Episode Transcript
[00:00:08] Good morning, everybody. Today I want to talk about a slightly tricky topic, and that is the topic of cancel culture and psychological safety and diversity. We are in the middle of launching some really cool stuff over the next couple of weeks you're going to really like. So this is a little bit of of a break from all the research stuff I want to do is I'm going to give you a couple things to read. If you look at the list of resources, I want to reflect on something that everybody's thinking about, and that is the war in Israel. And of course, what's going on in the war in Israel is we have two factions in the world, the Palestinian supporters versus the Israeli supporters. Hamas is obviously in the middle of this. Both sides demonizing each other, one side telling the world that they're being abused by the other side. And a lot of labeling of people bias, information coming out in social media that's hard to read, media organizations appearing to take sides, media celebrities taking sides, et cetera. I'm not going to get in the middle of the issue itself. Most of you know that I'm Jewish, so you can imagine how I feel. But the real issue I want to discuss is this issue of rhetorical debate and that we cannot run our companies or the society if we take advantage of or invoke cancel culture. Cancel culture is well, there's lots of definitions for it, but basically it's the problem of labeling somebody as evil or wrong or mal intended and then canceling them from the conversation and not having a logical discussion. And it has happened, and it is getting worse. There's research that shows that in the academic sphere, canceled culture is really limiting academics'ability to speak out, students, obviously, and it's getting worse and worse and worse at an accelerating rate. It's obviously big on Twitter and other social media platforms. I mean, there's just so many examples of this. It's frightening to the point that I'm very careful what I buy on social media and try not to express my opinions at all just because I don't want to get in the middle of it. But in terms of what it means in corporations, there's a big reflection for us. If you believe in a growth mindset, if you believe in innovation, if you believe in meritocracy, you have to deal with the same issue inside of your company. And surprisingly enough, dei leaders, who are oftentimes criticized for many reasons, are actually sitting in the middle of this topic because inclusion and diversity and psychological safety are really part of cancel culture. If you don't listen to somebody or don't hire them or don't promote them or don't give them a raise or don't invite them to a meeting because they're white, because they're black, because they're a woman, because they're young, because they're from this country, because they're from this department or whatever it may be. You're hurting your own company. And the world is becoming more diverse and we can't stop that. That's just the way the world is. And California Caucasians are already less than the majority and that's going to be true in the whole country of the United States eventually. Africa is now the fastest growing population in the world, as is Southeast Asia. So we're going to be living in a very diverse society. Our companies are going to be diverse. We're going to need diverse practices for hiring, for development, for meeting customer needs, for understanding market demand and so forth. Yet diversity investments are dropping. The right wing has started a whole series of lawsuits against dei programs thanks to the Supreme Court's affirmative action settlement and cancel. Culture in the social world is rampant. So my point is not that I want to make any comments about the social or political world, but we need to be vigilant about this inside of our companies. And we may be entering an economic slowdown. Probably next year we're going to have probably different kind of labor market. But I will tell you it's going to be hard to hire next year. We're going to continue to have issues of retention and skilling and internal talent mobility for everybody. It's not going to get any easier because of what's going on in the demographics. And if you're not vigilant and focused on these issues, you're going to underperform. Now let me take a step back and describe what I think the right framing is to think about this issue. And my own personal experience was when I was in high school and I was a very shy, introverted, kind of academic type kid. I was thrust onto the debate team my freshman year in high school and it was the most miraculous thing that ever happened. I will always be thankful to David Dansky, our debate coach, who is probably one of the most transformational people in my life. And what we did on the debate team for high school debate is you spend an entire year debating one topic one of the years. For example, we debated whether education should be funded by the federal government or the state and local government. Pretty sophisticated topic for high school kids. I'm not sure I understood what I was talking about, but I did my best. And what you have to do is you have to spend an entire year debating both sides. Sometimes you're on the affirmative, sometimes you're on the negative and you prepare literally thousands of pages or hundreds of pages of research to justify the positions you take on each topic. You have to make logical arguments and the debate judges evaluate the debate in a structured format based on who wins the arguments. There is a little bit of a bias based on the style of the argument. If somebody is talking too fast or hard to hear, obviously the coach will demote them a little bit, but it is really a judge of which of the two parties won the argument. And that's really what Cancel Culture is all about, is we're invalidating the logic of an argument by labeling people, by calling people evil or bad and then not listening to what they have to say. And I'm not saying this is an easy problem to solve. It's not because when you're emotionally involved in a decision because you don't like the person or you don't like the person's group for some reason, it is really hard to take a deep breath and listen to what they have to say because it means you have to be humble. It means you have to examine your own thinking. By the way, humility is one of the cultural values we talk about a lot in our company, because what we basically do on behalf of you guys is we look at all sorts of dogma out there in HR. I mean, just like everything in HR is sort of a quote unquote best practice, and nobody really knows why it is. And we have to kind of question it and look at it in a humble fashion and say, well, let's examine it. Let's study it and see if we can figure out what's really working and what's not. And that's really a form of meritocracy that we're doing. So this idea of the growth mindset, innovative culture, the Dynamic Organization, all the stuff we just finished publishing, is fundamentally grounded in the idea of a socratic meritocracy, where you can talk about things. I can bring up an issue, we can debate it, we can have an honest conversation. Maybe you're a five level person above me, but I still have an opinion. And if you don't listen to me, maybe I won't give you my opinion. And maybe my opinion actually is right because I'm the one on the front line dealing with the problem. And so many of the fundamental issues that come up in leadership and culture come down to this idea of psychological safety and canceled culture. Now, interestingly enough, as you think about canceled culture and what it means and the implications of it, there's a big business story around it. Kathy and I and others here worked on this project that we introduced a couple weeks ago called the Dynamic Organization. And if you look at the Dynamic Organization research, it's about understanding what highly dynamic, innovative, pioneering, growth oriented companies do to facilitate growth. And what you find when you look through that research is that the reason most companies fall behind because there was a product or a competitor or market change or something they couldn't adapt to, is that they were structurally incapable of adapting structurally. And I don't mean physically structurally, there were cultural and management structures that were preventing them from seeing or learning or paying attention or listening to the changes that were taking place. By the way, that's the same thing that happens in canceled culture. When I was at IBM in the 1980s and early 1990s, I was there when the company was a magnificently successful leader in all areas of technology. And everything that IBM sold was proprietary and little by little, at an accelerating rate, operating systems, applications, computers, chips, networks, all went into open systems. At the time, we called them open systems. We don't call them that anymore. And IBM was in denial. IBM refused to admit that their franchise was being attacked. Many of the very, very senior executives did not listen or did not want to hear what customers and salespeople were saying. And IBM suffered quite a bit until they came to grips with it. Now, obviously, they've bought red hat.
[00:09:49] They've really gone in the other direction. But this goes on all the time. And so in some sense, the reason I bring it up is that this dei thing that we think about in HR is actually a fundamental business issue. Do you have not only diversity, but do you have inclusion in your culture? Do you have a meritocracy? Do you listen to people that are younger or a different color, or a different gender, or a different nationality, or a different level? Do they have a voice? Can they activate their voice? Do good ideas get discussed based on their logic? The whole Amazon practice of reading press releases before you have a meeting, or reading a report before you have a meeting, I think it's magnificent. I mean, I really wish we could do it here. We just haven't talked about it enough. It's a really good discipline of bringing a culture of socratic debate into the you know, a lot of business people don't like debate because it slows things. Is there's been criticisms of Google and others that when the culture becomes too open, nothing ever gets decided. So you get to decide as a leadership team how much debate you tolerate and how you evaluate debate, and who the judge is of the debate. And usually in most companies, it's the senior leader who makes the decisions. I'm not saying that's the right answer. You can go to Ikea and companies in Sweden where they don't make decisions that way. They make decisions as groups. And I remember when I met with the Ikea leadership team several years ago, we talked about citizenship and culture and things. They said, look, the way it works here is most of the operational decisions are made by committees, and the committees are made up of senior and junior people who work in many locations, not just in one store or one country. And we try to socialize these decisions and make them as a group so that once we've made them, everybody gets on board very, very quickly. And Ikea is a very successful company. I've never lived in Sweden. I hope to spend more time there. But those kinds of cultures in some of the northern European countries actually lead to better quality of life. And I think there's businesses that operate that way. And it's up to you, obviously, to decide in your company how much of the collectivist culture you believe in versus how much of the top down decision. But it does come down to cancel culture. And so I think if you reflect on what's going on in our political lives and on the news and the left right debates in Congress and just sort of observe that and say to, hmm, do we have any of that going on in the company? Yeah, we probably do. This group never wants to believe what that group says. This functional area is not communicating well with that functional area. I would kind of lead you to the Dynamic organization to discuss this. Okay, so we're going to do more research on this next year. We're going to take a tackle at Dei again. I don't think we've nailed that one by any means yet. We've certainly done a lot of good work there. And the next thing I want to talk about is a little bit about AI. So we're going to be announcing some pretty cool stuff later this month and next month around this. And everybody wants to talk about it all the time. We just had a whole bunch of meetings on AI on Friday. I went and listened to all the conversations. And what's going on in AI is a lot of experimentation, a lot of learning, a lot of people. And actually there's a lot of interesting conversations about people in companies denigrating AI when they don't know what it is.
[00:13:33] I mean, we've done a little canceled culturing of AI. Too, by the way, demonizing it before we understand it. And what my perspectives are on this and I'm fairly familiar and into this now because we've been running our own AI project here for almost a year, is that this is an integrating technology. This is a very, very different, what I call paradigm shattering technology. I'm going to use the word paradigm shattering a lot in the next month. I'm going to explain what I mean by that later. But it breaks down barriers between data silos, information silos, language silos, and obviously functional silos in companies. When you use AI to look at data, when you use AI to look at learning information, when you use AI to look at process information, you see the interconnectedness between point A and point B. That's actually a form of meritocracy. And what I found interesting about our experience with AI, and you're going to see this in our product, is that when we developed our 20 or 25 different definitive guides on different parts of HR, studying each of the domains independently, once we put them into AI, we realized how interconnected they were.
[00:14:53] And Kathy and I have talked about this, and you'll see more coming for this, that the AI technology is a way of making better decisions in a better, more meritocracy socratic debate. Because one of the reasons that the left side and the right side or the a and the b don't talk to each other is they have different sources of information. And some of it is correct, and some of it is maybe not. But there's no way for the two sides to have a reasonable debate if the information is asymmetric and not trusted. And so when you look at what these AI systems do, not only do they do a great job of prediction and categorization of data and classification and analysis, but they actually do a lot of synthesis. And synthesis of information is important. We're using our new AI system that we're going to be launching soon internally a lot now. And I'm doing things like putting research reports in there and then asking it questions to assimilate the relationship between these five reports we just wrote. And it actually does it really, really well. So I think you should look at AI as your friend. Now, as we've talked about in most of you that have been involved in these big reset meetings, AI is confusing. A lot of people don't know what it is. They're afraid of it. The It departments are not necessarily on board with everything yet. We're worried about data security, worried about privacy, worried about accuracy, worried about who has privilege to what information. There's lots of things to be worked out. We're worried about bias, of course, but be that it is it may we're in the beginning of the new printing press. I was reading this weekend about the invention of the printing press in the 15 hundreds. Well, you know, when the printing press was originally created, they had canceled culture problems like crazy people creating inflammatory articles and documents and books and newspapers and magazines and things. And everybody thought it was the end of civilization. And over time, the society developed rules and labeling and other methods to validate information that was printed. We don't have that in social media yet. Social media can be anonymous. It can be made up, it can be generated by AI. And that's the reason we're having all these problems now with communications and debate online, AI can be a danger for that, but can also be a solution, because inside of a company, you as the company, I don't mean you as HR, get to decide what information is real. It's your data. And if the data is not valid or accurate, it's your fault. You can't blame anybody else, and we can look at that data in a more holistic way and make better decisions. I've been involved in so many projects where a team had a turnover problem, they had a hiring problem, they had a performance problem, they had a retention problem, and all of the managers had a very, very strong opinion as to what was going on. And then somebody did a really comprehensive data analysis and found out that their opinion was mostly right, but actually wrong. Let me give you just two examples of this. And this is not AI, but just an example of how powerful AI can be. So many of you have heard this story, but I'll repeat it. So there was a bank in Canada that was suffering from fraud in a bunch of their branches. And so the conclusion they were coming to is, we've got a training problem. We're hiring the wrong people. We've got to lay off a bunch of managers, blah, blah, blah, blah, blah. They did all this training. They redid their employee assessments. They did all sorts of traditional things to improve ethics and quality of hire. The problem didn't go away. This is multiple years of work. So over the summer, one year, they had some college kids doing analytics, and they looked at statistics, and they took a large amount of data about this company's branches and customers and transactions, and they did essentially a big project that could probably be done by AI now in a few minutes. But they looked at the correlation of all these things. And what they found was the only high correlation there was to fraud was the number of miles from the branch office to the district manager, because the local branches in small cities in Canada where there were one or two employees working there, were never getting visited by their superiors. So those people had no sense that they were being watched or monitored or cared for, and they were just stealing. Now, I'm not saying that's good. Obviously, that's an ethical problem, too. But that understanding that piece of data got rid of all the bias, and they said, okay, well, we need to basically visit these branches more often and change the rotation of who works in those remote branches, which was not obvious, was not obvious to these leaders before. Second example is an insurance company that was having a hard time hiring auto insurance salespeople. And auto insurance is a little bit of a commodity, but it's a pretty tricky area. It's a massive, massive market. There's many segments and many competitors. So this is a very successful company. I won't mention the name, but it's somebody you know. And they were having a lot of turnover in this particular group. And so they did their typical blue blood approach and said, well, let's look at what colleges these people went to, what their GPAs were, what kind of work experience they had. Let's give them a writing test. Let's give them a communications test. Let's give them a simulation and so forth. And that didn't really help.
[00:20:30] So, again, somebody did an unbiased data analysis of this particular business area, looked at a lot of data, something that, again, could be done in AI pretty quickly now. And they found out that the most highly correlated driver of a successful auto insurance salesperson is having worked in auto sales selling cars. And those people who have worked in auto sales love cars. So they're into the car industry, they're into cars, they're into the car market. It turned out those people ended up being the best salespeople of auto insurance.
[00:21:08] I don't exactly know why I could guess, but that data was not at all clear to them and they were hiring all these straight A kids out of Ivy League schools and stuff to do this. So this is an example of the power of data meritocracy, of listening, of unbiased decisions, of debate, of socratic method of making logical decisions. And I think in the business world, we're pretty doggone good at this compared to in the social world. But I get worried about what's going on in the social environment, that it's going to come into the business environment. I would basically say to those of you that are in the dei domain or interested in and obviously we all are in HR in dei, we need to stay up on this and think about it. And I think if you read the articles and books that I'm including in the podcast, you're going to see that this is a big problem in society and it's been building over the last decade or two. Canceled culture has no place in a company. It is not only bad human practice, it's bad business practices. Yet I'm sure it happens a lot. And if you want to be dynamic and you want to grow and you want to deal with AI, and you want to deal with all these things that are disrupting companies at the moment and the economy, which we can't predict for next year, this is one of the things that has to be in your toolkit. So take a look at some of the resources I have. I hope this was interesting. And next week you're going to see some really cool stuff from us that I think you're going to be pretty excited about. Thanks a lot, SA.
