 Our first keynote today aims to discuss why we need a scientific revolution on strategy execution. And to present this topic, nobody could be better than Professor Roger Martin. Professor Roger Martin is the former dean of Rockman School of Management. Last year, he was named the world number one management thinker by Thinkers 50. He's the leader of 11 books in the field. He's a trusted strategy advisor to CEOs of companies, including Protering Gabon, Lego and Verizon. Ladies and gentlemen, let's welcome Professor Roger Martin. Thank you, Roger. Thank you. Appreciate it. Thank you very much for the introduction. And first of all, thank you Brightline and PMI for doing this. I think this is very important work, and I'm pleased and thrilled to be here as part of it. I would also like to say a thank you and a shout out to my wife, Marie Louise over here, who's my wife and business partner. It's our anniversary. And so she thought it was important enough to be here and postpone our anniversary for one day for this purpose. So I'm all in on this. So to the task at hand, I am arguing that we need a scientific revolution in several management theories in order to accomplish what Ricardo and Brightline are trying to accomplish. Now, the paradigm shift notion has now become sort of trite. People will now use it to explain the Internet as a paradigm shift, AI as a paradigm shift. They are misusing, I would argue, what Thomas Kuhn talked about in 1962 when he talked about scientific revolution and paradigm shift. So just to review for a second, what Thomas Kuhn said is in the development of ideas, there becomes typically a focus on a set of assumptions that form an existing paradigm and science progresses with that paradigm by improving it, improving it, improving it, but not questioning the fundamental assumptions of the paradigm. So you get lots and lots of improvement. That's the nature of scientific work, scientific progress in the world. From time to time, what happens is you get a slowdown in the progress that you've been seeking under that paradigm, and you get the arising of anomalies, things that can't be well explained by the existing paradigm. And when you get enough of those anomalies, some people start looking at the anomalies and attempting to form an explanation for those that is different than the existing paradigm. They tend to get brutally suppressed because everybody is attempting to answer the questions and answer those anomalies only within the existing paradigm. But in due course, there are enough anomalies, and there's a compelling enough new paradigm that that new paradigm takes over and we have what he really called a paradigm shift, not just some new thing. It's a shift in the way we think about things. And just to give you just a quick example of a paradigm shift and kind of how compelling and important they are, think of the world. It's not a pleasant world of peptic ulcers. I don't know if anybody in the audience has had a peptic ulcer ever, but it's a very bad thing. It can be very damaging. In fact, it can be life-threatening. Doctors started to understand in the late 1800s the phenomenon. By the early 1900s, the medical world had converged on a paradigm which said the stomach lining of the stomach is very, very, very tender and fragile. And if there's too much acid in the stomach, that's what causes a peptic ulcer and the ulceration of your stomach. That was the theory. And it was sort of ensconced in 1910 when a doctor named Carl Schwartz, an important doctor, intoned the famous words, no acid, no ulcer. So if you didn't have excess acid in your stomach, you wouldn't have an ulcer. Now that continued along. And based on that paradigm, there were all sorts of scientific advances on how to reduce the amount of acid in your stomach. One was to prescribe a lower stress life, bland diets, but then more seriously, a peptic ulcer surgery that changed the acid production system in your stomach. And then later, drugs that did the same proton pump inhibitors. All of these things were actually quite damaging to you. So it was a bad thing to have a peptic ulcer because you had more damaging things done to you when you had a peptic ulcer to get rid of the peptic ulcer. But in due course, it became obvious that all of these advances were not actually curing all peptic ulcers and it took a hell of a long time for these things to work. So in due course, medical scientists and researchers started to ask the question, is this paradigm sensible? And two, a little bit wacky Australians, of course, decided that they had seen enough evidence to suggest that it was actually caused by bacteria, H. pylori. And they wrote medical papers on this notion. But since that offended entirely the existing paradigm, they couldn't get their papers published. Literally, the reviewers would say, well, this is dumb. This is not about acid, so this is really dumb. Intel, one of the crazy Australians, Barry Marshall, ingested H. pylori, grew himself an ulcer, cured it with antibiotics, and wrote a paper about that. And it finally got published, and as history progressed, people started to realize, wow, if you treat ulcers with antibiotics, it works a hell of a lot better, and you don't have to do all this other crazy stuff. But, interestingly enough, that paper was published in 84. It took till 1997 until the Centers for Disease Control in Atlanta declared the cause of ulcers was H. pylori. It was a bacterial. And nicely, as a happy ending to the story, Marshall and Warren were awarded the Nobel Prize in medicine in 2005, so 21 years after the publication of the first paper. But that is a paradigm shift. Things were getting better. We learned how to do things better on the basis of the paradigm, but the paradigm kind of ran out of steam, and it needed to be replaced with another paradigm. And as in most cases, the old paradigm wasn't stupid. It was just not good enough. So it turns out that H. pylori grows more aggressively. It flourishes better with higher acidic content in your stomach, and so it wasn't stupid. It just wasn't actually the answer, and so we needed a new paradigm. So I'm going to argue, reasonably quickly, I hope, that there are three business paradigms that are absolutely dominant that are getting in the way of having happened what Ricardo, PMI, Brightline, would like to have happen. And so I am suggesting that we revisit those and ask whether there's a paradigm shift that needs to happen. And I would argue we are seeing all sorts of anomalies in each of these of the sort that Thomas Kuhn referred to. So we're seeing anomalies that suggest that the theory isn't working as well as we hope it is, and I'm going to suggest in each case an alternative paradigm. So first, corporation is a machine. Our view of the corporation is that it is like a machine, like a car. You press the gas pedal, and it goes faster. And you can break down the corporation into piece parts, like you can a big complicated machine, like in a car. You can say, well, we're going to deal with the suspension system now and make that better and have the results we want. And then we'll think about the propulsion system, and then we'll think about the safety system, and then we'll think about the electronics and comfort features of it. It's just a big machine. It's fairly complicated, but it operates like a machine. Now what I would argue is that there are anomalies that are showing their faces on this. So one anomaly is incentive compensation, which we in machine-like fashion say if we give incentive monetary compensation, we'll get better firm performance. We've been doing incentive compensation for a long, long time. There are, I would argue, billions of person hours a year spent on designing compensation systems, managing compensation systems in companies. Yet there is no study. There's not yet been one rigorous study that shows there's a connection between incentive monetary compensation and firm performance. There's some to suggest that incentive compensation drives individual performance, but getting that to derive joint firm performance turns out not to be the case. But if the corporation was a machine, you should be able to do that. So that's an anomaly. In fact, I would argue that the only thing that there's a really positive correlation between incentive compensation and time negotiating targets, because the most important thing to your economic welfare in most modern corporations is to be a super negotiator on your targets. My friend Mike Jensen wrote a wonderful piece about this called Paying People to Lie, because the better you are at lying, the better your compensation will be. And the particular thing you have to be good at lying about is how hard it is to accomplish what you're trying to accomplish. Ooh, it's tough out there, boss. Even holding flat from last year, that would be awesome for the following 12 reasons. If you're really good at that, you get paid more. You don't get paid more for being better at serving customers. How's about another one? If you can drive labor rates down, you should become more profitable. Oh, sorry. That doesn't work either. How about pursuit of shareholder maximization? If it was a machine, attempted to do that would get you that. Well, it turns out it doesn't. How about you create risk-managing financial instruments while you accidentally create financial weapons of mass destruction? I would argue that a better paradigm for the corporation is a complex adaptive system like the Amazon. That if we thought of the corporation as a complex, always adapting system that adapts in ways that are hard to understand in advance, we'd be better off as a paradigm than the paradigm of the corporation as a machine. Or if you'd like, we could say the paradigm is a whack-a-mole game, push down one place and something will pop up that you didn't expect, another place. What would the implications be of that? Well, one implication of that is, when you press the gas pedal, the car might slow down, might stay the same, or might speed up. It is much harder to tell. And assuming that it is the last of those three is an error. If your paradigm was, this is a complex adaptive system, it would cause you to say, I've always got to think about the system, not about the piece parts. If it's a machine, you can break it into this piece parts and see how each piece works, and then reassemble the pieces, and it'll be fine. That is the practice of modern management. That is the curriculum of an MBA program. Think about it. For all of you who've done an MBA or wonderful critics of MBA programs like Henry, well, Henry Minnsburg here in the front, who you'll be hearing more later, that's what they do. They break the corporation machine into its piece parts, teach you the piece parts, and then assume that you will somehow be able to add them up, which, as it turns out, the vast, vast majority never master. This means you have things like Zane of Tom's wonderful work. And if you haven't read it, you've got to read The Good Jobs strategy, where she says, this complex array of pay your work in retail, pay your workers more, build in more slack, build in more training, and reduce assortment, that set of things, not pay your workers less, because labor is one of the biggest costs other than the cost of the purchase goods in retailing. No, pay more. But what frustrates the heck out of Zane up is most people read her work and pick one of those things to do, because they have in the back of their mind the corporation as a machine and say, oh, Zane up says, increase slack, and I will increase profitability. Zane up says, increase training, and I will increase profitability. Reduce assortment, and I will increase profitability. No, because it's a complex system. You've got to do all four of those things to get your results. It's not the piece parts. It's the whole that we have to be thinking about. And the other thing that's an implication, I would argue, is that you've got to prototype iteratively in everything you do. In a complex adaptive system, no matter how much you'd like to plan in advance, you cannot figure out all the implications. John Sturman, the great MIT professor of system dynamics, says quite wisely, I think, that in life there are no side effects. There are just effects that you didn't think about in advance. It's not as though some are categories as main and some are side. They're all effects, and it is hard for a human being to ever figure out, in a complex adaptive system, what all the effects are going to be. So prototyping, enhancing as you go, is smarter than trying to think in advance about everything, because there will be then what John dismisses as what you think of as side effects. And last one, and this may be simple, but it's important to make, is when dealing with human beings in the world of business, you've got to think about head, heart, and gut. Because what are human beings, if not little complex adaptive systems? And when we think somehow we're going to appeal to their head, and that'll take care of the other pieces of the complex adaptive system, or we're going to appeal to their heart, and that'll take care of our gut, and that'll take care of the rest is a fallacy and a fool's errand. We've got to think about all those three things simultaneously if we're going to deal with them as a complex adaptive system. So that's paradigm shift one, from corporation as a machine to corporation as a complex adaptive system that, interestingly enough, is existing within a big complex adaptive system called the world. So that's number one. Number two, and I did number one first because this relates to number two, even though number two is kind of most connected to what we're talking about here today, strategy versus execution. So this is the dominant paradigm, has been the dominant paradigm in business for time reasonably immemorial, or at least back to 1963, which I count as the foundation of strategy as a business discipline. We didn't talk about strategy in business much before that. That was the foundation of Boston Consulting Group and Bruce Henderson's view of strategy, boring strategy from the military and applying it to the world of business. So at least since then, there has been a paradigm that there are two things, one's called strategy and one's called execution. As with many things, metaphor does play a huge role. So in Pepticulter's, the metaphor of the stomach as this very, very delicate bag led to the view of it's about acid. Here, I would view that the metaphor of the human body is what's driven us to the paradigm that says there's a thing called strategy and a thing called execution. The metaphor, the human body, the brain makes choices. Roger, lift your arm, and then the body executes and lifts the arm. That's the metaphor. And it's sort of a sensible metaphor, because it's us, it's about us, it's about the human body, we're fairly familiar with it. Although brain science is telling us a hell of a lot more about how that actually works and it's not the way this notionally works. But what we've done is imported that metaphor to the world of business to say senior leaders formulate strategy and the rank and file executes that strategy. Am I right? This is the absolute dominant, utterly unquestioned paradigm in the world of business when it comes to strategy and execution. Any other theory that you've seen out there? That's it. It's the perfect exemplar of Thomas Kuhn's dominant paradigm. But it's throwing up, I would argue, anomalies. A rise in what we see of as execution difficulties, all the bright line work suggests that this is an obsession of senior managers. It's hard to get an execution. We've got lots and lots of it. So we have a theory that produces the opposite of what we wished. A theory should help us make sure there aren't execution problems, because we know exactly what it is and we know exactly that the brain should tell people what to do and they should go do it, just like we said. No, we are a rise in that. And we have a rise in unimplementable strategies. Again, Ricardo started with that. Well, the implementation, strategy implementation, the statistics are horrible on it. Well, if you've got a great theory, why would you have horrible results on both of these dimensions? And I would argue that this isn't particularly new, the attention on execution. The intention on execution has been, if anything, rising and rising quite dramatically. We're thinking more about how important it is to have better execution. And are we getting better execution? Not from what I can tell. The hue and cry about execution has risen, if anything. Hence, PI, hence Brightline, is to solve a problem. Here's my view, which is that we need a better paradigm. And for me, the better paradigm is the thing we refer to as strategy. And if you break down the activities that we engage in when we engage in this thing that we call strategy, is making choice under uncertainty and competition. Strategy is making choices. And there's always uncertainty and competition. That's why it's kind of hard to make them. And you sometimes make them badly. And that's the challenge. If you look and observe what we think of as execution, when we say, go execute that, this is my brilliant strategy. We're going to win on the basis of customer service. Go execute that. What are the people who are, quote, executing that going to have to go and do? I believe they're going to have to go and make choice under uncertainty and competition. Or it ain't going to happen. And when they do those things, they're going to hand off those choices to somebody else who is going to have to do what? Make choice under uncertainty and competition. So it does beg the question, for me at least, help me understand why it is we'd call one of those activities strategy and another execution. Last time I checked, generally speaking, in kind of language systems, when two things are exactly the same, we don't call them two different things. We tend to consolidate on one description of the thing. Not always, but it's sort of more efficient and effective to do that. So if it's the same thing, why do we think of it differently? Now, sometimes we say, oh, the people at the top who are making strategy are unconstrained. The people below making strategies are constrained, but I hang around with CEOs all the time. And if I told them, you know what people think? They think that you're unconstrained. They would heave me out of their office and say, please don't come visit me again. You don't think I'm constrained by the capital markets, by regulation, by my boards of directors, blah, blah, blah. Nope. Everybody's making choices under a whole bunch of constraints under uncertainty and competition. For me, for what it's worth, the way I think about an organization is it's just a multitude of cascades. And those of you who've read my stuff on strategy, I think of strategy as answering these five questions. And they cascade from the very top of the organization all the way to the bottom of the organization and the best companies that I deal with. In those companies, the people toward the bottom of the organization think they're making important choices. They do not think they're executing. And the reason it's so important is because the strategy versus execution paradigm puts those who are, quote, executing in such a bad box that it is bad for the heart of those people. It does not capture their hearts because they're not fools. When some CEO comes up with a esoteric strategy to say, oh, this is how we're going to win, now you just people go do it, they have a terrible choice. They can either obey and engage in mindless doing. Because if you're not choosing, you're engaging in mindless doing. You're just, quote, doing. So they can engage in mindless doing and not make any choices, in which case what will happen? Bad things. And what will the cause of those bad things be viewed as being after the fact? What? Bad execution. So it's going to be those people's fault that it's bad execution. What if instead they're completely insubordinate and rather than executing, they make a brilliant set of strategy choices that are consistent with the choices that have been made above them and then encourage the people below them to make yet another set of brilliant choices that are consistent with those choices so that you have a robust strategy that operates from the top to the bottom of the organization, then what will the diagnosis of the reason for that be? Brilliant strategy. Awesome strategy. So the strategy versus execution paradigm makes it an absolute no-win situation for 99.9% of the employees of any corporation. If they're insubordinate and do an awesome job, somebody else gets the credit. If they are subordinate and do what they're told, they get blamed. And you wonder why there's such crummy, quote, implementation. And you wonder why there's such low engagement in the world's modern corporations. Don't wonder. These are anomalies. You shouldn't have people going to work discouraged and feeling like a cog in some big machine. That's an anomaly. If you've got a good theory, a good paradigm, you wouldn't have that. We have it. It's an anomaly. We've got to ask ourselves the question, is trying to get better implementation, better implementation task forces, better implementation this, better implementation that, clearer implementation, all of that. Is that actually going to fix the problem? What I would argue is it's in the very, very latest stages of the eclipses, the Kunian eclipse of a paradigm. It's when the anomalies are so great, so invasive, so persistent, so huge, that we finally might ask the question, is that paradigm an actually useful paradigm? Because what's the paradigm for? It's for usefully organizing our way of thinking. It's a shortcut for thinking. Here's how to think about it. Don't start from square one. Just think about it this way. So there's a better paradigm. And the best companies, in my view, have people at the bottom who think they're making choices. I shouldn't say it in the Pierre, a fine hotel, sorry. But Four Seasons, number one luxury hotel chain in the world by all measures, literally. Not most measures, all measures. The bellhop, the busboy, the person at the bar all think they're making choices. And they've got to make some brilliant choices with this customer who's standing right in front of my face right now for Four Seasons to be the best luxury hotel chain in the world by far. It's not an accident. That's the view in the company. And that's what makes them better. And interesting enough, since they adopted the strategy, their current strategy, which is now 50 years in the making, nobody's actually tried to replicate it. One of the reasons is the paradigm that the world operates under. OK, second one. Third one, flat jobs. OK, so the world has a paradigm that's been based on a history in manufacturing operations, in service operations, that jobs are flat. What do I mean by flat? It means they're the same every day, every week, every month. So you show up at the call center, or you show up at the factory for your shift, and you do the same thing from whatever it is, 7 to 3, or 8 to 4, or 9 to 5, whatever your 12 to 7, whatever your shift is. And then you come back the next day and do the same thing over and over again. So we've organized the world by way of flat jobs, the same jobs with the same intensity every day. Now, that has thrown up in an anomaly, which is that, interesting enough, plant productivity, and this is America. I'm not sure this is the world, but I bet it is. Plant productivity has been going up at 3% to 4% a year for time immemorial in America. But there's been this big drop over the last 30 years in overall productivity in America, productivity growth, not drop in productivity, productivity growth. It's growing at about 1%. How can this be? Well, it's because productivity in white collar jobs is increasing at exactly 0% a year. And what has happened to the mix between people working in factories and people working in office towers? There's been a dramatic shift over the last 50 years into office towers. Those are what I call decision factories. There's product and service factories and decision factories. And productivity isn't going up at all there. That's an anomaly. That shouldn't be happening. And what we see is another anomaly. In many corporations, this is what white collar headcount looks like. We binge and hire a whole bunch of people. Then we realize we've got too many of them, and we purge them out. Then we binge again, and then we purge, and then we binge. I've worked with some companies for a long time, and I've watched these go on, binge, purge, binge, purge. Is this what we would expect? And we've had the increase in something called a project management office. It's now replete in organizations, where you have the organization, and then it has important stuff to do. And it creates a PMO that puts focus on that important thing to do. Why would that be? That's an anomaly in my view. It's an adaptation. The reason that this is happening is that while product and service factory jobs tend to be flat, maybe are designed as flat, decision factory jobs are entirely project-based. All of you guys are in decision factories, is my bet, or at least 95% of you. And if you just think of your life, do you come to work and do the same thing every day, every week, every month, every year? Do you? I would say you don't. Yes, you might have one meeting. The all hands, all staff meeting from 9 to 10 every Monday. But the rest of your time is spent on projects. Making a decision, your decision factory, your output is decisions. For what it's worth, you should think about that. And you have processes, you have work in progress. That's research. You have finished inventory. You have everything that you have in the product factory. But projects come, and projects go. There'll be things that each of you can think about that consumed all of an entire week that you never do again in your career, or you don't do it again for another six months or nine months. It's a whole set of projects that leaf together. It operates differently. The white-collar world. A minute Peter Drucker noticed there were those things called knowledge workers. This phenomenon was happening, where the structure of work changed dramatically. And this is the problem for this, for productivity, for what it's worth, which is because it's a whole bunch of projects, they add up to different amounts of time necessary over the course of a week or a year or a career. But what do we staff do? What do you think we staff to? The peak. We're like a public utility. We're like electric utility. You figure out what's the hottest day or the coldest day, depending on where you are of the year, when the power demand is going to be great, and make sure you have generation capacity in place for that. And the rest of the year, it sits idle. This is why, by the way, you see gigantic layoffs, 10,000, 15,000, 20,000 white-collar jobs being cut by a big corporation. And you'd think that it would be disastrous. They'd be incapable of doing the things they were doing before. And guess what always happens? They figure out how to do everything. So I believe that we have a overcapacity in the decision factories of America of about 30%. And it's just because we draw the line across the top of the top thing. Why? It's because when your entire corporation is organized around flat jobs, everybody's tied down to a flat job. And so you can't find capacity for a hump. So you have to make sure the capacity is built in, which creates all sorts of excess capacity. And you can't figure out what's excess and not, because if you've got a flat job, and you're in this low period personally, if this is one person, what do you do? Go lay on a beach all day? What do you do? Make up tasks. That is what you do. You make up stuff to do that may have no actual productivity whatsoever associated with it, but makes you look what? Busy, busy, busy, busy. And so we can't find the blue part until there's a crisis. When there's a crisis, we lay off 10,000 people. Some of the blue part goes away. Then we rebuild it up. That's why you purge. And then you binge again until there's another crisis. And then you go, is this what the paradigm was intended to produce? Absolutely horrible productivity, binging and purging, ineffectiveness. What I think we need to change to is in the decision factories, which now are typically 60%, 70% of the wage bill of the modern corporation, the ones I've looked at, it's in that range. That entire decision factory, we should convert the paradigm from you have a job to you have a portfolio of projects. Now what kind of company in the modern era has that kind of actual fundamental structure? What kind of company? Consulting. Professional service rooms are all organized that way. And you could say, but they're just tiny, tiny little businesses. They're not these big businesses. They're not big like Accenture. Oops, it's one of those. 40 billion or Deloitte, 32 billion or McKinsey, 10 or 15 billion, whichever number you want to believe. What kind of company has grown the most prodigious leave other than tech giants who come up with something fantastic? I get that. It's companies that have organized around a portfolio of projects. That is your life in a professional service firm. Whether it's a law firm, an engineering consulting firm, strategy consulting firm, IT services firm, you're defined by a set of projects. And when those projects are done, you go on to the next project, and you're staffed accordingly. So that, I think, is the paradigm for the decision factory. We move from job to portfolio of projects. In the service and product factory, I think it's still flat jobs. That is probably the way to do it, but portfolio of projects. I think that means we've got to convert from the notion of we have a dominance of flat jobs in the decision factory, and then this new age thing called the PMO to get done all the important projects while everybody else tries to be as unproductive as humanly possible, stuck in a job that is not structured around reality, to a minority of flat jobs. I'm not saying you should wipe out all flat jobs in decision factories. There'll be a few flat jobs, and then a majority of jobs structured around projects. So you don't have a project management office. Most people think of their selves as running a project. And I'm trying to get companies to do this. It's hard, actually, because it's the paradigm shift problem. Everybody rejects the paradigm. But I do not think, for example, at Procter & Gamble, who I work with would be much better off if they had a pool of assistant brand managers and brand managers who could be assigned to projects in one of any of their 50 big brands, not a specific structure for each brand that's a flat job. I think the brand managers would be much happier and you'd be able to get a whole lot more done at a lot lower costs. So you'd have happier employees, more productivity, better outputs if you went that way, if you organized around projects, not around flat jobs. And in your life then, you wouldn't think the paradigm is I have to climb the hierarchy, which is what it is now. To have a good career, I've got to keep on climbing the hierarchy of flat jobs. Is instead, you know you're getting better and you're getting more valuable and you're going to get paid more and you're going to have more fun as you get to tackle trickier projects. When a really tricky project comes up, we need somebody who is really, really great. And you'll know that you've advanced because you're tackling trickier projects than you used to tackle as you get more experienced and better at it. So those are the three paradigms that I think we need to shift in order to make the kind of progress that I think Ricardo and Brightonine needs to make, wants to make and needs to make. We have to go from the corporation as a machine to the corporation as a complex adaptive system. We've got to go from strategy versus execution to it's all one thing. And the job is to coordinate the cascade of strategy making from the top of the organization to the bottom of the organization. That is the task. And we've got to go from flat jobs to project-based jobs. So those are my thoughts, and I am happy to answer any of your all questions until they drag me off the stage. Thank you very much. Ricardo, do you have a question for me? Thank you. No, I have a trickier project. OK. Brightonine is one of them. Yes, you do. You do. Thank you very much. Is there any question, anyone that wants to make a comment or ask a question? Please, we just need to use the mic for the people in the lecture. Right, yes. OK? I wanted you, if you wouldn't mind, to comment on something you brought up about employee disengagement in this system that's not working. And it's increasing. And we all see it, and the search for talent gets harder. Why are we so resistant in recognizing this area of disengagement? Well, I think it's because we have a paradigm that says, essentially, they shouldn't be disengaged. I'm setting the strategy, and I'm telling them what to do. And it's their job to do what I tell them to do. And because I'm paying them money that should appeal to their head that says, I need this much money, and you're paying me that, why they shouldn't be engaged. I honestly think that's the case. If instead we had a paradigm that says, it's everybody's doing a strategy. Everybody's making choices. They're all important in its projects. And we'd say to that not engaged person, here's the project I want you to be working on now. And it's super important. Here's how the answer to this fits into what we're doing at the corporate level. We're depending on you coming up with a great answer. I can just tell you the problem. I don't have the time to solve it, because I have many problems to solve. Please go solve that and go to the allocation manager and get him or her to get you a team to work on that project. And I'm waiting with bated breath to hear the answer, because it's important to the rest of the company. I think your disengagement would be almost zero. A quick follow up. Do you have one, a good example, that you would say, you see a company doing it really well in the new paradigm? I honestly think, even though they didn't think of it this way when it came to be, although it did to a certain extent, it's four seasons. It's my favorite example of this. Although at Procter & Gamble, I helped work to convince them when they set up GBS, the biggest shared services organization in the world at the time to make it project oriented. And it did fabulously, fabulously well. But Izzy Sharp had this, I think, complex adaptive system view of people. He said in the mid-70s, and literally, he lost most of his senior management team over it. He said there was a turnover of it. He said, the only way we are going to have our employees treat our guests the way we'd like them to be treated at a four season is to treat our employees the way we want them to treat our guests. This in an industry, by the way, that has 60% annual turnover. Despite that, we're going to treat our employees like we want them to treat a guest at the four seasons. So if you look at the four seasons where the employees eat, it would be a nice restaurant to eat. And where they change, their clothes, they have a certain number of days a year free at a four season to anywhere in the world. And when they go, they get checked into the highest category of room that's available, even if it's a presidential suite at 30,000 a night. And so I think that's a complex adaptive system view. They're these complicated people, and we can't make a set of rules about how you treat them. We'll treat you this way, and then you'll treat them that way. We'll give you all sorts of help. And so you know what the turnover at four seasons is? 5%. So the average person you meet in a hotel in the industry has been there for less than 18 months, or is likely to have an 18 month career at that hotel before going somewhere else at four seasons. They're on their way to 20 years, or have been there 20 years. So that would be the best example. Yes, ma'am. Hi, yes. The flat jobs to project-based completely see where that is one of the core problems that we're dealing with right now in my organization. One of the questions I have is, as this complex adaptive system evolves, the projects are very different, and it requires different types of skill sets and different people. How do you see that working with those ups and downs? Sure, I mean, it honestly feels to me as though an iterative prototyping kind of thing, which is that you just need people practiced at doing projects, they will be the most adaptive. So when the environment around you is adapting more quickly, there's no magic bullet to it to say, we'll just have massively adaptive people. I'd say the people who are used to tackling the world as a project, projects are always new and different, would be more likely to do it. If instead, you're tied into a job description that says this is your job description, these are the things you do, and now the world has adapted such that those things are all a bad idea, but it's your job description, you'll continue to do what? Your job description, because if you don't do your job description, what are you in subordinate? Now again, you want in subordination in the sense that this is my job description, but the world is changing, I'm gonna do different stuff, but if it's a project instead, then you know this is time bound because you wanna make projects time bound and things are gonna change, and I'm gonna do a different project next. So that's how I would say a project-oriented company is going to be more adaptable to an ongoing environment than one who's tied down to job descriptions defined in flat jobs. I think that hand was up first there and then here in the middle after that. I mean, you can, I'm... No, no, please. I have a lot of questions. Okay, okay. They take the problem. You can ask me later. Yes, ma'am. Thank you very much for walking us through those paradigm shifts. In your experience with the companies that you work with, which ones seem to be the most open to implementing these shifts? Like what are the most common characteristics that you're seeing among those companies for being more open to these things? I would say it literally is a a design-y sort of mind at the top, right? There are kind of CEOs who are more... I sort of break CEOs into two categories, main categories, CEOs who are set piece. These are CEOs who want their life to be like a Shakespearean play. I know my lines, I know your lines, we're gonna meet and then we're gonna say our lines and we're gonna have everything defined in advance and there's no surprises, no nothing. So those are set piece CEOs and then there's read and react CEOs who are more inclined to say, you just read the situation and you react accordingly and those are the CEOs who say, hey man, I see a problem, let's come talk about it and you have no idea. The CEO literally has no idea going into the meeting what the solution will be. So you've got these two kinds. It's the latter kind. The read and react ones that are more inclined to think about the world in a way that's more consistent with how I'm thinking about the world. But I would say there are more set piece CEOs by far than read and react CEOs and the set piece CEOs wanna say, no, these are our jobs, these are our processes, this is what we do. I don't want any surprises, even though last time I checked, I don't know about you guys, but last time I checked, the world seems to be full of surprises constantly, but they don't want those. So I would say that's the number one characteristic that I see as being most determinant of the question you asked. Yes, right here, right here, and then we'll go to there next, yeah. Oh, okay, well, I had her on the line next. So why don't we do there, we'll do there and then we'll come to you if that's okay with you. Thank you. Excellent presentation. Stella Lupushera, was it a framework? A lot of what you're describing is a joint responsibility of management structures as well as HR processes. So how do you see this evolving in light of performance management systems and the rewards and motivation as well as employment contracts and how that will evolve? You can do project as a regular employee or you can do it as an independent or as a crowd. So how do you see that and where do you think the opportunities for HR professionals are? Sure, well, I mean, I honestly think that the HR field is sadly stuck in some paradigms that are ill-suited in terms of Darwinian fitness, they are unfit and there's a challenge of rethinking a bunch of those. I can talk to you later if you want about that in more detail. That having been said, people do ask me this question, the immediate connotation of being project-oriented is the gig economy, et cetera. I don't believe that, right? I mean, there is the gig economy and lots of people are gonna do things on it as an independent. But what I really am talking about is the system that I would prefer so in my beloved Procter & Gamble, the system I'd prefer is to have each of the 10 category presidents, baby care, hair care, et cetera, laundry, et cetera. If it was me, I'd add up for each of them what their current decision factory HR bill is, all in including bonuses and everything and so say it's a billion dollars for hair care, I'm just making it up, it's not. But a billion dollars for hair care, I'd say to the president of hair care, I'd start out by saying I take away the responsibility for you, for all those people, they're not gonna be Procter people, here's the billing rate for each of them, you have 900 million dollars to spend, you can buy them on a monthly basis, I'd probably say nothing less than a month, monthly basis and annual basis, whatever the hell you want, go at it. I believe that no president would spend more than 800 million, they literally wouldn't find stuff projects to do for more than that, but I'd have all those people employed, I'd have a pool of people just like McKinsey, it'd be like McKinsey, I'd have a pool of people who are ABMs, BMs, brand directors, whatever, all of those and the various functions and they'd get assigned. And the most important person in the organization after the CEO would be the head of allocation, because they'd have to be thinking about who can do a trickier project than they did last time, what's the professional development for a plan and timeline for everybody, oh that person has to go work in Asia to get around their experience, what Asian project can I put them on, et cetera. So that's how I would do it, but I would not say turn everybody into freelancers, absolutely not, you'd want as Procter and Gamble to say, just like, think of McKinsey, right? When McKinsey wanna say I wanna turn all of my great consultants into freelancers who may then go off and do something else that I don't have access to them, no, I wanna develop all these people to be awesome consultants or I'm just saying McKinsey is the biggest, but BCG, Bain would apply to all of them, they'd wanna keep them and have those people say, I'm gonna get better, more interesting projects with in McKinsey than if I did them on my own. Yep, right here, and then we're gonna go over to there, and that might, you gotta tell me how much more I can do. Do we still have time? Yeah, yeah, yeah. Yeah, we still have a couple of things. My name is Ricardo, too, by the way. Oh, really? Okay, well, it's a good name. My older brother's name is... So my question goes back to the way we are structured against those paradigms, and a lot of thoughts come to mind, one of them being, should there be a strategy or organization called strategy? Because the moment you assign that to a group, the rest of the group by definition is not doing strategy, right? So how do you think about titles? How do you think about ensuring that decision making is truly being cascading down when everybody who has the flat jobs is actually thinking that that's their job in the first place? Yeah. So I guess my question is, what mechanisms would you suggest us to consider in order to transition from one structure to another? It is a very, very good question. I would say, even though I'm a strategy person, I do not believe in there being kind of consequentially sized strategy departments. I think it's a line responsibility. However, what I would convert the strategy job to is you need somebody in the organization to be responsible for structuring those cascades, for helping the business to say, okay, you're gonna make these choices, now I'm gonna help you with the commissioning of the next set of choices. So for me, leadership in the kind of company I'm talking about means making only the choices that you are most qualified to make. Don't make more than those, just make the ones that you're most qualified to make, explain those choices to the next level, why you've made them, commission their choices, so now you've gotta make a bunch of choices that are consistent with my choices, commission them, offer to help. Say, I think you can make those choices, but if you struggle making them, that's fine, come back and I'll help you make those choices. And most importantly, if in making those choices, you cannot find a single decent choice to make. Come tell me, because it means what? I've made unimplementable choices, right? So that gets you that, in my diagram, that gets you the flow upward and downward between the two. I think the structuring of the choice cascade and the corporation is one of the most complex challenges and I'd have the strategy department, if you will, or one guy or gal, it's really clever, going through the organization, helping each person do exactly that. Okay, so who needs to make what choices now based on the choice you've made? I'll help you go commission those, I'll help you go organize so that they get done, but don't do the strategy for them. Like, I'm a little bit old fashioned and doctrinaire about this. If you're a strategy person needing to do the strategy for a line officer, that is prima facie evidence that the line officer should be fired, full stop. How can they possibly do their job? If they have to outsource strategy, the most important choices they make to them should be fired. We have time for one quick question. So you were, this gentleman back here was on the line for the next and I will try to answer it quickly, as opposed to what I'd normally do. I was gonna say, is this on? Yeah, it's on. I was gonna say two quick questions, but we'll collapse them into one. One is, when I think about project-based businesses and I think about financial services and investment banking, which is often a project-based kind of structure along with consulting, and I think they're, you see more binge and purge in investment banking than almost any industry, and so I'm sort of curious about that. And also, if we go to this project-based modality, which I really like and I think is really strong, and I look at your paradigm shift number two, which is you collapse strategy and execution because they're the same, then suddenly I imagine you have all these project-based teams that are making all of their strategy and execution decisions and I see a million arrows going in a million different directions and we lose maybe the sort of fundamental direction of an organization so that you have individually productive teams but collectively the organization's not moving forward. Okay, I'll answer the second one because of shortness of time, we can talk about the other one if you want later, but it's what happens now, think about it. Do you think people actually say, oh, I'm just gonna engage in mindless doing because my boss told me so? No, they don't. So it all happens now and you're right, it's a total mess, right? It's the product of massive disconnects, massive rework, massive, massive disasters. So the decision factories suck for a reason and so all I'm saying is acknowledge it in essence, acknowledge it so that you can actually then think about managing it more intensively and so it's at such a low level now that I have no fear of oh, this will make it more confusing, it's disastrous already. Disasterous, like one of the things to think about is the ways, and I'm sure Henry could talk about this at length, the ways we've chosen to manage companies have changed very little in the last 50 years. Business school has changed very little in the last 50 years. Corporations in that period have gotten gigantic General Motors was the largest corporation on the face of the planet by far in 1960. Sales of what do you think? 10 billion, a behemoth sitting astride the world, gigantic, of course it's 50 billion in real dollars but that doesn't get you in the Dow Jones 30. As companies have gotten gigantic, we have not improved the way we manage them hardly at all. And so we have a total mess, I'd acknowledge it and then we can make it better would be my answer. Thank you very much for all the great questions. Thank you, thank you, hey, pressure, pressure, thank you. Thank you.