Handling Complexity with Professor Richard Jolly | London Business School

it's yeah we kind of care about the same stuff uh so uh i'm really looking forward to uh sharing with you some ideas and engaging in a dialogue with you uh and um always struck me that hr and lnd if we take these two uh to two clusters you kind of have a really challenging job uh because we all know that you know the power of people and learning to really create value in organizations is something that if it's done very well as hopefully we do here at london business school uh if it's done well then it can be transformative but um you kind of have a choice you either work with an organization that really buys into and invests in people and learning uh in which case it's kind of it's already running you know sort of it's all running pretty smoothly already or you work for an organization that doesn't buy into it and you're always struggling to get resources and things either way you kind of got really quite a difficult uh challenge so i hope that what we are focusing on here uh this morning is something that's relevant uh and uh something that's uh helpful uh stimulating uh some thinking for you and uh what you can do in your roles uh and uh really what i want to do is really build from julian's session uh because uh julian coming from the strategy side it's striking to me just how many of the strategy professors are focusing in on this issue of purpose uh and which was traditionally an ob subject uh and uh so um you know and within ob this is absolutely something where there's a growing body of data to say this is a very important topic so what i want to do is uh start from the same place as julian started with but then look at it from a different lens more of an ob uh lens if i can do that uh so where i want to start here is uh with something called dunbar's number are you familiar with you're familiar with dunbar's number um so robin dunbar is a famous anthropologist well famous if you're an anthropologist that is uh and he did an analysis of our brains uh looking at something called neocortex ratio and this is basically trying to figure out uh when you analyze the the structure of our brains how many active stable social relationships can the average human being cope with uh and he came up with a rather precise number 148. now academics you know doing all this sort of rather precise stuff however another group of anthropologists did a completely different analysis uh they were looking at all of the hunter-gatherer societies in the world today and apparently uh there are 19 of them and what they found uh they're looking at the average size of their communities and what they found is whether they were some of the eskimo tribes in the arctic circle all the way down to the aboriginal tribes in australia the average size of the community was exactly the same and typically had been that way for thousands of tens of thousands of years the average size of the human community 148. now this may be a coincidence of course but there's something here and i think it's something important because human beings have lived in communities of around 150 people for as long as we've been uh socialized animals and whether it's an african tribe or a european village it's stable yeah you know everybody you know who baked your bread who who your vegetables who made your shoes and um you have stable structures there you don't have career development you're born into a role it was the same role as your grandparents be the same as your grandchildren it's stable over many many hundreds and thousands of years and by the way uh linkedin facebook the average number of people uh that uh the people are connected to is on both of those 150. so this is social fabric the problem is in the last hundred years organizations have exploded clearly following the birth of the industrial revolution the rise of these massive firms and julian touched on this i think at the beginning of his session and now 150 people we know how to get stuff to happen now when henry ford was building the model t he had over 300 000 people working in the same plant and within six years of founding the business he was turning out a quarter of a million cars a year how do you organize three hundred thousand people well uh the answer i was provided with this book which i would argue and i think julian would agree is the most important and influential business book of the 20th century it was published in 1911 the principles of scientific management taylorism and what taylor said in this book he said in the past the man has been first in the future the system must be first and so scientific management uh by the way 1911 this is almost exactly to the year that the harvard business school was founded yeah and even today we call it an mba uh i really don't think you find probably haven't done for many decades a single mba student who says i'm doing this degree because i want to be a business administrator but a hundred years ago that's what we needed we needed people to do scientific management with stopwatches and you know controlling it all and so this has been the paradigm of the 20th century control processes and if you get onto an airplane uh you know i can pretty much guarantee that that process is going to be fairly standardized why because that's how we get people flying all around the world pretty cheaply and pretty pretty safely so you know you will go in you'll have to do a chicken ticketing process security process passport control and then you get onto the airplane they will give you a safety briefing it will be fairly standardized and this is how we live this is the world we live in today and it's the world going back to henry ford of mass standardization any color so long as it's black um fantastic it means we have great healthcare we get great travel great communication all the incredible economies of scale that come from this world but there's a problem here for me at least well i think it's actually a bigger problem in fact it was a problem even for henry ford uh i don't know if you know but even during his lifetime the ford motor company lost market leadership no no don't do the story in fact they were a perennial underperformer for decades at least 70 years they were less successful than general motors and um you know they produced some really bad cars for many many years and uh and even though this guy henry ford was a genius he could conceive of this production line no one had ever conceived of this before and then he could can design it and and control it and the reason that forward i would argue uh struggled is that along came the rather magnificent alfred p sloane and i would consider sloan the father of modern management and as some of you will be aware we still have a an msc program here which is still called the sloan program and sloane said the following he said that there's a funny thing here we pay for their hands their physical labor we could get their heads for free 100 years later we have absolutely failed to get people to bring their heads in any sort of non-hierarchical way uh and uh you know there's examples of this so you know the data shows that you know ninety percent of good ideas don't come from the executive suite yep and yet we have this hierarchical model where things cascade down the hierarchy it just doesn't work you know in this modern more complex world it just doesn't work and then we have as you're all familiar with these employee engagement studies uh now you know if people are engaged if they really care about the organization if they're going to go beyond the minimum that's required just to sort of get stuff to happen and yeah yeah yeah i'll turn up when you say i'll tighten the nuts and then i'll leave on time pay me the money even today a hundred years later the vast majority of employees in your organizations don't give a damn how do we really get people at every level in the hierarchy to really care about the organization to go beyond the bare minimum you know traditional models of you know hierarchical control whilst it's brought us incredible efficiency it's fine we need all these systems and processes but we also uh we need something else and that's where i want to really sort of start off on this and the problem is that even in the industrial age scientific management didn't work but now if you call it the post-industrial age uh we're starting to see massive cracks uh so uh bert one of the leading sociologists said managers differ in their ability to survive and thrive uh without bureaucracy scientific management uh what is opportunity for some managers is distress for many others it's kind of nice to be in control particularly when you're in the executive suite you've climbed the ladder year after year you've got a depth of expertise you know more about it than anyone else and now you've arrived and you want to be in control why because you know more there is um well i was going to say an italian tire manufacturer but i think there's only one uh that i've worked with um uh for uh for many years uh and the uh the managing director is a guy called mr gorey and this guy is uh someone no pirelli here i don't want to prank uh this guy is uh famous within pirelli because uh he knows more about time manufacturer than anyone in the company he started off when he was 16 and he is famous he will go into the factory and he'll take off his jacket and say no you need to recalibrate this machine brilliant and you know he is a true expert he has that depth of expertise the problem is that again pirelli is a perennial underperformer because everything comes from him you know even today pirelli's strategy is actually defined by mr gorey and a few years ago the management team said hey could we do some of this sort of participative management thing please uh and he said yeah sure so what he did is he wrote the strategy and then had a two hour q a session with his management team so they could uh ask questions about his strategy now this is not what's happening in the companies i would argue they're going to be the dominant forces over the next generation and so what are they going to have well for me one of the most exciting shifts uh is the move from human capital which is what mr gory's got yeah knowledge and expertise towards social capital yeah the ability to get things done through other people and um so i think we're seeing a seismic shift here the biggest challenge here is uh you know the challenge between the generations because the people at the top grow up in a world of control they have this human capital and yet they're being challenged you've got to get better at relationships and in some of the industries and professions that you are part of a lot of the senior people are better at human capital than social capital now if i can pause here for a minute um and talk about the millennials uh now uh for years i've had clients of mine you know hr l d people saying oh the millennials and line managers say oh these millennials are a nightmare i go you know well no they're not i mean the data here shows that they are they want all these sort of extra things of course they do they've grown up in a bull market life has been good for them you know they've grown up slightly entitled perhaps and they're young and youth and all of that and they've had choices but then i have to say about two three years ago i started actually bumping into them in a professional context and i got it wrong i have to admit uh these guys are fundamentally different uh in their expectations uh and what they want from their organizations from their bosses and i would argue that if you in your organization aren't sort of uh really understanding how business is shifting uh and doing something about it uh i think there's gonna be a massive uh sort of shake-up here between the companies that are able to adapt not indulge them but adapt because they are a nightmare but they're also for me you know one of the most exciting things uh to happen for a long time and i have to say i think that generation are going to do a better job of running organizations when they get there than we are currently doing if i can be a little bit provocative so it's a nightmare but it's also a massive opportunity and but the problem they have to do is how do we influence up the hierarchy because we've got all these ideas and they don't give it that so this tension between human capital and social capital is for me what i see is the biggest sort of fundamental shift in organizations today does that make sense yeah so if that's the case what it means is you've got to deal with complexity why because organizations are getting more complex and it's not just the all the sort of stuff the trends that we all know about um it's the fact that the most complex things you have to deal with are people uh there used to be an old thing of you know uh even in the mba world the hard skills and then the soft skills yeah uh you know the quants and the poets and all of this and um uh you know i think the fact that strategy professor is now talking about purpose strategy used to be full of microeconomists yeah figuring out uh you know some uh some very uh statistical things the fact that uh all of us are kind of focusing in on what i would call not the sus stuff but the complex stuff uh is uh extremely uh important uh and um in fact uh used to be something called uh behavioral psychology uh that since 2002 when dan cannon won the nobel prize for economics the first and probably the last psychologist to ever do it uh they've now called it behavioral economics that's our stuff that's fine you know teaching it's all important even behavioral finance and so what we see here is this complex stuff the people stuff is really what organizations are having to get good at i think this applies differently to the different sort of generations if you like within organizations so if we're going to handle complexity well the problem is you're dealing with complex organizations in complex environments and uh you know some biology there's something called um and this is not particularly memorable it's called ashby's principle of requisite variety and what ashby says is the complexity of any organism needs to mirror uh the complexity of its environment so if you're in a simple environment like the ocean then you can be a you know pretty simple organism jellyfish amoeba whatever but that's not really the world we live in uh and russ akov uh who's sort of a big deal in my world uh died a couple years ago he said the only problems that have simple solutions are simple problems uh and so you know if you're a senior with your human capital your depth of expertise there's a risk that you think oh this is a simple problem i've seen it before and i always struck that if you're a senior and you think a simple problem has landed on your desk you have a problem uh because either it is a simple problem with a simple solution in which case why the hell has it written up the hierarchy i'm going to push those down or more likely you think it's simple and it's not uh so uh the the challenge here is uh living in this vuca world who's familiar with vuca yeah so this is uh uh something uh that i first came across doing some work with an american company uh at west point the american military academy about uh sort of five six years ago and um uh since then i've actually done some work with the british military and exactly uh the same uh the same phenomenon here and what they're saying is look so the military for me for for many many decades has been a very poor metaphor for organizations rather macho rather male i think we can say rather you know sort of you know kill the enemy you know marketing warfare i don't think this is very helpful but actually today i want to argue that the military metaphor is perhaps one of the most relevant uh metaphors we could use for organizations so what does vuca stand for let's just quickly go through this uh so volatility uh just the speed of change yeah remember these these things five year plans uh you know it's just kind of you know when we used to have these strategic planning departments uh and uh henry mintzberg wrote this wonderful book you know the rise and fall of strategic planning um and uh so we just don't know what's gonna happen all of these uh uncertainty these black swan events just so much speed and volatility and very hard to predict what's going to happen uh complexity the multiple different forces affecting our business so i do a lot of work with investment banks and you know pretty much every bank i work with today uh it's just you know there's regulatory stuff the internal sort of changes um uh that they're having to deal with if you're in professional service firms having to deal with this uh sort of uh you know offshoring outsourcing uh all this you know new uh sort of uh you know regulation or deregulation and it's just getting so many different forces we have to pay attention to and then finally ambiguity because reality is hazy and the military analogy they use for here is the fog of war throughout history there's never really been a situation where the general was sitting on top of the horse uh on top of the hill uh looking down over the battlefield and saying okay let's get the troops up a little bit here hold them back on the right it's never been that way and even today with a wonderful technology this is not the world uh that they have to fight in and this phrase the fog of war comes from the brilliant uh military theorist uh von von klosovitz who's still very much in vogue today and he used to write very poetically in the days in the 19th century when people wrote more poetically he said the great uncertainty of all data in war is a peculiar difficulty because all action must to a certain extent be planned in a mere twilight which in addition not infrequently uh like the ephed effect of a fog or moonshine gives to things exaggerated dimensions and unnatural appearance and in organizations today you know if you're the executive team and you think you know what the hell's going on and you think you're in control you know you think you're henry ford uh you're in serious trouble and um i think one of the biggest challenges that we face given all of this complexity around people around changing environments is we're losing i would argue something that for me is a critical faculty uh because it's harder to think in complex environments and here we have uh the the fantastic uh thomas watson senior who founded ibm founded in 1912 ran it until his death in 1952 and he famously had the word think put above his desk and even today those who know ibm will know that you know think is in their dna yep if you ever bought an ibm computer it was probably called a thinkpad and so uh uh you know this uh is you know kind of how they operate you don't go and you didn't go into this guy's office and say boss i've got a problem what should i do um but in 1952 this was pretty challenging today uh i would argue it's almost impossible because there is a disease spreading through our organizations uh the disease well let me share with you some of the typical symptoms of this disease uh it's what i call hurry sickness so some of these symptoms are from your personal life some from your professional life but the question to you is do any of these feel rather familiar number one if you're microwaving something just for 30 seconds you have to do something else whilst you're waiting for that microwave to go ping number two you get a buzz from just catching a plane or a train so you rush into the train station leap onto the train just as the doors are closing yes that moment of personal triumph and as for the airport you are a master of airport management the fastest route to the airport uh you know all the kind of how you pack what you wear uh kind of which queue you know that thing oh my god person could have got that um uh have you ever seen that george clooney movie up in the air master class of airport management um you uh do something else supposed to drive maybe listen to the radio be on the phone hopefully not eat your breakfast put on your makeup but you know something else as we're in the car uh you meet at your desk whilst checking your email sometimes on the phone at the same time you do something else whilst you're brushing your teeth particularly if those of you with an electric toothbrush if i had somebody recently richard yeah my electric toothbrush takes two minutes that's four minutes of valuable time a day he says so i have a part of reading in the bathroom so i can optimize that otherwise wasted time i thought that was packing his day a little bit too tightly um you get impatient waiting in line or waiting in traffic uh you check your mobile phone multiple times an hour i'm sure none of you will be doing that today but we do occasionally get participants on courses here who are rather obsessive uh studies recently have said the average executive checks their phone every seven or eight minutes on average um you hate the time it takes uh to boot up your computer in fact probably quite a while since you last turned it off you know sleep mode hibernate mode whatever it's called you find yourself wanting to interrupt other people frequently now you may be polite enough to hold yourself back you're standing there thinking come on going on i got the point i got the point um you do something else in telephone conferences uh now if you've got 20 people on a conference call typically you've got 19 people one person speaking rather and 19 people uh doing their email if they're in the office that is if they're at home you probably don't want to know what they're doing um but there is an ultimate symptom to know if you have this disease which is when you get into an elevator you have a favorite button and there are two words on that button which say door close now you don't just push that button once do you because that's not how microprocessors work you've got to keep pushing that button because that's really going to make a difference isn't it so how many of you recognize some of these symptoms in yourself my goodness you are a very sick group of executives uh in fact some of you may be so sick you're sitting thinking what's the problem richard i am achievement oriented i get a lot of stuff done uh well if you're that sick let me share with you why for me this is a dangerous disease and it's this in fact there's a specific point about this door close button uh i worked for years with one of the elevator manufacturers one of the directors told me he said richard uh yeah it's really frustrating uh because people are pressing the button so often uh that they're actually wearing out we keep having to replace them he said but the irony is what people don't understand richard is that over half of the door closed buttons in the world are not connected to anything it's a light bulb that's all it is push away why it makes us feel in control we like to feel in control in our lives um but there's a more fundamental challenge uh than that so next time you press that button i am going to be there whispering in your ear what the more fundamental problem is achievement orientation being busy getting stuff done is directly contradictory to a learning orientation and that's what we all the reason you're here is you give a damn you care about helping people then i hope otherwise you're in the wrong place we care about helping people learn if you're pushing the door close button you're not learning and they have a phrase they use in florida that for me gets at the heart of the issue they say when you're fighting off the alligators it's hard to remember you were trying to drain the swamp this is magnificent and for me if the strategic objective is draining the swamp and here we have a florida swamp the everglades the problem is there are alligators there and an alligator attacks you you've got to kind of defend yourself the problem is particularly facilitated by technology you can spend your entire career fighting alligators being busy and achieve nothing of any real lasting value to the organization why because fighting alligators feels good look at how many emails i sent today how many meetings and conference calls it kind of you know achievement orientation feels good you know if we go back to our phone thing you know every time you check your phone i don't know if you know this they've done studies neurological studies where they actually find that you get pleasure yeah you actually get dopamine produced in your amygdala you are chemically addicted to alligators uh and uh let me share with you some of the typical alligators i'll do this briefly because you know there's other stuff i want to cover but for me this is just so important because the reason you know learning is tough in organizations because of the damn alligators uh so first uh sort of so two challenges here first one is meetings um now many of you will spend quite a lot of your life in meetings and i reckon i could come into your meetings and using some standard facilitation techniques i could halve the length of those meetings and double their effectiveness is anyone here going to challenge me and say no richard you could video our meetings in my organization my meetings and use them as an example of best practice here in london business school anyone it's tough isn't it let me share with you my favorite app it's called the meeting clock uh again this is not i'm not genuinely recommending you use this but it's a nice provocation so you put in the number of people attending the meeting then you put in the average yearly salary number of hours you work a week which gives you an hourly rate we all have an hourly rate you know direct cost indirect course you know you could figure it out and then the beginning of the meeting you press start and it tells you how much the meeting is costing the organization now that is a way of should we say reframing what we're doing uh when we're having a meeting uh in fact there's a danish company uh velux where the ceo now uses this in his board meetings and if you're giving a presentation and you can see the danish krona ticking up uh you know bit of pressure because the ceo is quite a direct uh kind of things like to be quite direct i think we can say uh and um uh and uh you know give you some feedback you have just cost us you know thirty thousand danish growner that was not a good use of our resources in fact there's a company in silicon valley where everyone has you know swipe cards with an electronic barcode on them and so the meeting knows uh meeting room knows who's in there and there's a digital clock on the wall that tells you literally the cost of that meeting to the organization what they found is the average length of meetings just when they're sharing the information no consequences it's just information the average length of meetings halved uh because you know sort of in physics we have boyle's law gases expand to fill the available uh sort of uh volume and business parkinson's law work expands to fully available time so meetings are a problem the other problem is clearly email now uh we're not going to go into email that's not the core point of today but in my studies i've done over 95 of executives say emails just got out of control it is a nightmare in my life start off you know pretty good stuff yep connecting sharing now it's just got out of control and while we may like fighting alligators increasingly this is more the reality about how most executives kind of struggling here this is so much completely so many alligators and so this ability to really stop and think uh is becoming very rare the philosopher bertrand russell said most people would sooner die than think and most do for me one of the challenges both from an l d thing and hopefully what we what people do when they come on the courses here at the school we don't just go bang bang bang and all this sort of content and today's tuesday so it must be economics and tomorrow is going to be finance and then strategy i think you know really learning has to come from sort of slowing things down and creating protecting some space to think uh and um uh there's somebody used a metaphor for me recently where they said richard in organizations it feels like you're uh water ski yeah you're hanging on for dear life you're kind of bouncing over the waves kind of you know just barely in control of what's going on if you make a mistake it's going to be really bad and you're kind of terrified but it's sort of exciting at the same time and um that's what it feels like i think that's the achievement orientation yes i stayed up for you know five minutes without actually getting an enema um so uh that's tough uh but the challenge for a learning point of view is to kind of slow down and do scuba diving and hands up if you've ever been scuba diving quite a few divers here i i i love scuba diving and one of the reasons i love it is that it forces me to slow down yeah because you know if you're breathing too fast you use up your air in no time 20 30 minutes you have to slow yourself down you have to center yourself and this all this mindfulness uh sort of concept which again i think is actually very helpful just to get people to stop and think not just on their training courses but as part of our practices is one of the key challenges of really coping with these complex organizations and having worked with you know many many organizations i've been on the faculty here for 15 years and have a little consulting business on the side um i'm just very struck by if we look at an organizational level here rather than the individual level there's something that the best organizations they have something very consistently in common whatever industry profession they happen to be in the best organizations they kind of feel the same and it took me a while to figure out for me what the difference was and um the word i ended up with was confidence if you're in a complex world it's really hard to be confident now it's very easy to go to one of the two extremes here for example uh sort of overconfidence and we know what overconfidence in organizations looks like it's uh arrogance uh hubris grandiosity uh intimidation uh and um i think there's a little video here that perhaps illustrates uh rather well uh what i mean by this again this is the uss montana requesting that you immediately divert your course 15 degrees to the north to avoid a collision over please divert your course 15 degrees to the south to avoid collision this is captain hancock you will divert your course over negative capture i'm not moving anything change your course this is the uss montana the second largest vessel in the north atlantic fleet you will change course 15 degrees north i will be forced to take measures to ensure the safety of this ship over this is a lighthouse mate it's your call in the words of mark twain it ain't what you don't know that gets you into trouble it's what you know for sure that just ain't so so you may be the second largest vessel in the north atlantic fleet you may even be the largest the problem is there are rocks out there and overconfident organizations uh uh can sort of enjoy their moment in the spotlight uh but uh you know there's a sort of a triangulation here between psychology and economics about how so consistently organizations rise to a dominant position uh they get arrogant they get complacent and then they die uh and by the way uh there's some really good data recently showing that um they die typically just the when they've had their most profitable year i'm not sure i'd buy apple stock as a long-term investment right now to use one analogy there and so in psychology we call it the paradox of success uh which is that uh you know if we have a winning formula we just carry on with it even if people prevent us absolutely incontro controvertible evidence uh that it's the wrong strategy now we just don't change we keep on pressing the same door close button and um so that's psychology economic economists have something called the leaders lose principle because from an economic point of view we just see uh increasingly rapid market leaders are losing their dominant position sustaining that in a really dominant position even if you are the largest vessel well is increasingly hard so that's overconfidence now clearly there's a spectrum here and in a minute i'm going to ask you to reflect on where is your organization and maybe your function within this organization etc but clearly the other end of the spectrum is under confidence you may have come across this as well learned helplessness martin seligman brilliant research looking at how animals and human beings if we don't feel control yeah remember that control scientific management feels good if we don't have that control we just give up why bother um feeling a victim of the circumstances oh what can you do and no this regulation or all this red tape all of these horrible things going on and it could very easy get into that victim mentality uh the bystander effect now uh there is a video i used to show a video um of the bystander effect and there's lots of different uh stories here the original uh research was done based on this case uh in new york about kitty genovese the anyone familiar with this the waitress who was murdered and shouted and 38 people heard her but didn't help they didn't call the police uh and uh then you know this uh crazy guy came back um an hour later and you know killed her she was lying covered in blood and nobody came to help it was a huge outcry at the time and there's many examples of this the video i used to show about this was based in china a little girl called lulu was hit by a white van and on cctv it was captured and he drove over her looked out the window saw he'd driven over her looked around and no one was there the only way to get away was driving over again and disappearing so he did that and then you know you see 17 people walk past look at this girl four-year-old girl lying the gutter and eventually somebody then goes oh i saw your daughter in the gutter the mother comes and you know i've got two daughters who are five and seven i i can't show this anymore just it just makes me cry and takes off and she died and in china there was a huge outcry we have lost our community values because in china there was this incredible sense of 148 people we look after each other what's gone wrong with society and you know those of you who involved in china you know these massive sort of changes how do you actually create the sense of people caring we're not very good at it so this is the bystander effect and um uh jeff pfeffer from stanford said it's easy and often comfortable to feel powerless to say i don't know what to do i don't have the power to get it done yeah what can i do i told the ceo and besides i can't really stomach the struggle that may be involved it is easy and now quite common to say when confronted with some mistake in your organization it's not really my responsibility such a response excuses us from trying to do things and julian's provocation they're going and being disruptive and i love this fosberry flop you know it's such a great analogy uh in not trying to overcome opposition we'll make ourselves fewer enemies and are less likely to embarrass ourselves and particularly working in you know professional service firms um you know professionals the thing in my experience they hate more than anything else it's looking stupid and so learning involves you know practicing stuff you know if the first time you pick up a violin you know it's not going to sound very good those of you with children learning music instruments at the moment uh you know i share your pain uh it's sort of tough so learning when you have this you know this human capital this depth of expertise is actually really very challenging uh is however a prescription for both organizational and personal failure so this bystander effect for me is critically important and then there is the greatest story uh ever told at london business school uh have you come across downtown calcutta versus the forest in front of blue hands if you're familiar with this a few uh no apologies for showing it to you again so um for 11 years we had a professor here called sumatra goshal who was i would argue the greatest professor we've had uh in our time in our time as a school he was just one of those people who could just see things more clearly than the rest of us could see things just no further and i had the privilege of working him with him for uh five years he tragically died in 2005 well before his time sumantra was famous because with pretty much every group he ever taught he told them the same story and it's a story that's resonated with executives over the years and in it he compares and contrasts two very different environments downtown calcutta in mid-summer versus the forest of fontainebleau in spring i think there's a business school somewhere near fontainebleau i can't remember its name but um it's where he worked before he came here here's sumantra sharing the story very timely but given davos at the world economic forum individuals do not change fundamentally in who they are without a very serious personal crisis of some kind but the conclusion again for for us perhaps the key conclusion is that is a wrong question to ask revitalizing people has a lot less to do with changing people and has a lot more to do with changing the context that companies that senior managers that people in this room create around their people now context some manager called it the smell of the place it's a hard thing to describe and then let me try to describe it the best way i experience it through my sort of personal experience if you wish i i teach at the london business school i live in london have done so for the last year and a half before that i lived in fontainebleau in france for about eight years but one look at me and then one sound of my accent and you know i do not come from either of these two wonderful places in the world i come from india from the eastern part of india my hometown is the city of calcutta so every year i go to calcutta in the month of july that's the only time when my children have a summer vacation now calcutta is a wonderful town in winter autumn and spring but but summer well the temperature is hundred and two hundred and three the humidity is about 99 and i feel very tired most of my vacation i'm tired i'm indoors i used to live in fontainebleau and this i genuinely challenge you go to the forest of fontainebleau and spring go with a firm desire to have a leisurely walk and you can't the moment you enter the forest there is something about the crispness of the air there is something about the smell of the trees in in in spring you'd want to jump you'd want to jog you want to catch a brim to run do something and that i believe is the essence of the problem most companies particularly large companies have created downtown calcutta in summer inside themselves and and then they complain they say you know you are lazy and you don't take initiative and you don't do take cooperation you are not changing the company t-series is not about changing me i have a lot of energy in in spring and fontainebleau and i'm a bit tired uh in summer in in calcutta and that's the issue to change ultimately beyond all these abstractions of strategy of organization of processes at the end the issue is how do we change the context how do we create fontan blue forest inside companies brilliant that's it how do we create this energized environment rather than people just springing their hands yeah yeah yeah yeah purpose yes just just give me the damn money i've done my hours tighten the bolts and nuts whatever and here we have the forest of fontainebleau in spring and is this what it feels like working for you that energized confident organization where people on sunday night just another bottle of wine numb the pain friday yes is this it and by the way this isn't to do with how you know it's tough in banking it's tough some sectors particularly where it's really tough right now but actually that doesn't mean we can't actually have the time of our lives doing it again i'm not being naive here but actually very often with hindsight the times when we learnt the most actually even the times we had the most fun was when it's really tough you know frederick nietzsche's wonderful quotation what doesn't kill me makes me stronger that's when we really learn is when times are tough so um you know julian was referring to this quotation earlier and i think uh the american writer f score fitzgerald put it very well he said the test of a first-rate intelligence is really the ability to hold two opposed ideas in the mind at the same time and still retain the ability to function and so there is this point here about you know in a complex world you know you know one of the ways we simplify it is we become over confident or underconfident and so really the the provocation to you is you know well first of all where is your organization i'll give you some time to discuss this in groups with the people around you and i hope you'll i'm sure you'll be open and honest with each other so first thing is where's my organization and maybe even my function and you've all seen different organizations at different times in different spaces you know if the challenge is to really stay in that central ground the question is in your experience what are the characteristics of confident organizations uh now clearly one of the points we're making the form this morning here is purpose yep that's really one of the most powerful ways you can really get people there that's one of the things here but i really want to hear from you now we've got 10 minutes discussion here uh you know what are your experiences of overconfident underconfidence that's the group therapy point and when you've seen this done well what have been the key drivers that have created that confidence in the organization okay is that clear enough okay ten minutes discussion and then we'll just hear back from you okay if i can ask you to wrap up your conversations uh so i'm curious what was coming up for you in terms of the themes there's no single score for the whole organization yeah yeah and so is it that some parts of the organization are consistently in different places or at different different times yeah yeah yeah yeah the question of how can you try and create sort of a stable confidence level in the organization yeah i think i actually trust that uh yes i'll say a bit more i think when you're a leader and you trust the people working under you then it's easier for them to be creative and do their work yeah thank you you haven't seen my size the um question of what we want from our leaders uh cousins and posner who two you know proper academics in this field uh they did a study and they asked me what do you want from her and you know proper kind of a research rather than sort of you know some sort of uh you know sort of more sort of a journalistic approach and what they found is uh honesty uh more than anything else honesty now the next heist was forward-looking and having a plan uh then inspirational was only 65 and competent only 65 and that's my problem with human capital is your competence all this stuff you've known is that's that's not the point so leaders need to be builds trust there's two academics in the 1970s they did a fantastic set of studies where they went into a series of primary schools and they gave the children a battery different psychological test but they didn't tell the children the results all they did is they went to the teachers and said now don't share this with the children but just so you're aware we put the children into two categories the first are the high potential children and then we've got the low potential children but don't share this with the children the researchers then went away and came back three or four months later to see how the children were getting on and perhaps unsurprisingly in every single school the high potential children were doing well and the low potential children were doing less well every single time there was uh you know clear correlation uh the problem is uh they lied to the teachers the children had been randomly assigned to one group or the other and yet their measurable performance in every single class uh was showing a clear divergence and you know this is my you know this thing about confidence and trust this is why for me this is just so important because one way or the other through your attitude your mindset you create a self-fulfilling prophecy and there are some bosses who say i am skeptical you have to earn my trust uh and um they they're always right the idiot screw up i told you he was going what the hell are you doing ah and you know the problem is you give those same employees to a boss who actually can build trust uh and those same employees will perform better it's just simple one way or the other you create a self-funding prophecy uh and um i think particularly today in this sort of you know so as exactly as you're saying it's so hard to be confident so how leaders can build trust well that is i think a critical challenge other other comments it looks like having rich discussions here so i hope we can tap into those a bit more well it i worked for a um company and i would say my u.s counterparts version of confidence is what yes there is that uh sort of british uh thing there isn't it um well if you say um british because most people uh struggle with feedback because we don't like being criticized um uh and it's usually not as simple as you know you've done a bad job so pretty much every country struggles with negative feedback i think the british struggle even more with positive feedback and you know the classic british thing of oh it was nothing oh i can't take credit and oh no really it can be quite quite shocking and i've done various exercises over the years where you get people to say positive stuff to each other and so this reflected best self some of you will be familiar with which is very exciting as a way of actually getting people to focus on the positive and barbara fredrickson wrote this wonderful book positivity uh which um shows you know from an academic point of view if you focus on the positive uh you do perform better the problem is the way that gets expressed is is very context dependent isn't it the way you do that in the uk is look very different from the way that you do in the us and so these sort of cultural tensions uh what really does confidence look like it gets expressed differently i think that's one of the challenges across the borders i think it's a great point other other reflections there's also a gender element in it yes absolutely uh i think there's also a lot of studies that have shown that uh with a relatively comparable behavior um a male boss will be more likely to be classified as competent um just you know do his job whereas a female leader will tend to be classified as either glossy or or hormonal or yeah was this study on anger i think getting angry a boss getting a male what's going on it was like normal yeah passionate passion was probably yes it's so i'm sure i think the gender point it's you know these cultural gender points these these are these are really important and i think it goes um back to fundamentals of personality we take the big five personality traits so familiar with five factor theory uh and um all of them uh you know so uh oops low high uh you know what we know is people are normally distributed across each of the big five and there's no gender difference except for one of them the one where there's the gender difference is what we call agreeableness so if you're high and agree on this you're caring nurturing focus on the needs of others if you're low you're selfish competitive me me me uh i don't give a damn about other people you probably can figure out where the gender uh bias is 60 of women will be high 60 of men will be low um but so let's if that's just the the the theory here let me um talk about organizational environments here i would argue that most large organizations uh have rather a male uh culture in this respect yep sort of hierarchical uh sort of uh you know internal rivalries and competitiveness and kind of you know all of that quite individualistic stuff is that fair enough it's i think that's too controversial is it so let's say you happen to be a female executive in that environment and your personality no sorry it's not very well drawn but you know it's not that extreme but you happen to be more agreeable now what i would argue is um you have you have a real problem there you say okay so uh you know we encourage uh people to be authentic authentic leadership one of our you know themes we do go on a lot about here so okay i need to be authentic here so i'll be you know caring and nurturing and what are my male colleagues going to say about me if i do that yeah to self whatever you're sort of too weak too fluffy too soft to all sorts of things they might say so okay well clearly that's authenticity through that one out of the window on this dimension here so i need to play the boys at their own game uh and you take up your role down here uh well what do the male executives say about you then yeah very yeah exactly um we don't need to uh prepare out so i would argue here that as a female executive wherever along this dimension wherever you take up your role however authentically in the authentic you're screwed uh there's no right place the men will criticize you wherever you take up your role so being confident as a woman i think as you're saying there's a whole series of studies even just asking for a pay rise now the ad the typical male approach is i am fantastic you should give me a pay rise and i haven't done it yet but i should still get a pay rise give it to me now and the typical female executive is well my boss will see i've done a good job and will want to reward me and wait for that to sort of maybe happen so you're right i think the issue of confidence here uh really does have some very important dimensions here and um but the one thing i would say is that when you look at studies of creativity and innovation obviously overlapping subjects and those who've done hrst will will be familiar with this um what you find is and linda gratton is a world authority on this is that the most creative teams tend to have 50 50 on the genders uh and it's when that works well you get the creativity no fertility you might even say uh and um uh so that is kind of critically important and for me that goes back to the social capital point uh because a lot of these senior people aren't very good at dealing with people who are different to them and that relates to any aspect of diversity it relates to these millennials who are down there going hey you know you know i'm not developing what's the problem uh you know development and by the way i don't want your job look at you you're divorced and you're out of shape and uh kind of workaholic that's not that's not what i aspire to be so um uh i think these are challenges but but this is the challenge how do you really engage uh with people in this way and you know one of the simple points is just raising awareness and just the conversation here because it's one of the things that in my background i was i trained as a psychotherapist and particularly in relation to family therapy what screws families up uh is not that there's a problem there be it you know somebody's having an affair or alcoholic or someone's a peptomaniac or got an eating disorder whatever those aren't that's not what screws up families what screws up families is when we can't talk about it yet when things become taboo is the sort of the jargon that's used there and that for me is probably at the essence of what it means to build confidence and to build social capital you've got to talk to each other and human capital is not about talking to all these little people because i'm henry ford i've got a massive brain and talk to you little people you're just turning the nuts and bolts um it was still running organizations in the kind of scientific management taylor's kind of way and it's very tough and there's some a large firm we work with here at the school um uh that i've worked with now for gosh over ten years and uh they um came to us and said richard uh can you help um our senior executives be more agile uh as soon as i heard that i thought we're screwed absolutely screwed here that is the uh you know the sort of i could see the sort of uh the execution of sharpening his knife uh kind of uh as we engaged in that program and um you know because we sat there with them and said hey you should be more agile and they looked at us going you know uh kind of you know uh i've worked all this time to get to the top and i'm now here i want to be in control i don't be agile and um uh it was uh chuffing experience so my sort of position here was actually that was completely the wrong thing what we what we should have done and kind of hopefully what we're now doing is actually not helping these people more agile they're helping them create the context where other people can be more agile that for me that's a really critical way of reframing uh the the role of senior executives yeah uh any other other comments but thank you these are these are such great uh great points um i want to finish here with um a uh a metaphor um because if you agree with me that you know this fundamental seismic shifts here in what how we need to you know engage our employees get things to happen uh and it's not simply you know control uh it is about really creating this dialogue this conversation then uh i think the final analogy to perhaps uh wrap this up with is whenever you try and make any change whenever you try and do something differently maybe try to be a role model for the things that you think are important uh other people don't like it so julian's provocation go out there and be disruptive it's like come on uh you know he's gonna be kidding me uh because um you know sociologists a guy called robert jacqueline particular would argue that if you want to be successful in your career don't disrupt don't take any personal risk keep your head down don't get associated with any project individually and uh keep you know keep you know minimize risk and then eventually you'll sort of rise to the top and there's a lot of truth in that there's a lot of truth uh in it because um if you want to get uh promoted uh you know what the data shows is ignore everything that hr tells you uh i'm sorry it's bad news but uh you know everything it's all tells you and simply mimic the behaviors of the people above you uh that's the rational thing to do and uh i love this quotation here from the psychologist baldwin who said children have never been very good at listening to their elders but they have never failed to imitate them now as a parent this is terrifying and true and in organizational terms it's also true which is the way to get promoted is to mimic the behaviors of the people above you because they're gonna like you now the mini me syndrome as we i call it uh so um so that's kind of a rational thing to do but uh actually uh we need to uh reframe this because there is some truth here that everyone makes you feel uh that you're in a china shop yeah and you say well hey i came with an idea for how we could you know use our hr principles to help transform the organization they go that's fine but don't break anything that's fine if you want to do all your you know fluffy stuff that's fine but you better not impact the profitability then upset any of these people internally and externally you better not do this sir so don't screw up that's always how they make you feel it's just a truth about life so we're always being made to feel that we're in a china shop but it's just not true organizations are not china shops i would argue they're gardens you have an incredible depth of expertise you've built up for many many years you know uh what's uh you have a point of view about what the organization your organization should be doing differently based on all the stuff that you are passionate about that you care about and you've learnt over the years and there's a risk well yeah i'd like to do this but um well actually organizations if you push through the things that you are purposeful about things that you really passionate believe in my prediction is you won't kill the organization uh it's very hard to kill an organization if you've if you've ever done any gardening it's very hard to kill a garden if you have serious you know experienced capable people who so say this is what i care about and really push it through uh that's what really happens in great organizations whatever level in the hierarchy they make happen the things they believe are right so my encouragement to you is take some risks but it is it's very tough and my final slide here is um a quotation from mark twain 20 years from now you'll be more disappointed by the things that you didn't do than by the ones you did do so throw off those uh bow lines sail away from the safe harbor that would be my final comment to you and just just closing here um uh the um we're just launching in a few weeks actually a new program and i'm sort of co-director of it on uh the professional service firms the next generation of leadership there uh and um the uh the purpose that i have for this and my colleagues have uh uh sort of bought into is um you know we have so much expertise and professional service firms here at the school and some of you uh you know work uh for some of these firms and um and we haven't really captured this in an open program yet uh and our ambition is to make the harvard psf course look really old-fashioned there's so much change in these environments and but this is kind of a risk uh now you know we are passionate about it and you know put yourself out there and take that risk well you know we might fail but uh i'm certainly confident what succeeds i just wanted to share with you a personal example of that uh so um i hope uh that this morning uh you know uh both from a strategy point of view and uh from this complexity point of view i hope this is uh this is relevant uh to things that you're involved in and the one thing i would encourage you to is take more risks put your head above that parapet for the things that you passionately care about that's what happens in great organizations thank you very much thank you richard and while you're at lunch we'll be putting a copy of richard's latest article which is the paradox of indispensability signatures tend to lower the value once again richard jolly thank you you

Channel: London Business School

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Keywords: richard jolly, london business school, human resources, HR, HR development

Id: HPL5g3F_wbA

Length: 69min 57sec (4197 seconds)

Published: Fri Feb 27 2015