work autumn web by christhebarker

Autumn 2017

Work. Because business is about people

THE SMART ISSUE

From Klein to Kardashian: the worldâ&#x20AC;&#x2122;s 20 most influential thinkers Eddie the Eagle and the upside of failing at work Dumb luck: your high IQ might be making you unemployable If detectives can assess the evidence, why canâ&#x20AC;&#x2122;t managers?

Work.

Because business is about people

During last month’s eclipse, healthcare professionals treated more patients for eye pain than usual. Given expert advice to avoid looking directly at the sun without adequate protection, some people chose to put sunscreen on their eyeballs. Does this signify that, as a species, we are getting less intelligent or more inventive? Since 1950, as research from King’s College London suggests, our average IQ has increased globally by 20 points (although the bad news for Britons is that their intelligence has declined in that time). In this special issue we explore the mysteries of intelligence, unveil the world’s 20 smartest people (see page 20) and assess the evidence that evidence-based management really works. Do send us your feedback – and if you’d like the digital edition, it’s on the App Store and Google Play. Claire Warren, editor claire.warren@haymarket.com

Features in detail p4 Perspectives: distilled management thinking p6 Is it clever to be intelligent? p12 The world’s smartest people p20 Where’s the evidence? p50 One thing that made me smart p56 The benefits of failure p62 Intelligence gathering p68 Debrief: business research, reports and insight p70 Further reading p80 The off-piste guide to emotional intelligence p82

Front cover Self-Portrait as the Billy-Goat 2011 Pawel Althamer ISelf Collection: courtesy of the artist and Foksal Gallery Foundation, Warsaw. Photo by Bartosz Stawiarski

FEATURES IN DETAIL

Roll of honour: the world’s smartest people

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p20

In Outliers, Malcolm Gladwell wrote: “The relationship between success and IQ only works up to a point.” British politician Enoch Powell is a case in point. In an exam for the University of Cambridge, he translated a passage of Bede into classical Greek so quickly that he had time to translate it into three other ancient languages – and annotate each text. Yet he never achieved the high office he and others predicted. The top-of-the-class approach to intelligence is no longer in vogue, reports Matthew Gwyther – replaced by a broader-brush approach that takes in multiple forms of intelligence. That may change again in the years to come, as we contemplate the role of human intellect in a world in which artificial intelligence becomes ubiquitous.

If there’s one thing that unites our selection of the 20 smartest people, it’s that they don’t just dream about change – they act on it. With so many choices, creating a list was never going to be easy, but our final line-up gives a fascinating insight into what’s going on at the cutting edge of the world of work. Activist and author Naomi Klein is America’s favourite liberal, who is now viewed as a visionary for rejecting consumerism. Aliko Dangote, Africa’s richest man, is investing in raw materials to cut imports and rebalance Nigeria’s economy. Controversial composer John Adams asks deep questions about the purpose of art in postdeferential society. Margrethe Vestager, the EU’s competition commissioner, took on the might of Google – and won.

Matthew Gwyther is a freelance writer and broadcaster

Amazon founder Jeff Bezos was an early investor in Google, Twitter, Airbnb and Uber. Now he wants a piece of every market. A multimillionaire at 28, Elon Musk, the man 04

behind Tesla, has ambitious plans to take millions to Mars by 2020. France’s mould-breaking president, Emmanuel Macron, has been dubbed the new Tony Blair, JFK and Ronald Reagan. Allen Zhang, the publicity-shy inventor of WeChat, China’s answer to Facebook, likes to keep things simple. The vision of Karl Marx and the means of Adam Smith: Wingham Rowan’s ambitious plans for the gig economy. Trust in institutions is low, says collaboration expert Rachel Botsman, but our faith in sharing hasn’t disappeared. It’s moved online. Economist Atif Mian argues that borrowers and lenders must share the risk of debt more equally if we are to avoid further financial crises. Yuval Noah Harari has an unsettling vision: as authority shifts from humans to algorithms, humanity as we know it will cease to exist. The brain’s hemispheres experience the world differently. The problem, says Iain McGilchrist, is

that one has come to dominate the other. Governments and corporations are not ready for a future in which people live longer, argues Lynda Gratton. Growth will only increase social inequality, leading to more social unrest – that’s the message of French economist Thomas Piketty. Social media star Kim Kardashian has built a brand with more financial clout than many Fortune 500 companies – and it’s no accident. Anab Jain founded a consultancy that merges design, technology and science to connect with the future. Work and motherhood? They enhance each other, says Susan Wojcicki, CEO of YouTube and “the mom of Google”. Former chess prodigy Demis Hassabis now leads a team that uses advances in artificial intelligence to create a better world. It may sound impossible, but entrepreneur Leila Janah plans to pull four billion people out of poverty – one small piece of work at a time.

Superstock, Getty Images, Alamy

Intelligent by design

Where’s the evidence?

My greatest influence

How to fail successfully

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Every manager likes to think their decisions are based on evidence – even those who laud gut instinct. Yet too many businesses follow the advice of French philosopher Émile Chartier: “We can prove whatever we want to: the only real difficulty is to know what we want to prove.” As Paul Simpson discovers, evidencebased management is not simply a matter of throwing data at an issue – every decision is infused by values, preconceptions and collective experience. Reflecting on the greatest failure of John F Kennedy’s presidency, Germany’s U-boat strategy and the work of pioneering metaresearcher Dr John Ioannidis, he asks: is there any evidence that evidence-based management works?

For many leaders, the most valuable lessons come from the experiences of others. It’s why so many business books are a success. But when Work. asked a selection of academics, entrepreneurs and business leaders to name the one thing that had the most impact on their professional lives, the answers proved a little surprising. Take Lain Hensley, co-founder of California-based teambuilding company Odyssey Teams. As he tells Robert LangkjærBain, a diagnosis of throat cancer several years ago proved to be his most valuable experience. “It tested me,” he admits. “Afterwards, I rebuilt everything. I looked more closely at relationships and how I communicated with people.”

Many companies talk about the need to accept, embrace and even celebrate failure, but is anyone actually doing so? For every Google, which claims to pay bonuses for failure, there are hundreds of businesses in which the instinctive reaction to setbacks is to look for a scapegoat – often, for obvious reasons, firing the CEO. Drawing on the experiences of Scott of the Antarctic, David Bowie and the curator of an unusual museum in Sweden, Christopher Hadley explores the twin impostors of triumph and disaster and asks whether, as individuals or organisations, we are as adept at managing them as we like to think – and what we can do to confront the fears that still, for many of us, surround failure.

Paul Simpson is a business journalist and author, who has contributed to Wanderlust magazine and written books on football and Elvis

Robert Langkjær-Bain is a freelance writer and editor specialising in business, marketing and technology

Debrief p70-79 Human capital

German states with higher levels of foreign-born citizens see more innovation.

Brexit

Corporations fear leaving the EU will affect global job mobility and shrink the UK talent pool.

Intercultural relations

Cross-cultural relationships (the closer the better) stimulate creativity by exposing individuals to new ideas.

Corporate social responsibility

CSR activities may adversely affect business efficiency by using resources that could boost performance.

Diversity

Hiding sexual orientation to avoid stigma negatively affects both employees and overall organisational performance.

Decision-making

Change the context to reshape your thinking and combat subconscious biases.

Psychological power

Abusive leaders harm their own competence, autonomy and ability to relax.

Cross-cultural contacts

Ethnicity and gender can affect how we view a handshake.

Leadership

Organisations should focus on helping leaders to develop better ethical standards.

Analytics

HR needs to develop core competency in human capital analytics as the profession becomes more data-centric.

Christopher Hadley is a journalist, essayist and short-story writer

Performance management Stretch goals improve results for a few but can be a risky option compared to moderate targets.

Business ethics

CEOs starting out when the economy is good are more incentivised to commit fraud.

Innovation

Developed economies top the annual Global Innovation Index but new players are emerging, especially in Africa.

PERSPECTIVES MANAGEMENT THINKING DISTILLED

Q&A HEIDI K GARDNER

‘Smart’ collaboration helps boost revenues

ORGANISATIONAL SILOS, time pressures and lack of trust can all be barriers to the collaboration needed to tackle complex business problems. But, says Heidi K Gardner, author of Smart Collaboration and a distinguished fellow and lecturer at Harvard Law School, working across functional boundaries is not a ‘nice to have’ – it’s a strategic business imperative. What do you mean by ‘smart’ collaboration? It’s a means to an end: knowledge workers integrate their expertise to deliver high-quality, customised outcomes on complex issues. But the risks, coordination effort and start-up costs of teamwork are real so, unless you know why you’re collaborating, it may not be smart at all. If a problem is clearly defined within your area of expertise, it’s more efficient to tackle it yourself. Does collaboration have an impact on the bottom line? Absolutely. My research shows that customers served by two 06

So what holds people back from collaborating effectively? Pushback often stems from lack of competence or interpersonal trust. The further someone’s technical expertise is from your own, the harder it is to judge their competence and trust that they won’t make mistakes. On the interpersonal front, even people who don’t believe their colleagues would deliberately sabotage them can worry about losing control, not getting enough credit, etc. What can business leaders do to support smart collaboration? Leaders should develop a data-based reason for change. If they don’t already have evidence of how collaboration has helped the bottom line, they should run pilot programmes to measure the effect of this way of working on revenue and customer loyalty. They also need to show individual experts how collaboration benefits them and their own work goals, not just the organisation. In addition, they should reinforce a culture of smart collaboration by making sure compensation for everyone involved is appropriate.

China’s teacher turned capitalist WITH A REPORTED FORTUNE of almost $30bn, Jack Ma is the best-known Chinese entrepreneur in the west. But it isn’t just his wealth – he’s ranked second in Fortune magazine’s 2017 list of the world’s 50 greatest leaders – that has given him this high profile. The founder and chairman of online shopping giant Alibaba is also famous for his pronouncements on everything from world affairs to business strategy. He told this year’s World Economic Forum at Davos that the US had benefitted massively from globalisation, but had squandered its wealth on wars. And he went on to question the decision to bail out Wall Street after the 2008 financial crash, rather than building up America’s infrastructure. Alibaba has been widely slated for hosting sellers of counterfeit goods, a practice Ma has described as a “cancer”. But despite this cloud over his business, the former teacher is proving to be what Fortune calls “a surprisingly warm, optimistic and effective diplomat on behalf of capitalism – one known to disarm visitors by greeting them wearing sandals and Buddhist prayer beads.” Small business owners attending a recent event in Detroit caught a glimpse of Ma’s humble side when he advised them to hire a job candidate “if you think he will be your boss in five years”. Ma is executive chairman of the Alibaba Group

Words: Anat Arkin Pics: Utrecht Robin/PA Images

business units generate three times more revenue than those served by just one, and the addition of each subsequent business unit continues to increase revenues – often exponentially. It also improves customer loyalty, with customers served by teams three times ‘stickier’ than those with a single point of contact.

Internet Archive Book Images

Executives fail to value HR’s top job A STINT AS CHIEF HR officer (CHRO) can be a good career move for any executive with an eye on the top job. That’s the counterintuitive conclusion of research by John Boudreau, Peter Navin and David Creelman, described in a recent Harvard Business Review article. They found that executives from non-HR backgrounds can be reluctant to take the CHRO role, seeing it as career limiting. Yet those who had taken it on reported it as the most impactful of their careers. Interviewees attributed the success of ‘outsiders’ to a focus on business as well as people outcomes, a readiness to push fellow leaders and not just support them, and a desire to embrace opportunity, not just reduce risk. But they recognised that with the right skills and attitudes, traditional HR leaders could be equally transformational. And they didn’t discount the importance of specialised HR knowledge. “They all described the essential value of that knowledge and capability,” says Boudreau. Traditional HR leaders moving into other C-suite roles remains rare, says Boudreau, with HR’s input to organisational success less widely grasped, even when its contributions “to an enhanced and engaged workforce are quite tangible”. Boudreau is research director at USC’s Center for Effective Organizations

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Are business ethics in decline? From rigging vehicle emissions tests to overstating profits, bribing officials to cheating customers, corporate wrongdoing is rarely out of the headlines. But does this mean that ethical standards have fallen – or are regulators, investors and the media just getting better at uncovering bad behaviour and holding businesses to account?

EXPERTS’ VIEW PATRICK O’SULLIVAN

PHILIPPA FOSTER BACK

Professor of business ethics, Grenoble Ecole de Management

Director, Institute of Business Ethics

Companies are not that different from the people who work in them. Most people are neither devils nor saints but sit somewhere between these two extremes. The same goes for companies, although we are more likely to hear about their ethical lapses than the good things they do. Businesses are, if anything, behaving more ethically than they did in the past, but it’s difficult to say whether that’s because they believe in doing the right thing or they’re under more pressure to do so.

In today’s environment, with a 24-hour news cycle shining a spotlight on every corporate slip-up, there is nowhere to hide. So companies that have in the past not really recognised the importance of acting ethically now do so, especially if they have a strong consumer focus. Of course, there are bound to be people in any large organisation who behave badly in some way, or perhaps do not realise what they are doing is wrong.

What is clear is that people are becoming much less tolerant of corporate wrongdoing. Take the German conglomerate Siemens, which was accused of openly engaging in corruption, bribing officials around the world for years to win contracts. Attitudes changed and Siemens’ CEO was eventually forced out. A new leadership then managed to clean up the company’s business practices. The most serious types of corruption, those involving governments and big companies, are difficult to eradicate. But it can be done if governments as well as businesses are prepared to take action. When the government of Georgia decided to tackle police corruption a few years ago, it brought in higher penalties for taking kickbacks, while also increasing police salaries. Anecdotal evidence suggests that this carrot-and-stick approach has made a big difference.

Businesses need to be very explicit about the values they espouse and the behaviour they expect from their employees, while senior leaders need to role-model good behaviour. They also need to support staff who have the courage to raise concerns. That means not just protecting whistleblowers from retaliation, but training managers and supervisors to deal with their revelations. This can be very intimidating, and many firms do not seem to have thought through how to help supervisors caught between whistleblowers and those they accuse of misconduct. Legislation is a blunt instrument when it comes to promoting ethical corporate conduct. We already have an awful lot of legislation, which is not always enforced. Those companies that have yet to appreciate the importance of behaving ethically need to be nudged into realising that doing the right thing makes good business sense.

PERSPECTIVES NC

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Social presencing theatre How does it work? People involved in a difficult situation are invited into a room, one at a time, and asked to express a role (not their own) in that situation by choosing a body shape and to explain in a sentence – for example: ‘I don’t feel I belong’ – what it signifies. As each new participant enters the room they must also choose their place in the resulting ‘human sculpture’. Once everyone is in position, they are invited to reflect on the exercise. Sooner or later, one of them will move, prompting a chain reaction of movements that, Hayashi says, is based on “body-knowing rather than head-knowing”. Afterwards, participants sum up their experience in a single sentence, an exercise that often sheds light on problems that people don’t articulate; for example, the inequality of influence within a leadership team that is supposed to be equal. Isn’t this another fad? Not at all. As a practice, SPT may be relatively new but the idea of psychodrama – in which people use spontaneous dramatisation, role-playing and dramatic self-presentation to gain insight – was pioneered by AustrianAmerican psychiatrist Jacob L Moreno in Vienna in the 1900s. In the 1970s, American philosopher Eugene Gendlin suggested that listening to the body – which he called ‘the felt sense’ – could help people resolve various issues. His research showed that patients with a strong ‘felt sense’ were more likely to flourish in therapy. Gendlin’s theories helped inspire Blink, Malcolm Gladwell’s bestselling celebration of gut instinct. The bottom line Although many staff find the exercises awkward initially, SPT suits a corporate zeitgeist embracing emotional intelligence, mindfulness and collaborative leadership. SPT is being used by some US multinationals and the Scottish government, which aims to develop a new collective leadership. In a nutshell, it’s about replacing ego-systems with eco-systems.

Towards a better gender balance Cultural neutrality is key to success DIGITAL TECHNOLOGIES are producing profound changes in the way we work, bringing together people from different cultures. To thrive in this environment, companies need culturally neutral, globally coherent leadership standards, says Amit Mukherjee. “These standards should promote needed outcomes without prescribing behaviours that are counter-cultural to many peoples,” he wrote in an MIT Sloan Management Review article, ‘The Need for Culture Neutrality’. Outdated assumptions that most people working together share a common cultural, linguistic or religious heritage can seriously hurt projects and the companies behind them, Mukherjee warns. He points to evidence that Asian executives can feel disconnected from their western employers and vice versa. Mukherjee says top executives should lead change initiatives and ensure these involve people with culturally diverse backgrounds. “The numbers will provide the critical mass necessary when debate occurs over a legacy standard’s disparate impact on different peoples,” he adds. Mukherjee is a professor of leadership and strategy at IMD’s Singapore campus

NUDGE THEORY IS often associated with government efforts to encourage us to save more or lead healthier lives. But gentle pushes can also help employers hire and promote more women, according to Paola Cecchi-Dimeglio. “Nudges focus on changing an organisation and its decision-making processes, not people,” she explains. “There are a few versions but basically it’s the application of findings from psychology and behavioural economics to prompt people and organisations to make decisions that are consistent with their long-term goals.” If those goals include achieving a better gender balance in a firm’s upper ranks, recruiters need to identify biases against women in hiring and promotion processes and then design nudges to remove them. Something as simple as sending emails to interviewers underlining the company’s commitment to diversity can start creating a level playing field, says Cecchi-Dimeglio, who has used this approach in her work with public and private sector organisations. Her studies suggest that nudges, coupled with clear and consistent hiring processes, can lead to double-digit increases in the proportion of women appointed to senior and leadership roles. Cecchi-Dimeglio chairs the Executive Leadership Research Initiative for Women and Minority Attorneys at Harvard Law School

Asa Mathat

What is it? Developed by Otto Scharmer and Arawana Hayashi, social presencing theatre (SPT) is the art of developing management skills through physical awareness.

PERSPECTIVES

The best leaders understand ‘why’ HOW COME SOME LEADERS are so much better at inspiring customers and employees than others? According to Simon Sinek, it’s because they don’t think and act the way most of us do. We usually start by thinking about what we want to do and then how to do it. Very few people or organisations know why they do what they do. The most influential leaders – people like Martin Luther King or Steve Jobs – on the other hand, realise that people will only really buy into a product, service or idea if they understand the ‘why’ behind it. “And by ‘why’ I don’t mean: ‘To make a profit.’ That’s a result,” says Sinek in his TED talk, ‘How great leaders inspire action’. “By ‘why’ I mean: ‘What’s your purpose?’” Sinek’s latest book, Find Your Why, a follow-up to his 2009 bestseller, Start With Why, aims to show readers how to discover that purpose. That can help entrepreneurs to hire people who share their purpose, and employees to improve their performance. As for teams, or ‘tribes’ as Sinek and co-authors David Mead and Peter Docker call them, if it is not clear how they fit in with the overall corporate purpose, they can rediscover their ‘why’ by looking at the very best elements of the company’s culture. Sinek is a British/American author, motivational speaker and market analyst

JON INGHAM IT'S NOT JUST ABOUT THE QUALITY OF INDIVIDUALS, BUT THE RELATIONSHIPS BETWEEN THEM MUCH ATTENTION IS allow people to cooperate with currently being placed on digital others based on their experiences, technologies and how they enable interests and needs. Whereas work to be performed in different functions and projects prioritise the ways. This includes the increasing achievement of tasks, communities use of contingent workers, with and networks emphasise the a growing proportion bidding for fulfilment of individual potential task-focused opportunities through through connections with others. gig-working platforms. It is increasingly suggested that The traditional core workforce the future involves a shift from now needs to change if it is to offer hierarchical functions to networks. something a contingent workforce Organisations are certainly can’t: the ability to work together on delayering, but there is little larger, more complex projects that evidence of them truly abolishing depend on effective hierarchies and “People will need relationships, rather introducing selfto work together in than splitting work management. communities and into separate tasks. Instead, we will networks” To enable this shift, need to manage all we need to think less four types of group: about the quality of individuals functions, projects, communities and more about the relationships and networks. This will raise new between them and the quality of challenges for people leaders and the groups within which they work. HR. First, we will need to manage This is made more complicated by not just individuals, but the the fact that people work together relationships between them. in different ways. Most commonly Then we’ll have to navigate the they work in simple groups, usually complexities of the different groups. business functions, in which they How do we manage performance coordinate their activities but don’t and reward people appropriately if have to collaborate in the kind of they make different contributions teams needed for cross-functional – and have different levels of projects, and for focusing on engagement and performance – longer-term, end-to-end processes. within the four types of group? Increasingly, people will also These challenges will demand need to work together in just as much attention as those communities and networks. These created by digital technology.

Ingham is an HR consultant and author of The Social Organization

PERSPECTIVES

BEST OF Fresh thinking from the worldfamous incubator of ideas

GARRY KASPAROV Grandmaster Don’t rage against smart machines In 1997 world chess champion Kasparov lost a match against the IBM supercomputer, Deep Blue. As someone who fought machines and lost, he now welcomes the move of intelligent machines into virtually every sector. We must not fear technology, says Kasparov, but enlist its ability to remove difficulties from our lives and so turn our dreams into reality. If we fail, it’s not because our machines are too intelligent, or not intelligent enough. It’s because we grew complacent and limited our ambitions. “Only humans can dream,” Kasparov adds. “So let us dream big.” MELLODY HOBSON President, Ariel Investments Be colour brave, not colour blind Race is a touchy subject. Bring it up at a dinner party or in the workplace, and conversation comes to a halt. But racial discrimination still robs children of opportunities and holds businesses back. Recounting how she and African-American politician Harold Ford were once mistaken for catering staff at a lunch to promote his US Senate bid, Hobson calls ‘colour blindness’ dangerous because it ignores the problem. “We have to be colour brave,” she says, urging everyone, especially those involved in hiring or admissions, to talk honestly about race as businesses, products and research all benefit from greater diversity.

We all live some form of Option B SHORTLY AFTER THE sudden death of her husband, SurveyMonkey CEO Dave Goldberg, Sheryl Sandberg cried over the fact that he would not be there to take part in a pre-arranged activity with one of their children. A friend told her that Option A was not available, but promised to help her make the best of Option B. “We all live some form of Option B,” Sandberg says in Option B: Facing Adversity, Building Resilience and Finding Joy, her book that sets out to help us make the most of lives that are never going to be perfect. Written with Wharton professor and bestselling author Adam Grant, it traces her journey from debilitating grief to something like recovery, combining research data with stories of individuals who have overcome blows including serious illness, sexual assault and job loss, as well as bereavement. Sandberg and Grant show how ‘post-traumatic growth’ is possible even after the most devastating events, with resilience coming both from deep within us and from the support of others. The authors point to studies showing that

people recover more quickly from trauma if they realise that it is not necessarily their fault, will not affect every aspect of their lives and will not follow them around forever. Meaningful work, according to the authors, can also aid recovery for those with the opportunity to pursue it. While Sandberg’s earlier book, Lean In, came out of a TED talk about why the world is run by men, the origins of Option B lie in a Facebook post describing how isolated she felt when colleagues and friends avoided the subject of Goldberg’s death. Sandberg, who used to encourage people to bring their ‘whole selves’ to work, also held back from talking about her grief, until she eventually realised that she had to acknowledge the presence of this elephant in the room. “Until we acknowledge it, the elephant is always there,” she writes. “By ignoring it, those who are grieving isolate themselves, and those who could offer comfort create distance instead.” Sandberg is an author, activist and chief operating officer at Facebook

Antoine Antoniol/Getty Images, TED

MARTIN REEVES Senior partner, Boston Consulting Group Lessons from nature From the human immune system to tropical rainforests, living organisms use redundancy as a buffer against the unexpected, and a diversity of approaches to cope with whatever evolution throws at them. The modular design of living systems ensures that, if one part fails, another can take over, while adaptability and prudence enable them to detect and react to threats. These are also features of long-lived companies, but are rare in a business world fixated on short-term performance. To build resilient companies, says Reeves, we need to think differently about business and apply lessons from enduring biological systems.

PERSPECTIVES

INDY JOHAR WE SHOULDN’T FEAR THE ROBOT REVOLUTION – IT HAS GIVEN US THE OPPORTUNITY TO REDISCOVER WHAT IT MEANS TO BE HUMAN WE MAY NOT KNOW IT YET, but we face a tipping point in our development as a society, and the role of human capital in our economy. In short, we must choose between a civilization that takes a few to the stars, and one that takes the many. The current economy is coming to an end – replaced by multiple technological revolutions, from the ‘fourth industrial revolution’ to the singularity, which, according to the likes of Silicon Valley futurist Ray Kurzweil, will see artificial intelligence outperform human intelligence by as early as 2029. Process-driven, codifiable labour will be automated and codified soon. This leaves us with a deep choice. It could be argued that the current paranoia that has led to both the Brexit vote and Trump’s triumph stems from our concern for the growing redundancy of human labour. But do these trends mean the majority of citizens will become an economic burden in a jobless future? Or can we view the emancipation of humans from work as a chance to rediscover what it means to be human? In the capitalist dream of radical automation, jobs are finite and declining in quantity and quality. Humans are regarded as an expense, a liability on future wealth. In this scenario, many of us become a

societal cost to be managed, perhaps facilitated by a universal basic income. But an alternative reality is possible, in which humans are not an overhead on the balance sheet. This is a future that requires us to embrace the relatively infinite possibility of humans, as opposed to our limited capacity to manage process. Contrary to Kurzweil’s opinion, according to some estimates we are 40 years from the point where AI could truly become comparable to humans. And that “Are we genuinely unlocking the full capacity of all humans? Or are we obsessed with unlocking the economic dreams of the few?” means we are currently blessed with almost nine billion humans who are significantly more impressive than any machine yet created. Are we genuinely unlocking the full capacity of all humans? Or are we obsessed with unlocking the economic dreams of the few – and thereby subordinating the many to be, at best, ‘bad robots’? The solution to this challenge cannot be a mere patching over – a redistribution from the few to the many, which sustains unequal relationships of dependency and patronage. Instead, the answer is a human revolution focused on unlocking the

capacity of all our humanity. This is a revolution accelerated by radical automation and AI but focused on regearing our societies – releasing the full creative, collaborative craft and caring capacities of our citizens. There are many tasks we will need to undertake as part of this shift. We will need to radically transform educational and human development institutions. We must democratise creativity, voice and expression to support the shared discovery of what it means to be human. We should establish, in the UK, a sovereign wealth fund focused on open-source automation of our towns and cities and the democratisation of the benefits of automation. And we must redefine our macroeconomic rules, such as public balance sheets and deficit analysis, to take account of our unlocking of citizens’ potential. Big government is a problem in this scenario, but a big state is not. We can invent distributed and decentralised models of agency rather than aggregations of central power in parliament. We cannot policy edit our way to this future, because it does not require mere tweaks, but systemic societal reforms. But the good news is that humanity is not redundant. In fact, we are free – to discover, to mine the future and to care, create and dream.

Johar is co-founder of strategic design studio Dark Matter Laboratories

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With a subject as complex as intelligence, no wonder it’s still taxing even the most brilliant of minds. Matthew Gwyther investigates 13

ow do you get your head around intelligence? What, indeed, is it? Faster-firing neurons or empathetic observation? Why is it valued so highly both in business and society? Where does it come from? Can innate levels be enhanced? And, by the way, what is the story re nature and nurture? What are humans supposed to do in an age of anxiety as they face intelligence of the artificial variety? Questions abound, but where are the smart answers? In trying to define intelligence, it seems not unintelligent to defer to Albert Einstein and Socrates. Einstein, whose brain was so lauded that parts of it are now held at two American museums, once said: “The true sign of intelligence is not knowledge but imagination.” Socrates insisted that he knew he was intelligent “because I know that I know nothing”. What is immediately noticeable is that neither assessment emphasises raw smarts, a planet-sized IQ or the ability to solve a ‘super fiendish’ Sudoku in seconds. One says it’s not what you know that counts but how you connect elements of your knowledge to create something new. The other, while purporting to be an ignoramus, is really extolling the virtues of keeping an open mind. Neither of them stake a swollenheaded claim to be ‘the smartest guy in the room’. The ancient Greek philosopher and Nobel Prizewinning scientist anticipated the current debate about intelligence in which old shibboleths – and new theories – are being challenged. The old hierarchical top-of-the-class approach is no longer in vogue. The emphasis now is on an acceptance of all talents and prizes for everyone. The first serious challenge to the idea that a single, measurable intelligence, IQ, gave a true picture of human capabilities and performance emerged in 1904, when British psychologist Charles Spearman argued that it was more accurate to talk of general cognitive intelligence, which he called the ‘g factor’. In 1983, developmental psychologist Howard Gardner proposed a theory of multiple intelligences, arguing that intelligence consisted of eight distinct components: logical, spatial, linguistic, interpersonal, naturalist, kinaesthetic, musical and intrapersonal. (Interpersonal and intrapersonal would become more familiar in the 1990s, when Daniel Goleman popularised these concepts as emotional intelligence.) Psychologist Robert Sternberg entered the fray in 1985 with his triarchic theory of intelligence. In his view, the three factors that defined intelligence were analytical (the ability to solve problems), creative (the ability to deal with new situations) and practical (the ability to adapt to a new environment). In the past decade, neuroscientists have explored the mysterious relationship between biology and psychology, a quest that may ultimately revise most of what we think 14

we know about intelligence. Ironically, they may discover that Aristotle had a point when he argued that the mind was actually one of the body’s functions. The Greek philosopher may have been prescient, but he was not infallible. For a start, he considered the heart as the seat of our cognitive understanding. (Greek physician Galen corrected this error in the second century AD, arguing that the rational soul resided in the brain.) Also, in his treatise The History of Animals, Aristotle dismissed the octopus as “a stupid creature”, whereas we now know that they are one of the most intelligent species on Earth. With 500 million neurons, an octopus is roughly as smart as a three-year-old. The difference is that those neurons are, in an arrangement that dovetails neatly with Aristotle’s views, distributed throughout its entire body. Calling them “eight-legged Einsteins of the deep” may be a bit of a stretch, but experiments have shown that octopuses have enough cognitive power to decide to do one thing in the case of x + y and something else – or nothing at all – in the case of x + z. Whether you agree with Einstein, Socrates, Spearman, Gardner, Sternberg or Aristotle, the consistent, underlying message is that by relying on IQ and psychometric tests, focusing on certain logical and linguistic competencies, organisations may be overlooking other important talents and character components. One thing is for sure: intelligence is a sensitive issue. It does, after all, involve humans evaluating each other. Being stupid can be ignominious, but the perception that he is ‘not the sharpest tool in the shed’ has not prevented Joey Essex from achieving fame and fortune. Being too intelligent isn’t always a smart move either. In his book Outliers, Malcolm Gladwell wrote: “The relationship between success and IQ only works up to a point. Once someone has reached an IQ of around 120, having additional IQ points doesn’t seem to translate into any measurable real-world advantage.” British politician Enoch Powell never achieved the high office he, and others, predicted, even though, in his scholarship exam for Cambridge University, he finished the task – translating a passage of Bede into classical Greek – so quickly that he went on to translate it into three other ancient languages and annotate each text. Powell was regarded by many politicians as intellectually arrogant – ‘too clever by half’, as the saying goes – a trait that also doomed Socrates. Often depicted as a martyr to his beliefs, he was found guilty of ‘impiety’ and ‘corrupting the young’ and condemned to take his own life by drinking hemlock. Yet he needn’t have died. Under the Athenian legal system, he was invited to choose his own penalty. He alienated the jury of 501 citizens by joking that he should be rewarded with free meals for the rest of his life, and then arguing that a fine was not big enough. In this respect – if not in any other – you could argue that Joey Essex is smarter than Socrates.

intelligence

CIPD chief executive Peter Cheese says that, by abilities – were strongly contested and/or discredited itself, IQ is no longer of much use as an assessment but it didn’t stop the book selling 400,000 copies within of human intelligence. “Many individuals with a months of its publication. high IQ lack wisdom, which you could describe as Google operative James Damore was fired this application plus judgement. We’ve come some way summer for stepping out of line when it came to the from the 90s IQ-based ‘war for talent’ story, which suitability of women as programmers. Although the was propagated by McKinsey. Look where that ended word ‘intelligence’ was not used specifically – it would up: Enron, which, of course, was its case study for have been even more incendiary – Damore wrote that the benefits of smartness.” One of the lessons of “women are more interested in people and emotions... that scandal – that confidence is no guarantee and tend towards ‘neuroticism’”. This memo suggests of competence – was reinforced by the collapse of the that women are more anxious than men and worse at sub-prime mortgage market that triggered the global handling high-stress jobs, but it also implies that, while recession in 2008. Dr Spock-like ‘male’ logic is great for programming “Companies are now rightly more interested in computers, women are far better at most of the multiple values and attitudes and recognise the need to look at intelligences identified by Gardner. (The issue has people holistically – not just consider their intellectual become more complicated as Damore’s lawyer is firepower,” says Cheese. There are practical reasons for threatening to sue Google on behalf of employees who this; a successful football team, for instance, does not feel they have been discriminated against for contain 11 high-scoring strikers, and even the most challenging the company’s ‘liberal orthodoxy’.) high-tech business probably doesn’t need a disruptive Dr Tomas Chamorro-Premuzic, CEO of Hogan genius to run the facilities department. Assessments and professor of business psychology at Yet thinking more holistically brings its own UCL and Columbia University, is one of the sceptics who challenges. “It makes HR harder because the pressure questions the jettisoning of old-fashioned IQ. “There is a in recruitment is always to look lot of PR and populist rhetoric at making the process more around the subject,” he says. efficient,” says Cheese. That can When it comes to recruiting “Google, McKinsey and Apple mean it is easier to settle on a talent in a competitive market, simple common denominator, Chamorro-Premuzic says the may say they don’t IQ test such as IQ or even the right candidates… but nobody goes out fundamentals haven’t changed. university, than trying to explain “Google, McKinsey, Apple and to hire people with low IQ” the kinds of intelligence you are Amazon may say they don’t IQ looking for. test candidates, but the truth is a Collaboration – a blend of high IQ comes as a given with cultural and emotional intelligence – is, for Cheese, one their candidates. The people they hire are pre-selected of the most important aspects of intelligence. “It’s the on academic qualifications from the top universities. ability to work with people who are different from us Nobody goes out to hire people with low IQ – it’s and it sometimes means overcoming a very basic, that simple.” unconscious bias that is deeply wired into our brains. That’s certainly true in the boardroom. Research Those sorts of primal instincts to seek out and cooper- published in 2013 by Jonathan Wai, scientist at the US’s ate with individuals who look and feel like us go right Duke University Talent Identification Program, found back to the origin of our species in the African savan- that roughly 40 per cent of Fortune 500 CEOs, nah.” Seeking out diversity is, he believes, the mark of billionaires, federal judges and senators are in the top an intelligent, and more productive, organisation. 1 per cent of cognitive ability – in other words, they The study of intelligence is often fiercely controver- attended an undergraduate or graduate school with sial. Those who argue for nature in the nature v nurture extremely high average test scores. debate see IQ as innate and therefore largely unimprovChamorro-Premuzic also warns that attempts to able. This argument is still raging. create more ‘fairness’ could backfire. “The measurement There have been ugly showdowns in the considera- of intelligence was started in an active attempt to make tion of intelligence and race, and more recently the world more meritocratic,” he says. “It was supposed intelligence and gender. The notorious US book The to help smart people who were not rich and stop people Bell Curve by Richard Herrnstein and Charles Murray, selecting on social class. As IQ has become unpopular, published in 1994, still causes violent disagreement companies have tried to find substitutes such as today. Many of the claims – ranging from the relation- ‘learning ability’. But learning ability is a reflection of ships between low measured intelligence and IQ, so you are back where you began.” anti-social behaviour, to the observed relationship In part, the backlash against IQ reflects society’s between low African-American test scores (compared changing priorities. Intelligence is, in part, a social to whites and Asians) and genetic factors in intelligence construct. As Gardner put it when discussing his theory 15

of multiple intelligences: “As history unfolds, as cultures evolve, the intelligences they value change. Until 100 years ago, if you wanted to have higher education, linguistic intelligence was important. I teach at Harvard, where 150 years ago the entrance exams were in Latin, Greek and Hebrew. If, for example, you were dyslexic, that would be very difficult because it would be hard for you to learn those languages, which are basically written languages.” Today, mathematical and emotional intelligences are more important, Gardner says: “Your IQ, which is a sort of language logic, will get you behind the desk, but if you don’t know how to deal with people, if you don’t know how to read yourself, you’re going to stay at that desk forever or make room for somebody who does have social or emotional intelligence.” Alan Winfield, professor of robot ethics at Bristol University (the only academic in the world with that title), says the challenge for us today is that, if we can’t even agree about what human intelligence is, how are we going to deal with artificial intelligence? This becomes particularly acute as we contemplate a future where our near monopoly of useful intelligence is challenged by automation. Pessimists insist there’s no point discussing the workforce of the future because there won’t be one, while optimists enjoy listing all the exciting new jobs that will be created – although surely we can’t all find work as space guides and genetic 16

counsellors? What is clear is that in a workplace where smarter versions of HAL, the scene-stealing computer in 2001: A Space Odyssey, are commonplace, all kinds of occupations will be at risk. Financial Times columnist Sarah O’Connor recently quoted an accountant who suffered an “existential wobble” after a roundtable discussion about automation, concluding: “It’s easier to automate me than a carer or cleaner; in what sense am I more skilled?” So far, for most individuals, the idea of machines taking over the tasks of, let alone impersonating, humans seems more of a threat than an opportunity. Even Elon Musk (see page 24), a man driven by the belief that technology can deliver better ways of doing things, is sceptical. In a speech at the Massachusetts Institute of Technology, Musk described AI as “summoning the demon”, characterising the creation of a rival to human intelligence as probably the biggest threat facing the world today. As the inspiration for Marvel’s Iron Man, Musk may be eagerly anticipating the autumn release of Blade Runner 2049. In Ridley Scott’s original masterpiece Blade Runner, AI goes horribly, memorably, wrong. The Tyrell Corporation’s Nexus series of replicants are stronger, more agile and at least as intelligent as the genetic engineers who

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SamanthaJ/Getty Images

The Only Way Is Essex star Joey Essex (right) may have been dubbed dumb, but the multimillionaire has been smart enough to flourish as a reality TV celebrity, author and fashion designer

created them. “More human than human is our motto,” against the old, IQ-driven, definition of intelligence. If you were using either Gardner’s multiple intellisays sinister boss Eldon Tyrell. Like God’s angels gences or Sternberg’s triarchic intelligences to assess in Paradise Lost – but led by Rutger Hauer in tight two applicants – one robotic, the other human – you shorts – they rebel against their creator and the slavery would hire the person every time. This may change, as he has condemned them to. scientists are studying how to program robots to As a PhD student, Winfield was captivated by understand our emotions – by listening to how we say Blade Runner. Now, as an expert in robot ethics, he things. We like to think that empathy is inherently points out that the dystopian view of the robot and AI human, our unique selling point as we compete with goes all the way back to stories such as Mary Shelley’s automatons, but the US military is already funding Frankenstein, probably the first science fiction novel, research that aims to turn emotional intelligence into which was published in 1816. logical procedures and algorithms that can be pro“That whole existential threat from a superior AI grammed into a chatbot. intellect is not impossible but it’s highly unlikely,” he In a recent Harvard Business Review article, Ed says. He is just as sanguine about the implication for Hess of the Darden Business School took a much less human jobs: “I don’t think AI will replace jobs, but tasks optimistic view than Winfield. “Many experts believe within jobs. Just look at a search engine and consider that human beings will still be needed to do the jobs what that has replaced. When I was far younger and that require higher-order critical, creative and innovaresearching a subject, I had to go to a library and give a tive thinking and the jobs that require high emotional little piece of paper with a book request to a librarian, engagement to meet the needs of other human beings,” who would then walk to the shelves to find it.” noted Hess. “The challenge for many of us is that we Winfield also warns against alarmist notions that AI do not excel at those skills because of our natural is already taking over. “It’s not a revolution round the cognitive and emotional proclivities: we are confirmacorner but a far slower process,” he says. “People in jobs tion-seeking thinkers and egodon’t seem to have less work to do affirmation-seeking defensive – quite the reverse. And there has reasoners. We will need to overbeen no measured increase in “Chatbots may know the basic come those proclivities to take productivity, which is what you would expect.” rules of English, but they cannot our thinking, listening, relating and collaborating skills to a The aspect of AI that is seen do intuition and empathy. much higher level.” as particularly cutting edge at They don’t have hunches” Ouch – Hess appears to be the moment is ‘deep learning’, a arguing that we need to become modern refinement of ‘machine less human to compete more learning’, in which computers successfully. To beat the robots all we have to do is cut teach themselves how to perform tasks by crunching back on all that ego-affirmation-seeking stuff, mind large sets of data. Google paid £400m, outbidding our ‘emotional proclivities’ and have the intellectual Facebook, to acquire UK business DeepMind in 2014 courage to challenge rather than just confirm. (see page 45). DeepMind’s algorithms could close (Assuming, of course, that we don’t work for a boss the gap that dogs all AI research: by and large, tasks whose admiration of outliers begins and ends with that are hard for humans are easy for computers, and Malcolm Gladwell’s book.) vice versa. As Cheese says: “It is up to us, as human beings, Winfield says AI still has far to go when it comes to to define our future.” What is harder to envisage, aping true human intelligence: “Creativity, innovation, in this volatile, uncertain, complex and ambiguintuition – AI finds all these very hard. Also social ous world, is what kind of intelligence our interaction. Chatbots may know the basic rules of society will value in 10 or 20 years’ time. English, but they cannot do intuition and empathy. Will we have to become more like robots? They don’t have hunches. They cannot think.” He cites Do they need to become more like us? Or a the example of medicine and nursing. “An AI cannot bit of both? One thing’s for sure, whether take a proper history like a doctor. It doesn’t watch you look to psychologists, neuroscienpatient reactions to questions. It can’t see small clues tists or algorithms to answer those not in the notes. It can’t seek out dirty little secrets.” questions, you’ll still be none Nor, he could add, can it perfect the right bedside the wiser. manner or safely guide a frail old person into a shower. Ironically, this much-vaunted new technology performs best when benchmarked

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20 SMART PEOPLE

Naomi Klein just “wanted to do normal things” as a child, but became politicised by the massacre of 14 women in Montreal in 1989

Aaron Stern

They’re not all well-known but our list of the world’s top smart thinkers have one thing in common – they not only dream of change, they make it happen

1. Naomi Klein

2. Aliko Dangote

First on the left by Robert Jeffery

National Emergency Management Agency (NEMA)

he most popular liberal in America isn’t Bernie Sanders or Michael Moore. She isn’t even an American. Naomi Klein, Canadian author and activist, is the last gasp of the Occupy movement and bête noire of the corporate-military complex. She has achieved what no other member of the ‘new left’ has: sold out theatres and topped bestseller lists without compromising her brutal central message, which is, essentially, that neoliberalism is a malign force that will wreak social havoc and environmental destruction if unopposed. That Klein is as likely to appear on the pages of Vanity Fair as Socialist Review is thanks to her media savvy and journalistic credibility. Determined to defy her roots – “My parents were hippies, so I felt an acute sense of embarrassment… I just wanted to do normal things” – she became politicised by the 1989 massacre of 14 women in Montreal and was soon a campaigning writer, speaker and viral polemicist. She gained international fame in 1999 with her book No Logo, which distilled the rejection of brand capitalism into a disarmingly simple set of ideologies and actions that energised a generation left disaffected by the financial crisis. Klein’s issue is not with capitalism itself, but its encroachment into broader spheres, such as personal identity, warfare and foreign aid, which means it has subsumed government and civil society as our prevailing moral authority. In This Changes Everything (2014), she declared: “Our economic system and our planetary system are now at war.” Most recently, in No Is Not Enough (2017), she positioned Donald Trump’s election as the natural denouement of “shock politics”. Klein has a remarkably broad fan base, but is not without her critics. In the London Review of Books, law professor Stephen Holmes decried her arguments as unfocused and “curiously hard to follow”, while New York magazine journalist Jonathan Chait memorably portrayed her “brandishing a cookie cutter of corporate conspiracy like a drunk baker”. Yet this ignores how prescient many of her predictions have been. Her evisceration of Milton Friedman’s free market philosophy is now approaching orthodox economic thought. Her war reporting from Iraq was once seen as idealistic, but the country’s failure to return to stability casts it in a new light. Her fears that climate change denial was becoming its own industry have been realised by the election of a president who prioritises fiscal health over the environment. We may yet regard her as less a curiosity, more a visionary.

Africa’s chairman of the board by Paul Simpson

liko Dangote is a lucky man. The 60-year-old Nigerian billionaire and Africa’s richest man has survived not just one but three plane crashes. A football fan who is keen to buy Arsenal, Dangote is CEO of the Dangote Group, a conglomerate with operations in 16 African countries that he hopes to use to rebalance his country’s economy. Many governments have failed in that quest, but Dangote is uniquely placed to deliver. Next year, the firm will open Nigeria’s first privately owned petrochemical plant. This $16bn investment is pivotal for both the firm, which aims to quadruple its market capitalisation to $1bn by 2020, and for the Nigerian economy. As its CEO told McKinsey Quarterly: “Thirty-eight per cent of the country’s imports are petroleum products.” Given that Nigeria is the world’s sixth-largest producer of oil, this is an expensive absurdity. “When a country exports raw materials, it doesn’t actually make much money,” explains Dangote. “Rather than exporting raw materials, we’ll be exporting goods.” That belief is also driving investments in electricity, sugar and rice – in which, if his plans are achieved, the country will be self-sufficient by 2021. Born into a wealthy trading family, Dangote has been an entrepreneur since he was a child, selling sweets to boost his pocket money. His group has become a Nigerian economic powerhouse and he has donated $100m to flood relief, healthcare and the fight against poverty. But there have been troubles diversifying geographically: Dangote quit Algeria because of a lack of government support, and was fined by the Tanzanian government over working conditions. Rebalancing Nigeria’s economy will not happen quickly. “If you’re investing for the short term, you shouldn’t invest in Africa at all,” Dangote told New African magazine. Yet he remains optimistic. “All these challenges we face as a continent will go away. But you can only benefit if you’re already here.” 21

4. Margrethe Vestager

A dissonant dissident

Speaking truth unto power

by Robert Jeffery

by Emma De Vita

t a time when contemporary classical music is questioning its own relevance, it has in John Adams a crystal clear answer. While he has a strong claim to be the world’s greatest living composer, he is arguably most important for his ability to enmesh current affairs into his work, and his disdain for the rigid constraints of his genre. By refusing to shy away from controversy, particularly in his 1991 opera, The Death of Klinghoffer, he asks deep questions about the purpose of art in post-deferential society. Born to a clarinet player father and jazz singer mother, Adams was a prodigious composer from a young age, but equally soon came to hate the intellectualisation and classical tradition of the genre. Asked at Harvard to find inspiration in literature, he turned instead to Jimi Hendrix and the “harmonic surprise” of Beach Boys co-founder Brian Wilson. After graduation, he staged his first works in nightclubs and warehouses in his adopted San Francisco and gained fame (and a recording contract) with the symphony Harmonium in 1981. While hating the term ‘experimental’, Adams has come to stand alongside American composer John Cage as an exponent of dissonant sound and unconventional form in composition, while remaining recognisably populist and pioneering in his use of synthesisers. His later work has played with politics and the partisan media reports of geopolitical events; Nixon in China is “an opera that is rooted”, he says, “in our peculiarly skewed political image of ourselves”. With Klinghoffer, an account of the 1985 terrorist hijacking of the Achille Lauro cruise ship, he was criticised for antiSemitism despite the even-handedness most critics saw in the work (the Supreme Court’s Ruth Bader Ginsburg notably leaped to Adams’ defence after former New York mayor Rudy Giuliani led a protest against the Metropolitan Opera’s 2014 production). If the criticism stung him, it has not slowed him: at 70, his latest work premieres this November. 22

he EU’s commissioner for competition, Margrethe Vestager, is one of the most powerful women in Europe. Now she’s also one of the best known, thanks to the €2.42bn fine she handed to Google in June for manipulating its search results to bolster its bottom line. The consensus in Brussels is that Denmark’s former deputy prime minister is destined for bigger things, perhaps at the UN or the IMF. A stand-out performer, she is garnering a formidable reputation as a tough law enforcer with a sly sense of humour, who is unafraid to wage a high-profile war against corporate power. Dubbed “the person Silicon Valley fears the most” by Wired magazine, Vestager considers technology to be an enabler for an open, transparent society. “But it’s also an enabler for supervision to a completely unforeseen degree. And for commercialising personal space to an unforeseen degree.” As her biographer, Elisabet Svane, explains: “Going against these big companies and telling them they have to obey the same rules as the little ones – it makes sense in her head. It is very Danish.” The leader of the country’s Social Liberal Party from 2007 to 2014, Vestager takes a moral approach to being at the helm of a watchdog with a 900-strong team. “She is a true liberal, of the kind that believes the point of power is to break it down,” says Miriam González, partner at law firm Dechert. “Being competition commissioner always requires courage, but she has taken that role to a new level.” Vestager agrees that she is unafraid of conflict. Her office sports a ceramic hand with a raised middle finger, given to her by a Danish trade union in the wake of the austerity measures she introduced in her time as minister of economic affairs and the interior. She has said it serves as a reminder that decisions will never make everyone happy. In the process, she is giving the EU the backbone many thought was missing.

Jasper Juinen/Bloomberg, Allen J. Schaben/LA Times/Getty Images

3. John Adams

5. Jeff Bezos

John Keatley/Redux/eyevine

The man who sold the world by Paul Simpson

f the future belongs to any one individual, it must be Jeff Bezos. As founder of Amazon, he runs the world’s most disruptive business, an e-commerce behemoth that captures nearly half of the dollars Americans spend online, enjoys revenues that are larger than the GDP of half the world’s countries and, with its latest mission statement – ‘We seek to be Earth’s most customercentric company’ – effectively declared, as technology analyst Ben Thompson put it, “that the company’s goal is to take a cut of every economic activity”. No wonder other businesses are concerned. CNBC research shows that the threat of Bezos’s creation is discussed on 15 per cent of the earnings calls made by companies on the Standard & Poor’s 500 Index. The power of Amazon is summed up by one consumer industry consultant: “Forget the company’s profits and losses. The real story is that Amazon is eating everyone’s lunch.” The firm is yet to make a multibillion-dollar mistake and, to some extent, its success is selfperpetuating: many investors see any business in a market Amazon enters as potential road kill. One of the first shareholders in Google, Bezos has also privately backed Airbnb, Basecamp, Twitter and Uber, acquired The Washington Post and created spaceflight business Blue Origin. And through Bezos Expeditions, he has invested in (among other things) AI, 3D printing, carbonless energy, clean food, finance for SMEs, fusion energy, hand-blown glass gifts, nonprofit fundraising, medical apps, money transfers, neuroscience, research to combat neurodegenerative diseases, robots and trucking. In June, Bezos tweeted an appeal for philanthropic ideas: “I am thinking about a philanthropy strategy that is the opposite of how I mostly spend my time – working on the long term. With philanthropy, I’m drawn to the other end of the spectrum: the right now.” With a private fortune of $80bn – and counting – Bezos is rich enough to do what he wants. Yet charity may have to wait a while. There are still too many

geographic markets for Amazon to conquer – India being particularly pressing – and other sectors to disrupt. If the connected consumer ever takes off, Amazon will do a lot of the connecting. Its personal digital assistant, Alexa, has already been welcomed into eight million American homes. The long-term plan is to develop this AI-powered invention that performs straightforward tasks – for example, select music for a family party – into a device that, among other things, can discuss such philosophical concepts as the meaning of life. (At present, if you ask Alexa to define the meaning of life, it will probably reply ‘42’.) Like Steve Jobs, Jeff Bezos is an adopted son. His surname comes from his mother’s second husband, Miguel Bezos, a Cuban immigrant who worked at Exxon. The Amazon founder’s story fits the mythmaking machine of American business. As a child, he was an inventive, data-obsessed workaholic. When he was three, he took his crib apart with a screwdriver so that his parents would give him a proper bed, and when he was 11 he developed a statistical survey to evaluate how good his teachers were. In his own way, Bezos is as much of a child of the 1960s as Jobs. Bezos was five when Apollo 11 landed on the moon and he seems never to have lost his childhood faith in the transformative power of technology. Nor has he lost his fascination for data; the idea of an online bookstore came to him in 1994 when he noticed that the internet was growing at 2,300 per cent a year. His favourite book, intriguingly, is Kazuo Ishiguro’s novel The Remains of the Day. Such geekish gifts have been allied to a vision that puts strategic goals above short-term profit. Like Jobs, he has prospered by focusing on customers, not the competition or, reportedly, the welfare of employees. (Amazon’s corporate giving has also been called ‘stingy’.) The motto for Blue Origin, gradatim ferociter (step-by-step ferociously), perfectly captures the manner in which Bezos is leading himself, Amazon and us into a new world. 23

LUKE SHARRETT/The New York Times/eyevine, Tesla Motors, SpaceX, Tesla

HEADQUARTERS

THE GANG

THE SPACESTATION

6. Elon Musk

YOU ONLY LIVE ONCE by Jane Simms

Elon Musk hopes to colonise Mars within 20Â years through his SpaceX venture. Closer to home, he plans to sell 500,000 electric cars next year, powered by batteries made in giant factories (top left) THE BOSS

7. Emmanuel Macron

“He has healthy, inspiring hair” by Paul Simpson

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he political system is running on empty.” That stark assessment inspired 39-year-old outsider Emmanuel Macron to win the French presidency. In his new job, the former investment banker wants to make labour regulations more flexible, improve vocational training, shrink the state, cut corporation tax, stimulate innovation and create a more meritocratic France. Recent ratings reflect some missteps, but also a syndrome in which new French leaders are benchmarked against Napoleon and (usually) found wanting. Macron has a particular view of the presidency, telling Der Spiegel: “Sarkozy and Hollande suffocated their cabinets. A president should not govern, he should transcend partisan lines, delegate to those responsible and appoint the right people.” Yet when you campaign as national saviour, voters care more about immediate change than constitutional theories. Tabloid stereotypes of France ignore its strengths: impressive infrastructure, great universities, high productivity (generating 25 per cent more revenue per hour than British workers), technological innovation and an ability to disrupt itself in extraordinary times. Entrepreneur, Macron likes to note, is a French term. The 25th French president is hard to pigeonhole. Pundits have cast him as the new Tony Blair, Ronald Reagan and JFK. As James Wolcott noted in Vanity Fair, Macron and his fellow generation X leader, Canada’s Justin Trudeau, are “the true inheritors of Kennedy charisma and healthy, inspiring hair”. French philosopher Paul Ricœur (1913-2005) worked closely with Macron for two years and helped to define his centrism. Macron uses one of his mentor’s trademark phrases, et en meme temps (and at the same time), when outlining two seemingly opposing ideas. If Macron is to succeed, he should also heed the advice of Niccolò Machiavelli (the subject of his dissertation): “The wise man does at once what the fool does finally.”

Thomas Samson/Getty Images

any young people think they can change the world. In 1995, with three degrees under his belt, 24-year-old South Africa-raised Elon Musk quit his science PhD at Stanford after just two days, and started doing it. Four years later he was a multimillionaire, after Compaq paid $341m for Zip2, a web software company that he and his brother had set up with $28,000 of their father’s money. He used some of the proceeds to co-found X.com (later PayPal), and netted $165m from the sale of that to eBay. By the time Musk founded SpaceX in 2002, his ambitions had expanded considerably. Taking a million people to Mars within 20 years may seem bonkers, but the firm already has a fleet of working rockets. This isn’t his only futuristic idea. Musk claims he has “verbal” approval to build an ultra high-speed underground transport system to cut the travel time between New York and Washington DC to half an hour. The ‘Hyperloop’ would be based on pods that pass through vacuum tubes using electromagnetic propulsion. Then there’s Tesla, which in May overtook General Motors as the US’s most valuable car-maker. In August Tesla delivered its first batch of Model 3 ‘affordable’ battery-powered cars, a landmark the Guardian’s John Naughton describes as the industry’s “iPhone moment”. Musk plans to sell 500,000 Model 3s next year and is building ‘gigafactories’ to make their lithium-ion batteries, using solar panels to generate their power. “The factory is the machine that builds the machine,” says Musk, who aims to build four or five in the next few years, including one in China, each capable of creating sufficient batteries to power more than a million allelectric vehicles a year. It could be “the fastest ramp-up in automotive history” or “a colossal failure”, says Wired journalist Alex Davies. A danger sign? Last year Musk boasted he’d moved his desk to the end of the Model 3 production line and kept a sleeping bag in a nearby conference room. This big picture/detail nexus is just one of the mass of contradictions that characterise the man. He has invested in artificial intelligence businesses, but recently described AI as “our biggest existential threat”. He inspires his teams with missionary zeal – one SpaceX employee revealed that after a Musk speech about never giving up, “most of us would have followed him into the gates of hell carrying suntan oil”. But, cautioned the Drucker Institute’s Rick Wartzman in a Fortune article, Musk’s micro-management and “explicit disregard” for his staff’s personal needs regularly results in employee burnout. Musk’s future may well hinge on whether he – in Davies’s words, “a brilliant visionary unafraid to pursue big, crazy dreams” – can learn to delegate and concentrate on the big ideas, rather than let his selfconfessed nano-management get the better of him.

8. Allen Zhang

Qilai Shen/Getty Images

Worried by his own success by Matt Burgess

s far as the Western world is concerned, Facebook Inc is king. It has more than two billion monthly users – around a quarter of the world’s population – and its subsidiaries, WhatsApp and Instagram, dominate many smartphones. Despite this success, there have been some markets it hasn’t been able to conquer: notably China, where it has been blocked by censorship regulators since 2009. In China, WeChat is in command of the messaging market. Like Facebook, its status as a market leader has been directed by its founder, Allen Zhang (known as Zhang Xiaolong in China), who launched the messaging app in 2011 and has driven its development ever since. WeChat is owned by Chinese internet giant Tencent, which in April this year saw its market value surge to $300bn, overtaking Wells Fargo to become the world’s tenth biggest public company. Part of that success comes down to the app and its daily users – more than 768 million of them. Known in China as Weixin, WeChat is as much a service-providing platform as a messaging system. Users can play games, order a taxi, pay water bills, book movie tickets, check in for flights, search local libraries for books and much more, thanks to the ‘mini programs’ launched in January of this year. Intended to replace third-party standalone apps, these small, data-light versions of iOS and Android apps download instantly and can be stored within WeChat. Despite his dominance within the company, Zhang rarely gives interviews or speaks in public. China’s TMTpost reported that Zhang made his first public appearance at the start of last year. In a translated version of his speech, Zhang talks about his fears over the intersection of technology and social lives, and says he spends his time worrying about whether people use WeChat too much, referring to the “WeChat anxiety” caused by wanting to regularly check the app.

According to The Wall Street Journal, the early days of the app’s development saw Zhang – described as charismatic and with a focus on product design – take an unconventional approach to work. He would often work from late in the afternoon until early morning, chain-smoking and holding late-night conversations with staff about customer needs. Zhang’s success in building WeChat has come from that focus on users. Providing people with access to multiple functions encourages them to keep coming back: at the end of 2016, half of its users were on the app for 90 minutes a day, with a typical user sending 74 messages. But it’s not all about increasing the amount of time spent on the app. Zhang’s philosophy is to focus on the time it takes customers to complete tasks; in his speech, he describes a good product as one where users “use it and leave”. For him, people being able to finish tasks efficiently is a measure of success. If Zuckerberg’s lobbying of the Chinese government is an attempt to break back into the country, Zhang too has his sights set on expanding WeChat’s international presence. In 2013, the firm hired worldfamous footballers Neymar and Lionel Messi to star in commercials, and it tried to make gains in India through the use of Bollywood stars. These attempts, however, proved futile. So far, WeChat has failed to make inroads in other parts of the world where the Zuckerberg juggernaut is dominant, in part because of its limited functionalities outside of China. Yet, in line with Zhang’s philosophy of keeping things simple, there may be another way for WeChat to make money from outside the country. In April, it opened its e-commerce and payment services to brands based in Europe, enabling them to sell directly to people in China and avoid some of the international bureaucracy involved in creating physical stores. For WeChat and Zhang, this could prove an incredibly lucrative move. 27

9. Wingham Rowan

All in an hour’s work

by Robert Jeffery

fter an esoteric career in television – including spells behind the camera and presenting a children’s show for ITV – Wingham Rowan has dedicated more than 15 years to pursuing his dream of a publicly controlled, government-regulated market for people to trade their time by the hour. What Rowan proposes is a better, fairer version of the gig economy that would lower unemployment by matching people who have time and skills with private and public sector employers who need them. He calls it “securing the vision of Karl Marx through the means of Adam Smith” and he has the proprietary technology (a database called Cedah) fully developed. Yet despite both private and public investment, the goal remains tantalisingly out of reach, and Rowan is increasingly working with public jobs boards in US states and cities in his quest to make it viable. In the meantime, he has emerged – via his Beyond Jobs think tank – as one of the most astute commentators on the dangers and opportunities of a fragmented jobs market. Why do you believe the labour market in western economies isn’t working efficiently? There is a real problem with ‘core irregulars’ – people who only work irregularly, if at all. Perhaps you have a medical condition or complex childcare needs. There are lots of reasons that someone might wake up and say: ‘Am I going to work today?’ Those people are traditionally just shoved to the margins of the labour market. It’s very difficult for them to get work and, if they can, in the age of Uber and Deliveroo, it’s low-quality, commoditised work. The more we got into this, the more it became clear that the problem was much bigger because you also have ‘forced irregulars’ – people typically on zero-hours contracts. And we also see more and more ‘voluntary irregulars’, particularly the young, who look at the jobs available to them and don’t want to stand at a hatch all day saying: ‘Do you want fries with that?’ They want a portfolio of employers, with diverse networks and skills. A job, to them, is a weird, 20th-century idea. What’s your solution? There is a vacuum where there should be a healthy, robust market for hourly labour, so firms like Uber come along and fill the gap. That’s how labour markets used to develop – in the 1930s, all 30

sorts of hucksters and charlatans were promising to get people jobs, so governments created job centres and labour exchanges. Government bodies [today] have been really slow to understand and react to the fragmentation in low-skilled employment. And for all sorts of reasons, the solution isn’t going to come from the private sector. You will only solve it with incredibly sophisticated technology. These transactions are among the most complex in any market. It’s got to be made very simple. If you need five people to do market research outside a station at lunchtime today, we need to make sure you can book them without any silly overheads, all vetted, all ready – and, crucially, all working on their own terms, with your booking helping them on the route to career development, stability or skills. At a time of record-low unemployment, is there an imperative to improve the labour market? Yes, because US employment data, for example, counts ‘employment instances’. There’s a widespread assumption that that means a job; in the new world I could be doing work for five different people in Chicago this week and that will show in the data as five different jobs. The other thing to bear in mind is the labour market participation rate. It has fallen dramatically, and people seem to be moving into the shadow economy. If I can’t find work, I’ll ask around. Can I drive you to the airport? Can I work behind your bar this evening? That’s really bad news for everyone. Do you still have faith that politicians will address this issue? There is a political reluctance to openly acknowledge the extent to which low-skilled employment has fragmented and is going to fragment further. There’s still a belief that people doing these jobs can have steady hours, with one employer that will progress them. That is a diminishing reality for a lot of people. But the issue has built up more of a head of steam. An astute politician from any party in Britain could adopt the argument that we have to give people a much better labour market for hourly work. My road map is the public water supply. There was no ideology attached to creating a public water supply – we just needed the infrastructure. Today, we need the infrastructure for a new labour market.

David Levene/eyevine

Wingham Rowan’s plans for a publicly controlled market for people to trade their time haven’t come to fruition yet, but he hasn’t given up hope

10. Rachel Botsman

by Emma De Vita

achel Botsman has evidently struck a chord with her work, given that each of her TED talks on sharing and collaboration has been viewed more than a million times. “I really believe that research should come to life,” says the London-born writer, speaker and expert on the shift in trust from institutions to peers. “It doesn’t matter what audience you are speaking to – you’ve got to be grounded in theory and know your stuff. But what’s important is: how do I bring this to life with a narrative that is meaningful?” A visiting academic at the University of Oxford’s Saïd Business School, Botsman is the co-author of a prescient book, 2010’s What’s Mine is Yours. Written with entrepreneur Roo Rogers, it defines the theory of ‘collaborative consumption’. This concept explains how digital technologies enabled the rise of the sharing economy in a way that represents a new era of trust – a theme Botsman explores in her forthcoming book, Who Can You Trust? While our trust in institutions may be low, she argues, our faith in sharing hasn’t disappeared. Instead, it has shifted to a distributed model: millions of people are prepared to rent their homes to strangers, use digital currencies or trust online bots. Seven years on, are you surprised by what people took away from What’s Mine is Yours? I wrote it in 2009 and at the time I thought it was too late. Ironically, I now think it was too early. It should have come out in 2012 when the sharing economy was really taking off. I think people’s initial reaction to the book was that it’s just a short-term trend – a reaction to the financial crisis. A lot of the theory was right but there is a lot that I would change. I didn’t mention the smartphone. That said, there’s something about seeing a change in its very raw state before it becomes sophisticated that enables you to see it for what it really is. 32

What was a surprise was that the book became a movement. It was just insane. I was being contacted by entrepreneurs from around the world saying they had built a hub or a venture fund – not just for commercial reasons but as a social idea. It took on a life of its own. Who Can You Trust? is published in October. What’s the key thing you want readers to think about? There are two very different messages. The first is that I don’t think trust is disappearing from the world – it’s changing form. A lot of the pain, fear and fatigue we’re feeling is because trust is shifting, and with that shift comes responsibilities and liabilities. The second thing is that while technology is unbelievable in how it can enable different forms of trust, we’ve got to hang on to the fact that trust is a very human process and that we should not outsource this to bots and algorithms. We have to take personal responsibility for in whom and where we place our trust. What are you currently working on? I’m not done with trust. The area that is really on my mind right now is kids and artificial intelligence, and how this will change their capacity to trust and their decision-making processes. Currently, we depend on technology to do something, whereas they will depend on it to decide for them. Understanding the implications of that is really fascinating but I think it’s inevitable. Automation and efficiency are the enemies of trust. Many things can be addressed through design, however. It’s about designing moments of friction that make people stop and think: ‘I just gave that trust away to a bot’ or ‘I just gave that to someone but I don’t know if their photo is real.’ A big problem in the world today is not how do you build more trust, it’s are we putting trust in the wrong places and the wrong people?

Matt Writtle

“We should not outsource trust”

11. Atif Mian

12. Yuval Noah Harari

Debt traps – and how to avoid them

Algorithm and blues

by Jane Simms

by Georgi Gyton

Laura Pedrick; De Fontenay/JDD/SIPA/REX/Shutterstock

t the age of 39, Atif Mian was named by the International Monetary Fund one of the 25 young economists expected to shape world thinking on the global economy. That was in 2014, the year his book, House of Debt, co-authored with Chicago University economics professor Amir Sufi, took the world of finance by storm by challenging received wisdom about the cause of the global recession. Mian’s central premise is that the post-crisis slump wasn’t caused by failing banks withholding credit, but by the rise in household debt that preceded the crisis. When house prices collapsed, consumers stopped spending and producers suffered, reducing demand for finance and creating falls in output and employment. Policy makers should have been writing down mortgage debt rather than encouraging bust banks to lend, says the MIT-educated Pakistani-American, who is now a Princeton professor. He argues that you stop it happening again by sharing the risk more equally between borrowers (typically the poorer parties in the equation) and lenders, and by creating a self-sustaining ‘eco system’ that doesn’t rely on external agents – monetary or fiscal policy – to bail it out. It’s a challenging argument, and he and Sufi have their detractors, including those who point out that the poorest homeowners are not necessarily the poorest people. But the book has received plaudits from luminaries including former US Treasury secretary Larry Summers, who said it “could be the most important book to come out of the 2008 financial crisis”. Mian’s star ascended so high in 2014 that Pakistani politician Imran Khan announced that if his party came to power, he wanted Mian as his finance minister – only to backtrack after furious clerics pointed out that Mian is an Ahmadi Muslim, a faith largely banned in Pakistan. Mian, a believer in the separation of religion and state, broke his silence on the issue with a tweet to Khan urging him to “stop trying to play God”.

n a recent holiday, Bill Gates encouraged his wife to pack a copy of Yuval Noah Harari’s 2011 bestseller, Sapiens. “I was dying to talk to her about it,” he wrote on his blog. “I knew it would spark great conversations around the dinner table.” When Gates recommends a book, it is safe to assume its author has something intelligent to share. In this case, it’s a retelling of the history of our species and how we came to rule the world. For Harari, 41, a history professor at the Hebrew University of Jerusalem, the success of Homo sapiens comes down to our belief in shared fictions – gods, nations, money and human rights – that enable collaboration on a huge scale. Capitalism, he says, is the most successful religion ever invented, and he is disparaging of the benefits of the agricultural revolution. It’s not surprising, then, that the book’s cult status has not come without some criticism. Gates points out that there is “plenty to disagree with”, while others have described it as “too sweeping”. Perhaps, said author Andrew Anthony in the Guardian, “but it is an intellectual joy to be swept along”. Harari developed many of the themes of Sapiens in its 2016 follow-up, Homo Deus, in which he looks to the future and the unsettling notion that Homo sapiens as we know them will not exist in a century or so. As authority shifts from humans to algorithms, he argues, intelligence is uncoupling from consciousness and in turn reshaping human nature. “Just as divine authority was legitimised by religious mythologies, and human authority by humanist ideologies, so high-tech gurus and Silicon Valley prophets are creating a new universal narrative that legitimises the authority of algorithms and big data,” he wrote in the Financial Times. “As long as you have greater insight and self-knowledge than the algorithms, your choices will still be superior and you will keep at least some authority in your hands.” 33

Andy Dines

Iain McGilchrist chooses to live on the Isle of Skye, far away from a tech-driven world that is increasingly â&#x20AC;&#x153;uncreative and destructiveâ&#x20AC;?

13. Iain McGilchrist

AS FAR FROM SILICON VALLEY AS ITâ&#x20AC;&#x2122;S POSSIBLE TO BE by Claire Warren

efore he took up medicine, psychiatrist, doctor and writer Iain McGilchrist was an Oxford literary scholar. After developing an interest in psychology, he retrained in medicine. His achievements since include (among other things) becoming a senior registrar at the National Psychosis Referral Unit and a research fellow in neuro-imaging at John Hopkins University in Baltimore, as well as running a community mental health team in an ethnically diverse and socially deprived part of London. An unusual career change, then, but McGilchrist is not your average academic. He may have left the arts world behind, but it can still be seen in his approach to his work on the brain. In his groundbreaking 2009 book, The Master and his Emissary, he argued that we experience the world in two ways. While the brain’s left hemisphere helps us manipulate the world, the right helps us understand it as a whole – to make sense of it in context. Both are needed for us to function but, he believes, the left side has come to dominate and that explains many aspects of modern western culture. John Cleese rates the book so highly he agreed to feature in The Divided Brain, a film about McGilchrist’s work that is currently in production. “I love this book above all others because it promises to help me understand paradoxes that have puzzled me all my life,” he tells Work. “For example, why do I experience myself, when I am sitting on a Mediterranean terrace enjoying the hills and trees, as a completely different person from the one who hurries around London, trying to get everything done? Or, why do most educated adults accept the concept of the power of the unconscious, without having any inclination to explore their own?” McGilchrist, he adds, is unusually self-effacing for a genius: “He emanates a gentle, curious amusement that puts ordinary earthlings at their ease. I believe he’s one of those rare polymaths who’s more interested in finding the truth than he is in being right.” 36

How does your work differ from previous thinking on the division of the brain? Hemisphere difference was a neglected topic when I started getting interested in the 1990s. It had been popular until neuroscientists got frustrated by the rather glib ideas that were being bandied around in management seminars. People approach the brain as if it were a computer and the question you’d ask about a computer is: ‘What does it do?’ I think we were asking the wrong question. The important one is: ‘In what way does it do it? With what sort of a disposition?’ The one thing we know for certain, and in that Descartes was right, is that we are conscious: the world changes depending on how we dispose our consciousness toward it. What more can you tell us about the disposition of the two hemispheres? The right hemisphere is interested in the unique, whereas the left wants to put things into categories and treat them as generally the same. The left hemisphere is full of abstract general things from which one is detached – one doesn’t understand exactly what they mean overall, but has an idea of how to use them. In the right hemisphere, we have constantly changing but unique things that are interconnected with one another. We used to think a right hemisphere stroke was not such a bad thing, because most people can’t speak or use their right hand if they have a left hemisphere stroke. But my colleague, [British psychiatrist] John Cutting, spent years with people who had had right hemisphere strokes and discovered they couldn’t understand implicit meaning: irony, humour and metaphor. They couldn’t understand poetry and tone of voice, and they couldn’t read faces and body language. What are the implications of this for society? If we are tending to neglect the way the right hemisphere looks at the world, as I think we are,

14. Lynda Gratton

we lose the broader picture. Knowledge is replaced by information and there is a tendency to lose the concepts of skills and judgement, and for them to be replaced by algorithmic procedures. The left hemisphere requires things to be familiar, predictable and certain; it can’t cope with data when it’s not clear how to interpret it. The trouble is, most of the really valuable things that we desire in life – to be creative, loving, imaginative or even clever – are not things that can be operationalised. I think reasonableness is a concept we have lost. We are becoming more and more like the logical processing that the left hemisphere carries out. Social cohesion begins to suffer, because that is right hemisphere based.

James D. Morgan/Getty Images

We’ve seen this before, haven’t we? The three great civilisations of the west – the Greek, the Roman and the one we’re now in – follow a similar pattern from a hemisphere point of view. Initially the two work very well in balance, but after a period of time the left hemisphere stance seems to become stronger. Why? Because each of these civilisations had an empire, and within an empire you need military power, administration and distance from t u o ab we do what it is you are manipulating. e lef t t c an a h t h e W g “ n ted o ch a t a g in A completely different way of in m tr y -do s John phere ? ” a s k th e looking at the world takes over. hemis in e v we li ears in r y world o app Since the industrial revolution, a h t n w e , e Clees do cum we have externalised into the oming ain. “I think c h t r r fo ided B ing. iv h t D environment a vision of how o e n Th is… t swer a go a the left hemisphere sees the the an ould have ” ec But w g ourselves world: artificial, rigid, in ch a n g concrete, devoid of anything natural. It’s why people have a hunger to get out of cities. What should we do about it? This way of being doesn’t bring any kind of happiness or fulfilment – we get our pleasures in life from relating to one another and to nature. We need to help people see how these things could be different: how unintelligent, uncreative and destructive the way we look at the world now is and how we need to find a balance. People always want a quick fix but it’s not really like that: you can’t do 10 minutes’ mindfulness and that will sort you out, although mindfulness is a good idea. What we need is a complete change of heart and mind – not a sticking plaster.

100 years of solicitude by Emma De Vita

ynda Gratton’s decade-long fascination with the future of work ignites the interest of Davos heavyweights, corporate leaders and tweeting bookclub readers alike. The London Business School management practice professor’s latest book, 2016’s The 100-Year Life, co-written with economist Andrew Scott, explodes our basic assumptions about how we structure our lives. If life expectancy continues to increase, they argued, a three-stage transition through full-time education, work and retirement at 65 will no longer be possible. Given the level of savings in advanced economies, they said in a recent article for MIT Sloan Management Review, many people who are currently in their 20s will need to work into their late 70s or even their 80s. While their first collaboration was aimed at individuals, Gratton and Scott’s next book will speak to institutions, tackling what she terms the ‘great transition’ to a future where longevity collides with great societal and technological changes. “At a time of transition you really have to understand what is going on around you but also what might happen in the future so that you can make the right choices,” says Gratton. Individuals are becoming more aware of their lengthening working lives, Gratton believes, but she worries that governments and corporations are not prepared for the future that is threatening to unravel. “You’ve got to move on this quickly,” she says, praising companies that appoint ‘head of future’ board directors and warning those consumed by short-termism. In her own work, Gratton places great importance on making connections, gathering perspectives and creating conversations that span boundaries, whether at the World Economic Forum, her Future of Work Research Consortium or as adviser to Google.org’s ‘future of work’ initiative. It also keeps things interesting. After all, her working life, she admits, has been spent “running away from boredom”. 37

15. Thomas Piketty

16. Kim Kardashian

Do try to keep up by Paul Simpson

by Paul Simpson

ooks with titles like Capital in the Twenty-First Century don’t usually sell 1.5 million copies. Published in 2013, Thomas Piketty’s monumental insight into the economics of inequality made him the most famous French intellectual since Camus and Sartre. At around 700 pages long, the book became a bulky style accessory for metropolitan progressives. More importantly, it changed the public discourse about inequality and wealth. In 2004, for example, Robert Lucas Jr, the most influential macroeconomist of his generation, declared that even considering the distribution of wealth was “a poisonous tendency, harmful to sound economics”. Capital’s message was discomfiting. Growth, Piketty argued, would encourage inequality not reduce it, because in the current global economy the wealthiest get richer faster than everyone else. Why? Because, to use his simple equation, r (rate of return on capital) is increasingly likely to exceed g (rate of growth). As he wrote: “For mere mortals, the real return on wealth doesn’t go above 3-4 per cent. The biggest fortunes, which can afford to take more risks and pay wealth managers, get average annual returns of 7-8 per cent.” In an age of tax havens – which, he estimates, hold at least 30 per cent of Africa’s assets – when progressive taxation is deemed beyond the pale, major economies (particularly the US) are, Piketty argues, heading for the kind of oligarchical inequality seen in the ancien regime before the French Revolution. Many critics questioned whether inequality mattered as much as Piketty said. They got their answer in 2016 when the social divisions he had presciently highlighted inspired votes for Brexit and Donald Trump. Equality, or at least the realistic possibility of equality, remains one of the keys to social cohesion. The current level of political unrest – and this is before automation has transformed the workplace – suggests Piketty’s analysis will become more pertinent, not less. 40

CAMERA PRESS/Vincent Capman/RIVA PRESS

The rock star economist

‘‘K

im Kardashian is not a famous performer – she is a performer of fame,” wrote Jerry Saltz on Vulture. In the decade since her reality show launched, Kardashian has become the world’s preeminent performer of fame, the boss of her own cosmetics company, KKW (which recently sold out of its contouring kit in three hours), and an icon who makes $56,352 a day from an app in which millions of users pretend they have a lifestyle like hers. Aptly described by Vanity Fair as the “unexpected entrepreneur”, the 36-year-old American has leveraged her social media following – around 250 million across Twitter, Instagram, Snapchat and Facebook – to build a brand with more clout than many Fortune 500 companies. Sharing much of her personal life for free on social media, she offers ‘exclusives’ behind a paywall, one that millions are willing to shell out to breach. Her grasp of the market, along with some shrewd advice on digital strategy from Whalerock Industries, has earned her a personal fortune of at least $150m and a Forbes cover story as America’s most successful mobile mogul. She has also proved – with a revealing photo shoot for Paper magazine in 2014 – that her world famous derriere can almost break the internet. Alison Warner, senior lecturer in journalism at Roehampton University in London, says: “Many reality TV stars command a hefty fee and go bust. Kim is unlikely to be one of them. One early example of her business acumen was borrowing from her dad to buy five $750 pairs of Manolo Blahnik shoes – which she then sold for $2,500 a set on eBay.” Kardashian is already looking beyond fame, heading to San Francisco to study the technology sector – an industry she sees as “the next cycle of my career” by creating more apps and building her brand – and talking at conferences with Kara Swisher, one of the US’s most influential tech journalists. Yet Warner has mixed feelings about Kardashian as a role model. “She has a big role to play in the imagedriven, celebrity-obsessed culture that has led to growing self-esteem issues in young girls,” she says, “but she has gone make-up free, shown herself in dress-down gym gear, been honest about her fertility struggles, has curves and celebrates them, and showed the reality of the hard work in the gym required to get back in shape after pregnancy. There is an authenticity about her that is one of the secrets of her longevity.”

Jamel Toppin/The Forbes Collection/Contour by Getty Images

She Amazon’s may beworking culture has been an unexpected widely criticised, entrepreneur, but but itKardashian’s ranked Kim number two on brand has more Fortune’s of clout thanlist many most admired Fortune 500 companies companies

Cristina De Middel/INSTITUTE

Anab Jain’s dream of democratised space travel draws on Zambia’s failed space project, which also inspired Cristina De Middel’s book, The Afronauts

17. Anab Jain

Imagine helping the blind to see by Rosamund Urwin

n a future where global warming has resulted in scarcity, computers use fog to grow food. Ultra-efficient, the ‘fogponic’ machine uses water in a vaporised form to transfer nutrients to a plant’s roots, without the need for soil or even the water used in hydroponics. Housed in a ‘2050 London apartment’ built by the team at London company Superflux, it’s all part of its latest major project, Mitigation of Shock, which looks at possible responses to climate change. The consultancy, which merges design, technology and science to create future worlds, has also been invited to help shape the energy strategy of the UAE government (making ‘air from the future’ to illustrate why the country should reduce its reliance on cars); conjured synthetically engineered bees; and imagined how augmented vision could allow some of the blind to have ‘super sight’, seeing on the ultraviolet and infrared spectrums. Anab Jain, who founded the business with her husband, Jon Ardern, refers to herself as an “archaeologist from the future”. She doesn’t just envisage one version of the world though, but many – and it isn’t just about what new technologies could exist, but how we will interact with them, and the unintended consequences of such advances. A TED fellow, Jain is a problem-solver who enjoys grappling with difficult questions. Another focus of her work is artificial intelligence – Superflux recently created a project for the Vienna Biennale exhibition, called How Will We Work? “It looked at the societal shift around the transformation of what it means to be a worker,” explains Jain. “On one side, you have the relentless technological acceleration. On the other, you have anxiety, fear.” Jain believes that, unlike past workplace revolutions, advances in AI will create fewer jobs than it will destroy. Even coders could be coding themselves out of a job, as AI starts feeding on data. “We need to change how we educate people. We are training them for jobs

that will not exist in the future,” she argues. “Rather than going: ‘Oh God, these jobs are going’ it’s: ‘Let’s think about what we could do.’” Jain describes her career as “a long-winded journey”. She grew up in the Indian city of Ahmedabad, the largest city of Gujarat. Her childhood merged the scientific with the spiritual; she recalls hearing stories about bhoot – the restless ghosts of the dead who were supposed to haunt the streets – as she walked to the Community Science Centre. Founded in the 1960s, the centre was one of Jain’s favourite haunts. She remembers playing with the variegated wooden models, helping with experiments and being taught about Newton’s laws. On visits to a local snake park, she would try to peek into the Indian Space Research Organisation’s top-secret compound, gawping at the rocket at its entrance. Recently, she went back to her homeland and walked the streets carrying tiny ‘Mars probes’ and talking to those she met about space exploration and aliens. Drawing on the history of afronauts (Zambia’s 1964 space project) and vyomanauts (India’s astronauts), her vision is for democratised space travel. (India’s successful Mars probe, Mangalyaan, she notes, cost just $75m – less than space film Gravity.) Jain herself studied film-making at the National Institute of Design in Ahmedabad. Afterwards, she went to the Royal College of Art in London to do a master’s in design interaction. This led to work for Nokia and Microsoft Research, looking at machine intelligence and the future of mobile services. Jain found herself thinking about the unplanned effects of technology, which gave rise to Superflux “to engage with the precarity of our rapidly changing world”. She wants us all to think more about what the future will be like. In a TED talk, she told the audience: “Everything is happening so fast, [many of us] don’t connect with the future… but it’s not a foreign land.” And as her Twitter profile declares: “Other worlds are possible.” 43

18. Susan Wojcicki

Not to be interrupted

ere evidence needed to prove motherhood and a successful career are entirely compatible, Susan Wojcicki provides it in spades. When she started work for Google in 1999 as its first marketing manager and 16th employee, she was four months pregnant. Today, five children later, she is CEO of YouTube, a regular fixture on female ‘power’ lists and estimated to be worth more than $400m. Despite being credited with revolutionising online advertising, and lauded by Time magazine in 2015 as “the most powerful woman on the internet”, Wojcicki has kept a relatively low profile – she’s been described as “the most important Googler you’ve never heard of”. In truth, her assiduous management of work and family life can’t have left her much time for self-promotion, although she’s a passionate campaigner for gender diversity and a healthy work-life balance. Wojcicki calls herself “the mom of Google” for good reason. When she threw in her lot with Stanford students Sergey Brin and Larry Page, she already had several degrees and was working at chipmaker Intel. The company’s first employee to have a baby, she designed its in-house nursery. To her, work and motherhood enhance each other: “Having the sum of both those things going on in my life makes me a better mom at the end of the day, and gives me really important perspectives in the workplace as well.” Wojcicki’s mother, Esther, is an educator and her father, Stanley, is the former chair of Stanford’s physics department. She grew up on the college campus, surrounded by academics – eminent mathematician and computer scientist George Dantzig was a neighbour. Being surrounded by people whose goal “wasn’t to become famous or make money” inspired her and she assumed she’d become an academic. Everything changed when Wojcicki discovered technology. Hers was the garage in which Brin and Page developed Google’s search engine – she and her 44

husband rented it out to help pay the mortgage – and she was inspired to join them by their vision of how technology could change the world. Wojcicki was responsible for the dominance of the Google search engine. She marketed it with no budget, initially by persuading universities to include a Google search bar in their websites, and she led the development of advertising and analytics products including AdWords, AdSense and Google Analytics. It was Wojcicki, too, who advocated Google’s acquisition of YouTube, set up by Chad Hurley, Steve Chen and Jawed Karim in 2005 after they’d struggled to find an online video of either Janet Jackson’s Super Bowl ‘wardrobe malfunction’ or the Asian tsunami. Google snapped it up for $1.65bn barely a year after they’d registered the domain name. Today it’s worth an estimated $90bn and watched by more than one billion people, one third of the world’s online population. When Wojcicki took over as CEO in 2014, she was charged with building a business by luring advertisers from TV and expanding the site. Her innovations have included subscriptions, original content and virtual reality. Research firm eMarketer estimates that YouTube netted approximately $5.6bn in advertising sales in 2016, but it hasn’t all been plain sailing. In recent months it has been beset by controversy in the wake of newspaper investigations that discovered brand advertising being paired with videos featuring terrorist and white-supremacist rhetoric. Some 250 advertisers, including AT&T and L’Oréal, suspended their campaigns. YouTube responded by installing new machine-learning technology and by giving marketers a greater degree of control over where their messages appear but, while technology may reduce the risk, it can’t eliminate it. As for Silicon Valley itself, she has a simple cure for its macho working culture: “Hire more women. And when you’ve hired them, don’t interrupt them.” That, she says, is one of the most common micro aggressions directed at women in tech.

Christian Peacock/The Forbes Collection/Getty Images

by Jane Simms

19. Demis Hassabis

Tobias Hase/DPA/PA Images

‘‘

The AlphaGo male by Emma De Vita

’ve always been drawn to the huge things in life,” says Demis Hassabis. Now 41, the London-born artificial intelligence researcher, computer games designer and entrepreneur is a one-time child chess prodigy who has accumulated degrees in computer science and cognitive neuroscience. Huge things don’t get much bigger than “solving intelligence and using it to make the world a better place”. That’s the mission of DeepMind, the artificial intelligence start-up he co-founded in 2010 with Mustafa Suleyman and Shane Legg and sold to Google for $400m four years later. Making the world a better place is the oft-used aim of many a start-up founder, but in this case it could just be true. Hassabis, a Cambridge-educated polymath, leads a team of some of the world’s smartest machinelearning scientists, engineers and mathematicians who are using their advances in AI to solve problems in science, healthcare and energy. DeepMind’s innovations are certainly impressive. It has led the field in a form of AI that combines deep neural networks with reinforcement learning to build a system that can learn from its own experience – the rudimentary beginnings of a human-like intelligence that can be used to accelerate scientific discovery. “It is in this collaboration between people and algorithms that incredible scientific progress lies over the next few decades. I believe that AI will become a kind of meta-solution for scientists to deploy, enhancing our daily lives and allowing us all to work more quickly and effectively,” Hassabis wrote in the Financial Times. “If we can deploy these tools broadly and fairly, fostering an environment in which everyone can participate in and benefit from them, we have the opportunity to enrich and advance humanity as a whole.” Hassabis also believes that it might one day help to unravel the mysteries of the human mind, such as consciousness, creativity and dreaming. Games have proved to be the perfect way for DeepMind to develop its form of AI. Shortly before

Google snapped it up, DeepMind had developed a software programme that could successfully learn to play classic Atari games, such as Breakout, Enduro and Pong, with minimal input. Most famously, it created a program to play Go, an ancient and extremely complex Asian game. AlphaGo’s match against Lee Sedol in 2016 was watched by more than 200 million people worldwide who saw it beat the world champion by four games to one, an achievement that experts agreed was a decade ahead of its time. AlphaGo-type programs are now being used to solve real-world problems, such as protein-folding to accelerate new drug discoveries at the UK’s Crick Institute, analysing medical images to improve cancer diagnoses at University College London (UCL) and, closer to its corporate home, bringing about massive energy savings for Google, cutting energy use by 15 per cent and saving it millions of dollars. Hassabis himself is a committed, lifelong games player, and says he has always used them to train his mind in particular ways. His parents owned a toyshop and let him play with discarded games that had instructions or pieces missing. He experimented, invented his own rules and discovered a fascination that led him to play chess at master level by the age of 13, then switch to playing and programming his own video games after buying early home computers with his chess winnings. At 17 he was co-designer and lead programmer on the classic game Theme Park. While Hassabis possesses the kind of prodigious intelligence that led to him being offered a place at Cambridge University two years early (he graduated with a double first before doing a PhD at UCL), and a rapacious sense of curiosity and experimentation that guides his research, it is his deeply held desire to use his work to improve the greater good of society that makes DeepMind so important. “People that gifted can be difficult to mix with,” says computer scientist and entrepreneur Hermann Hauser, “but he’s very open, generous and humble.” 45

20. Leila Janah

“The best kind of aid is a job” by Georgi Gyton

ulling the world’s poorest four billion people out of poverty may sound like an impossible task, but that’s what social entrepreneur Leila Janah is trying to do – one small piece of work at a time. The founder and CEO of impact enterprise Samasource, Janah developed her idea of ‘microwork’ in 2008 and has implemented it on an admirable scale. Employees in Kenya, Uganda, India and Haiti complete small, computer-based tasks that depend on human intelligence, developing transferable skills and increasing their income from an average of $2 to $8 a day. Since it launched nine years ago, San Franciscobased Samasource has employed more than 9,000 people – and lifted tens of thousands more out of poverty in the process. Janah’s book, Give Work, will be published this autumn. What inspired you to found Samasource? When I was 17 I taught at a school in a rural community in Ghana. My students could name US senators and were incredibly bright and motivated. It made me realise that the problem of poverty was very much linked to lack of opportunity, rather than skill. The more I learned about traditional aid models, the more I felt frustrated. For westerners to come to these areas and assume they know what’s best for the local people is extremely patronising. It led me to think there had to be a better way. I believe that is creating jobs for the lowest income people – dignified appointments that move people out of poverty but also have a sustained impact.

What prompted your focus on microwork? I worked at a management consultancy after college and one of my clients was a large Indian outsourcing firm. I thought, this is a model that has created millions for wealthy entrepreneurs; if we could take that model and turn it on its head, generating a few dollars for billions of people, that’s where the real win would be. To partake in microwork, people have to be a short distance from a computer centre that has internet access, but I’d say there’s the potential for 100 million people to do this kind of work. Why is it better to give work rather than handouts? To help people living in poverty we need to put cash directly into their hands and the best way to do 46

it is in the format of a job. It’s a long-term cash deployment strategy that comes with many other social and psychological benefits. Poor women invest 90 per cent of their pay into the health and education of their family. That is the best development aid programme you could have. Study after study has shown that employment results in better educational attainment, higher incomes and better healthcare outcomes, not just for the current generation but for those to come. Another benefit is that in very poor countries governments are funded primarily by outside donors or big contracts with foreign companies. This means the social contract between a government and its people doesn’t really exist. What work does is create a tax base, which helps build that social contract. Do you believe the development of technology is beneficial for humanity? Technology is a tool that humans wield. We can choose to wield it however we want, but it can produce more inequality. In the past, if you wanted to be a billionaire you built a big company and to do that you needed to employ a lot of workers. Now, you can create huge wealth through algorithms. It concentrates wealth much more quickly. We could fix that by changing the tax structure to what Bill Gates has described as a robot tax. We could also consider a universal basic income. While the giving of cash through employment is better than just giving cash alone, at the very least we could ensure everyone has their basic needs met. We have to do capitalism differently if we want different outcomes. How do you envisage the future of work? For processes where human involvement doesn’t make a big difference to the end product, technology will play a greater and greater role. In parallel, I think there is a move away from technology, especially among more wealthy people. I think we’re going to see an interesting shift where technologydriven models are for the masses, who will only be able to afford things that are made by machines. My hope is that more investment can be made in sectors of the economy, like the care professions, that hire people and create good jobs and more healthy human interactions. That shift could be really profound – but only if we can make the powers that be realise the benefits of it.

Robi Rodriguez/Management + Artists/AUGUST

Leila Janah has implemented her concept of microwork on an admirable scale, lifting thousands of people out of poverty

decision-making

YOU SEE WHAT YOU WANT TO SEE Evidence-based management is in vogue but, asks Paul Simpson, is there any proof that it works? And can it prevail against a CEO’s infallible instincts?

fter a long, disastrous day, John F Kennedy retired to his bedroom in the White House and wept in the arms of his wife, Jackie. By the evening of 18 April 1961, it was clear that the invasion of the Bay of Pigs – led by Cuban anti-Castro rebels and backed by the US government – was doomed to fail. The landing of 1,200 self-proclaimed freedom fighters had not, as the CIA had predicted, sparked a national insurrection against Fidel Castro. After just three days, the rebels surrendered. What stung the president most was his own gullibility. As he recovered from the disaster, accepting responsibility with the old saying that “victory has a hundred fathers, but defeat is an orphan”, he would repeatedly frame the same rhetorical question: “How can I have been so stupid? All my life I’ve known better than to trust the experts.” The evidence on which Kennedy authorised the invasion was found, by the CIA’s subsequent inquiry, to be deeply flawed. The agency was said – by its own inspector – to have failed to make any realistic risk assessment; not analysed the likely strength of Castro’s forces; prepared no contingency plans; and ignored basic geography (the rebels’ designated escape site was 50 miles away, through hostile territory). The unanimity with which the CIA and military leaders backed the invasion became a prime case study in research into what American psychologist Irving Janis dubbed ‘groupthink’. Kennedy was not the first US president to be undone by evidence that wasn’t anywhere near as convincing as it seemed. In 1917, Woodrow Wilson’s diplomatic strategy – to keep America out of World War I at all costs – was wrecked by Germany’s incompetent efforts to make an ally out of Mexico and its decision to let its U-boats sink any ship they encountered, even if they belonged to still neutral America. The case for unrestricted naval warfare was made eloquently by Admiral Henning von 50

Holtzendorff at a government summit on 9 January 1917. Given licence to kill, he estimated that Germany’s U-boats could sink 600,000 tons of Allied shipping every month, starving Britain into surrender long before the US could enter the war. His assertions were backed up by a 200-page dossier that included, as Barbara Tuchman noted in her book, The Zimmermann Telegram, “statistics on everything from the price of cheese and the calorie content of the British breakfast down to the yardage of imported wool in ladies’ skirts”. Yet the dossier was really only evidence of one thing: the German military’s determination to triumph at sea in a conflict it had realised, as long ago as 1915, that it could not win on land. When the German chancellor, Theobald von Bethmann-Hollweg, expressed concerns about America’s reaction, Holtzendorff jumped up to say: “I guarantee on my word as a naval officer that no American soldier shall ever set foot on this continent.” That pledge helped carry the day but it shouldn’t have – it was actually explicit confirmation that Germany’s military leaders had succumbed to groupthink. Holtzendorff’s guarantee became null and void five months later, when 14,000 US soldiers were deployed in France. The Bay of Pigs and Germany’s U-boat strategy highlight some of the issues organisations need to confront if they seek to apply the discipline known as evidence-based management. Bolstered by charts and tables on harvests, freight and ports, the German Admiralty’s 200-page memorandum looked thoroughly convincing, but it was created on the premise outlined by French philosopher Émile Chartier: “We can prove whatever we want to: the only real difficulty is to know what we want to prove.” As Dr Richard MacKinnon, insight director at the Future Work Centre, says: “The mistake people often

Werner Forman/Universal Images/Getty Images

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decision-making

make with evidence-based management is that it is not him withstand military pressure to launch a pre-emptive physics or chemistry, it’s a social science. I can understand air strike to knock out the nuclear weapons the USSR the appeal of something that seems to objectively resolve had begun installing with Castro’s consent. decision-making discussions, but this is a fallacy. Any In October 1962, facing the most momentous decision evidence – no matter how much data is included – has to any US president had had to make since World War II, be evaluated by people drawing on their experience and Kennedy opened up the debate – to the point where he values. You could, for example, produce data that shows sometimes left the room so discussions could rage more that all your younger sales staff are outperforming older freely – and crafted a compromise that brought the sales staff – but does that mean, even if it were legal, that nuclear powers back from the brink. This stands in stark you should get rid of all your older staff ?” contrast to the stance taken by many other occupants of That view is echoed by Laura Harrison, director of the White House, and many CEOs too, that their strategy and transformation at the CIPD: “Organisations infallible gut instinct should decide matters. need to recognise that evidence is not always something The notion that any idiot can run the numbers but it you can fit into a spreadsheet. How you feel about a situ- takes a genius to have the right instinct was articulated ation – if the prospect of taking a particular action is, for in 2001 by Ralph Larsen, then the CEO of Johnson & example, giving you sweaty palms – is valid too. And the Johnson, who wrote in Harvard Business Review: “Very evidence will look different depending on your experi- often, people will do a brilliant job up through the middle ence and values, and the values of your organisation.” management levels, where it’s heavily quantitative in Seduced by the idea of bringing scientific rigour into terms of the decision-making, but then they reach senior management, some organisations forget that. Harrison levels of management, where the problems get more recalls a business leader who told her he was investing in complex and ambiguous, and we discover that their data “because once we all have the same data, we won’t judgement or intuition is not what it should be.” need to discuss things any more because we will all come Possessing the superpower of infallible instinct –as to the right conclusion”. Sir Arthur Conan Doyle’s The truth is that, as Malcolm creation Sherlock Holmes does Gladwell expressed in his – is a brilliant justification for a “Organisations must recognise bestseller, Blink, experience can munificent salary and an that evidence does not be evidence in itself, helping an exalted status within the art expert to sense instantly that organisation, but such claims always fit into a spreadsheet. a $10m marble sculpture, offered leave MacKinnon unconvinced. Feelings are evidence too” to the J. Paul Getty Museum as an “I’ve heard that kind of thing artefact from the sixth century often – just as I’ve heard people BC, was a fraud. In the subtitle to say ‘coaching is alright for those the book, Gladwell referred to this, slightly guys but I don’t need it because I’m an executive’ – but it simplistically, as “the power of thinking without seems to me a bit of a blind spot. I sometimes wonder if thinking”. But in this instance, the real issue was that this reverence for gut instinct is driven by fear because, the Getty’s managers were predisposed to believe in if everyone has the same information, the debate is the statue – such a prestigious acquisition could help among equals and hierarchies can be challenged.” the young museum establish a world-class reputation. Margaret Thatcher may have inspired the acronym In real life, the distinction between instinct and TINA (There Is No Alternative) but she certainly did not evidence is not as clear-cut as it appears in business invent that management style. Even companies that books. As Harrison says, evidence-based management profess to study the evidence before making a decision is not a panacea; you should be able to say that something can sabotage their own efforts – most commonly by feels wrong, while also being self-aware enough to ask having the highest ranked person in the room stating why you feel like that. their preference before discussion has even begun. This Accurate data – especially about Cuba’s military kind of attitude can preclude any serious interrogation of strength – might have helped Kennedy in 1961, but the the evidence that may, as in the case of the CIA in 1961 factor that should have averted disaster was his own and the German admirals in 1917, be as Alan Clark, a experience and values. As a sailor who had nearly died junior minister under Thatcher, memorably put it: when his boat was rammed in the Pacific in World War “Economical with the actualité.” II, Kennedy had learned to distrust the top brass, who he Unless the evidence is interrogated – and the assumpmocked as “fruit salads” (because they wore so many tions behind it made clear – organisations will continue medals), and as a politician he ought to have recognised to be led astray. The contrasts between Kennedy’s two that this shabby exercise in realpolitik was a betrayal of Cuban crises is instructive. In the first, all the evidence everything he claimed to stand for in his inaugural derived from the assumption that the Bay of Pigs would address. He did learn. In the 1962 Cuban Missile Crisis be invaded. In the second, where the options varied from (effectively a sequel to the Bay of Pigs), his values helped doing nothing to invading to the naval blockade that was 53

A SERIES OF UNCONNECTED EVENTS How the book Spurious Correlations shows you can prove anything with facts

SPACE EXPLORATION CAUSES STRANGULATION US spending on science, space and technology correlates with suicides by hanging, strangulation and suffocation 1999

2000

$30bn 10,000

2001

2002

2003

2004

2005

2006

2007

2008

2009 10000 $30bn

Hanging suicides

US spending on science

Hanging suicides US spending on science

$25bn 8,000

8000 $25bn

$20bn 6,000

6000 $20bn

$15bn 4,000

4000 $15bn

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 1999 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 Hanging suicides

US spending on science

NICOLAS CAGE FILMS CAUSE DROWNING Number of people who drowned by falling into a pool correlates with films Nicolas Cage appears in 4

120

Films Nicolas Cage appeared in Swimming pool drownings

100

1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009

MUSIC STOPS PEOPLE VISITING SEAWORLD Musical works copyrighted in the US inversely correlates with visitors to SeaWorld Orlando 6m

140 124 108 Musical works copyrighted in US Visitors to SeaWorld Orlando

92 76 60 2007

5.7m 2009

2008

MARGARINE CAUSES DIVORCE The divorce rate in Maine correlates with the amount of margarine consumed per capita 2lbs

4lbs

6lbs

8lbs

2000 2001 2002 2003 2004 2005 2006 2007 2008

Margarine consumed Divorce rate in Maine

2009 3.96/1000

4.29/1000

5.85m

4.62/1000

4.95/1000

eventually adopted, the evidence for and against each option was debated and discussed. The contrast also highlights an issue that, Harrison says, is often overlooked when discussing evidence-based management: voice. The CIPD is researching this topic because an organisation’s ability to enable different voices to be heard is central to its effectiveness in assessing evidence and making decisions. Most of the civilian advisers who disagreed with the Bay of Pigs were not invited to join the debate. They were all – particularly his speechwriter and intellectual alter ego, Ted Sorensen, and his brother (and attorney general) Bobby – given their chance to make a case during the missile crisis. Facilitating that kind of open debate as a president contemplating a nuclear apocalypse is one thing. Embedding that into a business culture is much more of a challenge. Some global organisations – notably drinks giant Diageo – have turned to intranets and internal social media. This is, Harrison says, a step in the right direction even if it doesn’t solve the problem. A better option, MacKinnon suggests, is to start by testing evidence-based approaches in several small, low-risk units, understanding how they resonate with your culture and values, and applying the learnings appropriately. A diversity of voices is critical because even reputable research can have flaws that need to be assessed. In 2005, Dr John Ioannidis, who specialises in research into research, published a seminal paper, Why Most Published Research Findings Are False. He and his team at the Meta-Research Innovation Center at Stanford proved, repeatedly, that many of the published studies in medicine – which doctors rely on when prescribing drugs – were misleading, overstated, impossible to replicate or merely accurate reflections of a prevailing bias. Such errors, it has been estimated, cost the drug industry at least $100bn a year. As identified by Ioannidis, the causes of these startling mistakes highlight some of the problems facing any organisations that place blind faith in the evidence. Medical researchers, he found, are predisposed to hope – to err on the side of optimism – to secure funding and, less cynically, to persevere with a project they believe is for the public good. They are not always as effective as they ought to be in filtering out unconscious bias from their tests. And the funding system rewards those who cherry pick evidence or make sweeping claims of major breakthroughs. In the case of one antidepressant drug, the maker published a study showing it helped 65 per cent of patients, while ignoring further trials that found that, at best, it helped only 11 per cent of patients and, at worse, left patients feeling more depressed. These issues are not unique to the pharmaceutical industry. Management research can be just as flawed. As Jeffrey Pfeffer and Robert I Sutton noted in Harvard Business Review, when arguing in favour of evidencebased management, the famous McKinsey research on the ‘war for talent’, which studied the effectiveness of

decision-making

the ‘rank and yank’ HR strategy used by General Motors, often value different things in players and the industry’s assessed the management practices of 77 companies in scepticism about sabermetrics is expressed by one 1997 and then treated these as the cause of their manager who said: “These people think that if we just performance between 1987 and 1997. As Pfeffer and throw a bunch of numbers at the problem, we can Sutton concluded: “The study violates a fundamental pretend we’ve solved football.” Even though statistics condition of causality: the proposed cause needs to are now almost as conspicuous in the game as money, happen before the proposed effect.” football remains resolutely unsolved. Equally, Harrison says, many boardrooms struggle to The motives for these missteps are revealing. In put evidence in the right context. Many American pharma, the big challenge is that, especially in the US, automotive giants have tried to replicate the success of any new drug can take at least 12 years to develop, win Toyota’s total quality management. None have succeeded regulatory approval and take to market, so the fewer – probably because they have tried to mimic a set of detours on the road to the regulator the better. Similarly, techniques and practices without understanding the in many boardrooms, evidence-based management is culture that underpins them. The urge to benchmark regarded as a cumbersome, time-consuming option that ourselves against the best is laudable but, Harrison leads inevitably to ‘analysis paralysis’. In an age when the argues: “You need to draw on your collective experience cult of charismatic, visionary, narcissistic leaders – such and ask: ‘Given what we know about our company and as Richard Branson, Steve Jobs and Elon Musk – is our culture, will this work?’” stronger than ever, it is easy to confuse the ability to Such misinterpretations led Richard Feynman, the manage with the ability to act fast. American physicist and bongo drum enthusiast, to coin Yet MacKinnon says this is a great misconception: “I the term ‘cargo cult science’. As he explained in his book, would never say to someone delay that decision for a few Surely You’re Joking Mr Feynman!: “In the South Sea, weeks until you have assessed the evidence. I might say there is a cargo cult of people. During the war, they saw let’s put the things in place that will give you the evidence airplanes land with lots of good to decide whether your intermaterials and they want the same vention was successful in the thing to happen now. So they’ve way you intended – or whether “These people think that if we arranged to imitate things like you can improve on that.” The just throw a bunch of numbers runways, to put fires along the side dossier prepared by the German of the runways, to make a wooden Navy in 1917 was hefty – and at the problem, we can pretend hut for a man to sit in, with two useless. In many cases, MacKinwe’ve solved football” pieces of wood on his head like non says, evidence-based headphones and bars of bamboo management could consist sticking out like antennae – he’s simply of asking someone who the controller – and they wait for the planes to land. disagrees with an upcoming decision: ‘Why do you think They’re doing everything right. The form is perfect. It it could go wrong?’ That question could well have prelooks exactly the same as it did before. But it doesn’t vented the Bay of Pigs. Chastened, Kennedy made sure work. No planes land.” such questions were raised in October 1962. Cargo cult science still flourishes today. Managers Sometimes, not acting on the evidence can be the hoping to learn from success often suffer from this con- smartest decision of all. In 1939, the preview cards from fusion between causation and correlation. Warren test screenings of The Wizard Of Oz showed that most Buffett is one of the most successful businessmen in the viewers wanted to cut Judy Garland singing Over the world and he invariably lunches on a burger and a can of Rainbow because it slowed the movie down. Luckily for Coke. Yet millions of people who enjoy the same lunch millions of cinemagoers, MGM’s executives took one have mysteriously failed to become multibillionaires. look at the review cards and ignored them. Similar questions surround the use of sabermetrics As Harrison suggests, it is important that organisain sport. In baseball, this statistically driven method of tions in general – and HR departments in particular – do analysing and recruiting players – which faced fierce not oversell the benefits of evidence-based management. opposition from scouts who relied on their experience to They also need to understand how, why and where decimake judgements – helped the Oakland Athletics punch sion-makers want to apply it. With artificial intelligence above their weight. Winning six divisional titles on a being readied to automate many decisions, businesses modest budget made their general manager, Billy Beane, need to recognise the merits of evidence that can’t be so famous that Brad Pitt played him in the film Moneyball. algorithmed. In the 2008 financial crisis, the banks that Beane’s other great sporting passion is soccer, but automated their buying and selling suffered grievously despite the obvious appeal of sabermetrics to club when the sub-prime mortgage market crashed. It took a owners – it could help poorer teams compete with richer human, Jamie Dimon, CEO of JPMorgan, to look at the rivals if they are astute enough to apply the right statistics data, say “that doesn’t smell right” and, by pulling out of – its use remains controversial. Coaches and statisticians the market, save his bank billions. 55

THE ONE THING THAT MADE ME SMART 56

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INSPIRATION can come from the most unexpected places. Ask a cross-section of people to come up with the one thing that had the most impact on their professional lives, and the answers can prove surprising. Business books certainly have their place, but one of America’s founding fathers, a French philosopher and even a cancer diagnosis are among the answers given by the business leaders and academics Work. spoke to. The wisdom of others: For many entrepreneurs, the most valuable lessons come from the experiences of other bosses. That’s why Bryn Zeckhauser and Aaron Sandoski’s book, How the Wise Decide, has been so important to Liz Earle, founder of Liz Earle Wellbeing. The book focuses on the stories of 21 successful leaders and distils key principles from their decision-making. Former Medtronic CEO William George, for instance, provided an example of ‘going to the source’ when a stint in the operating room helped him uncover the real reason that a critical tool used by cardiologists was failing. “It reminds me that the principles of good business remain the same, whatever the scale: produce a great product, deliver it with excellent service, and build a culture of loyalty and respect – both internally with your own team and externally with your customers,” says Earle. “Great brands are built by having happy customers. This only happens with authenticity and a genuine commitment to the product you’re producing.” A sporting mindset: You may not have heard of Greg Harden, but you’ve undoubtedly heard of Olympic recordbreaking swimmer Michael Phelps. Harden coached him. If you follow the NFL, you’ll know Super Bowl stars Tom Brady and Desmond Howard, who were also coached by him. But Harden’s influence extends far beyond the sports field. “Greg is one of the best I’ve ever met at getting people to be inspired to create personal change,” says Michael Parke, assistant professor of organisational behaviour at LonA group of leading experts share their don Business School, who was experiences with Robert Langkjær-Bain a young soccer player at the University of Michigan when he

ABC/Getty Images; Juan Gartner/Science Photo Library

met Harden. “He helped me with my sport at the time, but he also got me interested in how we make athletic and business teams better. He laid the foundation for me to pursue this career, helping leaders and organisations get better. A lot of the concepts I study now in businesses – leadership, team dynamics, engagement, proactivity, creativity – really stem from my athletics and sports background. What we want to create is executive athletes.” Strength through adversity: A diagnosis of throat cancer is among the toughest things anyone could have to deal with, especially when that someone makes a living speaking publicly. And yet Lain Hensley, co-founder of California-based Odyssey Teams, looks back on that diagnosis five years ago as one of the most valuable experiences of his career. “It tested me,” admits Hensley, who has since made a full recovery. “The work I do is all about helping people create support systems so they can take big risk in their lives. This was an opportunity to see if you really believe you can apply the things you’ve been teaching.” When everything stops and you have to hand over the keys for all the decisions in your life, he adds, you really see how well you’ve done at creating something that can live beyond you. “I saw that I hadn’t done a very good job at that. Afterwards, I rebuilt everything and looked more closely at relationships and how I communicated with people,” he says. “It wasn’t a perfect experience. I lost some friendships, I lost some employees. But I’m tighter with my co-workers, and I’m more passionate about my work, so there’s a level of thankfulness. We need adversity in our lives.” Keep calm to carry on: US TV news anchor Dan Harris’s book 10% Happier helped inspire author and former Google career coach Jenny Blake to get into meditation. Billed as a guide to “meditation for fidgety sceptics”, Harris’s book plots his personal journey from frazzled workaholic to mindfulness advocate, beginning when he had a full-blown panic attack on national television in 2004. Blake, author of bestseller Pivot, a guide on how to change careers, loved the book and says meditation has become “a daily staple” for her. “I feel calmer, clearer, more creative, more focused and 57

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more strategic with even just 10 or 20 minutes a day,” she says. “These sessions have a cumulative effect, even though on some days I feel more able to sit still and breathe than others, when I might be more stressed or jumpy. I use an app called Insight Timer to track my sessions, and I’ve started telling myself that I don’t have time not to meditate, rather than the other way around.” From the inside out: None of the countless business texts he has read has influenced Dr Philip Stiles as much as the work of French philosopher Michel Foucault on prisons. Foucault’s Discipline and Punish is “a work of extraordinary insight that transformed the way we see the nature of power, control and culture in organisations”, says Stiles, a senior lecturer in corporate governance at Cambridge Judge Business School. The 1975 book shows how getting individuals to internalise the norms of a regime, “to control themselves, in other words”, can be as powerful as exercising overt authority. “When people believe they are being watched and when any deviant behaviour is reformed, individuals become ‘normalised’. This analysis about the covert use of power and its effects on individuality was revolutionary and its influence is wide-ranging,” Stiles says. If that weren’t incentive enough to immerse yourself in Foucault, Stiles promises the book has “probably the most dramatic opening chapter in all social science”. When less is more: If it wasn’t for reading social scientist Donald Schön’s The Reflective Practitioner, says Linda Hill,, professor of business administration at Harvard Business School, she couldn’t have written her books on leadership. The MIT professor’s book, published in 1984, is based on the premise that professionals rely less on learned formulas and more on what they learn in practice – a largely unarticulated process. The job of educators then is not to ‘teach’, but to equip them with the tools to learn for themselves, through reflecting on what they do. Schön’s ideas were a big influence on Hill’s first book, Becoming a Manager. “I thought I was going to write about what they learn,” she says. “But Schön made me realise that they weren’t learning how to lead in a classroom; we’re just giving them the tools they need to learn. It’s not about acquiring competencies, it’s about a change in professional identity.” Hill

North Wind Picture Archives/Alamy; AFF/PA Images

also applied Schön’s insight to her latest book, Collective Genius, co-written with Emily Truelove, Greg Brandeau and Kent Lineback, which aims to offer readers a window on leaders’ experiences. Lessons from the past: The executive chair of The Big Issue Group, Nigel Kershaw, who runs its social investment arm, Big Issue Invest, regularly reels off quotes from Thomas Paine, philosopher and founding father of the United States. One quote from a 1776 revolutionary pamphlet sums up Paine’s influence on Kershaw: “A long habit of not thinking a thing wrong, gives it a superficial appearance of being right.” The words, says Kershaw, underline the importance of questioning everything. “Why are things done that way? Why do people think that way and act that way?” Paine’s belief that charity alone was not enough to fix the wrongs of the world, and that we must look instead at changing how we organise society, is another aspect of his thinking that resonates with Kershaw. The Big Issue’s aim (to dismantle poverty) and the way it goes about it (as a business, not a charity) both draw on these ideas, Kershaw says. The Big Issue “challenges the notion of traditional business”, while Big Issue Invest, which now manages or advises on £170m of funds, “challenges the notion of traditional investment”. There’s merit in everything: In her time as principal of the Brit School, theatre director Clare Venables made a lasting impression on Stuart Worden,, who is now principal there himself. Venables, who died in 2003, “loved culture and art from the high to the low”, says Worden. “You’d hear her playing Mozart one minute, and Angels by Robbie Williams the next. She could talk passionately to south London kids about the beauty of Shakespeare and the beauty of hip hop, and believe there was no difference.” The most famous alumnus of the performing arts school is pop singer Adele – although she may yet be usurped by Tom Holland, star of the film Spider-Man: Homecoming Others include Mercury Prize nominee Loyle coming. Carner and poet Laura Dockrill. The school values them all equally, Worden says. “If someone wants to write songs that millions listen to, that’s great, but if people want to make an arthouse film that’s going to be seen by a few, that’s great too. One isn’t better than the other. Clare gave us the confidence to believe that.” 59

FAILING WITH STYLE IF YOU’RE LOOKING for enlightenment, you could do worse than head to Sam West’s unusual museum in the Swedish coastal town of Helsingborg. At first glance, West appears to be trying to outdo the surrealist motto: ‘As beautiful as the chance encounter of a sewing machine and an umbrella on an operating table.’ Here an Apple Newton occupies a plinth alongside Trump: The Game, a face mask that beautifies you with electric shocks and several DivX movies (a DVD format that selfdestructed 48 hours after you first watched the film). Yet this is no chance encounter of objects – these are exhibits in the Museum of Failure. They are not on show to chuckle at, but to learn from. There is no teacher like failure, goes the mantra, and West believes that we can learn more from products that flopped than from those that succeeded. The beauty of his museum is that instead of having to learn from our own failures, we can learn from other people’s. If only life worked like that. Even a momentary contemplation of failure has our minds ransacking vast memory palaces of relationships wrecked, deadlines missed and incinerated steaks. Surely it is better not to think about failure at all? Don’t they say that if you’re trying not to hit a tree, don’t look at it but at the space you are aiming for? Eyes on the prize. So why can’t psychologists, pop philosophers and podcasters stop talking about failure? ‘Celebrate failure!’ commands one headline. ‘Please don’t celebrate failure’ pleads another. When you read the articles, both counsel exactly the same thing. How are we supposed to navigate through all these paradoxes? The idea that businesses should be tolerant of failure has become a cliché but is anyone really listening? In his book Black Box Thinking, Matthew Syed highlights a list spotted on the wall of an office cubicle that reads: ‘The 62

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Businesses talk the talk about embracing failure as a foundation for success but, Christopher Hadley wonders, is anyone really doing it?

failure

In 1988, Michael ‘Eddie the Eagle’ Edwards became the UK’s first Olympic ski jumper in 60 years. He came last in both his events but charmed the world in the process

Watch out, Eagle’s Amazon’s working culture has been widely criticised, but it ranked number two on Fortune’s list of most admir ed companies Amazon’s working culture has been wid ely criticised, but it

six phases of a project: 1. Enthusiasm; 2. Disillusionment; 3. Panic; 4. Search for the guilty; 5. Punishment of the innocent; 6. Rewards for the uninvolved.’ Cynical, but it does encapsulate the received wisdom: distance yourself from any activity that is risky, cover your backside, do not admit to mistakes, do not become associated with failed projects, pin the blame on someone else. Syed wants us to stop hiding from failure. “Success hinges, in powerful and often counterintuitive ways, on how we react to failure,” he writes. This is as true for individuals as it is for organisations. The problem is not only that, because we’re fearful of organisational culture, we hide our mistakes from others, but for a host of psychological reasons we hide our mistakes from ourselves. In the current parlance, we reframe our failures, fail to learn from them and make the same errors again and again. David Bowie made this very point in 1977 with his song, Always Crashing in the Same Car. The track was inspired by a specific incident of cocaine-fuelled road rage in Berlin but, metaphorically, it applies to us all. In some areas, notably healthcare and aviation, hiding mistakes should simply not be an option. When so much is at stake, says Syed, it is imperative that we learn from failure. The black box of his book is the box – which, despite the name, is actually orange – in an aircraft that allows investigators to study the data following a crash. The aviation industry excels at learning from failure. Pilots are encouraged to be open and honest when they 64

make mistakes, and failure is seen as an opportunity to change procedures rather than a stick to hit people with. Healthcare could learn from aviation. About 750 patients a month die unnecessarily in NHS hospitals, according to a 2015 review by the London School of Hygiene & Tropical Medicine. Culture is not entirely responsible. Complex medical conditions and scarcity of resources contribute but, Syed argues, many errors have subtle but predictable patterns that could be spotted with a more overt approach to mistakes. Yet surely the psychological mechanisms that help us deny failure are useful evolutionary traits, created to protect our self-esteem and allow us to proceed with optimism? No one is more eager to turn us all into optimists than psychologist Dr Martin Seligman, but even he counsels caution in using what he calls ‘optimistic explanatory styles’ when the cost of failure is extreme. If aircraft safety or patient safety is at stake, it is best not to be overly optimistic that things are going to be OK if the equipment is on the blink. While we might accept the need to admit failure to ourselves if we are going to treat mistakes as learning opportunities, is it generally wise to admit our blunders to others? The blame game is more prevalent than ever. Whenever there is a failing politician, banker or social worker, for example, the witch hunt begins, the media bays for blood and the need to hide failures at all cost is once again reinforced. It’s little wonder that so many of us still don’t make the most of failure.

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Renaissance goldsmith and sculptor Benvenuto Cellini, depicted here working on his bronze sculpture of Perseus with the Head of Medusa, faced numerous setbacks but always bounced back. He made great art, but died poor

Alamy; Getty; Press Association

failure

If hiding from failure closes the feedback loop so we rugby side from National League 3 to National League 1. learn nothing from the experience, it also acts as a The key to his success? Paying close attention to failure. disincentive to risk-taking and innovation. While the “You have to plan for it – plan for things that can go old-style corporate culture is still undoubtedly the norm wrong,” he says. and few ever dare to allude to ‘failure’ in conversation For Long, the pre-mortem is more important than the with the boss, some companies are doing post-mortem: before you even start a protheir level best to make up for everyone ject, you pretend it has failed and get WHO LOSES WINS else. They don’t just tolerate failure, they everyone to brainstorm what went wrong. Failure can pay off – but insist on it. The most oft-cited example In a sporting context, you imagine you sometimes it takes a while today is X (formerly known as Google X), have lost and then brainstorm all the reawhich gives the impression that it is sons for that loss. In business, the idea is to trying hard to ensure that as many pre-empt problems without generating projects as possible bomb. the negativity that could shut down a proAnd in a way it is. Director Astro Teller ject before it gets off the ground. is prone to saying things like: “There’s Long says you need to focus on those MINI magic in everyone believing that we might things you can control. “You can succeed Britain’s favourite car model have failed because we failed to fail.” What with your performance on the field and never made a profit, but it seems like a deliberate paradox is in fact still ultimately fail. But as long as you revolutionised automobile design and sold 5.3 million units just a question of semantics. Is Teller really know you’ve done everything you can to between 1961 and 2000. talking about failure? Deliberately win, that’s what counts. You could’ve engaging in a strategy of trial and error to been the better team all game and then drive innovation – knowing at the outset get a poor refereeing decision or a bounce that at least half of your projects are going of a ball and lose. It’s OK to be outto fail – is not what we usually mean by performed by a better team on the day ‘failure’ in the business world. – as long as you have played your best.” Still, this inspiring attitude embodies Most important of all, says Long: “You FANTASIA Losing $15m, and nearly Thomas Edison’s quote about the ups and don’t overreact when you win and you bankrupting Walt Disney, downs of inventing the light bulb: “I don’t overreact when you lose.” This may Fantasia is now regarded as an didn’t fail – I just found 10,000 ways that be easier said than done, but no sports animated classic, a precursor of didn’t work.” A modern example of this coach – nor politician – can prosper in the abstract expressionism. principle in action is Unilever’s efforts to long run without putting this advice into find a nozzle for a detergent. After experts practice. At the outset and in the afterfailed to design the optimum nozzle they math you don’t dwell on failure, you use turned to evolution by making 10 random it, focusing on what you have control over nozzles and keeping the best one, making and looking for themes over time. 10 more like that one, and 10 more like In sport, and in organisations, failure FREDDIE LAKER that one and so on until they hit upon just is not defined by winning and losing indiAfter his pioneering low-fare airline went bust in 1982, the right nozzle. It is a great anecdote, but vidual games or projects. You have to set Freddie advised Richard is it anything to do with real failure? your future goals and if you set the right Branson when he launched From a business standpoint, the most ones you are less likely to fail, or perhaps Virgin Atlantic two years later. useful idea here is if you are going to fail, less likely to see something as failure. But ‘fail fast’ – ie find out if something is what of the individual? Is there a paradox not going to work as quickly as possihere? If you want to be resilient and ble, before it costs too much. X’s recover from failure, you need to reframe so-called moonshot team confronts the the story and be optimistic. hardest part of a project first: the part Top athletes have learned to bounce PABLO PICASSO most likely to fail. Teller says they work back from a painful loss, rather than In Paris in 1901, a depressed hard at making it safe to fail. He even Picasso began the monochrome dwell on it. Sports psychologists talk of meisterwerks of his Blue Period. claims to reward failure with bonuses. picking up a blade of grass, imagining it is At the time, these works found But don’t most businesses, lacking the thing that went wrong and then little favour with collectors. Google’s aura of invincibility and billions letting it blow away. But for sport, and of dollars in cash reserves, want to avoid most other endeavours, failure plays a failure altogether and aim for success? vital role in acquiring talent in the first place. In his book Andy Long, a former professional rugby union player The Talent Code, Daniel Coyle describes how deliberate and England international, is now a business performance practice at the limits of our ability leads to failure. We coach. As director of rugby at Bishop’s Stortford, he has fine-tune our approach, usually with guidance from a achieved the seemingly impossible, taking an amateur coach, and practise again. This process of failing and 65

failure

learning over and over changes our brain structures. had no good ideas”, Walt Disney went on to prove the Being able to fail lots and adapt is essential to achieving newspaper’s bosses spectacularly wrong. mastery. That is why the flight simulator was such a This is post-traumatic growth, when people wrestle brilliant invention – before it, pilots could usually only with failure, change direction and are pushed into doing fail once. something they would never have ordinarily done, such Retired basketball superstar Michael Jordan sur- as starting their own business. “Failure can often be the prised fans when he boasted: “I have missed more than spur to greater things,” says Whiter. 9,000 shots in my career. I have lost almost 300 games. For those who do not see themselves as comeback On 26 occasions I have been entrusted to take the game- kings or gritty geniuses, Whiter offers consolation in the winning shot, and I missed. I have failed over and over form of the stoic concept of premeditatio malorum – and over again in my life. And that is why I succeed.” literally the premeditation of evil. If we prepare ourselves Clever quotes can inspire, but they can’t quite cure for failure by experiencing it and realising that it is not the our fear of failure. Self-help literature turns to stories of end of the world, we are better placed to cope when the comeback kings. The moral here being: face your fear of worst happens. Whiter tells the story of philosopher and failure, accept that eventually you will inevitably fail – politician Seneca, tutor to Nero, who he parses as a Roman and that it will not feel nice – and remember that you Warren Buffett: immensely wealthy and terribly wise. have to fail and recover to become great at something. Seneca would spend part of every year living as if he had There are techniques for developing this ‘if at first nothing, sleeping on the floor and drinking from a dog’s you don’t succeed, try, try again’ attitude. Optimism, bowl, just to remind himself that if he lost everything says Seligman, is not a fixed state. When you catch things would not be so bad. yourself being pessimistic, analyse your beliefs and Maybe we just need to be a bit kinder to ourselves. dispute them rigorously to change how you explain the The media bombards us with images of success but few world to yourself. “With an optimistic explanatory style, people, if any, are successful in every aspect of their life. failures don’t have to feel like Solace can be found in literature. failures – they become valuable The great tragedies of ancient learning experiences,” he says. which regularly depicted “With an optimistic explanatory Greece, In recent years, psychologists good people failing through bad style, failures don’t have to feel Angela Duckworth, from the luck, remind us to be less University of Pennsylvania, and judgemental and a little more like failures – they can become Carol Dweck of Stanford have compassionate. valuable learning experiences” fought to embed what sports Heroic failures like Scott of pundits call ‘bouncebackability’ the Antarctic can help balance into the school curriculum. “To our view of success. His endeavbe gritty is to fall down seven times, and rise eight,” says ours inspire us to do difficult things with no fear of Duckworth. To get gritty, children need to have a failure, to do the right thing, regardless of the rewards ‘growth mindset’. Her research suggests that children – or lack of them – by which we usually measure success. who believe their intelligence or other talents are fixed Should we worry less about those who flounder than are less likely to persevere in the face of setbacks. In those who flourish? As the 19th-century essayist Wiladult life, these will be the people who decide that failure liam Hazlitt wrote, those who are most likely to succeed is a permanent state brought about by their inadequacies. are those most intent on doing so and least intent on One thing most of the literature does not deal with at deserving it. That is cynical, but also a reminder not to all is when we mess things up big time. If you google mindlessly fete the stars of every success story. ‘famous failures’, you get page after page of phenomenally Once in a while, set aside the latest Branson biography successful people who failed and bounced back. Heading and dip into the life of someone whose story is more many such lists is Steve Jobs, who erred so spectacularly nuanced. Take the Italian goldsmith Benvenuto Cellini. that he got fired by Apple, the company he founded, Beset by endless setbacks, mostly of his own making, this before returning in triumph. ‘hero’ of the Renaissance nearly died in the Vatican prison, The literature does reveal little appetite for stories survived the siege of Rome, was double-crossed by about failures who kept failing. Seligman is vaguest on colleagues and lovers, and infuriated kings and popes. He what to do when pessimistic beliefs are perfectly valid. frequently lost everything, but bounced back every time So how do we come back from catastrophic failure? to produce magnificent art. Cellini died poor – an utter At the philosopher Alain de Botton’s School of Life in failure by modern standards, but what a life! As Robert central London, faculty member Barney Whiter teaches Louis Stevenson counselled: “Our business in this world is a course called ‘How to fail’. He is astonished at how not to succeed, but to continue to fail, in good spirits.” often people succeed only after major setbacks, like That might be the best formula for success we have. being fired. After being dismissed as a cartoonist for the For further reading, see page 80 Kansas City Star because he “lacked imagination and 66

8–9 November 2017, Manchester Central cipd.co.uk/ACEwork

Embracing the new world of work ‘The major global trends affecting our organisations, our profession and the world of work at large, are signalling that the future we so often plan for is already here.’ Peter Cheese, Chief Executive, CIPD

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INTELLIGENCE GATHERING p28

There are so many pieces of research citing possible factors for lower or higher intelligence that it’s likely to make your head swim. Several studies, for instance, have linked social conservatism with lower intelligence, although, as professor Lazar Stankov of the University of Sydney points out, the link is not as strong as first thought. While up to 16 per cent of ‘conservative syndrome’ had been reported to be caused by low cognitive ability, this has recently been revised to 5 per cent (which leaves 95 per cent attributable to other factors). Conversely, as Marcel Schwantes, founder of Leadership From the Core, says in an article for Inc., research highlights

several other factors that indicate higher intelligence: older siblings are reported to have an IQ 2.3 points higher than their younger siblings, left-handers are thought to have faster and more accurate spatial skills, mental flexibility and enhanced working memory, and night owls are said to have a higher IQ than early risers. In other words, you probably don’t need to worry, unless of course you’re a right-handed, socially conservative younger sibling who gets up early. And even then you could just take up a career as a comedian; in a 1975 study of 55 male and 14 female comedians, all but three of them scored more than 125 in a verbal IQ test.

p38

Do you have a pet name for your car? Or perhaps you like to talk to your favourite cactus? There’s no longer any need to feel embarrassed about it. Where once you may have kept these seemingly childish habits to yourself, or sniggered at a colleague who admitted chatting to their cat over breakfast, we now know the ability to attribute a human form or personality to an animal or thing is actually a sign of social intelligence. So says Nicholas Epley, professor of behavioural science at the University of Chicago Booth School of Business and author of Mindwise. He argues that anthropomorphising is an inbuilt psychological process that helps us to spot friend from foe. “Being able to read a mind allows you to cooperate with those you should trust and avoid those you shouldn’t,” he says.

Because our brain is working overtime to try to understand and connect with others, it is oversensitive to finding faces and ascribing minds to the mindless. That’s why with headlights as eyes and a grille for a mouth, a car can quickly be assigned a personality. Yet our brains go further than simply recognising a face in an inanimate object. We can also attribute it a personality that we use to explain its unpredictable behaviour. This is why you might describe your laptop as having ‘a mind of its own’ when it shuts down for no apparent reason. “No other species has this tendency,” says Epley. While there comes a point when talking to your teddy goes from being cute to creepy, don’t be shy in wishing your desk plants good morning. “It is a reflection of our brain’s greatest ability rather than a sign of our stupidity,” he says.

Dig beneath the surface and you’ll find some unusual research on the things that make or break our intellect. Emma De Vita reports

p48

It’s time for introverts to step out of the shadows – if they can bear the all-pervasive noisy workplace. Said to be more cautious and focused in their thinking than their more outgoing colleagues, introverts can often make smarter decisions and are thought to be more creative, get less distracted and take fewer risks. In her 2012 book, Quiet, Susan Cain championed the long-maligned introvert. And, as David Hassell, CEO of 15Five, pointed out in an article for Huffington Post, some of the world’s top inventors are introverts, including Bill Gates, Albert Einstein and Apple co-founder Steve Wozniak. But is there any real evidence to suggest that introverts are

more intelligent? While the US-based Gifted Development Center reports that about 60 per cent of gifted children are introverted compared with 30 per cent of the general population, introverts may only seem to be brighter. Intelligence, particularly if we accept that it is about more than just IQ, can be difficult to measure, and studies comparing extroverts and introverts have produced differing results. “Differently skilled is how we should look at introverts and extroverts, not more or less intelligent,” says Hassell. “Where introverts can create the most wonderful new ideas and inventions… talented extroverts can inspire and motivate.”

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Despite a distinct lack of evidence, overweight people still suffer at the hands of social stereotyping. According to a 2010 paper in the American Journal of Public Health, negative attitudes toward obese people are pervasive, with numerous studies documenting harmful stereotypes that obese and overweight individuals are lazy, weak-willed, unsuccessful and unintelligent, and that they lack selfdiscipline and have poor willpower. So great are our assumptions that last year media reports on a study – Effects of Body Mass Index and Body Fat Percent on Default Mode, Executive Control, and Salience Network Structure and Function – claimed it had shown that fat people are less intelligent than thin people. It showed nothing of the sort. In fact, reports the Independent, the research didn’t deal with intelligence at all and, say the researchers,

was “certainly not about shaming or stereotyping individuals based on their weight”. Even the HR profession suffers from this lasting stereotype. According to a survey carried out for People Management in 2012 on unconscious bias, when 122 respondents were asked about overweight women, 51 per cent revealed a bias against them at a level ‘likely or very likely’ to affect their behaviour. Perhaps surprisingly, people with high cognitive abilities are more likely to fall prey to social stereotyping, but they update them when given training. “People with superior pattern detection abilities appear to act as naive empiricists, both learning and updating their stereotypes based on incoming information,” say New York University researchers.

E RI

HUMAN CAPITAL

Immigration brings ideas and investment German study shows foreign-born citizens stimulate innovation

Chancellor Angela Merkel’s liberal immigration policies have attracted criticism – and growth

erman states with a large people relocated to the federal percentage of foreign-born republic than to any other country citizens are seeing higher levels in the world. Since 2006, the of innovation than those with less number of people moving to diverse populations. Germany has increased every year, A study comparing key economic from 558,467 in 2006 to more than data from all 16 of the 1.3 million in 2014. country’s federal states “Being open to foreign During the same labour has a direct shows that being open period, Germany’s correlation with to foreign labour has a unemployment rate direct correlation with lower unemployment” dropped from lower unemployment, 10 per cent to attracting venture capital 4.2 per cent. In addition, the investment and a higher number German economy was the secondof patent applications. fastest growing among the G7 The report, Foreign Human countries in 2016. Capital in Germany, compiled by These findings demonstrate that Movinga, notes that in 2014 more attracting more people from other 70

countries does not mean higher unemployment, the study observes. Although Germany has the largest foreign-born population in Europe, with more than 7.8 million (9.6 per cent) originating in another country, this diversity is not evenly spread across the federal states. In five states citizens born outside Germany make up more than 10 per cent of the population, whereas five other states have a foreign-born population of less than 3 per cent. City states, such as Berlin and Hamburg, that have a large foreign-born population, are also home to a higher number of firms receiving venture capital – 202 in the case of Berlin, more than any other state. Bayern (Bavaria) and Baden-Württemberg, which have the most patent applications, are also demographically diverse, with around 10 per cent of their populations being foreign-born. By contrast, federal states with fewer companies receiving venture capital and lower numbers of patent applications, such as Sachsen-Anhalt and MecklenburgVorpommern, have smaller foreign-born populations. These figures show that people born in other countries are of great economic value, and that an attitude of openness to foreign-born citizens is important for supporting innovation, research, development and growth, the report says. “The relative weakness of the federal states with fewer numbers of people born in other countries suggests that they could boost innovation and their general economic performance through attracting more talent born outside Germany.” Data used in the preparation of this report was provided by the Organisation for Economic Co-operation and Development and the German Federal Statistical Office (Destatis). bit.ly/ForeignHumanCapitalInGermany

Words: Rima Evans

BUSINESS RESEARCH, REPORTS AND INSIGHT

professionals, features the results “It is certain,” says the study, of a survey conducted among 26 “that depending on the actual MNCs to assess the perceived shape that Brexit takes, impact of the June 2016 Brexit vote. organisations and their The result caused shock waves in production, service delivery political and business circles and global mobility around the world, says the study, so may be strongly affected.” it is important to “understand how On a more positive note, the Report suggests UK talent pool organisations are likely to be companies surveyed also felt will shrink in new landscape affected, and what the likely that long-term demand for reaction of the expatriate international assignees would hile the UK will continue population will be”. continue, and that the UK would to be an attractive The majority of companies – remain an attractive destination. destination for employees on 58 per cent – said it would become “Just like reacting to external international assignments, its more difficult to obtain risks and dangerous “Half the companies departure from the European work permits and that developments in surveyed felt a high Union will have negative social security issues hostile countries, degree of insecurity in MNCs should devote consequences for global mobility would be more relation to Brexit” programmes, a new report suggests. complex. Another 69 leadership attention The overwhelming majority – per cent thought and their creative 77 per cent – of multinational overall compliance work would capabilities to understanding corporations (MNCs) surveyed become more difficult. In addition, not just the threats but the said it would become harder for half of the businesses surveyed felt opportunities that Brexit and foreign students and self-initiated a high degree of insecurity in other geo-political environments expatriates to stay in the UK. relation to the implications of entail,” says the report’s author, This would diminish the talent pool Brexit, and 40 per cent said it would Michael F Dickmann, professor available to businesses, and require be costly. A third of MNCs felt their of international HRM at Cranfield talent-sourcing strategies for hiring preparedness to cope with Brexit School of Management. bit.ly/BrexitGlobalMobility foreign candidates to become more challenges was low. agile and responsive to a changing In respect of the ‘known legal and political landscape. unknowns’ around Brexit, such as INTERCULTURAL RELATIONS The 2017 annual report from the further countries leaving the EU or R ES Forum, which is made up of the impact on financial markets, international HR and mobility MNCs are simply monitoring developments and waiting for more precise information, Cross-cultural relationships (the according to the deeper the better) boost creativity report, The New Normal of Global eveloping close or romantic Mobility: Flexibility, relationships with people from Diversity & Data different cultures can expand an Mastery. individual’s creativity, innovation Beyond Brexit, and entrepreneurship. Research MNCs believe the shows that by exposing individuals world is “facing tough to new ideas, such relationships times” as it becomes provide the cultural learning that more deeply divided shapes creative thinking. between rich and “Going Out” of the Box: Close poor, as well as more Intercultural Friendships and violent, nationalistic, Romantic Relationships Spark protectionist, Creativity, Workplace Innovation insecure, volatile Nicknamed the Three Brexiteers, Liam Fox, Boris Johnson and David Davis are tasked with navigating the UK’s post-EU future and Entrepreneurship cites the and uncertain. BREXIT

Brexit means bad news for global mobility

Michaela Rehle/AFP/Getty Images, Steve Back/Getty Images

Mixed blessings

achieve cultural learning and produce creative insights.”

Steve Jobs’ friendship with spiritual adviser Kobun Chino Otogawa inspired him to apply Zen philosophy to product design and was the impetus for graphic novel The Zen of Steve Jobs

example of Apple co-founder Steve Jobs learning Zen principles and then applying the Zen philosophy of simplicity to the design of Apple’s products. Previous studies have linked living and working abroad with enhanced creativity. However, this research, which involved several field studies, went further, seeking to highlight how social relationships between individuals from different cultures might also affect creativity. In one study, which compared individuals’ dating histories with their scores in creativity tests, those with extended intercultural romantic relationships performed well on the tests. The length of the relationship had far greater influence on creativity than the number of intercultural relationships a person had had. In another study, more than 100 Insead graduate school students representing 39 nationalities were given creativity tests at the beginning and end of their MBA programme. Students who had been romantically involved with someone from another culture 72

during those 10 months gained higher test scores for creative performance than those who had not had intercultural relationships. A final study sought to identify the effect of intercultural friendship (as opposed to romantic relationships) on creative enhancement. More than 2,000 global professionals who had worked in the US were asked about their professional accomplishments and if they had maintained close relationships with friends in the US. Those who had maintained close relationships were likely to have more creative accomplishments than those who had not. The researchers conclude that the closeness or meaningfulness of relationships is a key ingredient for achieving a creative frame of mind. “People cannot simply ‘collect’ intercultural relationships at a superficial level, but instead must engage in cultural learning at a deep level,” they explain. “Without close social interactions, it can be difficult for individuals to juxtapose and synthesise different cultural perspectives to

There are practical steps organisations can take to try to capture the potential benefits of creativity, innovation and entrepreneurship that come from close intercultural relationships. These include: • Cultivating overall cultural diversity by, for example, developing more exchange programmes between offices in different countries. • Promoting and nurturing close relationships among employees of different cultures by facilitating shared activities inside and outside the workplace. For example, managers could arrange for foreign and domestic staff to work together on tasks. The authors of this paper were William W Maddux of Insead, Adam D Galinsky, Jackson G Lu and Dan J Wang from Columbia University, Paul W Eastwick from the University of California and Andrew C Hafenbrack of the Católica Lisbon School of Business and Economics. bit.ly/CloseInterculturalRelationships

CORPORATE SOCIAL RESPONSIBILITY

Is doing good bad business? CSR activities need to balance social good with the bottom line

ow valuable are corporate social responsibility (CSR) programmes? Recent research shows that despite the social good these programmes do, they may harm business performance. Avishek Bhandari and David Javakhadze, from Florida Atlantic University’s College of Business,

The Zen of Steve Jobs

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found that CSR strategies siphon off resources that could otherwise be “deployed for identifying and funding valuable investment opportunities”. In the long run, these lost investment opportunities can result in loss of shareholder wealth, the researchers suggest. Their paper, Corporate social responsibility and capital allocation efficiency, defines CSR as: “Actions that appear to further some social good, beyond the interest of the firm and that which is required by law.” Large US corporations now spend hundreds of millions of dollars on such actions to improve their relations with key stakeholders, and because previous studies have shown that the market cares about the socially responsible behaviour of firms. Bhandari and Javakhadze wanted to gain a better understanding of how CSR affects the efficiency of a firm’s resource allocation and its performance. The pair examined accounting and financial data from a large sample of US companies, along with estimates of CSR practices based on environmental, social and governance data, covering the period 1992 to 2014. Their findings reveal that CSR reduces a firm’s overall performance and investment efficiency. Investment should follow growth opportunities, Javakhadze argues, and CSR distorts this relationship because it diverts a company’s resources from its core activities. That distortion is lower in firms where the CEO’s compensation is tied to the stock price or in those that are rich in resources. This evidence has important implications for practitioners and regulators, say the researchers: “Management should carefully evaluate the risks of CSR investing and its effect on external financing and potentially performance.” bit.ly/CSRAndCapitalEfficiency

University at Albany, State University of New York, Manuela Barreto from the University of Exeter and the University Institute of Lisbon, and Jasper Tiemersma of Nuffic, the Dutch organisation for Hiding ‘stigmatised identities’ internationalisation in education. negatively impacts on work The researchers based their conclusions on two studies, one iding your true identity carried out in the Netherlands at work can have adverse and the other in the US. In the first outcomes, including reduced job study, 95 lesbian, gay or bisexual satisfaction and commitment. It individuals were encouraged to may also lessen an individual’s remember a time when they either sense of belonging, concealed or revealed “A detrimental effect according to a study their sexual at individual level highlighting the orientation at work. affects organisational Participants were “hidden ramifications performance overall” of prejudice” also asked to recall against those with how they felt in that “stigmatised characteristics, such situation or, if they had never as being lesbian, gay, bisexual or experienced such a situation, transgender, or a history of poverty imagine how they would feel. or mental or physical illness”. The second study involved Although people may choose to 303 participants: a mix of LGBT hide these ‘stigmatised identities’ individuals, those who had to protect themselves from suffered or were suffering mental discrimination or because they health problems and others living want to be accepted, concealment in or who had experienced poverty. has a negative impact on their They were presented with fictional work, which in turn can also scenarios that involved either detrimentally affect organisational concealing or revealing their performance, say researchers stigmatised identities, and asked to Anna-Kaisa Newheiser of the imagine how they would react. ¢ DIVERSITY

To thine own self be true

CIPD employees, volunteers and members take to the streets for this year’s London Pride march as part of the institute’s ongoing work to champion diversity and inclusion

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The results show that recalling or imagining an experience of concealing a stigmatised identity in the workplace leads to lower levels of belonging, lower job satisfaction and lower work commitment. “When one is not fully open about one’s true self, social interactions suffer,” say the researchers in their paper, People Like Me Don’t Belong Here: Identity Concealment is Associated with Negative Workplace Experiences. Concealment has harmful consequences for organisations too, since a detrimental effect at individual level is likely to affect team processes and organisational performance overall. However, the study does not suggest that everyone must be actively ‘out’ in all contexts. Rather, it warns that actively concealing your identity can have repercussions, and that “environments that pressure individuals towards concealment are suboptimal”. Professor Barreto concludes: “What we need are environments where people don’t need to hide – inclusive environments where they don’t have to choose between being liked and being authentic.” bit.ly/IdentityConcealmentHarmful

DECISION-MAKING

Tackling your hidden biases Engineer the context to overcome predictability in your decisions

anagers would reach better decisions if they engaged their biases, instead of trying to eliminate them. A study distinguishes between ‘good’ and ‘bad’ bias, and suggests that the first can be used to overcome the damaging effects of the second. Researchers from 74

Warwick Business School and New Valley venture capitalist firm called York University describe a new way DFJ, for example, utilises some of of thinking that is based on the its biases to identify new thinking. premise that “decisions are often For venture capitalists looking for easier to change when we ‘go with the next big idea or disruptive the grain’ of human nature” rather innovation, it is crucial to overcome than try to fight against it. “The the bias to stick with those who are same errors that cause us to like us or think the way we do. So stumble can also be used to help DFJ uses a decision-making process us make better choices,” they say that avoids consensus: if all in Strategizing with Biases: Making partners agree on the potential of Better Decisions Using the an idea, the company has a ‘default’ Mindspace Approach. of rejecting it as not radical enough. Rather than using conventional The firm will, however, invest approaches that seek to eliminate in a start-up as long as at least bias by focusing on changing the one partner feels very strongly decision-maker’s mind, a better way about the idea. forward might be to manage biases “Research on groupthink by changing the context, the suggests that discussions and researchers explain. consensus among partners may also They point to increasing evidence lead to more risk-averse decisions, suggesting that the usual de-biasing inconsistent with DFJ’s goal,” says approach does not lead to effective Dr Chengwei Liu, one of the paper’s decisions because it only deals with authors. “Moreover, competition our conscious half – so-called will be more intense when ‘system 2’ thinking. Our automatic commercialising such ideas half – system 1 – also plays a role in because other venture capitalists decision-making, and is sensitive to may also see them coming. the surrounding environment. This “Instead of de-biasing their risk means that even such contextual aversion and competition neglect factors as the weather being sunny using system 2 techniques, DFJ or cloudy can significantly influence partners resort to ‘default’ to the decisions we make. The engage several predictable biases unconscious nature of these in their system 1 thinking.” influences makes them Other case studies “If all partners agree harder to combat, the looked at how on an idea’s potential, research paper says. Mindspace can be the company rejects it applied in M&A But these biases can as not radical enough” deals as well as in be fixed by turning them on their head recruitment. The and engineering the context to framework does not offer easy ‘initiate a bias’ to overcome a solutions, warn the researchers, damaging one. This approach relies because it requires a profound on a framework called Mindspace, understanding of the strategic a list of nine influences on system 1 and human context. thinking that shape our behaviours. “But it does offer a promising, These include: incentives; the alternative toolbox to address key messenger (who communicates strategic challenges associated with us); default (‘go with the flow’ with competition, search and and falling back on pre-set options); innovation,” they conclude. ego; and norms (what others do). The other researchers were The researchers investigated Ivo Vlaev, Christina Fang, Jerker how this approach works using a Denrell and Nick Chater. bit.ly/DecisionMakingBiases number of case studies. A Silicon

The team wanted to look into how leader behaviours affect leaders, rather than their followers. They also explored the impact of psychological power, as opposed to structural or hierarchical power. This is more about how a leader feels, and can change moment to moment in response to events such as being reminded they are in charge, or Gordon Ramsay’s performances on TV show Hell’s Kitchen are making a hiring unlikely to have had a positive effect on his ability to relax or firing decision. PSYCHOLOGICAL POWER The study involved daily surveys of 108 professional and management employees, collected for 10 consecutive working days. The surveys measured participants’ abusive behaviour, perceived incivility from co-workers, need fulfilment (how Power-induced bad behaviour satisfied they were about their can hurt bosses’ wellbeing own competence, autonomy and relatedness), relaxation at home eaders who are abusive are not and their agreeableness. just harming their employees, The results show that leaders they are hurting themselves too, engage in more abusive behaviour research has revealed. and perceive more “Abuse is not Abusive behaviour, incivility from others consequence-free for such as threatening when they feel more others, shifting blame, the abuser. It can come powerful. This, in back to haunt them” taking undue credit or turn, harms their humiliating staff, can wellbeing as it hamper leaders’ feelings of reduces their need fulfilment competency, autonomy or sense of and ability to relax at home. being respected in the workplace. It Not all leaders are influenced in can also affect their ability to relax the same way by psychological at home, the study says. power, however. Leaders who are “Abuse is not consequence-free more agreeable, valuing harmony for the abuser. Engaging in abuse and social closeness, are less likely can ultimately come back to haunt to resort to abusive behaviour. them,” say researchers Trevor Overall, say the researchers, Foulk from the University of “those in a state of elevated Maryland and Klodiana Lanaj, psychological power are neither Min-Hsuan Tu, Amir Erez and universally monsters (as Lindy Archambeau from the demonstrated by our agreeableness University of Florida. moderator), nor unaffected jerks

Abusive style in leaders is harmful to all

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(as presented by our findings that power-induced abusive behaviour hurt wellbeing). Rather, leaders are susceptible to psychological power, which causes them to have negative interactions with others, subsequently hurting their own wellbeing.” Still, high levels of psychological power may harm leaders’ ability to maintain their position or climb the ladder if they also engage in high levels of abusive behaviour. This is because their followers are likely to perform worse, the study warns. To prevent this from happening, the researchers advise organisations to: • ensure leaders have regular meetings with someone higher up in the organisation who can provide honest feedback about their behaviour; • rethink the qualities they look for in a leader and assign powerful roles to more agreeable leaders; and • offer leaders relaxation opportunities, such as engaging in mindfulness. The research paper is called Heavy is the Head That Wears the Crown: An Actor-Centric Approach to Daily Psychological Power, Abusive Leader Behavior and Perceived Incivility. bit.ly/PMBadBosses

CROSS-CULTURAL CONTACTS

What’s in a handshake? Ethnicity and gender can affect how a friendly greeting is viewed

t has long been established that a handshake can help an individual make a favourable first impression when conducting business deals or during job 75

interviews. But a new study shows that westerners view handshaking more positively than east Asians. Gender can also affect how a handshake is received – western men rate handshakes initiated by men and women differently. Major changes in ethnic and gender diversity in the workplace highlight the need to better understand the nature of social interactions between individuals with different backgrounds, says the study, When Nonverbal Greetings “Make It or Break It’’: The Role of Ethnicity and Gender in the Effect of Handshake on Social Appraisals. Sometimes non-verbal greetings can speak louder than words: Poland’s first lady, Agata Researchers Yuta Katsumi, Sanda Kornhauser-Duda, goes to shake hands with Melania Trump first, leaving Donald hanging Dolcos and Florin Dolcos, from the LEADERSHIP University of Illinois at Urbanathan east Asian participants. Champaign, Suhkyung Kim of the Perhaps this is because University of Washington and Keen handshaking is a more common Sung from the University of nonverbal greeting in western/ Massachusetts Amherst set out north American cultures than to uncover how the handshake – in east Asia, the study says. historically regarded as a sign of Significantly, however, western friendliness, hospitality, formality women rated all interactions Just 8 per cent rate themselves and trust – can be perceived by involving handshakes more highly in ethical standards different groups. positively than those that did The team showed videos of two not include this form of greeting. rganisations may need to help avatar characters – a ‘guest’ and Western men evaluated male hosts business leaders develop their a ‘host’ interacting in a business less positively when there was no moral character rather than rely on setting – to 88 western and east handshake, but rated female hosts hiring candidates with a strong Asian men and equally positively “Western women rated regardless of moral code, says the CIPD in women. The all interactions a report highlighting the scarcity characters either whether there was involving handshakes of purposeful leaders. shook hands at the a handshake or not. more positively” The CIPD defines purposeful as beginning of the Co-author Katsumi “the extent to which a leader has a meeting or started says the results strong moral self and a vision for his their interaction without a have important implications or her team, and takes an ethical handshake. After watching each for organisations with a global approach to leadership marked by video, participants were asked to outlook: “Our findings show that a a commitment to stakeholders”. rate the hosts on their competence subtle greeting behaviour, such as Such a commitment might include as business representatives, and a handshake, can lead to different treating employees well or being their own interest in doing business first impressions depending on the environmentally responsible. with the hosts. ethnicity and gender of those Purposeful leadership is Overall, the findings confirm involved in social interaction. If we important in that it provides the previous evidence that a want to make a good impression in stability and values that can help handshake has a positive effect business settings, we should be navigate a business through an in social interactions. However, mindful of the different traditions uncertain future, the report says. western participants had more and ways of social interaction that Case studies of four organisations positive views of social people are used to.” bit.ly/NonVerbalGreetings in different sectors show other interactions involving handshakes

Leaders lack an effective moral compass

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benefits too. The findings are not uniform, but suggest that “those who operate in an ethically aligned environment are satisfied at work, want to stay with the organisation and display organisational citizenship behaviours”. The report, Purposeful leadership: what is it, what causes it and does it matter?, reveals that this kind of leadership is more grounded in individuals’ personal values and ethics than in those of the business they are heading up. However, many leaders lack a moral compass or sense of ‘moral self’. In a survey of 1,319 workers in the UK, only 8 per cent of leaders rated themselves highly on the moral self component of purposeful leadership, while the majority – 86 per cent – gave themselves a medium score. “The general population has a low proportion of individuals who hold themselves to high ethical standards,” the report notes. “This signals a gap in the need and availability of purposeful leaders.” With such a large majority of leaders giving themselves a medium score, investing in leadership development could be a better way of filling this gap than relying on finding candidates who already have a strong moral code. Bespoke leadership programmes that develop moral character could help leaders understand the values of their organisations and address areas of misalignment. The study goes on to urge organisations to reconsider the ways they select, develop and assess leaders. Rather than focusing narrowly on individuals’ ability to perform, they should be looking at developing the whole person. The real challenge, says the report, “is not in trying to achieve a perfect match between leaders’ and organisational values, but in ensuring that they complement

each other in ways that best suit organisational circumstances at a given time”. The report was written by Ramya Yarlagadda and Ksenia Zheltoukhova from the CIPD, Catherine Bailey of the University of Sussex, Amanda Shantz from the University of Greenwich and Patrick Brione of the Involvement and Participation Association.

The CIPD’s HR Outlook winter 2016-17 survey shows that among employers with more than 250 employees, 91 per cent use HR analytics, compared to 54 per cent of businesses with fewer than 50 staff. “The reality is that many HR professionals and organisations are still struggling in getting going,” says Ed Houghton, author of the report and senior research adviser bit.ly/PurposefulLeadership for human capital and governance at the CIPD. A major challenge to overcome in ANALYTICS the adoption of analytics, he says, is the language used around human capital, which the report defines broadly as “the knowledge, skills and abilities of the workforce”. “Processes such as human capital Profession is in the early stages measurement, human capital of utilising new technologies analytics and human capital reporting are all connected but are he HR profession needs to different. Yet they are terms that “overcome its fear of data” if it are used interchangeably, so there is to succeed in using human capital is no consistency,” says Houghton. analytics to help organisations “The profession needs to agree understand the value and the terms and definitions, so that it contribution of their workforces. can then help educate stakeholders That’s one of the key conclusions and business colleagues about what of a CIPD report, Human capital they are and their importance.” analytics and reporting: exploring The report also recommends that theory and evidence. analytics becomes “Human capital There is growing a fundamental analytics should be interest in using capability, incorporated into HR human capital particularly as HR professional standards” is set on becoming analytics to help employers look more more data-centric. closely at which aspects of their “Future people professionals will workforce, such as diversity or need to have the competency and capability, are improving overall desire to explore different sources performance. However, the HR of information to inform their profession is still in the early stages decisions, and to help evidence of utilising new technologies to decisions for key stakeholders,” analyse people data in a more it says. “Human capital analytics, critical way, the report argues. as part of the drive for evidenceBased on a literature review of based practice, should be research on human capital theory, incorporated into the evolving measurement and reporting, the HR professional standards.” report outlines the remaining Houghton adds: “Human capital barriers to using people data and analytics may still be an area of measures in a more strategic way development for HR, but that means and communicating their meaning it’s also an area of opportunity.” bit.ly/HRAnalyticsStruggle ¡ to the rest of the organisation.

HR struggles with analytics

PERFORMANCE MANAGEMENT

When stretch goals shrink your profit Moderate targets may be more appropriate for risk-averse firms

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tretch goals’ set by managers to boost performance are not always effective: while they benefit a few companies, many others can see performance compromised. “Managers cannot simply assume that stretch goals may boost performance but can’t hurt,” warn researchers Michael Shayne Gary from UNSW Business School, Miles M Yang of Curtin Business School, Philip W Yetton from Deakin University and John D Sterman of the MIT Sloan School of Management. The team carried out two laboratory experiments to examine the impact of ambitious targets designed to stimulate innovation, promote new ways of thinking and energise employees goals, as well as the impact of more moderate goals. Participants took on the role of the CEO of an airline operating in a competitive market. In the first study, 134 managers were split into teams and randomly assigned a stretch goal or moderate goal to increase the airline’s profit growth over a 10-year period. Those with stretch goals had to achieve a cumulative net income target of $315m; those with moderate goals, $60m. The stretch goals were challenging but well below what is achievable, say the authors of Stretch Goals and the Distribution of Organizational Performance. A second similar study, involving 59 participants, examined how stretch and moderate goals affect risk-taking and commitment to the goals. 78

In the studies, compared with begin their careers in prosperous moderate goals, stretch goals times are more likely to engage in improved performance for a few, misconduct during boom years. but most participants implemented Do Good Times Breed Cheats? policies that inadvertently led to Prosperous Times Have Immediate bankruptcy, or, faced with that risk, and Lasting Implications for CEO abandonment of the goals. Misconduct reasons that managers Consequently, stretch goals and firms are more incentivised to generated higher variation in commit fraud during good times performance, created large because the payoffs are particularly performance shortfalls that high, while monitoring of fraud is increased risk-taking, undermined relatively low. In fact, the study goal commitment and generated notes, booms have been described lower risk-adjusted as periods of “Stretch goals performance. In other overconfidence, improved performance excessive optimism words, stretch goals for a few, but most led benefit some and increased to risk of bankruptcy” companies but appetite for risk. not others. Previous studies So how should boards or senior have shown that CEOs who start leaders proceed with respect to their working lives in economic setting stretch goals? Organisations booms tend to favour riskier with a large appetite for risk or financial strategies than those plentiful resources may still prefer starting out in downturns. So for the stretch goals, argue the researchers. former, taking shortcuts and For example, in venture capital or pushing ethical boundaries may private equity firms, the value become the template for how things created by ‘big winners’ in their are done, suggest researchers Emily portfolio can offset the losses or C Bianchi of the Goizueta Business small returns from the majority School and Aharon Mohliver from of their other organisations. London Business School. But for companies with a more They sought to test this theory risk-neutral or risk-averse attitude, using a data sample of 2,012 CEOs such as medium-sized family-owned of publicly traded companies in the businesses, moderate goals may be more appropriate. bit.ly/StretchGoalsRisks

BUSINESS ETHICS

Cheats thrive in boom years CEOs starting out in good times more incentivised to commit fraud

he assumption that unethical business practices abound during times of recession, when resources are scarcer, seems a reasonable one. However, a study has shown that those CEOs who

Contrary to expectations, it’s the good times rather than the hard times that lead to fraud

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US between 1996 and 2005, who received stock options from their employers. To gauge corporate misconduct they examined stock option backdating: an unethical, illegal practice that was common in the late 1990s and 2000s. It involves a CEO receiving a stock option grant on one date but reporting it as having been received on a different date, when the stock price was lower, to realise a larger financial gain. Bianchi and Mohliver used a procedure developed by other scholars to identify CEOs who were repeatedly and suspiciously lucky with their dates. They considered a stock likely to have been backdated if it was received on one of the most favourable days of the reporting period. Based on their procedure, 2.5 per cent of grants should have been awarded on incredibly lucky dates by chance alone. But their sample showed that nearly 15 per cent of grants were received on extremely lucky dates. Data was also gathered on the economic conditions at the time of the CEO’s entry into the workforce, using the annual unemployment rate as a measure. The pair found that even after adjusting for firm size, industry, number of options granted and other factors, CEOs who graduated in the best economic times were approximately 30 per cent more likely to falsify the dates of their stock option grants than CEOs who graduated in the worst times. “The present findings suggest that the broader economic environment, apart from an executive’s pay package and outside the organisation itself, can influence the likelihood that a CEO will cheat,” says the paper. The results also contribute to our understanding of the mark that early career conditions can leave on later attitudes and behaviours. bit.ly/CEOMisconduct

better than their development level would predict: 17 were categorised as ‘innovation achievers’ this year. Nine were in Sub-Saharan Africa (including Kenya, Rwanda, Senegal and Burundi) and three in eastern Europe, plus India and Vietnam. Another key finding highlighted as “encouraging for worldwide innovation in the next few decades” is the emergence of new Asian Tigers, combined with an “innovative India” and improved innovation networks in Asia. “Asia is definitely a more and more important engine of innovation in the 21st century, complementing existing innovation Regular as clockwork: Switzerland is judged efforts in high-income economies, most innovative country once again mostly in Northern America and INNOVATION Europe,” the report states. Alongside such innovation powerhouses as China, Japan and the Republic of Korea, other Asian economies – including Indonesia, Malaysia, Singapore, Thailand, the Rich countries bag top spots in Philippines and Vietnam – are index but new players emerge working to improve their innovation ecosystems, ranking witzerland has been ranked the high in several important indicators most innovative country for the related to education, R&D, seventh consecutive year. Also in productivity growth, high-tech the top five of the Global Innovation exports and others. Index (GII) 2017 are Sweden, the For the first time this year, Netherlands, the US and the UK. the GII assessed sub-national The rankings, drawn up by innovation clusters, as measured Cornell University, Insead and the by patenting – seen as essential for World Intellectual national performance. “Asia is definitely Property The leading clusters a more and more Organization, measure were Tokyoimportant engine of 127 economies using a Yokohama, followed innovation” range of metrics, by Shenzhen-Hong including patent Kong and San filings and education spending, Jose-San Francisco. that drive innovative activity and Calling for more R&D contribute to economic and social investment, the report, edited by growth. Rich countries took most of Soumitra Dutta, Bruno Lanvin and the top 25 spots in this year’s index. Sacha Wunsch-Vincent, stresses “Innovation leaders are that laying the foundation for uncontested at the top but new innovation-driven economic players are emerging,” says the development is “ever-more report, The Global Innovation Index paramount” to sustain a turning 2017: Innovation Feeding the World. point in global economy growth. bit.ly/WorldInnovationIndex2017 A number of economies performed

Innovation boosts a nation