 Felly mae'n gofyn i'n rhoi'r rai gweithio'r cyflawniedadau, sy'n ddylch chi'n rai gwaith, sy'n ddim yn cyfrifio'r Gweithio'r Caspusinsgol. Felly mae'r prof Ondre Spacer â'r pwylltig sydd wedi'u cyflawni ymddangos i gael mae'n gweithio'r gwaith i gael. Mae'r cyfrifio i'r gwaith eich myneddau, ddim yn gallu arweinyddio'r cyfrifio i gael. Felly byddai'u arweinyddio'r cyfrifio o Ondre. Felly mae'r profesor o gweithio arweinyddio. Mae'r ddaeth o'r rhan oedd yn ymwybod i'r rhathion rhathion. Dyna, wrth gynnigwch i chi i gyd. Mae'r ddaeth o'r ddaeth yn cymryd yn ei clywed i'r ddweud. Ond mae'r ddweud o bobl yn adill o'r Ddraes. Felly'r ddweud o'r ddweud o'r Ddraes, sy'n ddweud o'r ddweud o'r ddweud o'r ddweud. Mae'r ddweud o'r ddweud o'n cyngor. O'r Ddraes yn mynd i fod yn mynd i'r ddweud o'r ddweud o'r ddweud. ac yn ymdyn nhw'n fawr o'r ddiogel. Fe oedd yma'r gweithio pethau gwahanol, wedi gweithio'r gweithio. Yn ymdyn nhw'n gofyn nhw'n teimlo'r cwestiynau? Mae'n gweithio! Rwy'n gweithio'r gwahanol o'r rai'r gweithio. So, rydw i'n gwneud ymdyn nhw'n gofyn nhw'n dwy'n gwneud ymddangos. Ond yn dweud y ddwy'n gweithio, os gallwch ar y cwestiynau. Rydw i'n gweithio'r gweithio. Ddod. Yn y gallwch am gafodd, gallwch i chi i gael ei mwy o'r microphone? Rwyf yn fawr. Rwyf wedi'u gwawch arnyntio y mi. Felly, rydyn ni'n gofyn, rydyn ni'n gofyn, rydyn ni wedi meddwl â'rívach, ac rydyn ni'n gofyn. Ond roedd weithio arnyntio ym yn gael. Felly rydyn ni'n gofyn ffasg hon. Felly rydyn ni'n gofyn o'r Newsyl-Lyndau. Mae'r ysio arwch yn ysgog ar y bridd Gymhwyl. Byddwch i'n gofyn o'r campau yn ymweld. yelling out into the rain, perhaps being bad some sort of sadistic experiment of getting wet and soggy. You might like that to be cool with me but for me I have always always thought of camping going out you know get rid of all your possessions and you end up eating sand and food and it's unpleasent sitting next to people who you don't like you know cannot really allow all sorts of things so I met up with a friend recently and asked him why do you like going camping so much and he said well itís a few things Fy oedd y gallwn gweithio i gyd yn ffarnio'r gwahodlaeth, dylai'r gwahodlaeth, y tro i'r gweithio ar y gwaith? Rwy'n gwahodlaeth am ddweud. Dyma'r ddweud. Yr gweithio'r gweithio'r gwaith yma yw'r ddysgu'r bydd y cyfrifio'r sgolol ac mae'r ddweud o'r ddweud o'r rhaid i'r twil. Dwi'n ffordd o'i ddweud o'r ddweud o'r ddweud. But I then thought back to my times either going camping in Australia or in New Zealand. And what people would do is basically bring not just a tent, but bring a kitchen sink and a fridge, even a toilet almost like set up a whole little house to show that all that with it, so ie'w clywed o'r Worinf AskDel. And the third thing is, that they said, Well, sometimes you make unusual connections, so I remember once falling asleep outside a nice sunny day one of my friendsuchaajied in one year which was still the nice connection ond dylai, sy'n gweithio y 3 ymylion. Felly, fe wedi bod gyda'r caerch, ond rydyn ni fod yn gwneud rydyn ni'n gobeithio'r rhaid sy'n gweithio'r gweithio'r mwyaf o'r 4 o'r methu sy'n gobeithio'r gweithio'r gweithio'r email ond rydyn ni wedi'i chyfladau yn gweithio'r ffordd ac yn cael ei wneud o'r gweithio'r gweithio. Yr ydych chi'n cael ei wneud oherwydd, mae byw'r gwneud o'w ymlaen o'r ffordd i gael ei yw'r gwneud ym mwyaf. Felly, mae'r cyfeirio dylch o dylch, rwy'n ddweud ni wedi gynnwys y ddweud bwysig. A'r ddweud, y dyfodol y ddod mae hynny'n mynd i ddesblw fel hynny. Mae'r cyfle o'r cyfle o anghygoff ddiwedd yn ddigon fel peth ond y dyfodol. Mae'na rhaglion ffordd a'r cyfle o'r cyfloedd cychwyn, sphel yn yr hunain yn gymysgol, mae'n meddwl i'r cyfle o'r cyflwyno cymryd, ac mae'n meddwl gwrodd yn meddwl i'r cyflwyno, Oes oeddych yn cael ei gweithi fod y gwerthoedd y bwysig ac mae'n bwysig hwn ymwysig. Mae'r gwirionedd, amser hwn y gwerthoedd o meddwl ac ymlaen. Mae eisiau mynd i gyd y mod yw'r moneg, yn gweithio chi'n meddwl ac yn gweithio'r bwysig, ond y pwysig i fynd yn cwrthod hwn yn ei gwerthoedd. Felly mae'n tyfu yn gweithioi, ond ond mae'n cael eu syniad fan hyn. Something meaningful and important, make unusual connections and put aside the kind of corporate class at which you spend your day dealing. So that's kind of a little introductory bit. What I'm going to talk about is a book which we published last year with profile books. The centre of the era of headquarters is not too far away from here called the Stupidity Paradox. So myself and Matt Salverson who's kind of a Swedish guy who vaguely resembles the Swedish here in a strange kind of way. Spent about a decade going around what's called knowledge intensive workplaces. So this is consultancies, engineering firms, schools, universities, government departments. Where there are a lot of smart people with good degrees who say we're knowledge workers. And we wanted to get to the bottom of what was actually going on there. And we were struck by the fact that when you spoke with people, when you followed them around, what they said was, well actually I do a lot of stupid stuff. And there's a lot of stupidity in this workplace which is supposed to be knowledge intensive. So we wanted to kind of understand how that plays out and how that works. So I'm going to give you a little bit of a story about how this works. Consider why our knowledge intensive workplaces are often so stupid and encourage us to be stupid. And then think about what we might be able to do about it. So let me start with the story. This guy here goes by the name Dennis G.R. or Denny, if you're an American, which he happens to be. And he was a student radical back in the day. Spends his time in the 60s and early 70s protesting and so on. And then he thought eventually, okay, better get a job. So he went to Ford Motor Corporation, a strange kind of choice for a student radical. But nonetheless, that's where he went. And they ran all the psychometric tests on him and all those kind of things. And they hired this guy. And on his personnel file there was written the words Crown Prince. So clearly this guy was going places. He was on the fast street. And his first placement was into a part of the organisation which was they called the Recourse Department. Now what happened in the Recourse Department is that a car broke down or maybe it wasn't an accident. Something went wrong. And that car was then sent to the Recourse Department. And then people like Dennis, who trained as an engineer or Denny went through it, looked at what was wrong, identified the problem and then asked, is there something more systematic here that goes across all organisations that we are all of our cars which we need to fix. So he'd normally spend his days in his office. But maybe a couple of times a week he'd have to go to a place which they called the Chamber of Horrors. And this Chamber of Horrors was essentially a launch warehouse where you had a lot of burnt out cars. These cars which had been in accidents. And he said, if you actually imagined being in those cars, there was often people in there. There was melted plastic and dripping steel and all crunched up. It was disturbing, right? But he was an engineer so he had to use his analytical mind to think about this, analyse things very specifically and think, OK, what's the problem here? Look past the burned body remains and think about what's the systematic issue here. So one day he goes down to the Chamber of Horrors and comes across one of these, which is a Ford Pinto. And he sees this Ford Pinto, it's been involved, it's burnt up, right? And he thinks, well, something doesn't feel quite right here. There's a bit of a problem. And he looked at it and then he went back to the office and burnt out like this, looked like this. And went back to his office and said, well, guys, you know, to his older colleagues, I've just seen this Ford Pinto. I saw there was some problems and it just doesn't feel quite right. There seems to be something wrong here. I'd like to pass the issue up the chain, look into this a little bit more, maybe go and look at whether there's a deeper problem within the Ford Pinto. And his colleagues responded like this, right? They laughed at him. They thought, ah Danny, that's ridiculous. You've got one car here and we're dealing with hundreds of thousands of cars, right? If you want to push this problem up the chain, then you've got to deal with our managers above them and then above them like that. And if you want to recall all these cars, it's going to cost you millions and millions of, tens of millions of dollars to do this, right? So do you really want to go through all of this problem? And then as you pass the issue up the chain, people at the top are probably going to question you. And he sort of stepped back and thought, well, maybe he's got a point. I don't really want to spend the next six years of my life dealing with this recall. I'm going to probably move on from this job in the next six months or years as I get circulated around the company. I don't really want to upset my colleagues that much, right? Because I'm creating more work for them. So he just put it aside and then went on with his day job. And he was rewarded for that. He kind of climbed up the bureaucracy, didn't have too many problems. He was promoted, all those kind of things. But the only problem was a few years later, it turned out that the Ford Pinto, as some of you probably know, had a fatal design flaw in it, right? So the fatal design flaw is this. The gas tank, the fuel tank, was in the back of the car. And there was insufficient protection between the fuel tank and the back of the car, which meant if you were a car that rammed into the back of the Ford Pinto, you would turn the car in front of you into a flaming fireball. And many of you have probably watched Fight Club before the film, right? So Edward Norton's character is based on one of these guys who was assessing insurance claims around the Ford Pinto. And it caused a national scandal. So people were writing on the back of their Ford Pintos, keep off the back. I think about 100 people died in these Ford Pintos. They then eventually had... There were thousands who were very seriously injured. And then they had to recall it. It costs, I think, hundreds of millions to do a recall. They had to pay out huge amounts of insurance claims, et cetera, et cetera. So this one oversight here of looking at something in more depth, pushing it up the organisation, led to, in the short term, fairly good outcomes, which was this person getting ahead, not causing problems within the organisation. But in the longer term, this oversight from a very smart person seemed to lead to some very profound troubling and unethical and costly outcomes. So this seemed to be a kind of classic example in many ways of what we call the stupidity paradox. Smart people who voluntarily almost stupify themselves, right? They say, I know there's a problem here, but hey, I'm not going to think about it too much. And as a result, they're rewarded for that in the short term and everyone else around them benefits. But in the longer term, it's sometimes can have quite serious consequences. So that's the basic idea of what we want to get across in the book. Now, Denny has gone on and his new career, can you guess what it is? Same thing as me, business school professor. So that's what you do after you've caused lots of problems. So in many ways, the basic argument to sort of repeat in the book is this. Top organisations like Ford at the Time or any one else wants to appear smart. They market themselves as we're super intelligent, we have smart solutions, we are knowledge intensive, all of those ideas. So they tend to hire the best and the brightest people, like the people kind of sitting in this room, very intelligent, you know, passionate about their work, all of those kind of things. Now, the difficult thing with smart people is they like to think independently, right? You've been trained and bought into this for many years. You want to use your independent thought. But this tends to be kind of inconvenient, right? So it creates problems in your organisation. If you point out something and say, hey, this is an issue, we need to deal with it, it creates the group around you, oh, it's more work, further people further up in the organisation, oh, this is going to create problems, this is going to be costly, et cetera, et cetera. So firms need to manage stupidity, right? They don't just need to manage knowledge, they also need to manage stupidity. And often individuals, smart people, very quickly realise, hey, it doesn't pay to be too smart to use your intelligence all the time. So often they voluntarily begin to sort of dumb themselves down and sometimes even when they're mentoring or whatever other people around them say, hey, don't think about that too much, don't ask too many questions. And it pays off, this is the thing, it pays off often, at least in the short term. And as all of you know from behavioural economics, we have this thing called hyperbolic discounting where the burden in the hand is worth two in the bush, right? If I say to you, which I did with my students recently, here's five quid. Do you want five quid now or 10 quid next week? All of them will say I want five quid now, right? So we all tend to have the short term focus. We overvalue the short term and we significantly undervalue any long-term gains. This has shown all sorts of experiments all the time. So it pays off in the short term. But it can create problems in the longer term, right? So it kind of creates these smaller problems, which then over time, these sometimes problems can sometimes get lost or forgotten or overlooked. Large organisations are big places and they're fantastically great at forgetting things, right? Often the reason, if many of you have been involved in corporate restructures, what happens is this, we're going to centralise, right? Five years later, what are we going to do? Decentralise and then centralise, decentralise and like this and that, just constantly swinging backwards and forwards. So corporations need a very, very huge amount, a big supply of forgetfulness to constantly undergo these kind of restructures. So in the short term, these things can be not overlooked and forgotten, but often they can add up to disasters, right? And if you look at many of the kind of big corporate disasters which we've seen in the last decade or so, or over a longer period, you see exactly this happening. VW's emission scandal, what happened there? Smart engineers who were given this goal, okay, you need to bring down emissions. It was impossible because top management hadn't actually thought about how you technically implement that. So they go away, come up with a technical fix and cheating on it and then they implement it, which was fine for a while, but then it created this longer term consequence which was the company nearly went out of business. Now the interesting thing with VW is do you know that they did exactly the same thing about 30 years ago? So they were fined by, they manipulated emissions, they were fined by the EPA and they said, oh no, never again, we'll never, never do it. And then they forget, do the same thing again. The banks I've spent probably most of my time at CAS looking at how banks operate and there seems to be a huge supply of strategic stupidity in the banking sector of overlooking things, forgetting things, not even knowing what the models which they develop mean or how they work. The other thing I'm struck with is that people go out of their way to try and show you how smart they are using this jargon and nonsense and so on but when you actually try and dig below the surfaces. Not a lot of intelligence going on there. Tesco with their scandal around accounting and more recently the pricing scandal which they still haven't fixed which is basically if you go into a Tesco shop look at the prices on the thing and then take the thing to the counter often there'll be a big difference between those two prices they just haven't even fixed that and they're still doing it. And the NHS, there's many examples of these kinds of very smart people in the NHS overlooking things strategically because it will create too many problems and it then creates either huge capacity overruns or problems over time and you could go on and on. So we wanted to then understand what is this stupidity, how does it work and there are different ways of understanding it so when you probably heard the word stupidity this is kind of the image which may have come to mind. Charlie Chaplin in Modern Life where he's basically overworked and then he goes crazy and he starts going around the factory trying to screw on people's noses creating problems for all his workers. So many of you have probably worked with at least maybe one individual like this who's either crazy or just mentally deficient or something like this who just creates problems for everyone else in the system. So there's that but surprise surprise this tends to be we know about it it's high profile but it's actually fairly rare. It may be more common than we expect but it still happens. What's more common is this kind of thing. Do any of you know who this character is? Doctor Strange Love right? So extremely intelligent, super smart this guy was actually based on a real life Cold War strategist in the Kennedy Government using game theory to try and work out the ultimate way of destroying the world through nuclear weapons right? So super smart kind of good outcome maybe in the short term but in the long term the outcome is completely ridiculous destruction of the world. So we wanted to understand this kind of strange lovey and sort of stupidity. Now how could we understand it? We went to the literature we read loads and loads of books and studies and all of these kind of things on it. And we kind of then started to say well what are the common features? And we thought there were three common features here. Number one the first common feature was this which is functional stupidity involves not questioning your assumptions right? You don't make some assumptions but you don't question it right? You don't look into what assumptions am I making here what's going on okay? That's the first aspect. The second aspect is a lack of justification. Just do it. Don't ask why just do it. We just need to hit this target. Why? Well because there's a target right? We need to do this. Why? Well who knows we need to rebrand who knows why we're doing it but we need to do it right? So a lack of justification about why we're doing things and the final thing is a lack of thinking about what our longer term goals are. The ends are. So you know short termism. A lack of sort of you might have immediate goals but a lack of sense of what's the broader purpose of why we're doing all of this. So then the question we sort of started to ask ourselves is why is this happening? Why are smart people doing all of these things? Not asking questioning their assumptions not thinking about longer term goals and not giving justifications. Now there's lots of literature. If any of you kind of have watched a few TED talks you probably know this. One would say well it's because of information overload right? No matter how smart you are you're hit with all of this information all of the time. And then it becomes very difficult to kind of work out what the important information is to attend to and not. Okay so that's one potential explanation and there's lots of organisation theory which tells us about it. And we've kind of in some ways developed some ways of dealing with it. But it's one factor. A second factor and this is a common explanation is to say well large organisations are full of people who are analytically intelligent but those people tend to be lacking in other forms of intelligence. So normally you would have been told EQ so emotional quotient. By the way that's quite poor bad quality research. This is from a guy called Robert Sternberg who's a major sort of guy in the intelligence. Psychologist in the intelligence literature says well there are actually three forms of intelligence you can measure in people on. Creative intelligence, practical intelligence and analytical intelligence. And one of the big problems in many knowledge intensive firms as you hire people on one of these dimensions particularly analytical intelligence and then they might not have these other forms of intelligence. Okay that might be another reason. A third reason and this is the most common is the kind of Daniel Kahneman cognitive bias type idea that essentially our brains have two systems at work. System one is the fast reaction habitual system and it runs essentially on rules of thumb are cognitive biases when I give you a problem you react in a very quick way and most of us as professionals the reason you're a professional is because of your finely honed system one which is this holistic quick reaction system but the problem is this is plagued by biases and you make mistakes all the time there's all sorts of different 100 different cognitive biases one being things like self-serving bias if you put it forward a suggestion you're going to collect information which supports your suggestion and ignore other people's suggestions. System two is the rational thinking system so this is the system which makes deliberative slow rational analysis and the idea here is that function of stupidity will dominate when this system here system one dominates and this happens often but not all the time but what we noticed is spending time in say management consultancies engineering firms etc is that there were lots of cases where people weren't just asked to react quickly therefore you'd expect system one to be at work but they had time to reflect think about staff etc and they didn't seem to they still seem to make stupid decisions another example of this is the study done at Harvard where they got some undergraduate students and then some very practised smart intelligence managers and they gave them a case study basically so instead normally you'd give a case study to students in a package like 10 pages and they'd read through it the only difference here is they gave them a case study of cards like so one sentence per card or one piece of information per card now the students sat there and waited for all of the information to come to them before they made a decision what did the practised seasoned managers do do you think you presented one piece of information per card when did they try to start solving the problem pretty much immediately right they hadn't seen all the information they wanted to solve it they were told there's no time pressure you can just do what you want but they just wanted to immediately begin solving the problem and when they dug into this and this was common in what we observed in corporations why they were doing it we asked them why and they said I want to appear action oriented a good manager is someone who makes decisions gets stuff done makes things happen even when you don't necessarily under time pressure so it seemed to be largely about creating the right kind of image rather than actually coming to the right sort of decision so this was what we saw it wasn't just something about the way in which our brain psychology worked it seemed to be something about the way people wanted to present themselves and also the way the organisations were designed so we sort of tried to then formulate a different idea around this which was sort of instead of focusing on the structure of our brains we wanted to focus on how our organisations designed and the basic argument the kind of what we came to was this that we live in basically what we call an economy of persuasion there was some economists in Australia the Australian Federal Reserve who recently did an analysis of the US economy and they found that 30% of the US economy is basically persuasion right so this is people selling stuff marketing PR basically what are they producing it's just image right they're producing image hot air and persuasion 30% of the economy is this so in this economy of persuasion what gets produced and what gets valued is a nice argument a nice image so in many cases organisations in this economy are rewarded this is private, public and non-profit not necessarily for the substance of what they're delivering but the image, the rhetoric what they're telling people that they're delivering the image which they're presenting so if you look at what a CEO does with his time there are people who have followed around CEOs and looked at what they spend their time doing they spend between 30 and 50% talking with analysts right so these are people who work for large banks 20, 30, 40 years quite young generally speaking who are analysing what they're worth in giving a price to the stock market they don't spend their time looking at what's going on in the organisation they're more about keeping up this nice facade with the stock market at worst and this is what many organisations spend their time doing deciding on what the facade is we did some work recently with the UK Parliament so you know the people who run Parliament and I asked the central Peter they're kind of major people there what's the first kind of decision rule what's the decision rule on your mind when you make a decision about something and you know what their answer was what would this look like on the daily mail right that's the number one test we did some work with people from the senior people from Transport for London do you know what their number one test was the evening standard test what would this look like in the evening standard so often people at the very top of the organisation the number one thing on their mind is what is this going to look like on the front page what are my investors going to think about this not like what is the longer term issue it's what is the facade looking like and most of effort things that go into corporate life is about facade creation creating this nice facade which looks great but there might not necessarily be anything behind this now the problem is that there are things behind the facade and it's people like you smart people who are keeping the organisation delivering the things on a day to day level and they know that there's this facade and you have to keep it up that's important fair enough but sometimes it's a bit difficult when you have a bit of a difference between the rhetoric and the reality so we're putting up this rhetoric we're top 20 university in the world and we're knowledge intensive and powerful thinking and all that sort of stuff but if you actually go and look on what's going on behind that facade it often looks quite difficult and it's hard to keep up that distance so as a smart person you're saying well it's pretty tough so then how you react is to sort of almost how the organisations and how individuals react is to almost sort of encourage people not to think too much right so this works through systems processes which I'll talk about soon but also informal processes so when we were looking at say consulting groups you'd have a young person who comes up with a good solution they do lots of analysis, they come up with a solution that's actually right for the client and then they're told by the person running the team hey don't think too much deliver a nice PowerPoint presentation tomorrow don't focus on the solution focus on coming up with a nice PowerPoint deck so junior consultant spent more of their time polishing the PowerPoint deck than they actually came up coming up with the solution so this idea that thinking sometimes causes more problems than comes up with solutions and as a result you have an organisation of people who are willing to put their head in the sand because they just don't want to see all of the issues and all of the problems around them and life in that case can be quite sweet you don't get to see all of the problems around you you can kind of just go along do your task, life is fine and the other thing is that people around you start to like you you don't create problems so they're like this is a great person they come with solutions, not problems they fix things, it's great they're not creating too many problems for me I remember when I got my first academic job my PhD advisor my number one piece of advice was show that you're not going to scare the horses so show that you're going to come in and not create problems essentially so it seems to be quite sort of common people are going to reward you for it and you're going to climb up the corporate hierarchy as a result and sometimes companies benefit so create a nice facade to the financial markets the price goes up everything's cheery and great but the problem is that this can often lead to rights, problems, people overlooking things and as I mentioned that sometimes that's not an issue because you might see the problem but corporations have these revolving doors people are coming and going and it's quite easy to forget where problems actually exist many times but sometimes they can add up to these small problems can add up to large scale screw ups in some cases which is things like this or a disaster of various kinds not just in the company but systemic like the banking crisis so I guess the kind of argument here is that we live in an economy of persuasion which incentivises organisations to focus on symbols rather than substance this creates a gap between rhetoric and reality which people deal with through functional stupidity, sort of dumbing themselves down this pays off for individuals and organisations in the short term but at least some mistakes which build up to crises in the longer term so that's the basic kind of argument about why this works so the next question is how is this functional stupidity designed into organisations, how is it encouraged and we see where there's many things but there were five things which we saw were quite common number one was over emphasis on leadership too much a mystical belief in the power that leadership is going to make organisations great again so there's a study which was done recently by a guy called Jeff Effa who's a well-known Stanford business professor and the title of the book is leadership BS and one of his headlines findings is this that the US spends, American businesses spend something like 3.6, I can't remember the figure exactly but it's something like 3.6 billion a year on leadership development and if you look at the effectiveness of it it's basically zero so they're spending 3.6 billion dollars a year and there's very little effect on the actual quality of American business leaders if you actually look at the content of what gets delivered on leadership development courses I've run some myself I try and focus on the evidence but if you look at it more broadly you see people being sent to dresses and ninja for a day I've been on one where I was taught to beatbox which was about developing an effective team you find people who are sent to run around naked in the woods climb up walls my favourite one was horse whispering so you go out and the slogan for this company was equine assisted delivery and their slogan was you can lead people but can you lead a horse the point is that there's just so much ridiculous stuff which goes on in this area of leadership development you can call almost anything leadership development if you like and it's fine and often leaders themselves have a mystical belief in their own powers so if you actually look at people and we spent years following around leaders and we asked them and said okay tell me about your leadership style you might say I'm an authentic leader and I like to coach people and all that sort of stuff and then I go and talk with your report so tell me about when he does leadership and you'll go well I can't really remember any time he did any leadership or maybe he did this and then we observed so often there's a lot of talk about leadership there's like one or two percent of the actual time most of the time middle managers sit in meetings with other middle managers and they they send emails and they communicate and there's very little leadership going on and that's actually okay right but there's a lot of talk and fantasy about people being leaders which is sometimes a little bit misplaced let's say the second thing we saw is basically bureaucracy you know rules, regulations those kind of things so one organization we looked at here was a local authority, local government in Sweden and we went and talked with a guy who was running this authority and he said well the regulators came in and they asked for 30 different policies around a particular area I wanted to see 30 different policies so they went away again and what did he do he wrote a list of 30 policies they came back the next year saw the 30 policies and that was fine did he do anything else beyond coming up with a list of 30 policies no he basically said we spent so much time developing the policies that we had no time to actually implement them right and this is what you often see in organizations where they come up with what we call spectacular regulation one small thing goes wrong then you have to come up with all of this regulatory reporting requirements and this that and the other thing and policies and procedures and all those kind of things and nothing actually changes apart from the policies which are put forward so there's focus on the image rather than the substance and there's the obvious stuff about sort of rule following and so on the third thing we saw is corporate imitation a legendary business person he's the chair of Handels Banking which was the only bank during the financial crisis in Europe that actually grew rather than declined he made the point that business leaders CEOs are like teenagers choosing genes so if the fellow CEOs does it that they're going to do it as well rip genes today okay yeah they want it I'll do the same higher genes lower genes different color genes they'll repeat the same thing the same thing in corporations you're doing TQM today okay I want to do TQM you're doing agile yeah I'm going to do that as well so there's a huge amount of copying within industries we often think that companies are supposed to distinguish themselves and make themselves different but what they spend most of their time doing is copying the most shocking example of this I've come across recently there was a study which showed that when CEOs go golfing with their buddies and their buddy has done a merger in acquisition they're far more likely for them to do a merger in acquisition next right so mergers in acquisitions which we know is something like 8 or 9 times out of 10 fail to deliver on their objectives and they actually lose money most of the time this is done because their buddies have gone golfing they want to be like their buddies right so this is kind of the sort of stupidity which we see very frequently a third four form of stupidity which we see is brand induced stupidity so we did some work looking at the Swedish armed forces and we found out that they at one point in time decided that they were going to launch a new branding initiative where they changed the logo they changed all of the plates the symbols how many people have these flags that they're very proud of they changed all of these insignias and all of this sort of stuff created a lot of uproar but it cost millions and millions and millions to do this so as a result of this branding exercise they had to cancel military exercises right spending more money on rebranding the organisation rather than actually delivering on their court purpose which is to run military exercises similar thing we saw in say if you look at many rebranding you just see how ridiculous it is so for instance Western Sydney University recently branded itself as University of the West of Sydney recently spent about a million and rebranded itself as Western Sydney University about ten years ago National Australia Bank the Australian National Bank rebranded itself as National Australia Bank and Australia rebranded itself as Australian Opera rebranded itself as Opera Australia and this kind of stuff happens all the time where there's this huge process of rebranding and you often end up with the same kind of thing at the end of the day the final kind of example of this which we saw was was functional stupidity being encouraged by culture and particular cultures of action orientation and positivity so one great example of this which we saw was Nokia so if you look at when the smartphone was launched essentially Nokia had in place a culture of only come to us with solutions not problems so if you came and you didn't have an upbeat message for the senior managers it would be either disregarded or your division whatever would be downsized what often happened was there was a big problem at the time if you remember they were developing this system Cymbian and there was lots of problems with the operational interface users didn't really like it that much for one reason or another most people who were actually developing the system within Nokia knew this but they also knew that if they said hey there's a problem with Cymbian talk with people further up in the organisation they'd probably be punished for that because they were being negative so basically people there was this conspiracy of silence they knew that there was something going wrong they didn't want to appear negative so they didn't push this concern upwards as a result Nokia continued to develop Cymbian for about a year longer than they should have should have and Microsoft the iPhone Apple and also Samsung accelerated ahead while they struggled to launch a functional smartphone they launched one late they were late to the market where Nokia now doesn't really they're not really making smartphones in it but it's owned by someone else so the point here is that this kind of culture of positivity solutions rather than problems can sometimes lead to very big issues so the final question we need to then ask is okay we have these cultures of stupidity lots of forces encouraging us to not think too much what should we do about it and there are I think five or six things which we point out one is the role of devils advocates if you have in a group one person whose job it is to say no this doesn't work here are the questions critiquing questioning it's likely that that group psychological studies have shown us that this group is likely to come to better decisions they're going to like the process less take more time but the decisions are going to be better even if that devils advocate is saying something which is completely wrong but their job is to disagree with the group it will prompt thinking within the group and they're likely to come to a better solution and organisations need more devils advocates rather than the load of PA's personal and Australian assistance that they have the second thing is that organisations need to learn from their mistakes right so the basic thing that maybe some of you do is post mortems you know a project dies what went wrong and trying to build the learning in which is quite strangely quite rare process but that needs to happen but a second process you can do before your projects die is what's called a premortem so when you begin a new project the idea is this you get a group of experts around the table and you say let's imagine in three years this project is utterly screwed up there's something gone terribly wrong the experts around the tables sort of shake their head and say yeah yeah I know what's gone wrong and they say to the group of experts write down three or five things that have gone wrong and everyone will tend to come up with this list of similar three or five things and then the second thing that you can then say what should we do to make sure that doesn't happen then you can come up with a list of things now this does two things one is it's basic contingency planning right it helps you to work out the contingencies that's important but the really important thing is that it gets rid of what's called self-serving bias that whenever we begin a project we think it's going to take half the amount of time and cost half as much as it actually does so any of you who have done any home renovations know that this is certainly the case I think there was an American study done on kitchen renovations and the average people when you ask them how much is this going to cost before it's about half of what it actually costs that they think about it's going to cost before this is the same thing with most projects right but when you get people to think about the worst case scenario when you begin you actually get rid of that self-serving bias and people begin to think hey this is actually going to be more tough than we think it is so let's prepare for it third thing you can do is harness the power of outsiders so people who are coming in from outside of the organisation whether this is new croats secondirs etc so often these people will see the weird strange and bizarre things which you just treat as normal so for instance when we were doing some work with a large bank we came in the first thing you saw in the lift was the biggest thing was the share price right and then you go up and they say oh we want to play down the importance of short term share prices and think about ethics and all this sort of stuff and you say well just look in your head the lift this tells your employees all they need to know about what's important to the company so sometimes outsiders see these things which people in the organisation don't see the fourth thing and this is something I've just come across recently is the importance of actually getting people to think through how something works right so there was a study which was done at Yale about actually about about 15 years ago where they got people it's a very simple thing they got people and the audience or this experimental subjects to say you know how much do you sir know about toilets and most people would say yeah I know quite a lot about toilets you know I use the ball all the time it's quite a simple device and people would say well I know nine out of my expertise on toilets is nine out of ten right and I say okay good and then I say to you now tell me precisely in as much detail as possible how the toilet works right and then they'll start thinking about it and I actually don't know right and then I go back to you and say so tell me how much do you know nine out of ten out of a ten point scale how much you know about toilets and it's going to go rapidly down and you're then more likely to listen to outside facts this also holds for extreme political positions as well so if you have for instance a climate change denier and they have some favoured policy and they tell you the policy basically give them information they'll ignore all information which doesn't support their position and take on information which does the same to the other process if you actually ask them how is your policy actually going to work in as much detail causality they're likely then to begin listening to facts so this is what you can do in some cases to bring down what's called the illusion of understanding most people and organisations think they know how things work but as you probably all know we have no idea how they work how is your proposal actually going to work what are the mechanics of how this is going to work they'll begin to reduce their sort of own self-serving biases and be more likely to listen to experts like yourself in facts around the issue and the final thing is just a bit of humour so you can go and download these bullshit bingo tick cards if you'd like to and I think just laughing out the kind of ridiculousness of a lot of corporate language sometimes is sort of an important thing and it might help us to strip out some of the corporate cluster which we have and get to the more serious issues so to kind of conclude I guess there is some sort of nice quotes human stupidity has always been with us but there are two things which are infinite universe and human stupidity and Einstein wasn't sure about the universe butch and rustle the whole problem with the world is that fools and fanatics are always so certain of themselves and wise people are so full of doubts and then my favourite gustaf flwbeir to be a stupid selfish and health give health with three requirements for happiness though stupidity is lacking all is lost so I think I'll end it there and be happy to respond to any questions and so forth thank you so much Andre any questions in the room any toilet rankings strong 8 out of 10 I think yep over here you gave the example of the Pinto at the beginning and how long it took for it to acknowledge that it was wrong yep is there any difference do you feel between engineering of physical items compared to digital engineering and perhaps speech yeah it's a really good question I think there's two differences I'd say so I'm not an absolute expert at this but these are two things which we observed when you have a physical item the feedback can sometimes be very clear and obvious, dead people whereas when you're dealing with a digital object sometimes the feedback can be very clear and obvious like beds not being assigned or something like that but sometimes the feedback is virtualised and a bit more difficult to understand so sometimes when something is kind of virtual it's easier to I think the basic argument is that when there's a virtual aspect of things stupidity is far more likely than when there's direct physical feedback in some ways and I guess the difficulty here is that you all being experts in this digital universe will see the direct outcomes but for those people who are not experts that outcome isn't as obvious as a burnt out car or a dead baby or something like this will be one response I think the second thing which you are asking is around this change dynamic so when you have the speed of change does that give rise to more stupidity absolutely so there was a study which was done actually a stream of research which was done about do good leaders need to be intelligent normally it's the case that the higher IQ you have the better your leadership quality will be generally speaking but there's an exception to this which is under situations of stress so when there's high time pressure intelligence often doesn't make a difference so essentially what only happens is intelligent people just take talk more so the weird thing is that in organisations what often happens is that sometimes there's real time pressure but I'd say about 80% of when you have time pressure it's kind of it's created time pressure if you'd like that you don't need to respond so often there's this creation of stress so people just make decisions quickly and things happen so it's like when you go into a clothing store so what they want to do often in most clothing stores like H&M and so forth they want to create a quite unpleasant environment why? so you do something quickly you don't think about it too much and you want to get out of there as quickly as possible this is by recent experience when I went to IKEA you wanted to go in there you started going crazy and I just started picking things up and then I got out of there as quickly as possible I think some organisations are like this in the same way there's a huge amount of pressure on people which sometimes is real but sometimes it's rather fake so then they just start reacting using the system one process and often end up making rather stupid decisions so thanks yes in the guidgetable space clearly we think we'll make a very different product from the Parliament and as such we've kind of gone and invented our own rules some of which being now copied I hear the car industry is going out now I can't think of a more terrifying idea do you think that's a huge mistake do you think there's a lot more that we could learn from other industries yeah I mean I don't know enough about your industry but generally speaking yes I think there's often organisational problems aren't as unusual so most industries are obsessed with themselves and they only tend to learn from each other it's the same thing as organisations middle managers learn from other middle managers they don't look upwards or downwards most of the time so something like Agile for instance has spread out into other sectors but you've got to talk with each other a lot of the time and you then don't think what are similarities or differences elsewhere now there's unlikely to be grand silver bullets but what you're likely to find is that the problems which you face yes there's some specificity but there's also generalities general issues and probably learning from other industries yes is vitally important and it might be a short circuit to this problem of when you're just essentially copying each other in your own industry so it's an excellent point Sir you mentioned these confidence biases for example the somewhere effect really exemplified by a certain head of government at the moment what methods are things can be put in place to help us notice these things that make us act stupid and to get back on track basically at the moment there's a kind of rising literature on just focusing on cognitive biases on debiasing one of them is just being aware of your biases tends to decrease them a little bit but humans are really bad actually if you want to change your life the worst thing you can do is rely on yourself so if you want to lose weight the worst thing you can do is say I'm going to use my willpower to lose weight you're actually probably going to gain more weight during this the best thing you can do is change your environment around you so what we know from all of the behavioural science literature is that humans are weak and if you want to change the behaviour the best way you can do is to change the environment around them so if you want to lose weight you get rid of all the fatty stuff and sugary stuff from your fridge because we're lazy we'll just go into the fridge and pick out whatever's there you can do the same thing in organisations by changing the design of things and prompts around people that's one debiasing strategy there are a whole bunch of other things there's a woman called Kathleen Milkman who works at Wharton who's kind of come up with this quite nice paper she's come up with the other one which was mentioned I noticed there was something in the FT this morning which was about recruitment and selection and one thing which is being used there is that there's always these cognitive biases about homophilia which is basically we want to pick people who are like us rather than the best person for the job and one way to get around that is to rely on models rather than human intuition so there's a big role here for computer scientists coming up with modelling decisions which gives a solution rather than just relying on individual biases Thanks You've probably got time for one more question and then we'll move on Any others in the room? Going on the same kind of story to your point about complexity humans are very hard at making complex decisions especially long term ones and organisations are as well so when you're talking about how we work as businesses with other corporations how do you nudge people to use the term that's quite new isn't it to make smarter decisions and is that something that you've looked at? Yeah, so in some ways there's just the five things that are nudges to make smarter decisions number one, have someone who's there to disagree with you number two, have again with this debiasing have used probability like what's going to happen in the future normally we ask is this going to happen or is that going to happen ask questions about probability decision and then revisit it again sometimes that's a useful way of rethinking your biases there's a whole bunch of other kind of potential statistics get someone who's going to disagree with you get people to think about how something's going to work so all of these things are basically about shifting from relying on our biases to relying on our slow more deliberative thinking functions and there are many ways in which you can design so I guess I'm thinking about can you create systems that help a bunch of people to make the right decisions outside of those five things so people are taking financial if you're creating something around financial services for example how do you make smart decisions and how do you get the client to understand that needs to go through this process from a digital product development perspective because people will default stupid Exactly, so one option is the default you know you create in the system where the system at some ways defaults rather than the stupidest one but the problem is that financial service providers exactly it's better for the financial service provider this is what they've done with pensions right so you default to actually getting a pension versus not kind of thing and there's many other examples of this but it's a great point that there's a big role here for systems designers to have this default or slowing decisions down or things like this which default to a better decision Thank you very much Thank you again