[MUSIC] In this segment, we're going to talk about the failure of traditional ways of managing. What do I mean by failure? I mean that the, the current ways that the particularly large companies work today is not working very well. And not only is the world evolving in ways that require new ways of managing. But, in fact, our current model of management is actually not fit for purpose anyway. Let me just explain why, why I say that. Because this is a, this is a slightly subtle point. There's going to be two lines of argument. One, as it were, coming from above, and one coming from below. The argument from above is as follows. Lets look at recent spectacular crises failures. Lets look at British petroleums and McCondo rig in the gulf of Mexico, that was four years ago. When the report was done on what they did wrong. The report said it was a systemic failure of management that led ultimately to the explosion in the Gulf of Mexico. And when they said that they don't mean the chief executive was culpable. Obviously the key chief executive ultimately carries the blame when the company he or she leads gets into trouble. What they meant rather was that the systems used by BP, their risk management systems, their performance and valuation systems, all of these things were found wanting. That in fact the systems designed to prevent accidents of this sort just simply were not up to the task. Now these things happen very very seldom, but nonetheless, they should trap all such mistakes and they didn't. And you go back to financial crisis, you go back Lehman Brothers collapse and all the other banks that got into trouble. In all those cases again, it's very easy to see that the management systems that were designed to regulate human behavior that was designed to avoid companies taking on too much debt. All of those systems failed as well. So there is a fundamental issue in big companies if the very systems that were created to try to create order. And to try to create uniformity actually fail in their task. That's why I say that there is a failure of management. There's a bottom up angle as well, which I just want to explore briefly. Which is this notion that are management systems at a very individual level have failed us. So, one piece of data that you can look at is data on employee engagement. What do I mean by employee engagement? There's a lot of companies nowadays do surveys where they ask how, how excited are you about working for this company? Are you proud to work for this company? Do I have good friends who work for this company? How involved, how much prop, am I prepared to spend on discretionary activities for this company? Collectively this gives us a view of how engaged our employees are. And when you look at the data. The data says that, in fact, the number of people who are actively engaged, across industries, across companies, across countries is actually shockingly low. Many many countries in the world, the number of actively engaged employees is only twenty or thirty percent. And even more shocking, there's a similar number of employees who were actively disengaged. In other words, they are doing the bare minimum required to show up to work, to get their pay and to go home. And that tells us something about the kind of the typical atmosphere in large companies whereby people just don't feel fulfilled and motivated. An even more, kind of fun way of making the same point to consider the question about who you are happiest spending time with. Take a look at the chart that I, I've attached here. The chart says that the people we are happiest spending time with are not surprisingly our colleagues, our friends, and our families to a large degree. But as you go down the list and you get to the bottom, the interesting finding is that people are least happy spending time with their boss on average. And they'd actually prefer to be alone than to spend time with their boss. What does that tell us? Well it tells us that there are some really bad managers out there. Really bad bosses out there. There's some great bosses as well. I'm not trying to say this is a uniform issue. But there are many poor bosses out there. There are people who feel threatened, intimidated, or just generally disempowered by the quality of their bosses. Is that because those individual bosses are doing a bad job? Yes it is. But I would agree that those bosses are actually a function of the system that has been created around them. The systems and structures of big companies, actually, make it pretty hard for even well-intentioned bosses to do a really good job. So, put it together, what you see is, is a failure of management in terms of the systems that are created, and in terms of the overall climate. In which people work and for me this is a big challenge.
