Doughnut Economics: CI Business Brief Book Review Column

Originally published in 2017, Kate Raworth’s Doughnut Economics has gained fresh relevance as we seek new ways to address challenges in a world unimaginable five short years ago.  This interesting, engaging and thought-provoking book appeals for us to adopt a broader way of thinking, both within economics and throughout our lives as a whole.  As the book’s subtitle, Seven Ways to Think Like a 21^st-Century Economist suggests, Doughnut Economics doesn’t assume an in-depth prior knowledge of economic theory.  Rather it sets out to make clear the all-encompassing influence of economics on our lives.  In Raworth’s words, ‘economics is the mother tongue of public policy, the language of public life and the mindset that shapes society’.

Raworth is a firm believer in the power of pictures to convey a message and Doughnut Economics is replete with diagrams and images that help unpack some of the more complex concepts.  Central to this is Raworth’s own creation, The Doughnut, establishing a social foundation of well-being that no one should fall below and an ecological ceiling of planetary pressure we should not go beyond; ‘a world in which every person can lead their life with dignity, opportunity and community – and where we can all do so within the means of our life-giving planet’.

 

In many ways the Doughnut model echoes Abraham Maslow’s hierarchy of needs, identifying a set of basic requirements for individuals to have the opportunity of engaged and meaningful lives.  However, while Maslow’s hierarchy had a clear upward progression, Raworth sets out a circular system where the varying factors interact with each other to influence the overall outcome.  A second key difference is the ecological parameters with which Raworth borders the Doughnut with, linked to the nine control factors set out by Earth-system scientists Johan Rockstrom and Will Steffen in 2015.  No longer can we single-mindedly pursue the self-actualisation proposed by Maslow without reference to the environment that supports us.

 

Having established the Doughnut model Raworth moves on to consider seven key economic and social concepts that she believes need to be addressed if a fairer and more sustainable economic model is to evolve.  This is primarily a question of reframing and expanding current thinking to include considerations beyond the drive for economic growth that has dominated neo-liberal thinking for the past fifty years.  Raworth argues that we need to move beyond the definition of man as ‘Home Economicus’, driven by rational self-interest, quoting Adam Smith himself to point out that people flourish when we display ‘our humanity, justice, generosity and public spirit’.

 

Raworth calls for us to become agnostic about growth, putting forward a conundrum that is at the heart of this book, no country has ever ended human deprivation without a growing economy: no country has ever ended ecological degradation without one.  This is acerbated by the fact that we may be nearing the end of exponential economic growth.  Governor of the Bank of England, Mark Carney, stated in 2016 that many Western economies appear to be trapped in a “low-growth, low inflation, low interest rate equilibrium.”  The key questions now are how our societies will manage the distribution of limited assets if growth really is plateauing and whether that plateau will be within an environmental window that the Earth can sustain. 

 

The answers Raworth offers don’t make comfortable reading and are certain to provoke debate. Shortened working weeks, planned economies and guaranteed universal incomes hark back to a level of state involvement in the markets not seen since the 1970s.  But, as Raworth points out, economics ‘is not a matter of discovering laws: it is essentially a question of design’.  Whether there is sufficient political will to embrace wide-ranging change is an open question.  As Raworth concedes, Upton Sinclair had a point when he commented that ‘it is difficult to get a man to understand something, when his salary depends on his not understanding it’.  

 

Doughnut Economics offers an invaluable insight into the cultural and historical basis of many of the economic assumptions that underpin our society and sets out pressing questions to address.  As Raworth points out, ‘now is a great moment for unlearning and relearning the fundamentals of economics.’  

Post Corona: From Crisis to Opportunity. CI Business Brief Book Review Column

There is a palpable sense of anticipation building as pandemic restrictions ease, vaccination passports are discussed and travel-traffic light systems prepared.  Like an impatient toddler unwillingly strapped into a car seat on a long tedious journey, the temptation to whine ‘are we are there yet’ is a hard one to dismiss.  A sense of pent up energy suffuses Scott Galloway’s Post Corona: From Crisis to Opportunity.  Written in September 2020 Post Corona is well-positioned to draw lessons from the pandemic to-date and to offer observations as to what may come next.   

At the heart of Post Corona is Galloway’s assertion that the virus has acted as a super-charged accelerant across all social, political and economic trends, fast-forwarding them ahead by at least ten years.  As Galloway pithily puts it ‘even if your firm isn’t there yet, consumer behaviour and the market now rests on the 2030 point on the trend line – positive or negative’.  The U.S. ecommerce penetration figures presented by Galloway drive this point home.  Having grown 1% per annum since 2000 ecommerce penetration jumped from 16% to 27% during the first eight weeks of the pandemic, a decade’s growth in two months.  It’s possible that this trend will reverse, but the advantage clearly lies with those companies who have strong and engaging online presences.

 

As a tech’ entrepreneur and Professor of Marketing at NYU’s Stern School of Business, Galloway presents an informed account as to how the Big Four (Amazon, Apple, Facebook and Google) stand to solidify their market dominance in the post-Covid world.  For those looking to emulate their success Galloway offers the T Algorithm, breaking down the key traits he feels most companies capable of a trillion-dollar valuation have.  Some, such as ‘appealing to human instinct’ or ‘balancing growth and margins’ are already familiar.  Others, like ‘vertical integration’ and ‘Benjamin Button products’ (products that get more, rather than less, valuable to users over time) are predominately online features that look set to become common place in the post-Covid world.

 

Galloway also offers useful techniques for identifying sectors that are ripe for disruption.  His Disreputability Index, ‘a dramatic increase in price with no accompanying increase in value or innovation’ should be kept in the back pocket of every investor or start-up founder.  Two sectors in particular, education and health, are identified as being ripe for disruption.  While there is undoubtably still a need for in-person discussion and collaboration the rapid channel shift enforced by lockdown has demonstrated the potential for the digital delivery of tuition, particularly in higher education.  Galloway foresees a world where universities act as online platforms for top international lecturers, dramatically increasing the scalability of and access to first rate education.  

 

Similarly, radical plans are envisioned for health.  Imagine a world where your health care (and health insurance) requirements are managed via Amazon Prime, with the site using its immense data resources to connect customers to the most appropriate physicians, with prescriptions delivered to the door.  Perhaps most challenging is Galloway’s prediction that medics will deliver their services though a medical version of Amazon’s Marketplace, with a percentage of their revenues being paid to ‘Prime Health’.  

 

The world mapped out in Post Corona is one that risks total dominance by the Big Four.  Galloway concludes his book by considering how monopolies can be effectively challenged in a marketplace that rewards vertical integration and how governments can better support the creation of a new ‘commonwealth’ for their communities.  Central to this is Galloway’s argument that consumers are inherently fast thinkers, with little appetite for contemplating the long-term implications of their actions.  We need governments to do the ‘slow thinking’ and counterbalance the coercive law of competitive capitalism. 

 

Post Corona is an energetic and engaging first draft of what may come next.  Closer in tone to a long blog post than an academic business book its mix of insightful observations and provocative ideas are helpful in preparing the ground as we hopefully near the end of the critical phase of the pandemic and move into the post pandemic world.

 

 

Working During a Pandemic: CI Business Brief Book Review Column

 “There are decades when nothing happens; and there are weeks when decades happen.”

 

I’ve kept in a corner of my office the white board we were using to plan library services in the days running up to Jersey’s first lockdown on the 23 March.  The mess of scribbled notes charts what was a chaotic and unsettling time for everyone, as national and local developments relentlessly tugged away long held assumptions.  The quote at the head of this column has been variously attributed to Saint Peter, Karl Marx and Lenin, all of whom were reinventing (for better or worse) the world in which they lived.  In our own way we are all now working in uncharted territory.  The definitive guide to managing and leading during a 21^st century pandemic has yet to be published.  Instead events have prompted us to read more widely and deeply than ever as we seek to find answers to immediate problems and carve out a sense of what the ‘new normal’ could be.  

 

We have all had to rapidly adjust to a volatile, uncertain, complex and ambiguous environment, as described by Rob Elkington et al, in their book VUCA, Visionary Leadership in a Turbulent World. 

The pandemic has provoked an encompassing and rolling change management process since early March 2020.  Comfort zones have been completely swept away, with operating rules often changing by the day as we adapt to new public health guidelines and changing customer demand.  It should perhaps be unsurprising that books like John Kay and Mervyn King’s Radical Uncertainty have been a constant fixture in the bestseller lists. 

 

One change that may well have wide-ranging consequences that out last the pandemic is the number of people who are now working from home.  This sudden change to working arrangement gave rise to a number of challenges that are addressed by Penny Pullan in her 2016 book, Virtual Leadership: Practical Strategies for Getting the Best Out of Virtual Work and Virtual Teams.  Pullan sets out practical approaches to leadership, motivation, virtual meetings and team building.  While technology has outpaced some of the tools Pullan recommends, the basic principles and practices are as relevant as ever as we work to keep teams ‘together’ and focused.

 

Grace Paul’s The Ultimate Guide to Working From Home offers a compact primer for those who may still be getting to grips with home working.  With chapters titled ‘What to do when you’re having a bad day’ and ‘How to stay sane’ alongside ‘What technology will you need’ this is a readily accessible book that can be dipped into for advice.  Paul includes a short chapter on working from home with children, a subject expanded on in The Book You Read to Teach Your Children: 8 Ways to Keep Learning at Home Fun by Katie Tollitt.  Practical and judgement free this indispensable book offers helpful insight into the learning process and useful tips for engaging activities for young people

 

With the rapid rollout of vaccination programmes and the publishing of ‘reconnection roadmaps’ there is a sense in the air that the pandemic is coming to an end.  The question now is very much ‘what comes next’?  In many ways the economy and the way we work has changed irrevocably over the past year.  While it could be suggested that previous pandemics such as the Spanish and Asian Flu pandemics had little long-term impact on our societies, we are in a very different place socially and technologically now than we were in the 1920s or ‘60s.  The conversation of how we build-back a more cohesive society that can better accommodate new developments, like the move to home working, alongside the pre-existing challenges of automisation, AI and climate change, is already happening in books such as Post Corona:  From Crisis to Opportunity by Scott Galloway and Post-Pandemic: 12 Lessons in Crisis Management by Jonathan McMahon.  The reading list for 2021 is incomprehensibly different to that which we expected in 2020; a year spent at home as decades went spinning past. 

 

Women Leaders. CI Business Brief Book Review Column

The inauguration of Joe Biden will be memorable for numerous reasons. The National Guard troops sleeping in the corridors of the Capitol building.  The Field of Flags mournfully taking the place of the crowd that in pre-Covid times would have filled the National Mall.  The embittered, forthright speech given by the outgoing 45^th president to a sparse crowd at Andrews airbase.  Less dramatic but potentially most important were the shades of purple worn by many of the women standing on the inaugural platform.  Seen by some as a nod towards a desired consensus between the blue of the Democrats and the red of the Republicans, purple was also a colour adopted by the Suffragettes at the turn of the last century.  The swearing in of Kamala Harris as the first female, and the first black and Asian American, vice-president bought the 125-year struggle for ‘deeds not words’ closer.

There is still far to go before we reach true equality of representation, though.  Most of the people on the inaugural platform were men.  How do we get more women on the platform?  With that question in mind I asked Jersey’s Women in Tech network which books had influenced their work and careers.  One title received overwhelming recommendations, Lean In: Women, Work and the Will to Lead by Sheryl Sandberg.  Expanding the observations put forward by the Facebook COO in her seminal 2010 Ted Talk Lean In explores the factors that keep women from progressing to the tops of companies.  Sandberg urges women to examine how work is balanced in their homes, to avoid psychologically ‘leaving’ the workplace before starting families and to ensure they always ‘sit at the table’.  Dawn Foster’s Lean Out provides an interesting riposte to Sandberg’s arguments, suggesting that they encourage women to adapt to suit the prevailing patriarchal corporate power structures.  Whilst they come from different perspectives both books ask important questions of modern workplaces.

One core issue that seems undeniable, though, is the question of confidence.  A number of research reports over the past ten years have suggested that women are far less likely to apply for a job if they don’t feel they meet the job specification compared to men.  In terms of organisational performance this may not be a bad thing and potentially explains why the Peter Principle is named after a man.  But, as Sandberg suggests, a deficit of confidence is keeping some women from asserting the place they merit at the top table.  Katty Kay and Claire Shipman explore this in more detail in The Confidence Code, while The Charisma Myth by Olivia Fox Cabane uses stories, science and practical tools to unpack how charisma and confidence work.  

Aside from understanding corporate power structures and the psychology influences the ways in which we work, it is also often helpful to look to those who have blazed a trail before us.  Michelle Mone’s My Fight to the Top, Deborah Meaden’s Common Sense Rules and Jo Malone’s My Story all offer useful insights from UK entrepreneurs who have led their companies to great success.  Business As Unusual by The Body Shop founder Anita Roddick gives an engaging account of the creation and rise of an early social enterprise, while Emily Chang’s interviews with Silicon Valley insiders in Brotopia gives a more contemporary look at the challenges faced by women working in America’s tech’ industry.  

One final memory will stay with me from inauguration day; Amanda Gorman, the Youth Poet Laureate, reading her poem The Hill We Climb.  Delivered with quiet poise and confidence, Gorman’s words echoed those delivered by Franklin D. Roosevelt’s in his famous ‘all we need fear is fear itself’ speech given 87 years ago.  Gorman’s poem delivered the hope, honesty and vision we should expect from all our leaders and gave a hint that we may be moving towards a more purple future;

“For there is always light,

If only we’re brave enough to see it.

If only we’re brave enough to be it.”

2020 in Review. CI Business Brief Book Review Column.

 As the year draws towards it’s end it’s time to take a moment to pause and look back at some of the standout business and management titles published in 2020.  It’s an understatement to suggest that the year has not unfolded as many of us may have planned in January, though with hindsight my Christmas reading last year,The End Is Always Near by Dan Carlin, was grimly prescient.  Whilst Covid has swept all before it in 2020 the pandemic comes at the end of a decade of disruption, with austerity, technological change, Brexit and Trump all challenging established ways of working and thinking.  With that in mind it’s perhaps not surprising that much ink has been spent in 2020 trying to make sense of the rapidly evolving environment we find ourselves in and we might most effectively adapt to our changing circumstances.  

 

Two books in particular offer useful insights into how digital has revolutionised established businesses and provided fertile ground for new enterprises.  In No Rules Rules: Netflix and the Culture of Reinvention Reed Hastings, CEO of Netflix, examines with the INSEAD business school professor Erin Meyer how he transformed a company initially operating as a DVD mail order service into an online streaming service with 190 million subscribers and a market share rivaling Disney.  Equally interesting is Sarah Frier’s No Filter: the inside story of how Instagram transformed business, celebrity and our culture, which looks at how Instagram has grown from the photo app purchased by Facebook in 2012 for $715 million into a business valued at $100 billion with over 100 billion users. 

 

A number of books this year have taken a longer view on the social, economic and political ramifications of the changes the digital revolution is giving pace to.  Anne Case and Angus Deaton’s Deaths of Despair and the Future of Capitalism explores the factors behind the decline in life expectancy in the United States over the past three years and the dramatic rise in deaths from suicide, drug overdose and alcoholism.  Daniel Susskind’s A World Without Work could be seen as a more positive companion piece to Case & Deaton’s book, considering the potential benefits (and draw-backs) in the growth of automisation and AI.  Alongside these two books David Goodhart’s Head Hand Heart makes a compelling case for a rebalancing of the value our society places on manual and caring labour, when compared to cognitive work. 

 

If one thing is certain it is that new, robust and adaptable approaches to working are required if we are to address the challenges that have arisen over the last decade.  In How Innovation Works Matt Ridley gives a broad, historical account of how innovative thinking and working has improved living standards and social wellbeing over the past three hundred years.  Margaret Heffernan’s Uncharted: how to map the future together looks at how long-term projects developed over generations have adapted to changing circumstances, while John Kay and Mervyn King’s Radical Uncertainty examines both successful and flawed decision making methods in a world of ‘wicked problems’.  

 

Sometimes it is necessary to look back in order to be able to move forwards. Money for Nothing by Thomas Levenson unpacks the South Sea bubble of the seventeenth century, looking at the its immediate historical impact and the broader implications for our current economic systems.  Flash Crash by Liam Vaughan has the pace of a financial thriller as it investigates the cause of the unexpected and sudden market crash on 6 May 2010, revealing not just the man behind the fall but also the vulnerability of our financial systems.  Jill Lepore’s If Then: how one data company invented the future takes a similar historical approach to the digital world, looking at the development of the Simulmatics Corporation and their use of computers to attempt to predict and influence customer behaviour in a way that foreshadows the world of Facebook and Cambridge Analytics. 

 

It’s easy to loose the individual human element when discussing ideas around economic, technological and social change. As Aaron De Smet pointed out in a recent edition of the McKinsey Quarterly, change is often felt as a form of bereavement and at the moment many of our organisations are grieving (https://tinyurl.com/y5teuxpy).  It’s no coincidence that many of the books published over the past few years have focused on health and wellbeing.  As such my final recommendation would be Jo Owen’s Resilience: 10 habits to thrive in life and work, which offers a practical tool-kit which we can use to build and deepen our resilience in anticipation of whatever unforeseen challenges 2021 may throw at us.  Happy New Year!

Five Things I’ve Learnt About Jersey in the Pandemic: Bailiwick Express Article

 https://www.bailiwickexpress.com/jsy/opinion/chief-librarian-edward-jewell-five-things-ive-learnt-about-jersey-pandemic/#.X8C3cOTfXDt

Super-Forecasters: The Art & Science of Prediction. CI Business Brief Book Review Column

Are you a fox or a hedgehog?  That is one of the questions Dominic Cummings appears to have been asking UK civil servants to consider when he recommended they read Philip Tetlock and Dan Gardner’s book Super-Forecasters: The Art & Science of Prediction. Drawing on the findings of the Good Judgement Project (a US intelligence funded initiative started in 2011 by the psychologist Tetlock), Super-Forecasters seeks to set out some basic rules and guidance to help individuals, organisations and Governments better predict what is likely to happen next.  Working alongside journalist Gardner, Tetlock has written an accessible guide to not just economic and political forecasting, but also to the skills required for clear-thinking in an increasingly complex world. 

 

The fox and the hedgehog question was first posed by Isaiah Berlin in 1953.  Berlin suggested that the fox knows many things, while the hedgehog knows one big thing. Tetlock and Gardner contend that hedgehog thinkers are more convincing and get more airtime because they have a rock-solid confidence in their belief.  Unfortunately, however, hedgehog thinkers are also statistically more often than not wrong, in-part because they lack the self-reflection and instinctive uncertainty of the fox.  As Robert McNamara, initial hedgehog-like advocate for the Vietnam War, admitted; “The foundations of our decision making were gravely flawed.  Even the best and brightest need to be challenged.”   

 

Alongside intellectual challenge Tetlock and Gardner call for clear, unambiguous language in decision making. The 1961 Bay of Pigs invasion is given as an example of when misinterpretation led to disastrous outcomes.  The US Joint Chiefs of Staff and intelligence community briefed President Kennedy that the plan had a ‘fair chance of success’.  The officer who prepared the briefing later said that by ‘fair chance’ he had in mind odds of 3 to 1 against success.  Following the failure of the invasion the intelligence analyst Sherman Kent proposed statistical definitions to describe possible outcomes, with 100% as certain, 93% as almost certain, 75% as probable and so on.  It took the failure to discover WMDs in Iraq over 40 years later for Kent’s proposals to be adopted, but now they form part of US intelligence briefings.  

 

Super-Forecasters also gives thought as to how teams and leadership styles need to adapt to best position themselves in the face of changing information and circumstances.  As the authors put it “how can you maintain the decisiveness of leadership if you are keeping an open mind?”  Primarily it is a question of making a clear distinction between deliberation and action, whilst maintaining a willingness to change.  Tetlock and Gardner draw heavily on military thinking, quoting the Israeli Defence Forces’ slogan; “plans are merely a platform for change” and the Wehrmacht’s definition of good leadership; “The art of leadership consists of the timely recognition of circumstances and of the moment when a new decision is required.”

 

Tetlock and Gardner have a similarly robust view as to how teams should ideally operate.  They recommend ‘constructive confrontation’ and ‘Active Open Mindedness’, which entails the avoidance of group think, respectful challenge, the humility to request help and confidence to admit ignorance.  Underpinning this is the belief that ‘diversity trumps ability’.  Uniform perspectives only produce more of the same, it is through a diversity of perspectives that teams excel.  It is tempting to think Tetlock and Gardner’s book may have inspired behind Cumming’s infamous blog post, calling for “weirdos and misfits with odd skills” to apply for jobs within No 10.

 

Tetlock and Gardner draw their insights into a useful nine-side appendix at the end of Super-Forecasters, setting out Ten Commandments for Aspiring Superforcasters.  Advice such as ‘break seemingly intractable problems into tractable sub-problems’ and ‘strike the right balance between inside and outside views’ provides a simple approach to analytical problems that could be used in many different contexts.  Their parting shot returns to the overriding theme of Super-Forecasters though ‘Don’t treat commandments as commandments.”  Keep an open mind and be the fox.