Episode 381
Sometimes You Can Have Too Much Diversity
EP 381 - This week we talk to Alex Edmans about how you make decisions in a world full of misinformation. Alex is a Professor of Finance who has written and spoken extensively about subjects such as ESG (why those three letters don’t belong together) and why cognitive, rather than demographic diversity is a better indicator of business success.
He’s managed to do all that without getting cancelled, because his findings and talking points are guided by objective data rather than opinion. Though we do discuss how data itself can be misleading.
So if you want to know why too much diversity can be a bad thing, then dive in.
*For Apple Podcast chapters, access them from the menu in the bottom right corner of your player*
Spotify Video Chapters:
00:00 BWB with Alex Edmans
01:15 Synopsis
02:07 Meet Alex - Professor of Finance
03:54 Challenges in Assessing Cognitive Diversity
08:08 The Role of Academics in Real-World Impact
18:00 Confirmation Bias and Its Impact on Decision Making
30:36 The Nuances of Diversity and Inclusion
35:22 The Evolution and Challenges of ESG Reporting
39:20 The Burden of Reporting
40:31 The Problem with Standardised Metrics
42:16 Regulation vs. Market Demand
43:21 SMEs and Purpose-Driven Business
44:52 The Complexity of ESG
48:29 Governance: A Historical Accident
01:11:40 The Importance of Financial Literacy
01:13:22 Quickfire - Get to Know Alex
01:17:50 Wrap Up
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Transcript
Why is demographic diversity so attractive?
Speaker A:Because, as you say, Andy, it is so easy.
Speaker A:You can shame companies for not having sufficient diversity.
Speaker A:People say, well, men think differently from women, and different ethnicities have different lived experiences.
Speaker A:But I think that's quite reductive.
Speaker A:So to reduce somebody to just their gender and ethnicity and to say, hey, because you're a white man, you're not diverse, I don't think is correct.
Speaker A:So the whole idea of cognitive diversity is I might think differently from you because I was in the military before moving into asset management, or I've got experience of different countries, or maybe I just see the world in a different way.
Speaker B:The hard thing is it's much easier to tell whether someone's a man or a woman or they come from a certain ethnicity than to tell whether someone really thinks differently.
Speaker B:I mean, let's talk a bit about esg.
Speaker B:Are the efforts to improve esg, the reporting and anything, are they working?
Speaker A:So how did ESG start off?
Speaker A:It made people realize that there are these intangible factors, such as the trust that you have with your customers, your stewardship of the environment, your investment in your people.
Speaker A:And these are things that you need to take into account.
Speaker B:Hi and welcome to Business Without Bullshit.
Speaker B:We're here to help the founders, entrepreneurs, business owners, anyone who wrestles with the job of being in charge.
Speaker B:And if you like what we do here, please rate and review us on Spotify and Apple and come say hi on YouTube if you fancy watching us in Links are in the episode description or just search for wblondon.
Speaker B:Our guest this week is Alex Edmonds, a professor of finance and expert on decision making in a world of misinformation.
Speaker B:Alex has written extensively about our subjects such as esg, demographic and cognitive diversity, and all without getting canceled.
Speaker B:Well done.
Speaker B:Our chat range far and wide, touching on how data can mislead, which is compounded by confirmation bias.
Speaker B:The true drivers of company values are more likely to be intangible than not.
Speaker B:He's basically talking about people and why E S and G don't belong together at all, not least because it stops us from seeing the nuances in each and the complexity of at least two of them.
Speaker B:Hint, if you're running a company without governance, you're doing it all wrong.
Speaker B:We also talked about why forcing people to report on everything often means they end up achieving nothing, or at least not what they should.
Speaker B:Why cognitive, not demographic, diversity is more likely to lead to better business outcomes as long as it comes with a side order of psychological safety.
Speaker B:And yes, too much diversity can be a bad thing as you tend to get more dissent among like minded groups of people.
Speaker B:I hope the silent majority is as understanding of nuance as Alex thinks they are.
Speaker B:And if that's you, I hope you enjoy the show.
Speaker B:I am Andy Ory and today we are joined by Alex Edmonds.
Speaker B:Alex is a Professor of Finance at London Business school, holds a PhD from MIT.
Speaker B:Those are three acronyms that you should get in your name as a Fulbright Scholar and is one of the leading voices on responsible business, corporate finance and the decision making in an era of misinformation.
Speaker B:Beyond academia, Alex has spoken at the World Economic Forum in Davos, testified in the UK Parliament, and delivered TED talks that have been viewed nearly 3 million times.
Speaker B:He's the author of Grow the Pie, a Financial Times book of the year, and his latest book May Contain Lies, tackles how misinformation shapes our decisions.
Speaker B:Alex, welcome to the podcast.
Speaker A:Thanks very much, Andy.
Speaker A:It's great to be here.
Speaker B:That is the sort of CV every mother dreams of.
Speaker B:I think, you know, your parents must be incredibly proud.
Speaker B:Well done.
Speaker B:And give us an overview of what you're up to right now, Alex.
Speaker A:So my day job is, as you said, a professor of finance.
Speaker A:But really that only captures a small part of what I try to do.
Speaker A:So as a finance professor, you do research, you try to get it published in academic journals, but what I really enjoy is interacting with practitioners.
Speaker A:So speaking to executives and investors and policymakers about the findings of research, that might be the best way to manage companies or manage people or invest money.
Speaker A:That's why I really enjoy invitations like this to give my message to a wider audience.
Speaker B:Are you working on multiple things at the moment within the research you're doing?
Speaker B:Is there multiple papers and things you're writing or what are you looking at?
Speaker A:Yes, you look at many things at the same time.
Speaker A:So I might do academic, scientific research, I might do certain things which disseminate that to a broader audience.
Speaker A:So that may be books.
Speaker A:Or I may do industry reports which may be targeted at a particular sector to add a particular question.
Speaker A:Right now I'm working on a report on the role of cognitive diversity, not demographic diversity, in the asset management industry in order to have asset managers being more conducive to dissent in different viewpoints.
Speaker B:Interesting.
Speaker B:Cognitive diversity.
Speaker B:And that's all mental diversity rather than like neurodiverse or anything like that.
Speaker B:Just having a diverse selection of people who think, who then help to make better decisions in terms of investment and stuff like that.
Speaker B:Is that what you're saying?
Speaker A:Absolutely.
Speaker A:And that could stem from many sources.
Speaker A:So one source could be demographic diversity.
Speaker A:So people say, well, men think differently from women, and different ethnicities have different lived experiences.
Speaker A:But I think that's quite reductive.
Speaker A:So to reduce somebody to just their gender and ethnicity and to say, hey, because you're a white man, you're not diverse, I don't think is correct.
Speaker A:Because a white man may have had a background in, say, humanities, and everybody else's background is in finance, or he might have lived in lots of different countries because his parents were expats.
Speaker A:So the whole idea of cognitive diversity is I might think differently from you because I was in the military before moving into asset management, or I've got experience of different countries, or maybe I just see the world in a different way.
Speaker A:So I might be more pessimistic.
Speaker A:And I'm always looking at what could go wrong with an investment.
Speaker A:You could be more optimistic and you could look at the upside.
Speaker A:And we want a balance of both.
Speaker A:Just like a good car has accelerators and brakes, without somebody who's pessimistic, it may well be that you're investing in a bubble.
Speaker B:I mean, I couldn't agree with you more.
Speaker B:In fact, Alex Dupledge from Rezi made that point very strongly.
Speaker B:That, you know, she kind of feels that, you know, that some of the die stuff really misses the point.
Speaker B:Like you say, ticking a box because of someone's ethnicity.
Speaker B:What she wants is diversity of thought, which is basically the exact point you're making.
Speaker B:The hard thing is it's much easier to tell whether someone's a man or a woman or they come from a certain ethnicity than to tell whether someone really thinks differently.
Speaker B:I mean, what do you.
Speaker B:How does even one go about that?
Speaker B:You look at the kind of their history, I guess their CV almost is it.
Speaker B:Or you.
Speaker B:You know, how do you tell that someone thinks differently?
Speaker A:You know, it is extremely difficult.
Speaker A:So one thing I'm doing with this research is speaking to portfolio managers as to how do you assess cognitive adversity?
Speaker A:And they say it's really difficult to do at interviews.
Speaker A:So it's not that you can look at somebody's CV or look at somebody's past backgrounds.
Speaker A:It's something that you can only really do on the job.
Speaker A:And that's why for asset managers, internships are really useful.
Speaker A:You can see how somebody interacts over two or three months.
Speaker A:And it's not just the diversity of background.
Speaker A:It's your willingness to ask questions and to challenge, but also know when to.
Speaker A:To stop pushing back and when to know, to accept, say, a decision because it might be made by somebody with greater experience.
Speaker A:Why is demographic diversity so attractive?
Speaker A:Because, as you say, Andy, it is so easy.
Speaker A:Because if we think all we need to do is increase the number of ethnic minorities or women, that makes the job really easy for a nominating committee on a board of directors.
Speaker A:It makes it easy for investors.
Speaker A:You just vote for any director nominations, which will improve that diversity.
Speaker A:You can, as the media, you can shame companies for not having sufficient diversity if it's on easily measurable from the photo.
Speaker B:Yeah, absolutely.
Speaker A:And I think this is extremely reductive.
Speaker A:People might not know this if they're just listening to this, but I'm an ethnic minority myself.
Speaker A:I would like to believe that magically, by me just going into a board, I would increase the diversity of thought, but I might not because my background is entirely finance.
Speaker A:It might be somebody whose background is more psychology might be adding more value than I would.
Speaker B:Yeah, and the struggles people go through, you know, are different, isn't it?
Speaker B:You know, that's really interesting.
Speaker B:And when you're doing research like that, I mean, just take Jake.
Speaker B:Give me an example.
Speaker B:How much of your time do you spend, you know, I don't know, researching online, reading, reading books and other stuff, or is it very much.
Speaker B:It's really going out and talking to people and.
Speaker B:And because it's sort of, you know, you've got to.
Speaker B:You got to get into it.
Speaker B:I mean, you know, I imagine it varies hugely, but just to give a sense of what it's like to do.
Speaker A:So I spend an unusual amount of time talking to people.
Speaker A:And so that's quite different to most academics.
Speaker A:So most academics do two types of research.
Speaker A:So one of them is just building theoretical models.
Speaker A:So you write equations which might simulate a company and you might think, well, that sounds pretty abstract, but we have, say, city simulators and flight simulators.
Speaker A:And so if you could build a model of a company and change one variable, such as how you incentivize the CEO, then you can see, well, how does that change the outcome?
Speaker A:And the good thing about a model is that you can play around with it in a way that you can't play around with it in the real world and do lots of experiments, because if you did something with a negative outcome, then that would be problematic.
Speaker A:So that's one thing, that's theoretical analysis.
Speaker A:The second is empirical, where you just gather data.
Speaker A:So I might gather data on the link between diversity and performance and draw some relationship, but that could be problematic.
Speaker A:It could Be well, what causes what is it diversity causes performance?
Speaker A:Is it performance causes diversity or is there something else causing both?
Speaker A:So maybe certain industries might attract more women and those industries might be better performing.
Speaker A:And so it's the industry which drives it rather than diversity itself.
Speaker A:So what I do in some of my academic research is I go into the field.
Speaker A:So I might be surveying portfolio managers on how they think about esg, I might be interviewing them as well.
Speaker A:And certainly for this diversity project, which is something which is commissioned by the industry here, I will speak to asset managers and also to junior professionals in terms of what are the barriers to them speaking up in their organisations.
Speaker A:Some of those I initially did online, but you really get a lot out of speaking people face to face.
Speaker A:And so a lot of the meetings I've had this week were face to face meetings in order to try to understand from them what is it that might hinder or might help diversity in their organisations.
Speaker A:So you might think, well, what is the role of an academic in doing this?
Speaker A:Why doesn't a journalist do that?
Speaker A:And journalists can do that really well.
Speaker A:But before I did all of these interviews, I read all of the scientific research on the channels through which diversity can help or hurt performance.
Speaker A:And so I knew sort of what questions to ask and also how to ask them, that I was not leading a particular answer.
Speaker A:Otherwise, if people think, oh, here's a guy coming to look at the importance of diversity and asset management and if he asks me, well, is diversity important, then I better say yes, otherwise he's going to be upset.
Speaker B:I really like that you go and talk to people because so often I see this research come out on, well, so often the few subjects I have any knowledge on.
Speaker B:And I just feel that a lot of the stuff that are the sort of think tanks that seems to drive stuff is being written by academics with respect that aren't people who've been in business, or it becomes quite academic.
Speaker B:So it's great if you are actually.
Speaker B:And also you make the point about journalists, it's like, no, I think journalists are often writing a story, they don't have the depth of knowledge, you know, they get it wrong.
Speaker B:So someone to properly do their research, to understand the topic really well, be insightful in the questions they're going to ask and then get in front of people and really ask those questions that, to be honest, that sounds like the way research should always be done.
Speaker B:Do you know what I mean?
Speaker B:Otherwise it's just sort of, I don't know, I mean, we could read all day, I Don't know what conclusions we'll really come to because, you know, the theoretical is so far removed from the practical often.
Speaker B:You know, I really appreciate you saying.
Speaker A:This, Andy, and this is unfortunately not fully valued in academia.
Speaker A:So if you, you're doing something which is connected to the real world or you're disseminating your research to the real world, they think, well, it must be dumbed down.
Speaker A:It's not highbrow enough in that you can talk about this to the unwashed masses.
Speaker A:It's a bit like if you're an indie musician and then you're going mainstream, people think, oh, you're not actually true to your indie roots.
Speaker A:And I think this is extremely patronizing about practitioners in the real world.
Speaker A:Why are we doing research?
Speaker A:Why do we get funding from a lot of bodies that foundations have donated a lot of money to?
Speaker A:It's because that research should affect real world practice.
Speaker A:And while yes, do have a lot of respect for theoretical research and empirical research, you still need to have some understanding of the real world so that the theoretical models are actually realistic.
Speaker A:Right now there's a huge rush for people in academia to write papers on esg because ESG is so popular.
Speaker A:There's now loads of papers on cryptocurrency, but it's not clear whether these people actually understand the institutional features of these industries.
Speaker A:But if these models get accepted by scientific journals because the editors actually have no knowledge of these fields themselves, then people think, well, that is the state of the art.
Speaker A:Then any future model needs to have the same assumptions as the already published models.
Speaker A:And so you could have a whole cottage industry of research which is not actually real world relevant.
Speaker A:So I think it's incumbent upon academics, particularly among business schools, which are constructed and set up to have impact on the real world to make sure that they have a knowledge on what's actually going on.
Speaker B:Absolutely, yeah.
Speaker B:I mean, to do your research and then talk to business.
Speaker B:Because I bet half the, you know, someone who actually knows what they're talking about on a practical level will probably go, well, that's just bollocks.
Speaker B:You're missing the point.
Speaker B:That's not what goes on.
Speaker B:That's great.
Speaker B:How did you end up doing this?
Speaker B:I mean, obviously this has really been your career.
Speaker B:I mean, did you consider anything else?
Speaker A:I started off with a proper job, so my first job was as an investment banker at Morgan Stanley.
Speaker A:So that was really uninnovative.
Speaker A:Many people who did economics at university, like me, went into that career and I actually enjoyed that career.
Speaker A:So there's Many people who got beaten up and had to work really long hours.
Speaker A:But I actually enjoyed it.
Speaker A:I worked with some great people on some really interesting projects.
Speaker A:However, what I worked on was one company's problem at one time.
Speaker A:So when I completed my first deal the next day, it was great.
Speaker A:I could see it in the Financial Times.
Speaker A:But then the next day, the Financial Times covered a different story.
Speaker A:And I thought, well, the bandwidth of my contribution was actually relatively limited.
Speaker A:Whereas I thought in academics, if you write a paper, say, on the link between corporate social responsibility and firm value, that's something that could be timeless.
Speaker A:It could apply to many companies in different industries.
Speaker A:It could have been written 20 years ago, and it could still be valid today.
Speaker A:So that's why I wanted to go into academics, is to make contributions which have a wider impact.
Speaker A:Now, obviously, there are benefits and costs of that, and one of the costs is a lot of what you do is freely available.
Speaker A:So my research is freely available.
Speaker A:Things like TED Talks, anybody can access.
Speaker A:So it's not as remunerated as something like banking or advising, where your advice is proprietary to one particular client.
Speaker A:But it's something where I get a lot of satisfaction and joy if I feel that my research is relevant to the real world.
Speaker A:And this is why I put so much emphasis on relevance.
Speaker A:I chose to take, say, a salary sacrifice in order to go into this career because I thought this career has the power to have impact.
Speaker A:And that's why, to me, it's a pleasure to do podcasts like this.
Speaker A:It's a pleasure for me to be able to have a half an hour of a portfolio manager's time in order for them to contribute to my research and cognitive diversity.
Speaker B:What are you passionate about?
Speaker B:You're obviously keen to make a difference, as it were.
Speaker B:Is it a particular subject that drives you or anything?
Speaker A:I don't think it's a particular subject.
Speaker A:It's to change people's thinking and so that they come away from having a conversation with me or reading a book that I've written or listening to a talk thinking slightly differently to what they might have known before.
Speaker A:So sometimes I might take some topics where there's.
Speaker A:There's seems to be one socially acceptable answer, such as increasing ethnic and gender diversity always improves financial performance.
Speaker A:And I might say, well, hey, no, it's not as easy that certainly diversity is a good thing, but we need to look at other dimensions.
Speaker A:If you only look at gender and ethnicity, actually, the correlations are pretty much close to zero, irrespective of the number of studies claiming It's a positive correlation.
Speaker A:When you actually do the data correctly, you don't have that.
Speaker A:But you asked is this in any particular subject?
Speaker A:And I say no.
Speaker A:So in terms of finance, I look at some non traditional finance topics like diversity or human capital.
Speaker A:The first paper I ever wrote was about football.
Speaker A:And you might think, well, how does a finance professor end up writing about football?
Speaker A:I looked at the effect of football results on the stock market.
Speaker A:I showed that when a country gets knocked out of the World cup, the market goes down significantly.
Speaker A:And that's to show that the market is affected by psychology and not by emotions.
Speaker A:When I teach my students, I teach the standard core finance class, but my goal is also to try to improve them for the world of work.
Speaker A:And so one thing that I try to teach them is public speaking.
Speaker A:So that's a really important skill which is something which is really under taught in business schools.
Speaker A:So I have some sessions on that.
Speaker A:I also talk about the importance of time management, physical fitness and mental well being.
Speaker A:So all of these things which I think are relevant where there is some scientific research about this and which I think I'm not just gonna be parading the standard stuff that people might hear by picking up, say, atomic habits or a popular book.
Speaker A:I think those are things that might be useful for my audiences.
Speaker B:It's very true.
Speaker B:On the public speaking, it amazes me that people go through their whole educational career and they've never actually been taught to get over their fear of public speaking and to be any good at it.
Speaker B:You know, it's such a fundamental life skill.
Speaker B:It's mad.
Speaker B:Let's ask, therefore, let's ask you something then maybe about your book.
Speaker B:You know, it may contain lies, you know, that was, you know, you highlight how data can mislead.
Speaker B:What do you think is a common way business leaders fall for these bad statistics and how do they avoid it?
Speaker A:So I think the common cause to this is confirmation bias.
Speaker A:So what is confirmation bias?
Speaker A:That's the idea that there's a view of the world that you have and if you see something that supports that viewpoint, you're going to lap it up uncritically.
Speaker A:You're not actually going to scrutinise the data and if you see something that contradicts it, you're just going to tune it out or think it's by some lobby group.
Speaker A:So let's say outside of business, let's say if I was a climate change denier, I'm not, but if I was, and I saw a new report which says climate change is real and man made.
Speaker A:I might say, well, this is just done by some woke activist.
Speaker A:I won't even open it.
Speaker A:Or if I opened it, then I would read it, trying to pick it apart at every juncture.
Speaker A:Whereas if I saw a report saying climate change is a hoax, then I might not even read it, but just share it and tweet it from the rooftops.
Speaker A:How then does this apply to business?
Speaker A:Well, you might have business leaders who might see something which seems to be a threat to their business.
Speaker A:But because they think, no, my business is great, I'm a really successful CEO, they might tune that out.
Speaker A:For example, let's take Silicon Valley bank, bank.
Speaker A:When the models, their own models, predicted that the bank would be in trouble if interest rates rose, the top executives thought, no, this can't be right, the model must be wrong.
Speaker A:Let's try to change the assumptions of the model.
Speaker A:With Deepwater Horizon, when they ran say a test, it's called a negative pressure test, to check is the rig safe to be removed.
Speaker A:That test failed three times by a country mile.
Speaker A:They thought, well, the test must be wrong.
Speaker A:Let's invent another test.
Speaker A:And so why I think those examples are important is you might think, ah, misinformation.
Speaker A:That's something that other people fall from, perhaps less sophisticated people.
Speaker A:I'm smart, I'm a business leader, I've got to the top because I know how to make good decisions.
Speaker A:I'm not going to fall for this.
Speaker A:But in fact, it might be the opposite.
Speaker A:Those who are at the top are ones who might be overly confident in their own decisions.
Speaker A:They might also be people that others are unwilling to challenge.
Speaker A:Which is why I think cognitive diversity and psychological safety are so important to encourage challenge.
Speaker A:And if you really hear dissent and the different viewpoints, it might be that you only see confirming information.
Speaker A:And that's why some companies which were successful for a very long time, they then became bankrupt in maybe a couple of weeks.
Speaker B:So, you know, the cognitive diversity and the psychological safety can create an environment where people can can say, well I'm not sure about this, I agree, but is that that's always has to be the only weapon against it.
Speaker B:Like the problem with confirmation bias is it's just so addictive or it's part of us, isn't it?
Speaker B:You know, I mean, apart from, is that my only weapon against it is just to make sure that I've got people around the table thinking, you know, differently and making sure I'm making a place where they feel they can speak up.
Speaker B:Is that the main Weapon, really?
Speaker A:I think there might be one even more fundamental than that, which is just your own awareness of your own biases.
Speaker A:So just like any addiction, they say the first step to recovery is to understand that I have an addiction to alcohol or whatever.
Speaker A:And actually, confirmation bias could be seen as an addiction.
Speaker A:You might think that sounds quite extreme, but actually, people have looked psychologically, what are the underpinnings for this?
Speaker A:If I see something which supports my viewpoint, it releases dopamine in my bloodstream, it feels good.
Speaker A:And if I see something that I don't like, it triggers the amygdala.
Speaker A:And that is the part of the brain that induces a fight or flight response.
Speaker A:So just to be able to tame those emotions.
Speaker A:And some of this is in the spirit of Danny Kahneman's thinking fast and slow.
Speaker A:So let's try to tame our emotions and look at the data in an objective fashion.
Speaker A:Once I realize I have those biases, I might be more willing to read things that I might disagree with and invite other viewpoints.
Speaker A:For example, when there was the Brexit referendum, I, given the bubble that I lived in and given the bubble of my friends on social media, I only saw the views of other Remainers.
Speaker A:I was a strong Remainer myself.
Speaker A:And then when I went first went to a Brexit talk, I was shocked by how logical the guy's view was.
Speaker A:Now, I did not agree with the conclusion that he reached, but I did see the logic that led to the conclusion.
Speaker A:And so this meant that even though I voted for Remain, when the vote went the other way, I wasn't somebody calling for a revote, because all the people who voted on the other side were just misinformed.
Speaker A:No, they formed their decision, their opinion, based on logic.
Speaker A:And even though they might have reached a different conclusion than me, I respect that.
Speaker A:And it was really eye opening to me who might have thought the other side was just racist or xenophobic or misinformed, that they could actually legitimately reach a different opinion from me looking at the same facts.
Speaker B:It's the confirmation bias drives this polarization.
Speaker B:You know, obviously there's the Telegraph and the Guardian, as in examples of either side of the fence.
Speaker B:And I try and be a centrist.
Speaker B:I don't actually really like either.
Speaker B:And I.
Speaker B:It's weird when I read the Telegraph now, you know, I tried to like, you know, I'll read that when I see it, just to like, understand that side of the fence.
Speaker B:And it's a lot of ranting in it.
Speaker B:I mean, it's just ranting now it just seems because that's like, like the dopamine you say, yeah, yeah, really say it.
Speaker B:And then you read the Guardian thinking, well, you know, maybe they're more sensible.
Speaker B:No, just ranting, just the article after article about the.
Speaker B:You know what I was trying to look up?
Speaker B:Oh, I'd watched a question time time and I was trying to work with Kieran Kemi Bamikop and I was like, I couldn't really work out who was better or what was, you know, like in that question time.
Speaker B:It's kind of like what is the balanced view on who did a better job in this thing?
Speaker B:So you go and look at the Telegraph and they're like, yeah, can't even do this.
Speaker B:And because they were just shouting each other.
Speaker B:And then you read the Guardian like, kevin ridiculous.
Speaker B:And I was like, oh, wow, okay.
Speaker B:So you know, either side is just throwing stuff.
Speaker B:I mean, for me, I'm desperate for some sort of centralist because surely part of another weapon about confirmation bars is having the media that almost try and do that harder at its source and try and say, you know, look on a balance, Kemi's not a complete idiot and kids not an evil.
Speaker B:But, you know, these are just sort of absurd views.
Speaker B:But do you find it quite shocking now, you know, this sort of driving of this, this addiction, as you said?
Speaker A:Absolutely.
Speaker A:Because if you want to have impact, you have an extreme position because that's something that can be tweeted in 280 characters rather than something nuanced which says there's costs and benefits.
Speaker A:And so I actually do subscribe to both the Telegraph and the Guardian because I want to see both sides.
Speaker A:But sometimes it is that when you read the article, you don't like the extremity behind it.
Speaker A:So you asked earlier, Andy, what is my mission?
Speaker A:What is the subjects and the messages that I want to get across?
Speaker A:And I mentioned I don't focus on one particular subject.
Speaker A:I try to write about any subject that I think I might have evidence behind and I think is relevant.
Speaker A:But on all of these subjects I do try to present the centrist view.
Speaker A:So let's take esg.
Speaker A:So my first book wrote the Pie, as you mentioned, advocates ESG and sustainability.
Speaker A:But I also highlight that sustainability has limitations.
Speaker A:Right.
Speaker A:Not everything which is good for the planet is also going to be good for a company's long term profitability.
Speaker A:There's diminishing returns and trading trade offs.
Speaker A:I'm somebody who's generally pro diversity, but I highlight there's problems with just looking at gender and ethnicity.
Speaker A:A lot of the research which has gone viral on this topic is actually extremely flimsy.
Speaker A:And yes, I understand that maybe I would get more likes and I might get more book sales if I wrote a more one sided book or gave a more one sided talk.
Speaker A:But again, what is my mission?
Speaker A:Why did I choose to go into this career?
Speaker A:It is to have impact, but impact based on evidence.
Speaker A:And so if there is still a large enough audience which is willing to hear both sides of an issue, then I think I've done my job.
Speaker A:And what is gratifying is even though we live in perhaps a more polarized world, I have found there is a sufficiently large audience of people who want to see both sides of you and want to hear what the sense.
Speaker B:That's my point.
Speaker B:People say to me, oh, people don't want to hear that.
Speaker B:I'm like, like actually no, I think a lot of people do want to hear the central view.
Speaker B:I mean I, it's really interesting, you know, the addiction of confirmation bias, the addiction of social media, the addiction of these just like I want to hear this ranting, I want to get, I want to get angry.
Speaker B:And it, you know, as you probably understand much better than me, but you know, I've had friends explain it to me.
Speaker B:You know, it is linked to this amygdala, you know, it's linked to this almost dinosaur brain underneath that, you know, gets, if it gets stressed or, you know, it doesn't like certain things that, you know, the more cognitive part of us is dealing with.
Speaker B:With.
Speaker B:I mean, I, I think, I think that there's an interesting conversation to have as a society to say that, you know, do we need to be treated with this addiction?
Speaker B:You know, is it absolutely fundamental that you have to detox?
Speaker B:You know, that's normally the starting place, isn't it?
Speaker B:You know, right, you are not allowed to read the Telegraph of the Garden anymore.
Speaker B:You're only allowed, I don't know, the BBC or something, which is slightly left actually because they're journalists, but it tries to be more in the middle.
Speaker B:I mean, what a sort of fascinating issue.
Speaker B:But if we don't do that, I don't know if we can move forward.
Speaker B:You know what I mean?
Speaker B:I just, we're just going to pull each other apart.
Speaker B:You know, we had this conversation the other day.
Speaker B:You know, are we, are we able to develop new ideas if we're not willing to have a, a reasonable debate?
Speaker B:You know, I've had, I've had friends at the moment talking about how angry they are.
Speaker B:With the Labor Party, they're not more left wing.
Speaker B:And I'm like, what the hell are you talking about?
Speaker B:They should be in the middle.
Speaker B:Like, why you, why, you know why?
Speaker B:Why does no one want to come into the middle?
Speaker B:Why does everyone want to be at the ages?
Speaker B:But it's, it's.
Speaker B:This is it, it's this sort of addiction to this dopamine release.
Speaker A:Yes, there's certainly that problem of addiction, and this is something which is ingrained in our neurology.
Speaker A:However, I try to give sort of people more credit and see that the glass is more half full is that it might be easy for me to think I'm never going to cut through because people only want extreme views.
Speaker A:But actually, the silent majority may well be more nuanced than the views that you see which are loudest on LinkedIn.
Speaker A:It may well be, say, in an organization, in a.
Speaker A:Actually, you realize there's more people on your side than you think on any issue because it's just a few loud people who are speaking.
Speaker A:And just like the silent majority is influential and important within a company, I think the silent majority matters in the public sphere.
Speaker A:So when I give views on, say, diversity being more nuanced than people think, the number of people who cancel me is far less.
Speaker A:Less than I might have feared because people say, oh, no, actually, he does have a good point.
Speaker A:He is still pro diversity and inclusiveness of companies, but he actually realizes that we need to look beyond gender and ethnicity.
Speaker A:It's not that he's saying this because he's racist or sexist.
Speaker A:And so even if you were to take a particularly hot button issue, there are more people who are appreciative of both sides.
Speaker A:And actually what they might need is a first person to spark more nuanced thinking and then they're more willing to chime in themselves.
Speaker A:One thing that I now speak about is climate change, another rather hot button issue.
Speaker A:And what I'm trying to highlight is there are trade offs within net zero.
Speaker A:So when I was at the World Economic Forum, we were talking about a just transition.
Speaker A:And then one woman got up and she said, hey, I'm from Africa.
Speaker A:In Africa, 600 million people have no access to electricity.
Speaker A:You Westerners are talking about a just transition when 600 million of my fellow citizens have nothing to transition from.
Speaker A:And that to me was shocking.
Speaker A:I would have never known that.
Speaker A:I would have known that there's a lot of people who just don't have clean cooking facilities.
Speaker A:They have to use charcoal.
Speaker A:And that's something which is Extremely bad in terms of all of the particulates that this gives off.
Speaker A:And through.
Speaker A:I'm in a fortunate position that I get to go to the World Economic Forum and have those conversations.
Speaker A:And when I learn things that I did not know myself before, then I will try to disseminate that to my audiences.
Speaker A:And yes, it might be easy for people to say, oh, this guy says, oh, we don't want net zero, and he's a climate change denier.
Speaker A:No, I think climate change is really important.
Speaker A:But I also think electrification and clean cooking facilities is important.
Speaker A:Through my research on the Diversity project, I learned many ways in which women might be disadvantaged in asset management firms.
Speaker A:And this might be through no intent by men.
Speaker A:It may well be certain things that they say or do may try to be inclusive, but in fact are not.
Speaker A:And this is something I do want to get out in my report just to, to spark awareness because I came away from some of these conversations just thinking this is really bad, that this happens.
Speaker A:I myself have to ask, have I done something which unintentionally has these consequences?
Speaker A:I'm lucky that I got to have those conversations and learn about this.
Speaker A:Can I, given my platform, make this more publicly available so that people can be aware of these issues?
Speaker B:I mean, just taking that last point you made, is there an example just to illustrate that point where you think that that's being misunderstood and this is, is in terms of it being a male dominated asset management world, is it?
Speaker B:What are they doing when they're not realizing and they could change or we could all change.
Speaker A:So let's give an example.
Speaker A:So let's say you have a male partner of a private equity firm gets into a taxi cab with a female associate.
Speaker A:He might ask that female associate, hey, I know that you've got two year old kids, how's their nursery?
Speaker A:How are they getting along?
Speaker A:Is everything okay at home?
Speaker A:That is what everybody tells you is good management, right?
Speaker A:You, you think about the person as a person, not just as an employee.
Speaker B:Not as a machine.
Speaker A:But then let's say you take the same partner who now gets into a cab with a male associate.
Speaker A:He might ask him, are you being staffed on the right deals?
Speaker A:How's your career going?
Speaker A:Can I do anything to help you get more exposure?
Speaker A:And so let's say you have one taxi ride a month.
Speaker A:That's 12 opportunities that the man has to get mental shop and 12 opportunities that the woman doesn't have.
Speaker A:And that's something where you think about discrimination, that's not overtly saying something sexist it might be something where you think you're actually helping by talking to the woman about her family, but actually that's something which unintentionally means that you are acting in a discriminatory way.
Speaker B:That's so interesting because that's what my sense of it, because we've often had people on this podcast and there's those stats that people throw at you, which I find are so sort of one dimens, really.
Speaker B:They're like, oh, you know, only 2% of women get, you know, 0% of the, you know, all the funding goes to men.
Speaker B:And I'm like, but we live in our London bubble, like you said about Brexit.
Speaker B:But I'm just like, look, in my London bubble, I don't believe we are in a day and age where you're sitting opposite an investor and they're thinking, well, I was going to invest, but you're a woman or you're black, so I'm not going to.
Speaker B:That is just.
Speaker B:For me, the only way I can explain that is, is, and you know, anecdotally is just to say people invest in what they understand.
Speaker B:And, you know, a white man going to understand or feel that he understands a black woman less than may, you know, there may be a bit more of a gap there.
Speaker B:Is he making a.
Speaker B:That's just a bias, isn't it?
Speaker B:That's just a sort of, you know, an unconscious bias, as they would say.
Speaker B:But again, what I don't like is those stats get thrown out as sort of, oh, that's happening because they're a racist.
Speaker B:It's like, whoa, this person's not racist.
Speaker B:But, you know, yes, they might be.
Speaker B:There must be something else going on here.
Speaker B:Is there some.
Speaker B:Is that fair?
Speaker B:You know, I, I mean, you know, I did see racism.
Speaker B:I've seen it twice recently, which has shocked me.
Speaker B:So, you know, in a meeting of someone who was possibly where they were, you know, maybe wanting to be a client, they, they made this joke that we all like, what?
Speaker B:But I found that shocking in this day and age.
Speaker B:So I can see it's out there.
Speaker B:But my, my, my majority impression is exactly the things you're saying.
Speaker B:They're very subtle, unintentional.
Speaker B:You know, they're just, they're just things that, you know, I don't think I understand my wife, let alone, you know, let alone the female population.
Speaker A:You, you know, when something bad happens, we like to ascribe the worst possible intent to that person.
Speaker A:When actually a lot of the biases and a lot of the Non inclusion might be something which is quite unintended.
Speaker A:In a similar vein to that tax example, one investor told me recently, what happens if you are a pregnant woman?
Speaker A:Then people treat you differently because they want to be inclusive and not to overly burden, overly stress you.
Speaker A:But as you said, I much be pregnant, but my brain still works.
Speaker A:So you're removing me from these client meetings, you're giving me fewer stocks to cover and you think that you're doing this to help me, but actually this is something that I'm still very willing to get into.
Speaker B:Assuming is such a problem.
Speaker B:I mean, we assume, you know, I was just in a meeting saying we mustn't assume because often the person we've assumed is going to be worse at something is amazing.
Speaker B:You know, they end up in that role.
Speaker B:Let's talk a bit about esg.
Speaker B:I think it's such an interesting subject at the moment as we try and sort of grow up and deliver about it.
Speaker B:I mean, there's so much greenwashing, there's so many, you know, what, what do you feel is going on?
Speaker B:Are the efforts to improve esg, the reporting and anything, are they working?
Speaker B:Is that your sense?
Speaker B:Or what do we need to do differently as well?
Speaker A:So I think we should start with the history.
Speaker A:So why, why did ESG start to begin with?
Speaker A:It was the view that actually these things are material and are drivers of long term company value.
Speaker A:So how did I get involved in this?
Speaker A:I never set out to be an ESG person.
Speaker A:The PhD I did at MIT was a PhD in Finance.
Speaker A:It wasn't in sustainable finance yet.
Speaker A:When all of my colleagues were looking at the link between tangible factors and profitability, because it's mit, it likes to look at hard numbers.
Speaker A:I thought, no, the true drivers of a company are intangible.
Speaker A:I had just done a couple of years at Morgan Stanley.
Speaker A:That is a company in which you think culture should not matter, right?
Speaker A:The bonuses are so high, the promotion incentives are so high, it doesn't really matter how you're treated.
Speaker A:You're going to work hard because of those financial incentives.
Speaker A:But that wasn't true, right?
Speaker A:It really mattered how you were being treated.
Speaker A:If the boss went to a meeting, you didn't go, obviously you were so junior.
Speaker A:But if he or she spent five minutes calling you and saying, hey, this is how the meeting went, the work that you did over the weekend, this actually came up in the meeting and the client was really impressed by how well you've done that.
Speaker A:That made big difference.
Speaker A:So I looked at the link between employee Satisfaction and long term firm performance.
Speaker A:Not because I think companies should be fluffy and nice, but because I thought this is a material human capital factor.
Speaker A:This is about your most important asset, your people, and it was linked to performance.
Speaker A:So how did ESG start off?
Speaker A:It made people realize that there are these intangible factors such as the trust that you have with your customers, your stewardship of the environment, your investment in your people and the.
Speaker A:These are things that you need to take into account.
Speaker A:Well, where is the SG now?
Speaker A:I think it's in a phase where you're trying to force people to do things where you're mandated to tick particular boxes and that's crazy because you're not forced to do that in any other thing which is relevant for companies.
Speaker A:So people are not saying, oh well, I'm going to force you to invest X percent of your revenues in research and development.
Speaker A:They say, well, R and D is important, but we understand that maybe you as the CEO might know much better how much to allocate to R and D than somebody else.
Speaker A:They don't tell you necessarily how to price your products or how many new products to launch.
Speaker A:Yet you have some outside people telling you exactly what ethnicities to hire, in what proportion, how much carbon you should be emitting, and so on.
Speaker A:Also what this does is it looks at things on a purely quantitative basis.
Speaker A:So they reduce something really complex like ESG to a set of numbers.
Speaker A:So when I looked at employee satisfaction in corporate culture, that looks at many intangible things such as the mentorship that you provide.
Speaker A:Do you have a psychologically safe environment?
Speaker A:Are you cognitively diverse rather than just demographically diverse?
Speaker A:But now we want to rank or rate a company based on the percentage of minorities and women.
Speaker A:The CEO to worker pay ratio, when there's many other things about an employee value proposition which go beyond just the salary.
Speaker B:Okay, so people are being forced to do these things you're talking about.
Speaker B:I mean really we're talking about large companies in the UK being forced to report on things, aren't we?
Speaker B:Or I mean, that's the level we're at at the moment, isn't it?
Speaker A:Yeah.
Speaker A:So there's a couple of things.
Speaker A:Firstly, you need to report and, and people just have to hire employees who all they do is report and just fill in these questionnaires and fill in these responses to consultations and provide information.
Speaker A:It's not even clear what's going to happen to that information.
Speaker A:Maybe it just goes into a black hole somewhere.
Speaker A:So I just came from a board meeting where one of my colleagues said that they're an investor and as an investor they engage with companies and they now need to report to their clients for every single engagement.
Speaker A:Did they cover these specific topics and what were the milestones achieved?
Speaker A:And they need to report on that every quarter to that one investor that is one out of 900 institutional clients that they have.
Speaker A:And so you have to do that template for one particular investor.
Speaker A:You have to do that, then 900 times you're going to spend so much time on reporting your activity rather than actually doing your activity.
Speaker A:So that's one issue.
Speaker A:But then number two is not just the direct cost of having to report something, but if you know that you have to report something, then I'm going to skew my decisions to what I can report.
Speaker A:It's just like if I know my quarterly earnings are reported, I'm going to just focus on short term earnings.
Speaker A:With no Child Left behind, where you had to report standardized test scores, then you just teach to the test.
Speaker A:You don't teach other things like a love of learning or a respectful authority.
Speaker A:Yeah.
Speaker B:And you end up always wanting to show that the numbers are going up and sort of graduating.
Speaker B:But surely just by reporting it creates awareness.
Speaker B:So therefore it has a positive effect.
Speaker B:Like otherwise, if you know what would be the other way of doing it is the reporting in itself.
Speaker B:Isn't that just the start?
Speaker B:We report numbers, we report all sorts of things and then we sort of look at them and say, oh, we should do better with them.
Speaker B:And there's a pressure from external parties to do that.
Speaker A:Well, we actually might not always report numbers.
Speaker A:And indeed one of the big pushback is to quarterly earnings.
Speaker A:Because if companies report quarterly earnings, that focuses them on short term, just purely quantitative dimensions of performance.
Speaker A:Indeed, when Paul Polman took over Unilever, he said, we're going to focus on sustainability and these long term factors.
Speaker A:I'm going to stop reporting quarterly earnings.
Speaker A:So the issue is that yes, you might think, okay, more information is always better, better, but if that information leads you to taking shortcuts and just making a decision primarily based on that quantitative information, that's a problem.
Speaker A:And I think that's the same issue with just standardised test scores at schools.
Speaker A:This is why people say, well, actually university league tables or school league tables might be problematic as people will just look on those dimensions.
Speaker A:Now that is fine for some sectors where maybe the main output is quantitative.
Speaker A:So if I run a factory, I might want to look at the output from each of my different production lines because maybe quantity of output is the one thing that matters.
Speaker A:But for something like esg, when there's so many aspects to how you treat your workers more than just say diversity and pay, then actually if I'm to report on those things, it might be quite reductive and it might skew me to focusing on quantitative things at the expense of the qualitative.
Speaker A:And then what is the solution?
Speaker A:So do we even need regulation for this?
Speaker A:Because why isn't there a sufficient market for that?
Speaker A:Because even if indeed investors thought, oh, I actually do want these metrics, then companies would want to report at them themselves because if they didn't, then investors would not buy their shares.
Speaker A:So why do we need sort of a heavy handed, one size fits all regulatory approach where a regulator says every company needs to report all of these 300 different measures instead, the measures that might be relevant for one company might not be relevant for another.
Speaker A:For example, if you're in the tech industry, maybe biodiversity and climate change is not so important as cybersecurity and misinform.
Speaker A:And so if left to their own devices, companies will have to report things that investors believe are financially material.
Speaker A:Because in the absence of reporting that information, investors might say, I don't know about this company, therefore I'm not going to be investing in it.
Speaker A:But what should be driving what's reported is the demand from investors because they believe that this is something which is material.
Speaker B:Yeah, because I hang out with SMEs almost all the time.
Speaker B:I always hear that line about, oh well, companies that just run themselves only, you know, only caring about shareholder profits.
Speaker B:I mean, certainly the SME market that, that isn't even like, it's not even actually vaguely my experience that.
Speaker B:My experience of SMEs is they care about their people, they care about the problem they're trying to solve.
Speaker B:Yeah, they want to make money, but it's not a sort of oh, we've got to deliver for shelters.
Speaker B:That's very sort of big business.
Speaker B:I mean, you make this point in, you know, grow the pie that it's about focusing on purpose rather than, you know, maximizing profits.
Speaker B:And maybe the key is in that and maybe in the SME market then are still at a, you know, at a stage when they're still focusing on the purpose more.
Speaker B:You know, I feel the challenge for the SMEs is, you know, if someone's just trying to get this thing going, most of them are just surviving.
Speaker B:They don't have the capacity to suddenly sort of do a load of other stuff, you know, but they certainly care about their people.
Speaker B:You know, caring about the environment I think is really got to be linked to, there's got to be sort of more taxation or something on resources.
Speaker B:You know that people have suggested this idea and I think there's some really smart aspects of that that I can't just take water or take what I want and you know, crack on.
Speaker B:You know, if you make, if you make resources expensive or taxed or valuable, you know that I've got to look at it in that way.
Speaker B:Then you've got your people, you know, you're suddenly sort of understanding better how you accept the resources.
Speaker B:And then, I don't know, you know, the, the others we could work on.
Speaker B:But I mean, is that something you resonate with at all or.
Speaker A:Yes, absolutely.
Speaker A:It's just, just think about, well, what are the long term factors which are going to be affecting my business?
Speaker A:So why is my work on human capital is that I think is just a very material asset.
Speaker A:This is the most important asset in nearly every company with the environment.
Speaker A:Unfortunately it is more nuanced because we don't have enough government action on climate change.
Speaker A:This is often an externality where at the moment you can get away with polluting the environment and you're not bearing all of the consequences of your pollution.
Speaker A:And so unfortunately for that there is a trade off.
Speaker A:Is that, do you run your company to maximize long term, short shareholder value?
Speaker A:Even in the long term, it's not clear that you will be suffering from your climate impact.
Speaker A:People are saying in the future there's going to be some government intervention.
Speaker A:But I learned about climate change myself when I was in school many, many decades ago and there still hasn't been that action.
Speaker A: auses cancer was published in: Speaker A:Here we are 75 years later and the tobacco industry has made outside profits for the vast majority of those 75 years.
Speaker A:So we do need to accept that there are certain things where there might be a trade off between profitability and what is good for society.
Speaker A:But then it's your prerogative as an entrepreneur to think, well, what am I going to maximize?
Speaker A:Maybe I'm not going to maximize profit, I am going to be concerned about my climate impact.
Speaker A:All that research shows you is what the trade offs are, are not what the right decision is.
Speaker A:Sometimes there's not trade offs, which is what I think is the case for human capital.
Speaker A:This is my idea of grow the pie.
Speaker A:If you're investing in your workers, the pie grows and everybody is better off.
Speaker A:Unfortunately, not everything is pie growing and if there is a trade off between those things, don't fake the data and claiming, oh, this is always a win win, be upfront that there is a trade off and so business leaders can decide where they want be on that trade off.
Speaker B:Yeah, I mean when you're starting out, getting a business working, you're just, you know, you haven't got any money, you've got to get the thing working.
Speaker B:I mean most of my experiences with those, you know, entrepreneurs and SME is they making proper money out of.
Speaker B:It may never really come, you know, it may, it may, it may eventually come when they're much, much bigger and by then you've got a, you're sort of trapped because if you, if you started day one trying to do everything perfect, then you can't do it and by the time you're big, yeah, you're making lots of money.
Speaker B:But that's what now people are expecting and if you suddenly, you know, introduce like what you do anyway because that's the nature of big business.
Speaker B:But there's just sort of an inherent critical mass or sort of, you know, skate velocity problem of how the businesses get set up.
Speaker B:And I wouldn't say that a small business starting or medium one that's, you know, trying to get there and you know, it should be like if, you know, most of them are just not massively profitable.
Speaker B:You know, they're not all software companies chucking out, you know, 80% margins, you know, they're surviving and investing in their people.
Speaker B:So, so I think the people one I think is underestimated how much my experience of entrepreneurs, how much they do care about their people and I regularly see instances where their bosses are being paying themselves less than some of their team.
Speaker B:But the environment one as we say, is very nuanced and I just, I don't know whether the tax idea is clever that you just say, well, we're just going to make it really expensive to access resources and then you've got to build it into your business model and struggle harder.
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Speaker B:I'm going to ask you a really stupid question that has bothered me for ages but given your knowledge and intellect I mean esg, it's always bothered me this G because G is governance now.
Speaker B:Companies are intrinsically supposed to be governed.
Speaker B:I mean I've always found it.
Speaker B:I know it's a stupid question, so you can treat me like an idiot, but I feel like it.
Speaker B:The G is almost a distraction.
Speaker B:It's like people focus on the G alone but I'm like no.
Speaker B:The absolute principle of a company is it has to govern, you know, well, not an apps.
Speaker B:You know, it's enshrined in every part of our company should be.
Speaker B:It needs good governance that's already there.
Speaker B:Why?
Speaker B:It's like we've got two GS.
Speaker B:Do you know what I mean?
Speaker B:A company already has to have governance aboard, that should govern it.
Speaker B:Why do they add the G?
Speaker B:Just, you know, you can treat me like an idiot, but it's always bothered me.
Speaker A:I absolutely do not know because it's bothered me as well.
Speaker A:So it's not a stupid question at all.
Speaker A: In fact I wrote a paper in: Speaker A:Just saying these things should not be comb to begin with and even the ENS that comprises loads of different issues.
Speaker A:So to treat all of these things under the same umbrella just does not make sense.
Speaker A:So why might those letters have been combined?
Speaker A:I think it's entirely due to historical accident rather than them belonging together.
Speaker A:So where did ES come about?
Speaker A:A United nations report called who Cares Wins?
Speaker A: Which was published in: Speaker A: Around the Same time in: Speaker A:So around the same time people realised that ENS was more important than they had historically realised and they recognised that governance was more important than historically realised.
Speaker A:And so just because of historical accident, those things came to become mainstream at the same time.
Speaker A:So they thought well let's put these all things together and call them esg.
Speaker A:But they don't really belong together.
Speaker B:No.
Speaker B:Oh, you made me so happy.
Speaker A:Governance is just table stakes.
Speaker A:Every company needs to be well governed.
Speaker A:It's not about like people say, oh let's ban esg because it's all about wokeness.
Speaker A:Well no, if you're Republicans and you're the party of big business, you want companies to be well governed.
Speaker A:That is an absolute fundamental.
Speaker A:Governance is in shareholders interest.
Speaker B:Well it's almost like would do the opposite, isn't it?
Speaker B:Oh you're saying that company should be badly governed, you know, or we shouldn't have it, it's madness.
Speaker A:Whereas with Ian, yes, there is a legitimate debate.
Speaker A:So with governance that is absolutely essential and it will improve long term performance.
Speaker A:There is no trade off there.
Speaker A:With even the S, I think there is likely to be no trade off because workers are your most important asset.
Speaker A:E is quite different where that is an externality.
Speaker A:But to think let's bundle all of these things together under the same umbrella.
Speaker A:This doesn't really make sense.
Speaker A:So when I called the paper the end of esg, that's not because I'm an anti woke climate change night.
Speaker A:I'm absolutely for the idea of considering environment, considering social factors and considering governance, but not all sweeping them under the same umbrella and also breaking up environmental issues.
Speaker A:So maybe one good way to address climate change is to have electric cars.
Speaker A:I've got nothing against them, I own one myself.
Speaker A:But there is an impact of mining the raw materials which are needed for batteries.
Speaker A:Maybe one way to address climate change is have biofuels but they are monocultures and they reduce biodiversity.
Speaker A:So there's lots of trade offs even between different E factors.
Speaker A:Right now E is just climate.
Speaker A:But when we realize that there's other considerations beyond climate, then we see again these things in a more nuanced and less extreme simplistic way.
Speaker B:You may be so happy because that makes so much more sense.
Speaker B:It's basically run your business, well look after your people and give a shit about the world.
Speaker B:I mean, you know, it's just like care about these things.
Speaker B:And I think the point you made earlier is this really interesting one about we just, we're just not feeling the effects.
Speaker B:Know we can, we can drain 20% of the water out of a river, you know, just to do something and there's no one stopping us there.
Speaker B:So there's something very complex now.
Speaker B:But if we don't act as a community then it doesn't work, does it?
Speaker B:Because if there's, if there's 10 companies out of 100 that are willing to don't care about all of that, they'll win in a way because they'll just out compete everyone.
Speaker B:Most of these subjects you've really studied and passionate about, you know, they're quite intrinsically linked and I, you know, I give credit where you're coming from a learned position that you actually gone and studied and looked at the data properly.
Speaker B:But I love the fact that it's leading you to interesting or difficult conclusions that you then getting out in the world have you, if you, I mean you've sort of alluded to it, but has that been quite difficult you for at times.
Speaker B:Have you received quite, you know, some really nasty feedback or difficult situations?
Speaker A:Less than I would have thought.
Speaker A:Because I always try to present complex issues in a very nuanced way.
Speaker A:So.
Speaker A:So what I'll do is I'll.
Speaker A:I'll back it up by data.
Speaker A:So it's not a particular ideology that I have.
Speaker A:If there is no correlation between demographic diversity and financial performance, that's just there in the data.
Speaker A:So if you do the data correctly, you don't find a correlation.
Speaker A:And then you think about, well, what are the implications of that?
Speaker A:So one way to interpret this data is to say, let's completely scrap dei.
Speaker A:It's all woke nonsense.
Speaker A:And if I was to have that conclusion, then it may well be that I get a lot of pushback.
Speaker A:But instead, my interpretation of the data is this.
Speaker A:That does not invalidate DEI for two reasons.
Speaker A:First, you could do diversity policies for other reasons than making more money.
Speaker A:You could do this because I think, well, there's a good societal or ethical dimension to this.
Speaker A:Or you might think, well, we do want to do dei, but we need to look beyond gender and ethnicity.
Speaker A:So the reason why there's no link between demographic diversity is that demographic diversity is too reductive.
Speaker A:So given that I back it up my data and then I don't jump to the most aggressive conclusion from this, even though that might win me some plaudits from some sectors, I might think about, are there other interpretations of this?
Speaker A:Then let's just ban dei.
Speaker A:Oh, yes.
Speaker A:One interpretation is let's look beyond demographic diversity to other types of diversity.
Speaker A:And let's not look just at diversity, but also inclusion and psychological safety.
Speaker B:And I mean, not just yourself having to deal with it, but, you know, people are even more skeptical these days of corporations and leaders.
Speaker B:What do you think's the most effective way for leaders to prove they're acting in good faith?
Speaker A:I think there's a couple of things.
Speaker A:I think, firstly, for leaders to be upfront about limitations rather than making some big grandstanding statements saying, I'm gonna completely save the world when there are trade offs and companies are there to make money rather than just to benefit society.
Speaker A:So if there are trade offs, to be upfront about this and to say, well, yes, we are governed by a, but we also are here to make shareholder value.
Speaker A:So there might be some difficult things that we need to take which are gonna benefit some and not the others.
Speaker A:Let's contrast that with, say, the purpose statement of Ben and Jerry's this is.
Speaker A:We believe that ice cream can change the world.
Speaker A:Really?
Speaker A:Right.
Speaker A:Is this something that you actually truly think is gonna happen?
Speaker A:How is that gonna be affecting your day to day decisions in terms of guiding trade offs?
Speaker A:This is just a vacuous statement.
Speaker B:Do you think they'll be trying to be funny there?
Speaker B:I mean, yeah, it could change the world.
Speaker B:Everyone could be really fat, you know, but, you know, you could actually call.
Speaker A:Them out on that, but I don't think so.
Speaker A:What are they doing?
Speaker A:A lot of the time is it's like social activism to say, hey, I'm so great because I got arrested in the Black Lives Matter protest.
Speaker B:Is that the sort of thing Ben and Jerry's does?
Speaker B:Is it really?
Speaker B:Really?
Speaker A:Yeah.
Speaker A:And so I'm somebody who cares about racial equality.
Speaker A:But if you are running an ice cream company, I don't think think that you should be evaluated on such types of activism if you really care about racial equality.
Speaker A:Well, let's think about unconscious biases within your organization.
Speaker A:But maybe the most material thing is you are making a product which could be globalizing obesity.
Speaker A:Can we do something in order to reduce the calorific content of your food?
Speaker A:That I think is much more important than making some big statement and getting arrested and saying, look, I think they were also saying, oh, we condemn the war.
Speaker A:Or we are calling for the leaders to have a ceasefire.
Speaker A:Are they gonna do this because Ben and Jerry's an ice cream company is gonna tell them to have a ceasefire?
Speaker A:No.
Speaker A:So why are they doing this?
Speaker A:Is this again just to be seen as socially progressive?
Speaker A:Rather than doing your communications on that, could you not redirect your efforts in order to reduce the calorific content of your food?
Speaker B:There's something about brands, isn't there?
Speaker B:There's sort of another bias of us is the way we sort of, we sort of sign up to these things where it's almost.
Speaker B:I remember years ago someone explaining that, you know, when you're buying off the shelf, you're like, you know that emotional response.
Speaker B:And by chucking a bit of this, oh, we're not bad people.
Speaker B:It's like, I'm doing a bad thing in a way, I'm buying ice cream.
Speaker B:I mean, buying ice cream is not bad, but it's a treat, you know, it should be a rarity, isn't it?
Speaker B:And then you.
Speaker B:They throw some of this in.
Speaker B:Ben and Jerry is a really interesting example.
Speaker B:I didn't know much about them at all, you know, but they're a sort of brand that is managing to sort of create a sort of vague sense that they're a good bunch of people.
Speaker B:They're not just this giant corporate, but, you know, really interesting cynical examples in there.
Speaker A:And you talked about greenwashing earlier, and one could say that that is greenwashing.
Speaker A:It is an organization which has a product which one might argue does cause some harm.
Speaker A:And how do you sanitize that while you make a lot of statements?
Speaker A:Similarly, let's take McKinsey.
Speaker A:So McKinsey, I think are extremely respected firm, great consultancy, but they have had some controversy with issues such as Purdue Pharma.
Speaker B:Yeah, they.
Speaker B:They gave the advice, didn't they, about how to target certain doctors in America for oxycodone to.
Speaker B:To find a sort of doctor who is very, you know, loves selling drugs, basically, because if I'm not, I'm probably getting it wrong.
Speaker B:But the oxycodone crisis in America, they had to pick the states where there's not a double check of, like when you issue a prescription and there's some sort of double entry which stops sort of over issues.
Speaker B:So there are a few states that didn't do that.
Speaker B:And then the real key was Mackenzie came in advice, go and target these doctors.
Speaker B:Is that what you're talking about?
Speaker B:Yeah, yeah.
Speaker A:Yes.
Speaker A:And so that has.
Speaker A:Has worsened their reputation.
Speaker A:And I'm not going to say that this is definitely a consequence of it, but they have all these reports now saying, oh, diversity improves financial performance.
Speaker A:Now, this is really bad research.
Speaker A:It's been rejected left, right and center.
Speaker A:It can't be replicated.
Speaker A:But that's a way of improving their image after potentially some of the controversies that they've had.
Speaker A:Maybe the best thing to do is just to go back to your main mission and make sure that the advice that you give is not just going to be leading your clients making more money, but making sure that they do do this in the right way, rather than just greenwashing your image with.
Speaker A:With all of these other things.
Speaker B:It's funny, the diversity of thought.
Speaker B:When I think about it a bit more, if I think about our own business, which, you know, we're a couple of hundred people, but, you know, you're a tribe.
Speaker B:You.
Speaker B:You have a culture.
Speaker B:Do you know what I mean?
Speaker B:And that culture therefore narrows this diversity of thought by sort of almost, you know, does it.
Speaker B:I mean, does it have to.
Speaker B:I mean, does it almost suggest that a trick tribe, you know, if you can talk about a business or a culture, because it kind of is a sort of tribal thing, really.
Speaker B:Is there a Sort of push and pull there.
Speaker B:That's difficult to manage.
Speaker A:There is, and this is what's really interesting to me when I did my research on cognitive diversity, because before I started the research I thought, okay, demographic diversity, that is ambiguous.
Speaker A:Because actually the way of thinking that you have is more than just your demographics.
Speaker A:But I thought the evidence would be ambiguous, unambiguous, that you always want diversity of thought.
Speaker A:But even that is not why.
Speaker A:Because people like like minded people, right?
Speaker A:If you think of any social club, they say, oh, come here, join like minded people.
Speaker A:Strong cultures are people who all think similarly.
Speaker A:So actually if you have too much diversity and too much fragmentation, maybe you don't get the affinity and camaraderie which leads to bonds.
Speaker A:And this is not just a feel good factor, actually, you might get more diversity and more dissent among homogenous groups.
Speaker A:So let's take an industry which has a lot of creativity and a lot of innovation, which is music.
Speaker A:Think of some of the most creat, let's say the Beatles or Coldplay.
Speaker A:They are all white men.
Speaker A:They may have all grown up together and yet they can argue a lot about creative differences.
Speaker A:Why?
Speaker A:Because they know that the friendship ties will still be there.
Speaker A:That they don't need to worry about disagreeing with somebody else's suggested song lyric or riff because they know they'll still be friends.
Speaker A:So actually sometimes it could be that homogeneity, number one, just makes people happier to be at work.
Speaker A:Right?
Speaker A:You like to hang out with people who might also like whatever interests that you have.
Speaker A:And it might also so encourage you to share more and to challenge more.
Speaker A:And so even something like cognitive diversity, which me, before coming to this, I thought is gonna be unambiguously beneficial, actually sometimes you do want some level of homogeneity.
Speaker A:This could give a strong culture, maybe a strong type of identity to the firm.
Speaker B:Yes, almost the psychological safety goes up.
Speaker B:And music is something I've spent a lot of my life in.
Speaker B:I agree.
Speaker B:I think you know Dee as well, our producer sitting next to us.
Speaker B:But I think the thing I learned in music, music is criticism that you have to be able to take and deal with criticism and that great.
Speaker B:You know, occasionally you bump into someone in life that you can be, you can write songs together well, and it's because there's a feedback and there's, as you say, there's.
Speaker B:I mean it's always painful, like especially creatively, it's quite hard to have your ideas rejected.
Speaker B:I'll put my soul into a rap and someone will say, oh, it's not really doing it.
Speaker B:I mean, we joke that the way you do it in music is if you do it and no one says anything, or people are like, that means not good.
Speaker B:Whereas if someone goes, yeah, I was all right, you know, Then you're like, I really smashed it, you know, but you have to be gentle with your thing.
Speaker B:But that's a really interesting point that.
Speaker B:I mean, it's sort of psychological safety.
Speaker B:You're.
Speaker B:You're amping up your little bit less cognitive thought, but because the psychological safety, you're then more able to think freely, isn't it?
Speaker B:You know, that's fascinating.
Speaker B:This is stuff I don't know if you ever read into it, about what do geniuses have in common?
Speaker B:And one of the only things they have in common is severe emotional trauma early in life.
Speaker B:You know, they lost their mom or something terrible.
Speaker B:And the argument, and I read this many years ago, was that.
Speaker B:That.
Speaker B:That fruit.
Speaker B:The.
Speaker B:Because memory is connected to emotions.
Speaker B:If you think of a banana, you think of happy things, because bananas are sort of a jolly yellow fruit and stuff like this.
Speaker B:And that when you go through severe emotional trauma, if you ever looked at that or anything, you're aware of that.
Speaker B:No.
Speaker A:So there is some research which tries to look at what drives success.
Speaker A:And I know that some people look at.
Speaker A:Well, is it that you.
Speaker A:You were adopted?
Speaker A:So they will say, oh, Steve Jobs was adopted.
Speaker A:I think Jeff Bezos was as well.
Speaker A:I actually think, unfortunately, some of that research is pretty weak.
Speaker A:So that succumbs to what's known as the narrative fallacy, where if you see a couple of random things, you draw cause, effect, relationships, when it was random.
Speaker A:So people say, okay, Steve Jobs was abandoned by his birth parents, and that drove him to just work really hard and become successful.
Speaker A:But then if you ask him in his own words, he says, oh, no, this idea just doesn't make sense.
Speaker A:I've always felt loved.
Speaker A:I never felt that I had to prove myself or to show my birth parents that they were wrong.
Speaker A:So I don't know of the specific research that you mentioned about trauma.
Speaker A:And I can see that it is logical that maybe this leads you to wanting to try harder.
Speaker A:But there are, unfortunately, people who have trauma and they actually don't recover from that.
Speaker A:And it may well be that they're successful people who had great, comfortable and happy childhoods, and that gave them the safety and security in order to take risks because they knew that their parents would always have their back.
Speaker B:Yeah, interesting.
Speaker B:Out of interest, as a side thing, in this country, you know, being a Londoner, you know, do you think we've got a problem talking about money in our culture and that that is holding us back a bit as well.
Speaker B:I mean slightly outside of your main room.
Speaker B:It.
Speaker B:But something you mentioned earlier made me think you think of it.
Speaker A:I think we might not have a problem talking about money so much, but we do have a problem talking about success and we don't like people who are successful.
Speaker A:So compared to in the US where people tend to be more open about their success.
Speaker A:Now as a very extreme example, it's quite common to see bumper stickers on cars saying oh, my kid goes to Harvard or is an honour student now I wouldn't go.
Speaker A:Really?
Speaker B:I've never seen that sticker.
Speaker B:Wow.
Speaker A:That's actually quite common.
Speaker A:So people will be open about this.
Speaker A:And when I did my Fulbright scholarship orientation, they said when you meet people say that you're a Fulbright scholar.
Speaker A:As a UK person, I wouldn't want to say that.
Speaker A:That is just sometimes we call it within ourselves the F bomb.
Speaker A:So when do you drop the F bomb that you're a Fulbright scholar?
Speaker A:Because that to us is really non natural.
Speaker A:But when you say that then people just got really interested in this and they would just ask you about your experiences in the uk.
Speaker A:So actually respond to things quite differently there.
Speaker B:Here.
Speaker A:This could be a massive over exaggeration but you see a bit more of the crab mentality which is, well, if there's crabs.
Speaker A:Yeah.
Speaker A:Climbing out of a bucket, then you will want to pull the crab down who tries to escape.
Speaker A:So I do see, having spent 10 years in the US there's more celebration of success here where in the UK it may be if there's successful people then you want to drag them down or you like.
Speaker A:We like to see articles on social media which might be slamming that.
Speaker A:The great entrepreneur or the footballer.
Speaker B:Okay.
Speaker B:It's a tricky one for me because I like, I like how we're humble.
Speaker B:You know, I was teaching a hilarious lady from Romania who's kept sort of over being too, oh, I, you know, I'm brilliant and stuff.
Speaker B:And I said, oh, you got to stop doing this.
Speaker B:And I sort of made the joke to her, look, if you were the world, if you were the world's best tennis player and you were British, the best you could go with is quite good.
Speaker B:You know, you would say I'm quite good at that.
Speaker B:But it's, it's a funny, it's.
Speaker B:I guess it's these cultural faux pas each country has A British person understands what, what you mean if you say, you know, are you any good at this?
Speaker B:You know, you, and you say you're quite good, we're like, oh, they must be pretty good then.
Speaker B:And actually there's a lot of signaling going on there that's sort of allowing you, you, you taught both at Wharton and London Business School.
Speaker B:What's the biggest gap in how we're educating the next generation of business leaders, do you think?
Speaker A:I do think it's the softer skills that, that I referred to earlier is, is, is that we like to teach what is there in the textbooks.
Speaker A:And this could indeed be to try to improve scores.
Speaker A:So the Financial Times now ranks business schools on the number of hours they spend teaching ESG and net zero.
Speaker A:Now, I'm somebody who would like that because I benefit because I naturally teach esg.
Speaker A:But why do we focus on that?
Speaker A:There's so many other important skills that you might want to teach, such as public speaking or mental and physical wellness and resilience.
Speaker A:So when I started at Morgan Stanley, just the number of people who would just become unhealthy and not know how to manage their hours and prioritize important things like sleep or exercise, and this would just lead to burnout down the line.
Speaker A:We don't teach softer things like that because we see this as fluffy.
Speaker A:I think another thing we might not teach as much is resilience.
Speaker A:So when I taught in the U.S.
Speaker A:i would often, I would often cold call students and I would not cold call them to be aggressive or put them on the spot.
Speaker A:I'd cold call them to make sure that everybody participates.
Speaker A:And so it's not just the more vocal people who are having their voices heard.
Speaker A:But here when I cold call, people say, oh no, this is just too aggressive.
Speaker A:I don't want to be put on the spot.
Speaker A:But when I tell this to my former students at Wharton, they say, well, this is crazy, right?
Speaker A:You spend X hundred thousand pounds to do a degree and you don't want to be challenged.
Speaker A:And the real world does challenge you and asks you a question in a meeting.
Speaker A:You can't say, oh, you can't ask me that.
Speaker A:So it's surprising that more challenging approaches to education are less common now.
Speaker A:And I think this is not just a UK US thing.
Speaker A:I think it's a thing across the board.
Speaker A:So Wharton used to have a teaching award called Tough But Will thank youk in 5 years time.
Speaker A:And I think that was a great award.
Speaker A:This suggests that what they want is not just teachers who are great entertainers who tell jokes but people who tell you things which are difficult, but it's gonna be useful in your career, that has been stopped at Wharton.
Speaker A:There's no longer that type of award.
Speaker A:Instead, what we might be rewarding is entertainment or ticking particular boxes rather than actually challenging students.
Speaker A:And I say just one third thing is actually intellectual freedom.
Speaker A:So I think at universities now, it is difficult to have particular points of view.
Speaker A:So I think there was a recent survey where in Harvard university, I think 75% of.
Speaker A:Of students would feel uncomfortable disagreeing with their professor on a topic, would actually feel uncomfortable disagreeing with their own students on particular topics.
Speaker A:Even at the University of Chicago, which is known for being free thinking, this was about 65 to 70%.
Speaker A:So there's very few faculty or students who will come out and state conservative political beliefs.
Speaker A:And why might that be important is, well, some of the faux pas that, say, Target or Bud Light might have gone into, they might not have happened had they had some political diversity on the board.
Speaker A:So nearly a lot of people in academia will be on the liberal side.
Speaker A:And I am very sympathetic to that.
Speaker A:I like things like ESG and eo, but I also would like to hear from conservative colleagues on issues where I might have blind spots.
Speaker B:It's so true what you're saying.
Speaker B:And I find it really strange that everyone I speak to recognizes these gaps in education that are so simple, as you say, the softer skills, you know, I mean, you could.
Speaker B:You, you know, just basic stuff, you know, even, you know, how to cook or how to do, you know, you know, the other one I was thinking about the other day.
Speaker B:Cause my sister's talking about bullying.
Speaker B:And I was like, oh, they've got to stop it.
Speaker B:I'm like, you'll never stop bullying.
Speaker B:But we could.
Speaker B:We could educate people about why people do it, what it is, how you could react to it.
Speaker B:Better learn to have a sense of humor about yourself.
Speaker B:You know, it's sort of.
Speaker B:It's what I mean.
Speaker B:The thing I can't get my head around is why they can't change education.
Speaker B:I mean, my friend who's had been a teacher all his life said, well, because of people run it and map it.
Speaker B:So, you know, sort of, you know, obviously the sort of possibly true but cynical response, but, you know, you said it's because they think it's fluffy.
Speaker B: Why are we sitting in: Speaker B:Not, you know, another five that just help them so much?
Speaker B:You know, finance.
Speaker B:If the lack of financial education in society is arguably one of our biggest problems, that people don't understand money.
Speaker A:You know, I completely agree with this.
Speaker A:So financial literacy is a really, really important skill.
Speaker A:This is something for inequality.
Speaker A:So inequality is not just in terms of the salary that we receive, but what we do with that salary afterwards.
Speaker A:So one of the jobs I used to have is with Gresham College.
Speaker A:So that is a weird institution in the UK which you can't do any degree there.
Speaker A:All they do is to give free lectures to the public, a bit like Michael Faraday gave on science.
Speaker A: So between: Speaker A:Those same four years I was the Gresham professor of Business and my final year long lecture series was called the Principles of Finance.
Speaker A:Just basically explaining what is a stock, what is a bond, what is compound interest.
Speaker A:Otherwise if I'm just teaching at London Business School in Wharton at mit, hugely privileged institution I'm really lucky to have taught at, well, the people who are most in need of financial education cannot afford to do an MBA at one of those institutions.
Speaker A:So this was a great opportunity for me to share basic financial education to the general public.
Speaker A:So if anyone who's listening to this knows of teenagers or people who are non finance careers who might benefit from this, they're all freely available.
Speaker A:There's my talks, there's all my notes.
Speaker A:If people just want to learn from this in written format, it's a series on the principles of Finance.
Speaker B:So we're just gonna have a bit of fun now.
Speaker B:Absolutely, yeah, yeah.
Speaker B:So just gotta ask you a quick fire round, ask you some quick simple questions about yourself that you should know the answer to.
Speaker B:Answer as quickly as you can.
Speaker B:D cue the music.
Speaker B:What was your first job?
Speaker A:It was a paperboy for the Reading Standard.
Speaker B:Very good.
Speaker A:That's where I grew up.
Speaker B:Oh, you grew up with Ready?
Speaker B:Yeah, yeah, good boy.
Speaker B:So you know where Slough is?
Speaker B:What was your worst job?
Speaker A:My worst job, I can't actually say because.
Speaker A:Because I'm lucky.
Speaker A:For all the jobs that I've had, I enjoyed them.
Speaker A:So all of them I learned something from.
Speaker B:Very good.
Speaker B:You're a very glass half full favourite.
Speaker A:Subject at school, I'm sadly to say it's economics, which is why I end up studying at university.
Speaker B:And what's your special skill?
Speaker A:My special I think is to form connections between unrelated areas.
Speaker A:So that's why I end up say looking at the link between football and finance, which are not things which might naturally belong together.
Speaker B:Are you a football fan?
Speaker A:Absolutely.
Speaker A:But sadly I support Reading because you would never choose to support them unless you grew up there.
Speaker A:I was a season ticket holder at Elm park for many years and then the Modeski Stadium.
Speaker A:When they got promoted to the Premier League, I was in the US and so I'd suffered all of the taunting at school.
Speaker A:When Reading would lose and then when Reading would have their glory days, I was not here to.
Speaker A:To give it back.
Speaker B:Wow.
Speaker B:Well, now I mentioned Slough because we've had an office there for almost 100 years.
Speaker B:So.
Speaker B:Yeah, you know, Reading's near where I grew up.
Speaker B:What did you want to be when you grew up?
Speaker A:I wanted to be.
Speaker A:If ability was no object, I would have wanted to be a football manager.
Speaker A:So I think a kid, you'd want to be a footballer.
Speaker A:But I played like championship manager at that computer game as a kid.
Speaker A:And I also really like that motivating aspect.
Speaker A:So that might be why I went into teaching later is I do like the idea of motivating somebody.
Speaker B:Very good.
Speaker B:What did your parents want you to be?
Speaker B:Probably not a football manager.
Speaker A:Well, I don't think so.
Speaker A:Like my dad was an accountant, so I think he probably wanted me to go into something finance related.
Speaker A:But what was great was that I was not forced or even guided towards a particular path.
Speaker B:Unlike me.
Speaker B:What's your go to karaoke song, Alex?
Speaker A:It'd be Sweet Caroline.
Speaker A:So.
Speaker A:So why I think with the karaoke people are not there to listen to you because you're not going to be great.
Speaker A:But people want to sing along and so that is a good sing along song.
Speaker A:I lived in Boston where that is the song of the Boston Red Sox and it will get everybody singing.
Speaker A:So the song I probably would sing better is Circle of Life by Elton John.
Speaker A:But that's not going to get people on their feet as much as as the sing along.
Speaker B:You're very altruistic.
Speaker B:It's very nice.
Speaker B:You.
Speaker B:You care.
Speaker B:Office dogs, business or bullshit?
Speaker A:I'd say business.
Speaker A:I grew up with a golden retriever, so I love dogs.
Speaker A:When we moved away from central London, the biggest driver of our move was our non existent dog.
Speaker A:So I'd like to get another dog later.
Speaker A:But because of stamp duty you can't just keep changing your house.
Speaker A:So we moved to Wimbledon Common where because we've got a large enough garden to have this big dog when we've stopped having children and there's Wimbledon, Wimbledon Common to take him or her for a run.
Speaker B:Very nice.
Speaker B:Have you.
Speaker B:I can't believe you would have been, but have you ever been fired, Alex?
Speaker A:Not fired for performance, but I have been sort of let go because there's not been a business need anymore for me.
Speaker A:So it was that I was brought in on say maybe a one year contract and then it just came to an end.
Speaker B:Now don't let me down on the next one.
Speaker B:What's your vice, Alex?
Speaker A:My vice is I love eating loads and loads of food.
Speaker A:So I might not seem a very large person, but anytime there is free food, me being the economist, I don't want any resources to go away.
Speaker A:So I might not be able to stop myself eating lots favorite food.
Speaker B:What would get you going the most?
Speaker B:You could pick a cuisine.
Speaker A:Well, I love Thai food.
Speaker A:So I spent the second year of my PhD teaching English and Thailand.
Speaker A:Now that was a really enriching experience to teach people where actually even the English teachers had very little command of English.
Speaker A:And so that was something I thought it was really gratifying.
Speaker A:I thought I was going there to teach English.
Speaker A:But you're actually a father figure or a mentor to them because some of them, they didn't have two parents.
Speaker A:And so for me just to play football with them in the breaks meant a lot.
Speaker A:But I also got to enjoy some really, really nice food.
Speaker A:So that'd be my favourite cuisine.
Speaker B:Amazing.
Speaker B:Alex, you incredible mind and incredibly eloquent with it.
Speaker B:You've been absolutely brilliant.
Speaker B:Thank you for being out there, spreading some proper truth.
Speaker B:I mean, I really.
Speaker B:There was barely anything I didn't agree with you.
Speaker B:I think, you know, great that you're out there doing, doing what you can to, as you say, change people's mind a little bit.
Speaker B:Thank you for doing the podcast.
Speaker B:That was this week's episode of Business Without Bullshit.
Speaker B:We'll be back next Wednesday.
Speaker B:Until then, it's ciao.
