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It feels as though all of this silolization of education has made people think that I can apply some narrow perspective on this and it's the only perspective that is worthy. And if somebody applies a different perspective to it and comes to a different point of view, it's because they're either stupid or evil. Like that's the explanation. Rather than saying, now, that's interesting. What do they see that I don't see? Is there a way I could integrate some of what they see into what I see to come up with a better, better idea?


We don't seem to be taught the curiosity about that. We're taught to evaluate. Is my idea better than his or her idea? Yes. No, if it is that, I should beat them into submission. Right. Or if it isn't, I should say, oh, dear, they're right and I'm wrong. I kind of feel all terrible about being being wrong. It's there's there's just not enough curiosity about a better a better way.


Hello and welcome, I'm Shane Parrish, and you're listening to another episode of the Knowledge Project, this podcast on our website, F-stop blog, help you sharpen your mind by mastering the best of what other people have already figured out. If you enjoy this podcast, we've created a premium version that brings you even more. You'll get ad free versions of the show like you won't hear this early access to episodes before anybody else. Transcripts and so much more. If you want to learn more now, head on over to F-stop Blogs podcast or check out the show notes for a link.


My guest today is Roger Martin, who in twenty seventeen was named the number one management thinker in the world. He's the former dean and institute director of the Martin Prosperity Institute at the Rotman School of Management at the University of Toronto in Canada. We talk about the hardest skill to transfer in decision making patterns of good leadership and also self sabotage, the role of narratives and taking bold actions and integrative thinking. You'll walk away from this conversation a better leader decision maker and have a more connected view of the world.


It's time to listen and learn.


The Knowledge Project is sponsored by Medlab for a decade, Medlab has helped some of the world's top companies and entrepreneurs build products that millions of people use every day. You probably didn't realize that at the time, but odds are you've used an app that they've helped design or build apps like Slack, Coinbase, Facebook Messenger, Oculus, Lonely Planet and many more. Medlab wants to bring their unique design philosophy to your project. Let them take your brainstorm and turn it into the next billion dollar app from ideas sketched on the back of a napkin to a final ship product.


Check them out at Medlab Dutko. That's Metal Abaco. And when you get in touch, tell them Shane sent you.


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Roger is so good to get to talk to you today.


It's my pleasure, my friend.


You had an amazing mother growing up. What are some of the biggest lessons you learned from her and how did you learn them?


Well, maybe just by osmosis. She was an awesome, awesome lady. But I think the most striking thing about how I learned is, is she would answer almost no question if you asked her a question, she would typically ask a question back. For example, if I'd asked her, mom, have you seen my I used to play with Tomcat, those little metal Tonka trucks. Have you seen my blue Tonka truck? Instead of her answering, she would say, well, Roger, what's the last time you are absolutely sure that you can remember holding it in your hand and then that I think a whole lot about it.


And then she'd say, well, why don't you go to where you were when you last can remember, having held it in your hand and sure enough, it would be there. But she didn't say check your bedroom or check this. She would always be a return, a return fire with a with a question. So she taught me that you kind of have to think your way out of things and and you have the power to do that. And that may seem fairly simple, but as of four or five year old, it's sort of a powerful lesson.


It's something that we're missing today and a lot of ways, don't you think?


Yes, I think so.


I mean, I think the education system has got a fundamental assumption that the job is to unzip the top of your head and pour knowledge in rather than to teach you how to think. Now, there are awesome teachers and we work with a lot of awesome teachers in our, I think, program, for example, who I think are attempting to teach the students how to think. But there's just too much of it. Is is pouring in knowledge and assuming that that is that somehow makes you more effective.


And as the former dean of the school, you're in a position to know that you oversaw some of the most significant changes there in a long time. What would you say is wrong with sort of like business education specifically?


Well, yeah, that one.


Unfortunately, there's a big, big problem. And and it's that business schools do not teach the fundamental problems of business. I mean, that's that's pretty bad, right? What they teach are finance, what they teach marketing to teach H.R.. And as the great greatest management thinker of all time, Peter Drucker said there are no marketing problems, there are no financial problems, there are no accounting problems. There are only business problems. And these are problems that sloppily span across a bunch of domains.


In business, education has abdicated. It doesn't even try to to teach how you think across domains. And that's really problematic. And it's consistent with with a lot of the huge problems in the world is thinking that you can decompose things into into little pieces and somehow add them up together. And they all add up to the hole that you wish doesn't doesn't happen. And business education is is a critical impediment to that as it currently stands.


So is it right to say that part of teaching people to think better is trying to teach them that everything is connected to everything else in the world?


Yes, it is. And that's a more daunting task. So I understand why business education abdicates that.


That's a more daunting task and things are less easy to prove. Right? It's much easier to prove, as you well know. You've heard that that's all else being equal. This causes that right. And you and, you know, all those other things that you have this are equal or not.


But if you do hold them all constant, then you can develop and prove a causal relationship between two things. So it's sort of easier to write a paper and do a study all of those things if you take a narrow, narrow lens. But that's just not helpful to the world. And so, you know, I think business education draws in lots of people who would have succeeded without it. They're the ones that small percentage of people who can integrate who just learned early on.


Their life one way or another, long before they got to business school, how to think integrative, then they go to business school, then they go out and think integrative, despite what business school taught them. And then the business schools says, see, like we made that person right.


And and I just I just don't think that's that's the case.


Where should that start, that integrative sort of teaching and what should it look like? You said you strike me as somebody who's thought about this a lot more than the average person


I think I have.


And and I've been taught things that I didn't I for sure didn't expect or understand. So as you may know, I introduced this concept of integrative thinking.


I wrote a book on it and introduced the concept of a two to business education to the Rotman School. And I had a student, a wonderful student by the name of Ali Avichai, who came from an unusual background, primary education. She was a schoolteacher before coming and doing an MBA. She loved integrative thinking and said to me as she was graduating, Hey, Roger, I think you can teach this to younger people than MBAs.


And I said, OK, let's see. And we arranged through through a friendly, friendly person to test it out at an all girls high school called Branxholme Hall. And it was spectacularly successful. And it was an eye opener to me because these girls who were grade 10 girls, so they had definitively six fewer years of formal education in grade 12, four years of of undergrad compared to our MBAs in our MBAs on average, have about four and a half years of work experience.


So they have ten and a half fewer years of life experience and their ability to come up with integrative answers was one hundred percent as good as as the MBAs. And so I said, whoa, whoa, whoa, whoa, whoa.


What does this mean? This means that that additional six years and 10 years of life experience is good for nothing in making making you better at doing doing this thing. So that was a real wake up call.


Then we started teaching teachers, high school teachers, because we had this conception, how foolish we were. We had this conception that, well, you know, high school was really pushing it, that your intellectual development was was just maybe barely ready. Now, that wake up call was not your intellectual development is really ready. And some primary school teachers came to our our programs. And our first reaction was, oh, no, no, no, no, that's silly.


You can't teach it to kids like that. I mean, that they're just too young to really understand this complicated technique and bless the the teachers. The teachers were I think we'll be the judge of that. And they started doing it. And so we now have teachers in this in the school system in Ontario teaching as young as as grade one and two students how to do this. And here's the cool thing. They're really good at it.


It is just charming, actually, to watch these these kids work on solving kind of either or challenges. And we have all sorts of fairs at the school. They come in and I always get a weepy listening to them in. The bottom line is, is that they don't need to be untaught anything. Right. So that's their gigantic advantage. They're easily smart enough and they don't have a view already built up that life is full of either or choices where it's a devil or the deep blue sea, and you just have to suck it up and choose one bad choice over another.


They don't understand that.


So when when you say, OK, there's this there's here's this choice, do we do this or do that? But here's a technique for figuring out something better.


They're like, sure, let's go do it.


And they're great at it, like, really good at it.


You have to force that methodology for teaching that. Can you walk us through that a bit?


Sure. So you start with the notion of taking the two models, let's say, and we often use the Toronto International Film Festival as an example. You say there are two models of running a film festival like Toronto, the community oriented film festival. Anybody can go. There are not velvet ropes all over the place. There's not a jury. It's just a friendly community, a film festival. Then there's Cannes on the on the on the other side.


Rather than saying, let's think about something in between right away, you say, let's push those to the extreme, the completely exclusive film festival, the completely inclusive film festival. Right. And then you lay out how they work, how do they do each of those work and produce the output?


That they produce and we ask, how does it work for the various players involved? So how does it work for the community? How does it work for the film industry?


How does it work for the festival itself? And you lay that out and you say, OK, here's how here's how this one works. And here's here's how Cannes works and here's how to for Sundancer or Tribecca works.


So that's one. And then you ask yourself the question, what about these things do we love the most? What features, what mechanisms do we love of both?


And then ask the question. The third step is do what we call these integrative moves, because what we've noticed is that there's three kinds of of integrative moves. And in the case of the TIFE, it was what we call it, double down. So Piers, handling who was running at the time, loved everything about the inclusive, community oriented film festival. Everybody did for the community, loved what it did for the industry.


But he loved one thing about Cannes, and that is the buzz that it created that brought the attention of the international media, which made it a wonderful sponsorship opportunity. So Evian would pay a whole lot of money to make sure that a bottle of Evian is on the table when every starlet gets gets interviewed. And so what what Piers did it say? It's come up with this brilliant notion, which is we can make the inclusive film festival even more inclusive in a way that gets us the one thing we want from the other model.


And that was the People's Choice Award. Right. So the People's Choice Award said we will create buzz around who's going to win the prize. But the prize won't be an exclusive prize of an exclusive jury that'll make the audience feel like, well, it's them that's all about them. It's actually all about us. So it made the festival more inclusive and got the one thing he wanted from the the other model. And now TIFF is the most important film festival in the world.


That's the third stuff. The fourth step is you've got to try it, try experiment with it to see if it works. But that is indeed what they did. It's work better and better every every year. And it's the most important film festival in the world, maybe not the most famous because Khan's been around for so long and famous for so long. But anybody in the industry says Toronto is the most important film festival in the world. That's integrative thinking.


And quite quite frankly, we've we've got no place in the world. It feels to me where we're presented all the time with things that are either or look at US politics. Right.


You're either a Trump or a Biden guy.


And we just take sides in battle and fire missiles at one another. It feels as though all of this silo ization of education has made people think that I can apply some narrow perspective on this. And it's the only perspective that is worthy. And if somebody applies a different perspective to it and comes to a different point of view, it's because they're either stupid or evil. Like that's the explanation. Rather than saying, now, that's interesting. What do they see that I don't see?


Is there a way I could integrate some of what they see into what I see to come up with a better, better idea? We don't seem to be taught the curiosity about that. We're taught to evaluate. Is my idea better than his or her idea? Yes. No, if it is, then I should beat them into submission. Right. Or if it isn't, I should say, oh, dear, they're right and I'm wrong. I kind of feel all terrible about being being wrong.


It's there's there's just not enough curiosity about a better a better way.


Yeah, that's really interesting. I mean, one of the things that strikes me about that, I always ask myself when I see somebody doing something that I wouldn't do or strikes me as odd, I'm like, what would the world have to look like for that to be the option that I was engaging in? Right.


So that's good. That's good. That's that's a that's sort of a variant of the question I asked in strategy, which is the most powerful question and strategy is what would have to be true, not what is true, what would have to be true for that to be a great idea? Because that that gets you noodling around another logic. And and it is possible that by taking pieces of another logic structure, you can come up with a with a better idea.


I want to come to strategy in a second, but just before we leave integrative. Thinking here, are there limitations to this idea? I mean, it sounds very novel to be faced with a hard choice with trade offs and come up with an option that sort of like mixes this either or thinking. And where do you see this falling apart and where do you see it really under applied?


Well, I'd see it applied in the world in general. Right. I guess is is my view. Lots of people just asked me, you know, about limitations and should you do this all the time and the like?


And I say, listen, if the choice is is between kind of lying on the beach or getting kicked in the groin, you don't need to use integrative thinking. I'll take lying on a beach. Right.


But it's when it's when you feel like, oh, I hate I hate the fact that I have to that I apparently have to choose here. So you don't love either option, either choice and you.


And that's the time that's that's when a little light should go off in your head and say, stop, don't choose because you don't like it either. But I mean, I use it all the time.


I mean, I'm feeling all cheery these days about Tennis Canada, because this Monday in the rankings, the the men's rankings in this case, in this case, we're doing well on the women's side, too. But in the men's ranking, Canada had three players in the top 20. Interesting fact is that this is the first time in Canadian history that we had the most players in the top 20. We were tied with Russia. Russia's got three. We've got three.


US, Spain, all these other powerhouses have fewer before. Twenty five. When we put in place the Tennis Canada strategy that's resulted in this, we had zero in history. What was the magic solution to that? Transformed us from a nothing country, literally a nothing country that was irrelevant to a leading tennis nation where everybody says how is it that they've got so many great players from a little country that's got snow all the time? And and the answer is we we looked at the French system, which is a more control oriented system in the US system, which is a Wild West kind of system, and said how can we, rather than choose between them, come up with a better solution so you can apply integrative thinking to create incredible outcomes?


Left, right, center. I did at the Rotman School too. That was a product of integrative thinking choices. So I mean, maybe I have a hammer so every darn thing looks like a nail, but I do eat the dog food. Right. I apply this to all the tasks that that that I have and it's proven to be extremely valuable.


I interesting backside. I mean, I sort of hit on this as well. I went to business school in 2007 and I almost dropped out because I was just so disappointed in what I was. I come from a world of like Charlie Munger and sort of like interdisciplinary thinking. And I got to business school and it was like, this is ridiculous, right? Like none of these subjects are connected to each other.


Oh, really?


So that's good. I'm well, I'm glad you figured that out. Most people don't they they become indoctrinated into that notion, right. They come in indoctrinated into the notion that my job as a businessperson is to figure out into what category this problem that I'm facing falls and then apply that to all of this is a finance problem. So I will apply the capital asset pricing model or this is an H.R. problem. So I'll apply theory X theory why they're their tool matcher.




And that's and that's why MBAs are viewed widely as these incredibly narrow minded people.


Oh this is so fascinating. Have you seen? I want to come back to that in a second. Have you seen a lot of changes in terms of the incoming students, like with these girls that you sort of went back to in grade ten and you taught them integrative thinking? Have they had like tangible or quantifiable sort of results that are different as a result?


They it's more anecdotal, but yeah, lots of them, lots of them come back to us and tell us tell us stories of what they what they've done and what they've been up to, or they'll go back to their teachers and and and tell them, I mean, it is something I'm encouraging. The I think people to do is start collecting more data to show the the effectiveness of it. But we have some great stories. There's one of our absolutely save teachers teaches grade three and four.


And she was teaching grade three in a big school that has a bunch of classes of each. And the grade four teacher came up, came after that that at lunch and said, you know, in the first week, let me name a bunch of names.


And you tell me whether they were in your section of. Grade three, and she got A, B, C, D, E, F, G, and in our in our teacher is like, well, how do you how how do you know that?


And and the third grade four teacher just says they're like they behave completely differently. They ask a different set of questions. They do this, this, this, this.


And then our teacher was sort of like, you know, that's good. But she was 100 percent accurate without without knowing she was one hundred percent accurate in identifying our our teachers, our graduates. And then that teacher became a fanatic about it, too, because she said that they're just better. They're just better.


So good. We're talking a little bit what we were before we started recording about sort of Bonnel marching in the MBA and how one of the problems that I have with the NBA is it was so siloed. And you're giving these models. Here's a finance model. Here's the strategy model. Here's a decision making model. And we don't think of integrating these models. Can you sort of riff on that a little bit? And in terms of how that impacts education and the role of models being maybe the best model we have at the time, but not the only model?


The way I think about business education is that it's it's, I think visualized like one of those little red toolboxes. Right. You you come in as a student with that empty and and you get a bunch of tools, you get a hammer and you get pliers and you get a screwdriver and whatever put in your in your in your toolbox. And you're taught to size up a problem and ask the question is this is a hammer best for this is a is PIRS best for this is a screwdriver, best for this is a wrench.


Best for this.


And so it's this job of matching a bunch of narrow models to real world problems.


And that's why MBAs unfortunately get get get criticized for being the sort of you know, we had an MBA here and he did this silly thing. And the silly thing, if you analyze what way the person criticized what the MBA did, it typically falls into the category of the applied one narrow model to a broad, a broad question. And I understand why they do it. That's what they're taught. That's literally what they're they are taught. And you can recall this from your own MBA.


You know, when you do a case study, the case has been written to illustrate a tool. Right. The answer comes from applying a given tool like an and and we're made to think, oh, these are just general business situations. No, they're not that the writing of Harvard Business School case has evolved to this art form, which is to write a case that illustrates one narrow tool. That's what the business school world spits out and spits it out into a world that's organized that way.


I always found working with an MBA is a bit sort of difficult afterwards because they want these packages very much like case studies. And what you're sort of reinforcing without, you know, unconsciously, I think, is that all the information in the package is all the information that you need to make this decision or all the information that's relevant and pertinent. And that is so often in real life. That's not the case at all.


We get absolutely what we advocate for. There's no no question in my mind. Same in economics, right? There are a thousand partial equilibrium economists for every single general equilibrium economist.


And so we have economists who who kind of know everything about whatever fiscal policy, but nothing about labor policy or labor economics or environmental policy or the like.


They and they and they do that know, I'm not going to think about all those things, but I'm going to I'm going to think about the thing that my model covers. And it happens in medicine, too.


We had a wonderful lady worked with us on applying integrative thinking to the medical field, which is very valuable and when worked out well. And she was talking about her residency in which she is a resident, her attending saying things like, could you check on the liver in in room 217? Right. It's not check how Mrs. Smith, who has got the kind of liver problems and it's liveried check the liver.


Right. And and she said, you know, it's down to that sort of kind of narrowness. We're not even going to talk about the person. We're going to talk about one organ in the body. And so we're sort of teaching from from the word go not to think holistically, to think to think as narrowly as as possible.


And it causes blindness. Right. Like, we miss obvious things because we're just looking for something to fit this model. And then we we want to apply this model that we know. And I found this with my I had a computer science degree and then went into. The corporate world and then, you know, you start managing people and all of a sudden most of my computer science degree is irrelevant. Computers do what they're told to do. You know, if there's a mistake, it's always with you.


People or biological systems are much different. And I found a lot of the education that I had learned just didn't apply anymore. But the way that I tended to approach problems was very based on this comfort level with this is how I was taught to approach problems in school, and this is my experience. And then you carry that with you.


Absolutely. And it's a very interesting thing going on, people and a huge difference. So our MBAs at the Wharton School of about four, four and a half years of work experience are executive MBAs have about 14 or 15 years of work experience. So the MBAs take on average, less than one second year course in the entire OBHR field. And they just don't think that stuff is important at all. They load up on finance and strategy courses more so than any any other courses.


The MBAs have an insatiable desire for OBHR courses because they they have the learning that you said you had when you got into the into the real real world. They've been working in the real world for 15 years and they realize that everything is a people people issue. I don't think we do a good enough job in business school and helping these students understand that taking courses in that field, understanding more about the people dynamics is important. But they those courses, as you well know from having taken at, are less replete with with very formal models where you can calculate something.


Right. In finance, you can calculate yield curves or Sharpe ratios or or whatever, and you can do a five forces analysis or a Nash equilibrium in your strategy course. So they feel more comfortable learning a model because they wish the world would behave according to models like that quantitative sort of mechanical model. So they're more comfortable with with that.


We do that in the workplace, too. And I notice this with policies and procedures. Right. Procedures are basically like an algorithm that you apply given a certain situation and certain inputs. And what I discovered is that it just eliminated thinking because people would go, oh, there's no procedure for this slight deviation from what would happen. And I can't respond because at first you can. But you lose that ability over time to actually apply judgment. Well, maybe I shouldn't apply this procedure in this particular case and I have to do something different.


And that's where this this teaching thinking and teaching judgment sort of comes in. And I find that when we get into organizations, we actually reinforce this model siloed, predictable way of solving problems.


Absolutely. And there and if we want to go on this vector, it gets even worse than what you've described go on.


Which is which is we we dramatically, vastly overuse science. So what what business? What you were taught in business school and you tell me if if I'm wrong, wrong on this. Is that a good business man or woman. Business man in your case, if you're going to be a good business man, Shane, you will make decisions based on analysis. Yeah, right. You'll do the analysis and make a decision. You're some kind of a corporate floozy if you're just going making decisions without without the analysis behind it.


So you can ask the question, where does analysis come from? The answer is from Aristotle of twenty five hundred years ago, fourth century B.C., Aristotle essentially created science. The book is called Analytic Capacity or where he where he thought it was the first man in the world to say, here's how you can determine what are the terms of use this. Here's how you can have a rigorous methodology for determining the cause of the given effect, where you experiment, experiment, watch, watch, collect data and you can say, aha, this causes that all of the the future of science is based based on Aristotle's understanding.


We think that science came from the scientific revolution back in Newton, Descartes, Galileo, they formalized what Aristotle did two thousand years before them. So the guy who invented science, though, pointed out something about science. He said he said science. This methodology I've used is for the part of the world where things cannot be other than. They are. So what does he mean by that? Well, if I let go of this pen. What will happen in the fall if I let go of this pen 10 years from now?


What's going to happen? It's going to fall. If I let this go with this pen and Antarctica, it's going to fall. That's the part of the world where things cannot be other than they are. And so so there it makes a whole lot of sense. If I observe all falls that have ever happened in the past, what's it a pretty damn good predictor of?




Penfold's in the future? Right. So that's the part of the world where things cannot be other than they are.


And he said that's what you need to use assigned to reasoning method to be rigorous about understanding, because at one point we thought it failed because all objects like to be closer to Mother Earth. And and eventually we figured out that, no, there's a universal force called gravity that pushes everything down.


That's the development of of scientific knowledge. But the guy who invented science warned do not use the scientific method. Why would you say that? In the part of the world where things cannot be other than they are science analyzed data, collect as much data, analyze it rigorously to determine causes of effects and this other part of the world, imagine possibilities and choose the one for which the most compelling argument could be made. And he said the job of human beings and that former world is to understand the causes of the effects that we see so that we can optimize the world to that.


We observe all these people who smoke getting lung cancer so we can optimize against that by trying to stop people from from smoking, he said. In the other part of the world human beings job is to be the cause of the effect they want to see right.


To change the world in in in a better way by imagining possibilities and making those those new things come true.


What we've done is said that is for bad floozie type type people. The good ones are the ones who always apply science


I like that way of thinking in terms of like how you're explaining it, we are taught these models. We apply them as if they predict the future. But the reality is we're in a constantly evolving and changing environment and our ability to predict the future is more limited than we think it actually is. I mean, if we were able to predict the future, we would have seen covid come in. We would have seen a whole bunch of things coming. And that sort of relates to your your latest book about how we we hyper we predict this.


I almost think of it as this beam of light. We predict this beam of light into the future as if that's the only possible future, and then we optimize for that particular future. So we take away margins of safety in the supply chain. We sort of think of it as, you know, we take margins of safety and we turn them into money, which is what business school in a way has traditionally taught us to do. Right. You know, you don't need just in time inventories better because you have less inventory in the balance sheet, all these buffers and this slack that we sort of developed.


But these buffers in the slack allow us to position for multiple possible futures. They allow us to easily pivot when the world doesn't work the way that we think it was. The problem I see with this and the pushback that I give myself when I think like this is that in the moment, being inefficient and positioning for multiple possible futures is always suboptimal to somebody who's hyper efficient for this one particular feature. So in the short run, we're always looking like we're behind, but in the long run, we always win.


And then we have to deal with this sort of like time line difference. If you're the CEO of a company, I mean, what's your average tenure? It's a couple of years, right? So you have to sort of like get in and do your thing and get out. And you're not thinking about it from a long term point of view. But I'd love to hear your riff on this.


Wow. I can't do much better than you. Right? I mean, I think your diagnosis is is is bang on. And this is this is why I think a great a CEO and I've talked a lot. You probably know Paul Polman is a friend of a friend of mine. He's always nice enough to say that I taught him a strategy when he used to be at Procter and Gamble. But we talk about is that the part of the CEO's job is to create enough of that discretion so that they can do those things that that they know are going to be in the interests long term, like in your case, building up some slack for the for the bad times, because if they don't build that up, they will be forced into the one hundred percent efficiency now and that'll kill them sometime in the future.


It may not kill them during the time their CEO, but they won't have shown great stewardship for their organization. So I think you're I think you're right. And and it's one of the challenges of the modern capital markets. Right. Modern capital markets say gimme, gimme, gimme. Right. If you're not using the money, you buy back shares or dividend back to me. Lever your lever yourself up so you're more efficient.


Capital structure, all of all of those things are taking away that optimal amount of slack that that CEO has to make decisions that are good for the company, for the long term to invest in things for for the future. That's one of the reasons why I think that America had a huge advantage over the rest of the world for probably 30, 40, 50 years, somewhere between nineteen thirty and nineteen eighty, where it had the best capital markets in the world for helping companies grow and prosper.


I think in twenty twenty now, America has got a capital market that is a. To American competitiveness, because it is causing companies to behave in ways that aren't good for the company, its employees, America over overall


Oh double click on that.


Go deeper. Talk to me about that.


Well, I think what we're what we're getting is this taking away as of managerial slack driving managers as much as they can to managing for the short term for the this quarter.


Now, you have CEOs who stand against that, but the pressure is is in in that direction.


And it's dramatic pressure and and it's causing all these bad things. Right. There are studies that say CFOs, 40 percent of CFOs freely admit that they will they will not make an investment that they know is NPV positive in order to make this quarter's guidance. So all of that stuff is causing companies to to perform less well than they could. And that's a capital market problem. That's that's why I think I think we're going to look back 20, 50.


We'll look back on this period. Nineteen forty ish. Thirty five. Forty ish to say twenty point twenty five or thirty as this insane period where we thought the widely held, publicly traded corporation was the optimal form. And we're going to we're going to look back and say, what were we idiots thinking that that's crazy because it didn't work. It created all the wrong the wrong incentives. And we're going to be dipping into a world of more controlled companies.




Doesn't this create, like an arbitrage or almost competitive advantage for private companies or companies that are largely owned by one shareholder? When I look back and I look at Berkshire Hathaway's like track record, one of the things I ascribe that to is that Buffett and Munger controlled about 40 percent of the shares until recently so they could sit on cash and not do anything and not worry about an activist investor or, you know, and what they were really doing, I think, personally, is their positioning for multiple possible futures because they don't know what to do.


They have no degree of certainty in what the future looks like tomorrow. So we're just going to sit here in position for all of these possible futures. The same thing they did in March when people were like, why didn't you deploy all this money into the stock market? Well, that's easy to say. Looking back with hindsight of what what the stock market has done since then. But at the time, it's like, well, cash may become the most valuable thing in the world.


So we're going to sit on it and position for multiple possible outcomes. But it's always suboptimal. And so you need this control, which is comes from a private company often or family controlled or you could even probably get away with it with a super charismatic CEO. But these companies will actually, given what you're saying, if that's correct, they'll have more of an advantage over the next 30 years because they'll be able to build up the balance sheet because they have extra inventory and they can take advantage of sort of call it the professionalization of management in terms of model thinking, which is eliminating slack, eliminating and preparing for this next quarter and being hyper efficient on this next quarter.


I couldn't I couldn't agree more. And I've actually got an article on this subject coming out in the January February ACBAR on what I think is is the way we're approaching the tail end of the domination of the widely held, publicly traded corporation as the corporate model. It's just got too many problems that are arguably getting worse, not not better.


And it's one of these things.


There are so many things in life where it's like how how on earth did the logic structure hold for so long?


Right. So the view of a board of a widely held, publicly traded, professionally managed company. Right. Is that we need to have the board in my Argenton, as you as I'm sure you wrote about this with agency, the agency theory that that managers are imperfect agents. Right. They have self control problems. They are not necessarily going to manage on behalf of the shareholders.


And and so we have to discipline them. Right, to make sure that that the agency costs are not too high. What's our tool? Well, they report to a board of directors who represents who represents shareholders in and they can discipline them. Now, did anybody ask the question, what exactly are those board members? Would they not be? Agents just like management, and so what you're saying is that our solution to the agency problem is to put the fox in charge of the henhouse.


That's our solution. Yeah, yeah, yeah. That'll really work.


Well, I mean, it's like where where on earth did this logic come from? Right.


There either is an agency problem, in which case we have put foxes in charge of the hen house or there isn't an agency problem, in which case we shouldn't be bothering with any of this any of this crap. But the idea that that a board will discipline management is is just an absolute fantasy. And that's a core kind of element of the logical structure that guides the workings of the capital markets, the equity markets and the widely held, publicly traded companies.


It's just theater.


It is theater. Oh, my God.


But it gives us comfort because we're like the birds watching it for us. And yeah, I totally agree.


Yeah. I mean, I think I think of boards of directors as being like fire insurance that works, except when there's a fire,


I think they can work there.


Like if you have I think what I love to see on boards is it's not necessarily a large ownership of the company, but a high percentage of the person's net worth involved, sort of like really invested people. But they don't meet all of these requirements that we're starting to see in terms of like the ideal board, according to the stock exchange and the ideal board, according to sort of if you're a person who might think and apply a little bit of a judgment to it are often two very different things.




I agree. I mean, I honestly think that a good versus bad board members, the the key criteria are kind of psychographic ones


expand on that.


Well, they're attitudinal. They're they're what does the person think of his or her role in life? Right. It's things like that. Not are they a sitting CEO or the CEO or do they have financial expertise or whatever. It's it's how do they how do they behave? How do they think about their job? I've written about this, too.


I think the only the only useful reason for wanting to be on a board is, is that you think a well functioning board is integral to the success of democratic capitalism.


Now, how many people think that that's the reason for being on a board? Not not many. And most of the reasons for wanting to be on a board are bad for the effectiveness of the board. Right. So one reason for being on the board is it's good pay. Well, if you think it's good pay, then you will not be will not do anything to sacrifice good pay. Being on a board is prestigious. While you're not going to do anything that will sacrifice, the prestige is good camaraderie with other interesting people.


While you're not going to do anything that sacrifices camaraderie, I mean, they're all they're all bad reasons for being kind of on the board. Again, one of my theories in life is if you're putting something together, you have to think of what is it that would cause a person of the sort you need to fill the chair that you have designated. I talk about this in terms of bond bond rating, right. We said in the global financial crisis, what on earth were these bond traders doing rating things triple A with like an infinitesimal kind of probability of default and and they were defaulting on one hundred percent.


How can this possibly be? Well, you've got to ask the question, what would cause somebody to willingly sit in a chair called bond trader at Moody's or S&P? And I think the only logical answer you can come come to is that they are the only reason they would be in that chair is that they're not particularly good at reading bonds. Right. Because if they had a skill set that made them good at rating bonds, what chair would they be sitting at?


Would be trading bonds.


They'd be either sitting in a chair at Goldman or Morgan Stanley or their own or Apollo or their own, but their bond fund. So the only people who would would think of being at Moody's or S&P rating bonds, the only people who do that are definitively less good at rating bonds than the people who are running the the the bond market. And sure enough, they they came up, they came up wanting. But that's that's just fallacy of of we identify jobs for people, create that chair and then don't think about whether it is possible to get somebody to sit in that chair that can actually do the job that we need them we need them to do. Think about stockbrokers, right? There's only one thing you can. No, absolutely, positively without a shadow of a doubt about a stockbroker. The only thing that's for sure, you don't know if they're male or female, young or old. And but what you know is that they're crummy at picking stocks


because if they were good, they wouldn't be a stockbroker.


They would be a hedge fund.


Yeah, but this is sort of why I like to see boards with significant personal ownership as a material amount of their wealth, because I think, you know, maybe it just gives me another narrative for why they're on the board. But I think it also gives them a lot of investment in terms of the success or failure of the business. And it takes us away from the short term planning cycle of sort of thinking about it and quarter by quarter basis and start thinking and sort of like decades and what you have to do and the investments you have to make to make this company not only sustainable, but position it for multiple possible futures as things change.


Yeah, yeah. I mean, I'll give you an example from my own life.


I was on the Thomson Reuters, Thomson and then Thomson Reuters board for 14 years. And and a guy I love who is on for all the time. I was on Vantz Oppermann and the Copperman family owned West, their legal publishing company. The best the best business in touch is just what remote that has. Yes.


A gorgeous business. And and Vantz A was in it for the long haul. Last time I checked, he's still on the board. I've been off the board for like six or seven years. So he'd been on the board for twenty or twenty five years by now. And and I don't know how much the Oppermann family has in Thompson stock, but I think it's still quite, quite a bit from from the from the original transaction. And yet he takes his job deadly seriously and thinks about the long haul and and and is an awesome director, probably one of the best directors I've witnessed in action.


So I agree. Skin, skin in the game is a good thing to be sure. It's sort of like it's three times know they must own stock. That's three times annual board fees. That's for those people. Unfortunately, that's trivial. That's trivial. That your desired desired outcome happens, unfortunately, in only a small amount of time.


Totally agree. You study you've worked with you write a lot about leadership. Are there common patterns to success that you've seen across leaders other than integrative thinking?


I mean, they tend to relate to relate to integrative thinking.


I mean, I think great leaders are you have as a core characteristic when somebody says something to them that doesn't agree with where their head is now, the model that because we all we model everything and we say, I am running this company. And and I think, you know, I think this is the best the best product that we that we offer. And somebody somebody comes up to you and says. Roger that is going south. That sucks.


I don't know why we're investing so much in that. Great leaders.


First reaction is who say more. Tell me more about why.


I want to understand why you think that what you see that I don't see. Yeah.


Yeah. And that's that's because it has this like, super big, not like knock on effect. Right. So one, it causes your subordinates to all think that if you've got an interesting thought, I'm open to open to hearing it. I don't I'm not going to just shut that, shut that down because it disagrees with me.


So everybody kind of is more inclined to to think about things and think about things differently and not be not be afraid of that.


And you just get more raw materials. Because what we learn in integrative thinking is, is if we go back to that that TEF example, unpacking how the inclusive festival works and unpacking how the exclusive festival works, all that unpacking gives raw materials, which you can kind of recombine in entirely new ways and associative. What is right. Yeah, exactly. Exactly. So when I say this is our best product and we are going to win on the basis of this, that's only a set of raw materials that relate to that theory.


And if I can incorporate in a whole nother huge pile of raw materials, that's just another pile of raw materials I have access to.


Then then I can then I have a chance of coming up with a much better, much more powerful solution. And the person might be wrong, right, that this is not this is not a terrible product. Actually, there's a weakness in this product that by using that person's thinking, we can get rid of. And so we end up going with the product anyway, but doing it in a different way than before. That to me is key. I think another thing that is that is key is, is in this May this may sound a little funny, but is you could say it contrasts with my view of possibilities.


But the other thing is that they are sort of deterministic. Right. So the great leaders are able to say if this happens and then this and this and this and then this, we're screwed. Or if this happens, it will be will be in the kingpin's seed, like the less good leaders sort of just say, well, we're just going to sort of bob and weave our way down the field and see what see what happens. They're not they're not deterministic enough.


I think stronger leaders are willing to have a hypothesis about how they think things are going to play out, then be open to seeing seeing changes in that. But that gives them the boldness to make decisions.


Right, because you have to commit assets irrevocably to decisions to be great as as a company.


You can't just say, well, we'll do a little bit of this, a little bit of that, and we'll shift and change. You have to say at a certain point in time, this is worth investing in and we won't be able to get the money back because it'll be invested in a building or invested in a piece of software or invested in these in these in these people. And so they they are willing to make those those choices because they say unless we do that, we're not going to get to this place.


And I guess the last the last one is just I just don't know any what I think of as great, great leaders who don't love other people.


I mean, if you think people are annoying and you have to put up with them and put up with their foibles rather than you genuinely love them, then I think you can only be so good of of a leader.


I want to come back to sort of taking bold action here. And I think fear often prevents us from taking bold action. We may do a little of something outside of the ordinary, but not too much, because if we fail and we do something that's far different from the norm, we're moving out of this Gaussian distribution and we're going to the fat tails. And we've been taught that we don't want to be in those fat tails unless we're extremely successful.


Right. But this way, if we're wrong, we're not too wrong. And one of the reasons I think that we we like to keep within this narrow maybe call it one standard deviation band is fear. And I'm curious as to your view, but how we develop courage in the face of fear and the role of narratives in the story we tell ourselves and our employees.


You're absolutely right. And I've just written written a post on this or the first the first of a three part post on fear called fear rules, because fear rules us and there are rules for managing managing fear.


But it is it. Does come to to telling ourselves stories. I mean, we we create fear or make fear go away depending on what story we tell ourselves and you can.


My observation is that the people understand this and understand the debilitating aspect of fear. And that's why I that's why I argue that in Hollywood, the number one box office star of every era of movies played one character, and that is somebody who faced fear and didn't act fearfully.


Charismatic, unblinking, well-dressed. James Bond. Sort of a sense bond.


Yes. Or Tony Stark. Right. Or Arnold Schwarzenegger or or Humphrey Bogart is sort of they all play the same character. Right. Which is how high I can wisecracked my way through this. And it is and it resonates so deeply with people because it's if only I could do that in the face of a fear, I would be successful. And instead I am ruled by by my fear.


I think most fear we create ourselves. We produce it ourselves as a as a as a reaction.


And trying to tell yourself a story of how you can sort of deal with that is important. And, you know, people think of me think of me as having been a successful dean at the Rotman School.


Blasim But there are some things they don't they don't know me like.


Well, we created a completely different economic model that enabled the school to go from having a budget of 13 million in the last year before I got there to one hundred and thirty million in the last year, I was Dean. We needed a new economic model because the University of Toronto economic models were nuts and so you couldn't plan for the future. And I went to to Rob Pritchard, the president who hired me, and under the provost who hired me and and said after about three or four months, you hired me to make this a great school.


We can't sorry. We can't with the current model in the current model was every year the provost decides how much revenue you have. Right. It's not things you can do that build revenue. It's like they allocate. I said I can't do that. Here's what I'm going to I'm going to do. I'm going to double the size of the program, quadruple tuition, quintuple the endowment, quintuple executive education and get this much money to spend. And we'll have a we can have a great business school.


But in the current economic model, that money won't flow to the to the business school.


So we can't plan plan for it. And I said I'd be happy to pay you a tax. And right now her tax is about two or three million dollars a year to the to of 13 million. Under this plan, you can have a forty million dollar tax, but we need a different system. And they both said, OK, OK, OK. And let's and and we'll work on that. And and I said, in the meantime, can I spend the way I was planning to spend?


And they said, yes, but this was just verbally. And so I thought they were going to work this through the governance process maybe in six or nine months. It took four years. Yeah. And in those four years, because we had to go into massive deficit, 14 million accumulated deficit, which we then came out of completely, the whole plan had paying it back. So that were that we were plus.


But for each of those days, nights for for four years, I had to go to bed. With the recognition that if Adil Sedra the problem lost faith.


In his ability to get this different, a different system through governance, through Governing Council and so on, all those people and said Roger is running an unauthorized 14 million dollar deficit, my career in Canada would have been over. I would have been fired. I would have been on the front page of the Globe and Mail as having kind of illicitly spent 14 million dollars. And I would have probably had to leave the country and go back to the states where I was, where I had been living.


Not only that, I couldn't tell a soul this, because if I told anybody that and they started to act that way, it would encourage Addle to believe that.


I believe that he might not actually actually do it.


So I had to live for four years with the sword of Damocles, literally. I literally went to bed in the sword of Damocles was above my above my my head.


But I mean, I told myself a story which is just, Roger, are you doing the right thing or the wrong thing? Is this good for the school?


Good for Canada, good for University of Toronto or not? Yes. Did you actually ask for permission and they gave it to you verbally? Yes. Could you go back to the states, go back to your old job and pick the pieces pieces? Maybe you could never come back to Canada again because you'd be such an embarrassment. But but how bad is that? And I said, this is worth it. It doesn't kill me. It's worth it.


But that narrative is what gave you the power to sort of maintain the course. Yeah. Yeah.


But I could have told myself the story. You will be crushed.


You're a Canadian, you're an Ontario, and this is your home. You would be you would be embarrassed thoroughly. Your family would be embarrassed. Everybody would be embarrassed. And I could have focused on on that. And I would have probably caved and gone back to Adele and Rob and say, we've got to work our way out of this will change directions and I'll stop spending.


And I don't know what. And the Robbinsville School wouldn't be the Rotman School.


It is. It is today.


Well, luckily, it all worked out. Had it not worked out. I'm curious to see if he would have thrown under the bus or sort of I guess only only you would know that and him.


But yes. And I got to say, adults, adults who then went on to be president of the University of Waterloo, a great man. And he didn't like I had I had my faith properly, properly placed. He followed through and it was hard. He got a lot of pushback. Are you doing a special deal in?


The thing that makes me happiest is is then David Naylor. When he became president of the University of Toronto, he applied the Rottman system to the whole university is a better system for for being able to plan for the long term. So so I yes, I wanted to make sure Adle stood one hundred percent by me.


Coming back to sort of the leaders that you've worked with, we talked about common patterns of success. Are there common patterns of failure or self sabotage that you see repeated over and over again and otherwise smart and decent people?


Yeah, yeah. I mean, a lot of it has to do with this not being not having a sort of a deterministic enough view. So the failure mode I see probably more than anything else, is somebody who is what I think of as not strategic. Right. Which is that, which is that they believe that they need to always keep all their options open, not make big choices and sort of see what see what evolves and and then just react to what evolves.


That's probably that's probably a failure mode. No, no. One, if that's connected to and I don't really like people, that's a that's a sure thing. Right. That's a that's a certain disaster. And it's the three things I talking about. And if they're just not curious, if somebody comes to them with disconfirming kind of data, they want to suppress it rather than rather than absorb it and mine it for for everything they can, they can get interesting enough.


That tends to you know, those two things tend to be linked like it is a big system. Right. Which is you tend to like people. If people are this repository of stuff, you can't see


it and you're constantly learning.


And, yeah, you're very curious,


then they're good, then they're good. But if instead you're a threat, then you just wish you didn't have these annoying people around who are keep on threatening your your prevailing point of view and the one you prefer, just keep and not be kind of messed with by by anybody. So those two things I think end up being linked. And there probably haven't thought about this.


You raise a good. Sam gets me thinking, is probably it is linked to the sort of the non-deterministic to if your model is sort of impoverished because you aren't absorbing building in other things, the chances are it'll be harder for you to come up with with things that you can be confident in to say, you know what, I think it is time to invest here, go here. Let's bet on bet on this. So they probably all those three things are either deficient together or they're together in and kind of self reinforcing.


You mentioned strategy. What is strategy and what's the difference between a good strategy and a bad strategy?


Well, I think about strategy is a set of choices that enables you to invest in a given place to win, whether that's geography or business or whatever. So it it's it's that sort of set of choices. And what do I mean by winning? I mean, in the field of play that you choose, you have a better value proposition for the customers in that space than than anybody else. And a good strategy is one that has a logic that holds up to that, that that when when you put it into into action, you do get a better position where you've chosen to play then than any competitor.


And a bad strategy is one where you're sort of is it you're chasing multiple things.


You don't understand your sort of flywheel of success like


it can be any of those things.


It's one kind of bad strategy is a little bit of everything.


You know, we're going to do a little bit of here, a little bit of there. Another kind of crummy strategy would be one where where the economics don't enable you to continue it. Right. You can start on it, but it's not a remunerative enough model for you to be able to continue to invest behind it. So it sort of withers withers away. Another is is kind of bad strategy is just trying to do the same as everybody else and assume that you're going to win anyway.


That's that's the that's the great managerial conceit. We don't have to do anything unique or different, and we will and we will have unique success.


I love that.


I often think of this quote from a friend of mine, which is if you do the same thing as everybody else, you're going to get the same results as everybody else. So you have to sort of deviate if you want to deviate results, but you need to create an advantageous divergence. You have to not only diverge from what everybody else is doing, but you have to be correct. And that's extremely difficult. And when you have it, you need to, like, go all in and run with it.


And a lot of companies today seem like they have a bit of innovation and be like they want to be the one to create the iPhone or go zero to one and just create new markets like Facebook or Google. And there's billions and billions of dollars being thrown at these problems in R&D, in hiring. And the results don't seem to be super effective.


Do you have any thoughts on that?


it gets back to what we talked about earlier saying about science? Charles Sanders person is one of the great American pragmatist philosophers with John Dewey and that that era and William James pointed out that no new idea in history of the world has been proven in advance analytically.


I just think about that for a second. No new idea in the history of the world has been proven in advance analytically. Why it's linked to what Aristotle said. You can't prove something new and different that hasn't happened yet. Analytically and most innovation processes in the world of big companies. Right. Insist on proof before doing something.


This whole notion of like fintech and all this disruption by little, little technology firms is all kind of self-induced.


And that comes back to sort of the models that were taught, if you want, in school. And the way we look at the world, you come to somebody in an established business and you say, I need to spend 20 million dollars to prove this idea. And, you know, if 50 percent of the time it's not going to work and then so you say no. Well, there's no proof that it's going to work because it doesn't fit these models.


And then they go and start a startup and you end up acquiring them for like two billion dollars five years down the road. But you're only seeing the successful results and you're not willing to tolerate the failure internally.


Exactly. Exactly. I mean, and yeah. And and in some sense. Right, you know that in the ME, like, there's an infinite number of enemy that just keeps pouring over the over the, you know, your moat. Right. And a bunch of them drown in the moat and whatever. But it only takes.


It only takes. One to get across, and that's the problem, so that if if you have an internal system that makes that sets up that we won't do anything unless there's proof. Right, then you won't do any of those things. And there will be an infinite number of these these startups. And it's interesting, you know, James Marsh is one of the greatest, I think, management thinkers. Yeah. And he he wrote about about the importance of delusion.


And then because he said the economy is underpinned by delusion in that we do know that nine out of 10 startups expire with one hundred percent of the resources wasted. If anybody thought those were the odds that they personally were facing, they wouldn't do it. But they everybody is deluded, self deluded into thinking they're going to be the one, not the nine. And because of that, 10 people do try and the economy gets the one success. But it's only because it's only because there's massive amounts of delusion.


And so so, I mean, it is one of the cool things about about the the economy is all these deluded people who think they're going to be the one keep trying. And sure enough, that spits out enough successes to change and transform the economy. But I think the big companies sit there with their hands tied behind their back and say, we don't allow delusional people here.


We actually actively try to eliminate them through the hiring process, through the promotion process, through everything. Absolutely. I call that. It's interesting. I think of that as the storm trooper problem. And we saw this at the intelligence agencies where I used to work in because post Bradley Manning and Edward Snowden, what they really tightened up was sort of the hiring process. And then to get really well to get into the agencies and to get a clearance, you sort of like increasingly there's this narrow background you could have, right?


You couldn't have you couldn't have gotten in much trouble. You you know, you generally went to a great school, get good grades. You didn't sort of stand out in any crazy way interests. They viewed this as the way to reduce security risk and it might in fact be. But the problem is you get these people into an organization, a large organization, then you give them a checklist for promotions. You need to do these 10 things and then you'll get promoted.


And then all of a sudden they wake up at 30 and they're given a problem that you can't Google, that there's no procedure for that hasn't existed in the world before and you're told to solve it. And the problem isn't any one particular person. It's the collective. Because now what happens is the collective group of people in the room look at that problem through very narrow lenses. And you're not getting sort of what I used to call the misfits or the deviants or the the people that aren't necessarily a security risk but might have more of a checkered past because they got in trouble or they did something wrong when they were in high school.


Or and once you eliminate those people, you can't creatively problem solve and then you have to buy your problems. And I think we're witnessing that actually play out with intelligence agencies.


That is so fascinating. That's fascinating. I had no idea. But I agree I agree entirely with with your your hypothesis


The way that I think you can see this correct.


Or like see this like indicators of this being a correct view, if it is correct or maybe that it's wrong. But the labor component is going up and intelligence agencies, because you're requiring more and more people to solve a very similarly, these are scalable problems. Right. These aren't often one off problems. And then the contracting budget, I bet you, is getting much higher to outsourcing, to the misfits, to the people that are solving the problems.


But those would be interesting indicators that that is.


Yeah, yeah, yeah, yeah. No, that is that's fascinating. And I mean, it's just such a good example to have of it is a complex adaptive system and and you think you can pull a lever


and just not affect anything else.


Yeah. Yeah, yeah. And somehow, somehow everything else is going to be exactly exactly what you want. No you've got to, you've just got to think these things through. Now some of them you can't think through and you just have to accept the fact that different things are going to happen than we think and then be alert to those.


Well, often they know what they're doing is probably not going to have the results they want. But that it's it's sort of like doing what's defendable versus doing what's right. And especially in politics, you end up doing what's defendable versus what you know it's right because you're never going to fail. If you do, it's defendable.


Yeah. Fired for buying IBM. That's a big universal thing. Yeah. And that's again, that comes back to fear. Right. If if you are motivated by fear of being fired. And that's going to happen. I mean I mean, I remember I remember interviewing the famous CEO of of of Procter. I interviewed him for my work on integrative thinking. And in I remember we like one of the things that really sort of propelled his career because he was such a big success, was going from I don't know if you remember this going from big fluffy detergent.


Tide would be in a box fluffy to compact detergent, which he saw happening in in Japan and said, well, we wouldn't want them coming here with that innovation. And so so he led he led a a an effort to study whether to introduce it in the US. And he introduced it despite the fact that the data didn't support it. But the verbatim did. The qualitative stuff kind of was supportive enough. But he he described the spending of 200.


He got 250 million dollars to do the first thing. And I'll always remember him describing it as a fireable offense. So he knew that if this didn't work, he was done because it was straight up fireable offense. It wasn't a two to one blind winner and he wanted to do it anyway. And it turned out to have made them just and it just was monumentally successful. And it actually destroyed Unilever's US position so much that they they exited like it was so monumentally successful that propelled him.


But he described it whatever it was 20 years later, as a fireable offense. He would not have objected to being fired, but he wasn't so overwhelmed by the fear of being fired that that would have stopped him from from doing it.


I love that sort of advantageous divergence. Right. Let's talk a little bit about decision making. What's the most valuable thing that you've learned about decision making that's hard to transfer to other people, I guess.


I think it is patience giving yourself the time to roll ideas around as long as they need to be rolled around and not feel the premature need for closure. When I'm making a decision, imagining a variety of possibilities and not stopping until I have a good divergent set of them, then asking about each one of them, what would have to be true for that to be a good idea and then ask each element of the things that have to be true? How how likely do I think they are true now?


If they're not true, how could I how could I maybe make them true as part of the part of the world where things can be other than they are? All those things tend to slow it down. There's not as though I want to be have a lot of process, but I because you can do it doesn't have to have many days elapsed. But I think people often have this. There's real desire for closure fast. And I, I, I don't know.


Often I surprise people. Like I say, if I had if I didn't make this, I couldn't think anymore I would do this. And they're like, oh my God, Roger, you've jumped to that conclusion. I said I said, you know, sometimes you have to write. Sometimes if if it was it was either decide now or I shoot you in the head, you decide. But then I'm still open, you know, tell me tell me what about that is is problematic and let's think about it some more.


So I guess I guess that's that's it. I learned. I guess I mean, this is a very good question because I hadn't thought about this. But I would I would say that I taught myself a process of thinking that slows me down enough for me to absorb greater variety and greater, greater logical pieces. I think a little logical subroutines, a big decision as it is stacking together a bunch of logical little subroutines. And I have a process for for giving myself time to play around with those.


I could put this in here and this one there. And and that helps me come up with with what people often think of as the things I do as as. Wow. Do you ever come up with that creative solution, Roger? Well, I kind of slowed down is is, I think the answer. And I mean, I think I, I think I have a decent kind of track record of teaching. If anybody wants to learn it, I can teach people to do that.


How do you teach them?


How would you teach me?


I would just work with you. I think practices is is absolutely the best. And that's what I've gone to with the companies that I work with. I just say what's what's a choice do you think you're facing? And you say, oh, I really need to decide whether we're going to invest in this thing or that thing. I a good OK. And then I would just I would just walk you through the. Process. The way I would I would do it, and then you would learn by doing.


No, I'd explain to you why why are we doing this? Why? You know, you'd say no, Roger, it's either this or this. And I'd say, no, it's not. That's not enough variety. I want variety. And if you can't come up with the variety, that's no problem. Go ask 10 people in the organization and and don't stop until you can come back with at least five, six, seven. That includes your two.


But I want another three to three to five. All right. And and I'd explain to you why I'd I'd say you don't have enough raw materials. I don't like either of your choices. And the reason you haven't made the choice now is because neither of them are that good. If one of them was awesome, you would have already made the choice. You wouldn't be asked. Seojin, we need more raw materials. So go go get them.


And then then when you come back, I'll teach you how to play with the raw materials to make a better choice. And then hopefully you would the next time without me involved in the room, you would have slowed yourself down in a similar, similar way. Not thought. Those are the only two to go for raw materials to ask these what ifs what would have to be true type questions.


I have a friend, Rendel Stutman, here. Give me vocabulary around how I approach decisions and I never had vocabulary around it. But he basically said, you decide as soon as possible or as late as possible, but never in between. And I was always known for sort of deciding at the last moment because I wanted to keep all my options open. And if I didn't have to decide, like, why would I force a decision? I can get more input.


I can get more insight into the problem. I can see how the environment's changing and playing out. And I think that plays to the patient's answer that you gave, which I think is really an insightful sort of response, because so many people just get stuck in the middle. They don't make the decision right away. They'll make it, you know, in the middle because they just want to get this sort of Damocles over to their head or they want to stop thinking about it.


And it's then when you make these really bad decisions, I think because you you've been a premature decision. So you're missing all the input or you're clouding all the input that would come afterwards and you're only doing it to get rid of it. You're not doing it because you need to make the decision at all. You're just doing it because you don't want to have to think about it again. And there's also ways that you can do in your mind where you just sort of like put it down and suppress it.


But you're constantly gathering new information about, like, am I right? Will this prove me right? Where where's the disconfirming evidence that my hypothesis on this is going to be wrong and you can see the world through your actions, too. So it also allows you to make a decision possibly, but not communicate it, which is you saying, I know what I would do if I had to decide right now. And then you can see the world through those eyes.


Had you made that decision, which allows you feedback as well in terms of what that looks like? And I think that that's a really interesting way to frame it.


Yeah, I hadn't I hadn't really thought of it that way. That's good. Good insight. In some sense, when you force yourself to say this is what I would do if I had to choose. Now, that's the moral equivalent of putting a prototype out into the market. I hadn't thought of it that way because then then you can and you can say, oh, this happened, that that would have made mine a clever decision not happen, that it wouldn't have been so clever.


It's like a it's like a a prototype.


And when you do that, all the information you receive at that point, you interpret through you having already made that decision, which allows you to see the world in this, you can sort of like take a step through this door and say, what does this look like?


Yeah, no, no, no. That's I mean, that's so powerful because otherwise because again, people talk about data as if data is sort of this sort of very kind of. Yeah, I don't know what intrinsic thing it's not data is only data like it. It floats straight by your head if, if, if you're not looking for it. What I interpret you saying in part is you will actually create data out of nothingness. Right. So stuff you would not have paid attention to and wouldn't have collected as data.


You now collect this data because it's because your choice, you're pro-choice, you're choice makes that that phenomenon relevant data, and you collect it and then have the ability to use it that you wouldn't have before because it would float right by your ear. That's that's a very interesting thought, Jean. Gee, I learned something from from this coverage that I loved.


I've learned a lot. So I want to finish up with one question. I'm experimenting with this question so you can tell me your thoughts on it, which is when you're ninety, what is it you want people to say about you?


He was a voice that we will miss, plain and simple.


Thank you so much for an amazing conversation, Roger.


Thank you. You're awesome at this. I would happily do this any time, my friend.


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