers. Every time an insured customer receives medical care, an EOB is triggered. In theory, EOBs are meant to explain what a practitioner charged, what insurance covered (and didn’t cover), how much the insured is responsible for paying and why. In practice, many EOBs are practically indecipherable – one was even recognized by the Center for Plain Language as one of the most confusing customer statements on the planet. The typography of such statements, the lack of white space, the absence of clear headings – all makes such documents visually unappealing and difficult to navigate. EOBs are a great example of written experience artifacts that confound rather than clarify; that generate more questions than they answer. What’s fascinating, though, is that for most consumers the

EOB is the face of their health insurer. The EOB is, by far, the most frequent touchpoint consumers have with the company that pays for their medical expenses. Yet few insurers treat it as such, and instead continue to issue EOBs that cement health insurers’ position at the bottom of most customer experience industry rankings. For a contrasting example, consider Delta Airlines’ redesign of the passenger boarding pass back in 2012 – a change which, in part, has helped elevate Delta’s standing in airline customer experience rankings. Here, again, we have a physical document that largely fell under the radar in airlines’ passenger-experience improvementefforts, despite being an important navigational tool during travel. If anything, it seemed that airlines were in a competition to create the most cryptic, perplexing boarding document that made it difficult for travellers to quickly find the information they needed (such as final destination, boarding gate and time). Delta’s redesigned boarding pass exhibited a much cleaner design and organized information in a way that was much more relevant to their customers. For example, most boarding passes display the passenger’s origin and destination city in the same font size. What Delta realized is that people know what city they’re currently in. Of greater interest is to make sure they’re headed to the right place. So, Delta made the destination city – in name, not three-letter airport code – more prominent on the new pass. In addition, by eliminating clutter on the document, Delta was able to include information for multi-leg trips, obviating the need for passengers to keep track of multiple boarding documents. Delta also emphasized information on the new pass that would be of value to its employees. The passenger name is printed in a larger font, and presented by first, then last name, thereby making it easier for Delta staff to address customers personally.

The ripple effect

Whether it’s an EOB, boarding pass, or any other customer experience artifact, the influence of these materials goes far beyond the creation of a




S Y35

OORD RD M SY MSY It seemed that airlines were in a competition to create the most cryptic, perplexing boarding document

pleasing aesthetic. Yes, their visual appeal does serve as an experience cue for the customer, shaping, for example, the brand traits that people associate with a business – simple versus complex, clear versus confusing, easy versus difficult. However, these artifacts also have a very tangible operational impact on the business. If customers receive a health insurance EOB and can’t understand it, what will they do? They’ll call their insurer. That inflates call volumes, puts more stress on the firm’s operating infrastructure, and drives up cost. In addition, since that telephone call is born out of frustration, it means that customer interaction begins from a point of negative sentiment. Similarly, there are operational consequences when airline passengers struggle with their boarding pass. People arrive at gates late, need help finding their seat, or ask an airline representative to issue a duplicate pass for one they lost. That drives expense, it could even delay flights, and it certainly consumes the time of airline staff unnecessarily. The key point is that written artifacts not only affect the customer’s immediate experience, they also influence other downstream interaction points either positively or negatively.

How to capitalize

Here are a few tips to help ensure that written materials enhance your firm’s customer experience, rather than detract from it:

Pay attention to artifacts Begin by making certain that seemingly mundane or administrative written materials are not disregarded in the course of your customerexperience improvement-efforts. Instead, consider the influence of these materials on the experience from the customer’s perspective.

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Strive for simplicity We get paralyzed when our brains are faced with complex, incomprehensible written documents – sales prospects sit on the sidelines, customers get disengaged. Aim for great visual appeal, readability, a clear storyline and simple vocabulary that elevate the experience instead of complicating it.

Preempt the next question Deficiencies in static artifacts inevitably drive unnecessary, loyalty-sapping, expense-inflating customer inquiries – “I don’t understand this instruction sheet”; “I can’t figure out from this bill when my payment is due”; “What do you mean by this contractual term?” Construct written materials so they proactively answer, and therefore preempt, the customer’s next likely question. In this way, you’ll not only deliver a better and more effortless customer experience, you’ll likely do it at a lower cost. Business leaders are easily enamoured by customer-experience improvement-tactics that are garnering the latest buzz – predictive analytics, artificial intelligence, digital transformation – to name a few. As a result, less ‘glamorous’ initiatives – such as those that focus on the written word – struggle for attention and investment. That’s a problem, because these static artifacts can represent one of the most frequent and prominent interaction points that companies have with their customers. Treat these artifacts with the respect they deserve, because when it comes to customer experience differentiation, it’s wrong to ignore the write stuff. — Jon Picoult is founder & principal of Watermark Consulting Q4 2018 Dialogue


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Embracing vulnerability boosts credibility

There’s a human inside every manager Patrick Woodman is head of research and advocacy at the Chartered Management Institute

As a leader, how do you think of yourself? confidence. Handled right, credibility can How do you want others to see you? be enhanced by admitting to not knowing. Confident. Dynamic. Transformational. Admitting vulnerability and fallibility is Strategic? All of those, perhaps. Where does another human quality that sits outside the ‘human’ fit in the list? traditional leadership handbook. Yet one Being human has often been seen as recent report highlighted the lack of trust the precise opposite of what’s expected middle managers feel in their senior leaders of managers and leaders. We’re seen as due to a perceived lack of transparency. rational decision-makers, allocators What do middle managers want? They of resource. As shapers and executors want leaders to share what they’re of strategy. As providers of vision and thinking – and to admit to mistakes. For direction. But rarely as fully human, with too many, though, that admission of all the frailty, fallibility and emotional failure and vulnerability remains a deeply baggage – and wonderful creative potential uncomfortable prospect. – that brings. It’s vital that leaders de-stigmatize Happily, that has started to change. One failure: both to help people be more of my favourite books of resilient and to ensure the last few years, and that fear of failure CMI’s Management Book doesn’t stifle innovation. Being human has of the Year in 2015, was It’s also crucial for our often been seen as Not Knowing by Diana wellbeing. If we can’t the opposite of what’s Renner and Steven admit vulnerability, expected of leaders D’Souza. (Their followwe’re stacking up the up, Not Doing, appeared pressure on ourselves. earlier this year.) It’s a mentality that Framed as the way to turn uncertainty represses problems and buries them deep. into opportunity, it made the vital point Managers and leaders can be particularly that not knowing all the answers isn’t only vulnerable: elevated to a position of okay – it’s positively inevitable. Better to responsibility, they can face significant come to terms with that fact, be prepared pressure. Middle managers can feel caught to admit it, and to understand how to between the demands of their teams and get answers where they’re available – or the expectations of those leading the how to make decisions where answers organization, while senior leaders are just are impossible. Without that approach, as prone to burnout and mental health managers will be trapped by an challenges as anyone. endless hunt for robust data and Yet mental health is still often second conclusive insights. best to physical health-and-safety when In an ever-more data-rich world, being it comes to employer action. In the UK, a prepared to say “we don’t know” is an campaign for employers to appoint mental important principle for business agility, and health first-aiders alongside physical one leaders would do well to learn early. first-aiders – which are required by law – is Of course, some leaders will say gathering pace. It’s surely something that that their credibility hinges on being any employer serious about mental health the person who knows – who has a plan should look at – to make sure that those and the answers to others’ questions. suffering can access help quickly. Saying you don’t know can be distinctly No manager should be shamed for uncomfortable. But pretending to know admitting their limits. It’s time to let that is bluster, and is corrosive of trust and humanity shine through. Q4 2018 Dialogue




The principles of success The minds of great leaders reveal eight universal laws WRITING


Adam Quest

Dialogue Q4 2018


Q4 2018 Dialogue



About 30 years ago, I initiated a study called The Combat Leadership Study. This grew out of a quest to find the most challenging leadership situation, those leaders who successfully overcame it, and how they did it. There are many challenging scenarios for leaders in different sectors: in the hospital room, unexpected situations on the street, emergencies at sea or air, and road traffic accidents. There are also police confrontations involving hostages, or someone with a gun. But leaders in one particular field may be confronted by any or all of those challenges mentioned above: it’s hard to beat the almost daily leadership challenges facing those in the military when waging war.

Battlefield leadership presents the greatest challenge

A leader can be popular, but if he lacks integrity of character, he is not fit to be a leader Dialogue Q4 2018

The fog of war cuts off the flow of intelligence and means battlefield leadership is often based on scant data. As Drucker pointed out to me, “In no other type of leadership must the leader make decisions based on less reliable information.” So, battle probably represents a worst-case scenario – the one I was seeking to identify in my study. No wonder traditional employment motivators, such as high pay, good benefits and job security, aren’t very effective in attracting applicants. There is no ‘business as usual’ on the battlefield. Not only that, but when leading under these terrible conditions, successful combat leaders have to get things done ethically, honestly, and where possible, humanely. Nevertheless, from 95% of the responses I received from my survey of leaders in battle, I was able to identify eight universal principles, or laws, for successful leadership (see opposite). Each of the leaders who participated in my study said one or more of these eight principles had helped them achieve extraordinary results in their careers. Several wrote special notes or letters to express their support for my project. General Ronald Fogleman, who was chief of staff of the US Air Force, wrote the foreword to my first book on these eight universal laws. Many successful leaders wrote testimonials and allowed me to publish them. These included those with military experience, such as General H Norman Schwarzkopf Jr, who had then recently led and been successful in the Gulf War; and retired general and later Secretary of State Alexander Haig Jr; as well as astronaut Colonel Frank Borman and former US Marine Bob Lutz, who was then vice chairman of the Chrysler Corporation. There were also testimonials from leaders with no military experience, such as billionaire Bill Bartmann; and Barry Gordon, former and longest-serving president of the Screen Actors Guild. Bartmann, who made and lost several fortunes, was once listed as the 25th wealthiest man in America.

I had a lengthy discussion about each of the eight principles with Peter Drucker, which was published in my book Drucker on Leadership. We had gone to his favourite Italian restaurant in Claremont near where he taught and, over a spaghetti lunch, I went over my research in some detail. This is what he said…



Integrity first

Drucker said: “You are entirely right and absolutely correct in listing this as your first law. A leader can be well-liked and popular, and even competent, and that’s all well and good, but if he lacks integrity of character he is not fit to be a leader.” Drucker had written in one of his books: “Character is not something you can fool people about. The people with whom a person works – especially subordinates – know in a few weeks whether he or she has integrity or not. They may forgive a person for a great deal: incompetence, ignorance, insecurity or bad manners, but they will not forgive a lack of integrity.”


Know your stuff

Drucker said: “This seems obvious, but some managers do try to cut corners rather than mastering the knowledge that they must have and that is essential to the quality of their performance.” Drucker wrote: “. . . leadership rests on being able to do something others cannot do at all or find difficult to do . . .”


Declare your expectations

Drucker said: “I’m uncertain what you mean by this. If you mean that a leader should declare his objectives, his mission – by all means.”


Show uncommon commitment

Drucker said: “The failure of many is because they show no commitment, or commitment to the wrong goals. This gets back to your third law. Commitment comes from a worthy mission and then strong commitment.” Drucker wrote (referring to what non-profits could teach business): “. . . non-profit directors


BEHIND THE STUDY To conduct my study, I sought subjects who had not only led in battle, but also had gone on to demonstrate successful civilian careers in nonmilitary activities as well. The foundation of my research was a survey sent to more than 200 former combat leaders and conversations with hundreds more. All had become successful in the corporate world or in other nonmilitary organizations after leaving the armed forces. Among the responses I received in the initial phase, 62 were from generals and admirals. I asked these

former combat leaders what they had learned from leadership in battle. I asked about the tactics they used, about the importance of their style, and the most important actions a leader must take. I asked about adapting these lessons in their civilian careers. In a latter phase of my research, I interviewed other successful senior business leaders and reviewed dozens of corporate situations and the actions taken by these corporations’ senior leaders. Some had also combat experience in the armed forces. Most did

tend to have a personal commitment to the organization’s cause. Few people sit on a church vestry or a school board unless they deeply care about the religion or education.”


Expect positive results

Drucker said: “There is a cautionary tale. One must not be a ‘Pollyanna’. Still the central thought is correct. One cannot be negative and succeed in anything.” Drucker wrote: “Whenever you see a successful business, someone once made a courageous decision.”


Take care of your people

Drucker said: “Many managers are failing to do this, and it will catch up with them.” Drucker wrote: “A leader has responsibility to his subordinates, to his associates.”


Duty before self

This point requires some further clarification. What I meant by this is that the leader has a duty to accomplish the mission, and a duty to take care of those for whom he or she is responsible. The leader’s own needs must come after fulfilling this duty. Drucker said: “This should be the basis of all leadership. The leader cannot act in one’s own interests. It must be in the interests of the customer and the worker. This is the great weakness of American management today.”

not. Some had developed their own lists of principles of leadership over the years. While their lists differed from each other, they invariably included some version of the eight responses I had developed from my surveys. I also looked at 7,000 years of recorded history to confirm or to disprove these concepts in different settings. There was an abundance of evidence which supported most of the principles which I had uncovered from my first research with combat leaders, but when I found little or no confirmation, I dropped it from my list.

Drucker wrote: “Douglas MacArthur . . . built a team second to none because he put the task first . . He was also unbelievably vain, with a tremendous contempt for humanity, because he was certain that no one came close to him in intelligence. Nevertheless, he forced himself in every single staff conference to start the presentation with the most junior officer. He did not allow anybody to interrupt.”


The leader cannot act in his own interests. He must act in the interests of his customer and workers

Get out in front

Drucker said: “Very true. Whether a junior leader or the chief executive, the leader must be where the work is the most challenging. During World War I, deaths among higher-ranking officers were rare. Too few generals were killed.” Drucker wrote: “. . . the human being himself determines what he contributes.”


The other day, I was looking at what Bill Bartmann wrote in his endorsement of my first book on the eight laws of successful leadership. He had written: “You have discovered the essence of success. It will be mandatory reading for all of our managers because it will not only help them to become better leaders, but also enjoy a more successful life.” Bartmann was right. Those military personnel I surveyed for my combat leadership study had used these eight principles to become successful leaders. As Bartmann said, these eight laws are the essence of leadership success. And, judging from our discussion on the topic, Drucker clearly agreed. — Adapted from the book Peter Drucker’s Way to the Top by William A Cohen, to be published by LID in 2018 and syndicated Q4 2018 Dialogue




Dialogue Q4 2018


Goodbye, fat cats Leaders must be physically fit to lead so their employees follow them, writes Kate Cook

Obesity kills your business. It is a clear and present danger on both sides of the Atlantic. A study of 15,000 people in the US and UK found that overweight people were 15% less productive than their healthy colleagues. This productivity deficit is grave: studies show that the US economy is losing $43 billion a year because of the obesity crisis. As a leader, you likely know this. You are probably already aware that the physical health of your employees – or lack of it – comes with high commercial and social costs. You know the conventional countermeasures. You may have installed a wellness programme. You have probably already hired consultants to help encourage your staff up from their desks by way of digital detox. You might even have introduced lunchtime yoga. None of these are enough. My work with businesses over two decades reveals that unless healthy nutrition and healthy lifestyles are built into the DNA of every organization – and championed from the very top – most programmes are doomed to failure. Too often, balanced diets and active lifestyles are seen as a ‘nice to have’. They are typically allocated to the HR department as part of its responsibility to develop benefits and perks for employees. What they should be is fundamental to the strategic plan for the company. Thus, outcomes must be absorbed into the mindset of leadership. Frequently, they amount to little more than a few ‘lunch and learns’ for which the engaged people who don’t need them turn up, and the very people for whom they could be a lifeline remain glued to their desk – anxious about the impact on their workload, having been given neither space nor express permission to step away from their burgeoning email pile. If they take an hour off for lunch to listen passively – they fear they will simply pay for it later on by lingering even longer at their workstation. None of this is to say that lunch and learn sessions cannot be useful or good. But where is the strategic plan, and where and how is the benefit to the company actually measured? It is on these two key questions that leaders have a huge role to play. It is true that the pinnacle of an organization is a lonely place. It is easy to think, from your



Studies reveal that overweight people are 32% more likely than the mean to miss work P O O R LY PEOPLE


Studies reveal employees who are clinically obese are 62% more likely than the mean to call in sick

Only by leading by example will it be possible to inspire your employees to adopt healthy lifestyles

isolated standpoint, that the wellbeing of an organization is for ‘them’, not you. You power through stuff. You are paid to bear stress, right? Wrong. As a leader, you must live and breathe wellbeing. Only by leading by example will it be possible to inspire your employees to adopt healthy lifestyles. Enjoying a nutritious balanced diet should be a core responsibility to the business. It is a leader’s role to project that responsibility onto everyone in the organization by living it themselves. If the enthusiasm for wellbeing – both for mental and physical health – of your staff doesn’t begin with you, and the message doesn’t run all the way through the company, wellness initiatives are always just a box-ticking exercise. Your talent. That’s what you call the people who work for you. If you are a leader, you spearhead your tribe; you want to do everything that you can to look after the people who come through your company’s doors every day. That way your organization retains those clever, talented people. If you have engaged, alert and energetic staff, you can fend off competition, make more profit and win the day. Faking it as a leader is worryingly common. I have seen plenty of leaders struggle through meetings then having to snooze in the car park or literally under the desk. It is common for those in command to have just four to six hours sleep a night. The work of Professor Matthew Walker blows out of the water the idea that sleep is something we can do when we are dead. In fact, we might be dead sooner than we planned if we don’t heed him, since his evidence shows the damaging effect sleep deprivation has on the mind, body and immune system. There is a better way, but it starts with you. Bringing wellbeing into the DNA of your company is a key part of your role. How you plan to live a fulfilled, happy and healthful life permeates the place you lead. It will pay dividends on the engagement and happiness of your most precious asset – your workforce – and, thus, your business. — Kate Cook is a nutrition and wellness expert, international speaker and author of seven books. Her latest, Positive Nutrition, was published by LID in May 2018 Q4 2018 Dialogue




The rogue state The world has demanded North Korea unilaterally lays down its nuclear arsenal. It has refused. But is there still a way to improve diplomatic relations with one of the world’s most closed nations?








Percentage of North Korean energy derived from hydropower. Conversely, the majority of North Koreans do not have safe drinking water



FAC T F I L E N O RT H KO R E A Land area


Official languages

sq mi

(120,408 sq km) Population


Korean GNI per capita



Life expectancy


75 Women

Major religions

None Dialogue Q4 2018

Drip, drop

67 Men

We’re never out of diplomatic solutions Commander James Mattis, US Secretary of Defense

Against outside influence


Official philosophy of North Korea: Juche, or ‘self-reliance’ – said to be founded to prevent ‘influence’ from the outside world

Close enemies


Distance in miles between North Korea’s main weapons and South Korean capital, Seoul



Join the Dialogue


1.2 million

Suggested size of North Korea’s armed forces. This figure does not include the country’s almost six million paramilitary reserves


250,000 – 3.5 million

Estimated number of North Koreans who have died from starvation or thirst due to poorly handled agriculture


US $1.3 billion

Aid given to North Korea by the US between 1995 and 2008

The United States has been talking to North Korea, and paying them extortion money, for 25 years. Talking is not the answer!

www.dialoguereview.com @DialogueTweets @dialoguereview Dialogue Review Direct comments, queries and suggestions to: journal.editor@ lidpublishing.com


Dr Liz Mellon, chairman Tom Albanese, chief executive, Vendanta Resources Michael Canning, chief executive, Duke Corporate Education Professor Pedro Nueno, president, China Europe International Business School Ben Walker, editor, Dialogue

US President Donald Trump, via Twitter EDITORIAL

Ben Walker, editor Kate Harkus, art director Luisa Cheshire, chief subeditor Kirsten Levermore, assistant editor Miro Iliev, digital products marketing executive MANAGEMENT

Martin Liu, publisher Niki Mullin, business development director niki.mullin@lidpublishing.com Alexandra BoudreaultManos, business development executive Shutterstock.com

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Published in the United Kingdom by LID Publishing Studio 204, 16 Baldwins Gardens, London, EC1.

Disclaimer Copyright 2018 by Duke Corporate Education and LID Publishing Ltd. All rights reserved. Material may not be reproduced without permission of the publisher. While we take care to ensure that editorial is accurate, independent, objective and relevant for the readers, Dialogue accepts no liability for reader dissatisfaction rising from the content of this publication. The opinions expressed or advice given are the views of individual authors and do not necessarily represent the views of Dialogue. This journal is also supported by Knowledge Partners, including Duke Corporate Education as Lead Knowledge Partner. Whenever an author is related to a Knowledge Partner it will be noted as such. Dialogue takes every effort to credit photographers but we cannot guarantee every published use of an image will have the contributor’s name. If you believe we have omitted a credit for your image, please email the editor. ISSN 2053-4361 Printed by Pensord www.pensord.co.uk

Q4 2018 Dialogue




A passport to numeracy Dr Philip Young shows a way through the woods, finds Ben Walker

Buy Low, Sell High Dr Philip Young Published by LID bit.ly/buylowbook

Dialogue Q4 2018

Numbers matter. The survival of businesses is based on them. Yet too few people understand them. This is partly the fault of the way workforces are divided into those who have a named finance role and those who do not. It is partly the fault of the financial sector itself, which dresses up relatively basic principles into fancy language. And it is partly because, some time ago, literacy quietly overtook numeracy as a matter of parental and professional prestige. So deep has the latter trend become that, as the published expert mathematician John Allen Paulos notes, otherwise intelligent people take a perverse pride in “not being a numbers person”. Dialogue columnist Dr Philip Young is a hero of the fightback. Young, a former MBA professor, has been teaching numbers to ‘non-numbers people’ for decades. In his latest book Buy Low, Sell High he strives to demystify financial language, beginning by spearing the sector for its habit of using several terms for the same measure and serving endless helpings of alphabet soup via its obsession with initialisms. But there is much more to this book than Young’s pointed commentary. Readers will find an insightful explanation of accrual accounting which, as many accountants will attest, remains depressingly unfamiliar to many outside the sector. My old schoolmate, a financial adviser, uses the peculiarly British custom of round-buying in pubs to explain the concept to his English clients. That your friend happened to buy the first round of drinks doesn’t mean you are a pint of beer in credit, as you are morally (and financially) bound to buy him a drink at the next visit to the bar in recompense. Young prefers toothpaste, saying that at the moment you ship $100,000 worth of said cosmetic to your customer, you credit your accounts with the order, regardless of the fact you will not receive the payment until several weeks later. Similarly, producing that toothpaste comes with attendant costs – but you need not debit your balance sheet with those costs of sale until the goods are shipped, even if they have already been paid for. Of course, Toothpaste Plc could go bust if its customer doesn’t stump up

the $100,000 at some point soon. Indeed, most firms that do go to the wall do so at the point of poor cash flow rather than lack of orders per se. Young devotes an entire chapter to this, exploring in characteristically clear language how to calculate (and maximize) available cash within what is tolerable by customers and suppliers. The lessons run longer, covering profit




A footloose world


The gig economy can be unlocked with the proper tools, discovers Luisa Cheshire

margins, the cost of capital, shareholder value and everything in between. Financial illiteracy – ‘innumeracy’, as John Paulos has it – is not irreversible and should not be a point of pride. Young’s simple, clear, entertaining book is part of the solution. Next time you encounter a ‘not a numbers person’, buy it for them as a gift. — Ben Walker is editor of Dialogue

“I’d seen the weather forecast – so I worked ten-hour days all Saturday and Sunday when it was raining, so I could sunbathe the following Thursday and Friday in the coming heatwave,” one freelance colleague told me, explaining why she refused to take a staff job despite several offers for her signature. “I can’t see an employer ever being able to grant that level of flexibility.” The gig economy is by turns exciting, liberating and terrifying, depending on your point of view – and your mood. Gigging can be a pleasant existence if you are good at it: you need a well-paying, reliable client base; exemplary standards of self-organization; and – to make the most of it – a willingness to enjoy the quieter periods while being able to secure future income. Many of the great freelancers I work with admit that they struggle most profoundly with the latter part. Because all their ‘holidays’ are unpaid, the tendency is to fret about them to the extent they don’t enjoy them, or don’t take them at all. Marion McGovern is here to help. Her invaluable handbook offers superior insight for those working as, or looking to become, gig workers. She covers the crucial tools needed to harness this booming sector (44 million workers in the US alone, and counting); includes key insights into how to make

the most of the proliferation of gig platforms to make your entry into the sector easier and more fruitful; and offers valuable lessons in the minutiae of American employment legislation, personal branding and striking contracts. Yet this is not just a book for suppliers – it is required reading for companies that need to learn how to make themselves attractive to ultra-flexible freelance talent. Since chiefly office-based Baby Boomers began to dwindle in workplaces, the race towards a fully footloose world has quickened. Generation X introduced remote working. Millennials have been thrown into a global workplace where, as the great business philosopher Charles Handy says, those with a “proper job” inside a company are already in the minority. Thriving in the Gig Economy is a practical passport rather than a piece of futurism. But it made me wonder whether the nine-tofive is itself a sunset industry, and sweating on a Saturday to permit sunbathing on a Thursday might very soon put it into total eclipse. — Luisa Cheshire is chief subeditor of Dialogue

Thriving In The Gig Economy Marion McGovern Published by New Page Books bit.ly/gigeconomybook Q4 2017 Dialogue





The cloud engages where traditional approaches fail

Embrace the seven styles of learning Christian Smythe is head of content & partner strategy at BlueBottleBiz

With the technology we have today, there is no excuse for learners to fall through the cracks, and trainers have no excuse to let them Dialogue Q4 2018

What was your favourite lesson as a child? Why did you enjoy it? What do you remember learning? Can you take these and re-apply them to your working learning? We don’t all learn in one way. We all remember those disruptive kids in class who, when we look back now, just learnt in different, perhaps non-traditional ways. Many people who we deem to be successful struggled at school. Simon Cowell only has one O-level, Steven Spielberg was rejected from film school, and Russell Brand was kicked out of school at 16 for being a troublemaker. In fact, we all have different elements of seven learning styles. These are visual (spatial); aural (auditorymusical); verbal (linguistic); physical (kinesthetic); logical (mathematical); social (interpersonal); and solitary (intrapersonal). How many times have we heard, “Well I’m a physical learner. I need to learn by using my hands”? Especially as managers, we must deal with many different people with different learning styles. But there is not one type of learner; people are an amalgamation of learning styles. Yet they can prefer one style over another. In workplaces today, we must deal with these learning challenges. Up until the 21st century, we had very strict learning processes in the world of work. We turned up to our first day in the new office and, typically, were presented with a company handbook. These covered everything from your working day, contractual obligations and your health and safety briefings. The days of the traditional handbook might be numbered because trainers and HR professionals are beginning to realize that we all learn differently. So how can our in-work learning benefit from our childhood schooling? It is worth thinking about which teachers

and lessons you enjoyed and why you enjoyed them. Unfortunately for trainers, there is no one-size-fits-all solution to working out how people learn. We are quick to say how we prefer to learn from positive experiences, but often we are not honest about how effective they were. So we need to find ways that utilize every learning style. What should we do? Well, formalized training methods can fulfill a number of these styles, and great trainers can react to different types of learners. But for businesses that need to get new employees straight onto the workfloor, a training course may not be practicable. A solution to this is cloud learning. With courses, content, experts and support based in the cloud, learners can access their learning resources whenever they need to. Furthermore, different types of content can be accessed to assist each style of learning. Social learners can use collaborative features, while solitary learners can complete tasks by themselves. Visual learners can watch videos, while aural learners can listen to podcasts or audiobooks. Even with modern technology, verbal learners can use voice recognition software or recording apps on their phones to take notes and replay at a later date. And while kinesthetic learners may not be fully catered for as yet, the rise of augmented and virtual reality will mean that every type of learner will be able to utilize every piece of content to cater for their own learning style. While you can’t control everyone’s learning styles, you can control how they make the most of them. With the technology we have available today, there is no excuse for learners to fall through the cracks. And furthermore, trainers have no excuse to let them.





A sharp guide to the gig economy reveals that too many freelancers chase ‘likes’ over fees

Like me? Pay me

Piers Cain is a management consultant

Mizrahi is particularly interesting on the addiction of psychological reward that provides the worker with no actual income

Most of us will have heard of the ‘gig economy’, and probably associate it with internet-enabled businesses popular with the Millennial generation – Uber being an example. Olga Mizrahi, a digital marketing expert, has produced a slim ‘how-to’ guide for those contemplating making a living in this growing sector. Why should we care? According to a report by the McKinsey Global Institute in 2016, between 20-30% of the working age population in the US and EU-15 engaged in independent work, and 10-15% relied on this as their primary income. In the US, this could grow to between 30% and 50% in future. So, at some point this might be you. What do we mean by the gig economy? Mizrahi’s definition is vague: “Project-based on-demand services that can be provided by anyone” – which could be anyone from a plumber relying on word-of-mouth, through to drivers booked through Uber, people writing marketing blurbs via Freelancer, through to self-employed management consultants or other professionals. To a degree, this imprecision reflects reality. There are blurred lines between casual work, temporary work leading to full-time employment and start-up consultancies aiming to grow. Nonetheless, something is definitely happening. Who should read this book? It is mainly aimed at entry-level twentysomethings who have had only a basic introduction to the world of work, and who live (or are planning to work) in the United States. Most of the examples given are of platforms popular in the US, and advice on law and financial planning is very specific to the US context. More experienced readers might be mildly irritated that for a slim book (161 pages), space is taken up explaining that “taxes are the sum of money levied upon incomes and demanded by the government for its support” – and why this matters. On the plus side, Mizrahi provides a short, high-level and practical introduction to all aspects of being a freelancer: from how to develop your value proposition through to using online apps to get work; time management; good

practice and ethical behaviour; coping with bad reviews or rejection; and developing your career. Much of this advice could have been written ten years ago – and is none the worse for that –but as Mizrahi shows, some things have changed. This brave new world can be a bleak place. Mizrahi is particularly interesting on the traps and pitfalls of this internet-enabled market place. One is ‘gamification’ – designedin features that exploit our psychology to encourage certain forms of behaviour. This can lead to a sort of addiction where the worker becomes hooked into carrying out activities that benefit the platform provider in return for psychological reward (chasing ‘likes’, for example), but provide the worker with no actual income. Also some types of work can be done for clients anywhere in the world. The risk here is that workers from industrialized countries may find themselves competing on price with workers in emerging markets prepared to accept much lower pay. Bad news if you are based in a rich country. The author is also sound on the need to continually invest in developing one’s own skills, and to provide for the future in terms of pensions and the like. A risk of taking on only entry-level tasks is that one becomes trapped in a short-term mindset. Moreover, you are only as good as your last gig; so, freelancers must aim to produce excellent work every time. There are few second chances. Mizrahi is clear that freelancers should aim to be gradually increasing the value of their services and the amount of repeat business. I am left with the feeling that the best outcome for the freelancer would be to reach a position when she could ditch the tyrannical online platforms, work with a small number of regular clients – to ensure stability of income – on projects of increasing length and value. The internet-enabled gig economy may be a useful place to start out, or be a way of finding new clients from time to time, but it is not a comfortable destination. — The Gig is Up: Thrive in the Gig Economy, Where Old Jobs Are Obsolete and Freelancing Is the Future by Olga Mizrahi, Greenleaf Book Group Press, 2018 Q4 2018 Dialogue

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A diary for the mind The latest journal to hit the market only partly succeeds, finds Ben Walker

A crowdsourcing sensation, This Book Will Make You Stronger is clearly good for some people. It’s aimed squarely at male readers. Men are apparently much less likely to ‘journal’ (a trend so pronounced it has spawned a new verb) than women. The author, Ollie Aplin, wants to change that. Aplin’s mother committed suicide when he was in his late teens, which led to his suffering a mental breakdown. He argues that a characteristically male reluctance to be open about one’s feelings is a contributory factor in high male rates of anxiety and depression, which he claims are higher than those for women. I struggled with the book. Aplin’s pleading foreword achieved the opposite of its intention: its implicit assumption that I would be uninterested or suspicious of a journal aimed at men led directly to my being so. The lessons and exercises in the book sometimes felt contrived. The best journals allow the journaler to freely express thoughts and ideas. Here, the reader is corralled to write a rap, compile a bucket list and form a whole-life game plan. An ancillary aim of Aplin is to make readers adopt a regular writing habit. To this goal, he might succeed. The short

The best journals allow the journaler to freely express thoughts. Here, the reader is corralled to write a rap, a bucket list and a life game plan

exercises engender taut writing. For those that toil over written expression, the book might indeed make them stronger. As a life journal, it is of more modest utility. — This Book Will Make You Stronger Ollie Aplin, published by Ebury bit.ly/mindjournalbook


DIY apping is with us, discovers Perry Timms We are drenched in apps, platforms and software tools, and yet still you may have thought, “I wish there was an app for… (insert the chore or process that irks you most here)” Yet you didn’t know how to bring your idea to a developer, coding team or a new start-up venture. Well there is an app for that. Mockplus is a Web, iOS & Android app that lets you create the app you’d like to see built. No more sketches on a random collection of sticky notes; cobbled together slides of boxes and lines and fake sign-in screens. This app

has everything you need. Mockplus states it is “...a faster and easier prototyping tool to help you make prototypes by making interactions with simple drag-and-drop and working on a team project easily and effortlessly”. User Experience (UX) and User Interface (UI) are the tools of this app’s trade. You can envisage the full functional flow – without the pesky logic and coding necessary – to become a UX designer. Multi-user, social collaboration means you can inject teamwork into app design and testing; engage developers in other time zones and see how you can take a flat

intranet site, website or lengthy slide deck and turn it into an intuitive, engaging and useful app. Maybe we are all designers after all? See www.mockplus.com or Apple and Play stores. — Mockplus is an iOS and Android app — Perry Timms is an independent HR/OD practitioner, speaker, writer and CIPD adviser on social media and engagement. Follow him on Twitter @PerryTimms Q4 2018 Dialogue




Business leaders can learn from the mistakes – and triumphs – of religious movements in Central America

Sermons to do business by The Catholic Church in Guatemala is on a downward spiral. The magnificent Easter processions that fill the streets of its towns with penitents in purple robes disguises its decline from a monopoly position to under 50% of the population. The Church’s fall from grace here holds at least three lessons – or warnings – for firms a world away that are struggling with diversifying their workforce. On leadership Pope John Paul II was instrumental in the fall of Communism in Eastern Europe. The charismatic Pole was also key to the collapse of the Catholic Church in Guatemala. His ultra-conservative brand of Catholicism reversed most of the advances made at the liberalizing Second Vatican Council. The result was that, while large numbers of local priests worked against abusive militaristic governments, some bishops and cardinals had few qualms about buddying up with army-supported authorities. A chief executive delivering rising profitability may be looked on as favourably as Pope John Paul II was in Europe. But without a commitment to diversity and inclusion policies those profits won’t be sustainable, given the battle for talented labour. Financial services are in desperate need of talent. Headhunters Korn Ferry report that London will be facing a shortage of more than half a million workers in financial and professional services by 2030. A leader’s tone and interest in delivering more diversity are instrumental in attracting and retaining the best workers. And the more diverse the workforce, the better the firm’s chances of survival in our fast-changing world. On communication On my recent visit to Guatemala, I watched a wizened, ancient priest celebrate Easter Mass in the town of Antigua’s main church. The audience of indigenous Indians and mestizos listened to a sermon from the lips of this very white Italian. He is probably a good man. Yet he, and his sermon, were uninspiring. Compare that with the dynamic communication of the Pentecostals. They have Dialogue Q4 2018

radio channels dedicated to national music like salsa and merengue, laced with religious lyrics. They, and other arriviste movements after the Catholic Church, own TV channels preaching lively, relevant sermons. And they are adept users of social media. From job ads to websites, how you communicate, and where you send your message, matters. A company that writes about its diversity and inclusion policies only on the recruitment page is missing a trick. The power of certain words mustn’t be underestimated either. ‘Aggressive’ and ‘competitive’ are red lights to women. The words that Schroders has on its website are a green light to all: “Find out about our people and how we value, nurture and celebrate them.” In the last year, this FTSE100 asset management firm has seen female applicants increase from 20% to 30% through a transformed communication strategy. On HR policies Evangelicals, Mormons and similar groups have made huge inroads into the Guatemalan population by targeting local leaders and helping them become the preachers of the new religious message. Every convert morphs into a recruitment agent. The religious movements help local populations with export projects – taking care of both spiritual and material needs. Financial services worldwide are facing recruitment competition from all sorts of glamorous start-ups. The companies that will thrive are those that take care of the spiritual and material needs of their workforce. For instance, ambitious Millennial men expect to spend more time with their children than their fathers did with them. At Virgin Money in the UK, 60% of dads are taking shared parental leave of 11 weeks, infinitely more than in most firms. In adaptation lies survival. The Catholic Church, instead, went to sleep on its Guatemalan throne. Many banking firms are transforming themselves. Those who don’t, risk following the Guatemalan church’s fate. — Karina Robinson is chief executive of Robinson Hambro

The companies that will thrive are those that take care of the spiritual and material needs of their workforce






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