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Sohrab: Hello, everyone, and welcome back to our next edition of the "Agile Insights Conversations". Today I'm fortunate to be hosting Roger Martin again and this time we won't be speaking about any particular book because his next book is in the writing. It will probably come out in 2025. Maybe earlier. We don’t know yet or I don’t know yet. And today we're going to talk about a bunch of other things which probably have been covered in many of his books but it's not specifically in one of those books. Roger, welcome back to the show. Thank you very much for making the time.
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Roger: It's great to always be with you. I enjoy each and every time we talk.
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Sohrab: Oh, I'm happy to hear that. I'm happy to hear that. Roger, as mentioned...people can see your books behind me, "A New Way to Think" and the one before that, "When More Is Not Better", "When More Is Not Better". Exactly. Now today I want to talk to you about the state of management and where it is today. You've been an observer of that profession, a teacher of that profession for many decades. And I want to use this opportunity to tap into your experience, your thinking on that particular topic. And before jumping into our conversation, I did a bit of research. And not sure if it's true but at least it's stated on the website of the Wharton Business School that this was the very first business school and it was established in 1881.
It is 142 years since the first business school was established. And I would like to understand with you together how you look at the evolution of management since and basically where we are today. And probably you have checked those facts as well at some point as you were the dean of Rotman Business School. But let's dive right in. How do you look at the past 142 years and where are we today?
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Roger: Sure. And those facts are correct. People often think of Harvard Business School as the first but Harvard Business School was the first graduate program, 1908. But yes, Wharton and Darton or Dartmouth, I should say, actually preceded Harvard in having an official business program.
Yeah. I am a little bit worried about the state of management now and I think it's been through this evolution. And a really important time in the evolution of business education was when the Ford Foundation and the Carnegie Foundation simultaneously did studies of business education because both of them were heavily involved...foundations heavily involved in the evolution of American education. It was mainly an American thing because they're both American foundations. And they did studies simultaneously in and around 1960 and came out...and the studies were done by economists, the writers of them. I forget. There were cowriters of one of them and a single writer of the other and they were all three economists.
And they really slammed business education. Seriously slammed it. And their theory was the evolution of business education from 1881 or 1908 till that point in time they said was an evolution of sort of almost business education as a trade school almost. And they criticized the professors as being ex businesspeople who would just come in and tell stories and it was anecdotal and the like and said, "Business education needs to be kind of much more scientifically rigorous." There were no refereed journals like there were...like nature and science in the sciences. Well, there didn’t...and all medical journals. New England Journal of Medicine. There were no such thing in the business world. And so there wasn’t a development of the business academy in the same way with...backed by scientific research and scientific principles.
And the Ford Foundation in fact...and I won't get this exactly right but they funded the creation of PhD programs at four leading schools. I think it was Harvard, Columbia, Penn and Carnegie which was...or I think it was before Carnegie and Mellon got together. And in any event, they created the idea that you should have scholarship and business program...scholarship and PhD programs in the domain of business.
Now I would argue that that was a good thing in certain degrees but it's hard a long-term effect after 60-ish years. There has been a continual advancement of the idea that business needs to be studied and understood using what I would call conventional social sciences, research methodologies. You need to study business by going out and studying a kind of a statistically significant sample of whatever you're studying and then coming to rigorous conclusions about what's going on so that then you can teach principles based on the science of business.
And that advanced sort of s martly from the implementation of Ford and Carnegie...got a kind of foundation of principles and the founding as I said of PhD programs, creation of all these refereed journals. And the problem is...and this goes right back to Aristotle and things. We've probably talked about it and I've written about where Aristotle...father of science. He created the scientific method formalized 2,000 years later in the scientific revolution but he created the scientific method and as such is the father of science, the father actually of sort of modern ways of thinking.
But the father of science issued a warning about his scientific method. He said, "This scientific method is for the part of the world where things cannot be other than they are." And I always illustrate that by saying, "If I let go of this pen, what'll happen? It'll fall." It fell last week, it fell 20 years ago, it'll fall in Cologne, it'll fall in Fort Lauderdale, it'll fall 5 years from now, 10 years from now, 100 years from now. Why? Because it's that...the action of that pen exists in the part of the world where things cannot be other than they are. There is gravity. There has always been gravity. There will be gravity in the future. If you let go of this, it'll accelerate towards the ground at 9.8 meters per second squared everywhere forever.
And he said, "In that part of the world, use my method." What's my method? Essentially my method is to observe what's going on in the world, do an experiment, get enough observation points where pens drop and you can measure how fast they hit the ground and say, "They all hit the ground at a predictable rate." And use that scientific method. But he did say sort of not as prominently but he did say clearly, "There's another part of the world and that's the part of the world where things can be other than they are." And I always use this to illustrate that. How many of these were there in 1999, smartphones? Zero. The first smartphone was a BlackBerry in 2000. How many are there now? Last time I checked the numbers, there were five billion of them. That's part of the world where things can be other than they are.
And interesting enough, that's the world where sort of people interact with one another, companies operate and we get new things. And the interesting thing that Aristotle said about that was...and he was totally unambiguous about it. There was no ambiguity in this thought. He said, "Don’t use my scientific method." Why? It's because if you observe the past and draw inferences from the past, well, there are no smartphones so people must not want to have a smartphone and they will never use a smartphone. You will draw the wrong inference. He said, "In that part of the world, you have to imagine possibilities." Like Mike Lazaridis, founder of BlackBerry kind of did, research in motion, as it was called. And he imagined a possibility and then choose the one for which the most compelling argument can be made. He made an argument that, hey, you could cap spectrum in a different way and create...and get email on your belt. And that changed the world.
Essentially since the Ford and Carnegie studies, the business world has essentially said, "We're going to treat everything the way Aristotle treated the part of the world where things cannot be other than they are. And we're going to teach our students that the only way to make a decision, the only proper way to make a decision is to crunch the data and make rigorous database decisions. And if you don’t make rigorous database decisions, you're some kind of managerial floozy. You're not serious. You're using things like gut feel, heaven forbid."
And so that's my biggest worry about management right now which is we have two generations of business education graduates who have been taught to grotesquely misinterpret the father of science and apply science and scientific reasoning to all issues and problems that face them and make decisions on the basis of crunching the numbers and making database decisions.
And it happens in the world of government too, by the way. The whole dialogue about kind of facts...is this fact based or not? They're all based on the same delusion about kind of the way the world works. We've got a bunch of people who've been taught something that is fundamentally flawed. And the irony of course is they've been taught to be like Aristotle when, if you ask Aristotle, "Is that the way I am?" He would say, "Well, no. No, no, no, no, no. No. You're not being at all like me. You're being like me without the warning that I issued."
That's my worry and it's getting worse, not better, Sohrab. That's the problem. It is more and more the view that unless you can justify a managerial action based on crunching the data, it's a bad decision. And boards will ask, "Well, you want to make that investment? What's your data to prove that that will be a good idea?" If Aristotle were in a meeting, he'd say, "You've got to be kidding me. That's the worst possible way to make that decision." But boards will say, "No, no, no. Unless you can show me the data, I'm going to stop you from making that decision."
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Sohrab: Yeah. No. I can totally relate to this. Interestingly, this morning I saw a video on LinkedIn about the introduction of credit cards at Burger King. This must have been 50, 60 years ago. And they were...the camera team was interviewing customers of Burger King like, "How do you like the fact that now there is credit card?" And almost everyone was like, "Why would I pay with a credit card? It takes too long. If I want my Whopper, I want it now. I don’t want it in three minutes because the credit card processing takes so long." And I was wondering...today we get...sorry for using that word, pissed, if there is no credit card payment, if you have to run around with cash because credit card payment is so much faster and even with your phone or with your watch you make it even easier.
Yes, people back then, customers couldn’t imagine this but there must have been a few at Burger King, managers, sorry, that imagined a different world, things that could be different than they are and did that and made that innovation basically at their stores. And if I look at companies across the world today, there are highly innovative companies. You mentioned the smartphones starting by research in motion and then obviously Apple becoming the dominant player, Google also jumping on that ship. If we look at cloud computing, 20 years ago, 0 cloud computing but now more and more is moving to the cloud which is enabling a lot of us. If we look at Musk companies, they're doing stuff that nobody believed was possible including transitioning whole industries from internal combustion engines to electric vehicles.
Now what is it in some of those leaders that is so different from others and then results in those organizations also achieving different outcomes? I'm sure you've put some thought into this. If not, sorry for jumping at you with this question but probably you have an insight.
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Roger: Well, yeah. It seems to be that there are a small fraction of the world's business leaders who in their hearts just say, "I do not care what the data about this subject say." Elon Musk was facing quite a bit of data that electric vehicles just aren't viable. General Motors had done a big program in there and decided to abandon it. Others had tried and all failed. And so, the data all said, "This is a dumb idea." But Musk said, "No, I can imagine a world in which...we're going to have to do things differently than they did. We're going to have to build giant factories and vertically integrate and we've got to make this a kind of software that's super sophisticated. We're not going to be metal benders that try to make an electric vehicle. We're going to be software people who try to make an electric vehicle."
He imagined a different future and fortunately there's kind of enough people to do that to create advances. I guess I'm...for what it's worth, I resonate so much with these people because it's been my life from...the world needs a strategy consulting firm that does strategy consulting in a completely different way than the existing, dominant, gigantic players. Monitor. And we built Monitor and it changed the industry fundamentally. I said the Rotman School's going to stand for a new way to think. We're going to run differently than any business school and we succeeded. We created a strategy for tennis Canada kind of that took Canada in a direction that nobody'd ever done in tennis before. It's sort of my life. And I'm not sure exactly why I ended up with this as my mindset but...and I was interested to find...to be introduced to this because I never learned this aspect of Aristotle. I was taught that later in life, that Aristotle said this and I now can see it and read rhetoric, his book on that subject.
I can't say that he taught me to do this. He affirmed and now I have a way of explaining what happened to the intellectual lineage from him. But I wish I knew more about how it comes to be, I guess. It just seems to be that some people know that they were put on the planet to imagine possibilities rather than put on the planet to crunch data.
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Sohrab: I can also very much connect to this. And that's why I'm so inspired by the people that make those changes, that imagine a different situation. And this morning also as part of my preparation for our conversation I was talking to my dad who by the way has, I think, read all of your books. And I was telling him...yeah, I'm like, "I'm speaking to Roger again." That would be great. I was like, "What should I ask him today?" And he's like, "Okay, so what are you going to ask him?" He asked me a question. I was like, "I want to talk to him about the state of management or leadership or whatever we want to use as a term here." And then I shared basically the questions that I had sent to you via email earlier and he said, "This is all good." Ultimately from his perspective, it comes down to one point which is the ability to do critical thinking.
And he's also a big fan of Greek philosophers in general and he was like, "Then when you..."
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Roger: Is he? Okay, good.
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Sohrab: Yeah. He's like, "If you do this critical thinking, you would first of all think do things need to be as they are right now." Is that determined? Yes, or no? If not, how could it be different? And if that different is interesting enough, you would think, "How do I get to this different?" And then obviously you have to inspect and adapt as you go along the way which is to some extent applying scientific principles without thinking about, "Okay, now this is exactly how everything needs to be done." Because you're constantly reimagining things based on...as they never existed before.
And I was wondering...now hearing you speak, I'm like, "Yeah. This is very much going in the same direction." But how do we bring this critical thinking into not only the world of business? You also mentioned politics, etc. Society at large. How do we bring this in? Because when I thought back at my school, I learned part of my critical thinking in med school. But other than that, not so much. How do you look at this, Roger?
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Roger: Yeah. It sounds like you've got your brains naturally from your dad. Sounds like a very smart man. Yeah, I agree with the sense...and if I can just go on a bit of a tangent now on your being scientific along the way point, this links to something that Clay Christensen, the late Clay Christensen who I miss, a great man...he and I talked about and actually noodled of the idea of kind of writing a book. But he always made the point that data isn’t just laying around on the streets to collect. You have to create data. You have to take actions and then collect the data that come from the action. He had this view of sort of a very kind of future oriented view of data. And he was not thrilled with the degree to which the business research world had gotten into, "Well, can I find a great dataset and then analyze it?" He said, "No, you have to have a theory that causes you to create data."
I think your whole notion of sort of serially creating prospective data...that is being truly scientific. Only having data that's in the past I think is less so. I do think you can mix the two halves of Aristotle kind of quite well. I'm not trying to reject one half of Aristotle. I'm trying to be true to him in the sense of use this for something and use this for other things.
The question of critical thinking...as you probably know, I did that work on integrative thinking which was initially supposed to be to teach MBAs how to think differently about problem solving and we've ended up migrating it to the K through 12 domain in a program we called...I think this taught a whole lot of K through 12 kids. And I know from all of that work that critical thinking is one of the 21st century skills that now the K through 12 educational apparatus seized with needing to teach. But I just see very, very little evidence of it being taught anywhere. And I think it's because it's hard. I think it is harder to teach en masse. If you think of the times tables...if you're going to teach kids multiplication, I think it's just easier to stand up at the front of the room and have...here's two times three, here's three times four, etc. And it's easier to give assignments for that than it is to conduct a class on critical thinking.
And so, I guess I just think in education from what I can tell kind of ease dominates. If something is easy to teach, it gets taught a lot. If something is hard to teach, it doesn't get taught very much. And I think we've got to develop easy pedagogy for critical thinking. And I'm sure there is some out there. I'm not an expert in that. But I think for example...the initiative I've been saying...the fantastic group we have working on it...kind of think of some sense of the Harvard Business School case study. People think that Harvard Business School is the only place that uses the case study method. Nothing could be further from the truth. Harvard Business School is the only business school where their research is primarily case based research. But every business school on the planet virtually buys HBS cases to teach in their courses. In fact, our school, my school...sort of because there's a real rivalry sort of hates Harvard Business School because it's "case based" but they're mad that there's case-based research, not conventional social sciences research methodology research.
But probably 30% of the classes taught, the individual class...if you just added up all the sessions of every class in the MBA program, probably 30% of them are taught with a Harvard Business School case, the enemy. And why? It's really easy to teach. You get a teaching note that says, "Here's how you do it. Here's the point of this case. Here's what you should put up on the board and here's how you should guide the conversation." And so, I think probably to teach critical thinking, the world is going to need sort of methodologies like that where you can give Sohrab as a grade 11 teacher in secondary school or Sohrab is teaching a sophomore class in critical thinking...that you have material, teaching material that will make it easy for you to guide a conversation in critical thinking. And I'm not sure that we have that. And it's partly because it's not a big, big discipline. It should be. Business is a gigantic discipline. Over 20% of everybody in a four-year undergrad master's or PhD program, over 20% of them in all of America are in a business program.
It's gigantic. You can invest in educational materials for that and Harvard Business School certainly has. It's got a great business selling cases to everybody. It's a huge high gross margin business. I don’t think we have that in critical thinking.
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Sohrab: Yeah. Now when you brought up the cases at Harvard, I'm familiar to them based on being in med school which I think inspired the business school to create cases. Now what I always found interesting when we were discussing these cases was there's usually no one right answer. And this goes back to things can be other than they are and there is always nuance, so different answers which I think also makes it, as you mentioned, a bit more difficult to, for example, rate students and all of that which could explain a bit of the hesitance of teachers moving more in that direction.
But when we look at the world of business...in retrospect, everything seems clear but when Apple introduced the iPhone in 2007, even really, really good business people at Microsoft, Steve Ballmer and many others were just laughing at them. This was after they saw the product, after they saw the reaction of people. Still, they were laughing at them. It is very obvious then what Apple was planning to build the iPhone, they had almost zero certainty that this will work. And this requires, I think, a lot of seeing possibilities and determination to do it but also the courage to be wrong. Because they didn’t know whether they would be right or wrong. Now how do you look at this topic of having the courage to be wrong? Especially when we look at the business world. Let's leave out the kids and the teachers and academia. Just look at the business world, at the managers that you have worked with, that you have trained. How much courage do they have to be wrong?
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Roger: Well, there's an interesting interplay there. The problem is that if you crunch the numbers and make your decisions based on the numbers, you're allowed to be wrong. It's a legitimate excuse. We crunch the numbers and we did what the numbers told us and it didn’t work out so it's not our fault. It's some random chance event. If instead you say, "I just see...I've been looking at this and I know there aren't numbers to support it but people are going to type on glass. I just believe it in my heart." And if it then doesn't work out, then you get fired because you didn’t do it the proper way. There's kind of the kind of...the ante has been upped on the kind of courage required. You have to have courage that goes beyond crunching the numbers. And that's a harder kind of courage to have. And the more...the dominant mode in modern life is you must do what the data tells you. And again, just think about how many times that was on TV during COVID.
Are you following the data or not? That was the big thing. And if the answer is not, it's because you're a menace to society. Full stop. You're a menace to society. And if you're following the data...and just think about it from an Aristotelian standpoint. And you're the medically trained guy. What did we call COVID? A novel coronavirus. What does novel mean?
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Sohrab: Hasn’t been there before.
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Roger: We've never seen this one before. And for this novel coronavirus, the way we're going to deal with it and handle it is to crunch the data. What data? There is no data on a novel coronavirus. But if you didn’t say you're going to crunch the data and we're going to follow the data...we're just following the data. No, you're not. You're not. And unless you said that, you were a menace to society. It has now become sort of a cultural norm that pervades all segments, politics, medicine, business, economics. Economics. My profession. And as I mentioned...you remember in "When More Is Not Better", the blue-chip economic forecasters, all 50 of them had positive growth forecast for the U.S. economy in 2008 all the way to the December, 2008 forecast. Eleven twelfths of the year have already taken pace and you're still forecasting it's going to be a great year when it is the worst year since the Great Depression.
And 46 out of 50, I think it was...you can check my numbers. Forty six out of 50 were projecting real economic growth for 2009 which was one of the worst 10 years in recorded American economic history.
It turns out that you don’t even have to be right at all but you get to be called blue chip if you rigorously follow conventional social science's research methodologies and project the future from...as an extrapolation of the past. That's, I think, why more courage is required, Sohrab. I think more courage is required because in order to do what Aristotle said you need to do in that part of the world, you have to be viewed as a menace. A menace. It's quite something.
And so, I empathize with a lot of the managers that I work with where...and to a great extent, when I work with a company in a senior management team, I really try to get the board involved early on because if you help the board see this...people aren't stupid by any stretch. People are smart. But they're taught stupid things. Business education teaches a fundamentally stupid thing. But if you help them see the limitations of it, the inherent stupidity of it, they will imagine other things. I will have boards imagining possibilities and then asking the question, "Well, how can we de-risk this by looking at the logic of it and how could we do a little bit of it to build momentum towards doing more of it and more of it?" The way I essentially practice management is with an eye to the fact that we've got to confront this fundamental kind of mythology around what a good decision looks like and kind of nurse people along gently. Because otherwise, if you just say, "Stop doing this dumb stuff and be smart," they'll say, "Thank you, Mr. Martin. Good bye."
That's a lot. A lot of my work in some sense is with helping managers overcome their education which is sort of sad.
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Sohrab: Yeah. I know. I know. I can totally relate to that. Now I want to go back to the thing you mentioned around the novel coronavirus.
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Roger: Hey, can I...no, can I...
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Sohrab: Yeah, go ahead.
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Roger: Before we do that...I'd love to get there. I'd love to hear more about you, Sohrab, and what...how you got taught critical thinking in med school. And then let's go to coronavirus. But what did they do with you? Because I don’t know. I've never studied medical school. I just know it from a far distance. What did they do?
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Sohrab: It was mostly when you were dealing with patients where it was not immediately clear based on the lab results, the data what the diagnosis is. And then you have to start imagining. We call this differential diagnosis. You have to know that. Okay, this person has a headache. Easy thing to be. Maybe they didn’t sleep enough or they're dehydrated. There's always one, two, three things that you memorize. We're like, "Okay. I need to test for these." But suddenly the data comes back and you're like, "It's none of these three. All right. What is it now?" And now...and that's the difference between business...because in medicine, the next step is within a set of, let's say, another 10, 15, 20 differential diagnoses, you now start to probe. Which one of these possibilities could it be?
Sometimes or in many cases, 80% to 95% maybe of patients you can cover by the top 20 differential diagnoses. And then there's this one patient that doesn't fall into any of this. You have to further imagine possibilities and test things and you have to look at the patient holistically. That's one area where you develop, if you pick it up, critical thinking. The other area...
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Roger: Can I ask you a question about that? Is there dialogue during that? If you were an intern with the attending, would you be saying, "Listen, I've checked off these. Kind of what do you think?" And he or she probes you. Yes, so there's that sort of...yes.
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Sohrab: At least on a daily basis you talk about every patient on the wards that you're covering. And then with those patients where it's critical, you have multiple touchpoints and the attending...basically they pull you in. They're like, "Whenever you have something new, let me know." Because you need to put multiple brains together to figure it out as usually time is also critical. You want everyone to be on their feet and figuring things out. You do a ton of research. You try to get papers from other hospitals in different places in the country or even outside. This is one area, this constant touching base and figuring it out.
The other area. Now in many cases, if you get to the diagnosis, the therapy is clear. We have this whole thing around evidence-based medicine which is great because it has helped to get rid of a lot of hocus pocus. But coming back to novel things, evidence-based medicine doesn't cover everything. In that case, you have to go and, again, imagine possibilities. And if you look at the history of medicine, basically every advancement in medical science has been based on people looking at new possibilities. New molecules that they've seen. We can debate around whether the mRNA vaccine is a good thing to take or not but it's a huge advancement in terms of, again, technology because it's something completely new that was then applied to creating a vaccine much faster than we could create vaccines before. It might be something completely new and we have to see. It's an opportunity or possibility that some scientists are exploring whether it will make a huge difference in cancer treatment.
And all of these things are based...are for me examples of people going out there and applying critical thinking. Now they do this in the combination that you mentioned before. And when you mentioned Clayton Christensen, data isn’t lying around. You have to take action. And that's what we do when we conduct a medical trial. And then you collect the data and you see does it end up to be the possibility that you were imagining. Yes, or no?
Now in the case of COVID...and I've written about this...
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Roger: [crosstalk 00:41:34] to say...and I'm going to stop you. I'm going to stop you again to say it is tremendously interesting to me that you have an artefact in your profession, your original profession that we don’t have in business. It sounds like it's a very official one, differential diagnosis. It sounds like you were taught, you were taught that thing. It is a thing. You know what it is. You know what you're supposed to...we don’t have that. We have convergence towards an answer and not a... I would argue in the world of business, I would say we do not have that as a fundamental principle and a technique, a way of being, a procedure that you have. It sounds like you'd be considered sort of doing a shoddy job if after the first 3 are not the answer you didn’t explore the next 20. If you just said, "Well, let's try four and give it a whirl," you'd be considered a bad doctor from the sounds of it. You would not be considered a bad businessman because we do not have that artefact, that sort of procedure. It's an artefact, it's a procedure. It's a theory. It's a way of doing. It then sounds like it's ensconced in your practice in a very formal way. That's an insight to me today. We don’t have that in my view.
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Sohrab: It's also an insight to me because I never thought of it this way. But it seems like medical school has taught me a lot although I'm not practicing medicine. Yeah. Another thing [crosstalk 00:43:19]
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Roger: Back to COVID. Sorry. I interrupted you on COVID but this was a very important point.
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Sohrab: No, absolutely. And we connect these two. When you were mentioning the novel coronavirus and we were trying to do everything based on data, my critique during that point was always, "We're not collecting the data." We look at things that might be the case for other...but even there we...from my perspective, we didn’t do a good job now because...and how do I back this up? To this date, we don’t know what is the...how do kids get infected, what percentage. We don’t know how that infection spreads from them. We don’t know what the risk is if you go to a supermarket or to a restaurant because despite people trying to or advocating for the scientific method, they didn’t do what the scientific method would include. And you mentioned it earlier. You take a pen, you drop it down 100 times maybe, you observe, you make measurements and based on that, you get to a conclusion and consider it a scientific law. But none of that was done.
And it is still not being done. That's one. And the other thing. I can speak for Germany. I can't speak for other countries. The biggest challenges that we ran into...being the case of having enough ventilators in the hospitals and enough people that can deal with those ventilators and enough doctors basically that can treat those patients that need to go on a ventilator. We didn’t address any of these topics. If you believe that this is such a critical thing and that's you're bottleneck in order to keep society as open as possible, one would expect you take measures. I personally signed up with the Doctors' Association saying, "Hey, if you need me to get back into medicine, I'm happy to undergo any training needed in order to A, pass on vaccinations." For that I don’t need any training. But also put people on the...nobody got in touch with me. Same with my sister who's also a medical doctor, not practicing medicine. A lot of our friends did that. Nobody got in touch. We're like, "Why? Why?" If this is the bottleneck, that's where you need to act. That's where you need to act.
Now moving away from COVID, roger. We talked about courage. And you mentioned people are courageous if they can follow the data because if it's then the wrong decision, it's not their fault. Now for me by definition, you are only courageous if you can be held accountable. If you can blame it on somebody else or the data, you're not being...you're not demonstrating any courage if you're taking that decision. Now coming from management to the other hyped word of the past 20 years like leadership, for me, the definition of a leader is someone who demonstrates courage. And courage you demonstrate in the face of uncertainty which means you don’t know if the decision and actions you're taking will result in the desired outcome or not. How do you look at that? And as a follow up question, what is the role of people like you and myself and many others that have a chance to work with managers and leaders in the greatest organization to make a change in the current state of management?
[00:47:13]
Roger: Well, I think your diagnosis is right and I guess I would just pile on to say arguably business education is designed to ensure people can operate without courage. It says, "We're going to give you a methodology and as long as you crunch the data and you have an R squared that's higher than this or whatever correlation that's good there or whatever or 90% of customers thought X, as long as you can say that, then you are absolved." Sort of like we absolve you of any responsibility so you can go through your entire career kind of doing that and you can be essentially a corporate bureaucrat where you enforce that in your organization and you rise up because you've gotten that. That is the nature of business education and that's considered a meritorious business life if you went through your entire business life and made every decision based on crunching the data and doing what the data said. Then that would be a meritorious one.
It's sad but that is the status quo right now. How do you and I operate? I work with companies and tell them, "The thing about strategy is you actually only know that you have a strategy that might have a chance of being useful if you're nervous about it. If you're absolutely sure, chances are it's just a plan and it's not actually going to produce anything. And this is why I say, "Hey, you may have got this video, this viral video that says a plan is not a strategy." And what I just say is planning is doing...creating a list of doable activities in areas you control. Strategy is about making a set of choices that compels the people you don’t control, customers, to do what you wish they did. Those are two completely utterly different activities. You're taught in business school that planning is meritorious and you're essentially taught to stay away from a strategy. But the strategy courses, the strategy courses proport to teach you strategy. They don’t. They teach you strategic analysis techniques, not how to create a strategy or what a strategy really looks like.
[00:49:59]
Sohrab: Okay. Now yeah. I get it.
[00:50:03]
Roger: I was never allowed to teach. I was never allowed to teach a for-credit strategy course in the MBA program at Rotman School even though I was dean.
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Sohrab: This is...yeah. It's an interesting fact.
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Roger: It was considered dangerous.
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Sohrab: It was considered...I can imagine. Now I fully understand. I absolutely second what you're saying about plans and about strategies. Now what I'm wondering...because when I look around at businesses and our societies and what's happening in the world with wars and everything around the climate disaster and all of that, I believe more than ever probably...but we can't speak too much about the past as I haven’t been there but in looking at my lifetime, these past 41 years, more than ever in this 41 years we need people, we need leaders to step up, to look at things differently, imagine different possibilities like Elon Musk is doing in terms of all the businesses that he runs. But I don’t see...and I think this was also part of the insight that I took from this conversation. You don’t see that either. A systematic way of developing these people in our societies. Neither through school nor through university nor in most of the companies. There are a few exceptions out there. Otherwise, we wouldn't have the Apples and Amazons etc. that are doing tremendous work in terms of innovation.
And I'm wondering...because I'm not the type of person who's like, "Okay, you can do anything." No, I try to imagine possibilities where I could and probably others could take action to make a difference. And now you have been in this line of work for decades, four decades probably.
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Roger: Yes, yes. Four decades and two years.
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Sohrab: And you already mentioned a few things including the boards of directors, raising the awareness that people have to unlearn a lot of the things that they learned in business school, probably take away some of that engineering mindset if they've gone through an engineering career when it comes to imagining the future and the possibilities that businesses can have. What else is there that you would recommend someone like me to do in order to make the necessary changes so that we can change one team after team, department after department, organization after the organization and ultimately probably also how our politicians are acting although that might be a lost cause. I don’t know. But I'm interested to hear your opinion.
[00:52:58]
Roger: It might be, Sohrab. It might be. But well, I think it's doing what both of us are doing. But I guess if I were probably 20 years younger, I would probably start a school. I worked really hard for 15 years as dean. Fifteen years is a lot of years. It's almost a quarter of my life thus far to try and change the paradigm of business education. And during the time we were there doing that, it was considered by many to be the most innovative business school on the face of the planet and I got recognized. I was [inaudible 00:53:50] business school dean of the year for...and they cited the fact that it was so innovative.
But since I've left, it's regressed to the mean in almost every respect. And so, it's really hard in the current kind of educational environment to do this. My takeaway would probably be you have to create something new. You'd have to create a movement like kind of Waldorf Schools or...what's the other one? I'm forgetting.
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Sohrab: Montessori.
[00:54:39]
Roger: Montessori, thank you. Montessori, Waldorf, those kinds of things where there's a completely different educational philosophy. I think that would be required. That having been said, I guess I think you having this dedication to a series of podcasts that explore questions like this will at least get people thinking. I try to influence as many companies as possible kind of one at a time but that's sort of kind of hard work. But it's rewarding and you can see people starting to think differently in them.
But yeah. I suspect that what would be the most powerful would be to have an educational movement like Montessori that says, "We're just not having the outcomes that we think we're getting." Because that's the story. When business executives say, "I'm making all the decisions like I was taught in business school, data based, fact based," then if they check did they produce the results they hoped, the answer overwhelmingly is no. But in a manner similar to what you said about COVID where we didn’t even collect the data. We didn’t check it. They don’t collect that data because it's profoundly embarrassing. It's sad and embarrassing. But you can always blame random chance events. We did the best we could and random chance events kind of upset the applecart. You can always tell yourself that story.
[00:56:35]
Sohrab: Yeah. Excuses. Excuses, excuses, excuses. Yeah. They are always found. Kids are really good at finding excuses and I think many adults over their lifetime become even better at finding excuses. But yeah. Roger, I think what you mentioned around school trying to influence kids from an early age but also a different kind of business school for the lack of a better term where we teach people the difference between things that can't be other than they are and things that can be where you need to imagine possibilities and then collect the data as you go through your actions and ultimately determine how you can build better products, better services and better return for shareholders, whatever. All of that in a different way. And it was very well summarized in... we didn’t speak today about specifically your book, "A New Way to Think" but in that book, for many different types or areas, you lay out a new way to approach things which is completely more or less breaking with the narrative that most business schools are still probably teaching.
Now with regards to time, Roger...
[00:57:53]
Roger: You've reminded me of something, Sohrab. I'll just tell this story. You know, the Drucker Institute, right? There's a Drucker Institute at Fairmont College and I got invited...and I loved Peter Drucker and love the institute and so I got invited to this little session they had, the sort of reinvention because Drucker was big into that. And they wanted to have you kind of imagine a reinvention that you propose doing or think of doing. And they had the classic sort of kind of IDEO kind of thing. They had a whole table full of materials and you were supposed to create a visual of what it was. And so, I found a little flat box. It was probably a jewelry box maybe that a necklace was in. It was about that big and about that thick. And then they had all these little fuzzy balls, little puffballs. And they were all sorts of colors but there were a bunch of them that were black. And so, I made a little circle in the middle of the box of black ones and then took all these bright big colored ones around the edges and I said, "That's my conception."
I would propose creating something that's called not the MBA. And the black balls in the middle is the MBA which is all locked in and they're teaching the scientific, data based, everything. And you have to get the three letters so I would say, "You have to go and get your MBA. Then you can come and do not the MBA." And all the courses in it would be taught by nontenure stream academics. Because I knew from the Rotman School we had a few business practitioners who were great. They were conceptually strong but weren’t...they just didn’t have to obey the things and taught some of the most popular courses and you could measure popularity because of how many points you have to bid for their course in second year. The top three courses were all these adjuncts, ex business people, practitioner types. I said I'd search all across the U.S. business schools because I assumed...or North American business schools because I assume all of them would have people like David Beatty and Brendan Calder and Jim Fisher like we had at our school.
And so, create a curriculum that was taught entirely by nontenure stream faculty that would then teach you what you really needed to know about business after you got your MBA. I never did it but that is what I would do and I'd probably...if I were 20 years younger, I'd do it now.
[01:00:42]
Sohrab: Yeah. There's still time, Roger. You're not that old.
[01:00:46]
Roger: No, that's true. It's true. It just would be heck of a lot of work. But if somebody was interested and wanted to fund it, I could lead something like that because I know what stuff that is not taught in the MBA one needs to know to be, I think, a successful business person.
[01:01:14]
Sohrab: And in today's world, it could even be completely virtual as you do with your strategy course. I participated in that one. The experience was phenomenal. You get to meet a lot of people from many different countries. Nobody has to travel so it is cost efficient from the student perspective. Now this might be something that we take on further from this.
[01:01:36]
Roger: Sure, sure. No, you're a good provocateur, Sohrab.
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Sohrab: Hey, you provoke new ideas in my head and I try to do the same in your head.
[01:01:48]
Roger: Well, you do. You do. You've got me...you'll probably see a medium column. You know of my medium column? You'll probably see a medium column on differential diagnosis. I think I'm going to do a medium column on that so I'm going to...I'll have to look [crosstalk 01:02:05] I may bug you.
[01:02:07]
Sohrab: Yeah. You will share it on LinkedIn and then I can comment and share some stories. I love that. Roger, with regards to time, thank you so much. It was, as always, a great pleasure. And I hope we don’t have to wait till 2025 till your new book comes out. And we will have conversations in the meantime which I think is always also interesting for our audience. Thank you so much.
[01:02:33]
Roger: Thank you. It's always a pleasure. I'll do this any time, Sohrab.
