Episode Transcript
[00:00:00] Good morning everybody. Today I'd like to talk about a kind of underlying topic that affects work employment and your personal experiences with AI and society. And that is this idea of having a high agency life. Agency is sort of the word of the decade. We all want to have more control.
[00:00:21] Our AI colleagues have agency and we want our society to be built around agency. And isn't that also great? Our. I wrote a very long article that I'll point you to that's I think very important to sort of think through on the last 50, 75 years of employment in the United States and how the relationship between a worker and an employer has become more and more decoupled. More and more workers and more and more arrangements have been created that decouple your earning and life career and aspirations from the businesses or the employers that you have.
[00:01:00] It started basically in my research, sort of started during Ronald Reagan. One of the existential events was when he fired the air traffic controllers, I think it was in the 60s or 70s and just ignored their union and said we don't want to deal with you guys, we're starting over. And then a whole variety of federal policies to encourage 401 s as self managing retirement accounts and doing away with pensions, not supporting unions and more and more. And you can read the article and see the history. There's almost a continuous push away from federal policies to encourage organizations to support workers toward workers doing their own thing. And the economic sort of Friedman argument for that is more agency is good for the economy because it creates more innovation and more startups and more creativity and it helps our country grow. And our GDP has grown pretty well compared to most GDPs of the world. And you could argue that our tax rate is probably lower than a lot of countries, not all. And so this agency idea allows more companies to be started, more careers to be changed. And you can see this in the current state where something like 10 or 11% of computer science graduates coming from schools like Stanford have the word founder on their resume when they graduate from college. In other words, they've already started some sort of business. New business startups are increasing very significantly. There was an article about that recently. So there's lots and lots of agency taking place. And the tech bros tend to talk about high end high agency individuals versus low agency individuals. And they sort of have this insulting way of describing this that either you're high agency or you're not, which I completely disagree with. But we'll talk about that. And the book that we're launching in October called Superpowered is about this, this idea of agency and this idea of empowerment and this idea that AI is perhaps one of the best possible tools we've had in quite a while. Not the best ever, but one of the best tools we've had to create a sense of agency for many of us. You can write an article, you can look things up, you can create a website, you can build code, create pictures, videos, whatever. All of that sounds great when I describe it in those terms, but it's not as simple as it sounds. In this country, about half of the population has no savings. The minimum wage is $7.50 an hour. The economy grows, but the economy is becoming more imbalanced. I talked about the Gini index last week. The stock market's going up. But let me say something about the stock market. There's a lot of, and I talked to a lot of young people about this at the gym the other day. A lot of people are sort of under this impression that if they use AI and create their own gambling casino like trading strategy, they will beat the stock market and you know, they'll go to Reddit and they'll look in Wall street bets and they'll find the next big stock and then they'll bet on OpenAI or they'll bet on, you know, whatever the hot stock is of the day and boom. And then it'll be on CNBC and they'll be rich. Well, if you really think about it, that is the most absurd idea that you could possibly think of. Because when the stock market is going up in general, which it sort of is, it isn't going up that much, but it has been going up for a long time. We've had an 18 year bull market. Everybody in the stock market is making money to some degree and if you're making more money, somebody else is making less. And so do you really believe that you, the fitness trainer or the Uber driver have some a level of expertise or knowledge or capability to beat the Wall street guys and make more money than them? It's an absurd gambling casino. But it's been foisted upon us by this idea that we have all this agency. So I don't have a problem with agency. I believe in it. This is a reason I'm not working for a big company. But I think we have to be honest as employers or HR people or leaders that this desire and memeified corporation, glorified tech bro promoted idea of agency doesn't apply to everybody and it doesn't always work out. I was talking to Somebody during this conversation at the gym, the person I was talking to said, well, you know, I lost a lot of money on crypto. Should I sell it or what should I do with it? She was asking me my advice. I said, I don't have any advice for you. I'm not sure why you bought it in the first place. She said, because it was going up. I said, well, then you have to use that logic to decide what to do next. I didn't want to tell her anything because, you know, crypto has no intrinsic value. So this agency thing is good and bad. And when I wrote the article about decoupling and I was really doing a lot of research and thinking about it, I realized that in some sense, we've probably gone too far. And I think the reason we're seeing democratic socialism and taxes on billionaires and wealth taxes and asset taxes and taxes on people who own extra apartments in New York is because we've been giving everybody too much agency. There's. We live in a society, we live in a country. We live in a community. We are not individuals. We don't live in an island, even if we think we might. Every piece of infrastructure, when we ride on the roads, when we go to school, when we send our kids to school, when we call the police or the fire department, we're dependent upon systems and organizations to make our lives work. And so there's a huge amount of value in the organizational entities around us. And to simply demonize them and criticize them and complain about them, it's sort of fun, but it doesn't really reflect reality. Now, for you as an employer, because I know most of you are in the business side of this, there's a big story here. We are doing all this research on frontline work. We're learning a lot. We're going to launch this all in September, in October, rather. And what you see in frontline workers, people who tend to make 50, 60, $70,000 a year paid hourly, some unskilled, some highly skilled, is that they're not that committed to their employers. They're committed to their paychecks, and they need to make money. And they love their people they work with, and they love their teams and so forth, but they don't mind moving around because they don't feel that attached to the company. In many cases, sometimes they do. And the companies in the frontline world, who pay higher wages and take better care of their high agency workers, have far better business models. You've all read about Costco, you've all read about the companies that pay higher wages, Starbucks and their education and healthcare benefits. We have a story about a company that's giving stock to all their hourly workers. More and more of these are coming up. And what we're finding is that those companies, those organizations, those entities are more profitable. They have higher retention rates, they have better customer service than the churn and burn high agency companies. And I experienced this in my own world as a consumer. You know, everybody buys stuff online. You buy a pair of pants or you buy a pair of shoes, or you do business with an E commerce company or something. And the ones that have high agency employees have terrible customer service. I was on the phone with an investment company the other day. I won't mention their name, but I was just embarrassed at how bad they were at supporting me. And I asked the woman, do you actually work for the company or do you work for an outsourced firm? And she wouldn't answer the question.
[00:08:29] And she promised to get back to me with an answer. And of course, I never heard anything. And I immediately canceled my subscription and found out I couldn't cancel my subscription until the year was done. And I vowed to write a letter to the CEO and I doubt I'll ever do it. They're a very high agency company. It's not working out for me as a customer at all. So even though we want to empower people and we want to give them opportunities, we want to let them grow and we want to give them flexibility and allow them to work in the hours that are best for them, and we want to give them lots of options for 401ks and benefits and childcare and all that. We, we also, as employers have to create an experience where they're a part of something. And AI doesn't do that. AI doesn't make you a part of anything. And you know, my experience, by the way, an interesting thing on AI, just a small sideline. We're going to have a big announcement in September about the new version of Galileo. And it's a lot of engineering changes we've done to the system. And what we've learned in the engineering process here of improving and changing and updating many, many things in G Galileo is that the way these AI systems work is very, very fragile. The way they answer questions, the way they find information, the way they make decisions is very problematic. There's lots of glitches and averages and blurry areas inside of these systems that are dumbing down, in a sense. A lot of the information we get now you may consider that to be high agency, to get an answer very quickly to the question of why your electric car's not charging, which is great. I just tried that the other day. But for more advanced things, they're not as good as we would hope yet. So we can't necessarily believe people like Elon Musk telling us that these systems are going to be smarter than everybody else and they're going to teach our kids everything they need to know. It's just not true. I think there's a limit to the LLM, frankly, and I think we may reach that limit and it'll just be generating more slop and it'll be eating its own slop. And then we'll have AI producing results that were indexed from other AI that created the content in the first place. So, you know, so I don't know if AI really is the ultimate agency creator. It certainly helps you build a website. But you know what? Websites are a dime a dozen now. I mean, people, I get calls from all these startups and they show me their website looks great. Can I talk to a customer? No, we don't have any yet. Well, all right. So what's with the fancy website? Why don't you talk? Why don't you focus on your customers first and then come back to me? So I think as employers, we can't assume that everybody's going to be well taken care of with all of this newfound agency. Some people, obviously, yes, but the average standard of living here in this country is not going up. The average standard of living or purchasing power is way behind inflation. Now, I'm not trying to, you know, create some sort of a political argument for anything in particular, but look at the data. It's in the article. Whatever this agency's doing, it's not creating very good experience for most people. There are a few people that are doing really well, but it's a relatively small number, at least in this country. So we're going to move back, I think, to a much more holistic, and I think the word might be holistic perspective on agency. No company wants to treat their employees as if they're family members and they can never let them go. I know that we've talked about that many, many times, and there are companies that think that way, but ultimately, if you're not performing well or if you don't like the work and you're just goofing off or whatever may be holding you back, you're not going to be taken care of. But in the frontline world, we've now Got the data to prove to you that a deeper relationship with your workers and giving them a form of agency is good for you as an employer or manager and for them. And the magic to this, the trick to this, what the book Superpowered is all about.
[00:12:20] It's not just the individual powers you can use AI for, but how you build this balance between individual agency and organizational needs. The chro of News Corp, who I'm going to. I'm just finishing editing the podcast. We're going to get this out in another week or two, talks about this in the concept of the news media. News Corp. Is just a really interesting company. I've learned a lot about them in the last couple of months, and they're very profitable, they're growing, and they're very aware of AI and they're very empowering in how they use it. We're talking about the Wall Street Journal, Dow Jones, Macmillan Publishing, big company. And they are very cognizant of the fact that creativity and freedom and curiosity are critical capabilities for every employee in that company. Yet they're a company and they march in an order to do things, and they're highly accountable. So as you think about your recruiting and your job design and your pay and your culture and your management, I think you need to think about this idea that many people are being sold the benefits of massive amounts of agency when they come to work for you. And that may work against you if you're not careful. And, you know, I'm not sure what'll happen politically, but I think we as employers have to be very clear with everybody who works with us and for us that we're here to make a profit, take care of our customers, and take care of you within the bounds of what our rules and regulations and business is. And if you do that well and you don't go too far in one direction or the other, you're going to get the best people and have an incredible business. So this is a very strange time. One more little topic to just mention on this issue. So four or five years ago, whenever it started, the federal government and the Supreme Court suddenly decided out of the blue that diversity programs were bad. So that anything that sounded like we were tilting our benefits or our pay or our hiring toward African American people or women or minorities was a discrimination against white people. And so all of that got decimated, ripped off people's websites. Funding for various programs was cut for a whole variety of reasons around that, the military, et cetera. That sounded like it was in the best of intentions to Create agency and equality. I don't know if that's true. Agency doesn't mean that every manager gets to decide anything they want to do based on their own opinion or bias. Agency doesn't mean that you can treat people unfairly because you have personal opinions about anything to do with their work or their personality or anything else. There are still ethical and moral rules that people live by.
[00:15:12] And, you know, you don't have to be religious to understand this, that human beings know when something is wrong. They know when they have been wronged. They know when they're not treated fairly. They can tell. There's. I mean, in almost, you know, it's almost a genetic skill we have. So in this world of creating an agency centric business and balancing the organizational needs and the agency needs of the individuals, I think we still need to deal with issues of bias, discrimination, fairness, equality, pay equity, dei, whatever you want to call it. I don't think that's gone away at all. And I think most of you probably believe that. So all of this got thrown into the political soup over the last four or five years and the soup's been boiling and maybe the political world will change, I don't know. But we don't have to deal with that every day in business. So what you'll hear a little bit from News Corp and you'll hear this from other companies is how important it is to balance this idea of the real agency that we want to give people, but not wildly, in the context of your business needs and your business strategy. There's going to be a lot more coming out on this as the AI tech bros continue to talk about it. They're very proud of themselves for creating these tools. They're very proud of themselves for making all this money. And they believe they're empowering all of us to do everything we ever wanted. We'll talk a lot about this when we launch the book Superpowered. We do believe that you are superpowered in AI. We believe that AI is an amazingly positive technology for the most part. But we've got to learn how to balance it in the context of the benefits for the society and the organization, the company and the team. Okay, that's it for this morning. Bye for now.
