Spring 2024: The Superpowers Issue

A transformational $15-million gift from David Feldman to the Rotman School of Management will develop future generations of real estate leaders

The David Feldman Centre for Real Estate and Urban Economics at U of T’s Rotman School of Management is poised to become one of the world’s leading hubs of real estate and urban economic education, research and community engagement.

Named in honour of real estate leader David Feldman, the David Feldman Centre will advance knowledge and meet an acute need for expertise on some of the most pressing real estate issues facing the world. The centre will lever U of T’s strengths in business, real estate and urban economics alongside other adjacent fields to equip students and executives with the skills needed to meet the challenges of changing real estate markets. It will do so by developing critical courses and co-curricular activities, and hosting engaging workshops and public events. The centre will also generate timely and cutting-edge research, sharing its insights with the broader community. In doing so, the David Feldman Centre will serve as a hub of active dialogue and idea generation that will influence the way we think about real estate and cities more generally.

The University of Toronto thanks David and Angela Feldman, their family and Camrost Felcorp, for their visionary gift, which will help shape the next generation of real estate and urban economic leaders and help us make cities better homes for all of their residents.

To learn more, visit www.rotman.utoronto.ca/FeldmanCentre

Features MANAGEMENT

Two of Canada’s most influential leaders visited the Rotman School recently for a wide-ranging discussion with Dean Susan Christoffersen (far right). 3M President Penny Wise (at left) and GE Canada CEO Heather Chalmers (Rotman MBA ’04) shared insights on leading through uncertainty, the evolution of corporate governance, building a culture of innovation and more. For highlights of the conversation, see page 68 for The View From the Top: Inside the C-Suite. See our inside back cover for a list of upcoming events at the Rotman School.

6

There Is No Planet B: Bringing Sustainability to Life

by Anita M. McGahan and Leandro S. Pongeluppe

A Brazilian cosmetics powerhouse is demonstrating the vast potential of large corporations to address climate change.

18

Conflict Resolution 2.0: The Mindset of the Possibilist

Interview by Karen Christensen

One of the world’s leading conflict resolution experts describes why conflict is natural — and why we should all aspire to be Possibilists.

24

How to Integrate ESG Into Your Organization’s DNA

by A. Barrack, W. Hejazi and S. McGeachie

The smartest organizations not only manage the ESG factors that are material to their business — they also recognize their interdependence.

PHOTO: EUGENE GRICHKO

32

Strategic Foresight: Creating Visions of the Future

by Octavio Egea and Arjun Shukla

The path ahead is neither linear nor predictable, but that doesn’t mean we should fear it. Instead, we can attempt to shape it to suit our context.

38

Personal Development 101: Introducing The Wheel of Self

by Maja Djikic

When five aspects of the self are working in harmony, change can happen organically. But what happens when the Wheel of Self stalls?

50

Measuring Digital Innovation: A Four-Stage Framework

by David L. Rogers

A simple framework can help leaders avoid the common mistakes made by corporate innovators — and accelerate their next digital success story.

68

The View From the Top: Inside the C-Suite

Interview by Susan Christoffersen

Two of Canada’s top corporate leaders share insights about their current mindsets and priorities with Rotman School Dean Susan Christoffersen.

56

Was It Me—Or Was That Gender Discrimination? The Impact of ‘Ambiguous Incidents’ on Women by L. Doering, J. Doering and A. Tilcsik

Addressing gender inequality at work requires an understanding of not just overt discrimination but also the realm of potential discrimination.

74

The Way of the Unicorn: The TransPerect Story

Interview by Karen Christensen

44

AI’s Effect on Jobs: Automation vs. Augmentation

by A. Agrawal, J. Gans and A. Goldfarb

Evidence is mounting that AI will have the greatest impact on tasks performed by high-wage workers — and will provide new opportunities for those at the lower end of the scale.

62

Unlearning Silence: How to Encourage People to Use Their Voice

by Elaine Lin Hering

At some point in our lives, we have all silenced others. Five strategies can help you encourage people to use their voice — and reap the benefits.

Self-made Unicorn Liz Elting describes her entrepreneurial journey and the steps she took to build the world’s largest provider of language and business solutions.

80

Navigating Without a Map: The Quest for First Principles

by Joerg Esser

To improve our orientation in a complex world, we need to shift our focus from business practices based on past experience toward the ‘first principles’ that underly them.

FROM THE EDITOR Karen Christensen

The Superpowers Issue

BEING MORE POWERFUL than a locomotive and able to leap tall buildings in a single bound were once considered impressive superpowers. But in today’s world, there are abilities that are far more useful for leaders than those displayed by the superheroes of yore.

As we show in this issue, today’s management superpowers include having strategic foresight, knowing how to manage conflict, fostering innovation, helping others grow, addressing both ESG and DEI issues and understanding AI’s pros and cons — to name a few. The best part: unlike Superman’s outdated powers, all of these can be learned.

We kick the issue off on page 6, where Rotman Professor of Strategic Management Anita M. McGahan and Rotman PhD graduate Leandro Pongeluppe show the level of impact that purpose-driven corporations can attain in the world, in There Is No Planet B: Lessons from a Sustainability Innovator.

On page 18, one of the world’s leading conflict-resolution experts, Harvard’s William Ury, shares insights for dealing with disagreements big and small, in The Mindset of the Possiblist. The smartest organizations do more than manage the ESG factors that are material to their business: they also recognize — and address — their interdependence. And on page 24, Rotman Professor Walid Hejazi, Executive-in-Residence Andrea Barrack and RBC’s Susan McGeachie show How to Integrate ESG Into Your Organization’s DNA.

Elsewhere in the issue, we provide insights for building up your superpowers in strategic foresight (Creating Visions of the Future, page 32); DEI (Was It Me or Was That Gender Discrimination?, page 56); innovation (Measuring Digital Innovation, page 50); creating an atmosphere of psychological safety (Unlearning Silence, page 62) and mastering uncertainty (Navigating Without a Map, page 80.)

Our Idea Exchange includes insights from Stanford’s A.J. Crum and co-authors (on optimizing stress); University of North Carolina’s Steven Rogelberg (on the perennial value of the 1:1 meeting); Amazon ‘Best Books of 2023’ author Scott Shigeoka (on the power of curiosity); as well as Rotman faculty Sarah Kaplan (on Upholding Indigenous Economic Relationships,) Gary Latham (on mastering goal-setting) and Executive-in-Residence Jennifer Lee (Rotman MBA ‘06) on ‘consulting 2.0.’

In her message to the Rotman community in January 2024, Dean Susan Christoffersen summed up the current leadership challenge succinctly — and touched on many of the ‘superpowers’ we cover in this issue:

We need leaders who can innovate and navigate a world that is rapidly changing while remaining true to their purpose and values…[and tackle] macroeconomic risks — climate, technology and social. The rapid pace of technological change is not only going to increase the need for people to understand the role of AI…[it] is going to elevate the importance of our human skills to strategize, to empathize and to engage with kindness, compassion and respect.

My ‘spidey sense’ tells me that embracing the Dean’s message will lead to perhaps the greatest superpower of all: Making a positive impact on your organization — and the world.

Karen Christensen, Editor-in-Chief editor@rotman.utoronto.ca Twitter: @RotmanMgmtMag

THERE IS NO PLANET B: Bringing Sustainability to Life

Brazilian cosmetics group Natura & Co.

is demonstrating the vast potential of

stakeholder-oriented

corporations to address climate change.

by Anita M. McGahan and Leandro S. Pongeluppe

MOST BUSINESS LEADERS now recognize that climate change is a grand challenge of the highest order. While there is vast potential for corporate action on this issue, relatively little is known in practical terms about how firms should go about managing their stakeholders to address environmental preservation.

In this article we will describe how a Brazilian cosmetics company has been working with its stakeholders to create positive impact on the Amazon rainforest. Founded in 1969, Natura & Co. is the world’s largest B-Corporation, with 2022 net revenue of US$7.4 billion. Recognized with the United Nations Champion of the Earth Award in 2015, it has also been the parent company for other purpose-driven brands including The Body Shop, Aesop and Avon. By aligning the interests of its stakeholders with its own, Natura is simultaneously achieving both financial and environmental aims.

Intrigued by the company’s innovative approach, we recently set out to assess how Natura aligns stakeholder interests to address environmental issues. In this article we will summarize our findings, which were recently published in Management Science.

The Tragedy of the Commons Nobel Laureate Elinor Ostrom defined the commons as ‘land or resources belonging to or affecting the whole of a community.’ Her seminal work showed that governing the commons is complicated because, by definition, members of a community compete to use its resources while, at the same time, those resources must remain accessible to all. These features, she argued, lead to ill-defined property rights, weak incentives for preservation and, consequently, to what she called the ‘tragedy of the commons.’

The tragedy, per Ostrom, is that all stakeholders have incentives to exploit the community’s resources to the detriment of the common interest. This can — and has — led to the overexploitation and depletion of common resources. Today, this tragedy is extensive and includes the exploitation of fishery waters, river basins, air pollution, communal grazing lands and natural forests. In each case, access to resources among stakeholders with an incentive for private use leads to a ‘negative externality’ for the group.

Stakeholder-oriented firms can reduce transaction costs, align interests among diverse agents and provide innovative solutions to collective problems.

Negative externalities occur when the production and/or consumption of a good or service exerts a negative effect on a third party independent of the transaction. In the case of natural forests, where property rights are held jointly, individual stakeholders have logged, mined, trafficked animals, and clearcut forests for private agricultural use. In doing so, these stakeholders have generated private gains amid public losses.

Some of the mechanisms used by governments to address these scenarios involve laws and regulations around their use, taxation and penalties for deviant behaviour. However, these actions are often ineffective, particularly when governments don’t have adequate resources, must attend to competing aims that dilute attention to environmental problems or are led by parties who see no direct benefit from the engagement of their stakeholders in joint value creation.

British-American economist Ronald Coase argued that an alternative approach is feasible under certain conditions: in a situation of low transaction costs, a market mechanism can be developed to internalize externalities and increase production value through bargaining among the participants. The result, Coase argues, can be a more efficient and effective arrangement than what could be accomplished by the government.

Coase assumes that it is straightforward to identify stakeholders who are directly affected by an externality and that negotiations among stakeholders are feasible because all parties understand the nature of the common problem and have the capacity to negotiate. However, in the case of the Amazon rainforest and Natura, these assumptions don’t hold.

Prior to interacting with Natura, many Indigenous farmers in the region had little contact with big corporations or experience in market exchange. In such a situation, some might suggest that the government should have intervened to facilitate bargaining between agents as an alternative to enacting laws and regulations. However, in this instance, the government did not intervene, and Natura set out to devise an agreeable arrangement itself.

The insight in this case is that a private actor such as a corporation may achieve an alignment of interests through the ‘private ordering’ of stakeholder interests. Put simply, stakeholder decisions not to exploit or to restore common resources may be supported by a firm that overcomes impediments to align stakeholder interests in ways that internalize environmental externalities.

Take the case of a polluting factory, which was analyzed by Coase. He demonstrated that, if the factory owner and neighbouring property owners could freely bargain, they might achieve a more efficient allocation of rights and constraints than a government seeking social welfare. In this example, the private stakeholders ‘internalize’ pollution’s negative externalities and deploy the market to allocate resources more efficiently than a regulator could.

Here’s another example: suppose that an individual decides to cultivate a rose garden in a public space within a neighbourhood. If transaction costs are minimal, the agent may bargain with other residents living in nearby properties aiming to obtain rights and resources for the garden in exchange for pleasing aromas and visual experiences. As we show in our study, Natura likewise implemented arrangements that constituted the achievement of positive externalities through the reforestation of previously clear-cut areas analogous to the rose garden.

The Natura Approach

Recent advances in new stakeholder management research indicate that firms with a purposeful stakeholder orientation have several advantages over those with a shareholder orientation. In some situations, an orientation toward stakeholders can directly improve the firm’s economic performance as well as its environmental performance. In others, the achievement of a stakeholder orientation requires innovation in the engagement and alignment of stakeholders with the firm through a reconstruction of the company’s approach to value creation and distribution.

In this latter situation, stakeholder-oriented firms can reduce transaction costs, align interests among diverse agents, equalize negotiation capabilities and provide innovative solutions to collective problems. This then allows the firm to resolve collective action problems more effectively than the government by extending ‘Coasean arrangements’ in specific ways that are inaccessible to the government.

In particular, a private corporation may have the capacity to cultivate negotiation capabilities in local stakeholders with control over valuable resources. Through training programs, long-term contracting and relationship commitments, the company may cultivate institutional capabilities in previously undersupported stakeholders that ultimately lead to the development of sustain-

able markets. Such investments are justified because they yield private benefits to the corporation over the long term.

By leading the way on this front, Natura has enacted these and other types of solutions in its interactions with diverse actors, including rural suppliers, civil society organizations, direct sellers, consumers and even shareholders. The firm addressed failures in local market institutions by developing an open institutional infrastructure, which reduced local transaction costs and empowered a wide range of actors, including both participants and non-participants in direct exchange with the company. The company’s enablement of an efficient system for sourcing Amazonian agricultural products increased its own profitability by shifting volume toward products that commanded premium prices because of their Amazonian content — which led, in turn, to the allocation of financial value to Indigenous suppliers of ingredients.

Historically, the Amazon region has been neglected by both the private and public sectors. For decades, it was considered the archetype of wilderness and underdevelopment. Some political figures in Brazil went as far as to claim that the natural environment in the Amazon was impeding the country’s economic progress and that the rainforest should be destroyed. Under this framework, deforestation was encouraged to yield economically valuable timber and animals. The depletion of these natural resources was accompanied by human rights violations, including underpayment, enslavement and violence against Indigenous persons.

To establish a healthy network of Amazonian suppliers, Natura created an ‘Amazon Plan,’ which saw it increase its presence from four municipalities in 2000 to 56 in 2018. Rather than procuring conventional products through arm’s-length transactions, it created an ecosystem of suppliers through flexible contracts and trusting relationships with Indigenous communities. Over time, these relationships deepened as Natura collaborated with local leaders to engage in farmer training and other supportive activities.

To implement its Amazon Plan, Natura took two critical steps:

1. To be energy efficient and pool production at a single location, it built an industrial plant in the Amazon city of Benevides, Pará State, which subsequently became an ‘EcoPark’ for multiple firms working in the Amazon region; and

2. It established a dedicated Eco-Relations team to develop relationships with rural communities, which was crucial to establishing trust with Indigenous community leaders. Through regular visits, staff and local leaders built personal connections prior to discussing the details of contractual arrangements with implications for community farmers.

An essential feature of Natura’s arrangements was the ability of its Eco-Relations staff — many of whom were members of Indigenous communities themselves — to understand that, in Indigenous Amazonian cultures, value is conceptualized in ways that are fundamentally different from traditional economic theories. The team’s mandate was to explore mutual interests with community leaders to source Amazonian ingredients for cosmetics, shampoos and soaps. After identifying a potential ingredient, the team would begin discussions with community leaders regarding potential arrangements.

An important step toward forming contracts was the establishment of an association or cooperative in the locality to collectively set the terms of sale on price and quantity. Members of the Eco-Relations team worked with communities to set up bank accounts and to implement arrangements for transporting products to its Eco-Park.

After arrangements were established, Natura’s team worked with the community to identify processes through which ingredients would be extracted without damaging the forest to ensure its sustainability over time. A critical feature of this approach was the sustainable harvesting in perpetuity of Amazonian ingredients from the forest. Rural suppliers then became responsible for collecting, processing and shipping the products to Natura’s Eco-Park, where they received payment for the ingredients.

At the plant, the ingredients were transformed into natural oils, butters and pastes that became the essence of the cosmetics, shampoos and soaps in the Natura Ekos product line. The company then advertised the products’ social, environmental and technical benefits to consumers.

Natura’s payments to Amazonian municipalities for fruits, nuts, seeds and berries were set to convey sufficient value as to preserve the alignment of supplier interests with rainforest preservation. Among the total payments Natura made to the communities, 39 per cent were direct payments for products

Natura’s entry contributed to the preservation of about 1.8 million hectares, which is equivalent to 1.7 million football fields.

while the remaining 61 per cent were for additional benefits to the community. For example, Natura paid for access and use of traditional knowledge (71.5 per cent of the total), local research on Amazonian products (16.5 per cent), investments in infrastructure and institutional support (five per cent), provision of training programs and technical assistance (four per cent) and compensation for commercial images and carbon credits (three per cent).

The company’s employees, executives and shareholders made a commitment to sharing value with local communities to align interests and maintain Amazonian supplies. According to former CEO Roberto Marques:

To prevent ucuuba trees from being cut down for the production of brooms sold in local shops, [we] decided to pay twice the amount that the Amazon community received for their work. Instead of cutting, they started to earn more to keep the trees upright and extract only the seeds, which have moisturizing properties for the production of creams.

Natura benefited from these arrangements directly in several ways, including through higher profitability than the estimated average for global cosmetics companies.

Our Research

The purpose of our analysis was to determine whether and how Natura was able to remediate negative externalities through the deterrence of deforestation and to support positive externalities through reforestation. The data on which our analysis depended was drawn from the Brazilian National Institute for Spatial Research (INPE), which reports geo-referenced satellite information on environmental protection for each of the 760 municipalities in the Amazon region. The INPE system uses images from Landsat (NASA) satellites and has been recognized globally as a reliable monitoring system for forest preservation. We also used data from the Brazilian Geography and Statistics Institute (IBGE) on the yearly Municipal Agricultural Production Census.

To measure the degree of environmental protection and depletion, we used two primary outcomes. The first, forested areas (in square kilometres), describes the total preserved area

of the Amazon rainforest in each municipality. This value is updated every year by INPE’s satellite images. The second, fire incidents (in number of occurrences) indicates the number of fire incidents each year by municipality. Our hypothesis was that Natura’s entry into a municipality would impact forest preservation positively compared with what would have occurred had it not entered the municipality.

RESULT 1: We found evidence that Natura’s entry was positively tied to forest preservation in those municipalities. Forest preservation was 47.9 per cent higher in municipalities where Natura entered. Natura’s entry contributed to the preservation of about 1.8 million hectares, which is equivalent to 1.7 million football fields.

How did this impressive level of preservation occur? Our evidence points to perceptions in Amazonian communities of variable benefits and costs of conventional versus Amazonian agriculture. ‘Conventional agriculture’ refers to practices that can only be conducted on cleared land, such as cattle farming and obtaining high-volume crops to be sold on competitive commodities markets. ‘Amazonian agriculture’ refers to renewable fruits, nuts, seeds and berries originating in the Amazon biome that are produced in a way that sustains the forest.

One supplier described to us that, if it were not for the cocoa program developed with Natura, local rural producers would have been compelled to switch from cocoa to cattle raising. And to enable that, they would have had to clear-cut the forest and transform the area into pasture. Therefore, one mechanism by which Natura managed to promote forest preservation was by providing a viable economic option to small rural producers to keep the forest standing. As a result, fewer areas were converted to conventional agriculture such as cattle raising and soybean production.

We analyzed six types of agricultural products in our study, including three conventional ones (total soybean and corn production in hectares and total cattle herd in number of animals) and three Amazonian agricultural products (total acai, cocoa and passionfruit production area in hectares). We expected that Natura’s entry into a municipality had a negative impact on sales of conventional agricultural products and a positive impact on sales of Amazonian agricultural products.

RESULT 2: As expected, Natura’s activity was significantly associated with a reduction in conventional agricultural products that are prevalent in the area, including soybean production (54 per cent reduction), cattle production (16.5 per cent reduction) and corn production (51.6 per cent reduction). Natura’s activity was also positively and significantly associated with the three Amazonian agricultural products that are used as ingredients in its products.

RESULT 3: Our results regarding fire incidents are complex. Although the number of fire incidents in the municipalities that Natura entered increased by 49.4 per cent, we believe the company may have elected to enter municipalities in which fire incidents were extensive and imminent — which is consistent with the finding that, even after the firm’s entry, fire incidents increased. Growing certain products might also trigger a higher number of small-scale fire occurrences, which occur at the forest’s edge and are not as harmful to the old forest.

Our views are reinforced scientific arguments showing that in the Amazon, fire typically occurs in forest edges by escaping from deforested areas, pastures and agricultural fields and leaking into surrounding forests. Cupuaçu and açaí grow on trees and palms that tend to be cultivated in former pasture lands, so they are associated with forest regeneration in the forest’s edge. In contrast, pataqueira is a type of Amazonian grass (herb) that does not require much space and can be cultivated in irrigated beds. A blog post on Natura’s website reports that fire is traditionally used to produce this species: “According to local traditions, fire is used to plant pataqueira. The vegetation that margins the streams is burned and, after this, the plant is sown. We [Natura] had to find a new way of doing it without using fire, chemical inputs, and in a distant location.”

This quote illustrates why the pataqueira product has the strongest correlation with fire incidents among all products sourced by Natura, and yet the use of fire in sensitive areas carries dangers both for uncontrolled spread and environmental impact that had not been accounted for prior to Natura’s entry. As a result, Natura worked with communities to encourage the cultivation of pataqueira in ways that mitigated uncontrolled fire risk and river erosion.

To summarize, Natura’s entry into municipalities slowed down the upward trend in fire incidents. So, despite the increase

in fires after its entry, this increase was happening at a faster rate when the firm was not in those locations. Internalizing environmental externalities while governing common-pool resources is a complex quest. Further research is required on the tension between Natura’s reforestation efforts and fire occurrences deliberately performed by large-scale ranchers who advocate for conventional agriculture. Despite these difficulties, our study provides evidence of success in achieving the kind of private ordering of stakeholder interests envisioned years go by Coase.

In closing

We believe the case of Natura has global significance. By using local fruits, nuts, seeds and berries as ingredients in its products, it has internalized the benefits of forest preservation in arrangements implemented in partnership with Indigenous communities and supported by the price premiums paid by ecologically oriented consumers.

This case provides a solid basis for optimism regarding the potential for impact of purpose-driven, stakeholder-oriented corporations. By developing innovative approaches to stakeholder interest alignment, private-sector actors can take inspiration from Natura’s achievements. We must always remember: There is no planet B.

Anita M. McGahan is University Professor and Professor of Strategic Management at the Rotman School of Management, where she holds the George E. Connell Chair in Organizations & Society. Leandro S. Pongeluppe (Rotman PhD ‘22) is a specialist in socioenvironmental impact and an Assistant Professor at the Wharton School, University of Pennsylvania.

A DEI expert shares her insights around the recent backlash against these efforts; what to do and what not to do; and why she remains hopeful about the future.

Thought Leader Interview:

Sonia Kang

Interview by Karen Christensen

With respect to diversity, equity and inclusion (DEI), collective awareness has definitely increased in recent years, but some apathy has set in. Some have even used the term ‘backlash.’ How would you describe the current state of workplace DEI? There are a few things going on here, but one of the big reasons people might be feeling some ‘diversity fatigue’ is the perception of being stuck. People feel like this work has been going on for too long and that it has cost too much for there to still be a problem. With all the time and money that’s gone into creating diverse, equitable and inclusive spaces, why are we still talking about this?

The problem is that much of the work that’s been done around DEI has been focused at the level of the individual. On one hand, we have seen efforts to change or ‘fix’ the minds of the people who are doing the discriminating. For example, many readers will be familiar with unconscious bias or diversity training, and many will have attended at least one of these types of trainings at work or school. On the other hand, we’ve had efforts to change or ‘fix’ the people who are experiencing discrimination — the thinking being that if women and members of minority groups just work harder and do better, no one will have a reason to discriminate against them anymore.

Unfortunately, neither of these approaches has been very successful. At best, diversity training and ‘lean-in, pull yourself up by your bootstraps’ type approaches have little to no effect — and at worst, they create the kinds of backlash and resistance you mentioned in your question. But a huge body of research demonstrates that even when women and people of colour perform at the same level or better than their white and/or male counterparts, they’re still less likely to get a callback for an interview, to be hired or to receive praise or rewards for their performance, and more likely to be punished for making mistakes. That’s why more contemporary approaches to DEI aim to identify and intervene on aspects of an organization’s structures, policies and practices that create and maintain exclusionary workplace cultures.

For example, let’s say a company notices that Black employees aren’t being promoted as quickly or as far up the ladder as white employees. The ‘old-school’ approach might be to have managers attend an unconscious bias training session and, essentially, hope for the best. Contemporary approaches are much more systemic and holistic. Yes, managers might be told about the problem and asked to attend unconscious bias training, but the promotion process would also be examined for pain points or places where Black employees are worse off than their white peers.

BY SUSAN HINOJOSA (MSUSANHINOJOSA@GMAIL.COM)

I feel very optimistic about how younger generations of workers are pushing for more healthy work practices and policies.

For instance, the company might uncover a sponsorship problem, whereby junior white employees receive more sponsorship — they have someone to advocate for them and connect them to important opportunities for learning, development and advancement — while junior Black employees are left to figure all of that out on their own. Here, the company could implement a formal sponsorship program, ensuring that all junior employees are assigned to someone who is responsible for championing them and tie successful sponsorship of Black employees to recognition and reward.

Why do some individuals resist these efforts?

Some people simply don’t like change; others might feel too burned out to do anything other than their specific work tasks, and others might be motivated to protect and maintain the current power structures that put them on top. Some might believe common myths, like that DEI efforts undermine meritocracy or that lack of diversity is ‘a pipeline problem’ that needs to be addressed in schools, not in the workplace. And then, of course, there will be some people who reject DEI completely as ‘woke ideology’ rooted in a political agenda. Historically, we also tend to see resistance to DEI efforts during recessions and times of economic or social upheaval. When money is tight and things are uncertain, DEI initiatives are usually first on the chopping block — which is really sad, because those are the times that people need the most support.

Understanding why certain people resist DEI efforts gives us clues as to how to overcome that resistance. When organizations experience pushback and friction against these initiatives, they need to investigate the cause first, and then design and experiment with systemic solutions tailored to the specific sources of resistance. For example, if people truly care a lot about DEI but are too burned out to do the work, the solution will be very different than if people are resisting because they believe their own power or position within the organization is at risk.

One of our postdoctoral fellows at the Institute for Gender and the Economy (GATE), Camellia Bryan (who is starting as an assistant professor at UBC in the fall), has examined diversity resistance extensively. She finds that resistance and backlash can be overcome through both surface- and deep-level ‘opening,’ but that people need to experience deep-level opening to bring about a change in their fundamental orientation toward DEI. Deep-level opening happens through remarkable events (e.g. the murder of George Floyd; the continued discovery of unmarked graves at residential school sites) that capture people’s attention and induce powerful moments of reflection that can start to challenge and change deep-seated beliefs and attitudes. In the meantime, we need systemic interventions in place to improve DEI.

Changing fundamental beliefs and attitudes is a difficult process that takes a long time and a lot of energy — both on the part of the person experiencing change and on the part of the person/organization trying to bring about that change. It doesn’t surprise me that there is resistance to DEI, but again, I think the solution lies in systemic changes that take some of the pressure for change off of individuals’ shoulders.

Younger generations of workers are especially passionate about DEI efforts. Do you feel optimistic about the pressure young employees are putting on employers to be accountable on these issues?

Yes, I feel very optimistic about how younger generations are pushing for more healthy work practices and policies in general. I think much of this is driven by a rejection of the traditional idea of ‘the ideal worker’ as someone who devotes themselves to their career and company above all else. Younger workers are rejecting that notion and pushing organizations to create better work environments for everyone. Organizations are now realizing that they need to get creative and innovate for inclusion — or they will be left behind in the fight for talent.

Are you a fan of diversity and inclusion audits? If so, what are some of the key metrics companies should look at (and continue to track)?

Yes. When it comes to DEI, measurement and metrics are extremely important. It’s incredible how little organizations know about their workforce in terms of important diversity metrics like race, gender or disability status. Without a good understanding of the community you’re trying to serve, your efforts might be misguided or badly designed — or, even worse, can lead to unintended negative consequences.

It’s also important to figure out what you want to measure and how to measure it best, and an important part of that is making sure you are measuring diversity, equity and inclusion — not just diversity, as many organizations tend to do. Diversity metrics help you understand how representative your workforce is of the population you serve. Effectively, you want the demographics inside of your organization to reflect the demographics of the larger population. In terms of equity, organizations need to measure and understand whether all employees have access to resources and opportunities tailored to their unique needs and starting points; and for inclusion, metrics help you understand how the organization is doing in terms of creating a welcoming environment.

For example, diversity metrics would help you understand how many employees have a physical disability that limits mobility; equity metrics would reveal any gaps that exist in access to resources and opportunities between employees who have a

physical disability and those that do not; and inclusion metrics measure the uptake and success of organizational initiatives to be fully inclusive of all employees, regardless of their mobility needs — for example, making sure that meeting spaces are fully accessible. You really need all of these metrics to get the full picture.

Another important metric readers may have heard about is belonging, which is a measure of how accepted, valued and connected employees feel. On this front, metrics help organizations understand not only whether employees from a variety of different identity groups are present (diversity), but also how accepted, valued and connected they feel.

When underdeveloped DEI strategies are implemented, they often do more harm than good. What practices would you be happy to never see again?

I think (hope!) that these are already on their way out, but anything that’s a ‘one-and-done’ solution has got to go. A one-time diversity training isn’t going to undo a lifetime of forming and reinforcing unconscious biases, and an organization’s diversity statement does nothing to improve the experiences of employees if the values aren’t put into practice. I’d love to see organizations taking a more holistic approach that is designed in community with a representative sample of the workforce, that combines levels of action (individual, team, organization) and that infuses DEI into all aspects of the employee experience.

You believe that there are breakthroughs to be made at the intersection of behavioural insights, data analytics and design thinking. What will such breakthroughs look like?

I think the promise lies in designing simple, cost- and timeeffective solutions that set diverse groups of employees up for success by minimizing or even eliminating the extent to which biases can influence outcomes. Unfortunately, biases are part of human nature and therefore very resistant to change, so ultimately, we have to learn how to work around them. A simple example of this is removing masculine language from job advertisements to increase the proportion of people of all genders who don’t identity with traditional masculine ideals in the applicant pool. I’ve done some work testing this idea with Joyce He, who completed her PhD with me at Rotman and is now an Assistant Professor at UCLA. Of course, small tweaks like this aren’t going to change the world, but combining lots of small but behaviourally informed, data-led and well-designed interventions has the potential to make a huge difference.

You have said: “We need to identify specific entrenched processes and structures that bake bias into our organizations and remove them.” What are a few of the most common ones you’d like to eradicate?

This is a tough question because I have some ideas of what needs to change, but not how to change them…yet. One of the big things that needs a revamp is performance evaluation systems. We know that women and members of other minority groups receive lower performance evaluations and harsher punishment for mistakes than members of traditionally dominant groups like white men. Perhaps even worse, they’re also likely to give themselves lower performance ratings. Performance evaluations are an important metric for deciding pay raises, promotions and other types of rewards. You can’t get rid of them, but the entire system is fraught with bias.

One of our GATE Faculty Fellows, Rotman Professor András Tilcsik, has some brilliant and promising research showing that part of the solution entails changing performance ratings scales. In our society, numbers like 10 and 100 are associated with perfection and brilliance — qualities that are much more likely to be ascribed to men than to people of any other gender. András and his co-author, Kellogg Professor Lauren Rivera, showed that gender differences in evaluations can be eliminated when performance rating scales are instead designed around an arbitrary high value — in this case, six. The number six doesn’t carry the same social baggage as the number 10, and in their work, women were just as likely as men to get a six-on-six, even though far fewer women than men were achieving a 10/10 score. Again, a small change like this on its own will not solve the problem of sexism, but it’s an important piece of the puzzle.

Please touch on how identity relates to all of this—and why organizations should care.

Identity is an individual’s sense of who they are, and much of that understanding comes from membership in social groups. When people feel ‘seen,’ it essentially means that they feel like an external observer sees and appreciates them for who they really are. This leads to a sense of peace and belonging that enables people to do their best work.

When people feel like their identities are being devalued or disrespected — let’s say it’s a female engineer who is constantly talked over by her colleagues during a meeting — they experience ‘identity threat.’ Identity threat has a number of emotional, psychological and physiological consequences that prevent people from paying attention to their work, because it’s sounding an alarm that you’re in an unsafe environment that you need to escape from. Going back to the female engineer example, when she feels that identity threat, it triggers a physiological and emotional stress response that includes impostor thoughts (‘Maybe I don’t know what I’m talking about after all’); negative emotions like shame, anger and sadness; and the fight, flight, freeze response. All of a sudden, she is no longer just thinking about what is being discussed at the meeting, she also has to

Organizations have a lot to gain when their employees feel like they belong and have a sense of psychological and identity safety.

manage this identity threat response by downplaying all of these negative thoughts and feelings. That takes a lot of energy away from the task at hand and leads to fatigue and burnout.

On the other hand, organizations have a lot to gain when their employees feel like they belong and have a sense of psychological and identity safety. This means they feel accepted for their authentic selves, safe to learn, grow and make mistakes, welcome and empowered to contribute their ideas and to disagree productively or challenge the status quo when they think something needs to improve. If people are wasting precious time and energy trying to make their identities fit into a space and system that hasn’t been designed with them in mind, you’re not going to get that kind of constructive feedback and dedication to improvement.

Having taken on the leadership role at GATE, what will be your main areas of focus going forward?

My Rotman School colleague Sarah Kaplan founded GATE eight years ago, during a very different political and social climate. It seems like a short time, but so much has changed: we lived through a global pandemic, have witnessed major cultural movements around race-based violence and discrimination and sexual harassment and assault, and we continue to see increasing political and ideological polarization, both here in Canada and around the world. We will continue to focus on systemic change and engage our multidisciplinary students, faculty and organizational partners to understand problems and design interventions to increase DEI and inform policy.

Examples of this kind of engagement include our Gender Analytics courses and our new student zine, The Issue, which we’ve just started working on and which will meaningfully connect GATE with undergraduate students across the University of Toronto for the first time. A lot of early DEI work has focussed on finding and solving for problems in traditional, corporate environments, whereas GATE has started to explore other aspects of the economy, like care work, other sources of stress, like genderbased violence and other ways of knowing, like Indigenous research methods and practices.

Sarah has done an incredible job with GATE. She created it from literally nothing — and my goal is to nurture that foundation and to listen and learn from our community about where we need to deepen our roots and where we need to branch out to something new. But it’s important to remember that it’s not just about the Academic Director! I am fortunate to work with an

amazing team that does so much with so little — our Associate Director, Lechin Lu; our Senior Research Associate, Carmina Ravanera; and our Digital Storyteller, Salwa Iqbal—along with an ever-growing and impressively multidisciplinary community of passionate and dedicated faculty, students, project leads and post-docs. I wish I could list everyone by name, but the point is, I see GATE as both proactive and reactive. I know this might sound cliché, but we really do want to be on the cutting-edge of understanding inequality based on gender and its intersections. We pay attention to the world around us and we’re fortunate to have a large, multidisciplinary community that isn’t afraid to tackle hard problems.

Some of the current projects underway at GATE include exploring the potential relationship between low rates of ADHD diagnosis in women and their underrepresentation in upper management positions (BMO GATE MBA Fellow Alex Foty); the cost to global economies of sustained inaction on gender-based violence (GATE Faculty Fellow Dr. Beverley Essue and her colleagues); and how the introduction of automation and other technologies might alter the sense of identity and role responsibility for care workers typically working in low-wage, precarious positions (GATE PhD Fellow Laura Lam). We have lots of amazing work going on, and I’m thrilled to be a part of it.

Sonia Kang is Academic Director of the Institute for Gender and the Economy (GATE) at the Rotman School of Management. She holds the Canada Research Chair in Identity, Diversity and Inclusion, and is a Professor of Organizational Behaviour and HR Management at the University of Toronto Mississauga.

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CONFLICT RESOLUTION 2.0: The Mindset of the Possibilist

One of the world’s leading conflict resolution experts, William Ury, describes why conflict is natural — and why we should all aspire to be Possibilists.

Interview by Karen Christensen

As we speak, conflict is all around us. How would you describe the current environment?

William Ury: Every day, we are confronted by the headache and heartache of contentious disputes. More than at any other time I can recall, destructive conflicts are polarizing our communities, poisoning our relationships and paralyzing our ability to address our most critical issues.

Ironically, after many decades of working on intractable political conflicts around the world, I find an intractable conflict tearing apart my own country [the United States]. Unthinkable as the prospect may seem, more than two in five Americans fear that the country may be sliding into a civil war. I have never seen such levels of fear, anger and contempt for the other side. Nor have I seen such depths of resignation and despair — so many people throwing their hands into the air and concluding that they are powerless to change the situation for the better.

The phenomenon of polarization is not limited to the United States; it is a global trend, separating families, communities and societies around the world.

My question is, How many opportunities are we losing, for lack of a better way of dealing with our differences? In my work, I come up against the common assumption that all conflict is

bad — and I used to hold that assumption myself. But as an anthropologist and mediator, I’ve come to appreciate that conflict is natural. It is part of life itself. Simply by virtue of being human, we are going to have different perspectives and interests.

But we have a choice: We can either choose between destructive conflict, which destroys relationships, resources and lives, or constructive conflict, whereby we actually listen to each other, collaborate and negotiate. That is the choice we face. What if we applied our full human potential to dealing with conflict — our natural capacities for curiosity, creativity and collaboration?

Despite the current state of affairs, you believe the world actually needs more conflict, not less. Please say why.

I know it sounds strange, but if you think about it, constructive conflict lies at the heart of our democracies, in the form of elections, for example, or in the form of votes in our parliaments and congress. It also lies at the heart of the modern economy in the form of business competition. We need conflict in some sense to challenge us to grow, to make change, to address injustices and to evolve. In our personal lives, we learn and grow through the challenge of conflict. Many psychologists argue that healthy marriages benefit from conflict. It makes us come alive.

The New Yes means more than reaching an agreement. It means transforming our relationships.

You believe that if anthropologists living 1,000 years from now were to look back at us today, they would call this ‘the era of the human family reunion.’ Please explain.

An anthropologist in the future studying us today would note that, thanks to the communications revolution, all 15,000 language groups on Earth are now in touch with each other for the first time in human history. Never before have billions of people had to truly coexist as we do today. So, in that sense, it’s like a great family reunion of humanity.

But like many family reunions, it’s not all peace and light. There’s a lot of conflict. There’s a lot of resentment and inequity and injustice. How do we get along with each other and deal with the clashes of values? The greatest challenge we face today is to coexist and deal with our differences constructively rather than destructively.

You believe the traditional goal of conflict resolution—reaching an agreement—must change. Please explain.

When Roger Fisher, Bruce Patton and I worked on Getting to Yes more than 40 years ago, ‘yes’ meant a mutually satisfying agreement. Today, I believe the meaning must be expanded. The New Yes means more than reaching an agreement. It means transforming our relationships. Agreements are finite and often transactional; they come and go. Transformation is relational and can continue long into the future.

Even if we disagree — and we are going to — can we do so in a way that allows us to make progress together? Instead of trying to resolve conflict and reach agreement, can we aim for something more realistic and more sustainable than resolution? What if we were to focus on transforming conflict from destructive fighting into creative negotiation? The New Yes means leaning in and embracing conflicts for all they have to offer us. If we can embrace and transform our conflicts, we can learn to live and work together. That’s the goal of the New Yes.

You have developed a framework for getting to the New Yes, with three steps. The first is ‘going to the balcony.’ Please explain what that means. The biggest obstacle we face when we’re dealing with conflict isn’t what we think it is. We usually think it’s the ‘other’ sitting

across from us at the table — a difficult individual, organization or nation. But I’ve found the biggest obstacle to getting what I want in any situation is even closer than that: It’s me. It’s us. It’s on our side of the table.

The problem lies with our natural human tendency to react — to act and speak without thinking, in ways that are contrary to what we want to achieve. As the old saying goes, ‘When you are angry, you will make the best speech you will ever regret.’ Either we attack or avoid, which doesn’t solve the problem, or we accommodate and give in.

The secret is to do the opposite, which is where the metaphor of going to the balcony comes in. It means pausing and taking a step back from the situation. I counsel people to imagine themselves standing on a balcony overlooking a stage on which the conflict in question is taking place. The balcony is a place of calm, control and perspective. It’s a place where you can see the bigger picture. Doing this work within ourselves is the key precondition for getting to yes for all involved.

The second element in your framework is ‘bridge-building.’ How does that fit into the framework?

In today’s world, many people are busy burning bridges, so building bridges between people inside and outside of our organizations is incredibly important work. But it can only happen once we have taken the time to go to the balcony and see the big picture.

In destructive conflict, we dig into our positions and build walls. Again, we need to do the opposite. Imagine I’m standing here and you’re way over there. There’s a big chasm between your position and mine. It’s filled with all the reasons why it’s hard to reach agreement, including doubt, anxiety and fear of looking weak. If I want us to meet, I need to build a bridge — a golden bridge — an inviting way to cross the chasm of conflict. I need to make it easier for us to walk toward each other.

We need to start to see conflict as three-sided: There’s the work to be done on the first side, which is the balcony work; there’s the work on the second side, which is the bridging work; and there’s the work on the third side, which entails involving the community surrounding the issue. I call this last piece ‘making room for the third side.’ We need to put all three together if we’re going to have a chance to tackle today’s conflicts.

Tell us more about the ‘third side’. With conflict, generally speaking, we reduce everything to two sides: Us versus them. It’s union versus management. It’s sales versus manufacturing. It’s Arabs versus Israelis. And yet in truth, there are never just two sides in any conflict. There is always a third side, which is the surrounding community — the neighbours, the citizens, the co-workers. Everyone else around the situation.

The third side is a way of looking at a conflict not just from one side or the other, but also from the larger perspective of the

10 Roles That Can Transform Any Conflict

THE PROVIDER. Conflict usually arises in the first place from frustrated needs, like love and respect. Frustration leads people to bully others, use violence and grab someone else’s things. The most basic human needs include food (and other necessities for living), safety, identity and freedom. If we as Third-Siders can help people address one or more of these four needs we can avert destructive conflict.

THE TEACHER, Sometimes people fight simply because they know no other way to react when a need is frustrated and a serious difference arises. By helping people learn new values, perspectives and skills, we as Teachers can show them a better way to deal with differences.

THE BRIDGE-BUILDER. Anyone can help build bridging relationships across natural divides. A relationship operates like savings in the bank; whenever an issue arises, the parties can dip into their account of goodwill to help deal with it. Often not a discrete activity, bridge-building takes place all around us, sometimes without us even perceiving it—at family meals, on school projects, in business transactions and at neighbourhood meetings.

THE MEDIATOR. At the core of conflict are often conflicting interests. As Mediators, we can help reconcile the parties’ interests. The Mediator does not seek to determine who is right and who is wrong, but rather tries to get to the core of the dispute and help the parties resolve it. We may not think of it as mediation, but that is what we are doing whenever we listen attentively to people in dispute and urge them to think hard about the costs of not reaching agreement.

THE ARBITER. Sometimes mediation isn’t enough to resolve a dispute or isn’t appropriate because basic rights are being violated. Whereas a Mediator can only suggest a solution, an Arbiter can decide what is right. The Arbiter is a familiar role, embodied in the judge in the courtroom or the arbitrator in a work setting. More informally, the Arbiter is the teacher deciding a dispute among two quarreling students, the parent ruling on a matter involving two children, or the manager determining an issue among two employees. In this sense, we are all potential Arbiters.

THE EQUALIZER. Every conflict takes place within the larger context of power. Imbalance of power often leads to abuse and injustice. The strong refuse to negotiate with the weak or to submit their dispute to mediation or arbitration — why should

surrounding community. Any of us can take the third side any time at home, at work, in the community and in the world. You can have natural sympathies for one side or the other and still choose to take the third side — whether it is your family, and organization, your community or the world.

It’s really hard, particularly today, to go to the balcony — and it’s getting harder, so we need help. And where’s that help going to come from? It can come from the people around us and even from within ourselves. We can play the role of the third side ourselves if we take the side of the whole.

they, they think, when they can win? This is where the Equalizer has a contribution to make. Each of us holds a packet of power, a measure of influence over the parties around us. Individually, our influence may be small, but collectively, it can be considerable. We are capable of empowering the weak and the unrepresented so that they can negotiate a fair and mutually satisfactory resolution.

THE HEALER. At the core of many conflicts lie emotions — anger, fear, humiliation, hatred, insecurity and grief. The wounds may run deep. Even if a conflict appears resolved after a process of mediation, adjudication or voting, the wounds may remain and, with them, the danger that the conflict could recur. A conflict cannot be considered fully resolved until the injured relationships have begun to heal. The role of the Healer is to assist in this process.

THE WITNESS. Destructive conflict doesn’t just break out—it escalates through different stages, from tension to overt conflict to violence. By watching carefully, the Witness can detect warning signals, which, if acted on, can prevent escalation of conflict and even save lives. A Witness can also speak up to persuade the parties to cease fighting and sound the alarm to call the attention of other third-siders who can intervene as Mediators, Peacekeepers or other Witnesses.

THE REFEREE. Some fighting can be salutary. Fighting can serve the function of clearing the air and bringing suppressed problems into sharp focus. If and when people do fight, it is important to reduce the harm. That is the role of the Referee, who sets limits on fighting. Parents know this role well: ‘Pillows are okay, but fists are not.’ ‘No blows above the neck or below the belt.’ As Referees, we can change the way people fight, replacing destructive weapons and methods with substantially less destructive ones.

THE PEACEKEEPER. When the rules are broken and the limits on fighting are exceeded, the community needs to employ the minimally forceful measures necessary to stop harmful conflict in its tracks. The role of Peacekeeping need not be limited to specialists like the police and UN Peacekeepers; it is a community function that anyone may be called upon to play. When two children fight, adults can step in the middle and, if necessary, physically pull the two apart. The best Peacekeepers never fight, because they don’t need to. They accomplish their ends by intervening early and using persuasion.

The Path to Possible

3RD SIDE

What does it mean to be a ‘Possibilist’?

I’ve been working on some of the world’s biggest conflicts for many decades, and people often ask me, “Are you an optimist or a pessimist?” These days, my answer is, “actually, I’m a Possibilist.” I’ve seen all the negative possibilities of conflict up close. I’ve witnessed what happens when people, organizations and nations go at each other. But I’ve also seen lots of positive possibilities come to life. I’ve seen what human beings can accomplish, and that gives me hope.

During the 1980s, I spent a decade working on averting an accidental nuclear war, with frequent trips to Washington and Moscow. I witnessed the remarkable transformation of the U.S.Soviet relationship as the Berlin Wall fell and the Cold War came to an end, against all odds and expectations.

When I first visited South Africa in the late 1980s, experienced political observers believed that it would take decades and perhaps only a bloody civil war to end the racist system of apartheid. Instead, in a few short years, the conflict was transformed and Nelson Mandela, who had been imprisoned for 27 years, was elected to the presidency.

More recently, I had the opportunity to serve as an advisor to the president of Colombia as he sought to do what most people in his country imagined was impossible: to end a civil war that had persisted for almost half a century. Hundreds of thousands of people had died. It took six years of hard negotiation, but in the end a historic peace was forged and, to everyone’s surprise, the main guerrilla force laid down its weapons.

On a smaller scale I’ve watched families heal their feuds. I’ve witnessed bitter business rivals become friends again. I’ve seen leaders from all sides of the political spectrum in my own country learn to work together. I have seen human beings from all walks of life rise to the challenge of turning destructive confrontation into productive negotiation. If it has happened before, I believe it can happen again. In fact, I think our only viable choice going forward is to be Possibilists.

To be clear, possible doesn’t mean easy. There are no quick fixes. Dealing with conflict is some of the hardest work we humans can do. It takes patience and a lot of persistence. To be a Possibilist means to look negative possibilities squarely in the eye and use them as motivation to search persistently for positive possibilities. Whether they become a reality depends on us. Always remember, what has been made by us can be changed by us.

William Ury is an American author, anthropologist and negotiation expert who co-founded the Program on Negotiation at Harvard Law School. His latest book is Possible: How We Survive (and Thrive) in an Age of Conflict (Harper Business, 2024). He is also the co-author of the bestseller Getting to Yes: Negotiating Agreement Without Giving In and helped found the International Negotiation Network with former President Jimmy Carter.

SOURCE: POSSIBLE: How We Survive – and Thrive – in an Age of Conflict by William Ury

September 20, 2024

Reunite at Rotman

Save the date! Reunite is back this fall celebrating classes ending in 4, 9 and the Class of 2023. More information coming this summer!

www.rotman.utoronto.ca/reunite

Email us to learn how you can get involved with your class reunion.

How to Integrate ESG Into Your Organization’s DNA

The smartest organizations not only manage the ESG factors that are material to their business — they also recognize and address their interdependence.

by Andrea Barrack, Walid Hejazi and Susan McGeachie

ESG ENVIRONMENTAL, social and governance — has emerged as one of the most critical management imperatives facing leaders across industries. As data standards for reporting ESG performance improve and better alignment on reporting frameworks emerges, organizations will increasingly be required to report and be benchmarked against industry peers. This growing scrutiny and, increasingly, legal disclosure requirements, require attention from the most senior leadership within every organization.

In this article we will highlight four common myths associated with ESG which, if not understood, can lead to poor outcomes. We will also discuss the key stakeholders who are influencing organizations to improve their ESG performance, and how they are shaping the ESG landscape.

MYTH 1: ESG IS ALL ABOUT CLIMATE

The ‘E’ in ESG is the component that gets the most attention from leaders and many stakeholders, including the media. By now we are all aware of the risks associated with carbon emissions and the need to achieve net zero by 2050. The catastrophic implications of not achieving this goal have been well documented, and while much work has been done in this respect,

there is much more to do. In addition, there are increasingly material ‘E topics’ like biodiversity, deforestation and water — all of which are gaining traction.

However, ESG goes far beyond environmental sustainability alone. It also includes Social elements. This is a very broad pillar and includes everything from human rights to the treatment of employees and customers within organizations and across global supply chains. The ‘S’ also incorporates issues of diversity and inclusion, how the organization impacts its communities, including Indigenous communities and many other issues.

And finally, ESG includes Governance, which incorporates how organizations are managed, risk management and business ethics. It is often the case that deficiencies in governance processes end up in the news as scandals — such as the Audi emissions scandal, Facebook’s privacy violations and many others too numerous to list.

Organizations that focus on the ‘E’ alone are only addressing a narrow slice of the full spectrum of issues and are therefore likely to face challenges from shareholders and other stakeholders, miss interdependencies and be caught unprepared for increasing ESG disclosure requirements.

MYTH 2: ESG IS HANDLED BY A SPECIFIC DEPARTMENT

It is often thought that an ESG department, executive or committee will suffice to ensure an organization has appropriate oversight of ESG issues. While specific accountability is helpful, this siloed approach can hinder the organization in making required progress. Such an approach often results in an ineffective ‘tick the boxes’ approach to ESG.

This is in sharp contrast to an approach in which every decision made within the organization is made through an ESG lens. As the well-known saying goes, ‘culture eats strategy for breakfast.’ For organizations to fully integrate ESG into each decision — that is, into their DNA — it is essential that ESG be part of the organizational culture.

Many organizations have implemented extensive training sessions to ingrain ESG strategies into each of their functional areas — finance, strategy, HR, marketing and operations. When this is done well, there is no need for a separate office within the organization to oversee ESG because it will be ingrained in everything the organization does. However, such change takes time and ESG is still nascent in its maturity for most organizations.

While the ultimate goal is full integration of an ESG lens consistent with the organization’s culture, most are still developing the required structures and mindset through specialized functions.

MYTH 3: ESG IS ABOUT IMPACT ON SOCIETY AND THE ENVIRONMENT

A common view of ESG is that impact is a one-way street, focused on the impact a business has on society and the environment. The Taskforce on Climate-related Financial Disclosures (TCFD) was among the first to highlight the impact of climate change on a company’s financial performance, including the future potential price of the carbon it emits and other societal and technological headwinds that could impact future performance.

Insurance companies, for example, are feeling the impact of climate change by paying record claims for flooding and damage related to extreme weather; consumer packaging companies are experiencing the impact of natural disasters on their supply chains; and extensive wildfire smoke within Canada during the summer of 2023 resulted in significant disruptions to businesses, with the expectation of many costly health implications to follow.

Employee well-being—and specifically mental well-being—is increasingly being recognized as a robust forward-indicator of the risk profile and future success of a business. As a result, more organizations are placing it on their board agenda and greater attention is being paid to how well-being can be recognized as a critical part of ESG strategies.

The pandemic has brought into sharp focus how our fragile ecosystems are at the mercy of humankind. But it also demonstrated that with collective effort, empathy, innovation and investment, great businesses can help solve some of the biggest challenges we face. Which brings us to the focus required on the ‘S’ in ESG and, in particular, how to effectively build an ‘S’ foundation.

Enlightened leaders now recognize that mental well-being and health must be a core part of every responsible business. In addition, investors—especially asset managers—are beginning to recognize that positive staff well-being is a key forward-indicator of business performance. As they assess risk, alongside the traditional P&L and balance sheet they are starting to look for action on well-being as they look to predict future cashflows.

Our view is that well-being should be considered as the foundation of the ‘S’ within a business’s ESG strategy. To date, the

‘S’ has been understood as a mix of social impact activities such as human rights and social responsibility initiatives such as pay equity reporting. The balance of the work on ‘S’ has, in many cases, been focused on making the world—or at least an organization’s communities—a better place to live.

In our work, we focus on moving the needle on workplace wellbeing levers developed by three innovative partnerships: Indeed and Oxford University; Betterspace and Oxford University Hospitals; and the Berkeley Interdisciplinary Centre . Following are a few of the key levers of employee well-being identified by these initiatives—along with ideas for addressing them.

Belonging . Companies can address this by placing imagery depicting diverse role models throughout their offices and operations; implementing mentorship programs; reporting on pay equity and having gender and diversity representation goals and plans in place.

Appreciation . Good management is key for this lever, including employee recognition programs, buddy systems and opportunities to give back and support others.

Putting the ‘S’ in ESG: Employee Well-Being by Henrietta Jowitt and Poppy Jaman

The focus on the financial impact of climate change and other ESG factors on organizations became the litmus test for evaluating materiality to such a large extent that stakeholders began deprioritizing the organization’s impact on society and the environment. To curb the outcomes of such a complete shift, the idea of ‘double materiality’ has emerged, which recognizes both the impact ESG factors have on a business and the impact a business has on such issues.

MYTH 4: ESG IS A FORM OF ‘WOKE’ CAPITALISM

In some jurisdictions, ESG has become politicized and labelled Woke Capitalism. This development reflects a misunderstanding of what a focus on ESG is meant to achieve. The increasing rigour of reporting on ESG data that is relevant to business objectives is very different from the accusation that businesses are using their influence to advocate for social and environmental causes.

To be clear, these are two completely different topics. At its core, ESG is a neutral ground — an impartial analysis of how shifts in societal expectations, policy changes, technological advancements and changing weather patterns will impact the

economy, businesses and all stakeholders. As BlackRock Chairman and CEO Larry Fink has said,

Stakeholder capitalism is not about politics. It is not ‘woke.’ It is capitalism, driven by mutually beneficial relationships between you and the employees, customers, suppliers and communities your company relies on to prosper. In today’s globally interconnected world, a company must create value for and be valued by its full range of stakeholders in order to deliver long-term value for its shareholders. Make no mistake, the fair pursuit of profit is still what animates markets; and long-term profitability is the measure by which markets will ultimately determine your company’s success.

In short, paying close attention to all of your stakeholders makes good business sense.

Stakeholders Are Raising the Stakes

Stakeholders have been defined as ‘groups who affect and/ or could be affected by an organization’s activities, products

Achievement . To move this lever, leaders must ensure employees understand where their work fits in the organization’s purpose. And performance management must lead to appropriate recognition and reward.

Inclusion . Thoughtful and effective DEI programs are critical here. Leaders must advocate for team members, treat them fairly and have initiatives to reduce stigma.

Flexibility . Providing some level of choice in work-from-home policies, hours of work and focusing on output, not presenteeism.

Some of these levers entail hard factual data and others are more qualitative, but all can be measured and initiatives can be developed to improve them. All component parts need to be considered as part of the overall foundation of an ‘S’ framework that can be managed and measured to build social capital in a business.

To be clear, this needs to be a business-wide strategy, not assigned to a department or individual as a set of unrelated initiatives. Businesses can then pull all the levers together to roll up into a ‘well-

being indicator’ for the organization, which they can report on over time to employees, stakeholders and investors.

Getting employee well-being support right and measuring it will build an organization’s social capital and its resilience for the future. With that social capital will come the ability to attract and retain talent, drive innovation and growth—and to then invest in social impact outside the confines of the business. The end result: a direct impact on the resilience and success of your organization and its people.

Henrietta Jowitt is a Partner at EcoPragma Capital, Associate Fellow at Green Templeton College, University of Oxford and an independent director on the board of Franklin Templeton Fund Management.

Poppy Jaman, OBE, is Founder and Executive Vice Chair of the MindForward Alliance and Chair of the Global Business Collaboration for Better Workplace Mental Health. This article has been adapted from their report, Putting Employee Well-being into the S of your ESG Program

The complete report, published by the Chartered Institute for Securities and Investment, is available online.

or services and associated performance.’ But the list of stakeholders is often much broader than many leaders realize. While some are common to most organizations, their relative importance will vary depending on the impact the organization can have on them and the impact they can have on the organization. As such, each organization should develop an appropriate stakeholder engagement strategy to ensure it fully understands the issues of importance to each stakeholder group and to manage conflicting interests.

Following are the most important stakeholders for the majority of organizations.

FINANCIAL MARKETS. An increasing number of investors across the spectrum are insisting that the companies they invest in perform well on ESG, with a requirement that this performance be

A Sampling of Well-Being Levers

Drivers for need satisfaction

Belonging

Connections and equity

Inclusion

Equity

Flexibility Management

Flexibility Predictability

objectively measured and reported. This trend was cemented by Larry Fink when he wrote in his 2020 letter to CEOs:

The evidence on climate risk is compelling investors to reassess core assumptions about modern finance. Investors are increasingly reckoning with these questions and recognizing that climate risk is investment risk. These questions are driving a profound reassessment of risk and asset values. In the near future — and sooner than most anticipate — there will be a significant reallocation of capital. As a fiduciary, our responsibility is to help clients navigate this transition. Our conviction is that sustainability- and climate-integrated portfolios can provide better risk-adjusted returns to investors.

Estimates now put the level of investable assets committed to companies that have achieved an acceptable level of ESG

Sample operational capabilities

• Pay equity reporting

• Gender and diversity representation goals and plans

• Fairness and equal opportunities

• Mentoring

• Employee-led and management-backed Resource Groups

• The placement of visible imagery depicting diverserole models throughout offices

• Thoughtful and effective D&I initiatives

• Leaders advocate for team members

• Leaders treat team members fairly

• Initiatives to reduce stigma

• The removal of gendered wording from job adverts

• The anonymization of résumés

• Good management and process to enable flexibility e.g., work from home policies

• Choice within flex-work frameworks

• Focus on outputs, not presenteeism

• Being supportive and authentic

• Good training, coaching and mentoring programs

• Mental health and well-being are strategic priority, with assigned tasks

• Senior leaders publicly acknowledge issues and listen to employee needs

• Treatment of others integral part of assessing performance

• Toxic behaviour is flagged and addressed

• Leaders are aware of the impact their behaviour has on others

performance in excess of US$30 trillion and growing. These investors are demanding that ESG performance be verifiable using objective metrics to back up such claims. Younger investors, namely Millennials and Gen Zs, are twice as likely to use an ESG lens in making their investment decisions. As these trends increasingly permeate the markets, the cost of capital for organizations with poor ESG performance will increase, thus impacting their competitiveness and profitability. In contrast, those that outperform on ESG will have relatively low cost of, and priority access to capital.

EMPLOYEES. Increasingly, companies that don’t perform well in terms of ESG will have difficulty both attracting and retaining talent. In sharp contrast, those that embrace it have a competitive advantage in this regard.

A case study published in The Globe and Mail documents how employees seek employment in firms that are ESG leaders:

Eco-friendly retailer Tentree doesn’t have to advertise its carbon-reduction efforts to potential hires. Most applicants are familiar with the Vancouver-based company’s values and mission, including the trees it plants with every purchase, and are looking to join the company partly because of it, says founder and chief executive officer Derrick Emsley. And this is just one example among many.

This pattern is confirmed by a PwC survey which found that 86 per cent of employees prefer to support or work for companies that care about the same issues they do, and 84 per cent are more likely to work for a company that stands up for environmental causes. And the evidence goes further, indicating that workers who are satisfied work harder, stay longer and seek to produce better results for the organization. These trends will only accelerate as Millennials and Gen Zs make up an increasing share of the labour force.

CIVIL SOCIETY. Many organizations have reacted strongly against companies that cause harm along their supply chains. According to Harvard Business Review, “Companies are under pressure from governments, consumers, NGOs and other stakeholders to divulge more information about their supply chains, and the reputational cost of failing to meet these demands can be high.”

Perhaps the most well-known disaster in the garment industry was the Rana Plaza factory collapse in Bangladesh on April 24, 2013, which resulted in the death of over 1,100 people and injured over 2,000. This unsafe facility was the site where many Western retailers had their textiles manufactured. In the immediate aftermath of this tragedy, multinationals from

around the world lined up to defend their reputations, with many arguing that they were not aware that conditions were so bad.

The disaster led to calls for Western retailers, and manufacturers more generally, to be far more transparent about their global supply chains. By disclosing the facilities where their products are produced, they could no longer hide behind ignorance. Rather, disclosing their suppliers would incentivize them to ensure working conditions were up to their stated standards — and when that is not the case, either push suppliers to improve those standards or seek alternatives.

There are many such initiatives underway to enhance supply chain performance. One well known initiative is Human Rights Watch’s Follow the Thread. This initiative pressures companies in the industry to adopt a Transparency Pledge that includes the publication of names and addresses of factories that supply these retailers and the number of employees in those factories. Such a declaration constitutes an important step in making retailers accountable to those who work in the facilities that produce the goods that they sell.

Such challenges extend to many other industries, as well. For example, there is significant pressure on food companies to provide more transparency in their supply chains, with stakeholders demanding information about the treatment of animals, the use of chemicals, impacts on the environments where they operate and child labour. Chocolate companies have received significant negative attention, with Hershey, Nestle, Cargill and others facing child slavery charges in the U.S. brought about through a lawsuit launched by a human rights group, related to business practices on Ivory Coast cocoa farms. While these companies eventually won a dismissal in U.S. courts, there were definite reputational implications.

Elsewhere, in July 2023, a Scottish court ruled against a tea company, allowing a legal case to move forward where 2,000 Kenyan workers were seeking damages for suffering which they claim resulted from poor working conditions. The court’s ruling highlights the risks UK-based companies have for their business practices in other countries.

THE LEGAL SYSTEM. Increasingly, companies — including their board members — are facing legal challenges. According to leading Canadian law firm Torys, “The range of claims that may be advanced by stakeholders is wide and can relate to a variety of ESG issues, including efforts to address diversity and inclusion in organizational leadership and failure to properly prepare for the future impacts of climate change.” According to the firm, “Companies can mitigate the risks of ESG litigation by adopting regular audits of foreign operations, internal training and meaningful grievance and remediation protocols.”

Younger investors, namely Millennials and Gen Zs, are twice as likely to use an ESG lens when making their investment decisions.

From Challenge to Opportunity

The fiduciary responsibility of corporate leaders has traditionally been to shareholders alone. But the pathway to maximizing shareholder value has evolved. Efforts to improve working conditions for employees inside the organization and along the supply chain leads to many benefits that enhance organizational performance. Deploying strategies that reduce carbon emissions reduces environmental impacts that are clearly having a negative impact on many businesses and society overall. Being systematic in deploying strategies that lead to more diverse and inclusive work environments has been shown to enhance innovation, employee engagement and performance.

As noted in the seminal paper by Michael E. Porter and Mark R. Kramer titled “Creating Shared Value”:

Companies are widely perceived to be prospering at the expense of the broader community. A big part of the problem lies with companies themselves, [which] continue to view value creation narrowly, optimizing short-term financial performance while missing the most important customer needs and ignoring the broader influences that determine their longer-term success.

Companies must take the lead in bringing business and society back together. Businesses must reconnect company success with social progress. Shared value is not social responsibility, philanthropy or even sustainability, but a new way to achieve economic success.

In closing

Strong ESG performers manage not only the full spectrum of environmental, social and governance factors that are material to their business, they also recognize and address their interdependence. ESG is not a form of corporate advocacy for any one outcome: It is a strategic response to the rapidly evolving market in which businesses operate. ESG connects a business with the reforms in politics and institutional structures required to achieve a systems-based approach to creating value.

In the midst of today’s rampant uncertainty, one thing is certain: Companies that appropriately identify, assess, prioritize, manage and report on ESG factors will gain a competitive advantage.

This

Andrea Barrack is Senior Vice President, Corporate Citizenship & ESG at RBC and Executive Director of the RBC Foundation. She is also an Executive in Residence at the Rotman School of Management and teaches in the Rotman ESG Certification Program. Walid Hejazi is a Professor of Economic Analysis and Policy at the Rotman School, Academic Director of Executive Programs and Academic Director of the Rotman ESG Designation Program. Susan McGeachie is Co-Founder and Managing Partner at Global Climate Finance Accelerator and an Adjunct Professor of Climate Finance at the University of Toronto. Both Andrea and Susan teach in the Rotman ESG Designation Program. To learn more about this program, visit www.rotmanmag.com/ESG.

Coming Soon:

Despite the importance of innovation for the growth of firms, industries and national economies, the strategic tools available to create and manage new technologies are often neglected. In his new book, Rotman School Professor and innovation expert Alberto Galasso examines how firms can leverage and create technology capital. Available

STRATEGIC FORESIGHT: CREATING VISIONS OF THE FUTURE

The path ahead is neither linear nor predictable, but that doesn’t mean we should fear it. Instead, we can take steps to shape it to suit our context.

by Octavio Egea and Arjun Shukla

IT’S A STORY THAT HAS BEEN TOLD time and time again: Kodak’s journey from global photography giant to bankruptcy in the era of digital photography. The narrative usually plays out as a cautionary tale: Once upon a time, an incumbent failed to innovate and lost out to technically savvy new entrants. However, this misses an interesting subplot.

Between 1974 and 2006, Kodak had a nuclear reactor loaded with 3.5 pounds of enriched uranium in a secret underground laboratory in Rochester, New York. The reactor — which was used to perform neutron radiography testing — was an investment in cutting-edge technological research that should have kept Kodak at the forefront of new photography and imaging products. But we all know what happened next: Kodak found itself blindsided by new developments in digital photography and unfairly labelled laggards.

For many leaders, with today’s backdrop of accelerating technological convergence, the climate crisis and wider societal and systemic shifts, it can feel like one moment of inertia could lead to obsolescence, or even to becoming the next cautionary tale. The challenge lies not just in the ability to adapt to profound transformation driven by new technologies and elevated

data literacy, but also, in finding ways to proactively contribute toward a better future.

To make your mark, it is vital to carve out a path that is innovative, resilient and adaptable in the face of relentless change and complexity. But how? Our work with clients like the Associated Press and the United Nations has enabled them to imagine possible futures and act accordingly. In this article we will show that the way forward demands one skill above all others: strategic foresight.

Strategic Foresight 101

Strategic foresight is a discipline and mindset that equips organizations to effectively anticipate and navigate future uncertainties, continuously reinvent themselves and ensure that their strategies are responsive to the myriad forces impacting the market landscape. After all, the ability to anticipate future shifts is only as valuable as your organization’s capacity to reinvent itself in accordance with those insights.

A mainstay of business strategy for decades, strategic foresight can be manifested in various forms, from scenario planning to adaptive strategy development. Central to its philosophy is the

Every organization develops a distinct relationship with the future that profoundly influences how it prepares for what lies ahead.

understanding that the path ahead is neither linear nor predictable — demanding a culture of adaptability that is prepared for the onset of multiple possible futures.

Fundamentally, strategy is about creating choices, navigating through challenges and seizing emerging opportunities. We view strategy as a creative act — a product of human imagination, curiosity and intuition that shares a symbiotic relationship with design, data and technology. Strategy provides direction, design shapes the path, data informs the approach and technology enables execution.

The empirical perspective traditionally favoured by consultants tends to prioritize quantitative analysis and data-driven insights. While this approach has definite merits, it must be used in conjunction with other methods to capture the more nuanced, qualitative dimensions of today’s strategic challenges and opportunities. The future cannot be captured in a spreadsheet; it is a living, breathing landscape of possibilities. Here are just a few examples of what strategic foresight can do:

• It can help you make bolder choices based on real-time needs and even launch new businesses.

• It can transform brands, moving an organization into innovative, hyper-relevant positioning.

• It can help you achieve connected product and service experiences that push the boundaries of the possible.

• It can uncover new ways to deepen engagement and elevate loyalty with your customers.

• It can help you identify the essential capabilities required to future-proof your organization.

Whether leaders recognize it or not, every organization develops a distinct relationship with the future that profoundly influences how it perceives and prepares for what lies ahead. At different times and in different contexts, the future might be perceived as a threat, as an opportunity or as something malleable that can be shaped with a strong vision.

Through our work with clients, we have identified four main benefits of strategic foresight.

BENEFIT 1: Future-Shielding

Strategic foresight can protect you from further impact of adverse and unanticipated events. When an organization is forced to adapt retroactively just to survive, we call it ‘future-shielding.’ This is not necessarily a result of ineptitude. Life isn’t always

predictable and sometimes we form strong and knowledgeable convictions of what is likely to transpire — and end up being wrong. The challenge in this context is to pivot and adapt to the new reality that has emerged while minimizing potential damage to your people, product, revenues and brand.

We have witnessed numerous such challenges across sectors. For example, against the backdrop of rapidly changing media consumption and an evolving industry landscape, we helped one of the largest non-profit news agencies identify and navigate upcoming challenges and potential opportunities. We also worked with a major computer hardware manufacturer to revive the at-risk inkjet printer category with innovative product concepts. Using a combination of Gen Z research and futures thinking, we created a vision that was embraced by the client and helped them find a new niche.

BENEFIT 2: Future-Proofing

‘Future-proofing’ essentially refers to a series of strategic activities that companies can take to prepare themselves for the potential negative impact of future events. Utilizing elements from risk management, it entails a defensive position, where reactions to individual events can be detected and tackled with a series of actions that anticipate impact. This is usually the domain of large, mature incumbents with countless moving parts that need time, space and a plan to manoeuvre themselves in case things ‘go south.’

We recently used this approach to help a global leader in air traffic control and airport performance drive bottom-up change and think about the unthinkable. Understanding the evolution of its role in the context of new modes of mobility helped them develop an ambidextrous approach whereby they began to inculcate divergent strategic thinking while continuing to incrementally improve their core business activities.

BENEFIT 3: Future-Readiness

‘Future-ready’ organizations look at the future from an adaptive and anticipatory standpoint, positioning themselves to take advantage of new opportunities as they appear. This approach moves away from a deterministic methodology and into the realm of plausibility, asking ‘what could potentially happen?’ instead of ‘what is likely to happen?’

Envisioning plausible futures helps leaders craft an inherently flexible strategy. Along with a core approach, a series of contingent pathways can be activated should things proceed

differently than anticipated. For instance, our firm was commissioned by one of the largest tech companies in the world to envision how the metaverse will impact human life over the next decade. The program asked for divergent yet convincing narratives and a clear long-term strategy that enabled them to find their spot in this emergent ecosystem.

BENEFIT 4: Future-Shaping

Strategic foresight can help you define new business and cultural shifts to assess threats proactively. Companies that ‘futureshape’ usually have strong internal convictions and aim to take the lead on defining what the future looks like — bucking the herd mentality prevalent within their sector. While some may perceive future-shaping as risky or ambitious, the payoffs are potentially huge. This approach indicates to the wider ecosystem where you believe the most value can be delivered. This requires that organizations define a clear vision, ambition and pathway to not only bring their idea into reality but also shape the perception of stakeholders and bring them on board. It’s an approach aimed at shaping the systems and environment around you to build the future you want.

Recently, one of the largest infrastructure conglomerates in the world challenged us to help position them as a key player in the future of mobility and energy storage. The initiative tied their long-term corporate intent to a set of ambitious yet practical activities that generated an immediate impact for them. Within a matter of years, new business lines, strategic alliances and a future-oriented organizational mindset positioned them as one of the most innovative companies in their domain.

The Three Lenses of Strategic Foresight

Unfortunately, a universal strategic foresight formula doesn’t exist, since solutions and pathways forward are determined by a multitude of forces shaping the company’s internal and external context. But in general terms, there are three lenses that we apply in our work when thinking about the future. The key is to decide which combination of approaches is right for you.

LENS 1: The Analytical Lens

With this lens, you learn from historical data to inform and guide future-oriented decisions. Leveraging the analytical lens entails extrapolating from the past to derive informed opinions about the future. You can usually analyze tons of information and create compelling, content-heavy opinions that might

A View on Strategic Foresight

potentially withstand scrutiny of past events to develop best practices and avoid potential pitfalls. However, when used alone, this type of thinking is inherently reductionist, as it leads to opinions about the future that are rooted in past events. If the future ceases to follow convention — which it very likely will — using this approach alone is counterproductive.

LENS 2: The Speculative Lens

With this lens, you explore a wide array of future possibilities with creative and divergent thinking. By speculating on an individual topic’s variables and describing them holistically, organizations can encourage thinking outside of the box, capture divergent perspectives and incubate controlled and constructive friction. For example, we collaborated with wearable tech brand MACHINA to imagine ‘fashion as survival in the face of the climate crisis.’

FIGURE ONE

This approach utilizes tools such as brainstorming sessions, ‘brainwriting’ and ‘wildcards.’ Preparation and alignment on the tools and processes used for speculation are important here to produce successful results. These sorts of generative exercises are useful but must be considered at a deeper level to have lasting value. ‘Two-minute futures,’ designed over the course of a couple of workshops, could risk superficiality and potentially fail to withstand in-depth examination, providing limited value for the organization.

LENS 3: The Systems Lens

This lens enables you to connect your thinking across systems to build flexible and adaptive strategies. It entails the use of logic,

imagination, intuition and systems thinking to explore the possibilities of ‘what could be’ and to create desired future outcomes. By thinking about the interconnections and causality between different variables, exploring feedback loops and weak signals and synthesizing the insights derived from this analysis, organizations can obtain a deep and thorough understanding of the world around them.

In closing

Returning to our protagonist from the outset, Kodak was able to adapt and reinvent itself. Today, it is recognized as a pioneer that revolutionized photography and is still leading in new ways — recently building entirely new IMAX film stock

The Next Frontier: Integrating AI into Strategic Foresight

While strategic foresight has traditionally relied on a combination of analysis, human intuition, experience and creativity to identify signals, develop scenarios and craft strategies, AI brings a new set of advantages to the table that can fundamentally transform the way organizations approach futures thinking. Essentially, the foresight process comprises three main stages.

1. Scenario Development: This stage involves laying the groundwork for analysis by generating a range of potential futures around a central theme. AI can aid in scanning for signals of change, identifying causality between key variables, generating AI-enabled scenarios, crafting narratives and creating visual representations of the future.

2. Scenario Planning: Here, organizations assess the impact of various futures on their operations, formulating flexible and contingent strategies that are informed by a deep understanding of potential future landscapes. AI can enhance scenario planning by simulating impacts, evaluating strategic responses and reviewing the opportunity costs of different strategic pathways.

3. Scenario Monitoring: This ensures that strategies remain relevant and responsive to changing conditions, helping organizations stay ahead of emerging trends and shifts. AI can support this process by scanning for early indicators of potential scenarios, conducting sentiment analysis, tracking pattern evolution and analyzing response efficacy.

AI acts as a tremendous force multiplier, processing millions of possibilities and identifying signals and patterns that may go unnoticed. Beyond mere computing power, it can be trained to apply sophisticated analytical tools like ‘sentiment analysis’ and ‘crossimpact analysis’ to transform raw data into actionable intelligence.

AI can also help identify ‘weak signals’—early indicators of potential significant changes that are subtle or infrequent enough to go unnoticed by humans, providing organizations with a valuable head start in adapting to changes. Following are three benefits of AI in strategic foresight—and some advice on what to avoid:

CHALLENGE ASSUMPTIONS. AI helps overcome the cognitive biases that cloud human judgment by providing an even-handed analysis of information, enabling diverse perspectives, objective analysis and more informed decisions, free from human judgment prejudices. Proceed with caution: AI models are only as good as the data they learn from. This means that, although when used carefully they can help overcome bias, they can also inadvertently perpetuate existing biases or make flawed assumptions based on the data they’ve been trained on. The need for continuous human oversight and guidance—not just in decision-making but also in AI training, validation and monitoring— is essential to maintain the integrity of strategic foresight activities.

BOOST CREATIVITY. AI supports scenario development’s creative side, enabling the exploration of a vast landscape of possibilities— including those that may seem counterintuitive. It can assist in crafting narratives using targeted prompts, helping communicate

for Christopher Nolan’s 2023 movie, Oppenheimer. Kodak’s journey serves as a vital lesson for other organizations: Even industry giants are not immune to the tides of change. And in today’s era of accelerating, unabated and discontinuous change, it is worth questioning: How might we proactively identify and integrate emerging developments and market shifts, rather than being outpaced by them?

Ultimately, the leadership teams setting themselves up for success are the ones who dedicate time, resources and energy to imaginative and rigorous explorations of possible futures. Remember, as humans, our perception of reality is often anchored in cognitive biases, deeply ingrained mental models and subjective opinions tied to the past. Acknowledging this and hav-

ing a structured reflection on what may be around the corner enables change that resonates across the cultural fabric of your organization and helps escape the ‘business as usual’ mindset.

Ask yourself this: How is your organization preparing for the unknown? Are you simply following the well-trodden path, or are you ready to forge a new one?

scenarios in an empathetic manner. Post-scenario development, AI can help anticipate the potential impact and outcomes of dozens, if not hundreds of scenarios, generating opportunities and risks associated with each one. They can also be trained to suggest strategic pathways to prepare for various eventualities, leading to a more proactive and agile approach to strategic planning. Proceed with caution: Turning strategic insights into actionable plans not only requires human input, but also an ability to challenge and redefine existing mental models. While AI can offer us the ‘what’ and potentially the ‘when,’ it is human leaders who provide the ‘why’ and the ‘how.’ Using their understanding of organizational dynamics, stakeholder interests and emotional nuances, they can infuse datadriven insights with context, relevance and urgency.

SPOT PATTERNS: Ensuring continuous and real-time insights throughout the foresight process, AI ‘bots’ can roam millions of research articles, news pieces and social media platforms according to pre-defined criteria in order to spot patterns and connectthe-dots across large data sets. AI’s ability to continuously learn and improve allows it to evolve its search algorithms over time, getting better at spotting patterns and identifying relevant signals. Proceed with caution: Identifying patterns alone is not enough. Incorporating AI into strategic foresight brings us face to face with its ‘black box’—the opaque core of AI decision-making. The rationale behind the outputs generated by AI are not always clear and pose a challenge for decision makers. The quest for explainability isn’t merely academic; it’s about ensuring that the strategic choices

carved out by AI’s complex neural networks can be understood, trusted and acted upon by decision-makers.

Successful strategic foresight with AI requires a balanced approach. While AI brings computational power and objective analysis, humans contribute contextual understanding and ethical judgment—which are particularly crucial in addressing complex challenges. This translates into the following operating principles:

• Culture-first: Prioritize learning and adaptability to new ways of working within the organization. This means being able to deploy the right tools for the job, helping to facilitate diverse perspectives and agile responses to change.

• Insight-driven: Gather insights from large datasets to inform decision-making processes. Interpreting data successfully means being able to understand new developments and apply foresight methodologies.

• Tech-enabled: Build (or gain access to) the technological infrastructure that enables you to process and interpret complex information, supporting strategic foresight and development.

The challenge now lies in integrating AI, not as a replacement but as an extension of our strategic acumen, ensuring that the path to success in tomorrow’s world is as human as it is data-driven.

– Octavio Egea and Arjun Shukla

Octavio Egea is Vice President and Head of Innovation, Strategy & Design at frog, part of Capgemini Invent. Arjun Shukla is Associate Strategy Director at frog/Capgemini Invent. Both are based in Madrid.

Self Development 101: Introducing The Wheel of Self

When five aspects of the self are working in harmony, positive change can happen organically. But what happens when the Wheel of Self stalls?

by Maja Dji kic

“HAPPY FAMILIES ARE ALL ALIKE; every unhappy family is unhappy in its own way.” This is how Tolstoy begins his masterpiece

Anna Karenina. For individuals, we could say the opposite: When joyful, we are all different, moving towards our potential in unique, unreplicable ways. When suffering, we are all alike: we feel stagnation; alternate between frantic action and paralysis; suffer frustration and anxiety, rumination and negative selfthoughts; and try hopelessly not to repeat past failures.

We are alike in our suffering because, while our potential and paths are unique, the symptoms of getting stuck appear to be universal. But before we can begin to understand how stagnation happens and how we can leave it behind, we are faced with a big question: What is the self? Ever since Freud divided the self into id, ego and superego, hundreds of psychologists, sociologists, anthropologists and other human-centred professionals have been offering their answers to that question.

My own answer is based on observing which ‘parts’ of the self are most important to people attempting self-change. My framework, which I call the Wheel of Self, is a practical tool that you can work with to restart your personal development. In this article I will describe how it works.

The Wheel of Self

I think of the self as having five distinct parts, arranged into a wheel: motivation, behaviour, emotion, mind and body. When most of us try to change — say, to reduce the number of doughnuts we eat each week — we often focus only on behaviour. What we forget is that behaviour is influenced by:

• motivation, that is, our wants and desires (for a delicious Boston cream doughnut);

• emotions (the happiness we feel when we taste it);

• our mind (tempting thoughts about how fluffy and creamy it will be); and

• our body (which has been conditioned by many years of experience to expect a doughnut after lunch).

Imagine you are thinking of leaving your nine-to-five job as a project manager to start a freelancing career. You like the idea of being your own boss and having the flexibility to organize your life more meaningfully. To make this happen, it’s not enough to change your circumstances — you also need to develop the aspects of yourself that will be required for this life transition: to be disciplined about time, have sufficient confidence and

interpersonal skills to offer your services to a wider network of clients, and to know how to say no, to prevent burnout — to name a few.

When the Wheel of Self is functioning well, all five aspects of the self are in harmonious motion:

• On the motivational side, you are driven by a curiosity about your subject matter and are inspired to devour materials that will lead you to your aim;

• Behaviourally, you seek out and explore articles, blogs and books about freelancing and start connecting with people who are already working and living as you wish to do;

• A feeling of joy, an emotional signal of developmental movement, permeates your days, and you are excited and hopeful for what your future will bring;

• Your mind is drawn and attentive to anything to do with your new idea and will often get absorbed in reading articles or watching videos late into the night;

• And, despite the late nights and early mornings, your body feels energized, responsive and restored.

When in the midst of this, you don’t have to try very hard to change, apply willpower or develop habits to keep up your new behaviours. It happens organically, as if all parts of the self are conspiring to develop a new way of being. The question is, What happens when the Wheel of Self stalls?

When the Wheel Stalls

Abhinav, a 46-year-old physiotherapist, spent his 20-year career working too much. He now had a full roster of clients and was a managing director of the clinic; but he was heavily burdened with both clinical and administrative duties. Most evenings he would come home after his children had already been put to bed. During infrequent family vacations, he would get so anxious and desperate to continue work that more than once his wife suggested he return home early and let the children enjoy their few days on the beach. He knew his lifestyle was unhealthy and had tried to change, with no success.

With time, things got worse. He felt he was drifting away from his wife and was not as close to his two children as he wished to be. His health was deteriorating. His practice was full, yet he was still taking on additional patients on recommendation, particularly if they were elderly or had complex rehabilitation needs. In the previous decade, he had tried over and over again to cut down on his work, but his strategies never seemed to work. His friends would tell him, ‘Just stop working so hard.’ He tried, but his attempts left him feeling guilty and anxious.

Framing the problem of self-change as that of behaviour change is a common misconception about self-transformation. We forget that our behaviour is influenced by the other four parts of the self: motivations, emotions, thoughts and old patterns that we carry with us in our bodies. When we try to change behaviour in one direction (trying to work less) while our minds, emotions and bodies are fighting the opposite tendency (wanting to work more), what we produce is not self-change but a form of selffragmentation. We have tried moving one part of the Wheel of Self while the other parts are stubbornly static or moving in the opposite direction. This leaves us stressed, exhausted and full of guilt once we revert to the old behaviour.

For successful and lasting inner change, we need all five parts of the Wheel of Self to move in unison. When stalled, however, the parts of the self start doing something very different: Motivationally, instead of thinking of what we want as simply adding to our life — such as wanting to be a freelancer in the earlier example — we’d think of it as something that would fill a gap in our life. The want may get very intense and turn into a desire — a chronically unfulfilled goal. This kind of desire does not affect only one part of our life but colours its totality in dark hues.

Whenever Abhinav’s strategies to work less failed, he could no longer fully enjoy other parts of his life, whether it be family, friends or recreation. During the little time he did spend with his family or friends, he was unable to be fully present. He would drift away mentally, fantasizing about how amazing his life would be if only he could work less. It’s as if the one thing that remained unchanged became a dark cloud over the rest of his life.

The intensification of a want into a desire, punctuated by occasional hopelessness, is a natural outcome of chronically unfulfilled wants. When we don’t get what we want for a long time, we can lose hope; yet even this hopelessness is temporary since the motivational system has evolved to press its claims until fulfilled. We can try to stop wanting some change or pretend that we no longer want it, but the desire will surge again. Our motivational systems have evolved to continue pulling us forward, despite our trying to give up.

Behaviourally, desire and hopelessness lead us to alternate between overdoing and distractions. Desire makes us hurry to achieve our goals, and we pour time and energy into self-change. Like a dieter who keeps starting new diets, we keep overdoing activities that never seem to add up to self-change. At times it seems we are getting ahead, but these advances are temporary and opposed by the constant threat of the relapse into our ‘old selves.’ When this happens, overdoing gives way to distractions, where we abandon what we desire and try to forget about it.

Abhinav continually deployed strategies to reduce his work. Sometimes he tried suggestions he read about in books or followed recommendations from friends. He hired coaches, therapists and other professionals to help with the change. He would throw all his energy behind the endeavour, hoping this would be the time when he would finally make the change. Yet when the strategies failed, he would be overcome by great disappointment and resignation, which led to giving up his efforts and doing other things to forget he gave up.

After a while, the unceasing pulse of his desire would activate, and he would start again, his efforts escalating. This rhythm of overdoing and distractions is well known to those of us who have tried to change our behaviour only to run out of willpower when life’s stresses get in the way.

It’s difficult to relax and enjoy things if a looming unsatisfied want is always in the background. Even when Abhinav was spending time playing with his kids or making dinner with his wife, he was experiencing the background feeling of frustration. He’d be thinking to himself in those moments, ‘If I could solve the problem of working too much, I could have many more

enjoyable moments just like this and change my life.’

Many negative emotions show up when we feel stuck. There can be anger at ourselves and the world for being denied the one thing we want the most. A sense of hopelessness, dread and despair is common. These negative emotions are often fuelled by our mind, which spins out beliefs or narratives about what past failures mean. Usually, these include the stories of something being wrong with us, such that the fulfillment will always be unreachable; or something wrong with other people, who can be seen as direct obstacles to the desired thing.

An additional outcome of repeated failures is the mind’s ruminative or obsessive thinking about how to gain our goal while increasingly doubting that it is possible. The obsession with the goal permeates our life to the exclusion of other goals, making it difficult to maintain peace of mind even as we make some advances toward the goal. Are we going to lose it? Could it somehow turn out badly? And what is the chance that such success can continue?

For example, when Abhinav’s attempts at working less succeeded for more than a week, his mind would proceed to catastrophic possibilities: What if he declined a patient who would not be able to get care anywhere else and inadvertently caused this hypothetical person further injury — or even death? What if there was a catastrophic economic downturn so that his reduced work would financially devastate his family? Despite occasionally achieving (partially or temporarily) the object of our intense desire, the complete fulfillment and the inner freedom we hope to gain from it often remain elusive.

Finally, the body cannot but be drained by all the mental, emotional and behavioural activity that keeps leading nowhere. It is easy to forget that the stress of inner conflict is energetically expensive. If ruminative thinking about past failures and future fantasies continues for an extended period, the body under stress may start showing signs of illness.

Abhinav’s parents, who were immigrants, made many sacrifices so that he and his brother could get the education they did. His early experiences affected how he thought of work and sacrifice in his own life, unconsciously pushing him to work

Envy highlights the parts of our life in which we feel unfulfilled. If we take its cue, we can begin the hard work of restarting our growth.

more. Memories of his family’s struggles and his feelings of sadness, guilt and fear were still vivid inside him. Many of us carry such ‘active memories’ in our bodies, whether of our early threats, embarrassments or rejection. Trauma researchers show how the body carries the continued threat of early situations and acts on the present circumstances as if they were the past. The whole self-system — mind, emotions, body, motivation and behaviour — gets stalled. If the self were, in fact, in danger, it would be rational to worry, obsess and become exhausted. The self-system acts rationally but mistakes the present for the past and, in doing so, renders itself ineffective.

Now that we have a more detailed picture of what happens to the self when it stalls, it’s time to reflect on which parts of our lives might need further development.

Red Flags of Stagnation

Is there something without which you feel your life will not be fulfilled? Something you have tried to gain repeatedly without success? Something that makes you worried, frustrated, obsessed, frantic, hopeless and finally, exhausted? If these questions don’t bring anything to mind, here are four clues that will alert you to your stalled ‘wheels.’

FEELING ‘BEHIND SCHEDULE.’ Having strong wants frequently leads to a continual comparison with others. If we are unfulfilled in a particular domain (finances, relationships, fitness, creativity, etc.), we are likely to be inquisitive about other people’s achievements in that same domain. This often leads to selftorment when we compare ourselves to those who have done better than us — or to glimmers of hope when we find others who were ‘late starters’ like us but still managed to make it. This is the feeling of having missed a crucial opportunity, the feeling that ‘the ship has sailed,’ or ‘what’s the point of starting now,’ while at the same time being unable to stop wanting something. We may feel other people have built better careers, families, bodies, friendships or skills and that, by our age, we should have achieved more. Notice that this feeling of being ‘behind’ is entirely age-independent, so 20-year-olds are as likely to suffer from it as 70-year-olds.

ENVY. Although somewhat unpleasant to think about, wanting

what other people have while at the same time being irritated that they have it can be a great clue that our development has stalled in that domain of our life. Envy implies more than comparing our life to that of another person or even wanting to have something similar. It means we wouldn’t mind seeing them fail, and if this were to happen, we may feel schadenfreude, taking some actual pleasure from the misfortunes of others.

When envious, we may discuss information about unfortunate events in other people’s lives — a career failure, a divorce or a loss of their investments in a dubious scheme — eagerly and with gusto. This makes sense psychologically: If we believe we can’t have what we badly want, it is comforting to know that other people can’t have it either. While most of us shrink away from awareness that we are envious, facing and hearing our envy can be a great boon to self-development. Envy highlights the parts of our life in which we feel unfulfilled and underdeveloped, and if we take its cue, we can begin the hard work of restarting our growth.

SEEKING ADVICE. You have probably been in the shoes of either the giver or seeker of advice that doesn’t work. In one scenario, a person to whom something comes naturally gives (either unsolicited or solicited) advice to someone who desires that same thing intensely. Imagine a frugal person giving financial advice to a spendthrift. Despite the best efforts of all involved, such advice leads nowhere. It is either not executed or is executed in a way that doesn’t produce the outcome that the advice giver was hoping to produce.

This makes sense, since advice given by someone naturally good at something is then interpreted by the distorted lens of the person who is terrible at it. If we receive such advice while ‘stuck’ in some part of our development, we may discard it for various seemingly logical but self-deceptive reasons, postpone its implementation until the ‘right’ time, or follow it too literally or too vaguely for it to have any practical impact. Ultimately, both the advice giver and seeker will likely end up frustrated and disappointed.

We may want to reflect on what advice we seek the most, what is on our self-help or inspirational bookshelf, and what workshops we have spent the most money on. This reflection may guide us to know which domains in ourselves are still to be fulfilled.

The Developing Self

IMMATURE BEHAVIOUR. It is one of the mysteries of the self how development in one aspect of self may cease while development in other domains of our lives continues naturally. This is how someone may end up being a perfectly competent 53-yearold professional with great friends and finances who, when romantically rejected, behaves like a petulant 16-year-old and, when abandoned, withdraws like a scared seven-year-old.

This fact — that adults occasionally behave as if they were chronologically younger or immature — is frequently pointed out when it happens to others. Yet when we notice an immature outburst in ourselves, we often give ourselves excuses — we were tired, upset or it was someone else’s fault. Very few of us are willing to give the immature parts of ourselves a closer look. And for good reason. These aspects of us, stuck on the way to development, represent the most painfully unmet wants that have been continually denied and sometimes temporarily abandoned. Yet in that very same place lies, of course, the greatest potential of fulfillment.

The Stalled Self

In closing

Learning about how the self works and how to facilitate its development takes time, energy and the belief we have the inner wisdom to help us fulfill aspects of ourselves that have never (or rarely) experienced fulfillment. This is possible, but as touched on herein, it takes some work. You may not want to do the work quite yet, and that is understandable. Change in some domain of the self, even when positive, can impact your whole life. Only you can know when you are ready.

Maja Djikic (UofT PhD ‘05) is an Associate Professor of Organizational Behaviour and HR Management and Director of the Self-Development Laboratory at the Rotman School of Management. A psychologist specializing in the field of personality development, her first book is The Possible Self: A Leader’s Guide to Personal Development (Berrett Koehler, 2024). In January Maja was named to the Thinkers50 Radar List — which spotlights thinkers whose ideas are most likely to change the future.

FIGURE ONE

FIGURE TWO

AI’s Effect on Jobs: Automation vs. Augmentation

Evidence is mounting that AI will have the greatest impact on tasks performed by high-wage workers — and will provide new opportunities for those at the lower end of the scale.

by Ajay Agrawal, Joshua Gans and Avi Goldfarb

ALMON BROWN STROWAGER, a New York undertaker from the 19th century, was fuming. He found out that a local phone switch operator — the wife of a competing undertaker — was redirecting his customer calls to her husband. Harnessing his entrepreneurial spirit, he set out to take all switch operators to their employment graves: He and his colleagues invented the Strowager switch, which automated the placement of phone calls in a network. The switch soon spread worldwide and, as a consequence, a job that had once employed over 200,000 Americans virtually disappeared.

While the pioneer researchers in new areas of artificial intelligence (AI) such as machine learning, deep learning, reinforcement learning and generative AI are probably not motivated by similar frustrations, their stated goals have nevertheless been to develop human-level machine intelligence. Sometimes the goal is to mimic a human; other times, a specific task or job is a template for their endeavours.

In the realm of image classification, the benchmark for AI researchers was superiority over humans — a goal that was achieved for some tasks in 2015. Human performance is also the benchmark for AI natural language processing and translation. OpenAI demonstrated that its GPT-4 model exhibits humanlevel performance on a wide range of professional and academic benchmarks, including a Bar exam and the SAT.

In 2016, AI pioneer and Turing Award winner Geoffrey Hinton remarked that time was up for radiologists and that no one should continue training in that field. Whether or not that holds true, recent developments in AI have reinforced the widespread belief that the intent of AI research is to replace humans in performing a wide variety tasks

This view has not gone unquestioned. In his book Machines of Loving Grace, John Markoff celebrates researchers committed not to human replacement, but to human intelligence augmentation. He argues that the history of computer development demonstrates the scarceness of replacement alongside significant gains — both commercial and social — when computers are designed to be a tool that augments people’s skills.

Elsewhere, Stanford Professor Erik Brynjolfsson has identified the erstwhile Turing Test — a test of a machine’s ability to exhibit intelligent behaviour equivalent to that of a human — as “an instrument of harm” in creating an automation mindset for AI research at the expense of potential augmentation paths. Both Markoff and Brynjolfsson argue that it would be preferable if AI research travelled a more human-centric path, focusing on opportunities to augment rather than automate humans. Such AI applications would enable people to do things they could not previously do, creating a complementarity between such applications and human capabilities and skills.

Technologies that replace the core skills of some workers can enable others to get more out of their skills.

They are joined in this belief by MIT Economist Daron Acemoglu, who has been vocal about the risks AI poses for job security unless more diverse research paths are chosen. Acemoglu sees the potential for AI in many sectors — from healthcare to entertainment. He also speculates on AI use in education. Current developments go in the direction of automating teachers — for example, by implementing automated grading or online resources to replace core human teaching tasks. But AI could also revolutionize education by empowering teachers to adapt their material to the needs and attitudes of diverse students in real time.

The advocates for human-centric AI list the mindset of AI researchers as the primary starting point for attitudes to change. Brynjolfsson argues, “A good start would be to replace the Turing Test, and the mindset it embodies, with a new set of practical benchmarks that steer progress toward AI-powered systems that exceed anything that could be done by humans alone.” The underlying hypothesis is that if the objectives of AI research are changed, this would steer the economy away from the potential loss of jobs, devaluation of skills, inequality and ensuing social discord. In this way, society could avoid what Brynjolfsson calls the ‘Turing Trap,’ whereby AI-enabled automation leads to a concentration of wealth and power.

In a recent paper, we question this hypothesis, asking whether it is really the case that the current technical objective of using human performance of tasks as a benchmark for AI performance will result in the negative outcomes described by Acemoglu and colleagues. Instead, we argue that task automation — especially when driven by AI advances — can enhance job prospects and potentially widen the scope for employment of many workers.

The neglected puzzle piece we highlight is the potential for changes to the ‘skill premium’: AI automation of tasks exogenously improves the value of the skills of many workers, expands the pool of available workers to perform other tasks and in the process, increases labour income and potentially reduces inequality. We label this possibility the ‘Turing Transformation.’

The distributional effects of technology depend more on which workers have tasks that get automated than on the fact of automation per se. This defines a Turing Transformation. What is happening is that AI involves a task that requires specialized skills, and the automation of that task opens up opportunities for more workers. In effect, workers with generic skills are helped when AI is adopted because they are able to participate in jobs previously only available to those with specialized skills.

However, suppose the only workers are skilled workers. Under these assumptions, used by Acemoglu, if there are large economies of scope or AI involves a high unit cost, wages would

fall if AI were adopted. This is the situation that one might characterize as a Turing Trap. In this model, an AI that is built with the intention of replacing a human in a task — that is, an automation mindset — turns out to be augmenting for the majority of workers because it opens up an opportunity to work on other tasks that would previously have been bundled as a job created for relatively scarce workers. In this model, more workers compete with one another, but the productivity effect is such that total labour income rises.

Broadly speaking, the implication is that the notion that automation and augmentation involve distinct mindsets with distinct outcomes for workers misses some relevant features. Different workers have different skills, and many of the developments in AI with the potential for widespread impact entail replicating an aspect of the intelligence of a small number of higher-wage workers. In doing so, the technology could create opportunities for a much larger number of workers, enabling new opportunities for employment, along with the potential for higher wages and career choice.

When considering automation versus augmentation, the heterogeneity of worker skills is fundamental. One worker’s automation is another’s augmentation. Automation of rare high-value skills can mean augmentation for everyone else. Similarly, augmentation that complements the lucky humans with rare high-value skills can mean increased inequality and a hollowing out of the middle class.

Another potential criticism of this perspective is that it is not always obvious whether a technology replaces something that is currently a human skill, and thus the line between augmentation and automation can be blurry. We take the distinction as given. If it is blurry whether a technology is ‘intelligence augmentation’ or ‘human-like artificial intelligence,’ that enhances our broader point that this distinction is not useful.

Examples of the Turing Transformation

The discussion of automation and augmentation has a new urgency because of advances in AI over the past decade. These advances are primarily in a field of AI called machine learning, which is best understood as prediction in the statistical sense. By prediction, we mean the process of filling in missing information.

Our examples will focus on advances in prediction technology, though our broader point about the value of automation versus augmentation is not specific to prediction machines. Technologies that replace the core skills of some workers can enable others to get more out of their skills.

There is already some evidence that AI might be particularly likely to affect the tasks performed by high-wage workers. Webb found that the most common verbs in machine learning patents include ‘recognize,’ ‘predict,’ ‘detect,’ ‘identify,’ ‘determine,’ ‘control,’ ‘generate’ and ‘classify.’ He also finds that these verbs are common in tasks done by relatively high-wage workers. It is an open question whether automating these tasks will simply reduce the wages of those who are already doing well or whether it will create new opportunities for lower-wage workers. But our model suggests that automation has the potential to reduce inequality, not just by making those with higher wages worse off but by creating a Turing Transformation for many more workers. Following are some examples.

PERSONAL TRANSPORTATION. Since 1865, London taxi drivers have had to pass a test demonstrating mastery of ‘The Knowledge’ of the map of the city’s complicated road networks. Most drivers had to study three to four years before passing the test. This is a skilled occupation, requiring incredible memory skills and the discipline to spend the time studying. Fifteen years ago, no one could compete with the ability of London taxi drivers to navigate the city. Today, the taxi drivers’ superpower is available for free to anyone with a phone. Digital maps mean that anyone can find the best route, by driving, walking or transit, in just about any place in the world. The mapping technology substitutes for the driver’s navigation skill. It doesn’t provide something new, but it replicates a human skill more cheaply. As a result, taxi driver wages have fallen. This is precisely what Markoff, Brynjolfsson et al. warn against.

Automation of the taxi drivers’ competitive advantage, however, has created opportunity for millions of others. By combining navigation tools with digital taxi dispatch, companies like Uber and Lyft have enabled almost anyone with a car to provide the same services as taxi drivers.

Put simply, technology automated the core skill that only a handful of skilled humans could already do. And in the process, it provided the opportunity for many without those skills to work in the same industry. In the U.S., there were approximately 200,000 professional taxi and limo drivers in 2018. Today, more than 10 times that number drive for Uber alone.

CALL CENTRES. Around the world there are millions of customer service representatives working in call centres where productivity is carefully measured in terms of calls per minute and satisfied customers. Like other industries, worker productivity is uneven. The most skilled agents are much more productive

than the median, and new workers improve rapidly over the first few months.

A recent paper by Brynjolfsson and colleagues looks at the deployment of AI in a software support call centre. These calls are relatively complicated, averaging over 30 minutes and involving the troubleshooting of technical problems. The AI provides real-time suggestions on what the call centre worker should say, and the worker can choose to follow the AI or ignore it. The most productive workers benefit very little, if at all from this. They may even rationally ignore the AI’s recommendation. In contrast, it is the least productive workers and the newer workers that benefit. Notably, their relative productivity compared to the most productive workers increases: The AI reduces the gap between the less skilled and more skilled workers.

The paper provides suggestive evidence that this is because the less-skilled workers learn what their more skilled peers would do in a given situation. This technology is automation as defined by Markoff: It involves machines that do what humans do, rather than machines that do something that humans can’t do. It is used as decision support, and therefore can be seen to serve as a complement to all of the human workers, regardless of their skill. In practice, however, the technology helps the least skilled.

MEDICINE. A large and growing body of research is showing the potential for AI to provide medical diagnoses. Underlying this research is the insight that at its core, diagnosis is prediction: It takes information about symptoms and fills in missing information of the cause of those symptoms. Diagnosis, however, is a key human skill in medicine. Much of the training doctors receive in medical school — and the selection process they go through in order to get into medical school — focuses on the ability to diagnose.

Other workers in the medical system may be better at helping patients navigate the stress of their medical issues or providing the day-to-day care necessary for effective treatment. Diagnosis is perhaps the central skill that sets doctors apart. An AI that does diagnosis automates the task requiring that relatively rare skill. It is not augmented intelligence but a replacement for human intelligence.

In 2021 there were 760,000 jobs for physicians and surgeons in the U.S., earning a median income of over $200,000 per year. Automating the core skill that many of them bring to the table could eliminate much of doctors’ value, even leading to stagnating employment and wages. Again, exactly the worry that Brynjolfsson and Markoff warn against when AI replicates human intelligence.

When almost anyone has the ability to write clearly, there will be changes to who is capable of which jobs.

However, in 2021 there were also three million jobs for registered nurses and millions for other medical professionals, including pharmacists, nurse and physician assistants and paramedics. While AI diagnosis would likely negatively affect many doctors, if these other medical professionals could perform AI-assisted diagnosis then their career opportunities, and possibly wages, could increase substantially.

LANGUAGE TRANSLATION. Another task currently performed by skilled workers that AI could take over is language translation. Many people speak multiple languages, and in many workplaces this ability confers an advantage. Speaking French and English is an advantage in many Canadian workplaces, particularly for the hundreds of thousands who work in the civil service or in regulated industries. Similarly, people who speak multiple languages have an advantage in many international business opportunities.

Of course, many people work as translators, earning their income directly from their ability to translate between languages. For written texts, when the goal is simply to communicate with little regard for eloquence, AI is already good enough to replace many human translators. For large-scale translations and realtime translation of verbal communication, there are reasons to expect machine translation to be good enough to deploy commercially in the very near future.

These advances are probably bad news for the tens of thousands of language translators in the U.S. However, they are likely good news for many others. Brynjolfsson et al. report that AIs used for translation enhance the capacity of sellers on eBay, increasing exports by 17.5 per cent. AI that automates language translation enables enhanced communication across the world. It likely means more trade, more travel, faster integration into workplaces for recent immigrants, more crosscultural exchange of ideas and perhaps even different social networks. Those whose jobs have been constrained by an inability to speak or write in multiple languages would no longer face those constraints.

WRITING. The ability of AI to write goes beyond translation. When OpenAI released ChatGPT in November 2022, it quickly gained millions of users due to its ability to produce well-written prose on a wide variety of topics. It can even produce high-quality fiveparagraph essays, leading to worries about the future of takehome exams and the potential for widespread cheating. It can write eloquent emails, longer articles and summarize research and news events. Because summarizing, interpreting and writing is such an important part of knowledge work, MIT Economist

Paul Krugman worried that ChatGPT means that “robots are coming for the skilled jobs.”

Summarizing and writing are clearly not cases of a machine doing something that is beyond human capability. As such, this is automation, not augmentation. Or in Markoff’s language, it is ‘artificial intelligence for duplicating human behaviour’ — not intelligence augmentation that attempts to expand human abilities.

That, however, depends on the human. Many people don’t write well. With ChatGPT, they can quickly compose communications to customers, suppliers or friends without fear of grammatical mistakes and without the need to stress about how to get their ideas down on paper. This could enable millions of people to benefit from skills other than writing. When almost anyone has the ability to write clearly, there will be changes to who is capable of which jobs, with many people in the bottom half of the current income distribution receiving new opportunities while some at the top face enhanced competition.

As with taxi drivers, those who make their living writing will be affected positively and negatively. They may become more efficient, given that AI can summarize articles and write or revise drafts. But they will also face more competition for their work and, like taxi drivers, their wages may fall as their skills are no longer scarce.

Intelligence Augmentation and Inequality

We will now provide examples of information technologies that are best seen as intelligence augmentation under Markoff’s definition — as technologies that do things that are not possible for humans to do. In this sense, they are outside the motivating model, as they do not involve directly automating a specific task done by a human worker — although, as we have emphasized, one person’s augmentation could be another’s automation.

COMPUTERIZATION. As Brynjolfsson has put it, “computers are symbol processors.” They can store, retrieve, organize, transmit and transform information in ways that are different from how humans process information. Markoff notes that modern personal computers have their root in Douglas Engelbart’s augmentation tradition. Unlike AI, which we believe may decrease inequality, computerization increased inequality and led to polarization of the U.S. wage distribution, expanding high- and low-wage work at the expense of middle-wage jobs.

This is because, while some tasks done by computers could be done by humans, much of the changes are a result of complementarity between the skills of the most educated workers and

the identification of new ways to use the machines. In other words, rather than directly replacing a task done by middle income workers — as AI does — computers complemented the skills of those already near the top of the income distribution, thereby increasing their productivity for tasks that were already being done by humans.

Again, quoting Brynjolfsson: “As computers become cheaper and more powerful, the business value of computers is limited less by computational capability and more by the ability of managers to invent new processes, procedures and organizational structures that leverage this capability.” Census data comparing business software investment with employee wages shows that within and across firms, software investment increases the earnings of high-wage workers more than that of low-wage workers. Computers displaced the workers performing routine technical tasks in bookkeeping, clerical work and manufacturing, while complementing educated workers who excel in problem-solving, creativity and persuasion.

DIGITAL COMMUNICATION. The Internet represents another technology that does something distinct from what humans can do. For the most part, as Markoff notes, it does not replace specific tasks in human workflows. Instead, it allows computers to communicate with each other, sending information between millions of devices. This information is a complement to the human skills of interpreting and acting on information.

People and places at the top of the income distribution benefited from the technology while those with less education benefited less. To the extent that there are differences between augmentation and automation technologies, the Internet is more of an augmentation technology. As such, it complemented the skills of those who were already at the top of the distribution.

The above discussion warrants an important caveat: Many have called computerization and digital communication ‘automation.’ Formally, it is difficult to classify technologies as automating or augmenting, and we do not want to take a strong stand on which technologies belong in which category. That is an aspect of our underlying point: One person’s augmentation is another’s automation. What matters is the distribution of workers whose skills are complemented.

The first 50 years of computing introduced many technologies that appear to be intelligence augmenting, creating new capabilities and new products and services. The last 10 years have seen a rise in AI applications, whose inventors directly aspire to automate tasks currently performed by humans. On the surface, technologies labelled as ‘augmentation’ appear to complement

human workers, while automation technologies appear to substitute for human workers. Therefore, many scholars have called for engineers, scientists and policymakers to focus on augmentation technologies over automation.

An important aspect of this argument is the idea that complements to human labour will reduce income inequality, while substitutes for human labour will increase it. We argue that this dichotomy is misleading. A key aspect of understanding the impact of intelligence technology on inequality and the well-being of most workers is the heterogeneity of workers’ skills. Our bottom line is this: A technology that directly substitutes for rare and highly-valued skills could create enormous opportunities for most workers.

In closing

With technological change, the winners and losers are not determined by whether the technology seems to replace or augment human tasks. Instead, winners and losers are determined by whether the augmentation affects lower-wage workers and whether automation affects those who are already doing well.

Perhaps the best targets for computer scientists and engineers looking to build new systems is not to find intelligences that humans lack. Instead, it is to identify the skills that generate outsized income and build machines that allow many more people to benefit from those skills. As noted herein, this may be what is already happening with AI that recognizes, predicts, determines, controls, writes and codes.

Ajay Agrawal is the Geoffrey Taber Chair in Entrepreneurship and Innovation and Professor of Entrepreneurship at the Rotman School of Management, where he founded the Creative Destruction Lab. Joshua Gans is a Professor of Strategic Management and holds the Jeffrey Skoll Chair of Technical Innovation and Entrepreneurship at the Rotman School. Avi Goldfarb is the Rotman Chair in AI and Healthcare, Professor of Marketing and Chief Data Scientist at the Creative Destruction Lab at the Rotman School. This article summarizes their recent paper for the National Bureau of Economic Research, “The Turing Transformation: AI, Intelligence Augmentation and Skill Premiums.” The complete paper is available online. The trio are coauthors of Power and Prediction: The Disruptive Economics of Artificial Intelligence (HBR Press, 2022) and Prediction Machines, Updated and Expanded: The Simple Economics of Artificial Intelligence (HBR Press, Revised Edition, 2022).

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Measuring Digital Innovation: A Four-Stage Framework

A simple framework can help leaders avoid common mistakes made by many corporate innovators — and accelerate the discovery of their next digital success story.

by David L. Rogers

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THE DIGITAL ERA DEMANDS INNOVATION. Every business today — indeed, every organization — must continually adapt to keep up with changing customer expectations, new digital competitors and business models made possible by emerging technologies. For an established business, this means digital innovation within your core business — via improvements to your customer experience, as well as back-of-house improvements that address operations, risk and productivity. And it also means digital innovation beyond your core — testing new offerings in pursuit of new customers and new revenue models.

Yet it is not enough to blindly commit resources to innovation and the pursuit of new ideas. Leaders must ensure that every innovation adds meaningful financial value to the firm, along with value to the customer. It is therefore essential to measure innovations at every stage to determine that they are on track to create real value.

The Challenge: Measuring Innovation

Measuring innovation is a perennial challenge. New ventures cannot be managed by the same KPIs that you use in your core business. What’s more, the metrics needed to grow any new venture will rapidly change.

Because of your long experience with your core business, its day-to-day operations can be managed with traditional planning. But the inherent uncertainty of any new digital innovation requires that you manage it through a process of experimentation

This process should draw on seven principles shared by agile, design thinking, lean start-up and product management:

1. Start from the problem to be solved, not the solution.

2. Don’t write a business plan. Instead, write business hypotheses.

3. Focus on learning and testing those hypotheses.

4. Build new things quickly, cheaply and iteratively.

5. Get feedback at each step — directly from the customer.

6. Be ready to pivot or shut down quickly if the data do not validate your hypotheses.

7. Be ready to scale up if the data indicate that you are on the right track.

I define experimentation as ‘any process of iteratively learning what does and does not work.’ Metrics are essential to this kind of iterative learning. So, what data will guide you on your innovation journey? Based on my own years of research, teaching executives

The Four Stages of Validation

Essential Question

Stage 1: Problem Validation

Stage 2: Solution Validation

Stage 3: Product Validation

Stage 4: Business Validation

Are we focused on a genuine problem for an actual customer?

Does the customer see value in our proposed solution?

Can we deliver a solution that customers use?

Can we capture sufficient value from this innovation?

and coaching innovation teams, I have developed a framework for measuring innovation. I call it The Four Stages of Validation, and as indicated in Figure One, each stage is designed to answer an essential question about the feasibility of any new innovation.

All four stages are essential. Only when you can answer each of their questions will you learn whether your innovation is repeatable, scalable and profitable in the real world. But you cannot measure everything — or answer every question — at once. Instead, you must thoughtfully progress through the stages, adjusting your metrics as you go. Let’s take a close look at each of the four stages.

STAGE 1: Problem Validation

Are we focused on a genuine problem for an actual customer?

The aim here is to validate the problem you aim to solve, the customer who has that problem and the urgency of the problem from their point of view. Note that your innovation’s ‘customer’ may be a consumer, a business customer, a partner or someone inside your company. Some will prefer the term user instead of customer.

Problem validation is done primarily through in-depth conversations with customers, conducted in the work or life context where their problem occurs. These interviews should focus solely on exploring the problem from the customer’s perspective. Avoid

any mention of the solution you think you will build. Your goal is to probe the customer’s unmet needs, the different segments of customers who share this problem and the ‘existing alternatives’ they currently use to cope with it. With luck, you will encounter some early adopters — customers eager to test any future solutions you come up with, even in very rough form.

Your learning at this stage is mostly qualitative. Your quantitative metrics are simple: the number and depth of interviews you conduct, the number of early adopters identified and the projected size of the total addressable market (TAM).

The biggest red flags at this stage are if there is no agreement on the problem, if few customers share the problem or if they express little urgency to solve it. Many digital innovations run into these issues, discovering that they are building ‘a solution in search of a problem.’ This is a clear signal to shut down and redirect your resources elsewhere. But if you are able to validate a real problem faced by many customers who urgently want a solution, you are ready for the next stage.

STAGE 2: Solution Validation

Does the customer see value in our proposed solution?

Here, your goal is to validate whether the customer perceives value in the solution you are planning to build, the level of customer demand, and if your solution will stand out from other competitors in the market. Solution validation is all about what entrepreneurs call ‘product-market fit.’ This stage does not make use of finished products, or even working prototypes. Instead, it uses simple artifacts that merely illustrate the expected design and features of your solution, to measure customer feedback. I call these simple artifacts ‘illustrative MVPs.’ They may be as simple as a website landing page or as elaborate as a digital twin.

At this stage, your learning is a mix of qualitative insights (e.g. what is your perceived value proposition?) and quantitative measures of customer behaviour. Metrics often include things like click-through rate or landing page conversions from messages sent to prospective customers. In other cases, metrics may include signups for product trial, or purchase orders placed before delivery of your first working product.

Your biggest red flag at this stage is if customers who see your MVPs offer polite praise, but you receive no urgent requests to use or buy what you are building. By contrast, a clear measure

For any innovation to succeed, it must prove itself at all four stages of validation.

of customer demand will show that you have reached productmarket fit, with customers ready to adopt your solution as soon as you can deliver its promised benefits.

STAGE 3: Product Validation

Can we deliver a solution that customers use?

Here, your goal is to measure two critical things. The first is usage. When you present the customer with a working solution, do they, in fact, adopt it? If so, when, where and how do they use it? How frequently? The second thing to measure is delivery. Can you deliver the experience and benefits that you intend for the customer? What are the technical requirements, and can you meet them? What about legal, regulatory and other risk or compliance requirements?

Lastly, what combination of skills, assets, data and IP are required to deliver this innovation in the real world? Does your organization have any unique advantages that allow you to deliver this innovation better (faster, cheaper or with more user benefit) than competitors?

To measure Product Validation, you will need to build your first working solutions, which I call ‘functional MVPs.’ These solutions should start as ‘skinny’ as possible — with the absolute minimum features needed to deliver the most basic value proposition to the customer. They should be built quickly and cheaply with off-the-shelf components or manual service that could not scale beyond a handful of customers. As you test and learn, you will iterate your solution, adding more features and shifting to more robust means of delivering them.

During this stage, many of your metrics will measure customer behaviour (such as adoption of your innovation, frequency of use, customer satisfaction and retention). Other metrics will focus on delivery, measuring your operational speed, accuracy, throughput and downtime.

Red flags at this stage are when customers who asked for your solution fail to use it, or they try it once and never return. Similarly, your innovation is in trouble if you find you cannot deliver your solution reliably, or competitors can deliver an identical solution just as well as you. But if the data show you can deliver a solution that customers readily adopt, and where you have an advantage over competitors, you are ready for the next stage.

STAGE 4: Business Validation

Can we capture sufficient value from this innovation?

Here, your goal is to measure whether your innovation generates enough financial benefit to be worth scaling up beyond your initial limited tests. Business validation starts with measuring any revenue your innovation may generate, as well as any cost savings, improved efficiency or reduced risks. These should all be measured in financial terms. Business validation also means measuring the costs to deliver your innovation — both fixed costs and marginal costs. And it means combining financial costs and benefits to determine your potential profit margin and your maximum possible upside.

At this stage, you will use a variety of metrics to create a financial model of your innovation. If the innovation captures value from customers, your metrics will include customer lifetime value and other metrics that depend on your revenue model (subscription, purchase, licensing, etc.). Internal innovations will use metrics to measure cost savings, efficiency gains or reduced financial risks. Once you have a projected return on investment (ROI) for your innovation, you must still compare that with your firm’s internal rate of return (IRR), to know if your money would be better spent elsewhere.

Red flags at this stage can include customer unwillingness to pay, costs too high to reach a profit as you scale or a maximum upside that is too small to merit further investment. By contrast, a clear path to profitability and an attractive maximum upside will indicate it is time to commit to scaling up your innovation.

Learning Across All Four Stages

For any innovation to succeed, it must prove itself at all four stages of validation. This requires that your innovation team maintain a clear focus on the most important metrics and qualitative learning in all four stages. Figure Two recaps the business model hypotheses that must be validated in each of the four stages and lists examples of quantitative metrics that you may use.

Following are three principles to keep in mind when using this framework.

METRICS ARE FOR MAKING DECISIONS. Innovation metrics are only useful if they are applied to make data-driven decisions. For an

Stage 1: Are we focused on a genuine problem for an actual customer?

Hypotheses to Validate

• Problem definition

• Urgency of problem

• Customer segments

• Early adopters

• Market size

Stage 2: Does the customer see value in our proposed solution?

• Customer demand

• Perceived benefits

• Preferred features

• Perceived competitors

• Product/market fit

Stage 3: Can we deliver a solution that customers use?

Stage 4: Can we capture sufficient value from this innovation?

• Usage and retention

• Customer journeys & use cases

• Operational requirements

• Technical requirements

• Legal requirements

• Barriers to competitors

• Unit economics

• Path to profit

• Maximum upside potential

innovation team and its sponsors, each stage of validation offers critical data. At each stage, teams and sponsors must decide: Does our latest data indicate that we are on track? Should we keep going, continuing to iterate and improve our solution based on what we’ve learned? Or does the data tell us that something is fundamentally wrong? That we need to either ‘pivot’ (rethink the problem we are solving, the customer it is for or the solution to that problem) or quickly shut down the current effort, to focus resources on another innovation? Figure Three summarizes the signals to look for in your metrics at each of the four stages of validation.

THE SEQUENCE OF INNOVATION MATTERS. Successful innovation requires knowing both what to measure, but just as important, when to measure it. Many companies recognize the importance of experimentation, but they stumble in getting the sequence of measurement right. Specifically, they rush to start validating the later stages.

Sample Quantitative Metrics

• Number of interviews per customer segment

• Number of site visits

• Number of early adopters identified

• TAM (total addressable market)

• CTR (click-through rate)

• Landing page conversions

• Signups for product trial

• Willingness-to-pay

• Deposits or purchase orders before delivery

• User growth rate

• Frequency of use

• Retention rate

• Net Promoter Score

• CSAT (customer satisfaction)

• Delivery speed

• Accuracy rate

• Operational downtime

• Total revenue

• ARPU (average revenue per user)

• CAC (customer acquisition cost)

• CLV (customer lifetime value)

• Fixed vs. marginal costs

• ROI (return on investment)

• CAGR (compound annual growth rate)

• Total projected profit

• IRR (internal rate of return)

In finance-driven firms, I often see a rush to start with Stage 4: ‘Show me the business case first, with market size and anticipated profit margin. Then we can approve a budget to spend on market testing or validation.’ In engineering-driven firms, I see the urge to start with Stage 3: ‘We know the solution. Let’s build a working prototype as a proof of concept to see if it can be done. You can show it to customers for feedback — just as soon as we build a complete product for them to try.’ And in marketing-driven firms, I see a greater focus on the customer and an inclination to start with Stage 2: ‘We have a great idea that came from our market research and brainstorming. Let’s mock up some wire frames to quickly get customer feedback.’

All of these approaches are mistaken. Each starts the process of experimentation and measurement in the wrong place. By contrast, every effective innovation process I have ever seen begins with Stage 1 — validating the problem you hope to solve with the customer you think it will matter to — and then moves sequentially through the stages.

What the Metrics Say: Pivot or Proceed?

Signals to PIVOT or SHUT DOWN

1. Problem Validation

2. Solution Validation

3. Product Validation

4. Business Validation

• Customers do not agree on the problem.

• The problem is not a top five priority for the customer.

• Customers are satisfied with existing ways of addressing the problem.

• You receive polite praise but no requests to use or buy.

• None of your benefits motivate behaviour change by customers.

• Customers don’t see a reason to choose you over existing solutions.

• Customers don’t try your solution or discontinue use.

• Technology or regulation pose barriers to delivering a solution.

• Your solution can be easily delivered by competitors.

• Customers won’t pay, and you can’t find another value stream.

• Costs are too high to reach a profit, even if you scale.

• Maximum upside is not large enough to merit continued investment.

Of course, it is correct that your venture will need to answer financial questions such as the cost-to-serve and the profit margin. But you can’t start there. Time after time, I see companies labouring to write business cases for a new digital innovation when they don’t yet know what problem they are solving, what solution the customer wants or how they might deliver it legally and reliably. These misguided business cases are just spreadsheets filled with fictional numbers that add up to a meaningless estimate of future ROI.

THE FOUR STAGES OVERLAP. The Four Stages Model is not a waterfall. It is not a stage-gate process where success means you conclude one stage and move on to the next. Instead, each stage is never finished. Even as you test the finances of your business (Stage 4) and move to a public launch of your product, you will continue to learn and revise your understanding of the problem you are solving (Stage 1), the features you need to add next to your solution (Stage 2) and how you can deliver them for different customer use cases (Stage 3). Eventually, you will be validating all four stages simultaneously.

Signals to PROCEED

• Customers repeat a clear, shared problem statement.

• Customers express urgency to solve the problem.

• Customers are dissatisfied with current options.

• Customers will commit time, money or data to sign up for trial.

• One or more features drive urgent customer demand.

• Promised benefits are seen as distinct from competitors.

• Customers adopt your product and keep using it.

• You deliver a solution reliably, and in compliance.

• You have a unique advantage to deliver the solution better than competitors.

• You capture value from new revenue, efficiency or reduced risk.

• Marginal and fixed costs show a path to profitability if usage grows.

• Maximum upside is large enough to justify further investment.

In closing

The digital era demands that every business innovate to keep up with changing market needs, threats and opportunities. And innovation that grows your business will only happen with effective innovation measurement. With the simple, adaptable framework described herein, any leader can avoid the most common mistakes made by corporate innovators and accelerate discovery of their next innovation — one that truly works.

Globally-recognized digital transformation expert David L. Rogers is a member of the faculty at Columbia Business School and the author of five books. His bestseller, The Digital Transformation Playbook, was the first book to put the topic on the map. His latest book is The Digital Transformation Roadmap: Rebuild Your Organization for Continuous Change (Columbia Business School Publishing, 2023). He has helped companies around the world to transform, advising Google, Microsoft, Citibank, Visa, HSBC, Unilever, Merck, Toyota, GE, Cartier and many others.

Was It Me, Or Was That Gender Discrimination? How ‘Ambiguous Incidents’ Impact Women

Addressing gender inequality at work requires an understanding of not just overt discrimination, but also of the realm of potential discrimination.

by Laura Doering, Jan Doering and András Tilcsik

DISCRIMINATION AGAINST various groups in the workplace has been well documented as affecting a range of processes and outcomes, including hiring, compensation, performance evaluations and rewards, as well as everyday interactions. These findings make it clear that certain groups are consistently disadvantaged at work.

While researchers have firmly established the existence of workplace discrimination, individuals often feel uncertain about classifying negative personal experiences as such. They might wonder whether they were denied a particular reward as a result of discrimination or a more benign factor, like taskrelevant characteristics.

For example, when a woman is passed up for a promotion in favour of a man, she may wonder whether her colleague’s performance was simply superior. Left to make sense of the incident on her own, she may never fully resolve whether or not it was discriminatory. We refer to such experiences as ‘ambiguous incidents,’ and in this article we will summarize our recent research to uncover their implications.

The High Toll of Ambiguity

Uncertainty in understanding the behaviour of others is a fundamental feature of social life. People often feel unsure about attributing other people’s actions to a particular motive, and this makes it difficult to evaluate whether specific incidents were discriminatory. As a result, while research clearly documents the existence of workplace discrimination, an individual who experiences an incident may struggle to conclusively classify an event or interaction as fuelled by bias.

Uncertainty about gender discrimination may be particularly widespread in today’s workplace. Increasingly, co-workers, supervisors and clients have strong incentives to avoid explicitly sexist language or behaviour, given that obvious discrimination has economic, legal and social repercussions. However, the attendant shift from obvious toward more subtle forms of discrimination makes classifying incidents much more challenging for those who are subjected to negative treatment.

We define an ambiguous incident as ‘an event or interaction

Some ambiguous incidents are motivated by bias, whereas others are benign misunderstandings.

that an employee believes might have been motivated by bias.’ These incidents have three key characteristics:

1. They range from everyday ‘microaggressions’ (e.g. being interrupted) to rare but serious events (e.g. being passed over for a promotion);

2. They generate classifications ranging from ‘more ambiguous’ to ‘more obvious’; and

3. The motives underlying these incidents are varied and difficult to ascertain — for both the target and for researchers.

The welcomed decline in explicitly biased language and behaviour, along with the rise of more indirect forms of discrimination, opens the door for women to experience a range of ambiguous incidents. It is important to emphasize that one cannot know with certainty whether an ambiguous incident was discriminatory: Some ambiguous incidents are motivated by bias, whereas others are benign misunderstandings. The challenge for women lies in managing the uncertainty of being unable to classify an incident as falling into one category or the other.

Research emphasizes the cognitive and emotional costs that individuals experience when they struggle to classify an ambiguous incident. Scholars propose that individuals experience ‘attributional ambiguity’ when they feel uncertain about whether a negative event reflected their individual characteristics (such as a lack of professional experience) or prejudices against their marginalized group.

Members of marginalized groups experience a host of cognitive and affective costs when they cannot make definitive attributions about negative treatment. For example, those who are uncertain about the reasons why they received negative feedback report lower self-esteem than those who view the same feedback as discriminatory. Similarly, people experience more mental exhaustion following ambiguous events than after obvious discrimination. Importantly, when discrimination is obvious, individuals tend to attribute negative feedback to biases held by the perpetrator; but when it is ambiguous, they tend to attribute it to their own underperformance.

These findings are consistent with the research on microaggressions, which are typically couched in ambiguity. Microaggressions are comments or actions that are subtly hostile or demeaning to a member of a minority or marginalized group, and they have been shown to predict lower quality of life, worse mental and physical health, as well as emotional challenges. Examining the experience of women working in the tech industry, one study

showed that microaggressions engender a sense of fear, isolation and shame in women and racialized minorities. Although the personal toll of microaggressions has been well-established, little research has examined how individuals behave in response to ambiguous microaggressions.

Research shows that individuals suffer cognitive and affective (i.e. emotional) strain when they struggle to classify ambiguous incidents, but we suspected that such incidents also affect the actions that people take — or do not take — in response to them, particularly at work. We proposed that uncertainty in classifying ambiguous incidents likely carries a host of communicative, social and professional repercussions.

Given that individuals tend to feel uncomfortable with ambiguity and seek to resolve it, it stands to reason that women might be more inclined to reach out to managers, colleagues or human resource professionals to discuss and resolve the uncertainty they experience. Consistent with this argument, research on social networks shows that people often respond to uncertainty by seeking contact with others who can help them make sense of their situation.

However, there are compelling reasons to expect that uncertainty about an incident will lead to a different response. Research on workplace discrimination shows that individuals hesitate to register formal complaints — particularly if they suspect they won’t be believed. For members of marginalized groups, even suggesting the possibility of discrimination can carry steep reputational risks. Indeed, a common reason for not speaking up is the assumption that it is inappropriate to raise concerns without conclusive evidence. Accordingly, we felt that women may be especially unlikely to share concerns about incidents when they feel uncertain.

Our Research

In a recent study, we sought answers to two questions: How do women see ambiguous incidents as affecting their work experiences? And what actions do they anticipate taking in response to more ambiguous versus less ambiguous events?

Given that discrimination against women is still common and women in professional roles report high levels of it, we focused our study on women in professional settings in the U.S. We used three methods to study how women experience ambiguous incidents, how common such events are and how they affect women’s behaviour at work.

First, we conducted interviews with 31 women to analyze how they make sense of and respond to ambiguous incidents.

We then designed a survey of 600 professional women to evaluate whether respondents in a large, diverse sample experienced ambiguous incidents as regularly as our interviews suggested. Third, we used interviewee narratives to design ‘vignette experiments’ that compared responses to the same situation of negative treatment depending on whether the incident was more versus less ambiguous.

We launched our research by conducting in-depth interviews that had a median length of 74 minutes. After completing the first set of 10, we analyzed the transcripts, identified interesting findings and developed a coding scheme that we used to analyze the entire set of transcripts. For each incident of potential discrimination, we coded the type of event (such as ‘condescending treatment’ or ‘being passed up for a promotion’), the perpetrator, the certainty or uncertainty the respondent felt about classifying the event as discrimination, the information and input the respondent considered in evaluating the incident, the respondent’s response (such as filing a complaint or doing nothing) and the outcome and repercussions associated with the response.

RESULTS: After establishing respondents’ work histories, we asked whether they had ever experienced gender discrimination at work. Right away, several respondents prefaced their answers by pointing out that it was challenging to definitively classify negative experiences as discrimination. One respondent said, “Things aren’t always black and white, and I don’t know that [it was discrimination], obviously.” After describing several incidents of negative treatment, another commented: “You’re wondering, ‘Was it me, or was it because I’m a woman — or both?’ I don’t know — there are just so many questions around this and I wonder, is this happening to other women?”

Participants reported a broad set of incidents that might have been gender discrimination but remained shrouded in uncertainty. Many were minor incidents, such as colleagues interrupting them or ignoring their contributions, excluding them from social activities or making patronizing remarks that questioned their competency. However, they also mentioned highly consequential situations that could fundamentally shape their careers.

Following is an illustrative case: Kelly is a 36-year-old white woman. Between the ages of 28 and 32, she worked as a product manager for a security solutions company in San Francisco. After two years, her colleague Brian was promoted to senior product manager. Brian had been hired after Kelly, but she knew that he had relevant prior experience working in the industry. Kelly also

knew that Brian was hired with a higher starting salary than hers, but she accepted this, given his prior experience. However, Kelly felt certain that her work performance was superior to Brian’s — who, she noted, had been “in and out of a performance improvement plan.” Accordingly, she was upset when her supervisor invoked Brian’s work experience to explain why he, rather than Kelly, had been promoted. She said:

I don’t think the original pay discrepancy [with Brian] was gender discrimination because at that point, you could argue, ‘When you hire someone externally who has a lot of previous experience, you’re probably going to pay them more.’ But once we were both there and you could see our actual performance, giving him a senior title — I found that questionable.

Kelly thought a lot about her future with the company. Her friends and family found the promotion decision troubling and encouraged her to complain. Another colleague at the company even suggested Kelly explore legal options. But she decided to respond in a way she saw as more amicable, by asking her supervisor what she needed to do to be promoted to senior product manager.

Her supervisor failed to provide a clear answer. She recalled him saying, ‘Oh, we don’t have a plan in place for that. There’s some opportunity down the line that you can get engaged in, and that way you can expand your responsibilities.’ The opportunity never materialized, and when she had still not been promoted after two more years, she became disillusioned:

I said to my husband, ‘At this point, we might as well have kids.’

So we did, but after returning from maternity leave I realized that I cared less about it [the job]. I wasn’t working long hours anymore and wouldn’t respond to e-mails over the weekend. I stayed for a few more months, then I left.

A postscript: Kelly now works as a product manager in the healthcare industry and is much happier with this job than her prior position in a male-dominated industry.

Respondents also described everyday treatment that might have been gender discrimination and made it harder for them to position themselves for leadership opportunities. Specifically, they noted that colleagues and supervisors often discounted, overlooked or ignored their actual and potential contributions to their organizations — but they felt uncertain about whether these incidents were discriminatory.

Even those who had encountered obvious discrimination told us they found ambiguous experiences more troubling.

More than half of our interviewees described experiences of this kind. This challenge was illustrated by Alicia, a 39-year-old Filipina. Between the ages of 26 and 30, she worked as a donor relations manager for a philanthropic organization in the Midwest, repeatedly facing the issue of co-workers and supervisors overlooking her ideas and contributions. She recalls one particular meeting soon after she was hired:

I remember sharing something [in a meeting] and I didn’t know if anyone even heard me. One person responded and was like, ‘Oh, that’s interesting,’ but then it got brushed off. Toward the end of the meeting, a male colleague said, ‘By the way, I was just thinking about this place or this thing’ — and he shared the same exact idea. And it was well received.

Alicia didn’t know how to make sense of this experience and initially blamed herself. She remembers thinking, “Maybe I wasn’t loud enough or articulate enough?” Her response was to speak more loudly at subsequent meetings. In hindsight — having now had similar experiences throughout her career — Alicia interprets these situations as discrimination based on her gender, race and age.

Participants also reported entirely unambiguous incidents such as sexist jokes, groping and other types of sexual harassment. Interestingly, even those who had encountered obvious discrimination told us they found ambiguous experiences more troubling. They described brooding over such incidents, unsure how to interpret them or respond. In analyzing the interview data, we found that uncertainty shaped whether and how women responded to potential incidents. After all, ambiguous incidents are difficult to contest. Women may reasonably feel they need conclusive evidence of discrimination before complaining to HR, confronting an offender or asking supervisors to act.

Overall, interviewees described ambiguous incidents as a relatively common experience that occurred more frequently than obvious discrimination. However, we took seriously the possibility that our interviewees’ impressions might reflect that of a small, select group. We thus ran a survey to examine whether the trends described by interviewees were consistent with those drawn from a larger, more diverse sample of professional women.

In January 2021, we surveyed 600 women residing in the U.S. who: held at least a college degree, worked in a professional role, and indicated they were working part- or full-time before the COVID-19 pandemic.

Compared to our interviewee sample, the survey captured a more diverse set of respondents in terms of race, age, political affiliation, geography, work experience and other factors. We began by specifying that certain experiences are obviously gender discrimination, whereas others are more ambiguous. Respondents indicated the frequency at which they had each type of experience during the years 2019 and 2020. We focused on the 2019 results to avoid the unusual conditions associated with the pandemic.

RESULTS: Survey participants reported that they more commonly experienced incidents they perceived as ambiguous than incidents they perceived as obvious discrimination: 74.2 per cent said they had experienced an ambiguous incident, whereas 64.2 per cent said they had experienced obvious discrimination. This demonstrates that, on average, professional women view ambiguous incidents as a more common feature of their work experience than obvious discrimination.

Although our interviews suggested that uncertainty shapes how women respond to potential discrimination and survey data highlighted the frequency of ambiguous incidents in a larger sample, these data could not isolate the causal effect of uncertainty from the influence of other situational factors. We thus designed a vignette experiment to measure the effects of uncertainty in perceptions of discrimination on anticipated behaviour. This approach made it possible to examine how women anticipate responding to incidents that differ only in their degree of ambiguity, but are otherwise identical.

Each participant read one of three vignettes describing a potential incident of gender discrimination in the workplace. Within each vignette, we manipulated the level of ambiguity: the incident involved either relatively obvious discrimination or relatively ambiguous discrimination. After reading the vignette, respondents completed a set of questions to indicate how they would respond to the situation.

Our vignettes were grounded in our interviewees’ experiences and captured incidents of varying severity. In the first one, a supervisor overlooks the participant’s contributions in a meeting but gives credit to a male colleague for raising the same idea. In the second, the men on a project team are given substantive and valued assignments, whereas the female participant is left with a minor and less desirable task. In the third and highest-stakes scenario, the participant is passed up for a major promotion.

We manipulated the level of ambiguity in each vignette through the presence or absence of a possible reason for the negative treatment other than bias. We provided participants in the

more-ambiguous condition with a potential non-gender-related explanation for the outcome. For example, the ambiguous version of the first vignette introduced the possibility that the participant’s contributions to the meeting were overlooked because of a random distraction — a ringing cell phone — rather than gender bias. The second and third vignettes created ambiguity by suggesting that the participant’s male co-workers might have been favoured because of their relevant skills.

RESULTS: We found a clear pattern: When gender discrimination incidents were more obvious, respondents reported being more likely to discuss their concerns with their HR department, supervisors, colleagues or a local or industry-wide group focused on diversity, equity and inclusion (DEI). Yet when the same incidents were more ambiguous, women were more likely to ‘turn inward’ by working harder, drawing more attention to their contributions and communicating more formally at work. In short, rather than prompting women to speak up (e.g. to a supervisor) and speak out (e.g. to a group focused on equity and diversity), ambiguous incidents encouraged self-focused actions.

Key Takeaways

Professional women often experience uncertainty about gendered incidents at work, but they are unlikely to share concerns about them. This tendency has two challenging implications:

• First, if women remain silent about ambiguous incidents, it ensures that the fraction of such incidents that are discrimination will persist without being addressed. In this way, ambiguous incidents can contribute to negative cycles at work, in which truly discriminatory incidents persist or become increasingly common.

• Second, if women regularly experience ambiguous incidents, they may not only be discouraged from raising concerns, but may also become exhausted, develop lower expectations about their potential and be less likely to pursue opportunities for advancement. Ambiguous incidents may therefore be contributing to gender inequality at work.

To address our findings, we believe interventions that increase the transparency of personnel decisions can reduce ambiguous incidents. Such measures ensure that all insiders are aware of internal job opportunities, promotion ladders and eligibility rules, and foster pay transparency by enabling employees to know their peers’ salaries.

A related approach is to increase transparency in the communication of hiring and promotion decisions by clearly and accurately explaining how and why a particular decision was made. These steps can help organizations address ambiguous incidents by ensuring that patterns of potential discrimination are apparent to all, making it easier for employees to evaluate whether they experienced unequal treatment.

Finally, organizations should offer ways for women to share concerns about ambiguous incidents confidentially. Consistent with our findings, research shows that one of the most frequent reasons for not speaking up is the belief that it is inappropriate to raise concerns without conclusive evidence. Organizations need to dispel this belief by proactively inviting employees to share concerns privately. And when they do, leaders and HR professionals should look for recurring themes: A single event may be a simple misunderstanding, but a pattern of similar incidents signals a systemic problem that requires attention.

In closing

Understanding and addressing gender inequality at work demands considering ambiguous incidents alongside overt discrimination. Taking steps to address the uncertainty women face in the wake of ambiguous incidents as well as the behavioural implications of uncertainty will offer leaders a more complete understanding of problematic gendered experiences in the workplace.

Laura Doering is an Associate Professor of Strategic Management at the Rotman School of Management and is cross-appointed to the University of Toronto’s Department of Sociology. Jan Doering is an Assistant Professor of Sociology at the University of Toronto. András Tilcsik holds the Canada Research Chair in Strategy, Organizations, and Society and is a Professor of Strategic Management at the Rotman School. This article summarizes their paper, “Was It Me or Was It Gender Discrimination? How Women Respond to Ambiguous Incidents at Work,” which was published in the journal Sociological Science.

UNLEARNING SILENCE :

HOW TO ENCOURAGE PEOPLE TO USE THEIR VOICE

At some point in our lives, we have all silenced others. Five strategies can help us encourage people to use their voice—and reap the benefits.

by Elaine Lin Hering

I HAVE AN ADMISSION TO MAKE: I have a hard time speaking up. You wouldn’t guess it, given that I hold degrees from and teach at some of the best universities in the world. For over a decade, I had the title Managing Partner before my name and the initials JD for juris doctor after it. I’ve been in front of audiences of up to 300,000 people. I make a living by talking and leading.

Then again, maybe you wouldn’t have guessed I have a hard time speaking up — you would have assumed it. After all, I’m female, Asian and (relatively) young. It’s a well-documented stereotype and statistic that people like me are good entry-level hires but not likely to be promoted to management. People assume that we’ll work hard and not cause problems, but they also assume we don’t have the vision, self-confidence and savvy necessary to run the place.

I am the model minority myth incarnate: stable two-parent household, straight-A student. I went to the University of California, Berkeley for college, because in-state tuition was the practical choice. I studied and have taught at Harvard Law School. I tick all the boxes that are supposed to give you a good life. In some circles, people would say I’ve ‘made it.’ So, what is there to complain about?

If success were only about having a seat at the table, I would be considered successful. But having a seat at the table doesn’t mean that your real voice is actually welcome. I am consistently called upon to validate decisions from the ‘minority perspective’ — as if I can speak for all women, people of colour and historically oppressed groups. I’m often present so the powers-that-be can feel good about themselves (or change the statistics in the shareholder report) because the room looks a little more diverse — not necessarily because they actually want to hear what I have to say. I am a token, present but silent. Silence is a survival strategy, to avoid getting on their bad side.

Silence means not having to engage in ‘healthy debates’ that leave me reeling. In some instances, it quite literally means not losing the job that pays my bills. Silence is something I’ve learned, internalized and, at many times in life, been rewarded for. I’ve been on team calls where ‘George’ says, ‘Chen should run the numbers; Asians are great at math.’ I mean, really; such stereotypes are so worn out they are like a bad sitcom from the eighties. But I let it go, because it’s not worth incurring George’s wrath. It’s just a joke. Plus, I’m just trying to get some work done here. It’s easier to stay under the radar.

For people with traditionally marginalized identities, using our voices can be an uncomfortable and risky venture.

You may be thinking, ‘I would say something. Someone has to, or things will never change.’ But would you? When you suspect your boss’s great idea is going to make your co-workers’ lives miserable, do you say something? When you know your team won’t be able to hit its fourth quarter goals because they were unrealistic, do you say something? When your neighbour’s actions are just on the edge of what’s ethical, do you say something?

When asked, most managers say they want their people to ‘say something if they see something.’ Employers want employees to report health and safety violations and bad behaviour before it becomes an employee relations issue or liability for the company. When asked, most people say they desire trusting relationships with their friends and loved ones. Being seen, known and heard in those relationships requires us to use our voices. But how many of us actually do? There is incentive for each of us to stay silent. For people with traditionally marginalized identities, using our voices can be a new, uncomfortable and risky venture. How are you supposed to speak up when the world has repeatedly told you that you shouldn’t?

Silence is, by definition, an absence — of voice and opinion. It often starts so subtly that we don’t even notice it. We withdraw or withhold our true thoughts from a conversation and replace them with what we imagine others want to hear. But when we don’t create safe-enough spaces for people to share, we risk losing a brilliant idea in a brainstorm or a word of caution that could have saved future headaches.

Not surprisingly, silence is a factor in all corporate scandals. In each instance, there have been people who tried to speak up but were ignored, dismissed or disparaged — silenced — by others. Being repeatedly shot down and forced to absorb the costs of speaking up dulls our instincts and ability to see things differently — much less to be able to articulate differences of perspective. And that’s not to mention the structural silence already in place due to the absence of certain voices within our systems.

Putting an End to Silence

Intentionally or unintentionally, we have all silenced others. But there is no blame here. Instead, I want to help each of us increase our self-awareness so we can show up more like the versions of ourselves we want to be and create spaces where belonging, dignity and justice are realities. As a starting point, here are five strategies to adopt.

STRATEGY 1: LISTEN ACROSS DIFFERENCES. Most of us know viscerally what it’s like to say something and have the message go unheard or to be told we’re wrong. Not being heard inclines us toward silence. Most of us are also guilty of not listening to others when we disagree with what they’re saying or they aren’t communicating in our preferred style. Instead of listening, we complete their sentences for them. We assume, we rebut, we tune out, we project. We silence — even when we’re going through the motions of listening. And as a result, we miss out and deny others’ dignity in the process.

Why Large Organizations Are ‘Ignorantly Knowledgeable’ by Carsten Lund Pedersen

Large organizations rarely know what they actually know. In many, a disturbing amount of knowledge is hidden in plain sight, resulting in potentially valuable information remaining a secret to both employees and managers. In my research I have uncovered the ‘front-line paradox’—a phenomenon in which front-line employees are the first to sense impending change, but also the last to be heard. When suffering from this paradox, organizations lose out on valuable information that could give them a timely heads-up to emerging change; while employees, in turn, feel frustrated that their voices aren’t being heard.

There is also substantial evidence on stealth-mode, ‘shadow activities’ in many large organizations. Several studies suggest that when employees sense an environmental pressure requiring their response, but believe their organizations aren’t listening to them, they may turn into ‘mavericks’ who take matters into their own hands. The end result of this rule-breaking tends to be the emergence of shadow or stealth projects—often with a positive outcome for the organization.

For example, I once encountered a group of employees who broke organizational rules and formal procedures to launch a new product to market without official approval. Despite this potentially

‘constructive deviance,’ shadow activities are a symptom of the organizational illness of what I call being ‘ignorantly knowledgeable.’

Why does this occur? The answer lies in both cognitive and motivational factors among employees. In terms of cognitive factors, the more expert someone becomes, the more difficult it is for them to share their expertise with others—which has been called the ‘curse of knowledge.’ Just consider how difficult it can be for a professor to discuss their research with laypeople; it’s difficult for them to realize how much more they know about their subject, and they tend to incorrectly presume that people are familiar with the terminology of their discipline.

In addition, if the expertise is built upon tacit knowledge, it is very difficult to transfer and articulate it explicitly. It’s no wonder so many crafts are taught through hands-on ‘master-apprentice’ relationships, as seen in the world of haute cuisine. We also know that decision-makers are ‘boundedly rational,’ meaning that they have constraints that impede them from taking in all of the relevant information available. Think of how difficult it was for governments to initially respond to the emergence of COVID-19. They didn’t have access to all the needed information regarding the nature and scope

Ninety-six per cent of people self-identify as ‘good listeners.’ Yet moments after sitting through a 10-minute oral presentation, half of adults can’t describe its contents. Forty-eight hours later, 75 per cent can’t recall the subject matter. The research is also clear that people are more likely to voice concerns and experience psychological safety when authority-holders are perceived as open, approachable, responsive, empowering and inclusive. Unless we create spaces where people are confident that their contributions are valued, we are inclining people toward silence rather than voice.

So what does listening and being able to hear across difference look like? It means working to understand what the other person is trying to communicate, which may or may not be reflected in the words they initially use. As you listen, ask yourself, What is the core of what they are trying to convey? What are they really saying or asking?

Check your motivation and purpose at that moment. Are you listening just to confirm your own understanding of the world, or listening for the intent and heart of what the individual is trying to express? Listening, not to rebut or defend, but to understand and make the other person feel heard, is what supports voice.

We can also support voice by clearing our preconceived notions. We all make assumptions about people based on what we think we know about them — based on the colour of their skin, what school they went to or how much money we think they have. Figure out who they are and support their voice by clearing rather than reinforcing these preconceived notions.

STRATEGY 2: FOCUS ON OTHER PEOPLE’S INTERESTS (INSTEAD OF OUR OWN). One key way to support others’ voices is to focus on their needs, wants, goals, desires and perspectives, rather than our own. Before jumping into action on someone’s behalf or for a cause, check to make sure your information is good. What rubs us the wrong way might be okay for someone else. Don’t assume that you know what would be best for the other person. Instead, ask what would help them thrive. Does this person even want your involvement? How can you actually be most supportive of them? Taking action to speak on their behalf without inquiring whether it’s helpful likely creates more challenges for them — despite good intentions.

We all thrive under different circumstances. What do the people around you need? Where are they on their own journey of cultivating and using their voice? Do they need the spotlight? Do they need an affirming nudge that they have something worthy to say? Proactively let them know that your intention is to support them. In short, supporting someone means letting their needs and preferences drive things — rather than defaulting to your own needs and preferences.

STRATEGY 3: NORMALIZE DIFFERENCES. There is a ‘gold standard’ of communication — a single way of communicating that is most prized: in-person; no umms; clear, crisp and to the point; looking people in the eye; responding in a timely manner; showing enough emotion to seem authentic, but not enough to make people uncomfortable.

of the pandemic, and they couldn’t process all the information at their disposal in the short timespan they had available.

In relation to motivational factors, organizational life is rarely structured to incentivize knowledge-sharing. Here, individuals and teams are often organized to compete, not collaborate. For instance, if a salesperson is competing against her colleagues for a bonus or a promotion—a winner-takes-all game—it is arguably irrational for her to collaborate or share information with them.

Forcing employees to share knowledge is not the answer. It may lead to the opposite result, as reflected in ‘reactance theory’ (whereby people often balk when they’re told what to do). Moreover, philosopher Slavoj Zizek has suggested the existence of socalled ‘unknown knowns’—things we won’t even admit we know, as they represent ‘uncomfortable knowledge’ (think taboos or selfdeception.) Finally, the simplest explanation for a reticence to share knowledge may be a belief that the receivers of the information are not willing to listen, proactively discouraging people from speaking up.

Given all of this, leaders need to speak up about organizational silence and become knowledgeable about the organization’s ignorance. To get started, a leader could begin to track how much

they know about their organizations and, for some reason, don’t share with relevant colleagues; assess the underlying reasons for this silence; and commit to sharing certain ‘nuggets’ of knowledge going forward. Or, a leader can also become knowledgeable about their own ignorance by keeping a running list of things they realize they don’t know about their organization, then seek out relevant co-workers for help in obtaining that knowledge.

The bottom line is that most organizations know more than they know; and that’s a good thing. If only they knew what they knew, they might know how to get ahead. Unlike ignorantly knowledgeable organizations, this is one thing I know.

Carsten Lund Pedersen is an Associate Professor of Marketing at Copenhagen Business School. This article originally appeared in the journal Contexts (Sage Publishing).

These norms — and many more — assume a white, corporate orientation, high education level and neurotypicality rather than neurodiversity. They mean that people for whom these aren’t defaults need to contort themselves to fit a mould before they can be heard — and those for whom English is a second language have yet another layer to worry about. The truth is, voice is messy and life is full of umms. Can we start to normalize different modes and means of expression?

I realize I’m making a big ask. Because certainly, it’s a lot easier to hear someone when they are communicating in our preferred way, at our preferred time and ideally, expressing views that we want to hear. Only being able to hear people who cater to our preferred mode of receiving information means that we are skewing the data we curate. We are creating additional barriers of entry and engagement based on the communication norms of the people already in power.

If someone takes the time and effort to express a perspective, it is our responsibility to listen for the core of what they are saying — whatever their pronunciation, enunciation or word choice — and to make sure we understand what they are communicating and what matters to them — so much that they would take the risk to try to communicate the thought.

Here are three ways to lower the stakes for those around us:

RECOGNIZE YOUR DEFAULTS. What are your preferred communication styles and mediums? Which styles and mediums make it harder for you to metabolize information? Understand what mediums might make it easier for the other person to communicate. We don’t all have to use the same modes, but we do need to figure out how to hear each other.

ARTICULATE THE NORMS IN THE RELATIONSHIP. Whether in a workplace or personal relationship, saying, ‘I’d love to hear what you’re thinking, even if you don’t feel as prepared to speak as you’d like to be.’ Or saying, ‘Emotions are welcome. We are humans, not robots’ lowers the stakes and invites people in with more of their humanity.

PROVIDE YOUR ENDORSEMENT OF HOW SOMEONE COMMUNICATES. You can invite people to listen to someone who isn’t communicating in their preferred ways by saying, ‘I’ve asked Sally to share today because she has the most nuanced take on this topic that I’ve ever heard.’ Provide your reasoning for why you’ve invited the person so you use the social capital you possess to get others to listen.

STRATEGY 4: MAKE NORMS AND ASSUMPTIONS EXPLICIT. Unspoken norms silence those who don’t know what the norms are and means they have to figure them out by trial and error; while dominant norms seem obvious to those with dominant identities but are often opaque to those with subordinated identities. We can stay more in sync and aid each other in this journey by making explicit the norms that often remain unspoken. For example,

• If I have a comment, should I wait to be invited into the conversation or just say what I think when I feel it’s appropriate?

• If I have a question, should I wait until the end of a presentation or is it okay to interrupt the presenter?

• If there’s an underlying issue, are you assuming people will proactively raise it?

Setting these norms at the beginning of a new team project or in an existing relationship takes no more than 30 seconds. But it can save hours of headache.

STRATEGY 5: GET OUT OF THE WAY! Last but not least, sometimes leaders just need to get out of the way. Ask yourself, ‘Where do I need to not be present in order to support and unleash other voices? Where does my presence — and the shadow of my influence — dim the work of others?’ Put simply, sometimes, the best way to support someone else’s voice is to not be in the room.

In closing

I know from personal experience that unlearning silence is no easy task. But I also know that it’s the only way to build the communities, organizations and world we want. A world in which you and all the people around you can thrive.

I invite you to start taking steps to rebuild a world in which the loudest and most privileged voices don’t automatically prevail, and where there is space — and the active creation of space — for difference. Let’s make it a habit to celebrate voice to fully unleash talent and enjoy the rewards that collaboration and innovation promise.

Elaine Lin Hering is a Lecturer at Harvard Law School and the author of Unlearning Silence: How to Speak Your Mind, Unleash Talent and Live More Fully (Penguin Life, 2024).

For 12 years she was Managing Partner at Triad Consulting Group, working with clients including American Express, Google, Nike and Pixar.

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How well do behavioural science interventions translate and scale in the real world? With contributions from leading academics and seasoned practitioners, What Works, What Doesn’t (and When) provides prescriptive advice for making behaviour change happen in diverse domains such as financial decisions, health, energy conservation and diversity and inclusion.

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Edited by Rotman School of Management Professor and Behavioural Economics expert

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The View From the Top: Inside the C-Suite

Two of Canada’s top corporate leaders, Heather Chalmers of GE and Penny Wise of 3M , recently visited the Rotman School to share their insights. Following are some highlights from the wide-ranging conversation.

Interview by Susan Christoffersen

Susan Christoffersen: Both of you work for large multinational companies, on the Canadian side. Given today’s challenging environment, how would you describe the mindset shifts happening within big corporations?

Penny Wise: Over the 20-plus years that I’ve worked for 3M, the operating model has shifted from more autonomous, local entities to centrally driven approaches — and I see the same shift happening at other multinational companies. When you have operations in 50+ countries, there has to be a focus on simplification and standardization to be efficient and effective. More and more, I’m finding companies are building a global, more centralized model, where strategy is developed from the centre. Insights and requirements are gathered from all countries and the diverse needs of markets are accounted for, but there is a lot more centralized leadership versus individual country decisions.

Today, of the employees at 3M Canada outside of our manufacturing facilities, more than half are either in global roles or in roles that support the U.S. and Canada — which is fantastic for career development. It’s just a different model. Multinationals are thinking about things like, what does our global cost structure look like? Where can we find efficiencies? How can we drive scale and margin? That’s how I see the mindset shift. It’s an evolving model — and it has accelerated as we’ve come out of the pandemic.

SC: Meanwhile, at GE, the organization has been split into three separate businesses. Heather, tell us about that.

Heather Chalmers: Historically, when GE first expanded, Canada was the first country it entered. Here’s a fun story from our history: Thomas Edison, our founding father, travelled to the Kawarthas and fell in love with the area. He wanted to have a cottage there, and hence our first Canadian GE Motors facility was built in Peterborough. We’ve been in this country for 132 years, and our portfolio has changed dramatically. Over the years, we’ve owned transportation operations, water processing technologies — we even owned NBC Universal for a long time. But the portfolio has changed. For a number of years now, our focus has been on three things: healthcare, energy and aerospace.

Five years ago, Larry Culp came on board as CEO, and he believed that we would be better served as individual companies versus a conglomerate that had different businesses reporting in to it. The net-net of that is, in January of 2023, we spun off our healthcare business, GE Healthcare. And in the coming months, we will decouple and spin off GE Vernova, our energy business, and GE Aerospace. So GE is no longer a conglomerate. Believe it or not, I still get calls about GE Appliances, which we haven’t owned in ages, and even lightbulbs. But in the near future, there will no longer be a single GE stock ticker; there will be three new companies.

If climate change is our most important threat right now, not all regulations and permits can be created equal, because time is not on our side.

When these changes came along, given my years working for the healthcare side of the business, the ‘easy button’ for me would have been to stick with that. But I fell in love with energy. I don’t need to tell anyone that climate change is very real. For the foreseeable future, we need to invest in and develop a massive amount of infrastructure in Canada and around the world, to both electrify and decarbonize the world. At the same time, the global population is growing, and its needs are growing. So, you’ve got this growth demand while you’re also trying to get to net-zero carbon. The reason for bringing together a portfolio of energy companies under GE Vernova is to have access to a wide breadth of technologies to solve different puzzle pieces for clients, whether they be countries or utilities.

That’s where I now come in. I oversee our Global Growth Markets Team, and right now those markets are Canada, the UK, Australia and Africa. My job is to work in concert with our technology businesses to collaborate with governments, NGOs, trade associations and key customers to create solutions that can accelerate and scale efforts to electrify and decarbonize. You’ve probably heard about the small modular nuclear reactor that Ontario Power Generation is working on. That is ours, and a lot of work is going into making that happen. It’s going to be the Western world’s first small modular nuclear reactor.

Our focus goes well beyond Canada. I’m creating networks with the UK government and other places around the world so that — whether it’s regulatory harmonization, on the operations side or on the supply chain side — we can implement lessons learned and share best practices across geographies. The goal is to use existing trade relationships and trust to build bridges to scale and accelerate infrastructure projects for the energy transition. That’s what I’ll be working on for the foreseeable future.

The fact is, I have children, and I want them to want to have children and to have a wonderful world to live in. The good news is that addressing climate change is good business, too. There is going to be a lot of money spent and made in the coming years — and Canada is incredibly well-positioned to lead the way, not just in terms of meeting our own goals (which are very aggressive) but also, by helping to create green economies and a green supply chain that will benefit all of us for the foreseeable future.

SC: Penny, 3M is known as a problem-solving company. How do 3M leaders go about continuously pushing innovation forward?

PW: We are a 120-year-old company that was founded on innovation. I’d like to share my favourite innovation story, just to give you a sense of the culture. In the early 1900s, we were an ‘abrasives’ company. Put simply, we manufactured sandpaper,

and we sold it to automotive manufacturers. The industry had recently moved from offering only black cars to two-tone cars. At that time, when a worker was painting a car, they would place butcher block paper with mastic (a sticky adhesive) along the car to make a straight line; but when they pulled the paper off, most of the time there was a ragged edge between the colours and they would have to redo it.

Our sales rep, Richard Drew, was doing a sales call at one of our automotive clients when the manager said to him, ‘We don’t need anything today.’ Richard said, ‘Okay, fine; but I’d just like to look around and see what else is going on here.’ So he took a look around, and he immediately saw the issue that the painters were having. He had this thought: A piece of sandpaper is a piece of paper with abrasive material stuck to it. What if we took the abrasive part off and just kept the paper and the adhesive? These workers would no longer have issues making straight lines on the cars. The idea for masking tape was born.

He returned to 3M’s headquarters and described his idea to our president at the time, William McKnight, who told him, “Your job is to sell sandpaper. Get out there and sell!” Luckily for us, Richard wasn’t a good listener. He fiddled around with his idea in his spare time and figured out how to manufacture masking tape.

Our president was thrilled, of course, and this made him realize he needed to give people more ‘runway’ to work with. That invention was the beginning of McKnight’s Principles — one of which was the idea to give employees 15 per cent of their time to work on a passion project. And he offered this to both men and women, which was very significant in the 1920s. Some of our greatest inventions over the last 120 years have come out of the 15 per cent principle.

SC: Heather, can you share some examples of innovation in the energy transition and how GE is positioning itself in this regard?

HC: The first thing I would say is that there is no silver bullet. It’s going to take a lot of different technologies, approaches and partnerships. There are so many different needs to address. For example, in Quebec, the grid is predominantly hydro so it’s already 98 per cent green. Solving for that last two per cent is a very different challenge than the ones faced by our other provinces.

Then there’s Alberta, which is very heavily reliant on oil and gas, but also has some of the highest renewable penetration in the country, which people don’t appreciate. It can play a leading role in getting to net-zero via a technology called carbon capture and sequestration — literally capturing post-combustion carbon, compressing it and sequestering it. The province is

sitting on some amazing geology to do that, and they already have pipelines in place to start the process. So there are varied examples of where Canada can play a leadership role in the energy transition, globally.

None of this will be business as usual. And this is where, through the Canadian Chamber of Commerce or as individual companies, there has been a lot of advocacy with federal and provincial governments. We are in the midst of figuring out what it will take for businesses to make these necessary investments and how we can simplify making the large capital investments that are required for some of these projects.

We’ve come a long way and are getting much better at understanding all of this. You can’t just say, for example, ‘we can no longer use natural gas,’ because we need it, from a reliability standpoint, for the grid. The grid will always need to be balanced. There is a long journey of education that has to happen, but I’ll give our government credit, because they are listening and they appreciate that they have much to learn.

I think two big areas still need to be unlocked in terms of springboarding a number of projects that are just on the edge of investors wanting to make that commitment. The first is certainty around carbon pricing. We’ve announced a carbon tax that will go up to $170 a ton by 2030. But you want to be able to get some form of revenue from it, and until these markets become more mature, you’re banking on a future that’s not certain. No business model likes uncertainty. So, we’re working with government to create a carbon contract for different mechanisms in Canada that will provide the level of certainty required for investment.

The second area that we’re spending a lot of time on is around accelerating the permitting process and regulatory harmonization. I think we’re on a pretty level playing field now in terms of financing incentives, even compared to the Inflation Reduction Act in the U.S. But if it takes 10 years for a company to get a permit, we’re certainly not going to meet our 2030 commitments — never mind the 2035 net-zero goal.

Between the federal government, the provincial government and local municipalities, some way, somehow, we have to figure out how to do this faster. If climate change is our most important threat right now, not all regulations and permits can be created equal, because time is not on our side. These are huge, multibillion dollar projects that are going to take a long time to complete.

Finally, I want to touch on Indigenous engagement. We need to have a Team Canada approach. Indigenous Peoples must be given the opportunity to participate as equal partners in these projects. They also need access to competitive financing. This is being addressed, and we’re starting to see the federal government talk about it in some of its latest announcements.

SC: What else can the government do to foster productivity, competitiveness and innovation in this arena?

HC: Sadly, in terms of productivity, Canada is the laggard of the OECD. In healthcare, there are so many pockets of innovation, but they are always done as pilots. Over the years it has been frustrating to see great innovations fail to be scaled across our system. What is so unique and different about every hospital within the system? During the pandemic, those ‘differences’ melted away and everyone came to the table to figure out how to get things done. We need that same spirit to work together on climate issues.

I worry sometimes, because we have an unbelievable ecosystem for creating innovation in Canada, but we don’t have a good track record of adopting it into practice to drive that productivity curve. We tend to rely on labour — often less expensive labour — to drive top-line revenue, in the absence of trying to work better and smarter.

We have an unbelievable advantage with respect to AI. Rather than just producing AI tools that ultimately get sold to other parts of the world, we should be holding ourselves accountable to using them in our own systems, right here, today. I don’t have all the answers, but I do think about this a lot.

PW: Canada needs to ensure we have the right industrial policy and priorities for the future. We can make whatever we want here and be self-sufficient; but we will have to balance that with cost. We touched on critical minerals earlier. As a trusted country, we have incredible access to a critical mineral supply. It really is about deciding which direction to go in. What are we going to prioritize, and how are we going to leverage that?

SC: Penny, you’ve done a lot of work to leverage the physical assets and talent we have in Canada. Please talk about that.

PW: Each year, 3M produces a State of Science Index where we talk to people around the world. We discovered a couple of years ago that 70 per cent of Canadians believe underrepresented populations in our country don’t get the same access to STEM education and jobs. If we want strong economic development for the future, we need everyone to participate.

For example, women make up 47 per cent of the workforce, but they hold only 25 per cent of the STEM jobs in Canada. Eighty per cent of women have encountered somesort of barrier, whether it’s financial or not getting the mentorship or support they needed to move through a STEM career. And that’s just women — never mind other underrepresented communities.

We’ve really been thinking about and working with other businesses, with academics and with government to understand how to overcome barriers of access, of mentorship and

The effects and the costs of climate change are starting to impact everybody.

championship — and how businesses can take an active role. As we talk to Canadians about the barriers they face in STEM, we’ve been doing the same things to try and fix it for 20-plus years and we don’t seem to be moving the needle. What needs to change? That’s a challenge for us to solve.

As a science and technology company and an innovation company, this is critical to us. This is our lifeblood for the future — and I know GE feels the same way. We are both based on engineering and science and finding new ways to do things. These are absolutely critical issues for the future of Canadian business.

HC: Building on that, last summer we ran STEM Camps where we welcomed grade eight and nine girls to our offices for a week to introduce them to the art of the possible. ‘Engineering’ is a very nebulous sort of term, but when you bring people in and show them how to build a circuit or how to use a handheld ultrasound, all of a sudden you make the intangible accessible. If we can spark a few of them to go into a field that they otherwise wouldn’t have considered, we’ve made an impact.

SC: Innovation can’t happen without teamwork. What are some key principles for building strong teams?

PW: If there were any silver linings in the pandemic, one has been a recognition that we need to take care of our people and protect their mental health. Whether that meant allowing people flexibility to work the kinds of hours they needed to, or making sure we were providing mental health assistance to help people through difficult times — these lessons have real staying power.

As many companies are telling people to come back to the office — two, three, four, whatever number of days — 3M continues to offer full flexibility to all of our employees. If you want to work fully remote, work part-time in the office or come in fulltime, you have that flexibility. The focus is on making sure that you and your leader agree on your goals and that you deliver.

As we build increasingly global teams, we need flexibility more than ever. One of my team members leads one of our global automotive portfolios, and she has team members in Japan, Germany and other places around the world. So flexibility is required, and we offer it. This is a critical piece that companies need to pay attention to. Leaders need to show empathy and be supportive on this front.

SC: In terms of finding solutions to climate change, it seems the required urgency doesn’t yet exist in many companies. What is required to orchestrate people to work towards such a lofty goal?

HC: I believe the urgency is coming. Certainly, the effects and the costs of climate change are starting to impact everybody. Just look at rising insurance rates. In my role, I spend a lot of time with different levels of government and help to educate them with data and tools to inform the right policies that are necessary to enable large projects to happen. So that’s one key step — working as a company to affect change through different levels of government.

We also work towards solutions through trade associations and other places. Both Penny and I are on the board of the Business Council of Canada, and one of the big pillars we’re focused on is the energy transition. We’ve got the top 150 CEOs in Canada all rallying behind this incredibly respected organization on energy transition-related issues in order to make their industry successful going forward.

One area that I still think is lacking is public understanding of what the energy transition is going to require. To be clear, it is going to cost money. You can’t do these large infrastructure projects for nothing. But there will also be amazing jobs created. Lots of them. It’s important to bring the public along and let them have a voice, because as we said earlier, climate change is a team sport. It’s not even a Canadian sport. It’s a global sport.

Penny Wise is President and Managing Director at 3M Canada. Heather Chalmers (Rotman MBA ‘04) is President and CEO, GE Canada and President, Growth Markets, GE Vernova. She is also Treasurer on the St. Elizabeth’s Health Centre Foundation’s Board of Directors.

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The Way of the Unicorn: The TransPerfect Story

Self-made Unicorn (i.e. billionnaire entrepreneur) Liz Elting describes her journey to building the world’s largest provider of language and business solutions.

Interview by Karen Christensen

Why did you decide to start a translation business back in 1992?

Liz Elting: It was a natural business for me to gravitate to because I grew up living in five countries. I was born in New York, then I lived in Portugal when I was eight and nine. When I was 10, we moved to Toronto and lived in Canada for a number of years. Then I did my junior year of college in Spain and worked in Venezuela after graduation. Over the years, I had the opportunity to study four languages, and by the time I graduated from high school, I was hooked: I simply loved languages.

I majored in languages in college and shortly after graduating, worked at a translation company in New York City. I quickly fell in love with the industry. It was a wonderful way to combine languages with business and serve clients who were eager to ‘go global.’ I did that for three years, but I began to notice gaps between what clients needed and what was available in the industry in terms of quality, service and a ‘one-stop shop’ model.

I parked those thoughts in my head and went back to school to get my MBA from NYU Stern. Shortly after graduating, I had a brief stint in finance — but I realized quickly that it wasn’t for me and I asked myself, ‘Why wait any longer to start a translation business?’ I was 26, I was used to being broke and I knew I would put everything into it because that was where my heart was. This was right around the beginning of globalization and my co-founder and I felt that we could build the world’s largest and best translation business. That was the impetus for starting TransPerfect.

Despite your passion, the early days were what you have described as ‘grim.’ What happened?

As indicated, my passion was there, but it was very tough. At the

time, there were about 10,000 other translation companies in the industry — although many were tiny, with between one and five employees, and we wanted to be big. But there we were, working out of an NYU dorm room. We didn’t focus on getting funding because we didn’t think that was the best use of our time. Instead, we focused on selling: It was all about sales

I was very tough on myself. I would make up to 300 cold calls a day in search of companies who might have a need for our services, and then mail out marketing material to them. It was ‘grim’ because it was so intense. We were making so many phone calls and sending out so many letters, but getting so few clients. It sometimes took 500 or more letters just to get one customer. But I knew from the start that one small project could turn into multiple projects, and that multiple projects would lead to strong relationships and referrals.

One of our initial goals was to get out of that dorm room within six months and into our first office — and we managed to do that. From then on, we worked on our goal to become the largest translation company in the world, setting revenue and profit goals and taking the required actions to accomplish that over time.

You believe the best way to start a business is not to reinvent the wheel, but instead, to find a focused problem to solve. Tell us more about that.

I always say, ‘Don’t confuse being an entrepreneur with being an inventor.’ You don’t need to invent something entirely new to be wildly successful. We certainly didn’t. As indicated, there were 10,000 other companies out there at the time; but I knew the level of quality and service could be better: Turnaround times could be faster, and there could be more possible deliverables.

Entrepreneurial success is all about seeing something that is being done and doing it differently and better. You don’t have to invent something brand new.

Back then, the competition was only returning translations to clients in WordPerfect and Microsoft Word. I knew we needed to provide deliverables in a wide range of software as well as offer additional services and products based on our clients’ needs.

Entrepreneurial success is all about finding a problem that isn’t being addressed adequately. Certainly, that was the case with Fred Smith when he started Federal Express. Overnight delivery was already happening, but not in the best way. Or Steve Jobs with the iPhone. BlackBerry was thriving at the time and there were other smartphones, but they weren’t able to do anything like what the iPhone could ultimately do. It’s about seeing something that is being done and doing it differently and better You don’t have to invent something brand new.

Over the years, you attempted to build what you call ‘the perfect culture’ at TransPerfect. What did that entail?

There was a lot of trial and error, because in the beginning, I didn’t have much business experience. I was only 26, and in the early days, as indicated, I was completely obsessed with selling. Thankfully, some projects turned into bigger relationships, as we had hoped they would; but the hours soon became excessive for our employees. At first I thought, ‘We can just pay them more; or maybe give them a big bonus.’ But I learned quickly that that was not what people ultimately needed: They needed some of their time back. If you just pay people tons of money and make them work crazy hours, they will burn out. We certainly went through a lot of that in the beginning.

Our culture was always very much based on results, but at the same time we offered a lot of perks. We had monthly ‘wheel spins’ where high performers would get to spin a wheel, and it might land on a spa day, a new iPad or a trip to the Bahamas — things like that. Also, our people were dispersed around the world — in over 100 offices ultimately — and we made it a point to regularly get them all together to learn from each other and to bond.

Public recognition was another big aspect of our culture. We did recognition events twice a year, around the holidays and over the summer. We had a Platinum Club, where our star people—not just in sales, but in every area — would get to go on an annual trip with other top performers. Finally, there were lots of opportunities for continual learning and we held regular seminars where we would bring in well-known people to speak to our employees. There was constant training going on. My goal was to be an employer of choice in our industry — and ideally, any industry.

The last thing I’ll say about our culture is something I found to be extremely valuable: I made it a habit to ask employees, ‘If

you owned this company, what would you do differently?’ That was incredibly powerful, for two reasons. First, it allowed us to act on things that were important to our people; and second, it made the company improve continuously.

Of course, entrepreneurship has its challenges, and two of the main ones are cash flow and scaling. How did you handle those things?

The number one reason new companies go out of business is they run out of cash. As indicated, we didn’t receive any external funding; we bootstrapped. At first, it was about bringing in enough money to get us out of that dorm room, and then it became about making sure we had enough revenue to sustain us. It wasn’t easy. There were weeks and months where I thought, ‘Oh no, how are we going to make payroll?’ It was very stressful.

Fortunately, despite these challenges we were able to avoid outside investors. Years later, we tried getting investors for a second company, but we eventually bought them out because it was more trouble than it was worth. So, we were able to succeed without investors or even big loans. We got by through our focus on sales and culture — and a line of credit came in handy a few times along the way.

One reason we were able to make it work is super important: We never spent money we didn’t have. We focused on hiring great salespeople, and that actually leads me to the scaling question. We would bring in salespeople one at a time in our New York office and say to them, ‘If you sell $50,000 a month for three consecutive months, you can bring on a second person.’ And then we’d say, ‘If the two of you can sell $120,000 a month for three consecutive months, you can bring on a third person,’ and so on. This ensured that as we were bringing people on, we could afford them because there was revenue to pay for them. That’s how we scaled the company.

Many entrepreneurs have a brilliant product and great infrastructure, but they are the main salesperson for their company. They don’t have anyone else on board who can do what they do. Our goal was to create the biggest sales department in the industry, and we ultimately did that. We paid our salespeople so that they were making more money than they would elsewhere, and many of them also had a lot of responsibility — sometimes managing 50 or 100 people.

As I said earlier, when you start a company, you might only have one project for a client — and we certainly did, in many cases. But these were clients that had the ability to give us huge amounts of business — up to a million dollars’ worth. Our

Entrepreneurship allows you to create your dream work situation and be a master of your own destiny.

strategy to make that happen was to spoil them with quality and service. Whenever the sales team turned a new client over to production to take the project from start to finish, they could be certain the client would receive the absolute best results. That’s what makes people come back to you with repeat business — and make referrals both within their company and outside of it. Sometimes, people focus so much on new business development that they don’t think about that, but I would say 98 per cent of our business came from repeat business and referrals.

Sadly, your experience with TransPerfect didn’t end well but you now say that was a blessing in disguise. Can you describe what happened?

One thing I did wrong — and I talk about it in detail in the book — is something that is incredibly important for all entrepreneurs. When we started, as I mentioned, we were broke and we didn’t get any outside funding. But we also didn’t hire an attorney or an accountant, and as a result, we didn’t have the proper paperwork in place. Most importantly, we didn’t have a shareholder’s agreement to determine how decisions would be made, how to resolve disputes and what would happen in the event of death, disability or divorce. If you start a business with a partner and you are 5050 owners, what happens if one of you wants to exit? And how will the company be valued?

Those are just some of the reasons why a shareholder’s agreement is so critical. And we didn’t have one, so when we didn’t agree on something, we had to compromise. In the early days, that worked, even though it could be rocky. But ultimately, after about 20 years, it became extremely difficult. That’s why I always tell people, make sure you have a proper shareholders’ agreement and make sure it identifies a designated decisionmaker for when disagreements arise. Ideally, that will be you, because you want to be the one making decisions.

Unfortunately, in 2014, after 22 years in business, I did have to litigate because we just weren’t agreeing. I asked for a custodian to be put in place to resolve the deadlock — to make sure there was someone to break ties in the short-term and oversee the sale of the company in the long-term, whereby I could buy my partner out, he could buy me out or a third party could buy us both out.

I went through four intense years of litigation, and it was very difficult and very expensive. It was also heart-wrenching, because it put our employees in a very difficult spot. At the time I thought I wanted to own the company, and I did look at buying it with Blackstone, the private equity firm. But ultimately, that didn’t happen, and instead, I ended up selling. That was in 2018.

At first, I thought, ‘I can’t do this, this company is my baby!’ It had been 26 years and my heart and soul were in it. But once I sold it, I realized, ‘Wow, I did this for a very long time and I grew the company to impressive scale; but my situation has changed.’ Suddenly, I had time for all the things I never had enough time for. Finally, I could focus more on my family and other important issues.

Since then, I’ve been doing just that. I started a foundation five years ago, and we’re working really hard to support and empower women and people from marginalized communities. I get to speak widely about entrepreneurship, sharing lessons about what I did right and wrong and helping people learn from my story. And then of course, I was able to write my book. It has been wonderful.

You have said that entrepreneurship is one of the keys to changing the world for the better. For those who are considering it, what is your message?

I think it’s super important not to wait until you’ve done every bit of research, everything is in place and it’s the ‘perfect time.’ The fact is, if you’re reading this and you’re not in an ideal situation at work, this could be your moment. Use it as an opportunity. Assuming you have some idea of what you’d like to do — take the risk. Be bold and go for it.

It’s particularly great to do this while you’re young and don’t have too many responsibilities yet. You can learn so much by doing. That’s what I did. But don’t wait, because you can always find reasons not to do it. Entrepreneurship allows you to create your dream work situation and be a master of your own destiny. I think we need many more entrepreneurs out there creating the right situations — for themselves and for the world.

Liz Elting is Founder and CEO of The Elizabeth Elting Foundation and author of Dream Big and Win: Translating Passion Into Purpose and Creating a Billion-Dollar Business (Wiley, 2023). She founded TransPerfect, the world’s largest languagesolutions company, with over US$1.1 billion in revenue and offices in more than 100 cities worldwide. Liz has been recognized as NOW Woman of Power & Influence, an American Heart Association’s Women

Changing the World awardee and one of Forbes’ Richest Self-Made Women every year since the list’s inception.

Navigating Without a Map: The Quest for First Principles

To improve our orientation in a complex world, we need to shift our focus from business practices based on past experience toward the ‘first principles’ that underly them.

by Joerg Esser

FOR DECADES, leaders have relied on solutions propagated by the business mainstream. Want to improve profitability? Outsource everything that isn’t part of your core business. Want to build an efficient organization? Create the right organizational structure. Want to become a great leader? Involve yourself in all key decisions. The list goes on and on.

In the past, these mainstream strategies often worked well. The received wisdom was based on observations of what worked in practice and sometimes drew on years of experience. In other cases, they were just a passing trend or a reflection of some business thinker’s personal biases. In the worst cases, apparently contradictory strategies coexisted.

But time marches on. As we all know by now, yesterday’s solutions no longer work in today’s complex world. Something unexpected happens — a global pandemic, say, or a war — and tried-and-tested mainstream approaches stop delivering.

For many of us, doing business today feels like being on a different planet. Our past observations and insights into how to act no longer produce the expected results. I like to draw a paral-

lel with science: Isaac Newton observed that an apple falls from a tree to the ground at a certain speed, depending on its mass. But if we put Newton’s apple tree on the Moon, the apple will fall at a different speed. So, were his previous observations wrong?

The answer, of course, is No. But in today’s challenging environment we need to look beyond our past observations and experiences and find out what lies beneath them. We need to search for ‘first principles’ — the basis from which all things are known, to paraphrase Aristotle

In Newton’s case, his observations led to him defining the Law of Universal Gravitation, the principle underlying what made the apple fall to the ground at a certain speed. And that universal law applies whether we’re on Earth or the Moon. This is an example of a first principle. It holds true however much the context changes, wherever we are in the universe.

Reasoning from first principles forms the basis of the scientific approach. It leads to meaningful, robust knowledge and is needed to make sense of the world. But this approach has yet to inform the world of management. American theoretical physicist

and Nobel Prize winner Richard Feynman lamented the situation as follows: “I don’t know what’s the matter with people: they don’t learn by understanding; they learn by some other way — by rote or something. Their knowledge is so fragile.”

How can we make our thinking less fragile and more robust? I don’t for one moment believe that we need to throw out every piece of received wisdom accepted by mainstream business. But we do need to be ready to challenge more, to question what really lies behind our observations. Constantly questioning takes time and resources — in other words, it has costs. But those costs are amply compensated by the benefits that it brings.

Let’s take a look at some of the mainstream business ideas that I mentioned above and see how we could begin searching for the principles that underly them. Following are two examples where I believe the search could be fruitful.

FIRST PRINCIPLES FOR: Improving Profitability

To improve profitability, one of the competing established mainstream ideas is that you should outsource everything that isn’t part of your core business. However, that immediately begs the

question: What is our core business and what isn’t? Very often, this leads to an unsatisfactory discussion about what the business is really about. You fail to reach a consensus and instead, you look at what others are doing, which areas your competitors are outsourcing. Ultimately, you end up copying what others are doing, even if they are operating in an entirely different environment and have made their decisions under entirely different circumstances — as is more than likely in today’s rapidly changing and unpredictable world.

Instead, companies should look deeper for the first principle underlying the decision to outsource or not. I don’t have any ready answers here. But they could, for instance, look in the direction of transaction costs, as described by Nobel Prize winners Ronald Coase and Oliver E. Williamson. These are the costs of transactions made outside the firm, in other words, the costs of buying or selling goods or services on the market. They include the cost of deciding on the best offer, the cost of planning, negotiating and enforcing contracts, the cost of resolving disputes and the cost of unwanted lock-in effects with business partners. In a broader definition, they also include the hidden costs of

The Power of Minimalist Leadership by Roger L. Martin

As an executive, making the right choices demands recognizing two things about company structure and choices. First, as you go up in a company , managers have more knowledge than those below them about how the interconnections between various pieces of the company work. A regional plant manager will have more knowledge about how all the plants connect together in a network than the managers of individual plants in his region; the GM of the region will have more knowledge about how manufacturing connects with the other functions under her purview; and the president of a business unit will have more knowledge about how the regions under his purview fit with the other regions.

Conversely, as you go down in a company , people are increasingly knowledgeable about customers, because they are closer to them and likely to spend more time with them. In a hospital chain, the surgeon with the patient is much more knowledgeable about what to do than the CEO of the hospital, even if the CEO used to be a surgeon. As a result, the extremes of ‘up’ and ‘down’ in every company are the CEO at the top and front-line workers at the bottom. CEOs know the most about the whole company, which means they are in the best position to determine its winning aspiration. CEOs also know most about how the company’s various businesses interconnect with one another and what the synergies and commonalities are. That puts the CEO in the best position to make choices around ‘where-to-play’ and ‘how-to-win.’

Front-line employees, for their part, know the most about customers, especially in service businesses, which have become the biggest segment of the global economy. Even if you think they are ‘just executing,’ these workers are making decisions. And you need them to make the best possible decisions—not the ones mandated by managers who are farther away from the customer than they are.

Given these realities, I would argue that at its core, great leadership can be defined as follows: making only the choices that you are best positioned to make — and not making any other choices, even if you are more senior than the person who will make the choice . I advocate this approach for two reasons.

First, taking choices away from others who will be as good or better than you at making them underutilizes people, stunts their development and, at worst, infantilizes them. They get used to their superiors making choices for them that they are completely capable of making themselves. This is the very antithesis of leadership; and sadly, it happens all the time—especially if you add in the innumerable times that leaders second-guess choices made by their subordinates. Is this justified on occasion? Of course. Correcting poor decisions is part of the leader’s job. But doing so routinely makes for ineffective leadership.

Second, there is a wide range of choices for which your reports are just plain better. These are choices for which they have more of what Michael Jensen calls ‘specific knowledge’ than you have.

managing relationships with business partners and the risk of those partners failing to deliver.

When deciding whether to outsource or not, simply checking if a product or service could be procured for cheaper on the market than producing it internally risks ignoring these all-important costs of dealing with external providers. Thus, the first principle in this case might be formulated as follows:

In outsourcing decisions, transaction costs are as important as production costs.

Here’s an example from the aviation business. ‘Ground handling’ refers to the towing of airplanes, refuelling, passenger handling, cargo handling, cleaning and catering. Airports can either provide these services themselves or get another company to do so on their behalf. Before COVID-19, the mainstream thinking was that airports should outsource as many of these activities as possible, for the sake of efficiency.

But then the pandemic hit — and it turned out that external providers were less reliable than previously thought. When air-

ports started fully operating again, many external providers had difficulty finding staff, causing serious issues for airports. Major hubs soon concluded that they were better off doing ground handling themselves to ensure that passengers made their connecting flights.

In other words, rather than simply looking at the cost of providing the service themselves and copying what their competitors were doing, they included transaction costs in their decision, including the risks associated with outsourcing. Applying this first principle led them to adopt a much more nuanced approach to what should be outsourced and what not.

FIRST PRINCIPLES FOR: Organizational Structure

Another example is how companies structure themselves, in other words, their organizational design. In the past, the discussion generally centred on whether the first hierarchical layer below the Board should be organized by business units (geographical areas, lines of business) or by functions. Organizations often switched back and forth, sometimes on the advice of consultants. Then another fashion entered the market: Structure your

This is knowledge that is attached to a particular person because of that person’s job, and it can’t be as easily transferred to another person as ‘general knowledge.’ A surgeon has specific knowledge about the patient that the hospital CEO lacks.

Put simply, just because you are above someone in the hierarchy doesn’t mean that you are better at their choices — or that you should spend your time second-guessing those choices. If you want to be a strong leader who develops great decision-makers, the key is to be a ‘minimalist’ in terms of the choices and decisions you make.

I am a strong advocate of minimalism as an operating principle for the number of choices leaders make. But the opposite also holds with respect to how to make the choices the leader chooses to make. The first thought could be that the leader should be minimalist here, too: ‘I know the most about this choice, so I will make it by myself.’ That is one option, to be sure. But it assumes that because you know the most about the choice, you couldn’t make a still-better choice by accessing thoughts and advice from others who work with or for you. That is a very arrogant assumption. Making clear that you are taking responsibility for the decision, but value and want to integrate the views of others into that choice, is almost certain to produce a higher quality choice.

But there is also a second benefit. As a leader, everything you do is likely to be observed and then modelled by those who work for you. If you want your people to make decisions without consulting their teams, then you should make decisions by yourself; conversely,

if you want them to make decisions collaboratively, you should model that behaviour.

My advice is to strive for balance. People need to view you as a leader, so don’t come to them for decisions that you can and should make on your own. But avoid being seen as isolated and singular, or you will create an isolated and singular culture.

Always remember: A key aspect of your job as a leader is to advance the leadership capabilities of those who work under you. And these individuals will not progress if you continue to make choices that they are capable of making themselves. If you model engaging with your team to help you make the best possible choice, even if you could have done it alone, they are likely to follow your lead with their team. Over time, this practice will build up the choice-making culture and skills of your organization. In my view, exhibiting this kind of restraint around decision-making is the true badge of leadership.

Roger L. Martin is Professor Emeritus at the Rotman School of Management, where he served as Dean from 1998 until 2013. He is the author of several bestselling books, most recently, A New Way to Think: Your Guide to Superior Management Effectiveness (Harvard Business Review Press, 2022).

A longer version of this article originally appeared on his Medium blog. For more, visit: www.rogermartin.medium.com

Your organization is likely already following some first principles, consciously or unconsciously.

organization as a matrix — for example, five areas, five lines of business — and avoid a hierarchy altogether. The result was frequently confusion, a lack of flexibility, too much governance and a lack of communication, with the Board delegating management challenges and critical decisions to the matrix, and the matrix failing to deal with them.

Instead, I believe the first principle here involves looking at path lengths, or the distance between different organizational units. This can be formulated as follows:

Shorter path lengths between critical units are more important than the specific organizational structure.

The idea here is that organizational design is all about working together, so having short path lengths is vital. How can leaders shorten the path lengths within their organization? By having employees work on challenges together, meeting with each other and interacting more often.

Start from this first principle and you will find that structure doesn’t matter as much as you thought: You can have businesses first, then regions, or regions first, then businesses. Indeed, companies such as Apple have found that having an organizational chart is only important because it gives people a ‘home’ — a group to belong to. It doesn’t affect how the company operates, in practice.

Using First Principles in Practice

Neither of these first principles should be taken as scripture. Rather, they are simply directions in which companies can begin thinking and searching for underlying laws. One thing is certain: It is vital for companies to ask why — like a child, constantly asking, but why? why? In this way they can get under the surface of their observations and discover what really makes things tick. This practice also stops them from throwing everything overboard each time an unexpected storm hits.

When it comes to formulating and applying first principles, I propose sticking to a number of rules. Here are seven that are based on my own experience.

1. YOUR FIRST PRINCIPLES SHOULD BE BACKED UP WITH A CLEAR MEASURE OF SUCCESS AGAINST WHICH SPECIFIC SOLUTIONS CAN BE EVALUATED. In the case of choosing the best organizational structure, for example, the measure of success could be ‘the throughput time from idea to action within the sales organization.’

2. AVOID NEGATIVE STATEMENTS AND USE POSITIVE WORDING INSTEAD. Rather than saying: The role of a leader is not to hand down scripts but to shape ideas, say: The role of a leader is to shape ideas and enable the organization to develop effective solutions This shifts your focus from what doesn’t work in some circumstances to what does work in all circumstances.

3. DON’T HAVE TOO MANY FIRST PRINCIPLES. If you find you have a multitude of first principles and, in some cases, they seem to contradict each other, the likelihood is that some of them are observations rather than properly distilled first principles.

4. FOCUS YOUR ENERGY ON FIRST PRINCIPLES THAT ARE NOT OBVIOUS AND WHICH DON’T COME NATURALLY. Your organization is likely already following some first principles, consciously or unconsciously, and there is no need to fix what isn’t broken.

5. ROLE-MODEL YOUR FIRST PRINCIPLES. People learn by observation and putting things into practice, so make sure your actions and behaviour are ‘principled.’

6. MAKE SURE YOUR FIRST PRINCIPLES REFLECT YOUR CORE BELIEFS AND VALUES.

7. BE PRAGMATIC. In these times of increasing uncertainty, firstprinciple thinking should always be on your radar. But, in reality, questioning everything you believe and everything on which your company is built is not only extremely costly but can undermine the basis of your operations. Some mainstream ideas may actually be valid and not require questioning at all. Recognizing this calls for a certain degree of humility.

In closing

When it often feels like we’re living on a different planet, where can we look for orientation? The answer, I believe, is to shift our focus from mainstream business practices based on past experience and observations, and toward the first principles that underly them. As indicated, first principles will apply however the world around us changes, whether we’re on Earth, the Moon or Jupiter, and not just today, but in the future.

Dr. Joerg Esser is a Partner at Roland Berger, based in Dusseldorf. A Theoretical Physicist by training, he draws inspiration from science to help organizations perform amid uncertainty.

QUESTIONS FOR Malissa Clark, Professor, University of Georgia and Author, Never Not Working

Q &A

A psychologist and self-professed overworker describes how to recognize workaholism in yourself and others.

Interview by Karen Christensen

You have made it your life’s work to study overwork and its effects on people and organizations. Why is this topic so important to you?

It’s something I’ve struggled with myself. For as long as I can remember, I have felt an inner pressure to always be busy doing something. When I was younger, that meant signing up for all kinds of clubs and sports while still getting straight A’s. It wasn’t due to pressure from my parents; it was just me. I’ve always felt like I had to prove myself and really struggled with being idle.

By the time I made it to grad school, I stumbled across the concept of workaholism and I thought, ‘Wow, I could actually study this phenomenon and understand it better.’ That’s why I call my work ‘me-search’ instead of research. I think a lot of psychology researchers gravitate to things that they personally struggle with or that they’ve seen loved ones deal with. So I started researching how external factors can exacerbate workaholism and how it impacts people beyond just the person who is overworking.

What do we know about the perils of this approach to life?

It’s not just about working long hours — although there is a tremendous amount of research on the perils of doing that. That gets compounded when you add in some other aspects of workaholism in terms of the cognitive attachment to work. Research shows that we need to take psychological breaks from stressful or demanding things. Taking regular breaks from work helps us recover some of our lost resources, including physical and mental energy, so that we can recover in a healthy way.

One aspect of workaholism is a literal inability to cognitively detach from work.

One aspect of workaholism is a literal inability to cognitively detach from work, which has negative impacts on future work engagement and resource depletion that can lead to physical and mental consequences. There’s a whole chapter in the book where I present the stories of individuals afflicted with this, most of whom are members of Workaholics Anonymous. Of course, it’s difficult to directly link health issues to workaholism, but there is definitely a pattern to these stories that is supported by study after study.

Working all the time, a lack of cognitive detachment from work, and feeling like you should always be working — all of these things have been shown to lead to negative consequences spanning from heart attacks to sleep issues to high blood pressure, and also to mental health impact in terms of increased strain and burnout. The research is actually overwhelming. There are not many positive outcomes of workaholism, if any — apart from a temporary boost to productivity. But it is not sustainable.

For readers who feel that someone on their team might be a workaholic, what are some of the signs to watch for? It’s not always obvious. We read about work engagement a lot these days in the media, and how leaders can foster it. Just observing that someone is working long hours isn’t necessarily problematic. They might be doing that because they love their work and it could reflect high engagement.

By the way, you can also have both: high work engagement and workaholic tendencies. I think of them as two separate levers in each employee that can either be low or high.

For some, the gauge is high on both, but it can also be low on both, or high on one but not the other. But regardless of your level of work engagement, if you have workaholic tendencies, the outcome will be negative.

One telltale sign is over-committing — always taking on too much and over-promising amid unrealistic timelines. In the workaholic’s mind, they think, ‘No problem, I can get that done in two days,’ — but in fact, that means pulling two all-nighters in a row. That is not a healthy approach to work.

A second sign is the person who goes home at a decent time but is constantly on their e-mail after hours. I myself have been guilty of this. Sometimes I tell myself, I’m just going to check my e-mail, that’s all — and I’ll have a TV show on in

the background, so I feel like I’m doing something for myself at the same time.

A third sign is perfectionism. When most people are ready to stop working on a project, the workaholic wants to keep on going ad nauseam until it is absolutely perfect. But what in life is ever perfect? These people are never satisfied with ‘good enough’ and they fail to realize that no organization has unlimited time and resources. We all have to make decisions about when something is good enough, both at work and at life.

During the pandemic, with everyone working remotely, workdays actually got longer for most people. In the U.S., the average workday became three hours longer and in the UK, Canada, France and Spain, it was two hours longer. How did this happen?

That finding came out of a study Microsoft did, where they documented keystrokes on their employees’ computers. What they found is that there was a new ‘third wind’ of productivity happening, mostly in the evening. Right about the time the kids went to bed, people would open up their laptops and start working again — which, during the pandemic, made sense. If you had young children while we were sheltering in place, during the workday there were lots of interruptions. Some parents were basically home-schooling their kids while working at the same time. So, it made sense to try to ‘make up’ that lost time in the evenings. The problem is, lots of people have adopted this new way of working and stuck with it. In many places there is still an expectation that people will respond to e-mails during the evening because it became such a habit during the pandemic.

We all need to relearn the boundaries between work and home. When we were all working remotely, it was too easy to let ourselves slip into working in the off-hours compared to when we were physically going into the office. For three-plus years, those boundaries became blurred.

You have found that workaholics are more likely to engage in counterproductive work behaviour that might harm their organization. Please explain. There are many forms of counterproductive work behaviour. People tend to think about the really extreme kinds,

Workaholics are difficult teammates due to their propensity to over-promise and seek perfection.

like theft or damaging property. But in a broader sense, it’s about either directly or indirectly harming your organization or its people — and that can encompass a lot of different behaviors. For example, workaholics are difficult teammates sometimes, due to their propensity to overpromise and seek perfectionism, and that can be very hard on the people around them. For example, they might take back an assignment and tell their colleague, ‘I’m just going to do this myself.’ Working with a difficult boss or teammate definitely has implications.

You found that 66 per cent of Millennials self-identify as workaholics. Why are young people heading in this unhealthy direction?

That statistic surprised me, as well. We definitely need more research, because this goes against what we’ve been hearing for years about younger workers. We’ve been told, time and time again, that they don’t like to work as hard as older generations. This is just me hypothesizing, but I wonder if the blurred boundaries we all have now are exacerbated by smartphones, which are most heavily used by younger generations? I know my own kids are always on their phones and they do all of their schoolwork on their computers, which have chat apps on them. I think this is probably facilitating that finding, but we don’t have research to back it up yet.

The four-day work week is something we keep hearing about. Are you a proponent of it?

Definitely. In my work for the book, I got to know some of the key people involved with researching the four-day workweek and I really dove into their research. I am 100 per cent a fan of adapting the work week in some way. It could be four days or it could be a different configuration that works for the individual. Say someone wants to be at work until 2pm every day, so they can pick up their kids from school; so, they work from 9 a.m. to 2 p.m., five days a week. The key is to reduce the total number of hours worked.

There is a lot of research looking at productivity and how many hours people are actually working during the workday — and it is not eight. Very few employees work eight productive hours every day. The research that the four-day work week team is doing is very methodologically strong. They have done pre-tests and post-tests and they have

external researchers conducting the surveys and running the analyses. It is very rigorous. So, the fact that they’re seeing positive pre- and post-four-day work week changes consistently is very compelling.

For those who worry they might have a culture of workaholism at their organization, what are the first steps to dealing with it?

This is not an easy problem to tackle. First, I would say that some sort of culture assessment is critical to understand the norms and expectations and what type of behaviour is being rewarded (and not). Then, assess all of that and come up with a plan to address it. A company with a workaholic culture is not going to jump right in and adopt a four-day workweek. But there are some pretty convincing examples of how researchers have helped companies make small changes — even in highly competitive consulting companies.

Harvard Business School’s Leslie Perlow wrote about this in her book Sleeping with Your Smartphone. She and her colleagues went into an organization with a very workaholic culture and made one small change: there would be one night each week — just one — where the consultants were not allowed to even look at their work or e-mail. They called this ‘predictable time off,’ and it took a lot of work to implement it. But the people in this organization realized the benefits very quickly. They were like, ‘Wow, having an entire evening where I’m not working at all is really fantastic!’

There were some naysayers, for sure. Some supervisors ultimately weren’t on board and kind of defected from the study. But that is to be expected. Figuring out where you can make a small change like this is a great first step — and it’s a step in the right direction.

Malissa Clark is Associate Head and Associate Professor in the Industrial-Organizational Program in the Department of Psychology at the University of Georgia. She is the author of Never Not Working: Why the Always-On Culture Is Bad for Business — and How to Fix It (Harvard Business Review Press, 2024).

QUESTIONS FOR Jennifer Lee (MBA ‘06), Executive-in-Residence, Rotman School of Management

Q &A

A Rotman alum who helps global clients navigate uncertainty breaks down the new rules of consulting.

Interview by Karen Christensen

Uncertainty has become a daily reality for leaders across industries. What does ‘resilient leadership’ look like in this environment?

In the management realm, resilience is about the ability to manage uncertainty proactively by shifting from a reactionary mode of leadership to a proactive mode of leadership. Resilient organizations try to plan for the future as best they can by managing through scenarios that are informed by a wide-lens view.

I recently worked with a global, vertically integrated apparel brand to tackle this very issue as its business grew. We focused on creating three intensive scenarios, which incorporated very real political, social and economic scenarios that could hinder growth. We looked at every function and department and together we asked, ‘If this happens, what will we do?’ By coming up with concrete scenarios, you can be ready when a major macro disruption occurs — like geopolitical tensions or trade wars. This is a very different stance from waiting for things to happen and then saying, ‘Oh gosh, a trade war has hit. What are we going to do?’

Given the state of the world, we’re starting to see business resilience functions embedded within organizations as CEOs acknowledge that external market shocks are now an everyday reality. In the past, businesses could insulate themselves by focusing on being a well-run business. Our world has become more complex as business, politics and the economic well-being of a population have become intertwined signature issues. I believe the next ‘cross-functional’ business unit for many companies will be a distinct resilience function, which I already see clients

I believe the next cross-functional business unit for many companies will be a distinct resilience function.

starting to establish. It can either be integrated into the strategy function or the risk function. We are finding that one of the best ways to manage extreme uncertainty is to ask, ‘What do we believe could possibly happen?’ And if it does happen, what will we do?

You led the pandemic response for Deloitte. What are some of your top-level learnings from that experience? It was interesting because in the early days of the pandemic, we developed ‘control towers’ for our clients to manage the long list of things that the C-suite needed to address during that difficult time. But as we started thinking more broadly, we realized that approach was only going to be ‘table stakes,’ because it represented reactionary thinking. So, we pivoted from focusing on what are all the things that executives have to get done to what type of leader do they need to be to manage through this situation? Our overarching mindset was led by two elements: resilience and trust.

Trust is tricky, because what it means in China is very different from what it means in Germany, South America or North America. But the way people understand resilience is much more universal. At the top of the list of characteristics are the abilities to engage versus point fingers, and inviting diverse people to the table. To solve for this, we developed distinct ‘Future of Trust Forums’ around the world to debate and discuss trust across many dimensions: employees, society, board and shareholders.

At the time, many global firms were struggling and trying to manage shareholder expectations, and we recognized the importance of focusing on trust. We partnered with Harvard Business School Professor Sandra Sucher, author of The Power of Trust: How Companies Build It, Lose It, Regain It. With her insights, we were able to develop a ‘universal’ understanding of trusted leadership in addition to an analytics platform called TrustIQ to measure trust across stakeholders.

The concept of resilient leadership is now more widely understood. In addition to being proactive instead of reactive, it involves empathy and driving toward a clear purpose versus just managing a brand and corporate profits. As we worked with clients throughout the pandemic, we could show them where their organization sat on the scale in terms of proactive versus reactive thinking. And then we would work to move them toward more resilient leadership.

Do you see this mindset becoming widespread?

I do believe a different style of inclusive leadership is emerging and that the whole C-suite is going to start to embrace the qualities we’ve been discussing. What we are advocating for is not traditional scenario planning. This is about bringing diverse cultures and perspectives to the table — political, social and economic views to help shape scenarios around what could happen. So, for example, if a country invades another country and your supply chain is in that country, how will you manage? If you discover that there are unethical practices in your value chain, what will you do? Sometimes a scenario has nothing to do with the organization itself, and that’s what is so different about this approach. Today, social, political and economic forces must be considered to help leaders think proactively.

Traditionally, when consultants work with an organization, they are expected to come up with answers quickly. You prefer a different approach. Tell us about it.

Like styles of leadership, I believe the professional services industry is undergoing a monumental shift, particularly with the emergence of generative artificial intelligence. In the past, the consulting profession operated on having the ‘answers’ and being experts. While this is still true, our relationships with clients are shifting toward a more collaborative approach to finding answers and firms being invested in the outcomes of their recommendations. Our thinking as consultants will need to be much more holistic, and qualities such as empathy, strong communication and collaboration skills will be in high demand.

These days, it is inadvisable to come in with a cookiecutter answer or even a preconceived notion of what the answer is. Increasingly, there are answers that you can only arrive at together with your client. You might share how others have done it, what the thinking and the methodology were, but there is no one way to do things anymore. I can’t use the same approach I used with a global client with a Canadian client. It simply won’t work, because there are different combinations of cultural values, language barriers and personal biases built in.

That’s why we often utilize integrative and diverse teams to solve problems: our economists, political scientists, human capital, technology/cybersecurity and supply chain experts work with us on scenarios. We ask them,

Going forward, our profession will demand that we be curious. Curiosity builds trust.

‘What factors are affecting this particular country?’ It’s a very collaborative and integrative approach — which comes quite naturally to Canadians. I really think this gives us a competitive advantage in driving global strategy. Given our diverse population, we know how to integrate a wide variety of views.

For one global client, we had a team in Asia, a team in the UK and a team in the U.S., but it was all being driven by a Canadian team. Our integrative approach helped get the client on board. If we had just showed up with pre-determined scenarios, that wouldn’t have led to an emotional connection to the issues at hand. Professional services are transforming from a dictatorial ‘let me tell you how it is,’ approach to one of ‘let’s acknowledge that we are facing massive uncertainty, but rest assured: together, we will figure this out.’

In the midst of all these challenges, organizations are also operating in an era of data-driven insights. How does that fit into the new approach to consulting? Building the resilience to thrive amidst uncertainty is both an art and a science. Generative AI is a force that we cannot ignore, as it can significantly accelerate the delivery of programs and projects. As a rule, we will need to watch out for biases in the foundational data and protect privacy. That being said, generative AI can only take us so far. It is among diverse groups of leaders where true resilience is shaped, as leadership teams use data to interpret, debate and discuss scenarios. In discussions, you can use data as a foundation from which to engage in insightful conversations by saying, ‘What we’re seeing in the data is X; now, let’s have a healthy debate about what that means politically, socially and economically in countries A, B and C.’ Data enables us to say, ‘The probability of something happening is high in this particular area, and it’s very low over here.’

However, if you rely solely on a data-driven approach, you won’t get to incorporate the insights and diverse perspectives of the people at the table who are actually on the ground, working in these markets. Sometimes in meetings these people tell us, ‘Wait a minute; the data might be saying X, but what we’re actually seeing is Y.’ That richness of discussion is the basis for developing the most powerful scenarios, and the end result is that resilience gets built into the business.

To increase their impact, you have said that leaders need to do something rather simple: talk less. Please explain what you mean.

The future of professional services is going to require a full suite of skills. Qualifications like an MBA or a PhD will still get you in the door, but going forward, it’s going to be about, Do clients trust you? Do you spend enough time in a mode of curiosity, asking questions rather than jumping to an answer? Can you empathize with your clients and their customers?

Going forward, our profession will demand that we be curious. Curiosity builds trust. To be curious, you need to be good at listening to what is being said as well as what is not being said. Data and analytics are very powerful, but at the end of the day, people are going to do business with people they trust. Relationships are about much more than data.

What initial steps can readers take to get their organization on the path to resilience?

First, find out if your organization has any proactive scenarios in place, and if they do, when they were last updated. You can also start using the word resilience more in conversations and meetings and speak in more proactive terms versus reactive terms. Of course, if you’re the CEO, Chief Risk Officer or the Chief Strategy Officer, my hope is that you are already speaking more proactively than reactively.

Despite today’s world of big data and generative AI, there is still a human element to everything we do. Just remember, in the realm of consulting, there is a ticket to play — which is being really smart and having the right credentials; but there is also a ticket to stay — and that is trust.

Jennifer Lee (Rotman MBA ‘06) is the Vice Chair & Senior Partner of Deloitte Canada and an Executive in Residence at the Rotman School of Management, where she teaches “Management Consulting in an Uncertain World” in the MBA Program.

Optimizing Stress: How to Regulate Your Stress Response

PEOPLE DISAGREE a lot these days, but they do tend to agree on a few things. For one, the dominant cultural understanding of stress is that it is bad for us. This conception of stress leads countless individuals to embrace the common goal of reducing or avoiding it from day to day. But, given that stress is a fact of modern life, we propose an alternative approach: stress optimization. The widespread negative evaluation of stress has arisen, in part, because of research documenting its effects on our physical and mental health, brain aging and cardiovascular disease. The truth about stress, however, is not quite so grim. Multiple lines of research link it with several beneficial outcomes. For instance, studies link stress to personal initiative and productivity as well as physiological thriving.

Even high-intensity stress experiences triggered by life-threatening events can sometimes have positive outcomes — including improved relationships, a greater appreciation for life and enhanced perceptions of inner strength

— a phenomenon known as ‘post-traumatic growth.’ What, then, determines whether stress helps or harms us? Early research focused on features of stressful experiences such as their frequency, severity and duration, as key determinants. However, more recent findings show that the way people evaluate and cope with the stress they experience directly determines outcomes.

Hans Selye, a pioneer in stress research, defines stress as “the non-specific response of the body to any demand made upon it.” Selye insisted that experiencing stress can have both negative (‘distress’) and positive (‘eustress’) outcomes. Yet as indicated at the outset, the term is synonymous with distress. Indeed, the most widely used self-report measure of stress — Carnegie Mellon Professor Sheldon Cohen et al.’s Perceived Stress Scale — includes questions such as ‘How often have you felt that difficulties were piling up so high that you could not overcome them?’ Such questions associate stress with negative emotions characterized by situational demands exceeding our ability to cope. Interestingly, Prof. Cohen, who is recognized as the founder of the field of Health Psychology, was the first to provide evidence that high perceived stress increases susceptibility to the common cold.

POINT OF VIEW Alia J. Crum + Jeremy P. Jamieson + Modupe Akinola, Psychologists and Professors

Some of our most treasured and meaningful experiences in life involve stress.

The question is, if one feels capable of managing or even thriving from a stressful experience, does that still constitute stress?

‘Stress is bad’ definitions would suggest that coping with or even thriving under stress would not, by definition, constitute a stressful experience. But that mindset is problematic, because it ignores potentially positive outcomes that may come from stressful situations. Further, it assumes that experiences of stress and its negative effects necessarily co-occur, suggesting that the only way to remove the negative effects is to avoid or reduce the source of stress.

The fact is, some of our most treasured and meaningful experiences in life involve stress, including excelling in one’s career, maintaining deep relationships over long periods of time and raising children. Indeed, when people are invited to reflect on the times in their lives when they have learned, grown substantially or performed at exceptionally high levels, they often report those times as also having been deeply stressful.

To embrace the notion that stress can be either negative or positive, it is essential to separate the cause of stress (‘stressor’) from our reaction to it (‘stress response’). Accordingly, we would update the definition of stress as ‘the anticipation or experience of encountering demands (e.g. danger/conflict, uncertainty or pressure) in one’s goal-related contexts’ and define stress response as ‘the body’s response (physiological, behavioural and emotional) to the experience of stress.’

Stressors can therefore be defined as ‘manifold aspects of one’s life that can cause stress,’ including, for example, poverty, acute trauma, a conflict with one’s spouse, a cancer diagnosis or heavy traffic. By definition, these situations cause stress to the degree that they are anticipated or experienced as demanding in an individual’s goal-related context (i.e. they are important to the person experiencing them at that moment in time).

These distinctions are especially critical when it comes to stress regulation, which we define as ‘the manner in which stress responses are changed or altered within the individual.’ Defining stress as the anticipation or experience of encountering demands, and separating it from outcomes, suggests that stress responses can be regulated — and ideally optimized — regardless of whether the stressor (i.e. demand) itself is viewed as ‘good’ (e.g. having a child) or ‘bad’ (e.g. having a disease). Moreover, even in the context of ‘bad’ stressors, it may be possible to perceive stress as ‘good’ and intentionally alter one’s stress response as a result of that positive valuation.

Although stress regulation resembles coping in that both reflect ways of changing stress responses, coping can sometimes imply merely surviving or subsisting. Thus, we prefer the term stress regulation because we wish to also convey the possibility of optimizing stress responses such that one’s life is improved, not despite — but because of — the stress.

When stress is no longer viewed as only ‘bad for you,’ but is perceived as being ‘potentially good for you,’ this changed valuation has two important effects:

1. It removes the stress people experience about the purported negative effects of stress — or ‘stress about stress.’

2. It fundamentally changes the goal to one of stress regulation.

The stress optimization approach focuses on empowering individuals to identify, select and apply regulatory strategies on their own. Following are four powerful stress regulation strategies:

TOOL 1: SITUATION SELECTION. The intention of stress optimization is to select situations (regardless of the stress they might cause) that create opportunities to grow, learn and

The Perceived Stress Scale (PSS)

Carnegie Mellon University Psychologist Sheldon Cohen ’s PSS is a classic stress-assessment instrument for helping us understand how different situations affect our feelings and our perceived stress. You will be asked to indicate how often you felt or thought a certain way. Although some questions appear similar, there are differences between them and you should treat each one as a separate question. The best approach is to answer fairly quickly—don’t try to count up the number of times you felt a particular way; rather, provide a reasonable estimate.

For each question, choose from the following alternatives: 0=never 1=almost never 2=sometimes 3=fairly often 4=very often

l. In the last month, how often have you been upset because of something that happened unexpectedly?

2. In the last month, how often have you felt that you were unable to control the important things in your life?

3. In the last month, how often have you felt nervous and stressed?

4. In the last month, how often have you felt confident about your ability to handle your personal problems?

5. In the last month, how often have you felt that things were going your way?

6. In the last month, how often have you found that you could not cope with all the things you had to do?

7. In the last month, how often have you been able to control irritations in your life?

8. In the last month, how often have you felt that you were on top of things?

9. In the last month, how often have you been angered because of things that happened that were outside of your control?

10. In the last month, how often have you felt difficulties were piling up so high that you could not overcome them?

Determine your PSS score as follows:

First, reverse your scores for questions 4, 5, 7 and 8. On these questions, change the scores like this: 0 = 4 points, 1 = 3 points, 2 = 2 points, 3 = 1 point, 4 = 0 points.

Add up your scores for each item to get a total. Scores can range from 0 to 40, with higher scores indicating higher perceived stress.

• Scores ranging 0-13 are considered low stress.

• Scores ranging 14-26 are considered moderate stress.

• Scores ranging 27-40 are considered high perceived stress.

discover. For example, a person might seek to address a conflict with their partner rather than avoid it, subject themselves to difficult training to prepare for a competition or seek out health information to facilitate prevention or treatment. Additionally, the goal of optimizing stress can also lead people to disengage with stressful situations that don’t align with their valued goals. For example, dissolving a relationship that is unfulfilling, or turning down an opportunity in order to complete an unfinished task — despite the fact that saying No or exiting relational situations can themselves be highly stressful.

TOOL 2: ATTENTIONAL DEPLOYMENT. An individual can attend to the underlying goals and opportunities associated with a stressor rather than focusing solely on its negative aspects. For example, if someone is facing an impending exam, rather than focusing on all the ways the stress they feel is uncomfortable, they can focus on the fact that they are stressed because performing well on the exam is important to them, and devote more of their attentional resources toward achieving this goal.

Moreover, one may also attend to unforeseen opportunities that can arise in the midst of stress. For instance, a

disease diagnosis could be an opportunity to redefine one’s values and live in a more meaningful way. Research has shown that valuing stress as a ‘functional’ aspect of life is associated with reduced attentional biases for emotionally negative information and increased attentional bias toward sources of positivity.

TOOL 3: COGNITIVE CHANGE. Reappraisal processes represent a broad array of strategies in which an individual can alter their thoughts in an attempt to regulate stress. The key distinction with our approach is that an individual will be more likely to choose reappraisal strategies that are aimed at optimizing rather than reducing or ignoring stress. For instance, rather than attempting to reappraise a situation in a way that makes it seem less stressful (e.g. trying to ‘put stress out of your mind’), an individual can employ reappraisal tactics to change perceptions of the stressor and one’s ability to effectively regulate one’s response to it (e.g. ‘I have what it takes to manage this diagnosis.’) Reappraisal tactics can be employed at the level of the situation or stressor (e.g. choosing to view piling demands as evidence of a positive trajectory) and/or at the level of the stress response (e.g. telling yourself that anxiety and arousal just mean you’re excited).

TOOL 4: RESPONSE MODULATION. This entails modifying behavioural, physiological and psychological stress responses after stress is experienced. Rather than strategies intended to suppress stress responses (e.g. taking beta-blockers or drinking alcohol) or suppressing behavioural displays associated with stress responses (e.g. remaining stoic), stress optimization encourages people to utilize or even ‘up-regulate’ stress responses to facilitate goal attainment.

For example, a student experiencing stress about a pending exam may decide to drink a cup of coffee to help them stay up late to better prepare, thereby optimizing the stress associated with the exam. In fact, up-regulating arousal outputs via ‘pump-up’ music, pep talks and warmups, to name a few tactics, are common strategies employed by athletes before high-stakes games.

People who are overly keyed-up about something may also seek to engage in deep-breathing or other relaxation techniques to be in a more optimal state before a stressful event. Here, again, the response-modulation strategy would be chosen based on the goal of optimizing the outcome in the stressful situation, and not on simply reducing the stress.

In closing

There can be no doubt: modern life is stressful. Herein we have presented four tactics for optimizing stress by identifying, selecting and applying regulation techniques that serve to achieve our underlying goals and values — as opposed to merely seeking to outright reduce stress. Always remember: how we respond to life’s stressors is a key determinant of our overall health and well-being. We hope that our model can assist readers in improving both.

Alia J. Crum is an Associate Professor of Psychology and Medicine (Primary Care & Population Health) at Stanford University. Jeremy P. Jamieson is a Professor of Psychology and Chair of the Psychology Department at the University of Rochester. Modupe Akinola is the Zalaznick Professor of Business at Columbia Business School. This article summarizes their paper, “Optimizing Stress: An Integrated Intervention for Regulating Stress Responses,” which was published in the journal Emotion, published by the American Psychological Association.

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The Art of Goal Alignment

by Jared Lindzon

BUSINESSES ARE MADE UP of a wide variety of individuals, each of whom comes into the workplace each day with their own motivations. When personal goals are aligned with those of the broader organization, great things can happen. When there is misalignment, however, the opposite is true.

That’s according to Gary Latham, Secretary of State Professor of Organizational Behaviour at the Rotman School of Management. Prof. Latham has dedicated his career to studying goal-setting and performance. Based on his research, when self-set goals are aligned with assigned goals, individual performance improves. “Without such alignment, personal goals have a detrimental effect on a group’s performance.”

Latham believes four strategies will ensure a mutually beneficial relationship between your personal ambitions and your organization’s objectives.

STRATEGY 1: CHOOSE YOUR EMPLOYER WISELY. Aligning your personal goals with those of your organization starts before the first day on the job. During the recruiting and selection process, Latham says it’s important to seek out roles that speak to your personal ambitions, and for employers to use the interview process to weed out anyone who doesn’t share the organization’s mission and values.

Many job postings now include statements about the organization’s goals and values to help prospective employees determine if they align with their own, and Latham encourages candidates to ask about those ambitions during the interview process.

For example, he says he would never take a job at an academic institution that didn’t allow him to pursue his own research interests. “To the extent that I can align my objectives with the organization’s objectives, I require little or no supervision because I am self-motivated and I’m doing something I believe in,” he says.

STRATEGY 2: FIND YOUR PASSION. People often choose jobs without taking the alignment issue into consideration or deprioritize it over other attributes of the role. And even those who begin on the same page as their employer sometimes see that alignment fade over time. When that happens, employees often experience a lack of personal motivation and disengage from their work, which can be a costly problem for the organization. To restore that alignment, Latham says employees should work with their managers to find new ways to contribute to the organization in ways that better align with their personal interests.

For example, when Latham was hired as department chair at the University of Washington in Seattle, he found that a number of faculty members had clearly lost interest

FACULTY FOCUS Gary

Latham, Secretary of State Professor of Organizational Behaviour, Rotman School

Knowing when to pivot on a goal in the face of unforeseen circumstances is an important skill.

in their jobs. One of his first orders of business was to sit down with each over lunch to discuss how to get them to contribute more. “They had been teaching the same courses for 20 years, so I gave them permission to create brand-new courses that they would love to teach,” he says. “Suddenly there was a bounce in their step, and it lasted until the day they retired.”

Latham explains that when personal goals are lacking, or not in line with the broader organizations’, it’s incumbent on individuals to work with their managers to find new ways to contribute — or accept that the relationship may have run its course. “Within the parameters of the organization’s overall goals and vision, what are the one, two or three things that you could do that would make you feel good?” he says. “In big organizations, it’s much easier to find a home for people than in a smaller organization.”

STRATEGY 3: SET ORGANIZATIONAL GOALS FROM THE BOTTOM UP.

Those who seek employment at organizations whose values and mission align with their own are much more likely to be successful in the short term. Maintaining that alignment, however, often requires a certain degree of wiggle room, which is typically more present at some organizations than others.

Objectives that are dictated from management, Latham says, are more likely to be achieved if contributors lower down on the corporate ladder have some degree of flexibility to contribute in ways that align with their own goals. That’s why he believes it’s important to be transparent about organizational goals, and not too rigid about how individual contributors, teams and departments work toward shared objectives. According to Latham’s research, bottom-up approaches to goal-setting are more powerful than top-down ones because they are “expressed in the language of the employees.”

“Senior management comes up with an overall, fiveyear plan — the goals they want to attain and the overall strategy they want to see the company pursue,” Latham says. “People lower in the organization can then set goals for their department that link directly to that plan.”

STRATEGY 4: SEEK FEEDBACK. Individuals might feel confident that their personal goals are in alignment with their organization’s, but the only way to know for sure is to ask. According to Latham, goal-setting is much more effective when people have a sense of their progress. It is incumbent on managers to provide feedback — but also on individuals to seek it out — to maintain ongoing alignment.

“Feedback has two functions,” he says. “The first is informational. It gives information about what you need to start doing, stop doing or consider doing differently. Feedback is also motivational in that it tells you whether you’re making progress toward goal attainment.”

Maintaining strong alignment between personal and organizational objectives, he adds, requires regular, detailed and thoughtful feedback. “You personally need to take the initiative to seek feedback to clarify the goals you should be working towards,” he says.

Failing to Meet Goals

Despite our best intentions, everyone has had to give up on a goal at some point. Perhaps they set the bar impossibly high; maybe they didn’t have the required resources to get the job done; perhaps the circumstances surrounding the goal changed or they lost interest. Whatever the reason, knowing when to pivot on a goal in the face of new challenges or unforeseen circumstances is an important skill in both professional and personal contexts.

“You have to continually ask yourself, ‘Are these still the right goals? Are these things I want to continue to

pursue?’” says Latham. “It’s about constantly scanning your environment to determine whether what was true before is still true now.” He says that often the most successful organizations and individuals have a strong understanding of when to stay the course and when to pivot to something new. To master the art of pivoting, Latham says you need to do four things:

REASSESS YOUR SITUATION. Nobody is immune to changing circumstances, but individuals do have the power to adjust their expectations based on those changes. To maintain motivation and commitment in the face of volatility, however, Latham says it’s important not to pivot too often, or you may begin to lose faith in your ability to follow through. “Don’t do it whimsically,” he says. “There has to be strong evidence.” Latham explains that before pivoting, it’s important to consider the root problem preventing you from achieving your goal. Otherwise, you risk running into the same roadblocks later.

“You have to ask yourself why you aren’t meeting those goals,” he says. “Are you getting adequate feedback? Feedback is necessary because it tells you whether your plan is a good one for goal attainment. Ask, ‘Do I have the necessary resources? Has adequate time been allotted to goal pursuit? Are the goals still within my ability?’” This assessment should provide adequate evidence to consider how to adjust your news goals in a way that overcomes the challenges that prevented you from achieving the old ones.

WATCH OUT FOR CHANGES TO OUTCOME EXPECTANCY. When we set goals for ourselves, there is often an expected outcome: studying more will lead to better grades, hard work will lead to a promotion, eating healthier will result in weight loss, etc. Often the best evidence that it’s time to change our goals — and our behaviours — is when ‘outcome expectancy’ changes, Latham says. If you are passed over for promotions despite the extra effort, if you are gaining weight despite eating healthier food, if your grades are still suffering despite dedicating more time to studying, it’s probably time to consider a different approach.

SET SUB-GOALS. One of the best ways to follow through on more complex and long-term goals is to set sub-goals, or what Latham refers to as ‘proximal-performance goals.’ According to his research, setting proximal goals that operate in service of larger ones can make it easier to pivot and adjust in the face of new challenges or changing circumstances.

In a research paper titled “Goal Setting: A Five-Step Approach to Behaviour Change,” published in Organizational Dynamics, Latham challenged a group of high school students to a business game that offered fluctuating dollar amounts in exchange for toys. Through that experiment, he concluded that those who set sub-goals were more motivated and more successful in the face of changing circumstances. The study also revealed that breaking down long-term goals into smaller sub-goals can act as an early warning system that notifies us when our initial approach is no longer able to produce the desired longer-term outcome.

LOOK

FOR MODELS.

Often the best way to determine if you’re on the right path is to look to others on the same course. “You can find a model with whom you identify; the model can be another organization or another individual,” he says. In his research, Latham notes that ‘self-efficacy’ — the belief that you can attain your goals — is key to successfully pursuing them. Once you lose that, it becomes very difficult to follow through. Key to enhancing self-efficacy, he says, is finding role models who have accomplished the same pursuit previously.

“Take the employee on your team who received a good performance appraisal (while yours was disappointing): look at what that individual did, so you can emulate it,” he says. “If you don’t want to do that, it may be time to look for another job.”

The Role of Managers

The best managers often commit a significant portion of their time and energy to helping team members set and attain their own goals. “Goal-setting gives employees focus, and it gets people on the same page, so one employee

isn’t going in one direction while her colleague is going in another,” Latham says. “It also gives employees a sense of accomplishment and makes them feel good about themselves when goals are attained.”

Latham has identified a handful of strategies that improve the odds of success for leaders as they help their employees set and achieve goals. He endorses and has contributed research that further validates the effectiveness of the ‘SMART’ approach to goal-setting, which suggests that goals should be:

• Specific

• Measurable

• Attainable

• Relevant

• Time-specific

“SMART goals are excellent for employees to work in a collaborative way with a team,” Latham says. “Otherwise, you can get ‘meandering’ among your workforce.”

Managers can only do so much to motivate their employees directly. At a certain point the motivation needs to come from within. According to Latham, managers can facilitate a can-do spirit and confidence in their own abilities — self-efficacy — to help their staff achieve their goals by showing rather than telling them what they’re capable of.

For example, Latham says the Rotman School’s MBA program accepts a certain number of students with a Liberal Arts background, and it’s not uncommon for them to enter the program with anxiety about the more quantitative aspects of business education. “To give those students the confidence of ‘yes, I can,’ we pair them up with secondyear MBA students who have a Liberal Arts background and have clearly gotten through the first year,” he says. “The first-year students go, ‘Wow, look at these students in their second year; if they can do it, so can I.’”

Latham adds that managers can help build self-efficacy among their employees by developing a formal program that pairs junior employees with higher-performing colleagues of similar backgrounds.

In closing

Managers need to constantly keep in mind the ability of the individuals that they’re coaching, says Latham. “People often maintain high goals and then management tries to set them even higher — but they stretch people so thin that it backfires, and employees give up because the goal exceeds their ability.” Setting goals too high can lead to employee resentment and even dysfunction, he says.

Latham says that to help employees set and attain their goals, they need to be few in number — three to seven, as opposed to 37. “With 37 goals, the eyes glaze over, you lose focus and then people start to cherry-pick the ones they’re most interested in — not necessarily the ones that are of highest priority for the organization.”

Gary P. Latham is the Secretary of State Professor of Organizational Behaviour at the Rotman School of Management, with cross-appointments in the University of Toronto’s Centre for Industrial Relations, Department of Psychology and Faculty of Nursing. He is the former President of the Canadian Psychological Association (CPA), the Society for Industrial-Organizational Psychology (SIOP) and President of Work and Organizational Psychology, a division of the International Association of Applied Psychology. This article was originally published on the Rotman Insights Hub. To sign up for the Insights Hub Newsletter go to https://bit.ly/InsightsHubSubscribe

QUESTIONS FOR Denise Hamilton, CEO, WatchHerWork and Author, Indivisible

Q &A

A DEI expert shares insights from her new book and explains why it’s so important to recognize that we are indivisible

Interview by Carolyn Drebin

What does it mean to be ‘indivisible’?

One of the biggest challenges we face today is the adversarial nature of our interactions. We all share a responsibility to care for this world together. We may disagree about the ways to do that, but we need to remember that we are all in the same boat.

To be indivisible is to understand our interconnectedness. It means moving through the world with a deep understanding of the value, strength and beauty of others. Embracing this mindset goes beyond knowledge; it is an ongoing practice of bridging differences to activate the unique capabilities of others and of ourselves. Sadly, we haven’t yet learned how connected we are — and it’s thrown us into crisis, both individually and as a society.

Please describe your work as an Inclusion Strategist. A lot of people have good intentions about bringing inclusion into their organizations, but may not be very good at it or know where to start. My role is to support leaders who want to operationalize their goals and bring them to life.

I have a special affinity for middle management, since these responsibilities often fall on them. Some organizations heap on initiative after initiative and expect everything to get done at the same time. People are always surprised when I come in and make suggestions for program cuts, or for folding one program into another. I like to take a step back and look at the core objectives to ensure people are doing the right things relative to their organization’s culture.

Bridging differences and forging human connections are skills that we should all be cultivating.

A movement against diversity, equity and inclusion efforts is now in full swing. Tell us about that.

I see this in my work each day. As a consultant, speaker and adviser to C-suite executives, I have faced a barrage of questions about how to handle employees, especially white men, who see only the costs of DEI but don’t feel included in its promise. Many people feel aggrieved, insisting that they are losing opportunities because they don’t fall into certain groups.

Data can be enormously helpful to dispel any false picture people have of what’s actually going on in organizations. For example, the Fortune 500 includes only six Black chief executives. That’s up by only one from last year, and it’s a historic high previously reached a decade ago. That’s only about one per cent of CEOs, while about 14 per cent of the U.S. population identifies as Black or mixed race with African-American as part of their identity.

It’s really important to acknowledge that some people believe these efforts will hurt them. While a claim of unfairness is not supported by the numbers overall, it can nevertheless be deeply felt and can be the greatest test of leadership in this space. Leaders must work to inspire positive change while still honouring the achievements of their current team. Emphasize that the point of diversity, equity and inclusion is to be inclusive of everyone. That the organization can move forward optimistically without leaving folks behind. Be honest, open and direct about the steps being taken to make sure everyone is given an equal, fair shot.

Change is hard. Do you have some tips for managing transitions when not everyone wants to join the journey? In every aspect of life, people have a deep commitment to their current practices. In the book, I talk about my term ‘Earth sets.’ Since the Earth revolves around the sun, it actually isn’t the sun that sets, it’s the Earth. But if I tried to

convince people to call a sunset an Earth set, they would resist, even though it’s technically true.

We tend to think that because we want to do something noble or fair, we’ll be able to influence other people to join us. But people are creatures of habit. Their ways of doing things give them a sense of order and help them make sense of the world. To create any kind of change, it’s crucial to prepare for that resistance.

I’ve been seeing a lot of organizations give up when faced with these challenges, specifically when it comes to DEI. They have been doing things the same way for decades, so they try a new program for a few months and give up when it doesn’t produce results overnight. My biggest tip is to budget and prepare for resistance, because you can’t avoid it when you’re trying to create change.

Finally, there is often a temptation to shame those who are not at the same point of change as you, but we need to allow people to change or evolve at their own pace. Of course, that doesn’t excuse bad behaviour — but we need to give people a chance to trade in their ‘broken story’ for a better one.

Talk a bit about how the language we use can help. We have to make our visions of possibility sound positive. Instead, we often make them sound like a terrible sacrifice. We have positioned change as consisting of winners and losers, rather than in a positive light wherein people can see possibilities for themselves. We need to rethink the way we use language and focus less on what is being given up, and more on what will be gained.

For example, we need to talk more about human potential. Just think of how much genius and creativity has gone to waste because it was born in the wrong neighbourhood. We will save ourselves when we find a way where everyone who has a gift has the capacity to share it with our society.

Just think of how much genius and creativity has gone to waste because it was born in the wrong neighbourhood.

Instead, we talk about these things through a lens of loss, disappointment and failure. That’s why language is a great place to start if you want to catalyze change.

You worry that generally speaking, we are getting worse and worse at connecting with each other. Please explain. We’re all so busy being productive — using AI, ChatGPT and other tools. And when we do connect in real life, we tend to be isolated within our own communities. The best way to make space for what is important to someone else is to get to know them, to understand their mindset. A perfect example is intergenerationality. We have come to a place where we only know people in our own generation — which, to me, is disastrous. You can’t understand someone else’s challenges if you don’t know them or understand their value in society. We are all stuck in our own tribes, and getting out of that is going to take intentionality.

We need to regularly put ourselves into contexts where we can talk to one another in real life. Bridging differences and forging human connections are skills that we should all be cultivating. This is what makes us human. The temptation to make those who disagree with us our enemy must stop. We have to find a way to disagree without destruction.

How can we emerge from the win/lose paradigm? We can all focus on being a better member of society. Not just bettering oneself, but being impactful. We need to recognize that our interconnectedness is more pronounced than it ever has been in human history, in spite of the social media environment that incentivizes difference. We need to move past winners and losers and start driving across bridges built by others.

We perpetuate divisions by not trying to bridge our differences, by seeking out comfort rather than embracing challenges. I want us all to win. The win/lose paradigm cheats us out of so much innovation, creativity and problem-solving.

Finally we need to stop letting people who are committed to the status quo be in charge of our future. In the past, somebody had to be courageous so that we could have the changes we enjoy today. Now it’s our turn to be in charge of change and to be courageous. The tenacity and stamina of our leaders will determine whether diversity, equity and inclusion become a reality in business, or a big empty promise that fails us all. Remember, the only people who can change the world are those who believe they can.

Denise Hamilton is the Founder and CEO of WatchHerWork, a digital learning platform for professional women, and author of Indivisible: Practical Ways to Build an Indestructible Family, Team, Company and Country (The Countryman Press, 2024).

How to Bring the Entrepreneurial Spirit to Your Leadership

FORTUNATELY FOR ALL OF US, history is full of people who embody the entrepreneurial spirit. These bold thinkers imagine the world in a new and better way and drive change to make it a reality. Of course, not everyone is cut out to be an entrepreneur. But whether you’re launching a start-up or managing a corporate team, every leader can benefit from learning how to think like one.

The entrepreneurial mindset fosters creativity, adaptability and a problem-solving approach to life and work. It encourages seizing opportunities, taking calculated risks and learning from both successes and failures. This mindset is a powerful tool for innovation, enabling individuals to see challenges as opportunities and drive positive change.

While leadership and management are interdependent in every organization, their practical applications differ significantly. Leadership is primarily concerned with working ‘on’ the business. It’s about carving out time to do the deep thinking required to define a clear direction and create openings for others to step into. Management, on the other hand, concerns execution, working ‘in’ the business to realize the vision. It involves setting expectations, clear communication and daily oversight to ensure goals are attained.

Let’s take a closer look at how these roles differ in their application of an entrepreneurial mindset. Following are five critical leadership practices:

PROVIDE CLEAR DIRECTION. Like the best entrepreneurs, effective leaders communicate a compelling vision, creating openings for the team to contribute. Typically, it takes at least seven repetitions for an idea or principle to embed itself in someone’s mind, so repeat yourself often. My colleagues and I prescribe a quarterly ‘state of the company’ address so that the vision and values can be heard by everyone at least every 90 days. When each employee clearly understands the vision and recognizes their role within it, they fill it with their own initiative, creating a truly vision-driven organization.

PROVIDE THE NECESSARY TOOLS. After sharing the vision, it’s crucial to equip the team with the tools and resources they need for success, including technology, training, support staff — and the leader’s time and attention.

DELEGATE TO DIRECT REPORTS. Delegation can be scary, and many leaders struggle to make the leap of faith required to fully delegate responsibility. However, the best entrepreneurs know that no team or individual can achieve its full potential if it is micromanaged. Full delegation assumes

POINT

Jeremy Robinson (Rotman MBA ’14), EOS Worldwide

In addition to standard annual reviews, you should be scheduling quarterly conversations with each of your direct reports.

confidence in team members’ abilities. Leaders who find themselves unwilling to delegate may need to address an underlying hiring issue promptly.

ACT WITH THE GREATER GOOD IN MIND. Effective leaders align actions with the organization’s vision, prioritizing the greater good over their personal ambitions. This creates a culture of selfless leadership and inspires direct reports.

SCHEDULE TIME FOR STRATEGIC THINKING. Amid day-to-day pressures, leaders must allocate some unstructured time for strategic thinking. My colleagues and I recommend regularly scheduling ‘clarity breaks,’ which provide a dedicated space to contemplate significant organizational questions.

Now, let’s turn to the big five management practices inspired by the entrepreneurial mindset.

PROVIDE CLEAR EXPECTATIONS. Clear expectations, including roles, core values, 90-day priorities and measurable targets, reduce the need for corrective actions. Effective communication ensures mutual understanding. When expectations are clear, firing becomes a rare occurrence. The ‘wrong’ employee will quickly conclude that they are not able to live up to the required standards and quit.

Note that expectations are a two-way street. You need to ensure that you are giving your direct reports the opportunity to communicate what they expect from you as their manager — and that you incorporate their feedback.

COMMUNICATE WITH CANDOUR. Successful entrepreneurs know that effective communication involves a two-way exchange. A litmus test of whether you are communicating well with a direct report is the feeling that you know what is going on in each other’s minds and can speak freely when issues arise. For instance, an effective manager won’t let a passiveaggressive comment or wary expression go unchecked. Instead, they will ask, ‘Hey, why the look?’

I recommend ensuring that 80 per cent of your communication with direct reports involves listening rather than speaking. Let them sell themselves on ideas and evaluations of their performance. One powerful technique for raising your communication game is ‘echoing’: conclude each

conversation by asking the other person to repeat back what they’ve heard you say, then clarify their input by stating, ‘Here’s what I heard you say today…’

MAINTAIN AN APPROPRIATE MEETING CADENCE. The right meeting frequency balances support with autonomy, ensuring alignment and issue resolution. I recommend a weekly team meeting that follows a strict agenda where each attendee reports on their measurables and works with their teammates to solve the organization’s most pressing issues. These can be augmented with one-on-one meetings as required to strike the right cadence. Make sure that your meetings maintain a healthy exchange of dialogue, respect communication guidelines and ensure that all team members are contributing appropriately.

SCHEDULE QUARTERLY CONVERSATIONS. Regular one-on-one conversations provide a platform for feedback, performance evaluation and mutual expectations, contributing to ongoing improvement. In addition to standard annual reviews, you should be scheduling quarterly conversations with each of your direct reports. Keep these informal by getting out of the office for a walk or coffee and maintaining a two-way dialogue.

Prepare feedback on their performance in hitting their measurables, their progress on their 90-day priorities (what we call ‘rocks’) and their behavioural alignment with core values. Compliment them on what they’re doing well, ask them what is working/not working and if there is anything they require from you. Ultimately, you want to ensure they are still committed to their role and, if so, get the information you need to make minor course corrections so they can continue to improve.

REWARD AND RECOGNIZE PEOPLE. Napoleon once said, “No amount of money will induce someone to lay down their life, but they will gladly do so for a bit of yellow ribbon.” Rewards and recognition can mean either a pat on the head or a kick in the behind. If you observe behaviour that merits feedback, deliver it as quickly as possible — ideally within 24 hours. Criticism should always be given in private, while praise can be given in front of the entire team. Never violate this principle.

If you have ongoing concerns about a direct report, employ the ‘three-strike rule.’ Strike one is a private conversation where you explain your concerns, supported by at least two pieces of quantitative evidence, such as a failure to hit measurables or behaviour that contradicts a specific core value. Let them know they have 30 days to address the issue(s) and schedule a follow-up meeting one month down the road.

At the follow-up meeting, let them know if the issue has been resolved or if it still needs to be addressed (strike two). If the latter holds true, they will then have 30 more days to avoid strike three, or be let go. At this point, most employees who are not the right fit will quit before being terminated, having clearly seen the writing on the wall.

Remember, in order to effectively reward and recognize your employees, you’ll need to maintain some professional distance. Be their boss, not their buddy, so you can have the tough conversations when required.

In closing

Being entrepreneurial requires an openness to learning, to inviting opportunity in, and motivating and mobilizing others in the organization to do the same. It’s like any other competency you’re trying to build: You have to start not only with the desire to change but also with a commitment to practice consistently.

Regardless of industry, both leadership and management can benefit from embracing the entrepreneur-inspired practices outlined herein. I invite readers to do the following: Depending on your current role, review either the five leadership or five management practices one by one and ask yourself whether each of your direct reports would agree that you are consistently applying it. If the answer is no, make a commitment to yourself (or your boss) to begin using it going forward to become the best leader or manager you can be.

Jeremy Robinson (Rotman MBA ’14) is a Professional EOS [Entrepreneurial Operating System] Implementer for EOS Worldwide, a growing organization of successful entrepreneurs from a variety of backgrounds who are passionate about helping other business leaders succeed.

Making Possibilities Happen: The Art of Seeing

WHILE WE DON’T OFTEN THINK ABOUT IT, every day we have an opportunity to positively alter our lives and those of other people. How? By bringing possibilities to life. Regardless of the realm we are focusing on, possibility is about the ability to see something in our imagination or in our heart — and then, taking steps to make it materialize. In my work at Stanford University’s Hasso Plattner Institute of Design — the ‘d.School’ — I have developed a framework for manifesting possibilities for our life, family, work and dreams. The four one-word steps look deceivingly simple:

1. See

2. Start

3. Do

4. Finish

Sounds easy enough, but the reality is that these behaviours don’t come naturally to us. In fact, they are counter-

intuitive to how the human brain functions and to our innate evolutionary disposition. As a result, our physiological tendencies, the constructs of our built environment and our own emotions all get in the way of step one, and we can’t begin the process.

In this article, I will share some insights about the first of the four steps in my framework: Seeing. Interested readers can learn all about the other three steps in my book, Make Possibilities Happen

Ten years ago, at the conclusion of the Creative Gym— a course I teach that focuses on developing the skill sets needed to foster innovation and creativity — a student named Dr. Daniel Hong, a Taiwanese brain surgeon, approached me and asked, “Am I different now?” I told him, “Of course you are; you just completed 10 weeks of creativity training!” He quickly shot back, “No, I mean, is my brain different now?”

This simple query launched a decade-long research study focused on creative capacity-building and collaboration at Stanford. Together with Dr. Allan Reiss and his

POINT OF VIEW Grace Hawthorne, Stanford d.School Professor and Author

Being tied down to the familiar keeps us from seeing possibilities. Whenever possible, intentionally act outside of the familiar.

Center for Interdisciplinary Brain Sciences Research, Assistant Professor of Behavioural Sciences Manish Saggar, the Hasso Plattner Institute at the University of Potsdam and the Stanford d.school, we embarked on a journey to define creativity and its underpinnings in the context of innovation.

We wanted to know whether people are born with a fixed level of creativity or if creativity is acquired knowledge — like riding a bicycle. Could we teach people to become more creative through conditioning the mind as we would a muscle? Our research led to a powerful finding: Creativity is a state of mind that can be taught and conditioned. After undergoing the creativity training from the Creative Gym course, not only was a student’s brain rewired, but they produced more highly rated outcomes on creative tasks.

This was one of the first longitudinal studies on creativity of its kind, and the results were not the typical self-reported assessments frequently used in difficult-to-measure situations. Instead, the combination of fMRI brain scans and a battery of neuropsychological tests administered to participants indicated that there were actual physiological changes in the brain as a result of creativity training.

As indicated, some of our brain’s wiring is inherited from our hunter-gatherer Stone Age ancestors, who lived nearly 200,000 years ago. To survive back then, the brain was biased toward comfort, certainty and safety. Flash forward to today, and our brains maintain that bias.

Making possibilities happen goes against those enduring primal tendencies because it is risky and uncertain. Back then, safety equated to survival; but today those same behaviours may lead to stagnation. So, how can we sidestep our brain’s wiring without throwing out the physical safety bit in its entirety? By employing ‘mind dodges’ — simple tricks that use the power of consciousness to proactively guide our thoughts, rather than letting them guide us. Following are three of my favourites.

MIND DODGE 1: Recognize your bias to what you already know.

Your brain is a repository for all of your prior experiences — mapped with all your cumulative emotional, cognitive and motor experience to at least age 25. That alone restricts your ability to think without limits. Without us knowing it, our memories define how we perceive, process and act. This is how we make sense of things. We are typically uncomfortable in unfamiliar situations that don’t make sense — they are disorienting and disturbing and disrupt the brain’s sacred trinity of comfort, certainty and safety. But being tied down to the familiar keeps us from seeing possibilities. Don’t let your defaults (i.e. your unconscious biases) hold you back. Whenever possible intentionally act outside of the familiar by not always sticking to your usual drink choice, route home, daily schedule and so on. Explore the full potential of your life.

If your mind cannot conceive of and believe in a possibility, you will not be able to achieve it.

MIND DODGE 2: Use your thoughts as fuel.

In 1991, Rolf Landauer, a German-American physicist and forerunner in the field of Quantum Computing, famously declared that “information is physical.” Landauer postulated that our thoughts are energy. If we think of our thoughts as conducting energy in the same way data can be transmitted as electromagnetic waves to our phones and computers, it is not far-fetched to make the next imaginative leap: Where our thoughts go, energy flows.

For example, I have noticed that my positive thoughts tend to call on and resonate with other positive thoughts. If thoughts produce energy that can recruit more like-energy, we should all be using our thoughts resourcefully by enlisting them to serve our possibilities. This mind dodge comes in handy when you face a huge task that feels overwhelming. Negatively dreading the task will only generate procrastination and lethargy, while positively accepting it will set up a chain reaction of initiative and action.

MIND DODGE 3: Pay attention to your attention.

Be the bad-ass bouncer at the entrance of your mind’s door and carefully choose what thoughts you allow in. This means you have to be incredibly attentive to your attention. Psychologically, humans have a natural negativity bias, so it’s all too easy to dwell on fears or unproductive emotions like worry and regret. Studies show that people tend to pay more attention to negative stimuli than positive, give more weight to negative pieces of information over positive ones when making a decision, and assign stronger emotions to negative events versus positive ones. Case in point: When you chat with a good friend, do they bend your ear with

all the great things about their partner or do they tend to complain about their partner’s shortcomings? If negativity tends to be our default mode, be mindful about where you place your attention, and place it only on what you want — not what you don’t want.

Once we make a habit of these mind dodges, we can begin to envision with intention. If your mind cannot conceive of and believe in a possibility, you will not be able to achieve it. Envisioning your possibility as a fait accompli, bathed in rich detail, brings it that much closer to completion. One way to bring possibilities to life is to build a matrix. To do this, think about your project as consisting of three vectors: purpose, vision and goal. Then ask yourself some questions:

WHY IS THIS POSSIBILITY IMPORTANT? What is the intention behind it? Having a purpose is the departure point to all possibilities and achievements in life. Moving toward an accomplishment that is meaningful to you gives you the energy to get through it. It can be whatever you want it to be; you have absolute control and power in determining your purpose or possibility. Instill your purpose into both the macro of your life’s work and the micro of an individual task. Purpose points to our existence at the most fundamental level of being. With a definite purpose, you can create a clear picture of what you want.

HOW WILL YOUR POSSIBILITY INTERACT WITH THE WORLD? How will it make it better? Your vision is a mental image of something that has not happened yet. Use your imagination to ‘see’ what does not yet exist. If you conjure an image

clearly, with rich detail, you should be able to feel like you are ‘there.’ Of course, having such a vision does not guarantee that it will happen — but not having one guarantees that it won’t. With a vision that is clear, forward-thinking and purposeful, conviction can step in and lead the way. Remember that visions come from the heart; goals and objectives come from the head. Your vision is not the realization of your goal; it’s everything else around it — the emotions you will experience, the people who will be positively impacted and what things will feel and look like in that moment.

WHAT DO YOU HOPE TO ACCOMPLISH WITH YOUR POSSIBILITY?

WHAT WOULD ATTAINING YOUR GOAL MEAN? Goal-setting is usually very challenging for people because it’s hard to right-size a possible project to the dimensions of time, scale, achievability and importance. Sometimes people have too many goals and can’t focus, or are unsure how to prioritize them. Setting milestones to help measure progress is helpful in keeping efforts focused. If you don’t have a goal, you have nothing to shoot for and are leaving things up to chance.

What you ‘see’ through your vision is not just the images physiologically captured by your retina. Our retinas serve up so much visual information that the brain can’t take it all in. To make it manageable, the brain picks out the bits it recognizes and fills in the rest with what it already knows. Everything you ‘see’ is continuously being shaped by your personal context. It is impossible to look at the world and our lives without seeing everything through a moving kaleidoscope of memories, disposition, past experience, heritage and so on — all the things that shape our

identity. I frequently share a famous quote that perfectly expresses this idea:

We don’t see things as they are, we see them as we are.

I have long been attributing this quote to the author Anaïs Nin. But upon further investigation, I found that it actually has a long lineage of usage and origin, dating back to the 1800s. Regardless of its source, I love it because it leaves us holding the bag. It inspires us to take responsibility in a dimension that no one ever gets to see: our mind. It also succinctly sums up the power of perception — the intersection between what our eyes see and what our brains perceive.

Because we can’t disconnect our memories from what we see, we have a tendency to amplify and focus on the things we want to see based on past experience. But once we become aware of this, we can see more intentionally by choosing how and what we see. I call this informed ability our ‘purple lens,’ because actual violet lenses provide enhanced colour and contour perception. Proverbial purple lenses are a tool at your disposal now, where you can consciously make a deliberate choice about how to perceive a decision, event, person and so on.

Elite athletes use visualization all the time to envision the outcome they want to achieve before they compete. These mental images of a positive future outcome prime the subconscious emotional state and promote calm and confidence. Additionally, these mental images get stored in the mind as something akin to an actual memory. Our minds can’t tell the difference between something vividly imagined and a real memory.

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What is efficient about this is that our subconscious brain continues to work on the visualization without being aware of it. Consider it a ‘mental rehearsal’: You see and feel the situation and the outcome you desire so clearly in your mind that your brain creates a muscle memory of that possibility.

Combine this visualization tool with paying attention to your attention, and you will have the one-two punch to help set your mind’s stage to that desired end. This is somewhat analogous to the theory of target fixation — a behaviour in driving whereby the driver tends to drive straight into the singular object they are focused on. The simple fix is to not look where you don’t want to go. Similarly with visualization, set your worries aside and create mental images of only what you want to happen

In closing

If life is part genetics, part circumstance and part perception, only one of those is really under our influence — and that is perception. Lean into it. Choose what you see and how you perceive it. As with any other skill we seek to master in life, we can get really good at shifting our perspective with practice and awareness. Go ahead. Take the first step toward making something great happen.

Grace Hawthorne is an Adjunct Professor at Stanford University’s Hasso Plattner Institute of Design (the ‘d.school’) and Founder and CEO of Paper Punk and Foldmade. Her latest book is Make Possibilities Happen: How to Transform Ideas into Reality (Ten Speed Press, 2023), from which this article has been adapted. Reprinted with permission from Ten Speed Press, an imprint of Penguin Random House. Text copyright © 2023 by the Board of Trustees of the Leland Stanford Junior University.

The Perrennial Value of the 1:1 Meeting

AS A LEADER, do you really still have to do oneon-one meetings with each of your direct reports? The answer to this question is, of course, yes. If it weren’t, I wouldn’t have written an entire book about the value of the one-on-one (‘1:1’) meeting. The fact is, there is something special and unique about 1:1s that goes beyond team meetings, an open-door policy and social interactions.

You might already be getting heartburn at the thought of having more meetings. But keep in mind that well-executed 1:1s will wind up saving you time by creating better alignment in your team, higher-performing direct reports (‘directs’) and fewer spontaneous interruptions to your workday. They also promote employee engagement, ultimately decreasing turnover.

In the simplest sense, 1:1s refer to a regular and recurring time held between a manager and their directs to discuss topics such as the direct’s well-being, motivation, productivity, roadblocks, priorities, clarity of roles/assignments, alignment with other work activities, goals, coordination with others/the team, employee development and career planning.

Ultimately, 1:1s serve to meet the practical needs of your directs — the support they require to effectively conduct, prioritize and execute their work both in the present moment and over time. But they also address their personal needs, including the inherent need to be treated in a considerate way and the need to feel respected, trusted, supported and valued.

Overall, despite you driving the process to create a dedicated space on the calendar to truly engage with your people

individually, for the most part, this is their meeting. You certainly influence what is discussed and the logistics, but the meeting should be dominated by topics of importance to the direct’s needs and concerns. Given this definition, 1:1s are not:

• An emergency meeting to address a problem that has emerged or to put out an unexpected fire.

• A meeting for you to share a to-do list with your direct.

• A meeting to reprimand your direct.

• A meeting for you to just micromanage your direct.

One key question I often get asked is whether a formal performance appraisal meeting counts as a 1:1. Although these meetings are conducted in a 1:1 format, they really are a different type of meeting, whereas 1:1s can elevate and complement an organization’s formal performance appraisal system. In fact, they can be the engine for making a formal performance appraisal system realize its full potential. To better understand this idea, let’s back up and first recognize why formal performance appraisals are needed in organizations.

A formal performance appraisal system, done effectively, accurately documents how your people are doing. This can drive performance improvement while serving to reinforce desired behaviours through recognition of good performance. Moreover, formal assessments can be used to make better, more informed decisions about compensation, promotions and exiting poor performers when necessary.

In the aggregate, performance appraisals give you a sense of your overall talent pool, where you are strong, who

Steven G. Rogelberg, Professor, University of North Carolina and Author

89 per cent of managers say 1:1s positively affected their team’s performance.

your high potentials are, where the bench is weak and if you currently have the talent needed for succession planning. These appraisals can also help you determine training needs (e.g. common deficiencies that can be targeted) and serve as criteria to evaluate organizational practices such as the introduction of a new training system (e.g. did the introduction of Program X lead to increases in the overall performance of your people?).

While there is clearly great promise in having formal performance appraisals, many people — managers and directs alike — complain about them. Here’s why:

• Directs often feel the formal assessment is unfair, unbalanced and weighted with more recent behaviours than cumulative ones.

• They often feel the formal assessment is not timely (e.g. the assessment may cover something that happened six months ago).

• They often feel anxious and stressed when wondering what will happen during the formal assessment meeting and what they will learn.

Managers often dread these meetings as well and worry how people will respond to their feedback. On top of that, it is time-consuming for managers to put together a thoughtful review and to complete all the required documentation, particularly with large spans of control, as they may not recall all that occurred during the evaluation period for their various directs.

One-on-ones to the rescue! Regular 1:1s take the anxiety out of the formal review process because performance issues and strengths have been signalled well in advance. Furthermore, notes from 1:1s serve as an incredibly helpful archive to draw from when creating a formal appraisal. Not only does this make it easier to prepare for the review but it also increases the accuracy of your assessment and your direct’s perceptions of fairness, as keeping meeting notes helps to mitigate the possibility of the review being dominated by things that have happened most recently.

The research is clear: regularly scheduled and successful 1:1s are essential to seven interconnected and important outcomes:

EMPLOYEE ENGAGEMENT. The link between 1:1s and employee engagement has been found in a host of contexts and studies. Gallup, for example, studied the engagement levels of

2.5 million manager-led teams around the world. They found that “on average, only 15 per cent of employees who work for a manager who does not meet with them regularly are engaged; managers who regularly meet with their employees almost tripled that level of engagement.”

Relatedly, in a study published in Harvard Business Review, “employees who got little to no one-on-one time with their manager were more likely to be disengaged [while] those who got twice the number of 1:1s with their manager relative to their peers were 67 per cent less likely to be disengaged.” Interestingly, research has not found a plateau effect for 1:1s, whereby too many resulted in employee engagement levelling off or decreasing. In fact, it turns out to be just the opposite. My research generally suggests that overall, there is a positive linear relationship, such that as the number of 1:1s increases, so does employee engagement and positive perceptions of the manager.

TEAM MEMBER SUCCESS. One-on-ones are essential for promoting team member productivity and success. First, they establish a regular cadence of communication to check in on progress, create alignment and ensure that the team member is prioritizing the most critical projects. These meetings allow managers and team members to discuss the direct’s obstacles and roadblocks, engage in real-time decision-making, enhance coordination and provide support and resources when needed. Success is also promoted through ongoing feedback, accountability, support and coaching.

MANAGER SUCCESS. One-on-ones enhance the manager’s success in three ways. First, investing time and energy in regular 1:1s decreases the need for you to answer ad hoc questions, since team members can save those questions for the 1:1 itself. This limits interruptions, increasing your ability to find longer blocks of time to focus on your work. Second, 1:1s serve as a key mechanism for you to acquire needed information, gather feedback and communicate with your team members that better enables you to thrive and drive the team.

Adam Grant summarizes the final way 1:1s promote manager success: “Leaders are judged by what their followers achieve. The higher you climb, the more your success depends on making other people successful.” Oneon-ones are clearly about helping others become more successful. This, in turn, extends to team success, which is a reflection of your success as a leader. For example,

one study surveyed 1,183 managers and 838 non-managers about 1:1s. The data is striking, with 89 per cent of managers saying that 1:1s positively affected their team’s performance and 73 per cent of employees indicated that 1:1s positively affected their team’s performance.

BUILDING RELATIONSHIPS. Getting to know your people and engaging with them on a regular basis is the foundation of building relationships with your team. One-on-ones open the door to this by providing a space to foster connection, to learn about one another and to promote trust. They make relationship building an intentional activity that signals to your directs that they are so important to you that you are willing to schedule a meeting focused on them and their needs. At the same time, if there are problems or tension, regular 1:1s allow you and your directs to clear the air and keep your relationship on track.

DIVERSITY AND INCLUSION. Each 1:1 is an opportunity for you to promote — and to truly hear — the voices of your team members. They ensure each team member is not just grouped together with all other directs in the manager’s mind. Instead, they allow each individual’s unique lived experience at work to be better understood and taken into consideration when making decisions and solving problems. As the challenges or issues of each team member are addressed in a genuine and collaborative manner, directs’ ability to thrive and succeed increases — and with this success, your diversity and inclusion goals are more likely to be achieved.

PROMOTING EMPLOYEE GROWTH AND DEVELOPMENT. Every 1:1 is an opportunity to help team members grow and develop through honest and actionable feedback, coaching, mentoring and career conversations. Elevating those that work for you is central to being an effective leader. Every 1:1 is an investment in the present and the future of your team members. At the same time, these investments serve to elevate your talent pool, giving you a stronger bench and a greater ability to promote from within. In doing so, you become a more effective manager.

In closing

Think about what foregoing 1:1s would convey to your people. As humans, we observe others’ actions (or lack thereof) and ascribe meaning to them. Unfortunately, as we seek to make sense of what we see or don’t see, research demon-

One-on-One Meeting Outcomes

strates that we are subject to a distortion bias known as ‘the fundamental attribution error.’

Here’s an example of this bias at play: A colleague passes you in the hallway but avoids eye contact. Research shows that, most of the time, people would explain this behaviour in dispositional terms and assume their colleague is rude or aloof. These dispositional attributions tend to prevail over more nuanced situational explanations such as assuming that your colleague was distracted by an unexpected deadline or bad news.

Put into the context of 1:1s, what attribution will your people make if you are not having 1:1s and other managers are? Or, what if you are only having 1:1s with a select few directs because you’ve decided they need more time than your other employees? Most likely, you will be inadvertently fostering the impression that you only care about the success of a select few, even if you had the best of intentions in making these decisions.

Yes, 1:1s are a choice. Just remember that our behaviours define us. They signal what is important to us and what our values truly are. That’s why I hope you will agree that 1:1s are an obligation and the embodiment of leadership.

Steven G. Rogelberg is Chancellor’s Professor, Professor of Organizational Science, Management and Psychology and the founding Director of Organizational Science at the University of North Carolina, Charlotte. He is the author of Glad We Met: The Art and Science of 1:1 Meetings (Oxford University Press, 2024).

FIGURE ONE

Upholding Indigenous Economic Relationships: A Review

THE ABUNDANCE OF RECENT CONFERENCES and articles on responsible management, corporate purpose and stakeholder theory suggest that leaders and management scholars alike are searching for solutions to an economic system that has produced crises of global warming, inequality, pollution and other issues. Yet, we tend to look at our navels when we do so — thinking from within the current system rather than exploring entirely different ways of knowing.

That’s why concepts such as shared value and environmental, social and governance (ESG) metrics dominate the conversation: By arguing that you can ‘do well by doing good,’ we imply that we can solve these problems without disrupting existing power and economic arrangements. We often fail to appreciate that the economic system reflecting these arrangements is inherently a colonial one that was originally designed to exploit people and the land.

If we are going to find solutions, they will have to come from radically different understandings of what the economy is and what well-being could be. This is precisely

what Shalene Wuttunee Jobin does for us in her excellent book, Upholding Indigenous Economic Relationships: Nehiyawak Narratives (UBC Press, 2023).

In line with recent contributions from other Indigenous writers such as Carol Anne Hilton’s Indigenomics: Taking a Seat at the Economic Table and Tyson Yunkaporta’s Sand Talk: How Indigenous Thinking Can Save the World, Jobin unpacks how the current system is designed for exploitation, and she offers an alternative economic model based on Cree world views. Jobin is a Cree and Métis scholar and a citizen of Red Pheasant Cree First Nation, Treaty 6, in Canada. She also is Vice President, Academic, at First Nations University of Canada.

Her analysis is both closely tied to her Cree heritage and universally relevant. She uses what she calls “resurgent methodologies,” in which the research process focuses on not just the ways that economic development has affected the Cree people and their relationship with the land, but also on how Indigenous peoples are rebuilding their economies and communities through acts of resistance to economic exploitation.

FACULTY FOCUS Sarah Kaplan, Professor of Strategic Management, Rotman School of Management

Settler colonialism disrupted the four aspects of Cree ways of living: their language, territories, ceremonial cycles and living histories.

Jobin’s riveting inquiry interweaves careful analysis of legal history and scholarly research with evocative stories from her collaborators in community. It also includes many beautiful images of Cree people, art and practices, along with a glossary of Cree terms, which provides a window into Cree ways of knowing.

She explains how intimately intertwined capitalism is with colonialism, relating a story of an Elder who, when asked about colonialism, threw a completed jigsaw puzzle that was on the table up in the air, scattering all of the pieces. She then shows how this scattering occurred by offering a narrative of Canadian history, explaining how — from the Royal Charter of 1670 that established the Hudson’s Bay Company, to the Indian Act of 1876, to today — the economic exploitation of Indigenous peoples and their lands created an economy that disconnected its essential pillars.

In her telling, settler colonialism disrupted the four aspects of Cree (nehiyawak) ways of living: their language, territories, ceremonial cycles and living histories. She develops and proposes the concept of “colonial dissonance” to describe the experience of Indigenous peoples when they cannot live in connection with the land. The capitalist system exploits the land; Indigenous people live with the land. Settler colonialism “makes silos” of spiritual, governance and economic practices, and her objective is to show how these silos can be broken down “to recognize Cree economic relationships in everyday actions and in sublime practices…[to] witness acts of resurgence as strong antidotes to colonial dissonance.” Today’s dominant economy treats the spiritual as non-economic, but Cree ways of knowing show how spirit and ceremony are intrinsic to economic relations.

Jobin draws on Cree narratives such as that about the Wendingo — a superhuman figure who can never satisfy its appetite, eating and growing and then needing to eat more — to capture the insatiable greed of the capitalist system. Modern-day Wendingo are the corporations, private equity firms and consulting companies that make up the dominant economic system.

But it doesn’t have to be so. Jobin shares with us the Cree definition of prosperity — “the good life” (in Cree, miyopimâtisiwin) — which can exist in a “livelihood economic model” in which the dollars-and-cents economy does not prevail over the other spheres of livelihood (cultural, social, political, legal).

From this view, decolonization focuses not only or even primarily on the negative impacts of the colonial project but uses ‘colonial dissonance’ to surface the strengths of the community and the reclamation of agency. The implication here is that so-called economic development for Indigenous peoples that centres on ways in which they, too, can exploit the land simply replicates colonial logic.

Instead, in the livelihood model, as represented in a beaded rose design (okinewâpikonew), there are five circles representing how everything is interconnected: The innermost circle represents spirit beings, then all non-human beings (the land, water, animals and air beings), then a people (e.g. the Cree people), then other Indigenous peoples and then non-Indigenous peoples on the land. This is a way to show that economic decisions affect all of these different beings. When she uses the phrase “all my relations,” she means that all of creation is related.

Jobin relates a series of “resurgent practices” that are emerging in Indigenous communities around Turtle Island (broadly, North America). She shows how the renewal of traditional giveaway ceremonies, in which gifts such as a horse, food, a dance or a song are used to repair relations in the community and redistribute wealth, can help communities support one another. Another practice is kâ-ohpawakâstahk: renewing relationships with the land. She gives the example of Flying Dust First Nation (in Saskatchewan), which was deeply affected by land appropriation, residential schools, and industrial resource extraction, coming together to develop a Community Plan to “build a strong, healthy and self-sufficient Nation.” One element of this was a community gardening initiative led by Cree women that uses traditional planting techniques to

When she uses the phrase “all my relations,” she means that all of creation is related.

take care of the land as they take care of themselves, builds multigenerational connections by getting young people involved in the land, and challenges “market citizenship” by focusing on trading and self-sufficiency rather than on sales.

Another practice involves sharing Indigenous knowledge with Indigenous and non-Indigenous people, as Jobin does in the Community and Academic Indigenous-Based Learning Collaborations — a partnership between the University of Alberta and a Cree community. In a for-credit course, students participate in an on-the-land camp to learn traditional skills connected to the land, such as tanning moose hides, while at the same time reading books and articles about Indigenous laws and governance.

Jobin shares some of the powerful student reflection essays written at the course’s conclusion, including one from a non-Indigenous accounting master’s student who saw that these practices were “destabilizing to the colonial establishment,” such that it would be “difficult to economically rationalize the hide-tanning process.” He concludes, “The colonial establishment’s methods of cost-accounting and profitability analysis are not the only way to assess value.”

These examples show scholars and practitioners new models for thinking about economic value and management practices, and they will prompt us to challenge many core assumptions we make in our work, even for those who have focused on corporate social responsibility, stakeholder theory and new economic models.

A big question arises about how these practices might scale up to macro-level systems change. Jobin reports that she gets asked that question frequently, and her ideas here are also transformational. “Instead of thinking of macro initiatives,” she argues, “we should be thinking of networks of place-based economic endeavours.” This argument means that ‘how to scale’ isn’t really even the right question to ask. Seeing how Indigenous historic trade networks existed to connect communities in knowledge exchange and trade, we can start to imagine how to use current tools and technologies to re-envision these networks to sustain the livelihoods of all of our communities.

My sense for why both scholars and practitioners don’t move forward with these different ways of thinking and doing is in part because they don’t have models to emulate. Jobin gives a starting point with some examples of these resurgent practices, but the need for models suggests openings for other Indigenous and non-Indigenous scholars to seek out such examples and, in collaboration with people on the land, to find ways to amplify and connect these ideas in the theoretical and practical networks that Jobin reimagines for us.

Sarah Kaplan is Distinguished Professor, Founding Director of the Institute for Gender and the Economy (GATE) and Professor of Strategic Management at the Rotman School of Management. She is the author of The 360° Corporation: From Stakeholder Trade-offs to Transformation (Stanford Business Books, 2019).

Sharla Alegria + Catherine Yeh, Sociologists, University of Toronto

Machine Learning and Inequality: A Cautionary Tale

IF LAST YEAR HAD A TITLE, it could be ‘the year of artificial intelligence’ (AI), especially advanced systems that use machine learning (ML). Universities around the world, including ours, were asking more students to take tests in classrooms to prevent them from using tools like ChatGPT to write answers for them. Meanwhile, notable computer scientists, including Geoffrey Hinton, considered the godfather of AI, wrote open letters sounding the alarm over “existential threats” from future versions of these technologies.

As much as we agree that it would be highly undesirable for computers to start wars or interfere in elections, we don’t need to imagine future technologies to see that ML tools are already reproducing social inequalities. In order to consider how these tools can reproduce inequalities, it helps to understand a bit about how they work.

ML is a subcategory of AI that uses algorithms to detect patterns in data, typically vast quantities of data, then uses these insights to make decisions. What distinguishes ML is that it aims to accomplish tacit knowledge tasks that humans

can perform but struggle to explain. For example, consider a chair with four legs, a back, a seat and armrests. Is it still a chair without armrests? What if it is shaped like an egg, or has rockers instead of legs? While it may be challenging to explain exactly what makes an object a chair, it is generally easy for humans to decide if an object is a chair or not.

Traditional algorithms are rules-based, in that a programmer writes a set of rules and the computer follows them to produce a result. This works well for tasks like solving math problems, where there is a clear and knowable set of rules. ML is different in that programmers do not know what rules resulted in the decisions people make, so instead of writing a rule for each step, they use data to ‘train’ the software on what a person would probably decide. Training data might include a set of images that people have tagged as containing or not containing chairs, for example. An ML program will analyze the data that make up the images and identify patterns that commonly occur in images humans tagged as ‘containing chairs.’ Based on the patterns the software found in the training data, it will calculate a probability that a new image contains a chair.

Computers don’t ‘see’ images the way people do. Instead, images are made up of pixels — individual points

Media tend to trivialize, condemn and outright omit the accomplishments of women and racial minorities.

with colour numerically encoded. An ML program will analyze the pixels that make up the images and identify patterns, such as slightly angled vertical lines for chair legs with a perpendicular surface for a seat. These properties become part of the ML program’s ‘knowledge’ about chairs. Training will continue with more images, tagged and validated by humans, until the software is able to assign high probabilities to images with chairs and low probabilities to images without.

We use this logic in ML software for a range of tasks including facial recognition, language, images and more. Data are the key input for ML models, which is why vast quantities of data are so critical to them. The trouble with data-fuelled software is that the underlying data are generally created through social processes, and most social processes have unequal consequences across gender, race, class and other vectors of marginalization.

To demonstrate how ML can reproduce inequality, we tested ChatGPT’s ability to recognize the accomplishments of people who tend to be under-represented online. OpenAI, the company behind ChatGPT, explains that training data for the software includes web pages, Wikipedia and books. However, sociologists studying media representation have used the term ‘symbolic annihilation’ to describe the ways that media tend to trivialize, condemn and outright omit the accomplishments of women and racial minorities. For example, Wikipedia entries about women tend to emphasize marriage and sexuality.

Since we expected symbolic annihilation in the online sources that make up ChatGPT’s training data, we suspected that ChatGPT also trivializes, condemns or omits women in its responses — especially women of colour. To test this, we tried to get it to identify Alice Coltrane as ‘an influential free jazz musician’ without asking specifically about her or specifying women in jazz.

Coltrane was a bandleader, jazz pianist and harpist who was influential in free and spiritual jazz. She recorded music with jazz legend John Coltrane, to whom she was married before his death in 1967. In 1966, she replaced McCoy Tyner in Coltrane’s band. Her album, Journey in Satchidananda, recorded in 1970, is included in Rolling Stone’s 500 Greatest Albums of All Time.

We began by asking ChatGPT questions about influen-

tial musicians in free jazz. We started broad, asking: “What can you tell me about the free jazz movement?;” “Tell me about some influential free jazz musicians;” “Who was influential in free jazz?;” and “What are some famous free jazz recordings?” These questions returned names, descriptions and records of men only.

From there, we narrowed further by asking questions that should have included Alice Coltrane, including “Who was in John Coltrane’s band at the end of his life?” After seven attempts, we abandoned subtlety, asking, “Can you tell me about women in the free jazz movement?” Alice Coltrane was, unsurprisingly, at the top of the list. However, of the five influential women ChatGPT named, two were actually men: Marion Brown and Milford Graves.

Our finding: because women are underrepresented in online texts about free jazz and because information online about Alice Coltrane emphasizes her personal relationship to John Coltrane before her impact on the music they were both involved with, ChatGPT did not include her in its answers until we asked specifically about women.

We think of this as a data bias that ChatGPT reproduced and will continue to do so until or unless OpenAI finds ways to address it. But drawing on data that underrepresents women does not explain why ChatGPT identified two men as women. Large language models (LLMs) can infer gender based on context from co-references in the text using pronouns, honorifics (such as Mr. or Ms.) or other gendered language. When there is no gendered language in a text, they may reference a database of names and associated gender. To do this, the model must be able to identify entities (people/places/things) referenced in text, find all the different words used to reference those entities, including pronouns and honorifics, and link the appropriate information with those entities.

There are many ways that gender inference can go wrong — misidentifying an entity, missing a reference to that entity or missing information about the entity can all result in misgendering. Language models tend to default to masculine gender when information is missing or incorrect because the text available as training material contains more references to men.

We don’t know exactly why the model made the mistake it made, only that something went wrong in one or

more of the many places where problems are possible. Consequently, ChatGPT misgendered Marion Brown and Milford Graves. The error over-represented women in this case, but the particular way it over-represented women had the effect of suggesting that even fewer women contributed to free jazz.

To help explain why it is important to understand ML and its underlying data through a sociological lens, we have identified four key ways ML tools can reproduce existing race and gender inequalities:

BIAS IN THE UNDERLYING DATA. Because ML tools rely on data to identify patterns, any decision or output from the tools will be a reflection of the underlying data. ChatGPT did not identify Alice Coltrane as an influential musician until we specified our interest in women because information about her was not prominent in the underlying data. Data do not simply appear. They are observed, collected, organized and analyzed—all through social processes. Biases in the data will emerge in the results that ML software produces.

For example, considerable research demonstrates that police in the U.S. have disproportionately targeted people of colour. Predictive policing tools use data collected about past arrests, including suspects, passersby and locations, to inform how police and other law enforcement agencies deploy resources in the present. If people of colour are over-represented in the data police use to predict where crime will happen or who is likely to be a criminal suspect, that over-representation will lead ML tools to predict more crime in communities of colour and more people of colour as suspects. Importantly, the decision to concentrate police resources in those communities will not appear racially motivated but data driven, regardless of what motivated the decisions in the underlying data.

Similarly, ML tools can reproduce inequality when data collection is unrepresentative. Amazon provided an instructive example when they experimented with an ML tool to help automate the hiring process. The tool strongly preferred men. It would downgrade candidates for using the word ‘women’ in their résumé, as in ‘women’s basketball’ or attending a women’s college. In further experiments, they found that even without the word ‘women,’ the tool preferred language that men tended to use more, words like

‘executed’ or ‘captured.’

The Amazon team trained the data using résumés from past hires, which disproportionately included men. Consequently, the ML tool learned to downgrade any indication of femininity on a resume. Amazon could not satisfactorily remove the tool’s gender bias and eventually gave up on the project. These examples show how biased or unrepresentative data can lead ML tools to reproduce social inequalities.

MISALIGNED DATA USE.

Even with the best data available, it is still possible for ML to use good data in ways that perpetuate inequality. For example, a range of indicators that do not measure race per se may be effective proxies for race, including zip codes or school attended. If models for something like creditworthiness for mortgages use these variables, they will systematically elevate the risk score of people of colour relative to their financial qualification.

In her book Automating Inequality, Virginia Eubanks describes how a Pennsylvania county created an algorithm to predict child neglect and abuse based on certain family and household characteristics. The team that created the algorithm used a technique that dredged public data to find indicators correlated with a referral for a child to the Office of Children, Youth and Family or removal from their home. Some measures they used to indicate risk — including time on public benefits and receipt of nutrition assistance — are effectively proxies for poverty. They only had information about access to public services, so families with the resources to access the same services through private means, such as food banks or churches, appeared less risky.

In the quantitative methods classes we teach, we would describe the relationship between nutrition assistance and increased risk of abuse or neglect as ‘spurious’ because poverty is behind both the need for help getting food and the risk of not having enough of it. Not only would the Pennsylvania algorithm miss the question on spuriousness on our exam, but it also legitimizes heightened surveillance of a vulnerable population and increases the chance that children from lowincome families will be separated from loving caregivers.

INEQUALITIES FROM ALGORITHM OPTIMIZATION. ML and AI tools can also reproduce inequalities because of what they are designed to accomplish, even with good data

Machine learning is not the root cause of inequality, but it can and often does encode and reproduce social inequalities.

and appropriately applied measures. Latanya Sweeney’s research on Google ads provides a clear example. When users enter terms in Google’s search engine, its ad server supplies targeted ads that accompany the search results. Google is able to ‘target’ the ads based on information it has about the user who will see the ad, such as the terms they search and the information they have about all search users, including what ads people click when they search particular kinds of terms.

Selling targeted advertising is Google’s primary source of revenue, and at the time of Sweeney’s study, it only charged the advertiser when a user clicked on their ad. Sweeney found that when users performed Google searches for names that are more prominent among Black people, the ads that accompanied the results were more likely to suggest a person with that name has a criminal record and to place those ads more prominently. These ads included wording such as ‘Latanya Sweeney Arrested?’ The Google ad server was optimized to maximize ad clicks, which has the effect of reinforcing stereotypes around race and criminality.

Google could point to user behaviour and say the algorithm is simply responding to users. While that may be true, if they had designed the algorithm to be best at something other than maximizing ad clicks or to balance equity and ad clicks, the ads would be different. As if to demonstrate this point, all the Google searches we’ve tested for people’s names no longer return ads suggesting criminal records at all. We suspect Google made a change to continue maximizing ad clicks while reducing the appearance of bias. They may have done this by imposing constraints on the language that advertisers can use or by preventing ads of any kind from accompanying search results for people’s names.

TARGETING VULNERABLE POPULATIONS. Often, particularly for those of us who are middle class and comfortable with technology, we get to make decisions about which ML tools to use and when and how to use them. Other times, private firms and governments make those decisions, which can be particularly damaging for people living in poverty or under police suspicion. As Eubanks’s book makes clear, middleclass families would be unlikely to tolerate the kinds of invasion of privacy and suspicion that come with the digital systems used to administer services for the poor.

Elsewhere, Sarah Brayne’s study of the Los Angeles Police Department shows that police use a range of systems to collect licence-plate information about parked cars, people on the street in neighbourhoods they patrol and more. This kind of data collection allows the police to include those cars and individuals as potential matches for criminal activity in data-driven digital systems. Even being a bystander or having a name queried in the system before increases the level of suspicion of individuals in the database.

Authorities also routinely install sophisticated surveillance systems in public housing facilities, often with buyin from residents, with the stated goal of stopping violent crime. The surveillance might help with violent crime, but as Douglas MacMillan at the Washington Post reports, authorities also use facial recognition to scan footage for violations such as overnight guests or banned individuals. Authorities can use that footage, even of residents committing minor infractions like spitting in the hallways, to support eviction cases.

In closing

As sociologists observing and using these technologies, we find them both exciting and terrifying. Clearly, machine learning is not the root cause of inequality, but as indicated herein, it can and often does encode and reproduce social inequalities. That’s why it is critical to understand these tools through a sociological lens to ensure that their widespread use does not simply exacerbate existing inequalities.

Sharla Alegria is an Assistant Professor of Sociology at the University of Toronto (U of T). Catherine Yeh recently received her PhD in Sociology from the U of T. She is a Researcher at the Social Research and Demonstration Company. This article has been adapted from a longer version that was published recently in the journal Contexts (Sage Publishing).

The playbook on change has just been reinvented.

New from bestselling authors and cohosts of the TED podcast Fixable, Frances Frei and Anne Morriss

Based on their work with fast-moving companies, Frei and Morriss reveal the five essential steps to moving fast and fixing things. You’ll learn to:

• Identify the real problem holding you back

• Build and rebuild trust in your company

• Create a culture where everyone can thrive

• Communicate powerfully as a leader

• Go fast by empowering your team

Does Spirituality Belong at Work?

IN 2020, after the murder of George Floyd, interest in creating more inclusive workplaces surged as corporations focused on addressing racism and power imbalances. As diversity, equity and inclusion (DEI) programs have increased over the past four years, some companies are now rethinking DEI to include belonging. Spirituality should be included in this effort.

In a recent study conducted by Business for America (BFA), a non-partisan, non-profit organization, more than two dozen executives from 18 companies were interviewed, revealing how companies are struggling to ‘build bridges’ in an increasingly polarized culture. According to BFA founder Sarah Bonk, despite noble intentions, DEI initiatives have unintentionally deepened divisions within some organizations and led to the emergence of resentment among employees.

Because of these unintended consequences, some companies are now trying to shift away from addressing the differences among their employees to focus more on the attributes they have in common. Some have adopted new language, ushering in ‘the Age of Diversity and Belonging.’ But more than nuance and new language is required to achieve the kind of substantive, sustained change that businesses are seeking.

To foster authentic belonging, leaders must acknowledge that employees can only truly belong and show up as their authentic selves when all aspects of their lives are valued — including spirituality and faith.

Why Spirituality Matters Now

For many individuals, spirituality or faith serves as a fundamental driving force, infusing their lives and work with deep meaning and vitality. The World Health Organization (WHO) recognizes spirituality as the fourth dimension of health, highlighting the significance of ‘spiritual well-being’ as a vital component of overall wellness. By emphasizing the integration of body, mind and spirit, spiritual health promotes an environment of inner harmony, fostering connections with others, with nature and with a higher power. These studies indicate that by fostering spiritual experiences in workplace environments, people will be more productive and have greater work satisfaction.

This conclusion is further supported by research published in the Leadership & Organization Development Journal, which found that dimensions of workplace spirituality — meaning in work, community at work and positive organizational purpose — were significantly positively associated with organizational commitment. And, an analysis of the Baldrige Performance Excellence Program award recipients revealed the impact of spiritual leadership — comprised of hope/faith, vision and altruistic love — on organizational commitment, unit productivity and employee life satisfaction.

And yet, meaningful conversations about incorporating spiritual beliefs into the workplace have thus far been limited. Some studies suggest there is comfort among some leaders to publicly express their personal faith or spiritual beliefs, but there has been little incorporation of related companywide initiatives. It is time to reconcile this contradiction and

POINT OF VIEW Denise Lee Yohn + Steve Morris, Brand Experts and Authors

PayPal is one purpose-driven company that has taken big strides toward spiritual and faith inclusion.

to acknowledge that spirituality belongs at work because it improves individual and organizational performance.

Business leaders themselves have begun to report on the benefits that spirituality brings to their companies. Davis Smith, founder and former CEO of the adventure gear company Cotopaxi and a Mormon, has found that embracing people’s faith — including his own — has increased his company’s attractiveness as an employer. He explains that Cotopaxi recently received more than 3,000 job applicants for a graphic designer position in part because, “My faith’s teachings of loving your neighbour, uplifting the poor and needy and mourning with those that mourn have defined the Cotopaxi brand, our mission of fighting poverty — and my leadership.”

Writing in the wake of a mass shooting in the community surrounding her company’s headquarters, Ellyn Shook, Chief Leadership and Human Resources Officer at Accenture, explained that bringing everyone’s faith beliefs into the workplace helps to “welcome each other, learn from each other and celebrate how our diversity makes us stronger and better together.”

PayPal is one purpose-driven company that has taken big strides toward spiritual and faith inclusion. Guided by its ‘One Team Behaviours,’ it aspires to uphold the highest ethical standards, foster a diverse and open culture and commit to treating everyone the company touches with dignity and respect. These belief-driven behaviours encourage employees to challenge the status quo, ask questions and find solutions.

To strengthen this culture, PayPal established a number of DEI initiatives, including Believe, an employee resource group (ERG) whose mission is to create an inclusive work environment where employees can bring their whole selves, celebrating and respecting all faiths and worldviews. PayPal’s employee benefits website states:

We believe all employees have the right to bring their whole self to work. Faith and worldviews are core to who we are — our values and beliefs — and to how we conduct business. The mission of Believe is to foster an inclusive workplace culture and to promote holistic well-being by providing a forum to openly exercise and celebrate all faiths and worldviews while working. Believe exists to create awareness and understanding of faith, hope, love, empathy, respect for one another and service toward our customers, communities and co-workers.

Milind Makwana, former program manager and leader of Believe, said PayPal provided a “great structure” for bringing people together through their faiths. “The Believe ERG plays a fundamental role in bringing everyone — irrespective of the faith they practice — together and by encouraging everyone to participate in each other’s festivals,” he explained. “For example, one of the core Hindu festivals — Diwali — has been celebrated here for the past 10-plus years with great enthusiasm and joy.”

PayPal is just one of a growing list of top-tier companies that are experiencing the benefits of faith-based ERGs, which also includes Walmart, Texas Instruments, American Airlines, Google, Intel, Facebook, Apple, Dell, American Express, Salesforce and Goldman Sachs.

To foster an environment that honours and integrates diverse spiritual beliefs, leaders must take proactive steps. Following are six essential practices leaders can adopt to cultivate spiritual belonging:

1. EMBRACE SPIRITUALITY. Leaders must clearly and proactively acknowledge and support the significance of spiritual values within their broader culture-building efforts in increasing DEI and belonging. Simply by affirming that spiritual beliefs are valued, welcomed and respected, leaders send a powerful message that they really do want employees to bring their whole selves to work.

2. BUILD COMPETENCY IN BELONGING-ORIENTED CONVERSATIONS. Leaders must develop cultural competence that allows for safe and respectful discussions about spirituality. As such, companies should provide training on the attitudes and skills necessary to facilitate dialogues that honour diverse spiritual perspectives and create an atmosphere of psychological safety. Active listening, empathy and curiosity are crucial components of fostering belonging-oriented conversations.

3. FOSTER WORKPLACE CONVERSATIONS. Leaders can actively encourage open and inclusive conversations that embrace spiritual topics and the underlying values. For example, managers can help people understand the origins and practices of different faith traditions and invite people to share a range of perspectives on how their faith influences the work they do. When done with clear and proper boundaries,

Spiritual Values: A Definition

Spiritual values encompass the beliefs and principles that shape our inner and outer worldview, guiding our thoughts, behaviours and most important, decisions. They are tied to our beliefs about the purpose and meaning of life, the nature of the universe and our place within it. Examples of spiritual values include love, compassion, humility, servanthood, sacrifice, peace and gratitude.

While some values can be both spiritual and secular, spiritual values are distinguished by their origin, nature and purpose. They are developed through religious, spiritual or philosophical teachings, personal experiences or introspection. Spiritual values are integrative and generative. They are meant to produce more than productive relationships and effective practices: they cultivate a higher state of thinking, feeling and being.

5. TAKE A STAND. True leadership requires the courage to stand up for one’s beliefs, even in the face of potential challenges. Leaders must be willing to lose employees or stakeholders when defending the integration of spiritual values in their workplace. By unwaveringly upholding the value of allowing people to bring their whole selves to work, leaders foster an environment where individuals can authentically express their spirituality.

6. LEAD BY EXAMPLE. Leaders must lead by example and align their actions with the invitation to team members to bring their whole selves to work. By being authentic and vulnerable in sharing their own spiritual beliefs and experiences, leaders inspire trust, encourage deeper connections and enhance the overall sense of belonging within the organization.

these discussions provide space for individuals to express their beliefs, share experiences and find common ground.

4. CULTIVATE VALUES ALIGNMENT. Leaders should strive to align values across all areas of people’s lives, including the professional, social and spiritual realms. Companies can hold workshops that help employees identify commonalities between their personal values and the organizations’ and consider new values or new language for existing values that apply to both. Then, leaders can develop programs to express and reinforce those values.

For example, the value of generosity might be operationalized by individuals and the company as a whole contributing to a fund that helps those in need, whether that’s employees, business partners or other organizations. The value of servanthood could be advanced by companies serving faith-based or spiritually focused organizations in their communities through donations, services, volunteering and more. By integrating spiritual values into organizational practices and policies, leaders demonstrate a commitment to supporting their employees’ holistic growth and well-being.

In closing

By embracing these six steps, leaders can cultivate a workplace where belonging thrives. Integrating spiritual values into the fabric of organizational culture not only promotes individual well-being and fulfillment but also fosters a sense of purpose and engagement that can drive success. Leaders are increasingly recognizing that it is their responsibility to honour the diverse spiritual identities within their teams as part of fostering an inclusive and thriving work environment for all.

Denise Lee Yohn is a brand leadership keynote speaker and expert whose clients include Lexus, Facebook, Target, Dunkin Donuts, Sony and Frito Lay. She is also the Co-Founder of the Bay Area Center for Faith, Work & Tech, and the author of two bestselling books, What Great Brands Do and Fusion: How Integrating Brand and Culture Powers the World’s Greatest Companies. Steven Morris is a brand and culturebuilding expert, speaker and author of The Beautiful Business. He has worked with more than 250 brands and cultures, including Google, Habitat for Humanity, Samsung and Disney.

QUESTIONS FOR Scott Shigeoka, Author, SEEK: How Curiosity Can Transform Your Life and Change the World

Q &A

The author of an Amazon Best Books of 2023 title explains the importance of moving up on the curiosity spectrum.

Interview by Jason Hreno

You believe the goal of curiosity isn’t to know but to understand. Why is this such an important skill in today’s world?

Curiosity is often seen as an intellectual tool for extracting information about the world in order to know something. But there is another form of it that I call ‘heart-centred curiosity.’ This entails asking deep questions and moving away from surface-level knowledge to a deeper understanding of a person. What were their experiences growing up? What values or relationships are important to them? Do they know their purpose?

This type of curiosity helps us see other people in more depth, and that is really important today because we live in an era of in-curiosity, where we’re turning on each other. Everywhere you look, cancel culture and toxic polarization are tearing us apart. We’re ending relationships before they even start because we disagree, so there are fewer chances for positive connections or dialogue. None of this will lead us to a place of justice, connection or belonging — all the things we strive for in our personal lives, in the business world and in society writ large. Achieving these things is the goal of heart-centred curiosity.

Describe what you call ‘the curiosity spectrum.’ I grew up in Hawaii, so I like to use the ocean as a metaphor. Curiosity is much like the ocean in that there is a shallow aspect to it and a deeper part. On the shallow side, you understand someone on a surface level. You’re only getting bits of information: their name, where they live, where they

When deep curiosity is directed at us, it helps us feel seen, heard and valued — like we matter.

work, whether they’re married, if they have kids. But as you move down the curiosity spectrum toward the deep end, you start to dive beneath the surface and see this person in a more complete way. Instead of learning what their job title is, you might learn about what excites them or challenges them at work, or about their purpose in life. Because these aren’t things you can see at the surface level, getting there takes more time, patience and exploration. But you do need to start out at the shallow end, to build the trust and connection that enables you to move toward the deep end. Just as with the ocean, the deep part isn’t necessarily better — it just offers different experiences. Both shallow and deep curiosity are important. One leads to the other — it’s all connected.

In terms of our personal and professional lives, what are a few of the key applications and benefits of curiosity? When deep curiosity is directed at us, it helps us feel seen, heard and valued — like we matter. That’s the number-one reason why it is so important and why I am determined to bring it into people’s lives. In a personal context, curiosity toward your romantic partner, sibling or children makes them feel like you’re genuinely interested in what they’re thinking and feeling. This makes them feel good and secure, but it also makes both of you feel closer to one another. It builds trust, understanding and fortifies a strong foundation for times when conflict might arise.

The same is true professionally. As employees, when we feel that we truly matter on a team or at our organization, we want to contribute more. Our investment of time and energy keeps us engaged and prevents us from seeking opportunities elsewhere, where we know we won’t necessarily feel this same powerful feeling. Leaders need to know that if someone feels like they don’t matter, they will search to feel valued elsewhere.

Curiosity is also a key ingredient in building strong teams and keeping them engaged. Research shows that when a leader is curious and intellectually humble, people want to work with them. Leaders who embrace deep curiosity are seen as more competent because they seem genuinely interested and less arrogant. They don’t claim to have all the answers, but instead, are willing to challenge their assumptions, opinions or biases and explore what others think. These leaders are not only more successful but are also beloved by their people.

Not all curiosity is positive, though can you define ‘predatory curiosity?’

True, deep curiosity needs to come from an authentic place of open-heartedness and open-mindedness. You can’t have an agenda or ulterior motives. By contrast, in the real world, sometimes we ask questions and engage another person, but only so we can lead them to say or do something; then it’s like, gotcha! With this disingenuous version of curiosity, we’re really just trying to confirm our own biases or waiting for our turn to speak and share our perspective — which is why I call this predatory curiosity.

Describe your D.I.V.E framework and how it helps us develop curiosity.

Curiosity is a muscle: if we exercise it daily, it grows; and if we never exercise it, it atrophies. To develop this muscle, we need a set of exercises, and that’s why I developed the D.I.V.E. model:

The ‘D’ stands for Detach. Let go of your ABCs — Assumptions, Biases and Certainty. Doing this takes effort and practice, but it’s necessary if you want to achieve true curiosity.

The ‘I’ is for Intend. You have to cultivate the intention of being curious and create the mindset and setting for it. Curiosity is deliberate, conscious and premeditated.

The ’V’ is for Value. You have to start from a place of seeing the dignity, humanity and value of the person you‘re being curious with. You can’t connect with someone if you don’t fundamentally value and respect them on a basic human level.

And lastly, ‘E’ is for Embrace. Welcome the hard times in your life. When we are going through a difficult period, that is exactly the time to be more curious and genuinely interested in others, because it’s going to be reflected back on us and reciprocated. Our own curiosity is going to create connections and unwind a lot of the fears and anxieties we’re feeling. Curiosity can actually help to liberate us from feelings of helplessness, fear, anxiety and isolation.

Can you describe the four ’speed bumps’ to curiosity, and how we can overcome them?

Sure — there are more than four, but the main ones are fear, trauma, time and distance. Fear gets in the way of curiosity because trying to learn about someone can be scary.

Curiosity isn’t just good for the soul and for our relationships. It’s also good for business.

What if they reject or dismiss our attempts? We may not know how best to connect with them. So, instead, we fall back on that fear. We’d rather things stay the same than be vulnerable to what curiosity could open up for us.

Next is trauma. Trauma isn’t like a broken bone; you can’t just heal it naturally. Spiritual wounds live in us for a long time, making it hard to be open and curious because we’re still healing, trying to find coping mechanisms to support our mental and physical health and well-being.

Third, a lot of us feel like we don’t have a lot of time to get curious, because we’re taking care of our kids, pets or aging parents, and working full-time with all these other obligations in our world. Who has the bandwidth?

And finally, there’s distance. We live in a really segregated time across race, age, etc., and we’re losing these socalled third spaces — communities like a religious congregation or something similar, where we interact with people from different socioeconomic backgrounds and life experiences. Devices only make this worse by keeping us in silos and ‘echo chambers.’

Curiosity can be the medicine or antidote for all of this. It can actually help us overcome our fears, help to heal buried trauma, unlock more time for us through mutually beneficial co-operation and help us bridge cultural, physical and emotional distances. And you can start getting curious about other people any time; there’s no right or wrong time in your life to start.

How does curiosity impact organizations overall?

Curiosity isn’t just good for the soul and for our relationships. It’s also good for business. Leaders who are more curious have more creative teams and organizations. And creativity triumphs in today’s market: creative products, services, content and marketing campaigns and creativity in problem-solving at the team and organizational level are all huge markers of success.

Curiosity also fuels innovation. With rapidly advancing technology like AI, it’s going to be up to companies to reinvent themselves and for leaders to do the same, which requires innovative thinking and behaviour. One of the best ways you can create innovation for yourself and your company is by creating a more curious culture. Research shows that curious teams and organizations do better in the market from a strictly financial standpoint.

In general, team members need to remember that their fellow team members, regardless of background, are more than just their jobs. Having curiosity about them on a personal level is key because it helps you support the people you work with. And as a leader, having real relationships with people helps to create a respectful workplace where everyone is seen, heard and valued individually and equitably. All of this starts with being curious.

Most leaders recognize that their job isn’t just about helping their organization succeed, it’s also about helping human beings succeed. I advise people to remember that curiosity is one of their biggest assets and superpowers. And looking ahead, it’s only going to become an increasingly valuable competency in our world.

Scott Shigeoka is the author of SEEK: How Curiosity Can Transform Your Life and Change the World (Hachette Book Group, 2023).

An IDEO alum, he is on the faculty of the University of Texas, Austin and is a Fellow at The Greater Good Science Center. For more visit: www.seekthebook.com

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