# think ahead

Data: 11-01-2025 21:41:01

## Lista de Vídeos

1. [think ahead: Breakthrough growth and how to achieve it](https://www.youtube.com/watch?v=PPWOpOQ7RO0)
2. [think ahead: Issues and uncertainties in the global economy](https://www.youtube.com/watch?v=-zRQqSboaXk)
3. [think ahead: The business implications of AI](https://www.youtube.com/watch?v=K1Qq11HeONo)
4. [think ahead: How will AI innovation in healthcare improve our lives?](https://www.youtube.com/watch?v=ZUdlUawXB_w)
5. [think ahead: Energy Transition, A View from the UAE](https://www.youtube.com/watch?v=ONsN6nxftZk)
6. [think ahead: Challenging Contemporary Energy Systems](https://www.youtube.com/watch?v=hJOeONgMszA)
7. [think ahead: COP28 Expectations and the Role of Business](https://www.youtube.com/watch?v=MU9Li2tUwTM)
8. [think ahead: Complex Climate Trade-Offs](https://www.youtube.com/watch?v=XE9DPMV4ENM)
9. [think ahead: Meeting the Climate Challenge](https://www.youtube.com/watch?v=_LE1nBUDaDQ)
10. [think ahead: How Regulation is Supporting the Path to Net Zero](https://www.youtube.com/watch?v=HyC66Ybmhok)
11. [think ahead: Climate Transition and Emerging Markets, led by the Wheeler Institute](https://www.youtube.com/watch?v=jKanGWK6WmA)
12. [think ahead: Fireside Chat Hosted by Christopher Caldwell](https://www.youtube.com/watch?v=Bc5pYw7tppQ)
13. [Think Ahead Podcast: How can AI be the answer to our environment crisis?](https://www.youtube.com/watch?v=a7O9y2fVTlc)
14. [think ahead: Leading with Purpose in Turbulent Times](https://www.youtube.com/watch?v=16HvH1bqYo8)
15. [think ahead: Traditional to Trailblazing - Strategies for Mid-Career Transition](https://www.youtube.com/watch?v=5HY3-otqSkQ)
16. [think ahead: From ATMs to Algorithms: Assessing Tech’s Influence in Finance](https://www.youtube.com/watch?v=8_wpOPkr7Cw)
17. [think ahead: Eco-Chic - Sustainability in the Luxury Sector](https://www.youtube.com/watch?v=pHYQPy46NyY)
18. [think ahead: Ripple Effects - The Global Economic Impact of the US Election](https://www.youtube.com/watch?v=9870bYAiZfE)
19. [Think Ahead Podcast: Tackling digital risks in the era of AI](https://www.youtube.com/watch?v=m1NWF1IhH_A)
20. [Think Ahead Podcast: Resilience through disruption and transformation](https://www.youtube.com/watch?v=7qZ_6c9gyuQ)

## Transcrições

### think ahead: Breakthrough growth and how to achieve it
URL: https://www.youtube.com/watch?v=PPWOpOQ7RO0

Idioma: en

welcome everybody
thanks for joining us on this fine
morning this is our first think of head
event for London Business School we have
a series of these coming up over the
next months and years and it's a great
pleasure to have you here this one we
are calling it breakthrough growth and
how to achieve it that's the topic
obviously a challenge in any environment
and certainly in today's business
environment probably an even bigger
challenge than before but we are hoping
to shed some light on this topic for you
so to join me today I'm part of the
panel but to join me today I'd like to
welcome to the stage my fellow panelists
first of all Helen Edwards who's an
adjunct associate professor of marketing
at London Business School then Chris
McCarthy director of strategy and growth
at Jonathan Johnson the huge consumer
product medical and pharmaceutical
company and Linda Yu who's Adjunct
professor of Economics at London
Business School
and I'm also delighted to introduce our
moderator James Hurley who is the
assistant business editor at the Times
newspaper who I'm going to hand over
two start proceedings James the floor is
yours thank you very much thank you
Julian and good morning everyone it's
lovely to see you all here in a
fantastic fantastic room as well as the
largest audience I've had for one of
these in in quite a while so fantastic
to see everybody so breakthrough growth
and how to achieve it we were just
saying when we were talking a moment ago
this that is a a very difficult thing to
achieve if it was easy to achieve I
guess we'd still love Liz truss as prime
minister wouldn't we but we hope to hope
to shed a little bit of light on on this
subject and perhaps what some of the
challenges are as well and why it's so
difficult for for companies to achieve
is is something that's interesting to
explore too before we dive into this I'm
going to ask all of the panel to
introduce themselves and maybe just set
the scene very briefly as well about I
guess what are their that they're most
interested in it talking to us about
this morning with regards to this topic
um so Linda why don't we start with you
much lovely to be here and came out just
Echo Julian James is welcome to all of
you it's nice to see everybody IRL
in real life I've learned something
opportunity pandemic
um so so my interest as an economist is
really in two areas so one I've written
uh two economic history books
um to learn examples from history of how
it is that companies and countries
achieve breakout growth so my uh by my
latest book actually came out a few days
ago the great crashes
um you know where there's a bus there's
a boom and the ones that do well coming
out of if you do well when there's a
downturn you do really well where
there's an upturn so that's one area
that I've been fascinated by in terms of
learning from history and the second
area is that I said on a number of 4100
boards and I also chair an investment
company that only invests in private
growth companies and so I've seen my
share of failures and remarkable
successes so be absolutely wonderful to
have a chat about some of that
Chris good morning everyone and my name
is Chris McCarthy I work at Johnson and
Johnson I've actually been in med tech
for 19 years I'm currently lead of
strategy and chief of staff for the emea
med tech business and today just
importantly I'm here in a personal
capacity to share my my perspective from
from industry and it's not the view of J
J but
um I start with the question when we
talk about breakthrough growth by first
being clear on actually what do we mean
and certainly in healthcare and in med
tech growth is all about treating more
patients it's about improving outcomes
whilst reducing the cost to serve that's
what we refer to as being the triple aim
and that's ultimately our North Star
and when you think about the world
around us today still 5 billion people
don't have access to health care
that's over 60 of the global population
and even in developed markets such as
the UK over 7 million patients are
waiting on waiting lists for surgery in
the UK
that's one in ten so the unmet need is
clear there's huge opportunity even as a
market leader really to change the
trajectory of healthcare globally
um
and in order to to overcome a challenge
as big as that clearly I don't believe
one player or party can can achieve that
on their own it does require the
activation of the full ecosystem and
when I when I talk about ecosystem I
mean payers providers policy makers
um industry uh to name only a few all
coming together and maybe what I can
talk to
um over the over the time this morning
is is what we at J J have have focused
on to to drive our part in Touching more
patients improving outcomes and
improving society today we touch 80
million patients
um and we went through a full potential
exercise to uh to actually look at
growth opportunities to reach more
patients and in fact ask the question
what would need to be true if we were to
double that over the next five years so
to move from 80 million patients being
treated to 160 million with our products
and we came up with a current state
future State and then defined our
building blocks and Concepts such as
shark tank for making choices Etc is
something that we can come back to maybe
yes and thanks very much because we'll
come back to some of those those topics
of how how you achieve growth that
Jonathan Johnson was super interested to
hear that I'm held on to you hi so I'm
Helen Edwards I'm an Adjunct professor
of marketing so I guess my point of view
comes very much from a people
perspective and I guess when I'm working
with companies and people talk about
breakthrough growth the question really
quickly comes well where is it where's
it going to come from and the default
answer is often technology and that's
usually followed up by a some reference
to Clayton Christensen and disruptive
technology and that and that disruption
where all the opportunities that are
going to Cascade from it let's be
disruptive and it tends to be seen as a
supply side phenomenon the key point
that I want to talk about today is
coming the other way and coming the
other way can be just as exciting and
just as disruptive and that's disruption
that comes from demand side so that's
where can consumers in their Millions
change habits and adopt new ways of
going about their lives and that can
Propel new markets new categories new
companies and fuel growth so if you
think about it a really recent example
of this is the explosive growth of
veganism you know it it was a tiny
minority who were vegans for decades and
then really since 2017 it's taken off
all of us many of us are vegan some of
the time it's worth 23 billion as a
category and food would drink and
growing and that's before you get to the
opportunities in health and beauty in
Furniture in clothing
um in my book I call this
consumer-driven disruption so that's
when markets get overhauled by a force
of collective consumer preference and
little waves that start with ripples
just fundamentally change markets and
importantly we can see these ripples now
in today's marginal Fringe behaviors and
I think there are reasons why we're
going to see more of them coming to the
four and fueling new growth for
companies and markets so it's an
exciting but it's a counter-intuitive
new route route to growth excellent
fascinating thank you Helen Julian yeah
so I'm a professor strategy and I study
a researcher consult
um the sort of the big picture changes
in the competitive landscape
and I think of it as this almost like
this this darwinian struggle among on
the one hand the the big tech companies
the fast growing doing Amazons and
apples and Googles you know those
companies they're in the news all the
time
and then what you might call the store
what's the big companies the Johnson and
Johnsons of this world who have kind of
been around forever and and the the
simple point I want to just get across
at the start is we spend all our time
talking about these big tech companies
and the way that they are rampaging over
the landscape and killing every
everything else else off in their wake
but we mustn't forget that in fact a lot
of these old stalwarts are doing very
very well I've been analyzing you know
which ones have survived and of course
the vast majority of them survive the
nokias and the kodaks are absolutely
exceptions that prove the general rule
so my research tends in fact because
it's less focused on to try to figure
out what it is that these big strong
water companies are doing to reinvent
themselves and to stay agile and to stay
relevant excellent thank you very much
so I think all of you mentioned at some
point disruptive technology and we will
get onto those stalwarts as you were
describing there Julia but why don't we
start off with uh disruptive technology
because I think it's what most of us
associate with breakthrough growth we
immediately think of Technology unicorns
don't we now Tech unicorns have been
getting a bit of a bad press of Lake
from culture to the whole way they're
financed and of course they're facing a
big challenge because the funding
environment has changed Linda can I
start with you on this topic since it's
something you you know lots about do you
think the era of sort of easy Venture
Capital financing being challenged and
maybe behind us a little bit will create
a paradigm shift in how great is
financed
wow that's uh that's an easy question at
quarter to nine in the morning
um so um so yes I um I chair Billy
Gifford's Fish Italian fund which is a
listed uh vehicle on the specialist fund
segment of the LSC we only invest in
late stage private companies that in
other circumstances would be public
given where they are in their growth
trajectory but because of how much money
in PE and VC there is these companies
are actually staying private longer so
an example of a company that we invest
in is SpaceX I always joke that when
they run out of when you do funding
rounds it's a b c d I always joke when
we get to zed do we just go back and do
funding round double A for SpaceX if
Elon Musk never wants to take it public
because there is such interest on in it
so um so actually in my book I write
about the tech crash and in November
2021 the the tech
components of the NASDAQ dropped I mean
we're talking 75 80 percent now that's a
crash in anyone's book and whether or
not that changes the the Paradigm the
landscape I um uh I would probably again
draw for my book and learn from history
which is the last time we had this kind
of massive build up in terms of euphoria
around Tech was during the.com bubble
where um you know oh there's so much to
say about the.com bubble but but a small
example is human nature is driven by
Euphoria and there was this belief that
e-commerce was going to take off
completely right but maybe just 20 years
ahead of time so yet all these companies
which were getting massive amounts of
funding to create beautiful websites
when we were still using dollar modems
do you remember dial-up modems remember
the Noise Okay and somebody would tell
you get off the phone I need to get on
the internet
and so what happened after the.com
bubble was that the NASDAQ then
collapsed it didn't actually recover
until the middle part of the 2010s took
well over a decade but then the boom
started again and by the time we got to
November 2021 valuations were before
then were so high that you started to
really question whether or not
um you know the values of these
companies we weren't talking about
unicorns we were talking about
tetrachorns you know so who everyone's a
billion yeah that's nothing that's
really worrying so it's not surprising
that the valuations have come down so
the one Trend I would say that has
changed
um is it is now becoming more normal to
have down rounds so up until this point
because of the way the structure the
incentive of startups is
you have Equity invested in the company
so you don't want to see the value of
the company come down so there's an
unwillingness to accept around so stripe
is a company we invest in they're very
publicly took funding out around that
value the company much lower than what
it was previously because that's the
return of the founders and all the
employees so to me that's the one change
that has happened if you can't begin to
normalize down rounds then you could
find private companies are more cyclical
and I would say there's still a lot of
Firepower in the vcmpe community but
people are much more wary about
valuation and I mean profit is a whole
other debate I mean but anyway so I
think the funding is absolutely key to
help these companies achieve
breakthrough growth that I have no doubt
because probably one of the reasons why
you see these massive companies in the
US and China is because the ecosystem
really funds their growth and one of the
challenges Europe has is we have some
companies but we don't actually have the
same scale and I suspect it's because
the banking system here dominates it's
about 80 20 to Capital markets in the US
it's the other way around Capital
markets are 80 percent of funding
banking is around 20 percent so I hope
that hopefully that gives you a flavor
of of um you know anyways when you learn
from history is Mark Twain is Right
history doesn't repeat itself but it
does Rhyme so hopefully we'll learn
something right
that's that's an excellent introduction
thank you Linda Julian to come up to you
on this top I just wanted to ask one
more question about unicorns Linda
mentioned there the word profit and this
is surprised me over the last 10 years
how the whole culture around financing
companies has changed to the extent
you'd meet young entrepreneurs and
they'd never mentioned the idea of
profit and you see so many companies
they don't even have a gross margin even
so all of the usual sort of business
fundamentals kind of went out of the
window now we're starting to see some
sobriety coming back into those
conversations do you think that we're
going to see a return to more sort of
normal business fundamentals when we
Finance growth yeah as soon as you hit a
down market like the one we're in now
for for Venture cap venture-back funds
as you say business reality is then kick
in the only way that you can sustain
crazy valuations when you're making no
money of course is through exponential
growth that growth has now been
curtailed and so we're seeing a very
appropriate sorting of these business
models and there was something like I
was looking at the numbers 1300 unicorns
last year that that number has now
dropped to about 1200 I think it should
be half that I mean the really probably
our only four or five hundred companies
worldwide who actually have the child
Prospect of really being successful so
what that's happening is they are now
being pushed to turn a profit if you if
you all remember the.com just one last
thought on that you know Amazon's
biggest breakthrough was in the year
2000 they they managed to make an
operating profit for one quarter and
this was Jeff Bezos proven to the world
that Amazon was not like all the other
dot-coms that they actually could make
money so he actually sort of starved it
of investment just for a little bit made
a little bit of a profit and operating
profit and then they could start
reinvesting again they didn't make any
money for the next five or ten years so
so that is that is the game you've got
to show that you've got an operating
profit model that works and then the
investment continues to flick Helen did
you want to come in here
thinking about the fact that you know
persuade people to pace for something
it's not difficult to get growth in
consumption if you're giving it away
that's easy it's then persuaded them to
pay for it and I think probably we just
don't focus enough and startups don't
focus enough on what am I doing to serve
people better I think they start with
their idea rather than what am I doing
to serve people better which they're
eventually going to pay for because
that's the root profit
so we've spoke a little about startups
we've spoken about unicorns what about
large established companies as Julian
was talking about at the start Chris how
does a company like Johnson Johnson look
for growth when it's a big established
company it's been around for a long time
can you just give us a little bit of a
flavor of how established companies look
for growth in the current environment
absolutely so I think there's really two
parts to that so firstly Innovation
Innovation is our oxygen and in in in
All Tech firms so there's a I think over
the 130 years of Johnson Johnson there's
a long history of investing in new
technology acquiring companies
um and there's probably many case
studies of Johnson Johnson integrating
those businesses into this decentralized
organization
um over the last 20 years that I've
worked there it's changed slightly and
it's become more Johnson and Johnson as
a whole but still
um using our own Venture fund using
Innovation labs uh funding startup
businesses supporting their growth to
have a first choice option on on
potentially acquiring a later date or
even just learning
um in in partnership with them through
that so that's that's a massive Focus
for J J
um and then even just actually in the
second part within our own control with
the resources we have today we have
amazing Solutions and I spoke at the
beginning about the significant unmet
need and for me it's always a case of
making choices about where we focus
where we double down so analyzing and
assessing the marketplace where are
patients waiting for us where is the
biggest disease burden and how can we
make a difference and and then as a
result with our same resource making
choices
um and and driving driving growth and
having impact in that way it's
interesting that you spoke about you
know where is the disease burden for
patients that leads me on to some of
Helen's research because we often think
of innovation as being sort of passed
down to us by sort of brilliant
entrepreneurs and tech companies I mean
probably an example everyone is familiar
with today would be chat gbt real new AI
was around but I was really surprised by
the quality and speed of adoption of
that but lots of innovation isn't like
is it a lot of it actually is is demand
led by consumers you've done lots of
research on this haven't you can you
just talk us through that a little bit
Yeah I I think a lot of
it are doing not even consumers yet but
what people are doing with their lives
and how they want to live their lives
you get early Clues as to where the
demand is going to come from and that's
what I've been looking at so when you
look at marginal or Fringe behaviors
call them early adopters if you like not
all of them will be early adopters
that's important to say that gives you a
clue as to where future demand is going
to come from so even if you look at
something like Med devices in there's a
whole group of people who are interested
in being the Quantified Self so that's
measuring daily Biometrics in order to
get to Better Health now if you take
something like that where there is an
answer from technology people are
interested in and then you get covered
that gives it a shaft because everyone's
suddenly aware of their own health much
more we're aware that health systems are
under pressure and you've got a kind of
colliding of factors that mean a
particular demand area will take off and
I think very often when you get this it
fumes multiple categories so when I
talked about veganism you know the
growth of veganism isn't just in food
it's in clothes it's in healthcare and
beauty and it's in Furniture so it fuels
multiple categories instead of just one
Linda you want to come in here yeah
there's so much it's absolutely
fascinating and it just triggered a lot
of
um observations around Innovation that
I've seen both uh in my uh in my books
in my research and also my own companies
so there's two there's always sort of
two uh two ways to think about
um you know Innovation the one that
probably you know what you were
describing is the one that we're most
familiar with is kind of like
um Steve Jobs saying that people don't
know what they want until I tell them or
Henry Ford saying if you ask people what
they want they'll tell you they want to
Foster horse yeah you know so however
Helen is Right a lot of the companies
that we deal with
um what's really interesting about the
current generation are startups is they
are actually very focused on consumers
on ESG and on disintermediation so they
do something existing better so the
other notion around Innovation is
everyone thinks Innovation is SpaceX
because you can get Broadband from
satellite it's oh I shouldn't say of
course it's Innovative we invest in
SpaceX that is absolutely part of it and
of course in the medical breakthrough
absolutely but there's a lot of inter
there's a lot of what's called micro
invention so the macro inventions take
you here and then it's the adaptation of
those inventions the incremental
improvements that actually drive
economy-wide productivity changes that's
a lesson we learned from the late 1990s
which was the only period in which
productivity growth in the U.S Rose
since then and before then and in the UK
and in all major economies including
countries like Japan South Korea Germany
productivity growth has actually been
slowing since the 1980s so this is a
solo Paradox which is you can see the
computer age everywhere except in the
productivity data so if everything is so
Innovative why is it we have such low
productivity growth and the answer is
actually around incremental micro
inventions adoption and companies that
get that right are the ones that I have
seen who work in areas which you
wouldn't consider to be a techno you
know high tech so for instance
um you know I probably should stop
naming companies nothing I say should be
relied upon for investment advice
it's going to come a bit late but you
know I have seen I wear Footwear luggage
companies I mean just traditional
Industries where you think really but
the Innovation is in the
disintermediation the cutting out the
middlemen the speed of delivery the
customization the tailoring to customers
doing it more sustainably that's all
micro invention so sure the shoe is
sustainable it's vegan but it's
everything else that achieves that
breakthrough I've always found that to
be absolutely fascinating just to finish
on another point that Helen has made it
is always about the people you know are
they do they have the right culture now
that's a whole other lecture probably
need to get Julia to observe them I mean
just one one final point on on the thing
that haven't started I mean we you
didn't use this word but sometimes we
have these so-called platform
Innovations on which additional
micro Innovations can be built and you
know the the iPhone The Genius of the
iPhone was not the touchscreen it was
that it was a phone on which
applications could be built and the App
Store obviously exploded as soon as the
iPhone and then the Android platform
will launch and and I mentioned that
because of course you know we we play
with chat GPT that is a product of open
Ai and and you know the clue is in the
name they have built open AI as a
platform on which artificial
intelligence will be accessible to
everybody so we are at the beginning of
this fascinating period where over the
next couple of years we're just going to
see hundreds if not thousands
of artificial intelligence products
built on that platform I wanted to bring
Chris in in a moment on culture as Linda
mentioned but just very quickly staying
with you julings I wanted to ask you
about something that Linda also
mentioned which was productivity this is
something that I find very confusing
because as Linda said we've got all
these wonderful technology tools that
have all made our lives in some ways
much easier certainly large parts of our
working lives I remember a colleague at
work talking about this a couple of
years ago and speculating that perhaps
the office of national statistics was
measuring this stuff wrong why have we
got such low productivity when all these
wonderful tools have made our life so
much easier
well I mean so there are many books
um and Conference devoted entirely to
that subject so some of it is about
measurement or we just don't know quite
how to measure it another of course is
that some people claim wait and see and
some people will literally say that that
technology investment has been made and
that we will see the upturn coming
through from it
I'm not completely sure that's right I
mean when I was looking at the
statistics recently you know UK of
course as Linda says you know we're in a
bit of a bit of a funk I mean our
productivity growth is Tiny the only
growth we get
interestingly in terms of productivity
is basically by working longer hours so
it turns out if you compare the UK to
France uh but UK can only get any sort
of any sort of uh growth by working
longer hours France actually has higher
productivity than us and what the
economists call Total Factor
productivity of academic term but
basically the sort of the stuff you
can't quite measure which comes through
innovation in better ways of working
that seems to have kind of got stuck and
nothing so my my personal answer to the
question is what should we be doing
differently and it does start to lead to
the people question is we've just got to
find ways of actually making more value
getting more value out of the human part
of the of the equation in other words to
work smarter not just work longer and
that is I'm not saying we've cracked it
but that for me is the is the root of
the solution Linda you wanted to just
follow up quickly just on the
measurement issue I was just going to
use an example to illustrate why we
think it's very hard to measure uh total
Factor product safety or economy wide
productivity
because we are predominantly a Services
economy increasingly increasingly so
because so software as a service SAS is
now a big rooming area API which is the
stuff inside the stuff that connects all
the stuff there's a more technical term
but everything is intangible we're in
the intangible economy how do you
measure the output of that so this is
how the ons does it so can you raise
your hand if you've been in a meeting
that's been absolutely boring and a
total waste of time
okay those of you who haven't raised
your hand come up and tell me what you
do for a living
but how many of you have been in a
meeting which has achieved a
breakthrough just really got a project
going you know really unblock something
and this moved everything forward raise
your hand please raise your hands
okay so in statistical terms that hour
of productivity output per hour is the
same
because the measurement of services is
input driven not output driven you can
make quality adjustments and there's all
sorts of reasons you should declining
prices Moore's Law computing power blah
blah blah blah but we don't yet measure
it properly it's not the whole answer
but I like to think we're not nearly as
unproductive as all the statistics say
especially vis-a-vis France
had a thought which is I think we're
also seeing a generation of consumers
and a generation of people who are
working who want a different sort of
productivity and a different sort of
growth in terms of life and that might
sound a bit idealistic but certainly
when I did my research and we did
research in the UK and the us what we
were seeing is as a drive for the way I
want to live my life and what I want to
consume often a primary or a secondary
driver for that was respect for the
planet respect for Humanity respect for
my time and and animals and I think that
will come more to the fore that people
will look for a different sort of growth
a different sort of way of work talking
and even productivity I think yes I want
to follow up on that actually in a
moment but I just wanted to talk a
little bit about sort of culture and
Leadership first because it's not just
it's no good just having the bright idea
or the right idea even is it I mean we
were just talking before we started
about a couple of classic examples of
companies that came up with fantastic
ideas for example famous famously Kodak
invented digital cameras but couldn't
capitalize on it there's another
interesting example of Xerox creating a
kind of like Windows style computer
interface and apparently Steve Jobs went
and visited and saw it and couldn't
believe they weren't exploiting it Chris
can you tell us a little bit about how
large companies can set about having the
right culture culture so they don't make
mistakes like that and if they do come
across the right idea they're they're
ready to exploit it
yeah absolutely so I think a couple of
things come to mind firstly I think when
you are working within a company where
there is there is continuous integration
of of new businesses through acquisition
you've always got an opportunity to
learn from organizations that for the
reasons why we why we acquired them are
doing something right and they're
growing
um and sometimes it reinforces and
rekindles actually what was core within
the the main business in the first place
so that's something I think
always chairs outward being customer
focused is it's it's obvious it's a
basic but it can sometimes be forgotten
in complex work environments
particularly Matrix organizations
um and I think anticipating future
future demands needs so one that comes
from being very close to your customer
um but
taking big bets I think sometimes you've
got to be prepared to not get everything
right in order to learn just through the
process so that's something that we're
very much invested in and I think that's
where part of the The Innovation arm of
J J uh scouring the global Enterprise to
see what what's happening and what's
working out there and what can we take
from it and integrate where possible and
harness you mentioned Shark Tank in your
introduction what's that how does that
work and Shark Tank is the American term
for Dragon's Den is it is isn't it is
there any is there any maybe maybe
similar so this is this is quite a fun
concept so I spoke around
choices that we make we've been on an
interesting Journey as an in mayor med
tech organization focused on Full
Potential so it's a case of making
choices where do we focus so it starts
with defining current states
understanding where are the fast growth
segments where are most patients waiting
for us where are our resources deployed
today and then co-creating a very bold
ambitious future State I think that's
critical and by having this audacious
goal of doubling the number of patients
you serve come back to the building
blocks and it was part of the building
blocks process of the choices that we
utilize the Shark Tank concept so
clearly there is huge opportunity across
the region for investment and to have an
impact to patients and so we pitch these
cases and these opportunities against
each other right in a vigorous
um you know it was it was fun but it was
competitive K sport for actually what
are we going to choose to do but
importantly what are we going to not do
and then we relentlessly reallocate
those resources we have a governance
structure around that which allows us to
check milestones and if they're achieved
then obviously the next round of funding
and Investments made to reach that that
patient Target and if it's not we go
back into the next round of of
opportunities so it's a I think a no
stone unturned approach to to reviewing
your business and trying to move away
from status quo
nice idea because I think
real and what they really mean is be
faster and cheaper I think I don't think
they really want their people to be more
entrepreneurial because they get shock
if they were but I think the notion of
the Shark Tank where you sort of Hive
off and get people to be more
entrepreneurial literally by pitching
their ideas is very powerful actually
because just shouting at people to be
more entrepreneurial just doesn't cut it
it's not fair either so I think it's a
brilliant idea actually I mean I hate to
sort of inject any sort of reality into
this conversation but I'm going to have
a go I mean the evidence is that these
shark tanks incubators new Venture
divisions
almost all of them fail
um and that's a bit of a downer
um and I said I'm not going to be quite
as rude as it so don't worry so the
evidence and I've I've been working in
this area for 20 years I mean these
units they're sometimes called disparity
Innovation theater you know we do all
this fun and games it looks beautiful we
we bring lots of people in and then the
actual track record of the businesses
created from these things is poor now
that's partly exactly what you'd expect
because most new Ventures fail anyway
whether they fail within corporates or
whether they fail in the if you'd like
in the startup environment but the other
reason they often fail is because you
don't give them long enough and what
happens is that the senior Executives
overseeing this they get a little bit
impatient and they expect to see some
profits immediately and they expect the
first idea that came out to be the one
that's going to be the big success what
are the first two or three are actually
failures and the one that was going to
be the tenth in line is the one that's a
success
so the there is no simple answer I'm not
saying we shouldn't do it I think it
does have absolutely ancillary benefits
but if you're going to do this my number
one advice is give it five or six years
for sure make sure you don't evaluate
progress until you've got at least 10 or
20 examples of what you do and that
long-term View at least gives it a shot
which in fact is going to bring me back
to say something very positive about
Johnson Johnson because for about 50
years they've had an eventual division
called jjdc Jonathan Johnson Development
Corporation probably the most successful
corporate venturing unit around I mean I
can think of a couple of others but it's
actually one of the most successful ones
and that's because they actually took a
long-term view on it it's quite
interesting all that stuff Julian
because we I've just noticed we kind of
go through sort of paradigms on this as
well don't we if you go back 10 years
you used to have a completely hived off
um where they were and to be fair I
think there were a couple of excesses I
think Xbox actually came out of that
kind of model as you say there are also
lots of failures and then a few years
ago we had the sort of uh investing in
startups as an incubator thing and not
much really seemed to come out of that
so we do see lots of Cycles on this
Linda you wanted to come in here didn't
you yeah I mean in terms of
um when you find startups or the
statistics in the US says it's no better
success is no better than a flip of a
coin 50 of all startups will fail and so
if you now transplant that into the
culture of an established company I will
say some of the established companies
have been impressively Innovative and I
think you know this is the John K
version of Anna Tolstoy right you know
and a Karenina sorry for toast toy which
is you know each happy family is the
same each unhappy family is unhappy in
his own way and John Kay's version is
each successful company is different in
its own way you know so therefore read
Julian's research so
um but I think the you know so what is
um from the work that I've looked at in
terms of economic history is it is um
you know and this does go back to Joseph
schumpeter so even in the term the last
century you had big dominant companies
so you had the U.S deals you had you
know these Mega companies and you had
tons and tons of starters at the same
time and what tends to happen is the
startups are the ones that stimulate the
competition and the big firms either buy
them lose out to them you know and these
days you see exactly the same pattern
you see the big dominant tech companies
um some you know met her buying
Instagram is an example buying WhatsApp
um and exit these days is actually more
often by acquisition than IPO in the
statistics and who are they being
acquired by it's actually the big
companies This Racist issue is around
competition around whether or not the
ecosystem is actually creating
oligopolies but my point is this is
again history this is exactly what
happened at the turn of the last century
the century of when America became the
big economic power and they did create
the system in which innovation in these
various ways did actually work I'll
finish with an example of Jeff Bezos the
guy who worked for Amazon who created
Amazon Prime so how many of you have
Amazon Prime
yeah okay so a lot of admit to it but
we've got it so the guy who invented
that was also the guy in charge of
Amazon Fire how many of you had that
oh sorry
and so he told me you know but Jeff
Bezos has this view when he interviews
people which is you know if you haven't
failed big you haven't tried to move the
dial and I said that is great that
really Fosters innovation in a big
company so when he failed on Amazon fire
even the demo didn't work when they
launched it
um he writes about it in in his book
um and I was talking to him about it and
I said but that's fantastic Bezos
created this culture where you know you
can actually fail in order to succeed
and then he joked yeah but imagine if
Amazon Prime had failed and so you know
so just you know so that is the
challenge at big companies and quarterly
reporting and all of those things and
that's why Kodak failed to capitalize on
digital photography because they're
reporting quarterly it would have
cannibalized their film sales they were
selling film and it's that ability to be
willing to that's hard when you've got
shareholders boards quarterly reporting
so maybe the suggestion is we ought to
have longer term reporting which is
another John K recommendation actually I
want to get on to this I'm really
interested in this you know how do we
measure growth and actually are we
looking for for the wrong things but
first Chris I just wanted to give you a
quick opportunity to whether you wanted
to come back on any of the challenges
Julian it set on how we go about finding
growth in big companies have you what
what have you found that works what are
the do's and don'ts I think we're we're
we definitely haven't cracked it so
we're on a journey we we engaged
McKinsey on this exercise
um and
I think it's it's all about trying to
create a culture as well where you are
trying to push the boundaries you're
trying to move the needle as we've said
and if you if you don't try you can
guarantee you're never gonna you're
never gonna get there so trying to
instill a culture where people can think
big unconstrained
um think like owners extreme ownership
end-to-end accountability that's all
Concepts that we're bringing into our
culture while focusing on Talent
developing general managers for future
Etc so whether whether it does work or
not I'll come back to you maybe uh this
time next year and share some successes
or not but
um but yeah I think if you don't try
then well you're guaranteed to be I mean
I guess look of course I agree with with
what with what you said and I actually
think having these shark type type
activities is a good thing to I mean
that's I I don't want to be
misinterpreted it is very very good for
the culture to have these opportunities
but you know the hard look at the data
says that that if you disconnect them
too much and make you you know two sort
of um autonomous and two kind of you
know an activity for its own sake then
the chances of it working as well
because most of the good ideas actually
can
can be found within I mean and they're
often quite close to the core and they
also need top management not just
blessing but literally top management
stewardship because you know they used
to talk about the incubator as you say
sometimes those incubators became
orphanages I mean they were the places
where you know ideas were left to sort
of to to be on their own uh we need
absolute top stewardship of the the
bottom-up ideas for that for these
things but isn't the long term of that
really hard because I think management
teams change faster than ever now and
then someone comes in with a new idea
and they want to be famous for something
else and then that gets junked and then
another initiative comes forward so I
think all of that is really not
conducive to these kind of long-term
pictures yeah I mean it is it is the
case that that the constant changing at
the top
um you know the the reason that you the
corporate venturing incubator gets
killed is because the new chief
executive comes in and he you know she
kills off the thing before so it's a
longer term thinking uh longer term
stewardship you know sometimes not
always is but sometimes these private
companies and these family-owned
companies who really care about the
longer term are actually the best
stories of the long-term growth this
whole discussion we've been having is
kind of predicated on the idea that that
growth is good and our economies are set
up we measure GDP growth we want
companies to grow we and that's all
based on consuming more and more of the
planet's finite resources we are
starting to see some people question
that aren't we Helen what do you think
where where do you think we're going
with with this are we going to have to
scrap GDP and come up with some kind of
some kind of new new measure well I
think that's
can say is that when I did my research
and we did a lot of research among just
regular mainstream consumers in the UK
and the US they were looking for growth
they were looking to consume in a way
that was more sustainable more
respectful to people more respectful to
animals now how that's done is for
business to solve but I don't think
people these especially with the coming
Generations that actually especially the
biggest generation we've got single
cohort of all time they are very aware
of how what they consume the impact that
it has and I think we can't ignore it
any longer and I think people they're
not going to consume something that's
worse because it's more sustainable but
they're looking for business to solve
that problem and I think consumers
looking to consume better actually
rather than consume more we have this
kind of movement I think it's called
degrowth or something like that where
people are challenging this idea that we
should be just going for GDP growth all
the time in economies do you expect this
to become a larger movement in economics
Linda
um
uh in the sense that I think people call
it all the different things and in my
book I call it the great reset so I
think people are not just interested in
the quantity of growth but the quality
of growth is it Greener is a fair does
it look after the most vulnerable in
society this is actually an old Concept
in economics economics didn't used to be
a it's a social science didn't even used
to be a social sciences to be philosophy
so if you think about Jeremy Bentham and
the idea of utilitarianism it was always
this notion that we should be maximizing
utility utility is never just pecuniary
it is always about the non-pecuniary
consuming Leisure for instance over work
and that's what the pandemic has
accelerated so I completely agree I
think looking forward
ESG you know some people are critical of
it they think it's just it's just a new
incarnation of CSR I'm not sure why it
always has to be an acronym myself like
why can't we just have more sustainable
businesses that do you know that
actually provide a better quality of
life
um you know for for all of us and
technology has its upsides and its
downside so it's not just solely about
technology it's about how we consume
um what our politicians the policies
they set especially around fairness and
you know and I think picking up on
Helen's points about consumers you know
consumers actually have a huge you know
we can't vote with our
um I was about to say pocketbook but
it's all on the iPhone these days you
know which says a lot by the way you
know you can vote for politicians that
um you know provide for fair Greener
Society you can buy from companies that
do things the right way
um to me all of that is
um you know uh that is I think one of
the best things to come out of a lot of
re-examination you know of the last few
years so these acronyms CSR ESG so
Julian how how real is this how do you
do you see companies actually genuinely
investing in this stuff and genuinely
want to be in environmentally if you
think that you mentioned iPhone there
Linda Apple you know usually the world's
biggest company by value an
environmental disaster probably uh you
know how is this is this we're all
window dressing so there is of course
some window dressing some some green
washing going on there are some
companies who are genuinely caring about
the planet Helen probably is a better
list of those than I have and then
there's a whole bunch in between who are
trying to reconcile
um you know doing the right thing as
well as making profits at the same time
and using clever mechanisms Innovative
techniques to create products that
actually square that Circle and of
course they can't all do that so it is I
mean it is the most important I would
say business challenge of the day
because you know capitalism is the world
in which we live growth is sort of you
know intrinsic to capitalism in the
mindset and yet excessive growth is
going to create all these negative
externalities it breeds additional
inequality in society all those ills
that we've got to get to grips with
companies can only do so much I mean I
do actually think this is a point where
governments have a very helpful role to
play in helping to set the set the terms
and and for example increase the
reporting requirements so that we are
more explicit about those negative
externalities we create so that
businesses pushed towards doing the
right thing Julian how do we get
corporates to be more courageous in
investing in growth so I mean some of
them are absolutely coming out with very
bold statements Chris can speak
specifically to J J in a second but you
know Paul won at Unilever became famous
for absolutely committing Unilever to go
down the sustainable development goal
path
um and he got rid of quarterly reporting
and went to annual annual reporting to
the markets
um and Unilever actually did quite well
as a result and that's just one famous
example there are many the many others
um I think that Chief executives are
under huge pressure from their investor
communities to make these statements
but and then of course there is a caveat
because some of you will know the French
company done on
um Emmanuel Farber was the chief
executive there uh and he lost his job
because after committing to all these
huge pledges around sustainable growth
um he missed I think three three
earnings uh in a row and he lost his job
as a result uh explicitly as a result of
that so so you know it is it's a bit
it's a challenge I mean that's that's
all I can say at the moment you've got
to absolutely commit to these ambitious
goals but you have to still find a way
of getting enough of the profitability
you know you've got to put the the money
back into ESG to ensure that those
long-term things are not hurt by a
short-term earnings Miss Chris did you
just want to follow up on that quick
question yeah I want to challenge the
idea that jnj is not not correct we
absolutely are we're publicly assisted
organization you can see the investor
relations Reports online and everyone
can can digest that I think when you
look at the size and scale of a company
like Johnson and Johnson inner med tech
we're a five billion dollar business
operating in in all countries serving 80
million patients a year
there are many many factors that
um that obviously contribute to to your
potential growth for the impact you can
have and I think when you're dealing
with high inflation Rising costs uh
burdens on Healthcare environment as we
know staff shortages Etc there's
internally clearly a desire to touch
more patients and sometimes that is then
undone in another vein in another Market
in a different platform so balancing
that across the board to deliver a
breakthrough growth across the whole is
is challenging but definitely we're
doing it there are there are significant
growth engines within Johnson and
Johnson within MMA Medtech
um maybe they don't make the same kind
of they don't get the same attention
because everything's then obviously
combined as as part of one business uh
performance but
um it's a great question I think we need
to be bolder as well and if you do it
with the right purpose and we're there
very clearly to to treat patients I
think
you can't question that ambition so so I
think part of it is probably a challenge
to sort of my world a little bit as well
because in business reporting we do tend
to focus quite a lot on as we've said
the big tech companies but also Venture
Capital gets huge amount of attention
but we probably don't do enough on the
corporate venturing side and the kind of
Investments That companies like yours
make so maybe we need to do a better
better job of that as well how do we how
do we combine shareholders short-term
interests with the longer term needs of
delivering growth Linda let's start with
you in the local 10. great can I just
say I find it really reassuring Chris
how you're focused on the patient and
treatment since I'm the chair of a list
of company I meet a lot with
shareholders and the contrast between
now and say even five six years ago is
Stark five six years ago I remember I
was in a sharing a taxi going to
um you know festival and the person next
to me was very ethically minded and he
said you know I only want to invest my
pension into ethically sustainable funds
I can't find except for maybe one or two
and I'm willing to take a hit and I was
like wow you know we've got to do better
and that's how a paradigm shift happens
so the shareholders I was talking to
then that was not top of their mind but
over the course of history economic
consensus is break down and then they
get reformed so we didn't have a welfare
state in the latter part of the 19th
century it was the breakdown in
consensus that it was not good enough
for people to starve on the streets that
caused the shift and I'd like to think
we're in a period in which we're
creating a new consensus so the
shareholder meetings that this is ajm
season by the way because um listed
companies tend to have a calendar year
end and so last few weeks is how you
would know it's all agms lots of pay
revolts as well yeah exactly and so I
met a lot of shareholders and the focus
that they have is actually on ESG and
the questions that they have is you know
are you the company that I chair
investing in companies which are acting
in aligned with environmental social
concerns as well as having good
governance now I'm not saying that
that's wholly consistent because there
will be some who are you know
complaining that maybe some of the
Holdings which are completely
sustainably orientated businesses and
like Julian said the Returns on it are
lengthy it's not going to be quarterly
remember we are listed company and so I
have actually had shareholders tell me
who themselves are a big investment
companies that the institutional holders
they're telling their own private
clients you have got to have a longer
term perspective you do not invest in
this sector you should not invest in
this kind of investment company that
invests in private companies unless you
have a long-term time Horizon because it
is not the kind of you know return that
you this is not the kind of investment
proposition for for you it's high risk
it's a liquid lots of companies will
fail but we are investing in companies a
lot of whom their key trait their USP is
their sustainability is there ethical
behavior and that's actually what's
causing them to disintermediate
established markets so I see the
conversation changing for the good and
then linking Matthew the third question
um so CEOs are under a huge amount of
pressure to
um you know to do quarterly reporting I
know a few CEOs who resist that pressure
because they have good relationships
with their shareholders and they just
you know say yes sure all the
competitors in my field do quarterly but
I do send me
and I'm like wow but my shareholders are
supportive because they understand that
we are going for a longer perspective
and you know and I know CEO tenure can
be quite short but I also know quite a
few who have hung in there for quite a
long time
and it might be linked to you know maybe
that they do have this long-term
perspective in shareholders but maybe
Helen has more on that yeah Helen what
are your thoughts on this do you think
longer term reporting can help with a a
more sustainable outlook for example
yeah I think it could it potentially
could because I think if you come back
again and go look in the end you need
people to want whatever it is you're
going to produce and what people want is
a better kind of business and especially
younger Generations I was so struck by
it in my research so they want a better
kind of growth now if that takes
companies taking a longer term
perspective then that's that will happen
because that's the only way they're
going to get the consumers I think in
the end and maybe they'll take I mean
bigger bets on on areas of behavior
instead of single Tech Technologies so
you know if you take an area of behavior
in health which is that we want to know
more about our own health now that's
convenient for Healthcare Systems too
but there are multiple ways companies
like J J could serve that but it becomes
an umbrella sort of area of growth
that's responding to a patient demand as
opposed to we've created this pill or
we've got this technology
I just wanted to thank you all for a
fascinating discussion I've really
enjoyed it so thank you so much and
thank you to all of you for listening so
patiently as well
[Applause]

---

### think ahead: Issues and uncertainties in the global economy
URL: https://www.youtube.com/watch?v=-zRQqSboaXk

Idioma: en

hello everyone thank you so much I hope
you had a good uh break I hope you're
enjoying reunion weekend so far uh I am
Ramsey Sergeant for those of you who
don't know me yet I am the I'm an emba
Global 2005. but I am also the
um executive director of alumni
engagement at London Business School so
it is a pleasure to welcome you all back
here this weekend it is a particular
pleasure
two
welcome you to the Fantastic session we
have next which
uh is part of our think ahead Series so
this panel is featured as one of our new
think ahead events and it's a podcast
series which offers evidence-based
discussions and insights to help you
navigate Big Business issues
with the global economy under multiple
interconnected pressures from war and
climate change to inflation and Supply
change disruption understanding the
impact and outlook for business is
difficult this panel will explore the
challenges and opportunities of the
global economic landscape for business
in a wide-ranging discussion covering
issues including deglobalization
monetary policy inflation cryptocurrency
decentralized Finance artificial
intelligence and supply chain our
faculty will help you navigate
complexity
I'm pleased to say that our moderators
will be Isha Nelson business and
economics reporter at the New York Times
then we have we changed the order here
Nico Sava professor of management
science and operations and chair of the
management science and operations
faculty
Jeremy Galia Professor management
science and operations
professor of economics and Richard
portes professor professor of Economics
academic director aqr Asset Management
Institute
over to you thank you and welcome
everyone I first would like to say thank
you for leading the beautiful weather
outside and coming in to join us I
promise we will absolutely make it worth
your while so as the title of this
lesson says we're talking about issues
and uncertainties in the global economy
we only have about an hour this
afternoon and there are way way too many
to get through in that small amount of
time so we're just going to pick a
select few to talk about and discuss and
hopefully also take away some of the
opportunities that are part of um
dealing with some of these challenges
anyway we don't want to depress you all
too much on a Friday afternoon so I'm
going to ask each of my student
panelists here to just introduce the
topic that they're going to be talking
about a little bit more in the Q a
session afterwards so the question I'm
going to ask you to begin by introducing
the topic you'll be talking about today
is one of the major issues facing the
global economy thank you very much and
good afternoon everybody so I will talk
about inflation and monetary policy
uh do you know that you know inflation
is back at least for the moment and
central banks are pursuing the sharpest
tightening that we have seen since the
Second World War
and I think it's important to appreciate
this fact that the tightening we hadn't
seen anything like that in many many
years
so the question is are they doing too
much or are they doing too little or
better for you know since we are talking
about uncertainty this afternoon what
are the risk of doing too much or the
risk to do too little
so I think to answer that questions I
just want to have few initial
observations the first of all is we
should ask ourselves what kind of shocks
why all of a sudden we have seen
inflation and there is a debate out
there demand Supply fiscal policy
whatever so my view is that if we talk
especially about Europe This is mostly a
supply-driven shock and I'm talking here
about energy and Supply chains and this
means when we talk about energy that
since Europeans citizens are not
producers of energy or net importers of
energy that shock has made all of us
poorer this is not the case for the us
because they are not exporters however
for both the URL Zone and Europe in
general and the us we are seeing a very
lots of change in relative prices and
changes in relative prices creates a
dynamic of inflation which is very
difficult to understand
so that you know first the energy goes
up and then manufacturing prices go up
because their direct uses of energy and
then Services because their user of
manufacturing products and so on and so
forth so that's a chain we create a
persistence which central banks a very
hard time to understand
now the other characteristic of this
inflation is that inflation expectations
have been stable and this is very
different from the inflation of the 70s
that only Richard and I were there when
that happened okay so but we remember
that
so um so with that background then we
can ask okay where are we now after you
know more than a year of of tightening
and my view is that we have tightened
enough and I think it would be dangerous
to tighten more my calculation on how
much you know above I mean how much
tightening there is is you know 110
basis point for the us more than neutral
situation and about 50 basis points for
the Eurozone above neutral situations
having said that I think that a
discussion about inflation should also
take a more long-term View and on the
long term there are maybe factors that
will drive inflation on average to be
you know higher than in the past and
these have to do with the need of public
and private investment that we will see
in the next decades as a consequence of
the many the economy is facing
especially climate change thank you so
much great
um Richard can I ask you to introduce
your topic yes crypto the
good news is that crypto is not a threat
to the financial system I've spent the
past year and a half chairing a task
force European task force that just
produced a report addressing precisely
this question
crypto International stability and I can
say with some confidence that right now
crypto is not a threat to financial
stability
the bad news is multiple there is no
obvious to me there's no obvious use
case for crypto first second if you
wanted to use think about month crypto
is money forget it it's not money it
doesn't perform couldn't perform the
same functions as money being a unit of
account store of value medium of
exchange very efficiently
and the so-called stable coins are
simply so-called stable coins some of
you will know that tether for example
one of the best known broke its Peg last
year once and has just broken its Peg
recently past four days
Heather is not as dramatically below one
as it was a year ago for a while but uh
you know it's it's been four days now
that it's been distinctly below its Bank
um and uh there are other stable coins
so-called stable coins that aren't that
have shown they're not stable either uh
oh but this is great it's decentralized
you don't need to trust anybody right
trust the code excuse me
typically crypto transactions have to go
through exchanges of one sort or another
and even to convert crypto into Fiat
money through banks well look at what
happened to the two banks that
specialized in crypto they went down
okay signature and silvergate and as for
the exchanges well there's FTX yes
um coinbase is now being sued by the
United States binance is now being sued
by the United States
um uh I don't think I want to deal with
them anyway
um and then
um the question comes uh what is it is
that we can do about this what should
the Regulators do to deal with those
with those issues with the bad news and
the answer there is very different in
different jurisdictions Europe now has
entering into Force this year a very
detailed markets and crypto assets right
set of regulations okay but for Consumer
and investor action the U.S has no such
thing that is not likely to have any
such thing for quite some time so that
leaves the SEC free to do what the SEC
wants to do which is effectively kill
off crypto and they're doing a fairly
good job of it so that's the two
different two places UK is somewhere in
the middle but
Rishi sunak said so he was thrilled that
Andresen Horowitz is going to set up
their big crypto office European crypto
office here in London isn't that
wonderful I don't think it's wonderful
but we we can talk about that
France we didn't let we in the UK didn't
let binance register here because people
can see there's there are problems with
that outfit France welcomed them with
open arms they're now not quite so sure
that that was a great thing to do
um so Singapore initially was very
friendly and then in September of last
year decided they didn't want to be
friendly after all Hong Kong on the
other hand is proving to be super
friendly right now or trying to be super
friendly so you have very different
approaches across the globe to crypto I
know which side I'm on wonderful you
know don't trust the humans trust the
code because they think this brings us
nicely to you excellent because the
topic I've chosen to talk about it's all
about coding and generative AI
so so you're surprised
so who's using who has ever used chat
GTP or being
most of you who's using it every day
okay a few of you okay good good good
did you know that such a TP the
technology behind it existed for at
least five years I've been using it in
my classroom so that'll be asked for at
least two years and nobody cared and now
you all do
so so what has changed I think I I mean
there were two innovations so the first
was that these models became a lot
larger in the last uh year or so and uh
so the by becoming a lot larger they
developed capabilities that surprised
many industry observers certainly me and
I think also were honest with their
developers so so size seems to matter in
this case and size enables this uh sort
of uh codes to become more sophisticated
to generate output which is text or
images or video these days that are
that's close to the quality of that
produced by humans the second thing that
happened also is that about nine months
ago was that openai created this wrapper
around uh charge GTP uh sort of which
made it sort of available to anybody
with an internet browser and very nice
the rest of us could join me basically
the rest of us without needing to code
without needing to use any complex
interface you could use it so so I mean
you know and you know why is this
important because uh the ability to to
create uh sort of a knowledge oh sorry a
text that's that's at human level
quality uh is is having the potential to
automate uh uh tasks that are typical
difficult to to codify tasks that are
related to creativity tasks are related
to a knowledge based work that I'm
guessing most of us are engaged with so
and this is where exactly the tasks that
were very difficult to to automate in
the past
so so this is sort of you know a a new
era we're living in where it's possible
to now start automating knowledge-based
work so so because this is a panel about
evidence I wanted to spend a few minutes
talking about what the evidence uh tells
us about how good these models are in
automating knowledge based work so there
was uh sort of you know there are four
studies that I think passed there sort
of you know the scientific threshold
have been considered a word to mention
in this panel the first one looked at
um at the knowledge based workers these
are mid-level professionals and their
ability to to write a memos and emails
and what the study found is that
compared to those that didn't have
access to judge GTP those that did were
able to do the work 37 faster and they
were rated this thing they were a little
bit better than those that didn't have
access to to charge UTP now can you
imagine when was it the last time that
knowledge based work had a 37
productivity in boost never
so another study looked at the pro
computer coders and those that had
access to judgeatp were able to complete
coding tasks faster and they said they
were more satisfied with their work
because they spent less time getting
stuck on problems and more time on the
creative part of coding a study looked
at how our charge of the people is
giving advice to patients and compared
it to the advice that doctors were
giving to patients and a panel of
experts preferred the advice of judging
to people the advice of human doctors 79
of the time
and
patients found the advice given by child
GTP as more empathetic
so so you know you know where in trouble
if computers are faster uh slightly
better quality and more empathetic than
us
um
so so and let me just finish with one
observation that that some of the
studies also looked at good benefits
from the use of charge GTP which workers
benefit the most and and by and large
the findings are that the least
experienced workers the workers that
perform kind of you know less well
compared to sort of you know the average
or the most experienced workers there
are those that perform their performance
increases the most by using charge GTP
so in a sense you can think of touch it
appears the great equalizer in terms of
our performance and all of this are
going to have sort of tremendous
implications and I'm not sure what all
of these implications are but I'm sure
for one thing that uh they're going to
increase uncertainty which is the theme
of the Pando thank you so much Jeremy
can I ask you just to briefly introduce
your topic as well the first question
I'm asking myself is why am I here
um and um and so you you know I I sort
of been teaching Supply Chain management
for for a long time now this is this is
my field where I do research
um and so why am I here um
I'll do it like Richard bad news it's
probably not a um a streak of bad luck
so
kovid
brexit
Ukraine you know if you're here in the
UK some disruptions
um you know it's not uh and there's
reasons why it's not why I'm here it's
not a streak of bat of bad luck uh sort
of climate change for weather
disruptions
um epidemics more people living in the
world those people travel more
communicate more and so on
um geopolitics of course but you also
have
globalization there's a general Trend
increasing ever and uh Market demands
the more we all want
customized products we want them cheaper
there's more competition there's we want
our larger selection of these products
and what does that mean in terms of the
supply chains that are required in order
to satisfy this Market they're broader
more widespread more disseminated and
more exposed to this trend of more and
more disruptions in the supply chain
okay so that's that's why it's uh you
know I'll have my sit here in this high
flying panel
um that's the bad news some of the bad
news I'm I'm sparing some of it in the
in this period of uh keep keeping the
looking forward to the weekend
good news though
the good news is that there's a lot of
there's lots of opportunities relative
to what forums are doing there's been a
lot of work
thinking through
what's best practice how should
companies organizations respond to these
increasing threats okay and there's and
there's a very well known they're not
easy to do but they're well identified
type of ideas and Concepts and tools
that can be applied
I'd say the I'd say the first one is
sort of pretty well established is to
sort of move from firefighting and
becoming a good crisis manager to to
sort of looking at it as a strategy much
more in advance and really looking at
assessment prevention mitigation and
sort of action that companies can do in
these areas
um so that that's the first one the
second one is the realization that you
know risk management for many of us in
companies it means these risk registers
okay ERM risk registers about most of
you uh you know I've been involved in
those so you basically identify risk and
think of risk as events okay a Cyber
attack a fire an earthquake a tornado
and so on uh and so for each of these
event was the probability what's the
impact and what should we plan to do in
case that hits
um and and that's useful in particular
for contingency planning for the high
probability high high impact events
um but the but sort of the emerging
Paradigm that's sort of been proven to
be much better is to not focus on all of
these events I mean who forecasted that
the uh that the ball was going to block
the Suez Canal
who forecasted that there was going to
be an Icelandic volcano Bringing Down
the European airspace and so on and so
forth so the opportunities to think
instead of Supply chains as
um assets
facilities products suppliers
Transportation links and for each of
these assets not think of the specific
event that could disrupt them
but think of what would be the
consequences and the actions that would
be dictated by this particular asset
being taken out okay so that's the first
idea the second idea is using data the
raw kind of data which is why those
topics are obviously related
and and the right kind of data here is
the data that allows
many people in organizations to make the
right decision it's very systemic
resilience is dictated by what product
you make how you make them where you
have your suppliers where you put your
facilities how you deal with your
contract suppliers whether you do dual
Supply and all of these decisions are
made but pretty much everywhere in
organization so you need the data that
allows them to make these right
decisions taking into account risk and
there's at least concepts are there for
doing this Revenue at risk profit at
risk it's almost like a company that has
to build up a bit of an insurance
capability so good news these tools are
you know appropriate for this other
opportunity to be good at resilience
sort of mapping out disruptions is first
uh it's been this number of anecdotes
there's studied by hand grits and
signals saying it does have a lasting
impact on performance companies are good
at doing this responding planning to
disrup options have a sustainable
long-lasting advantage on the market and
then the and then the other good news if
you wish is that you gain strategic
advantage and if you become good at
doing this you also become good at doing
other things like knowing supply chain
transparency who are your suppliers your
supplier suppliers what data do you have
about them and it's also Alliance
synergistic with sustainability okay the
the kind of relationship tools mapping
data you need well if you start having
to worry about your supplier supplier
supplier extended responsibility in the
supply chain for example it's the same
kind of data that you need to make the
decisions about making your supply chain
resilient in the first place if you're
good at resilience there's lots of
synergies with sustainability as well as
well of course running your operation in
a more transparent way for your
customers to to see okay okay
um they're all very naughty and
so now we're going to whiz through a
bunch of questions in much more detail
there's amazing ways to kind of set us
off um the question I'm going to come
back to you and your question
information to me
it feels like we're in a bit of a new
phase with the inflation I'm gonna say
issue problem question where inflation
has come down quite far from its peak in
the US for certain in Eurozone
unfortunately a little bit less here in
the UK
um and a lot of policymakers imply to me
that you know that was the easy bit a
lot of that was based especially in
Europe on what's going on with the
energy markets and that's in a better
state so now the difficult bit is
getting actually to this two percent
medium-term Target in all these places
I'm wondering you said there that you
felt actually that Center Banks had
tightened enough do you do you feel that
actually this is maybe you know being a
little bit dramatic okay maybe it's not
the difficult part how do you assess
this next bit they have to do and why
and just a little bit more detail on why
exactly think they they could be they
could be done yes my view is that that
because this is a uh is a is the shock
which comes with a lot of changes in
relative pricing reason that has
originated from energy and disruption of
Supply chains is absolutely to be
expected that when energy goes down
headline inflation goes down very
rapidly and in fact it has gone down
more rapidly than at the beginning of
the 80s when we had a similar type of
shock and this is you know the you know
our memory
but it is also to be expected that
the underlying inflation of what is
called core inflation which is mostly uh
you know service mostly service
would go down you know would has picked
up later but we go down much more slowly
so in my calculation okay so
evidence-based when we look at the past
for both the US and the Eurozone the
delay from the first shock until inflict
core inflation goes back to the initial
conditions is about 60 months so we are
within the norm I must say that my view
is not the mainstream viewer so
I may be wrong okay so but this is uh
I've just written a report in which I've
been trying to argue at this point well
no it's an interesting one I think part
of the challenge we face is that Central
Bankers have become a little bit more
nervous about their forecasts you know
they've had they kind of apologize for
the fact that they underestimated
inflation so even with the analysis
you've done they might not be so willing
to sit on their hands and wait and as we
go into the summer I think it's going to
be interesting you know we saw the ECB
raising rates yesterday saying they were
going to do more the day before the east
the FED pausing and next week probably
the bank of England going ahead how do
companies react to this uncertainty this
summer where it's going to be less clear
what each yeah I think that you know
what you said is right I think that uh I
mean what people have picked up is that
there is a little bit of confusion and
uncertainty from the side of central
bankers
it is to be understood because the
situation is totally you know new to a
certain extent and that uh so monetary
policy has become more an exercise of
risk management like uh Jeremy was
saying uh so it is really about
balancing this risk but the the thing
that I find it incredibly surprising is
that if you look at the expectations of
companies and the professional
forecasters they are quite stable around
the two percent Target if you look at
the median term which is two to three
years and so in a way that credibility
has not been lost which one you know
maybe it will be lost you know because
you know the the the communication is
not ideal I mean both Lagarde and Powell
gave an impression of not exactly
knowing what was going to happen next
the data driven this is the message that
they keep on giving but after
expectation has are quite now if
expectations are anchor that means that
there is sort of a little bit of a
luxury to go a bit slower remember that
monetary policy as with a lamp of about
two years so we are only now seeing the
effect of the tithing that has been
already implemented especially in the
trading markets where you know the
numbers for a credit conditions loan
demands have deteriorated quite fast
both in Europe and in the US hopefully
so how should companies respond to this
period of higher interest rates that
will probably last a while this land
effect where we're only actually
starting to experience the tighter
policy financing conditions what is what
are those implications when it comes to
investment comes to other decisions that
our audience should be thinking about
well you know when Paul Walker who is
the hero former president of the or the
Federal Reserve and is a hero because he
tamed that inflation of the early 80s
when he was asked how did you manage to
pay him inflation he said well I created
few banking prices and you know this is
probably what we're going to see so we
are going to see that you know some
weakness in the financial Market of
course the mortgage Market is the first
to be hit in the UK there will be you
know a lot of mortgage you know holders
that will have to roll roll over uh you
know their loans and uh and so this is
these people are going to be hit okay so
this is typically you know the first
people who will be hit eventually this
will have an effect in consumption now
consumption has been very weak in the
Eurozone not so much in the UK so this
is a difference
um but you know the numbers are have
been surprising uh you know on the
upside so far but now you see
increasingly some weakness uh
independent you know in the in the
creative Market especially okay so
that's what what you see basically some
not so much in the labor market this has
been also the big puzzle that the
central Bankers have been confronted to
because normally Central Bankers thinks
well the there is first unemployment and
then uh you know when you start tithing
you you the first effect is on on the
labor market but partly because of the
big changes in behavior in the labor
market postcovid we have seen that
unemployment has been quite low and so
the main channel of inflation has not
really been the labor market and and
just make sure and your point that after
the pandemic and it was so hard to hire
people again companies have become much
more resistant to letting people off now
that's right all over again and then
there have been in the US and not so
much in the Eurozone the the great
resignation so a lot of people have
decided to stay home or to go part-time
so now this is gradually changing but
you know post Kobe that was something
that I think which is I can't help but
pull you in to talk about banking crises
and we'll blame the criticia who bought
them up but you know are we out of the
woods yet when we spoke a couple of
months ago we were sitting on table just
as Credit Suisse was being brought by
UBS Silicon Valley Bank had collapsed it
felt like we were right in the middle of
a banking crisis I've decided to become
quite relaxed about it but maybe I
shouldn't be no I don't think the
banking crisis is over at all
not in the United States at least
Europe's different story European banks
are pretty well capitalized
and
are not as
stuffed with
low interest rate low yielding assets as
the American banks are and that's the
real problem uh the problem here I might
disagree slightly with the crates here
uh the problem there is not a mortgage
Market problem at all uh not yet anyway
the problem is that the banks in the
period are very low rates took on a lot
of very low yielding assets uh whether
they be long-term Securities or
long-term loans at
low rates okay then rates go up and
guess what uh where what happens to your
net interest margin what happens to your
deposits your depositors are getting
virtually nothing on their deposits but
all of a sudden now they've got an
alternative they can go to a money
market fund that's going to pay three
four five percent say
um and so what do you do in the bank
you've got to raise your the positive
rates on deposits in order to stop the
outflow and that is a road to ruin uh
long term not immediate but what happens
is effectively
that the reposit franchise gets eroded
and the banks
um and we're talking particularly about
the mid-range mid-sized Banks uh in the
US that I think are many of which are
becoming zombies great something to look
forward to then but
how much should we in Europe be worried
about fillovers from that because it
can't quite you know there's an antique
ocean but I don't think that's always
enough not a lot no I don't think as I
say I don't think it's a big threat to
the European banking system we had the
Credit Suisse uh story but that was
really an exception very very bad
regulation
um and uh and they you know the sequence
of mistakes that go over a whole you
know a long period that
um LED this bank to to effectively to
failure but it wasn't a matter of the
changing interest rate environment that
bank was effectively insolvent by the
Autumn of last year they lost one third
of their entire deposit base in three
months the last quarter of 2022. you
can't live very long that way okay I'm
going to move us on to a pretty
wide-ranging conversation about tax
really in a value to Global to the
global economy annually as it automates
up to half of all work between 2013
2016. now others are saying that AI
could destroy Humanity
each one is more likely both okay
uh I mean so there's the implications of
Charity to to the economy the short-term
implications if you like and I think
there McKinsey study you know it's it's
a spot on so so a lot of the work is
going to be automated and initially is
going to be sort of you know more
repetitive sort of you know more menial
tasks but increasingly is going to be
more creative tasks and whenever you
sort of you know have large productivity
gains I mean two things happens first
you need fewer people to complete the
same amount of work but also the cost of
the work goes down and therefore work
that was an economical to do before it
becomes sort of you know profitable to
do so the work expands and and typically
in previous sort of you know about the
sort of shocks the ladder effect
dominated so so uh within C uh uh huge
drops in employment after sort of you
know previous shocks like the internet
for example uh uh but but that's not to
say that we shouldn't worry about this
because there might be issues with
inequality issues with more of their
ends going towards Capital rather than
workers and we need to be prepared and
we need to sort of uh not repeat the
same mistakes that we have in the past
so that's on the economic side now I I
mean modern existential side there's two
types of words the first word is that
sort of you know Bad actors might use
this technology for
uh sort of you know certain purposes
that are not desirable for example the
cost of writing fake stories that are
customized to the interest of specific
groups have come down dramatically so
perhaps it will be easier to show the
video uh create campaigns or with fake
news to try to manipulate democracy
elections and so forth uh but you're
more seriously perhaps uh uh you know
the studies that suggest that you can
use strategp to get information as to
how to create a pathogen that can create
a pandemic and with detailed
instructions as to how to do this and
where to order the material and what
companies to order them from that are
less likely to scrutinize your orders
which is kind of scary yeah instead and
um so so we need to again start thinking
about how do we regulate this how do we
make it more difficult for people to
misuse this technology and then there's
a third sort of you know category which
is even more existential if you like
which is sort of look this stuff comes
from the fact that technology has
improved immensely in the last year
so so exponential Improvement so if it
continues it's a big gift there's very
good reasons to believe that it might
not but if it continues then we might
find ourselves with having sort of
artificial intelligence that's uh sort
of so much better than human
intelligence that can continue improving
uh on itself by itself and then people
talk about the end of sort of you know
human domination in the planet and we're
gonna have this alien technology that we
have to to sort of you know compete with
or at least content with uh and that's
something to worry about yeah great
um well we will ponder that yeah this
week was an interesting week though in
terms of AI regulation the EU uh part
the European Parliament classes draft
law
um which some people said is kind of
maybe going to set the standard or at
least is something that other countries
can look to I'm kind of curious if you
could just talk us through a little bit
about where some different locations
stand at the moment in terms of regular
nation in terms of like you know how you
tackle both getting the economic
advantages out while also we know that
they're looking at how do we make
um you know things like charity between
more transparent how do we could tell
the use of facial recognition software
so that you know and how do we decide
when and we we shouldn't shouldn't use
it and all these really complicated
ethical privacy questions you know where
what's the landscape at the moment I
mean you're right it's it's it's a
complicated question and then at the
heart of it the fundamental Trader for
regulation is what it usually so so from
100 you want to protect consumers from
sort of uh
from from Bad humans using the
technology so the identifiers manner or
even you know from from alien technology
but but you know on the other hand you
don't want to stifle Innovation okay so
you want to to get the benefits but you
want to at the same time minimize the
heart so so the the regulation is really
trying to identify where the harms might
be coming from and uh sort of at least
in the short term and try to sort of
mitigate some of uh uh so the uh the the
Europe uh is on the Forefront of
Regulation it has been with gdpr uh uh
whether this has been effective or not
you know we can debate that in some
Dimensions it has been more effective
than others uh uh but other
jurisdictions like uh the the UK view
this is an opportunity to sort of you
know allow uh our companies to develop
faster with less regulatory oversight uh
hoping that this will generate sort of
you know an advantage in the in the long
run uh but you know I am a little
worried that the UK is a little too too
relaxed about hey I uh but you know at
the same time
I mean the current technology the amount
of Regulation we need to do on the
current technology I think is it is
relatively light it's not as dangerous
as people think it is uh and it's not a
foregone conclusion that we're going to
have sort of you know General AI that's
going to be so much better than humans
in the in the in the very near future so
so right now I think the right approach
is to sort of monitor where the harms
are coming from be prepared to act if it
seems like sort of we're seeing a damage
being generated but this is so new so I
think it would be premature to start
regulating with very specific Frameworks
at this stage what about you know
companies now that you know they aren't
AI companies but they want to take
advantage of what's out there it's not
just about
where do you start where do you begin
what kind of opportunities are there
that people can access today and not
necessarily have to keep waiting for
kind of more more advances so there's
actually a lot of opportunities to
integrate so generally Navy general
General sort of you know existing
workflows there are some problems to be
overcome so I know that a lot of banks
for example the financial institutions
in the UK have banned the use of
generative AI within their systems and
the fear there is uh sort of data
security so if you have employees
putting in customers information and
asking sort of judgment to write an
email to the customer I mean that's data
that's information that's living the
company systems and going sort of you
know out uh shared in the internet so so
the first challenge is to create sort of
systems that exist within the firewalls
of of a company so so to safeguard
information and this is happening but we
are maybe six months away from this sort
of you being rolled out and the second
uh so this is the infrastructure so you
need to get the info structure right and
the second thing you need to start thing
is the interest sort of examining sort
of processes and the engineering
processes so that sort of uh parts that
can be uh uh that can benefit from a
productivity booster from charge GTP can
sort of you know benefit from it and
then the third thing is to sort of you
know put safeguards and guard rails
because this technology is not perfect
it's sort of you know immature and you
want to sort of catch the the instances
where the technology is kind of failing
to have the desirable link so I think
these three parts okay yeah absolutely
let's uh move on to crypto which is
always a joyful roller coaster to be on
um you know you've already told us about
some of the failures
to some of the use cases now you know
what are the ways in which crypto
decentralized Finance can be used
present tense not future tense
I don't think there is a use case I
think there's a demonstrated use case at
four
um the
transactions with these instruments are
costly they're not so fast
I can transfer money across across
borders actually now
through my own bank very quickly I don't
need I don't need to use crypto and go
through go through the blockchain and
spend actually
a substantial fee in doing so uh so you
know if you can if anybody can show me
all entitled to come up with one and
some of you that must own crypto they
should have asked at the beginning oh we
can ask now show of hands yeah
come on if that if nobody yeah come on
you are a statistical completely outlier
yeah I just I don't believe I just took
a group of students to uh to Frankfort
and Paris uh and
um at one point spoke to an alumni group
the alumni club in Paris
and they wanted to talk about crypto and
I asked them you know about
according to a third I would say of that
group
our own crypto
nothing there's nothing wrong with it
you know if you want to gamble it
that's why it's gambling
and gambling perfectly respectable
um I have nothing against gambling but
um but that's what it is so if somebody
can give me a convincing use case
that that doesn't involve money
laundering doesn't involve regulatory
Arbitrage
then
um it doesn't involve thought of any
sort
then okay I'm ready to listen but I
haven't seen it
okay what about I'm just curious about
then the things that you described as
being fairly is you know the exchanges
that have collapsed is they
are they like real death blows to this
industry or am I in a couple years time
are we going to be having a similar
conversation it's an interesting piece
in that kind an interesting piece in the
Ft today
by their crypto correspondent who just
came back from a a crypto conference in
Amsterdam and said the mood was very
downbeat right and that's partly because
uh because of not just of FTX
right but the problems with the number
of those yeah you you've got these
outfits that are crypto asset service
providers we will cast
uh and they co-mingle functions that you
would not allow a traditional financial
institution an issue an institution in
the in the standard Financial system to
do right
to
hold
deposits on for depositors not just all
deposits to lend to act as an exchange
the London Stock Exchange doing lending
excuse me right this is not such a good
idea and that's what you have in the
crypto space so I think that
that those institutions which turn out I
mean as I say this is supposed to be
decentralized Finance and yet a lot of
it is going through these uh these
exchanges which have turned out to be in
some cases just purely fraudulent and
it's not just FTX Gemini there's this
whole story I keep on getting mixed up
in between Gemini and Genesis one of the
other a lot of money
and it and it hasn't got it okay and so
that means that depositors are out as it
stands right now about a billion dollars
worth of whatever it is that that was
worth
okay this is not good and that's where
we are right but if there's you know as
you said at the start there no threat to
financial stability is the issue here
that it's not entirely contained right
that there are all these depositors out
there without access to me that the
industry doesn't completely go away is
that why we talk about it so much well
there's a case there is a case for inter
consumer and investor protection that's
what the European Union has decided to
do one of my good friends and colleagues
um and who served on the task force that
I was heading
um very distinguished professor of
Finance uh says Let It Burn Right don't
regulate it don't legitimize it by
regulating it okay
um you just let it implode it'll implode
people get hurt on the way uh that's for
sure but you know Paul Pete stuff
happens you know and if it's gambling
yeah
some you win a few and lose a few and
then I think that is really the
difference right now between Europe
uh which is taking this
detailed regulatory approach the UK
hasn't really decided where we we're
there is a there's some conflict there
those of you who
um are familiar with UK financial
markets and so with in this case there's
a clear conflict between the bank of
England and their views on these issues
and the treasury or the or the ministers
okay I wouldn't speak for the civil
servants of the treasury but uh but
ministers are as I said including the
prime minister
we want to be a center for financial
Innovation so we want you know you want
to be very friendly to crypto the bank
of England said no you know we are sort
of familiar with some of these problems
and we study these problems here this is
not necessarily such a great idea
and I think that's where we're at
they might just run down the clock to
the next election you know
let me ask um Jeremy if we can talk
about Supply chains a little bit here
because so I cover Central Banking uh
mostly and Supply chains became you know
all they talked about for a while there
during the pandemic but it was mostly
this idea of supply chain bottlenecks
that these are kind of short-term ish
issues
um that very much tied to the pandemic
and that now they're easing they say
with their fingers crossed and inflation
will improve Etc but I feel like you're
speaking of something bigger something
that's absolutely not you know
transitory more that Supply chains have
been disrupted
um for larger issues I'm wondering if
this is this geopolitical or is this
extreme weather conflict all these
things just take us back a little step
in terms of like what those
disruptions
are that you think are the most serious
um that are you know that won't ease
that can't just be you can't just wait
them out
so yeah recently we've had we've had
some disruptions that we would led to
hope would be sort of transient bad luck
but when you step back um there's been a
lot of the disruptions are hitting
companies so weather related uh so
there's fires floods hurricanes a lot of
those things are known to be linked to
climate change and so they're not uh you
know and it's been sort of measured
there's more and more uh and they also
have more and more damaging impact this
is even even sort of covid obviously
it's very unprecedented in the history
the extent of it uh to which it
disrupted everything
um but but the the
underlying reasons that are creating
pandemic
um are relying driven by how many people
are on the planet and how many much
exchange there is between them and that
is a steady increase as well
um so so the extent to which sort of
small localized epidemics before can can
really spread out is um you know is
really increasing as well so so that's
on the
know that's and then the uh there's a
back and forth and it's not clear it's a
choice how you design a supply chain do
you buy your things local or Halfway
Around the Globe to the cheapest total
landed cars lots of Transport lots of
intermediaries a lot of Arbitrage and
labor costs and transportation costs and
so on
um but there is you know that it's going
to take a while before the World is Flat
with respect to these differentials and
costs and the uh the economy benefits
the financial benefits associated with
cutting Purchase cost cutting total and
cost or enormous because you're just
sort of going right to the bottom line
when when you caught purchasing
um so you've got this these are really
strong powerful incentives to expose
supply chain through the design
decisions that are made to this
increasing trend of disruption so yeah
no it's it's uh it's a fun story for the
bad news but that bit is definitely bad
news it's not uh just because it's not
just brexit it's been really going on
for um for a long time and and of course
what we experience of it is the the
exact disruptions happening in a given
year at that scale yeah we can be lucky
we can be unlucky companies can be lucky
or unlucky but if you're sort of looking
on a 5 10 15 years Horizon it's very
clear it's not it's not going away you
mentioned extreme weather obviously
linked to to climate change I was just
thinking about
teens are going to have to change
because of the climate change whether
it's location or where you are in your
the rest of your supply chain whether
that's trying to reduce emissions in
line with transition plans that more and
more companies are being asked to
produce however that's to take advantage
of policy like the US inflation
production act and just you know I've
you mention all of these other things
that are going to last for a reading on
time and then you pile on all this other
stuff
um if I'm in charge of a company supply
chain I'm sitting there going this is
absolutely loads to take on and to
consider and so and some of these things
feel like they're in Conflict to each
other so I mean how do you how do you
think through some of these challenges
and kind of come up with a resilient
process
yeah so that that's why I think it is an
opportunity
and it's also an opportunity that is
linked to being more sustainable
and that's when at the end of this you
really think
uh deeply about it what is the
difference between being more resilient
and being more sustainable you know you
just use resilience in sort of in in
context of resisting to support your
instructions whereas being more
sustainable it's more in the context of
social environmental sustainability but
in both cases
um you affect
resilience sustainability by all of
these really large numbers of decisions
that companies make sort of Designing
the product what material you put it in
who you buy it from where are the
facilities that make them how do you
transport them around uh how and
and there's a lot of um and there's a
lot of these trade-offs that companies
are doing both in the case of
sustainability is in the case of
resilience because yeah if I look at the
price I'm getting now uh by buying from
the cheapest vendor
Halfway Around the World in China and
then buying it six months before
shipping it through a container cheap
one having intermediaries stocking it
and so on the total and the cost is
going to be is going to be look what's
the what's the problem with that is that
and in many cases these decisions are
made so really looking at efficiency
driven TLC driven decisions uh and you
don't care about maybe uh putting a more
expensive material which is not made in
a region where there's hurricane or a
region where there's sort of other kind
of issues and the opportunity is just
like when you're assessing the trade-off
between okay what's my missions what's
my future impact on sustainability those
things need to be uh Financial measured
and that's the opportunity to install
the metrics that are going to allow
these decentralized all of these
decentralized decision makers product
manager purchasers facility to to inform
these decisions and and make the right
trade-offs so that's what I'm hearing is
that there's just absolutely no easy
answer to this because you know it can't
just be you move everything closer or
you go for prize it just seems like
there's it's a much more complicated
process than it maybe ever has been
that's right that's right it's it yeah
absolutely science and the AI to do it
better until it takes over that's right
there are huge amounts of challenges out
there how do we deal with higher
interest rates for longer what is the
energy transition going to mean to
volatility and long-term inflation how
do we ensure that all these gains in
financial stability aren't undone by the
other part you know the non-banking
sectors of the economy and how do we
actually take advantage of all these
questions around Supply chains and use
them well so that we don't all go into
the supermarket and go or where is it
not even where do we get it from but why
can't I find the thing
um we're actually looking for so while
that was
um I guess up and down emotionally I
would say
I do thank you all for joining us this
afternoon and really appreciate it and
thank you very much to our amazing
panelists
thank you

---

### think ahead: The business implications of AI
URL: https://www.youtube.com/watch?v=K1Qq11HeONo

Idioma: en

ladies and gentlemen welcome welcome to
you here and to the over 6,000 people
who have registered online for uh this
evening with us thinking about uh the
business of implications of AI in the
think ahead series I'm Michael Jacobus
I'm uh the sedon Gordon professor of
Entrepreneurship and Innovation and
professor of strategy I study industry
Evolution value migration digital
platforms and ecosystems and like
getting my hands dirty on the practice
side as a lead adviser of evolution
limited uh Boutique advisory uh helping
companies navigate disruptive context
but uh also in policy uh as the chief
digital economy adviser in the helenic
competition Commission Now speaking of
AI two years ago with uh colleagues from
BCG and the Hanson Institute where I
serve as an academic adviser published a
study on AI where we looked at the
evolutionary dynamics of artificial
intelligence and we spoke of the DraStic
potential changes and the possibility
that AI had to create new winners and
losers now this feels like ions ago
because of course when it comes to AI 2
years is ions ago one thing that has
changed one thing that has transformed
the landscape in that regard is that
we're not speaking about a eye in its
traditional guise in terms of big data
and analytics but we're speaking about G
ative AI that has made all the
difference I.E the possibility of not
only seeking patents through
computational statistics uh but being
able to sift through text document
images as we've recently seen in order
to be able to provide answers that are
correct given the context and this is a
discontinous change it's not only a
discontinuous change in terms of what
the technology can do it is also
discontinuous in terms of the speed with
which this technology has been able to
improve and it is a quick a real Tech
Revolution which unfolds remarkably
quickly yesterday uh speaking with uh
one of our theme panelists aadada who's
the head of uh product development in
open AI um uh he was excited as open AI
started speaking in images digesting
images and I hope I'm not um traying any
confidence saying that a nine digigit
number of users use it during the first
day and that as a statistic is
unprecedented the takeup and the use of
these Technologies does stand out in
terms of anything that we have seen in
terms of historical patterns research on
productivity has started emerging and
the estimates that we have seen is
anywhere from 25 to 80% improvements in
terms of productivity and let me note
that the productivity Boost from steam
engine was around 25% so we are speaking
about things that are transformative and
AI is becoming better being able to
train itself with synthetic data without
the worries that we were concerned about
only a few months ago now it's clear
that AI matters and I suspect that a
number of you are using it if you're not
using it do use it it's actually uh
really fun the question though is not
only how we use it as an individuals the
question is not even what's going to
happen in terms of the specific jobs
there's a lot of discussion about
whether AI will eat our jobs and even
more discussion whether Humanity will
cease to exist because we're going to
have some uh weapons that are going to
be created by those using it we'll leave
it to the UK government and it's
Bletchley uh Park meeting to help
assuage some of these links what we will
be focusing on are the business
implications of AI
thinking about how AI is going to affect
businesses and how it's going to affect
competitiveness now if you think about
what people look at unsurprisingly the
first thing that they look at is the way
in which the use of this new technology
can improve their productivity in a
panel last week the CEO of turn 10 said
well what I will do in 18 months is
probably need to employ 20% of the
engineers that I'm employing today and I
will not need to have them be college
graduates they're going to come stri
straight out of um the school so this is
perhaps the easy bit and it may even be
the misleading bit and it's the easy bit
because it is the pure substitution of
Labor with capital and this will create
inevitably some tensions the really
interesting bit comes when you start
thinking about augmentation I.E rather
than saying that I'm going to be doing
exactly the same things how you will be
able to combine the processes that you
have with this technology in order to
add value into to the world now in
trying to map it we're clearly entering
Uncharted Territory but we're not
without any signposts we can draw on
what we have learned from previous such
technological disruptions and we can see
what research on AI has already found
and what history tells us about massive
technology changes now let me give you a
few factoids that will hopefully inform
the conversation and help us think about
what the impact of AI is going to be
what do we know about the previous
version of AI well what at least we
found when we looked at it considering
how AI was being integrated is that AI
does lead to new winners and new losers
the first thing that it does is it
increases the inequality in terms of the
profit distribution it does help
companies that are more technology uh
friendly um and it also works for
particular organizations and that's
where our big Tech discussion comes in
because AI especially now if you think
about AI of the
generative sort works for what is
modular I.E what are specific tasks that
can be isolated in the previous
generations of AI you can think about
the patent recognition it was great
because there was a lot of discussion
whether AI can work better than uh
Radiologists and detecting tumor or
identifying metal fatigue right now we
have ai that does terrific synthesizing
and by the way rather than patent
recognition it does the basic creative
stuff something we never expected years
ago because it excels in recombinations
which are at the very core of creativity
including what it is uh that we teach so
when we seek concrete answers when we
have modular structures we do see the
possibility of these massive
productivity gains on the other hand
what we also know is that all of these
Technologies and we know that from all
of the studies in terms of the previous
version of Information Technology fail
to deliver the long-term implications
that they have when they need to be
embedded why well because Technologies
require a concommittant
organizational change you have the
possibility of doing stuff with the
technology but the organization is not
just the infrastructure it's not just
the stuff organization are the processes
the people the way that they are managed
and that means that we need to rethink
how we put all of these together that is
why for a number of years people were
frustrated with information technology
we even saw that in the earlier areas of
AI what we will then see is that
organizations will need to change and
adapt their practices but this is where
things start becoming a little subtler
in the world of AI what else could be
happening well the first thing is that
we see that there are a few
organizations including the big Tech
mind you that have got a much more AI
friendly background they've got an
operating system that allows them to
integrate these processes and they are
structured in ways that allow them to
benefit we also see that there is the
possibility of a new generation of
entrepreneurial firms that will come and
will be able to leverage AI in order to
push and challenge existing
organization we know that AI is a little
bit strange though it's not like other
Technologies what does AI do the first
thing that we have realized from the
studies that are seeing the light of day
is that AI
disproportionately helps the worst
performance now that's an unusual
technology it may change but so far the
Delta is bigger for the uh for the ones
that are the least performing they are
the ones that could leverage this type
of help and we also know that there is a
risk that has already started being
documented of people being asleep at the
wheel because they trust AI rather than
using their own exercise another
interesting challenge that organizations
will need to look at what that means for
the way that we organize and also for
the organizations that are going to
succeed is one of the things that
remains to be seen the other thing that
we see is that AI is becoming
increasingly effective at Mass creative
stuff at synthesizing information at
contextualizing information and at
providing answers it isn't yet great or
perhaps we think that it isn't yet great
in giving very precise answers when the
stakes are high let me remind you that
already the previous iterations of AI we
did not want to use because if a doctor
makes a mistake in a diagnosis well a
doctor made a mistake and diagnosis
people will die if a system made a
mistake and diagnosis we are much more
sensitive and as a society less willing
to allow the decision to be driven
without the human in the loop so we do
have issues of where exactly we see the
human in the loop and when the stakes
are high if we're going to behaving
differently when when we have creative
tasks so that too and I suspect that CLA
who has worked for decades in the
application of Technology including AI
in the healthc care sector um will be
able to shed some light into that
finally AI today operates as a massive
demo it's been free or nearly free and
we don't quite know in which way will it
be monetized we have some early moves
Microsoft bundled with open AI open AI
continues providing its services but
Microsoft also integrated in its own
this morning AWS not to be left behind
as big Tech is absolutely Keen to ensure
that it keeps its dominance made an
equivalently sized commitment slightly
small
with anthropic an offshoot of AI
developed by the way out of people who
were dissatisfied with the fact that
Microsoft created this link there's a
bit of irony there uh that I'm sure is
not going to be entirely lost in members
of the AI Community how exactly will
that pan out the question of how the
ecosystems that will be able to allow
companies to take AI is going to be
quite important and in that guard may I
say that this raises issues of dominance
I think that one uh of the authors of
the competition and Market authorities
recent very interesting and thorough
initial go at looking at the large
Foundation uh model is here and I think
that it's a great place to look at the
initial concerns in terms of competition
they are also concerns in terms of
strategy so we know that they're going
to be issues like we saw in the previous
version of AI were the hyperscalers by
the way a different name for big
technology firms who could see where
value existed and change the foot in
order to ensure that they maintain their
dominance and as such cement their
position are going to be very active
what else will happen with us well
that's where we move from the what in
terms of uh gen AI to the so what so let
me think about the so what and the first
part of the so what for the people
interested in what that means is that I
think that AI will challenge entire
sectors and business models so in a
moment we'll hear from Beano who's the
CEO spring studio in a sector who which
as you guys also said uh will go into
the polls in a moment maybe threatened
Lock Stock and Barrel but this is not
the only sector I'm also the coordinator
of lbs's AI task force I am we are at
least in the task force deeply
both interested and concerned in terms
of what AI will do for us first of all
we need to ensure that the system is
robust people can have their essays
entirely written by uh open AI both to
enter and as they are here in the school
so lots of the old ways of assessing
homework or trying to see whether people
are intelligent on the basis of how they
F in some criteria become irrelevant
when you are able to use AI to create
these outputs that in a time honored way
have not changed in a very very long
time second how do you integrate this
technology we're starting to think about
flipped classrooms about roleplaying
with AI taking different roles and
students or Executives participating and
engaging because people who will be in a
top business school will have a eye at
the fingertips and what we need to work
on is thinking about how this technology
can be combined with the skills and then
work on the skills that we need to
produce the same challenges that exist
at the level of a top business school
such as ours are challenges that exist
in a number of organizations the only
open question is whether they will
accept it or not and whether they are
ready to see them now let me take a
breather here because I'd like to see
what you told us by looking at the polls
that we had uh through Linkedin um in
terms of of the key questions that we
asked so let me uh feed them also to our
panel um which of the following IND you
think are going to be the most
significantly transformed Healthcare is
top clear to note um media and
advertisement uh almost ties with
education we're both toast bee uh and
finance we don't have a finance uh
representative here I think the
transformation of Finance is very real
will happen a slightly different way um
it's interesting that I think that the
large majority of you think that AI will
be transformative and I think that um uh
we probably agree with that and that you
expect that AI will transform the entire
business model by a very strong majority
in addition to employee productivity and
I think that all of the above are
correct it will affect employee
productivity customer experience
competitive Dynamics and the entire uh
business model and it's interesting to
see that we've got a very split audience
in terms of how confident you are uh for
how you going to be able to manage this
now over and above the high level impact
which is of course massively important
AI will also Drive New winners and
losers at the level of the organization
we do have to take these existential
questions seriously we have to think
about how we will integrate it for our
own companies now if you are sitting
there and you are part of a firm that
has had some history thinking I'm now
toast I'm gone well the good news is
you're not um if you look at the data
despite the rhetoric on this massive
disruption that we have been hearing
over the last 20 years the resilience in
all the major indices in the stock
market has been greater not smaller for
traditional firms let alone extremely
small movement from the big Tech firms
that of course spend a lot of
advertising dollars to tell you that
it's a very competitive market it
absolutely isn't which is uh issue for
competition authorities but it is also
interesting that the traditional firms
have been able to adjust how did they do
that well they did it because what we
are seeing is that the Innovation
patterns are changing so that the
traditional established incumbents are
able to acquire combine build ecosystems
together with smaller firms and be able
to integrate lots of Innovations so
there is more hope if you look at what
the record is and there is an
interesting pattern in this version of
AI that Ana perhaps uh would be able to
confirm which is that some of the
earliest adopters are some of the
companies that perhaps you would have
thought are the old economy flat-footed
firms that are knocking on open ai's
door saying what can we do in order to
adjust so there is a change agenda and
the change agenda is possible but it's
also a bit of a tug-of warar of a set of
new more digitally able companies as
they try to both compete and collaborate
with the existing um
firms now enough of me and enough of the
overall uh views what I'd like to do now
is to turn to our panel because we've
got the luxury of having um a terrific
uh panel uh with us so let me start by
order of um appearance first we've got
um uh Arad Dar um with whom I've had the
pleasure of collaborating with the last
few months who is the product lead of
open AI that needs no introduction and
just graduated from arone program while
writing uh the software that is uh
transforming our society I guess
somewhere between breakfast and the
assignments uh that uh that he had um of
course he's also the co-founder of
zindler and he's got other um um uh
engagements in addition to that um that
uh uh turn his engineering uh training
from MIT into products
next in terms of the order of of
appearance speaking about organizations
that uh may be challenged another
collaborator and former student in our
executive programs is Beano who's a
global CEO of spring Studios after
having worked in um wpp as a CEO of Wan
Thompson uh who is uh also has a PHD in
marketing and has a new book on that
with Philip Cotler then I'm sure that he
would love everyone to buy uh and last
but not least um we have CLA mortimore
who is um business transformation
service leader for UK and Ireland for
IBM and she's a senior partner in
healthcare and public sector and she's
helped transform the NHS during the coid
pandemic and has seen firsthand both the
promise but also the challenges of using
Technologies including AI that she uh is
responsible uh for with here as well so
ARA let me start with you um as uh one
of the people responsible for building
this new technology and seeing what
applications it had what are the aspects
of these uh Technologies of these
products that you create that you are
most excited about and what do you think
they will do in terms of transforming
how organizations are
structured um all of
it I have two questions I wanted to ask
though is does everyone have Chad
gbt okay fantastic all right and is
anyone directly working in the AI
World sort of all right awesome great
it's good to know the crowd you know
yeah um let's see so you know like I
have to go back to the days how openi
started um it's a very much a research
it's a we're a research company
primarily full of like phds doing
research in computer science and machine
learning and like the the focus really
is pushing the boundaries of of really
like scientific knowledge that that will
help us uh hopefully one day Asher in
the like a safe AGI and potentially safe
ASI um and that is that remains our goal
um Chad gbt was really an experiment
that we wanted to do and and see like I
I I will never forget November 2022 we
launched the product and you know we
didn't really think anything was going
to come out of it it kind of took off
and then we had to quickly hire a lot of
people to keep the company going and to
keep producing like good products um and
it's been absolutely phenomenal um what
has been phenomenal was you know this
shift of just kind of introducing a new
way of getting computers to do stuff for
you before you needed to know
programming languages we went through
the whole journey of going from you know
Machine level languages to very very
easy languages human understandable
languages like python but now you have
just literally any language to talk to a
computer and get the computer to do
stuff for you even write code for you
and that is transformative that brings
in power of compute to every ordinary
individual in the world um and it's a
great balancer and and that's what we
are most excited about um Sam went on a
world tour and he had a fascinating
learning that he shared with us and the
learning was the more developed
countries he went to he saw like a a
tendency not to change or get involved
into anything new and the more
developing countries he went to there
was a lot more interest in trying to
understand how can this give us the edge
up how can this be the balancer and how
can this help me narrow my genie improve
my HDI what can I do and the parallel is
really the you know the if you look at
the like the like Asia kind of skipped
flip
phones and I think that's the same thing
that we're going to do like AI is going
to become the great balancer and and
that is what I'm most excited about
terrific now uh let me go to bee because
I'd like to look at applications so Bea
I remember we were speaking um uh
sometime the summer and you were showing
me an advertising campaign by um a
company that uh uh is in the
entertainment business uh with people
having fun and a very nice aesthetic
product and you said well look at all
this uh which these great actors in this
great location none of them is real and
AI is wonderful because it reduces
friction and I guess the challenge is it
reduces friction but aren't you friction
so why is it uh if uh you
can stop using uh people for the shoots
uh and organizing this entire
complicated production process why don't
people just do that easily with the
tools that ARA gives them and what will
give a license to uh the creative
industry to continue monetizing itself
well I guess that's exactly the point
right you you you've said before that uh
in education and media advertising we
have uh this this issue or opportunity
and we need to figure out what to do
with AI I guess that uh as long as it's
about figuring out what to do with AI
it's still okay the problem is the
moment we start thinking what to do or
what AI does without us that that's the
the most the more interesting question
having said that the more I think about
it the more I call this book that I I
read some time ago and uh talking about
the future of business the book was like
the the factory of the future will have
two employees a dog and a human the
human will switch on the machine in the
morning and the dog will be there to
make sure that the human doesn't do
anything else now I I don't think this
is the future but when it comes to my
industry uh being the CEO of a company
uh global company in the marketing uh
communication sector of course I'm very
conscious and I'm also very interested
in understanding what's the future
because you know if you we simplify the
the business model of uh of advertising
uh it's about content production or
ideas if you want and delivery or
distribution of the content
technology data processing artificial
intelligence machine learning had an
impact in the last few years on the
distribution of the content the delivery
of the content and it was great
everybody was very happy uh the Holy
Grail in marketing is to deliver the
right message to the right person at the
right time so it was just
great however ideation was still
something that only humans could do and
that was the distribution
now generative AI is having an impact on
the other side on the production of the
content on the ideation which is exactly
uh what the two of us were discussing a
few days ago and so yes yes there is a
huge opportunity because until a few
months ago weeks ago uh to produce that
specific campaign would have had you
know plenty of conversations with the
client reaching out to a model agency
selecting some people sharing the
shortlisted people or actors with the
client and then we had to go back to the
model agency verify their availability
fly people from all over the world book
hotels and restaurants and and a
location and then oh my God it's raining
so we need a backup location we need
another day uh we need to to change all
the flights and so on and so forth and
today we've done the same
campaign without everything else you
know it's just uh artificially generated
images and uh it's great yes it is
however we need to rethink our entire
business model so it is absolutely true
that it's having a huge impact um for
now what we are seeing is it still needs
humans
to
oversee it's still okay not sure for how
long maybe ARA you will tell me and
please call me the day before you
release the feature one week one week
second uh he lacks emotional
intelligence for
now which is quite important when it
comes to face-to-face uh uh you know
interactions for example in a retail
space um or when it comes to deciding
whether or not you can use a chatbot so
as we all know a chatbot is perfectly
fine if you want to know uh whether or
not the store is open or uh uh you know
if you want to book an appointment but
if you have uh a problem with your
dishwasher and you want to reach out to
the store because you've just bought the
thing and it's broken
the last thing you want is interacting
with the chat you want someone with
picking up the phone empathizing with
you and providing you with a solution in
30 seconds that's exactly what we want
so we still need humans for now last but
not least what we're seeing is it
lacks bird
eye uh it's a bit silid in the way it
works and so for example going back to
my example if you have a campaign online
that is not performing one specific ad
that is not
performing you know the the the machine
I don't know what to called the software
would just decide that since it's not
performing it it has to be shut down
right
however having a more like a broader
view you might end up understanding that
it's not about that specific ad maybe
there is another major factor that
that's impacting the entire internet or
that entire uh category or that entire
business and that's the only reason why
this is happening so again lacking the
the broader perspective is currently an
area in which we believe humans still
make the difference having said
that I believe that the competitive
advantage and the source of value
creation for companies like the one that
I run and and in general for any
business will lay in the ability to find
the right balance between what we want
humans to do and what we want to
delegate to artificial intelligence
robots and and softwares and machines
and of course this balance will
continuously be redefined so it's all
about trying to understand what to do
and then reassess every six months
hopefully hopefully every six months the
last thing I want to say and is
something that I've learned working with
of course my team but also with some of
our clients
the Temptation is to say let's do
something because there is a first mover
advantage to catch however this of
course expose companies to a huge risk
of deploying money like you know let's
buy land in the metaverse six months ago
and then or let's buy nfts and then you
realize that that money was just wasted
and so somebody might be tempted to say
let's try to catch the second mover
Advantage well what I've learned is that
yes you can do it but trying to catch
the second mover Advantage doesn't mean
that you can just wait and see it means
that you need to start experimenting
learning exploring alternative sources
of revenues and trying to understand how
your company and your sector might
evolve in the near future so that when
the time comes for you to try to catch
the second mover Advantage you are ready
as a business as an organization as a
company and as a culture within that
organization terrific CLA let me just
turn to some of the topics that bee is
uh considering which is the difficulty
of organizations to integrate echnology
um the promise of it generally and AI in
particular has been extremely elusive in
the world of healthcare um and um we
have had long uh for hopes that things
would be transformed and some successes
and some not what can we learn from what
we have seen so far and what do you
think are the key impediments to
realizing these benefits on the basis of
your experience so so I think it's a
fascinating statement that you know
technology hasn't had the impact in
healthcare actually if you look at the
NHS as you know is take the very British
example of healthcare R the NHS 75 years
old this year is fundamentally different
than the NHS was when it started and a
lot of that transformation actually is
driven by technology in some form so
actually the healthcare as an industry
is is in a fundamentally different place
and there are lots of pockets of
brilliant adoption of Technology the
challenge with Healthcare is that it's
in those pockets and what we saw during
the pandemic was a real acceleration of
the opportunity for people to take on
that technology within a space where we
needed a solution now and the rules the
rules were not off but the rules were
different and so the excuses went away
if I could solve a problem in a space
and make a difference to the thing that
was at the Forefront of everybody's
Minds right now people were started to
try and so in a post-pandemic world
we've got a really interesting position
in health where you've got these kind of
we've sort of proved you can do it but
now you have to shift not just the
system right so there's there's all of
the reasons the NHS and every
organization within it is a big
organization right and and moving any
big organization with lots of people in
it is very difficult it is also
fundamentally not there to think and
worry about technology it's there to
provide care so the the the focus is
very different within health and the
people who you're working with are not
fundamentally driven by what's the new
wizzy Gadget and what can I do that's
you know that might be what people play
with on the weekends it might be what
they're learning so that they can keep
up with their kids but they don't come
to work to play with technology as you
do in quite a lot of Industries now so
they they're motivated in a different
way um but there's also actually the
kind of public acceptability so you said
in at the beginning right if a machine
makes a decision that causes harm that's
just in our in our minds the public
perception of that is somehow different
than if an individual makes that
decision so the level of public
scrutiny um is is much much greater
another reason why it's hard but also
the other thing is actually healthare
touches all of us and Healthcare has to
provide in some form right equal access
to service for everyone and so a lot of
what you see technology and AI driving
is it's part of a digital Revolution so
we're digitizing lots of services so how
do I from a health perspective
digitalized services in a way that
doesn't disadvantage those who don't
have digital access um and I think the
but but there are absolute pockets of
Brilliance and I think the the the
opportunity with generative AI um I
think allows us to start changing that
conversation at a time post pandemic
where there is huge public support for
seeing change in the health system
because people know that we need to do
something different if we are going to
persist the NHS within the UK which is a
hugely kind of powerful asset that we
have but also if we're going to be able
to continue to manage our own health and
wellness in a way that allows us to
frankly get on with the rest of our
lives so so actually it's almost it's
very much a human question and I think
it it challenges us all to look at you
know the experiences you do talk about
in the retail space actually how do we
as
Citizens accept that health is going to
adopt some of those Technologies in the
same way but also how do we help the how
do we help the health system to create
that broad access um so that those
systems can be used and deployed without
that inequality that that comes so I
think there it's almost much it's not a
technology problem there are many
technology challenges there's data all
over the floor um there is hugely siloed
systems there's the challenge of
sharing assets and Technology assets in
particular across that complex system
but we could fix that given enough time
and money and brains it the human piece
I think is is going to be that
persistent Challenge and but that will
play out across many Industries and and
it's great to see a more optimistic note
on that let me ask two follow on
questions if I may um one of them has to
do with the fact that you mentioned that
there are pockets of Brilliance what is
it that stops Pockets from being
wildfires of Brilliance is the first
question and the second is is there
anything qualitatively different in
terms of the potential application of
gen to healthcare I suspect that ARA may
have uh some views in terms of that as
well but you know if you could start us
off off so so what stops a pocket of
Brilliance from becoming a wildfire um I
will give you a personal opinion and I
think of very often it's either
fear because actually doing something
within a small
space sort of under the radar right is
okay but but is that fear of public
scrutiny um and sometimes the rules the
rules say you can't do something within
the system so I think I mean to your big
question of what what's the kind of
business model implication there are
lots of reviews and thinking that we
need to apply to to how do we apply the
rules to enable perhaps wildfires is
probably the wrong word in this context
but but though but that spread from
those pockets are brilliant absolutely
um I I think the other thing that
prevents those pockets of Brilliance
from becoming
wildfires
is time actually people having the time
and the head space to to to make the
change in the way that they work to
adopt those new things to to get their
minds around the acceptability of
different ways of working absolutely and
um ala asked earlier on how many people
uh use open AI um I'd be C to see how
many people use it in their businesses
because legal departments have actually
uh to some extent come in said you're
not supposed to be using that because we
don't quite know what it is yet it may
get us uh in trouble so you know when
you're speaking about the uh issues uh
about the rules and about who's going to
be able to use it or not there is yet
another layer and perhaps the companies
that uh knock the door of open AI are
not the most representative companies in
the economy and then there's an
interesting question of the things that
hold us back but I wanted to to to go
back and and and ala return to something
that you mentioned earlier on of the
differences that you saw geographically
in the previous study that we do did
with with with uh uh the bhi BCG uh we
found significant differences in the E
AI ecosystem in China in Europe and in
the United States um and there it goes
very sort of deep um Europe you still
see the the fear of vazi and um the
postc world war and you know non-
libertarian uh government and government
should not be snooping um whereas in
China there is also a different sense of
the individual versus the collective let
alone the power of the Chinese Communist
party uh that changes the willingness to
accept AI so in China we saw a drastic
difference you know 70 80% were happy to
be snooped by AI in Europe much less the
US very very much closer to Europe but
in a slightly different libertarian as
opposed to individual civil Freedom uh
kind of attitude but you know U uh again
uh significant concerns so um we are now
addressing some of these questions about
what is perhaps hindering our being able
to adopt it and some of them will differ
by companies other will differ by
countries what is it that you have seen
either in terms of the difference by
countries is all Difference by those who
tend to be excited uh that say oh that's
great and we will integrate it as
opposed to interesting but I don't know
you know we probably want to keep away
from that y I think like challenging the
status quo is always tough right so and
and what we see over and over again and
this is not like an open AI think I'm
going to give you my personal opinion um
we are always rooted in all this
construction like everything that you
see around us like we came up with this
someone woke up and said we need to work
5 days a week to make
living right like someone woke up and
says we're going to have seven days a
week like in the Gregorian calendar
right and then there are a whole bunch
of different calendars by the way um my
definition of a good life would be to
hang out with my wife and my dog at the
beach work two days of War week and make
a decent living and and that would be
fantastic so I think like to make to
really understand a future with AI we
need to be willing and ready to rethink
how we live our lives at the most
Foundation at at the foundation of
things and and that is tough because
change is tough it it bothers us we have
routines that we need to follow and
whenever our routines are shaken we get
really really nervous and and we need
those kind of like we need a calendar to
tell us how to live our life um like why
can't we have businesses that that uh is
able to deliver you know like 10 times
the number of clients make tremendous
amount of Revenue but do it by working
25% versus how much you work now as long
as we are able to redistribute that
wealth and not hoard it but that's a
totally different that's a that's a
different that's a different problem but
even then you're going to see
individuals in in firms who are going to
be really good at prompting there'll be
some who are not going to be good at
prompting at the end of the day we have
an innate need to stand out so we'll
still figure out ways to stand out but I
think I I have a problem with this um
this is the status quo and everything
has to fit into the status quo that's
not how the world evolves um shocks are
brought into the system and a few are
going to stand up and say I'm going to
I'm willing to rethink how I run my life
and they become examples some of them
totally fail on fall on their face and
then the revolution stops and that's
okay but I think like we need to be
willing to say I live life right now
this way there's a new
technology what do I really care about
what is most important to me and then
start making decisions from there so
this is prescriptive let me just push
back to the description do you see any
Rhyme or Reason in the variant because
there are some people clearly that are
more open interested to experiment and
as be was saying if you don't experiment
then you can't even think about how that
may involve you and how you can take
advantage of it but do you see any Ram
or Reason in terms of either the
organizations or the geographies or the
industries of people who are saying you
know what let's try to see how we can
reimagine part of what we do with the uh
help of AI is there any pattern that you
can see there absolutely I think I I
learned this example from someone and I
love it um it's like how high on the
floor are you that you're jumping from
and how much you expect it to
hurt right so if you think you're on the
10th floor and you have made it you're
going to be much less willing to take
risk and make changes and that's a
representation of Highly developed
economies I'm not a political scientist
I'm just giving you my ideas right and
if you're like I have less to lose and I
really have to figure out how to do well
for my population you're willing to take
more risk um and that applies to not
just countries I think it applies to
companies it applies to us as
individuals like if you are the CEO of a
company and you have to bet your entire
netw worth on the next big thing you're
going to think like a thousand times
over versus if you are like a broke
college student and you want to go and
start something new you like what do I
have to lose like I already share my
house with 20 other dudes and the worst
thing is I'm going to continue having to
do that for another 2 years versus I
live in a mansion and I don't want to
have to go back to sharing a house with
20 other TOS so I think I think that's
the foundation of it it it comes down to
how comfortable we are and how much it
might hurt if you fail and and that
drives how we decide a lot of these
things uh true so let me go to a dude
who does not live with another 20 people
and the corporate speak but is a CEO of
a company that's a bit of a tricky spot
because you've got some investors um and
some shareholders who are scrutinizing
what you do so they may love listening
to ARA but they're like man we're we
want to see the results and we want to
consider what you are doing for the
business in addition to having fun
spending spree because you just told me
that there's sort of new technology how
do you take the desire to experiment and
try new things in an organization and
turn it into reality what do you do in
saying well this is a great new
technology I would like to see how we'll
integrate it but the CEO has fewer
buttons to push than people think that
they do how does it look as you're
thinking about needing to keep your
organization working and adjust to AI
well in our case the starting point is
we leave in a world where Supply exceeds
demand in the majority of sectors so you
still need something story a Content an
efficient algorithm to let people know
what are the options and likely to
curate a short list of options to
simplify their lives now if we assume
that there
are each of us is different but for some
people I have zero emotional invol
inment when it comes to my toothpaste so
in that case the curation and the short
list I'm very happy to delegate that
short list to an algorithm and I'm very
happy it simplifies my life Place orders
I'm just happy but for other things I'm
happy to have a human curation so far uh
perhaps I'm following an influencer
online and that influencer is
recommending some products and I'm happy
because I I want to follow that specific
style or that specific selection now our
job is to understand this Evolution and
understand how people want to make their
choices if at some point 80% of the
choices will be automated our job is to
figure out what to do so to go back to
your
question it's all about learning by
doing an experimentation and it's all
about trying to convince my people and
my sholders that it's absolutely fine
that we are experimenting while we are
doing our
job and it is the same way you would do
for whatever business transformation or
digital transformation as we used to
call uh the process uh few years ago
it's all about trying to find the right
balance between some quick wins in the
short term so that we try to embed techn
specific technology like the campaign
that we talked about before and we start
delivering projects and that projects
are paid so you can prove that you are
doing baby steps in a direction and this
is all about experimentation so that if
there's a shift like a big one in the
medium term at least you are equipped
while
simultaneously uh deliver against what
you're doing now so it's all about if
you want organizational ambid
dexterity and uh I always say that my
job is not the CEO not not the chief
executive officer but it's the chief
calibrator officer so my job is to
calibrate the speed the length the
entity of change assuming that change is
the only constant so it's either we
change or we extinguish so I don't have
an answer but what I'm trying to do is
this unbe dexterity in this baby steps
and learning by doing so that we can
constantly fine-tune the value
proposition and I can again reassure my
shareholders uh and my people that we
are still doing our job while simul
simultaneously we try to again
experiment and learn from our own sort
of mistakes or perhaps another way of
framing it would be to say that we've
got different time Horizons in terms of
the threats and opportunities there's
the short-term time Horizon whereby uh
AI may affect your ability to operate or
the options in which you operate you
know the sort of homework example if you
take an academic institution and you
know the conditions that exist there so
that you are running in a more efficient
way while you've got the medium-term
question of in which way will your
skills change in order to make them
relevant for techn techology correct
well you have to also think about the
long term what is the uh the role that
you need to play in terms of society
because one of the exciting bits and
this is where it it becomes really
interesting uh ARA that uh you speaking
about essentially issues of purpose and
issues of what
Society um allows us to do or mandates
that we do and these are the most
resistant technological change in most
of the world we still have the
continuation here in Europe of the
guilds uh which are these societies that
have exclusive rights do lawyers and
doctors who are the only ones who are
allowed to perform medicine well right
now one of the interesting questions
when you have the possibility and we go
back to the medican medical POS uh
profession and the triage can happen as
a combination of people as the NHS has
already done much more effectively than
it used to be uh doing a couple of
decades ago having automated systems
with people who don't need to have the
stamp of approval of the doctor to do
the basic triage and support and expand
what the system does we have seen that
sometimes it is the
institutions that may be quite important
which is where also regulation may end
up being quite important not only do we
have regulation in terms of AI for how
it's going to be uh structured and
distributed and the ecosystems and uh
whether the ecosystems are going to be
fair or unfair we also have regulations
in terms of how it is integrated in
organization so clear if we go back to
examples like that of healthcare um what
is it you think that will allow these
new technologies and in particular
generative AI to make a difference what
is it that you think is the most
exciting Dash the thing that that is the
bottleneck that if we get we're going to
be able to see yet more
transformation I I think actually what
we've seen with what generative AI has
done which previous kind of iterations
of the technology have not managed is
it's captured the imagination it's it's
actually you
know my parents are looking at chat GPT
you know my kids are looking at chat
everyone is looking at chat GPT they
didn't look at previous Technologies in
that way and and I think it because it
has captured the imagination it allows
us to look at a system like the health
system and not just look at how do we do
things differently with this technology
but how do we do different things and to
really change quite fundamentally how
the health system functions the big
Drive in health in order to drive reduce
the cost of providing Health at the
moment is a shift towards what they call
population Health right so actually you
you start to manage your own Wellness
rather than relying on the system to
manage your illness
and and actually generative AI creates I
think a space for really accelerating
that kind of conversation because it
starts to encourage us to engage with
the system in a different way going back
to what you were saying Arch technology
is AI democratizes technology and almost
things that even in terms of the
programmers and think about you know
your own uh sort of work in programming
it it feels that we we have a world
whereby uh software Engineers who used
to be the equivalent of tribes and
medieval monasteries having the vum and
being able to pass the knowledge and
being indispensable will soon enough
become less indispensable at least for
some activities because you will have
conversational ways of creating
programming and leveraging Technology
without the need of this uh sort of ried
intermediary what do you think
technology has in store for us yeah I
wanted to like you know even just when
we think about like healthcare like
delivery of healthcare is like I would
think I would in my world like it's a
very small part of the healthcare
ecosystem right like there is drug
Discovery there is like drug interaction
findings there are clinical studies
these are extremely data heavy uh like I
I know like scientists who have spent
years just trying to do meta analysis to
understand drug interactions um that is
solved in 5 minutes now yeah like you
can have a huge Corpus of of drug
interaction studies and you can converse
with that
Corpus that blows my mind yeah like you
can have 20,000 documents and have a
conversation with a model that
represents the knowledge behind those
20,000 documents that was not possible
before so I think like as as you pointed
out and thank you I actually like um
again like going back to my original
point just having a conversational
interface with the
computer it sounds simple that's the
game changer absolutely absolutely so
now we're turning to the final part of
um our time together which is questions
so do feel free we already have some
questions that have been sent by slido
if you have any questions we'll try to
see whether we can put them quickly um
in I'll just um uh start with questions
and whoever wants to take them um uh the
first thing is Will businesses need new
roles to oversee the ethical and legal
considerations of AI and AKA we're
starting with you uh as the producer
100% yes um I think it's like a like
it's the same thing if you think about
pillars to support like the work of AI
you're going to have someone who needs
to understand compute really well you
need to have someone who understands the
science of deep learning someone who
understands data they sound like
foundational but the other two
foundational areas are all things to do
with policy ethical issues um
understanding the boundaries of model
performance U you know all things like
Safety Systems those are as important as
compute and data and and science of deep
learning I would I would question
whether it's a new role or an evolution
of role and skills in many industries
that are already there and and I think
one of the dangers is that we put AI in
a little box on its own somewhere
separate and we transform the world with
with that new technology box and
actually we forget that that the world
we're transforming is one that people
have lived in for a long time and
there's a huge depth of knowledge that
we need to connect so I look at actually
how do we evolve the knowledge the
skills and complement you know perhaps
some of the roles that are there rather
than creating something and and avoiding
the risk of re Reinventing the world
especially when some of these ethical
considerations have been with us for a
very long time so we should not simp say
I totally agree with you I think like
the the huge context of knowledge that
we already have is very important but
there is a very important like a pivot
that we need to make which is you know
if you think about moderation like
Facebook has thousands of people who
goes and moderates post but moderating
AI is totally different yeah because it
generates like how it's not doesn't
exist and now it exists so where do you
bring in that mod um so I think there
are like foundational pivots that needs
to happen but totally with you we need
to like build on the the huge context
that we already have completely
absolutely uh let me turn to um a more
busy question how can small to
mediumsized businesses Implement AI in
their products and services without
breaking the bank I think that um I you
know AR if you want to make a pitch you
can make a pitch now they already are um
look like at least for open AI we are a
profit cap company so our prices for our
products keep going down and it's not
you don't need to do anything fancy
right like you just have to like sign up
and slowly develop your prompting skills
and and I have spoken to small
businesses who are already benefiting um
like you can never in a small business
if you're running like a corner store
you're not going to have a CFO you're
not going to have like a you know a VPO
strategy or like a chief people officer
right you don't have those expertise
they were not they were never even
within like your reach before but now it
is now you can actually maybe not the
full scope of it but you can ask
questions that can Leverage The
expertise of all those individuals
without actually having them in your
payroll so again it's going to be the
great balancer you're going to see
Corner shops which like start actually
getting into competition with tesos one
day because they can do more they will
have better knowledge of supply chain
and they're going to be small and
they're not going to go down the path of
like an academic exercise to understand
the impact of AI instead they're going
to just go and try experimenting and
doing stuff did I just use the academic
word while sitting at lbs in a negative
way sorry Point
yeah um
thoughts well there is one thing I mean
we we talking about all the sort of
positive implications and I I'm quite
sure everybody's thinking yeah but what
about the dark side so I think we should
men
also um but when it comes to the dark
side and I'm not talking about you
know jobs that will disappear I'm
literally talking about very specific
easy things
so and again in terms of positive side
it's it's incredible and I agree with
you I've just finished my book and I I
could copy paste chapters as soon as
they were done and I will ask uh chbt to
play Devil's Advocate to challenge my my
sort of uh the chapter my my thoughts
and that was great because that helped
me so on the good side let's say
positive side I'm absolutely with you at
the same time I know that there are
tools now ai machine learning and also
sort of visual tools uh which allows
allow people to I I I'm speaking a
language now and I could just fill
myself wait 30 seconds select another
language and look at me speaking
Greek uh and and my lips would move in a
way that is exactly so nobody would at
some point will in I would say 6 months
uh understand whether or not it's me
whether or not I can actually speak
another language so of course I'm
concerned what what if my my daughter
calls me or video calls me in whatever
two years and she asked me things
including why don't you make me a
whatever wire because I need some money
and I'm I having a problem and whatever
how is it scaring yes of course what we
I guess what we are not equipped to do
as humans and so probably it be good to
talk about it is we tend to focus on the
evolution of one thing and we lose track
of the evolution of all other things
that will benefit from the same
technology so I'm scared yes if I
receive a video of my daughter asking me
for help or whatever at the same time
perhaps in my phone there will be
embedded a feature released by you guys
that helps me understanding whether or
not like an antivirus uh understanding
whether or not that's a real content or
not so I just wonder how hard it is to
predict the future well and there's the
regulation too right now the in China I
think we had the first people imprisoned
for um false information now of course
the question is what exactly is false
and where do you draw the lines in terms
of what is false and what is
Inconvenient Truth to borrow Al gul's uh
U line but I think that if if you look
at the the the standards that came from
there they're quite interesting and
quite bold in trying to resolve what
will be a very real issue um there is a
problem of Confusion And disinformation
um which uh goes hand inand with the
power of the technology and we cannot
shy away from that and I think that the
reason that you see everyone I know in
the AI World saying yes we need
regulation the question is what sort is
that this is absolutely evident to
everyone there and that connects to um
uh another uh very thorny uh topic I
don't know whether there's any views on
that um how I suspect that your um uh
opening I had might limit you um from
answering to that which is um how you're
coping with IP rights so as there are
cases currently uh being discussed
perhaps I'm going to uh see if anyone
else says perhaps even in terms of
generating a marketing campaign using AI
what's the IP consideration there well
there are huge C there there's a strike
uh in the in the US that's been um well
again it's hard to predict but it's
clear that either we find a way and
let's go back to regulation like some
sort of water mark that says generated
by humans or not which is an example of
potential solution
or we need to reinvent the the whole
system uh what if we create a song a
campaign a a script a storyboard an
entire series uh with an AI that is able
to predict the way uh viewers will react
and it's perfectly fine tunes and and
select and does the auditions and
selects the right actors in a way that
is just perfect it's it's already there
it's already happening so I guess I
don't really have an answer but the
point is either we find a way to
regulate and to put a water mark there
or uh yeah I mean I should I should know
I mean there are currently a number of
of sort of big uh lawsuits going on from
giab and uh there's also authors that
are taking all the big um AI companies
to court saying hey you used our data
would like a share some of them uh say
would like a percentage like we have in
the case of Google and uh people that
are doing the news and would like a cut
on that others are saying that if this
automates our job it essentially
embodies our job and I think that the
next few months we're going to see
things that will shape the landscape and
I think that this is one of these open
questions because the landscape is still
rather fluid it's fluid in terms of
monetization and it's probably not going
to stop here um it's fluid in terms of
ownership and competition authorities
are just starting to look into that it's
fluid in terms of the uh how do you
ascribe the benefits that you see and
how do you pass on uh these to those who
have included it uh its fluid in terms
of the types of AI that you are allowed
to let me go to something that may be a
slightly less politically charged
question um which is that AI is only
good as good as a data it's being used
to train it what kind of data standards
can be put in place to improve
reliability of AI and businesses and I
think that that's that's not a totally
right understanding of generative AI or
or how neural networks work today um you
know one thing actually I can't talk
about that in too much details right now
but like it's uh um we you you briefly
mentioned like synthetic data majority
of training today is done using
synthetic data exactly which is where
the model is itself classifying what is
right what is wrong or what is good what
is bad and uh and then there are a whole
bunch of other filters that is kind of
in the training run uh for such things
um
yeah so I I yeah I would I I I don't
think that's a correct way of looking at
llms today great uh on the other hand U
as I did want to to to uh feel this
question but I think that the question
that becomes more relevant is slightly
different which is that there are there
is a possibility of training your um
either something that you have produced
or something that you have refined uh
where the most of of the work may have
happened from the foundation model but
then you may have uh the refinement that
happens from uh or the additional
overlay onto your own data which then
becomes more relevant to you so it's not
the training itself that we are
concerned with not the foundation model
but what is sort of further Downstream
and here there has been a question of
whether that might lead for
organizations that have a deeper either
qualified or simply existing data to
generate a better type of insight and as
such improve their ability to leverage
that than the other startups so um this
is what I see is this very interesting
Dynamic on the one hand you could say
great because as he was saying this is a
leveler in the sense that you've got
startups with access to this data the
technology is very easy to scale so you
need some complimentary skills and then
if you find someone with a big Bas you
can tack onto them so you combine with
an existing player and it's great but at
the same time uh there is an
informational Advantage for large
players including the players that are
working with you that are saying this is
data that is ours and we will be able to
leverage them how do you see that being
played out how do you see the two forces
that are essentially are the ones that
are going to be shaping the competitive
landscape for tomorrow ultimately being
played yeah I mean really like our our
third party strategy does involve like
uh you know you being able to connect
your data sources to get the most out of
them um and it's a misunderstanding to
also think about that data is
automatically used for training like no
we just need to have an inference from
that data to to make a to make a
decision on what should be the output um
but you see like we're getting at the
foundations again of like we are always
going to every individual even without a
company like every individual is always
going to seek a Competitive Edge and
it's going to come out in all kind of
different ways it's going to be a data
Advantage it's going to be a prompting
Advantage um at a country level we're
going to have like energy Advantage
ability to access gpus having enough
silicon so I think it's going to be that
kind of a competitive landscape like no
matter what we do right in in in some
some interesting way um how it pans out
like as a company we are going to try
and produce the best models that are
super useful um and those best models
will be used by other companies who are
sitting on huge Corpus of data to have
their own Edge uh in the in the in the
kind of like in the business world of
things but I think for us what is
important is the models that we put out
are more intelligent more smart they
have more context they have more
knowledge and yeah and I think this is
speak I was speaking about modularity
earlier on this is the definition of the
modularity in terms of a strategy we're
looking at our own module we believe in
the innovation of those who will
complement Us in other modules we're
creating an open API to some extent this
may also be an interesting side effect
of the model that open AI has as a
result of its both Charter and sense of
mission and it'll may end up being
different depending on who is it that is
like I can share an example and actually
it's it's really related to the to the
um so just yesterday or day before
yesterday we announced a partn like a a
new product that we deployed with
Spotify where if you go and look at any
of the
podcasts the podcast is in your own
language and to me that is great like
language is an incredible barrier right
now um and uh what happens is they have
these tons of podcasts and you can just
pick a language and the experience is
not like of a subtitle or a dubbing it
really feels like the accent the
annotations it really comes across um
and that is to spotify's Advantage they
have 350,000 audiobooks they have 100
million tracks They have some number of
million uh like a basically they have 70
trillion tokens worth of data and they
have decided that I'm going to use that
and make it more accessible using this
and and and opening up like all our
podcasts to 198 languages right like but
what you just said really was really
fascinating right because it's not about
who's got the solution or who's got the
data or who's got the idea it's the
Partnerships and I think that's the
shift that we're going to see is much
much more is it's not one organization
that's going to that's going to make the
change it's it's how you create those
Partnerships I think it will be
fascinating to see how the the
technology really evolves yeah and I
think that's where we are going to see a
lot of like very interesting IP come out
in terms of how this partnership
structured and where does the data
sharing and insight sharing happens yeah
and as I see a deep red little sign here
in terms of the time that uh means that
we have seconds to go I think that this
is a wonderful place to end this
conversation that could go on for a very
long time because I think that what we
are seeing is that there is a need for
new sets of Partnerships and I do expect
that the shape of the ecosystems will
start being visible soon enough but also
a need to rethink both the strategy of
individual organizations and the value
ad of business models and sectors we in
the beginning of seeing this
transformation happen I do expect that
there's going to be much more about that
that will happen soon uh we're going to
be trying to be in the center of it here
in uh London Business School uh so uh in
terms of both research applied research
um uh and also our programs that you can
see in line uh but please be part of the
conversation um we would be delighted to
learn from your reactions uh because I
think that conversations like these are
the ones that are at The Cutting Edge
and I hope that you will agree that that
has been a fascinating way of spending
an hour and a half please join me in
thanking the panel for
[Applause]
traing

---

### think ahead: How will AI innovation in healthcare improve our lives?
URL: https://www.youtube.com/watch?v=ZUdlUawXB_w

Idioma: en

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welcome to think ahead London Business
Schools thought leadership event series
I'm Julian burkinshaw I'm the vice Dean
and I'm a professor of strategy and
Entrepreneurship at the school and this
evening event we're calling it how AI
Innovation artificial intelligence
innovation in healthc care will improve
our
lives I'm going to introduce our
panelists shortly but before I do so I
just want to acknowledge that we've got
a an opportunity for you to ask
questions to the panel you should see
the the space bar where you can add your
questions which we will take a look at
and we'll ask towards the end and also
before we get going I want to share the
results of a poll that we did on
LinkedIn which some 350 people filled in
this was just uh to just get a little
bit of a sense of what you are thinking
uh we asked you two questions and you
should be able to see the results right
now first question was in your opinion
what is the most significant impact of
AI in health care and your answer was
47% of you said that refining diagnostic
capabilities was the most important
second more Access to Health Care
Services uh some of you said equally
significant let me just acknowledge that
there's going to be a few other ways in
which AI is impacting Healthcare which
our panelists are going to talk about so
they'll talk about those ones but
they're going to talk about a few others
as well and then secondly we asked do
you believe AI can help address Health
Care disparities by providing Better
Health Care access to remote or
underserved
areas unambiguously you said yes 80% of
you says yes it yes it can and again
that's going to be an issue that we're
going to get our panelists to talk a
little bit about probably towards the
end of the session so it is a great
pleasure to introduce four distinguished
speakers uh joining you from different
parts of the world from from Boston to
London to India uh first of all we have
Barbara dmain Haymon entrepreneur in
Residence at the Francis criek Institute
and an lbs alumna from the Sloan
Fellowship she has a background in
biotech and big farmer astroica among
others now runs an accelerator at the
Francis Creek called KQ Labs hi Barbara
hi second we have Crystal Ruff senior
director of Neuroscience and vaccines at
tea and also an lbs alumna she has a PHD
in Neuroscience she leads scientifical
medical team in the US also has a lot of
experience investing in startups hi
Crystal nice to meet you nice to see you
julan thanks pleasure to be here third
we have niik o SAA uh professor of
management science operations at London
Business School so a colleague of mine a
real expert on artificial intelligence
you know the underlying if you like
science of artificial intelligence and
also about how it's being applied in
healthcare among other sectors hi necos
hi everyone and last but not least
Andrew valeno chief medical officer of
medic cover and chair of Serena and
fitness genes who also spent many many
years as chief medical officer at berer
Healthcare now works a lot in the
startup space hi Andrew hi thanks
joining us I believe from India rather
late at the late into the evening right
now so thanks for joining us so um I
want to give each of you a chance just
to to share some initial thoughts first
a little bit more about what you do but
also perhaps focusing on where you see
the most exciting AI Innovations in the
healthc care area from your perspective
we want to just get a few examples just
to to get us going Barbara why didn't
you kick us off well thanks very much
and delighted to be here so by
background I'm I'm actually a a PhD
chemist um I then went into the
corporate world um into marketing spent
11 years there had an early midlife
crisis and went to London Business
School where thanks to the Loan program
I stumbled upon the world of
Entrepreneurship and that completely
changed my career PA so I really owe lbs
a huge debt of gratitude um so for the
last 20 odd years I've been working in
the biotech sector and about six years
ago I became amongst other things um
entrepreneur and residents at the
Francis Creek Institute and there we
observed this very exciting area where
basically data and biomedical science
were converging and in this converging
area you know which is an interface
interfaces are always challenging we
noticed that the very early stage
companies were really struggling to get
investment because biotech investors
understand those particular business
model models but the business models in
this new emerging area are completely
different and Tech investors were okay
about the business models but they don't
understand the world of healthcare and
all the regulatory implications so these
very early stage companies really
struggling so we thought well if we
don't do something to support the early
stage we will not have an ecosystem that
that we deserve to have in the UK so
what we thought as one institution what
could we do we started an accelerator
program and it's for datadriven startups
from all across the UK and each year we
select 10 companies um that are very
exciting now I'll just give you a
snapshot of What kinds of companies we
have so they generally fall into three
categories and AI is definitely a theme
in all of these um we have um companies
that use AI in drug Discovery um so that
basically faster better cheaper ways of
discovering new drugs um examples of
that um Farm Ena is doing small molecule
drug Discovery we we also have base
immune which is using AI to design
antigens for vaccines which is obviously
very topical in the context of of coid
Etc the second category we have is is
around Diagnostics and actually
Precision medicine so that basically
enables potentially earlier detection of
disease so for instance Oxford cancer
analytics detects lung cancer earlier
than other forms um and queen sare
analytics uses
um um MRI imaging to detect um what P
what treatment regimen would be the best
for a particular multiple sclerosis
patient other companies look at cancer
and what is the right treatment regimen
for that particular patient and that's
using Ai and then there's a third
category which is a bit more patient
facing directly and that can be for
instance remote monitoring of patients
it can be using an iPhone to do that
remote monitoring um and for instance
Opthalmology you can monitor patients
and monitor the progression of their eye
disease at home so they don't have to
keep coming into the hospital unless
it's absolutely necessary we have
companies that help patients with
Parkinson's disease um also patients
that have um for instance stroke
Rehabilitation so really a profusion of
areas where AI is making a huge impact
into health care and each year we get
large number of applications and we kind
of get a feel for the Zeitgeist and what
areas are up and coming um we we can
judge that each year there's a little
bit of a wave so I can talk about that
later we'll come back to that thank you
so much Crystal let's go to you now tell
us a little bit about what's exciting in
terms of AI innovation in your world
right um so hi everyone my name is Dr
Crystal Ruff and I am the senior
scientific director um at teada
Pharmaceuticals for us medical
neuroscience and
vaccines so my team primarily works with
healthc care providers um to determine
how they're interacting with patients to
to help improve the patient experience
prior to that I was in strategy
Consulting where we worked a lot in
digital enablement for large companies
prior to that I worked with alumina so I
was lead of strategic initiatives and
Innovation for Europe Middle East and
Africa and while set alumina side by
side with Barbara um I created uh the
first genomic specific accelerator in
Europe alumina accelerator UK and we can
talk a little bit about some of the
learnings in genomics and prior to that
I did the traditional route of uh PhD
postdoc um which led me to lenon
business school appreciating the the
commercial realm so in terms of AI and
Healthcare I don't want to overlap with
with what Barbara said and I I think you
you really covered a lot of it Barbara
um so the things the two things I might
add where I can add some some
differentiate experience so looking also
you talked a little bit about patient
journey and and apps for the patient and
and how do we
care um on the on the end of the patient
pathway um I think that's very important
and looking at right now with the
increasing cost of the health all Health
Care Systems you know there there's an
in population and I think it's something
like 80% of our Healthcare dollars are
spent after the age of
65 and 65% of that is spent in the last
year of life right and globally we have
Julian you can speak to this better than
I can but we have a globally aging
population so we need to find ways that
we can save cost and still deliver the
same or or better standard of care um
and that necessitates using Ai and
data um the second thing I'll I'll stick
to my my um genomics roots and I mean
like metars we're using it in metaps but
I think Andrew will speak to that um in
genomics
specifically we have only recently had
the technology to sequence and and I I'm
saying genomics but now it's extended to
proteomics epitomics all sorts of things
that are happening in complex ways in
our body we only now have I think it's
been about 5 years since we've had the
technology where we can sequence it and
the chips that we can't that are are um
sophisticated enough to do it you know I
remember during my MBA in in 2016 2014
to 2016 we were the year of big data and
we the world was just learning about
what big data was and this AI in
healthcare it's the next step it's the
next Evolution along that pathway
good and we're going to come back to
exactly what sort of changed to make all
that possible shortly um actually I'm
going to go to Andrew next and then
nichos last if that's okay Andrew tell
us a little bit about your your work and
where you see the biggest opportunities
in a thank you and thank you very much
for inviting me uh well I started uh my
career as a surgeon but uh as you said I
became chief medical officer of bua
where I was for 17 years I'm going to
just mention one project there which is
relevant um I initiated the first
program um using the routine use of
patient reported outcomes back in the
late 90s uh from there came the NHS
National program a pilot program
collecting routinely patient reported
outcomes and from there a huge database
has been formed um for hip and knee
replacement outcomes in hip and knee
replacement which of course these
massive real world databases and big
data need need AI to keep them organized
I retired so-called in 2012 and as you
said became chief medical officer of
medicover which is operating in Eastern
Europe uh Germany and India where we
have 26 hospitals and where I am now as
you said but what we we also have is a
very big Diagnostics division in Germany
uh increasingly working on developing
genetic testing and genetic counseling
and again as has already been said you
know AI is crucial with that huge volume
of of data uh you mentioned that I'm
involved in some startups which is true
I'm just got three examples the first
one I got involved with is called I am y
am which is um a very good health and
well-being startup they have their own
lmm uh llm um they've got large language
model just in case yeah yeah sorry yes
yeah chatbox stuff I suppose but
250,000 research papers uh in health and
well-being space from high impact
journals as well as data coming in from
customers um huge amount of AI to bring
that all together run by the redoutable
Lena Pika some of you may have heard of
uh Serena is a mental health app I chair
their board and uh in mental as I say in
mental health uh doing solely digital
CBT um so it's disruptive because it
doesn't involve any clinical uh input at
all uh which is pretty disruptive
actually and we're beginning to use AI
for detecting mental health issues and
the third one is called Fitness genes I
just wanted a bit of variety and um it
does a simple genetic test uh tells
somebody their genetic makeup entirely o
only related to genes rating to Fitness
and gives advice on how they can manage
their health in in view in that
context uh you know it generally I
believe really strongly in the the
developing value of artificial
intelligence both in healthare but
particularly in health health promotion
um you know Health Care Systems these
days can't afford to get into prevention
it seems and um it seems that the
private sector and these startups are
really taking hold and it's going to be
hugely valuable for all the country I
think and generally for health care that
sort of work um I I I do get concerned
about the talk about sort of AI taking
over altogether the work of doctors uh I
don't believe that's uh right and uh I
think it's a long way off but instead I
think much greater priority should be
given to um to U providing support and
to compliment doctors and healthcare
workers to give them more time with
patients and I think there's huge
opportunities there both clinically and
and administratively thanks good so
let's let's hear finally from nichos and
and if you can give us a you know a few
thoughts on both where the opportunities
uh most exciting things are but but also
if you can start to unpack a little bit
about what we mean by AI because of
course nowadays people leap to
generative AI because we've all started
playing with chat GPT but you know
there's lots of different varieties of
AI out there and I'd like you to just
help open the Black Box a little bit
around that so great great to be here
thank you for organizing Julian so so
yeah I mean you know AI has been around
a long long time before CH GPT which
only came about 11 months ago so and you
know in general AI is the sort of you
know tools processes algorithms if you
like that have the ability to learn and
detect patterns directly from data so
unlike sort of you know traditional
Computing systems where sort of a human
expert needed to program everything that
was relevant for the system before the
system was implemented with AI the
algorithm is given a large set of data
and is asked to figure out what pattern
exist in the data directly and obviously
this has had a huge amount of
application in anything that involves
prediction or classification so for
example the problem of whether a a
radiography sort of image is consistent
with healthy tissue or sort of unhealthy
cancer tissue it's a classic
classification problem and artificial
intelligence has been really good at
doing that what what happened though
with generative AI is that suddenly
artificial intellig managed to crack
natural language so he was able to
understand and produce natural language
at the level we humans understand it and
that kind of opens a huge amount of
applications that involve sort of you
know understanding processing and
applying human
knowledge uh and this got a lot of
people you know including me really
excited about the potential for uh s in
general but but but specifically for
health care so and if I can give you
like a couple of examples there the
first studies on generative AI that are
coming out in sort of rigorous sort of
you know scientific journals that sort
of you know and generally the studies
sort of you know take a group of
knowledge based workers be in healthcare
or outside Healthcare and sort of
they're given some tasks to complete one
group gets access to chpt or an
equivalent language model and the other
group doesn't and then the research
Compares how the performance of the two
groups that were very similar to start
with changes after one group is uh
exposed to and has access to this
technology and the findings are
astonishing so so we're finding that
knowledge-based workers these are
us they are able to do sort of the stuff
they were doing before but sort of
taking a third less time so that's 33%
productivity gains at the same time
quality you know depending on the Contex
might improve a little bit certainly
doesn't deteriorate and also
interestingly enough the benefits acre
mostly to the people that are least
experienced so they perform almost as
well as they are more experienced sort
of colleagues that don't have access to
chpt so chpt also improves the sort of
the performance of people that are
experienced but by not as much so so
people call chpt the great sort of you
know equalizer so so if you think about
the implications for this on health care
I mean you know in general knowledge
based work has not have a productivity
boost sort of you know of any
significant magnitude ever and
Healthcare probably never so we are
sitting in a situation where sort of you
know a lot of the tasks that we're doing
Healthcare can be done again by sort of
you know the expert human because the
human expertise is needed but they can
be done faster and the more repetitive
more sort of you know boring stuff if
you like can be can be can be even done
by each GPT or equivalent models of you
know very quickly so so so so you know
I'm very excited about the this
potential to take away work that's not
value adding and sort of automated and I
think this is where we're gonna see a
huge amount of of innovation going
forward so I want to come back to the
kind of taking out of of certain types
of repetitive work in about five minutes
but just just before we do that you made
the right point I think which is that
you know a lot of a lot of AI was being
used for prediction and for
classification um it's also been quite
useful I mean I think Barbara you
mentioned it I mean it's actually used
in drug Discovery as well tell us what I
don't mind who answers this question but
why has it suddenly taken off in other
words what has happened in the last
let's say five years which has allowed
us suddenly to see this booming
creativity and innovation in AI I mean
we've had AI for as long as you had
computers but suddenly it's
proliferating anyone want to help me
with what what SU exactly changed in the
last five years um I could I could have
a go saying yeah go for it yeah so so so
so I I think you know three things came
about at roughly the same time the first
you know a few people have mentioned it
we now have bigger data sets more
detailed data sets that that we had
before uh but but that's probably the
least important the most important are
the other two so we have a lot more
computational power than we had before
with the Advent of computers that are
very well suited to parallelizing uh uh
tasks so they can do a lot of tasks
simultaneously and that enables us to do
a lot more calculations per unit of time
if you like but perhaps the most
important one is new algorithms that
like the transformer architecture which
is the the T in the
GPT uh which has allowed us to parallel
process sort of very complicated tasks
such as language recognition but not
only
and that makes them Well Suited to run
on this new hardware that can
parallelize processes so so the this
strings together so more processing
power more data and better algorithmic
architectures have allowed models to
scale and by scaling they've become
surprisingly good like nobody I've been
following the GPT sort of
evolution gpt2 to gpt3 I mean I wasn't
expecting almost more people were not
expecting such a degree of improvement
but it turns out that there something
imine going on with scaling these models
uh uh and and and larger models are not
just a little bit better than smaller
models which is sort of you know
typically what you observes but larger
models genuinely have new capabilities
that smaller models didn't have magic
thank you Crystal you point I would add
one more thing to what Nico said as well
of things that are happening in parallel
is our ability to store data as well and
that's doubling you know almost year on
year it's doubling exponentially
and so finally we have
servers that are small enough to fit in
a warehouse or rumor or whatever you
need but are also powerful enough to
store all of the data that we're we
we've been collecting I've got a
question I mean maybe I'll take it to
Barbara first but I mean I get it that
you know if you're doing if you're
diagnosing cancer or whatever you've got
very clever algorithms which can crunch
through millions of previous examples of
of of cancerous and non-cancerous cells
or whatever but the you Barbara you
mentioned drug Discovery right I think
of drug Discovery as a creative activity
and you know the way I think about large
language models is by definition they
are you know they are trained on
pre-existing stuff right so how how does
AI do make the creative leaks that we
typically you know attribute to
humans well that's a huge question um I
mean it actually helps to identify what
are the best targets for the drugs to
actually um latch on to and then in
other ways so looks at the massive
amount of chemical space that there is
and and basically iterates in a way that
is UN unimaginably fast um compared to
what what humans could do but I think
there's one other point I'd like to make
which is very important which is there
is a bit of a fly in the ointment with
this which is that it all depends on the
quality of the data so basically quality
you know basically garbage in garbage
out and um essentially the quality of
the data is absolutely critical and with
human health you've got added Dimensions
where you're taking samples from people
and so a lot depends on how the sample
was taken how the sample was stored how
it was analyzed um and the quality of
that and then on top of the quality of
that you've then got the the potential
biases that are introduced by not having
um a dis a sort of a representative
sample of many many different types so
for instance of different ethnicities so
um and and also gender because
historically clinical trials have been
done you know mainly on men a certain
age range of sort of 18 to 60 so um so I
think you know the the quality of the
data is absolutely critical and you know
we have to look at this quite critically
thank you I want to come back to the the
issues around bias and stuff on but but
Andrew one one question to you before I
think we kind of move to a whole
different category of questions you
talked about patient facing applications
some of your work is is very
specifically you know working with
individuals um how does AI do that
because obviously you know we've talked
a lot about classification we talked a
lot about if you like creativity this is
about interacting with humans right I
mean can you just give us a bit more of
a flavor about how AI does that because
again I think of you know relating to
other people to kind of encourage them
perhaps to behave in a different way as
a as a fairly human thing which
computers aren't particularly good at no
and and and I
think the direct human intervention is
like the human intervention with a
chatbot really so if I come back to I am
why am you know you you are dealing what
they use as an interface an avatar if
you like um you know who who they can
speak to so so they try and mimic as we
do in Serena actually um in the mental
health field mimic a human and we try
and make it as humanlike as we possibly
can and that that that can work if you
do it properly I want to just come back
on one point you made though about
Radiology um which of course everyone
knows it's been it's been sort of one
use for AI but you may have seen the
other day that nice the National
Institute for clinical Excellence has uh
has just said that they they don't agree
that there is enough evidence for using
AI for Di nosis of lung cancer at the
moment it could be lung cancer could be
missed or people having unnecessary
surgery so there is a a worry about the
um the underlying um the data that the
training that's done in the data in the
first place which and to Echo Barbara's
point this whole point about ethnicity
and and uh you know that that sort of
thing as well so let's go there now
because I I do want to come back to this
issue about you know sort of making the
healthc care system as a whole work more
efficiently let's talk about ethics
privacy data all those types of things
you you both correctly I think pointed
out that you know by definition the
large language model is only good as
good as the data it's trained on what
are some of the other risks and threats
that make the um the use of AI in the
health care sector a little bit
challenging maybe Chris would you want
to give us a couple thoughts on that and
then we'll go around the room sure um so
the biggest
risk of AI in the health care sector I
mean I think one of the the biggest
things that I've been talking about I'll
be it you know be it in Pharma be it in
in other areas is data
security and how do we combine our data
you know and and I think we saw a great
example of Co in in coid one of the
Silver Linings of something very
terrible is a lot of Pharma companies
were able to collaborate work together
to get to a vaccine as fast as
possible and you know one of the things
that we're looking at is how how do we
share data how do we Access Data even
internally within PHA companies it's so
siloed and and so looking Solutions have
emerged that use um what's called
Federated Data Systems and sharing of
data whereby the data can stay in at Sil
it can stay in its server storage room
in I don't know one's in China One's in
Zurich and one is in
Brazil and it can still be stored with
that country level specific um
governance but you can send queries on a
network on top of that you know so for
example if I want to know how many
5-year-old kids are in the school
district of London instead of getting
all of the attention sheets and getting
through all the information I can send a
query on top and one school will say
three kids five kids 7 8 10 and I can
get my answer that way and that's how a
Federated system works so I think in
answer to your question number one is
how do we provide secure data that is
useful and you're you're saying that
technically that's possible I get that
are we seeing countries allowing that'ss
yeah so so even um I mean this is not
not as five years ago I went to I think
Estonia Denmark and some some other
country in the nordics have have a
Federated system and they're able to
access and you can you can control the
user permissions to see who can access
what but you know the the DMV data stays
at the DMV the hospital data stays at
the hospital but you can then
draw you can cross reference it and say
you know how many people in who have
been in car accidents yeah um
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got their license from the DMV within
the the a month of their car acent or
something like that and those are the
more sophisticated queries that can
really inform got it what we're of
course overcoming the data privacy prop
Andrew yeah please yeah well well yeah I
absolutely agree with all that but I
think trust is going to be an issue I
mean um driverless cars we all thought
we going to be great but um you know one
accident in the whole world says they're
rubbish and uh we've got to be careful
with things like J jck G gbt I mean they
say themselves they have a quote this
does not mean have the ability to verify
accuracy or credibility of every Source
they say that themselves so that's a
worry and we know that there are these
sort of hallucination things where where
if they can't find an a true answer they
may go off and find an answer which
isn't true and that's that's going to
lead to a lack of trust so that's got to
be really got to be sorted out I think
and then it it's also open to
misinformation scams uh manipulation you
know we know that scammers can get
through almost every system whatever you
do and so so the security issue I
suppose is is vital there uh and uh and
you know personal data the point that
Crystal was making will be a worry if
people are submitting their data onto
these things and the intercountry thing
is really quite complicated I mean it's
a daunting problem in all in all walks
of life how this the AI is is abused and
it's even more so in healthcare I can
completely see that um we'll go to
Barbara next and then we we'll go to
Nichols Yeah I mean just to combine
actually some themes that both Crystal
and Andrew have raised I mean I think
trust is massively important and also um
that people feel that they have control
over how their data is being used so um
for instance there are companies that
are uh helping to enroll into clinical
trials sonogenetics is one but they
allow that the the people control their
own data and they go back to the the
patients and they say would you like
your your data to be used in this
particular way in this particular trial
and the patients can say yes or no
actually I don't want to be involved in
that trial and that's very empowering
and it really builds trust and I think
we had the issue in the UK uh a couple
of years ago where basically ba data was
going to be used in a certain way and
and people didn't understand it and they
got really quite quite anxious and the
whole thing um was was was withdrawn
which I think is a great shame if it had
been done in the right way it's
something that would be immensely
powerful yeah so nich how how are we
going to crack these problems what do
you reckon so absolutely I mean I think
some solutions sort of exist and they're
Technical and you know Crystal talked
about Federated learning differential
privacy is another way of learning from
data without sort of revealing too much
about an
individual but I I think I think sort of
it would be naive to think that this can
be solved only by better algorith and
better encryption because nothing is
completely safe so so therefore you need
to have sort of you know transparency
you need to get consent for people when
that data is used in any way that they
might not sort of you know explicitly
have given permission for uh and also
trust works on the other end too I mean
you need to have models that are able to
explain what they predict and are able
to sort of you know be audited and if
there are any issues either with
accuracy or with bias this can be picked
up and this is not easy if it's a black
box that makes the recommendations but
it becomes a little easier if the models
are designed with explainability in mind
because sort of explainable models can
be more easily sort of audited now you I
want to also say something about sort of
the point about sort of data being sort
of very important and and obviously you
know that it's hard to argue against it
but I think you know from that we
shouldn't conclude that we can use a
unless the data is perfect because of
you know the data is never perfect I
think the right conclusion is that
whenever we collect data we need to be
very careful in documenting the data
collection the data generation process
and if there are any imperfections for
these imperfections to be identified and
to at the very least address it when we
are training models so so so very simple
ways of addressing it we will know that
the boundaries of the model that the
model is not very good at making
predictions outside its training set or
we might want to sort of deploy some
ways to uh uh overcome data limitations
but obviously all of this is impossible
if we start with the assumption that the
data is perfect so um yeah can I come
back on on just on the first point that
that Nichol was making I mean I think
there are things that will have to be
done I mean it's been suggested that all
models should clearly describe their
data sources that's not done at the
moment it's completely unknown as to
where data comes from of course in many
places it comes from all sorts of places
which makes it difficult to do that but
but they should also try and the
training should always try and make it
more representative and less biased and
that that's a longterm thing to do
because so much uh of research is you
know North American and European and you
know there is there is this there is
this bias so I just thought you know
there are things we can do um so we we
need to know the risks and then we need
to act to try and avoid them but they
are complicated I think to deal with um
thank you Crystal last point on this and
then I'm going to move us to a different
set of questions all right um so I I
just want to add on on what Andrew is
saying in terms of bias and in terms of
these AI systems is something that we
really need to keep you know keep at top
of Mind especially with diversity Equity
inclusion because if you have a system
where only you know 18 to 60y old
Caucasian men fed in
all outputs of that system are going to
be skewed towards that demographic so
this makes an even stronger case and and
there's a lot of population genomics
initiatives going on and I love it it's
fantastic all of us initiative in the
states and lots going on to make sure
that the data going in is representative
of the popula the population of humans
as we are you know so like Barbara said
quality and quality out and let's keep
that depth and breadth of quality going
in good so change of pace now and by the
way there's lots of good questions
coming in I'm actually picking up on
some of those questions with with what
I'm asking the panelists but um we
touched earlier I think nichos you
mentioned it first but you know the the
use of of particular generative AI in
making us more productive um we've all
experienced I think most of you will
have tried doing this but using chat GPT
just simply to do certain rather boring
tasks more effectively um it's very
clear that there is a a huge need to
make Health Care Systems more affordable
more
effective it is possible that AI is
going to allow us to take out huge
numbers of jobs from the systems and I
don't just mean Healthcare I mean I mean
you know law firms and accountancy firms
and and goodness knows what else as well
I mean in the same way that the
Industrial Revolution you know changed
manufact facturing forever artificial
intelligence is affecting the world of
of professional work so I guess my
question is where is the biggest
opportunity to get these huge increases
in in essentially the efficiency of all
the supporting infrastructure around
healthc care um and and how kind of how
quickly is it happening because my my
nagging worry is that uh that it's not
actually going to be quite as as as
efficient as we'd like it to be who'd
like to have a first go at where the
biggest opportunity all
that I mean I can tell a story I can
tell an anecdote of at work um so I
think building on what Nico said in
terms of
productivity um I heard this in the
great finite I like to repeat it because
it's it's really valuable you know to
the people who are saying oh AI is gonna
gonna steal our jobs you know it's going
to take away our
jobs I like to say it's going to shift
the role of the human you know and and
no Bob it's not going to take your job
but someone using AI will you know AI is
not going take it but someone using it
will because there is that that obligate
human interactive element to make it
work and so actually I think we have two
two listeners on the call today um who I
work with so uh our our field director
and our scientific director we had a
problem
and so we had this report that needed to
go out there were hundreds of fields of
information every few weeks it went out
and and it was a very monotonous
job and and it was the kind of job that
you just put off doing and and it takes
three weeks to do it and by that time
you got to start the next one um but
it's useful it was it was pulling in
certain information and coating it into
into something usable so we need it for
the
organization and um the three of us sat
together and we did a pilot and so like
I said this was taking hours like six
plus hours um human hours difficult ones
a week and we just sat out and we we fed
it historical information and we
compared it to the human generated
report that took weeks for and we
compared the um the the we have a an
internal an internal chatbot that it was
anonymized cleaned data let's point that
out
um very important as we cleaned it we
fed it in and we looked
at the thing that took 8 to 10 human
hours and the thing that took two
minutes right on the chat the equivalent
of chat GPT and they were comparable
yeah you know so I mean I mean I get it
and I do completely see because many of
us have experienced this ourselves the
the dramatic improvements in
productivity that we get out of this
stuff my bigger question and you touched
on it maybe braber you can have a go at
this um is yes we're g to become better
at doing specific tasks we are of course
as you st going to become smarter at
using AI to complement our human skills
to do our jobs better yeah but does that
actually lead to the sort of
organizational level efficiency
improvements that we actually need
because ultimately if we're going to try
to make the systems work better we need
to almost like redesign our entire
processes not just make each individual
doing their own jobs more efficient but
Barbara any thoughts on on that sure so
I I'll I'll give two examples and I I'm
sure Andrew has a lot of very good
examples here as well so um one is I
mean we've talked about the use of of AI
to analyze images radiology and so on
there is a massive shortage of
Radiologists in this country and indeed
in most countries countries and there's
a terrible backlog of of basically scans
that need to be looked at to be reviewed
by these Radiologists if the if an AI
can actually review the routine ones the
ones that basically fit into a normal
pattern that can save the Radiologists
time to actually focus on the difficult
cases so it's not that the Radiologists
are going to be done out of the job
quite the opposite it means that they
can actually concentrate on the patients
that actually need a bit more effort and
a bit more help so that's one example
and the other example is just an
anecdote so I was I was on a panel
discussion a few weeks ago um with a
with a clinician and at the end I said
oh so what would be the one key message
you would say about the use of AI you
know to to the audience and he said do
the simple stuff do the boring stuff
first because all the all the use of AI
That's patient facing is challenging
there are a lot of regulatory
implications especially with some
something that you know is evolving like
an algorithm um so there's a lot of
regulatory stuff that still is being
worked through but there's an enormous
amount that can be done in the sort of
the back office the patient Pathways the
organizational stuff as you said um that
is not necessarily quite so sensitive
and is not regulatory um in the same way
um and that's absolutely perhaps the
first opportunity and I'm sure Andrew's
got many examples of that Andre you
wanna well I mean I mean the other area
is pathology particularly looking at
blood smears for leukemias where you're
you know you have to look through a
microscope at 100 different slides uh or
a 100 places on one slide to try and see
to check whether you can find that that
that bad cancerous cell and of course
you look at the machines doing these in
the Laboratories and they they they sort
of flick through the the pictures are
just
going and it's done in seconds but there
still has to be calibration there still
has to be someone checking uh because
they can Trend away from from you know
so that there is always work to do to uh
to make sure that it's running properly
I mean I think I'll come back to what I
was saying about doctors earlier on uh
you know I uh I I do feel that that's
one area which is going to be much more
difficult I mean to to me uh that first
consultation with with a doctor with a
new condition is the foundation of
medical practice and and if the doctor
is a good doctor and uh actively listens
uses empathy uses compassion even humor
and and gets the trust of the patient
then they'll get the proper story out of
the patient and that's where I find the
difficulty in believing that chap Bots
would be able to do that but it's a very
personal experience but it's after that
that the doctor can then use um the
sorts of things we've been hearing about
out and supportive other Technologies to
complement that work and take them
through after that but um I think that's
a very important principle actually in
medical practice thank you nichos you've
got a point and then I want to open up
another question because you men you you
made a point you asked the question you
know are we going to see the
organizational change required to see
the benefits of this technology and I
think so a point that I find very
interesting about generative AI is that
un like unlike and you're absolutely
right to ask this question that you know
any other Innovation we had had to come
with explicit redesigns of processes and
systems in order to see any productivity
gains so generative AI actually is
backwards compatible with anything that
we already have so in a sense I mean you
know if you're a hospital and you have
an information system and sort of work
processes you don't need to
fundamentally redesign them to start
getting benefits out of using generative
AI for doing some of the more repetitive
tasks like coding not keeping uh sort of
sort of letter writing and so forth I
mean this can be done within the
existing system now obviously in the
long term once you have these tools you
need to start thinking about how to
design the system better I mean and and
my I'm not an expert in healthcare but I
do know quite a lot about organization
design and structure and the trouble is
you make you know uh sort of badly
structured processes and work more
efficient that's helpful but it's
nowhere near as helpful as actually kind
of re-engineering the process in the
first place and of course the AI can't
do that for us I mean unfortunately you
know if you think about the the tortuous
process of of you know me getting the
appointment at the hospital to get my
you know my my hip checked I got a new
hip last year I mean there's no there's
no way II can help us on that we've got
to get and of course we've got you know
years of of bad examples of of failed
process redesign that that need to be
worked on and aren't yet sort of working
so I I I'm I'm afraid I just leave that
as a as a problem unless one of you's
got a bright idea about that it does
seem we need Andrew you're Andre just I
do agree I think it's it is a change
process however much you may sound it
make it simple nichos and uh we know
that change is is always very very
difficult especially for the end user
even if it seems that it's going to make
life much easier it's amazing how much
resistance you can get in in big
bureaucratic systems and uh so you have
to take account of that and the
educational processes and building of
the trust which we came back to is going
to be fundamental right at the beginning
really and all the way through that sort
of change process thanks Barbara did you
want to add something to that or yeah I
mean just I mean I I can't talk to the
internal workings of of a healthcare
system system where I I intuitively feel
there are massive opportunities but for
instance remote monitoring of patients
so um I mean Julian you know you had to
go in to have your hip checked after
you'd had your operation but if if for
instance you had a chronic condition um
then you would be able to be monitored
at home potentially for many of the
aspects of that condition and you
wouldn't have to go in routinely once a
month which is what a lot of people have
to do you would go in if your condition
deteriorated and you needed to go in so
there is re-engineering of processes
that way which can improve efficiencies
so here's a question which I think all
all of you actually have some expertise
in answering so what we've got of course
is I mean you know every country's got
its own Health Care System but you've
got in the UK the NHS dominates
everything orbe it with some private
stuff on the side we've got lots of
startups several of you are investing in
startups you've got the the Googles and
the Amazon and the apples all of whom
are sort nibbling at the edges of this
huge industry this ecosystem of
healthcare and saying maybe there's
something we can have here is it
possible that this competition between
all these different types of
organizations is actually going to
provide an impetus to create efficiency
gains in some part of the system I mean
that's a perhaps a vain hope but it's at
least possible you many of you are
working in all you know with startups
are these startups helping to well I
would have thought so but but it's
really important that they are able
these startups to show Effectiveness
good outcomes and Effectiveness so many
of these apps and startups you know they
their value is having numbers on the app
not and they very rarely show an
evidence-based or Effectiveness so that
that's that's crucial and if you can
show I think there's huge opportunity
for apps which can show that they are
you know a easy to use avatars or
whatever it is and effective at what
they do in delivering sustainable better
health or sustainable improvements in in
anxiety in the case of Serena so I I
think that has to that has to be the
case and you know I dread to use the
word regulation but you know nobody
likes the word regulation but somehow we
have to try and ensure that the the ones
which are not really using AI or are not
really showing any Effectiveness somehow
are dealt with whether it's through
regulation I don't know but that's a
problem to me yeah Crystal you also talk
about so so moving with the
proliferation of these apps you know
assuming that we can we can pull out you
know sorting the wheat from the chaff in
terms of Effectiveness and and really
medically valuable
things let's also bring it back to I I
think I keep bringing it back but it's
it's really important is diversity
equity and inclusion in in medicine you
know Julian you had your hip replacement
you had to go in every month to to get
treatment what happens if you were
living in rural Africa and it was a 10
mile walk every time you had to go in
you know so so by getting these apps by
getting you know I I was um I was
recently reviewing someone that was
looking at drones for delivering
medicine in rural locations you know we
can drop off medicine we can pick up
samples and go all of a sudden you have
access to reasonably quality good
quality let's say health care for people
who just never could could have it
before yeah you know and all of a sudden
with with this technology and I think
sometimes we see this you know it can be
adapted relatively quickly by a lot of
people when there's no other option so
can I can we run with that point because
um one of the questions we've got is
will the global differences in AI
Innovation significantly widen the
inequality gap between the developed and
developing World whereas the poll I
showed at the beginning talked about I
mean essentially um the audience said
they believe that it's actually going to
help to address disparities chryst
you've given us I think a nice example
of how AI can potentially help to reduce
that Gap or at least to help underserved
areas other thoughts on the the
developed versus developing country
divide obviously Andrew you're in India
Barbara I think you've got some
experience with this as well
yes I mean I think I think it's a little
bit analogous to when the mobile phones
came in and and landlines and basically
in the in then you know vast numbers of
people in Africa and India have mobile
phones now um whereas getting a landline
was a huge issu they basically
leapfrogged over that stage and went
straight to the mobile phone I think
something similar can happen here where
instead of just going through trying to
improve their basic Health Care Systems
they may be able to Leap Frog here so I
think think there are opportunities it's
it's going to be patchy um I think a lot
of the early stage companies that I talk
to are actually doing trials in India
for instance um but I think and there
also the Middle East countries are
really investing in AI although that's
probably going to be mainly for the more
wealthy members of the population rather
than throughout the population but I
mean Andrew is obviously in India so
your your thoughts on that point no I I
I agree I mean having been into some
really um looking from the outside quite
old-fashioned buildings in in small
towns near hydrabed the the equipment
that they've got in them is absolutely
uh top rate they they've clearly
leapfrogged in many ways from from the
what they would have had even five years
ago and really moved in into the new so
I think there is an opportunity for
things like AI to to Leap Frog I mean
it's partly perhaps because there's less
regulation that there's more freedom to
uh to uh to to sort of do these things
without being held back uh and I think
that's that's the case in India but
there's certainly an appetite for
Innovation and in fact some of the most
coste effective surgery cardiac surgery
is definitely done in India you know
DEET and his team there um using perhaps
I don't know about AI but certainly
using modern technology they really have
jumped and there is a real opportunity I
think to learn from some of that work
good um
I want to move to a question about
regulation there's a couple of questions
about regulation I mean obviously
Regulators uh have a job to do which is
to make this stuff safe um we touched on
it already um what what are your
thoughts about um I mean I guess the
best way to ask it is I'd like to be as
optimistic as I possibly can here I mean
do we do you think that that Regulators
kind of get it in terms of the you know
either fast tracking or opening up their
sort of their minds as to using
AI as an opportunity or rather kind of
as a risk who wants to have a go at can
I just start and say well I think at
last nice uh the National Institute for
clinical Excellence for for our our
overseas viewers as it were um has
actually started a formal program to
look at uh healthtech startups using Ai
and uh you know that's not a regulation
but it's it's checking that they are
medical that they they are doing all the
things you would expect and that they
are showing Effectiveness and I think
that type of approach um is important
but but it doesn't mean to say that the
others won't just carry on doing as they
are saying they're doing this but
they're not but I think people should be
looking for that sort of sign off and
there's an organization called Ora which
I forget what it stands for but is
trying to assess uh apps in the health
Tech field field and in terms of their
utility and things like that and I think
that is one way to people be looking for
those to see whether an app is one which
they should be thinking about looking at
so the analogy here for me is the
financial contract Authority FCA in the
UK for banking um I mean you may or may
not know much about banking but you know
the UK has become this Hub London's
become this hub for fintech financial
technology startups because the FCA has
created this regime whereby they they
allow people to try out their new stuff
in a sort of a Sandbox which sandbox
meaning you know a place where you can
do it without risk of contamination of
the rest of the system Andrew are you
saying that that nice or perhaps there's
other regimes where they are trying to
help startups try things out on an
experimental basis they are they're
doing exactly that and uh and Serena has
you know this app from the mental health
out I've talked about has been given a
sort of early approval um for for
research purposes and that's going to
give us a great bip I think and we're
now doing a randomized control trial and
so on and but you see so many promises
made by these things and which just uh
are not true and how how the question is
how do we manage that how can we try and
ensure that you know well don't be too
rude about them but really they are not
delivering any sort of Effectiveness and
yet people believe the marketing and and
and and go for it and I suppose it's not
sustainable they realize after a while
that they're not gaining anything from
it and come off it I suppose the market
in a way may eventually uh you know rule
out but it's not seeming to do that at
the moment I mean as you say it's it's
in any industry you see this
proliferation of companies emerging
whenever any new technology comes along
remember the doom boom uh and you know
most of them will fail uh most of them
should fail and of course the only
difference here is it's it's potentially
dangerous for for users as well as for
the investors in these companies so um I
don't know if anyone else wants to to
jump on on this point about regulation
about how we nichos do you have a
thought on just wanted to say that you
know we focus a lot on regulation and
rightly so in this industry you as well
as any industry I mean we need to
protect the end use there but but you
know to to my mind the the figures are
not necessarily on the regulatory site
but on the fact that we we often fail in
healthcare to to to build a market after
something has proven itself so let's say
you know the the app that Andrew has
mentioned I mean the Serena which I know
a little bit about I mean if it's uh if
it goes to prove itself it's not clear
who who who would buy it I mean the the
NHS doesn't have sort of one point of
access that one can sort of you know
sell a successful new application even
though it would save a lot of money so I
think we need to be thinking about sort
of yes regulate to protect but also at
the same time sort of put in the
structures so that we create healthy
markets for for innovations that have
proven themselves to to to
proliferate
especially sorry I would add one good
thing about your app Andrew especially
in the field of mental health you know
this is life or death you know if you
have a depressed person who's you know
experienced a crisis or something like
that you know apps like this can be life
thing so it's so important to get them
into the right hands and the work
Andrew's doing is
fantastic Mar's point is is is true I
mean the NHS has waiting times to see
clinical psychologists of you know at
least six months from the time of
referral uh whereas an app whatever the
app I mean this is what we find you know
you can as soon as you can get onto it
you start straight away and and you're
able to go through six sessions over a
period of six weeks by yourself self
self-managed and uh at least clinical
psychologist should be saying in this
case well why don't you try this while
you're waiting but it's absolutely
impossible to get into The National
Health Service what what they need or a
Health Care System needs is somebody who
is prepared to assess on behalf of the
NHS these apps and to say it's a very
disintegrated Service as we know but to
to to actually stand up and say this is
a good one and this one is not um and so
that the NHS has somewhere to go to
because otherwise you have to go through
it every everywhere you go that you have
to start again and it makes life very
difficult so we are talking to
universities and employers rather than
the NHS where the need is gracest wow
yeah Barbara you've got a point on that
and I've got another absolutely I mean I
think yes I mean a lot of our early
stage companies are really banging their
head against a brick wall with with the
NHS they can get feasibility they can
get Pilots feasibility studies but
actually getting adoption is a really
difficult thing but I completely agree
with with Nik this point I mean I think
Regulators are are incredibly important
they have to protect the public that's
really what they're there for but that's
only one step and the next step is
actually to get your product paid for
and um and you know for instance in the
US if you don't have a a reimbursement
code you're not going to get your
product used so and and that's something
that companies have to start thinking
about very very early on it's not just
getting over the regulatory hurdles but
you also have to think about how do you
get your product commercially adopted um
and what's the path to Market from that
point of view so I've got a lot of
questions about aspects of user Behavior
patient Behavior one specific one says
panel seems to assume I'm not sure you
do that because a patient can do
something remotely they will in fact
those who need the care most don't I
mean I think the broader point there is
you know for these things to work we've
got to see a fundamental difference in
the way that people behave and I I'd
like your reflection on that I mean is
it is it the case that certain segments
of the population ages or whatever are
showing themselves more willing to the
use these how do you try to change well
I don't want to come back too quickly
but but I mean I think we do find that
younger people um are are more prepared
to come onto a uh onto an app where they
don't have to see anybody you know they
don't have to download to a person uh
they're much happier coming onto a
digital app where they can self-manage
themselves but older people don't like
that and they want to you know they're
not so Keen at all on on that sort of
thing is a very great generalization and
they prefer to have a face-to-face
contact in in in in some way so we do we
do see those sorts of difference with
younger people much more prepared to try
some of these new
technologies fview on user Behavior yeah
please B so I was I I agree with that
and we've got an aging population and so
we have to be very careful that the
elderly don't become um essentially
disadvantaged because they're not
digitally um literate and at ease in the
same way and you know and some some some
areas of society as well so we do have
to be careful of this digital divide
that that doesn't make things worse yeah
Crystal um and I would I would add to
that as well you know looking at
volition so so one of the therapeutic
areas that I'm responsible for at cada
is depression and you know how are we
dealing with folks with depression and
and to get folks to engage is not
trivial you know if someone is in the
middle of of a low you know brushing
your hair can be insurmountable for the
day you know so I I really do like this
question because you know the answer is
it's it's very complicated you know and
and and speaking the digital divide and
and speaking of you know when we talk
about apps we assume that everyone has a
cell phone but you know I think it's
it's something like 20% of folks and
this this is an America the last time I
looked um doesn't it like 20 to 25% of
folks don't have access to a smartphone
even in the US and and does that and it
usually has to do with socioeconomic
status it usually correlates with that
so does that even further
disadvantage people who are people who
are po you know how do we how do we
bring that back up and and that's a very
good question yep thanks I didn't
there's any more on that I've got one
one final kind of big category of
question let me just a couple of people
have asked about this but is this is
this issue of of of of you know what's
going to happen to the jobs that's
always a question when AI comes along um
and we all know that some jobs will over
time disappear and other jobs will be
created in that space that's what
history kind of tells us creative
instruction we call it in Academia so my
question's got two parts really one is
about let's assume that most of our
audience are interested in in in the
world of healthcare for their careers
what sort of job areas are are the big
kind of growth areas within the the
healthc care profession and then
slightly related is what are the sort of
skills that people need to be kind of
honing if you like for them to be
successful in this artificial
intelligence
world so I mean there's lots to that I'm
sure you've each got something to say on
it I'll go to Nichol first on this one
absolutely I think anybody that can help
sort of Health Care actors from sort of
you know hospitals to pharmaceutical
firms to sort of you know insurance
companies
integrate AI machine learning into their
work processes will be will be extremely
highly valued and anybody that can
access the bridge between sort of you
know what AI can do and what the
healthare system can do probably even
more so so uh uh you know to to to
anybody that's thinking about what to
study well if you start from sort of a
clinical perspective maybe invest a
little bit of time understanding uh
technical aspects of machine learning
and and data science and helping people
with a more technical sort of background
apply the skills to the needs of your of
your sector and vice versa and of course
London Business School has some great
programs in analytics and management
that people should be thinking about as
they do that who else uh who's next um I
don't know Andrew do you wantan to go
next on this one what was the first
question because first question was
about what particular kind of jobs or
professions within medical services and
and then the second was more the
specific skills that we should be
focusing on yeah I mean well we've
already heard that um you know radiology
and pathology and those sorts of things
where there sort of multiple routine
things to have to go through are are
going to be very much s of taken up more
with with AI I think um if you if you
want to have a job which is not under
threat although even being a surgeon is
under threat these days because of
Robotics and things like that um but but
surgery I suppose is less likely to be
using AI in terms of the actual
practical uh process of the operation
but but even with robots someone has to
operate the robot uh and uh and those
sorts of things so I think you know
those areas are pretty protected um as
should be the individual as I've said
before the individual onetoone patient
doctor interface at least for the first
meeting with a new condition I think
after that you know other things can
take over tele medicine takes over um
you don't have to see the patient
directly and I I would hope that people
will come back to to general practice
once we get better Ai and systems in in
primary care where there's a real
problem of overload of paperwork and and
all the rest of it it does seem that the
human touch is something that we're
never goingon to you know want to lose
right and I as you say the human touch s
we say over a screen is something we've
kind of started to figure out but but
we're a long way from those Bots
actually having a proper conversation
with person um who wants to go next
we'll take both uh Barbara G yeah so I
mean I think historically people have
been either from a biomedical background
or from a tech background the really
successful people will be able to do
both they'll be literate in both genres
and I think that's very important and
that will happen because basically all
kids are going to learn to code I think
that's really important you just grow up
learning to code and it's just another
thing you have and then you add the
biomedical expertise on top y
Crystal um yeah I was going to say you
know my my innate answer to what you
need to learn learn programming yes
learn computer science boys and
girls learn that because that's that's
the language of the future and you know
like I say learn how to use technology
it's it's not AI that's going to take
your job but someone using AI will so be
that person using
AI exactly so we've got a couple minutes
left I mean I was just again I'm just
going to draw from the world of
financial services I saw an article in
the financial times and said something
along the lines of when it comes to
investing human
stupidity beats Ai and what they meant
by that of course is that you know if
you want to invest your pension in in a
in a Tracker fund which follows the
market the AI can do that it's very good
at replicating if you like the the
footsy index but if you want to beat the
market or indeed run the risk of losing
out that's when the human interface
comes in because the human sometimes is
is taking on those slightly contrarian
bets that help you to as it were beat
the herd now does does that apply at all
in the world of medic Medical Services
or health care or pharmaceutical
research I mean I I want to bet that
sometimes that kind of Maverick sort of
Elon Musk quality must sometimes pay
dividends in your world any any thoughts
on that it's a bit of a wild card
question I'm just wondering if anyone's
got a thought on it I mean to be very
provocative the m
to me these days is the sort of doctor I
was talking about who who spends has
time to actually listen and uh and use
empathy and uh all that sort of thing
and uh and really um doesn't want to use
the technology in that first interface
and uh what is happening more and more
is that the doctors aren't aren't
perhaps doing that as much as they used
to and they're doing a battery of tests
to try and find out what it might be
before they've really thought thought
about well what is the diagnosis and
therefore we want to try and find we've
got three ideas we want to now confirm
which of those it is so we're getting a
awful lot of over intervention and over
technology um you know and I would hope
that listening to the doctor and the
doctor being at the center of things
will will
remain some sort of control on that but
I'm not sure and you know from Amazon
drivers to call center workers to
whatever you know technology can become
this sort of Big Brother that absolutely
you know drives our Behavior to the
point that we lose our human qualities
Al together so you know we mustn't we
mustn't let it do that that is that is
for sure any any last thoughts on that
sightly mic question or or yeah yeah I
think I mean if you look at the the
investment into this area um investors
tend to to go um according to Fashions
so one or two will invest in an area
then a whole load of others will Pile in
and follow and you know nobody gets
fired for following the trend kind of
thing uh but the really successful ones
tend to basically strike out and be the
first to invest into a new area so I
completely agree I think it's a great
point I mean all the money the VC money
is piled into generative AI yeah um you
know the earlier investors in that area
probably will do well the latter
investors will not you know smart
investors figure out what's next what's
rather than what's what's gone before I
I think we're going to stop here if
that's so okay I mean I'm not going to
try to summarize our conversation we've
obviously covered a huge range of issues
and I really would like to thank our
panelists enormously for their breadth
of answers I didn't get quite as much
disagreement I'm afraid as perhaps I was
looking for you were all very uh nice to
each other but perhaps that means that
the path forward is is actually uh
relatively clear in terms of where we
want to go even if not how we get there
uh before we close um I would like i'
like to just tell everybody that there
is a QR code which I should think should
be flashed up on your screen about now
uh just to give you a link to
information about our next event which
is coming up in November it's on a
different topic it's called the road to
cop 28 aligning expectations with
outcomes which of course is all about
the climate emergency I believe I'm
going to be one of the hosts of that as
well so please do come to that event
obviously there's going to be a whole
series with our with our think uh sort
of Monica around it coming up this year
and indeed next year so with that we are
GNA finish thanks once again to Crystal
to Barbara to Andrew and to nichos I
really appreciate your very thoughtful
insights into this topic um I will close
thank you audience I'm sorry I didn't
get to all of your questions but we did
get to quite a lot of them thank you for
all your attention and all of your great
questions we will close there thank you
from me and from London business school
and good
evening
oh

---

### think ahead: Energy Transition, A View from the UAE
URL: https://www.youtube.com/watch?v=ONsN6nxftZk

Idioma: en

so just to get a started Alex I mean not
everybody will know Peta I I know it
pretty well as a company that weon and
business school have worked with a lot
over the years just tell us petac and
what you do at petac so petac has been
going for about 42 years now uh and we
started out as the clues in the name
right it started out as an oil and gas
Services Company um based birly in
abedine looking at the North Sea and as
well as in in sha in the UAE where a lot
of our business is based so we've been
delivering large scale onshore and
offshore energy assets mainly oil and
gas for the last 40 years so we design
it we build it and then we operate it
and more recently we started
decommissioning it as well uh my role is
we started an energy transition projects
group about three three years ago um
because the the essence of what we do in
in the oil and gas Services when
engineering construction and operation
is equally applicable in hydrogen or
carbon capture or offshore wind uh a lot
of the uh the the periphery of the the
job that you do a lot of the actual work
to make project successful revolves
around safety procurement Logistics
construction safety uh scheduling
invoicing all all that good stuff uh it
doesn't really matter whether it's a a
steel pipe with oil and gas in it or
whether it's a steel pipe with carbon
dioxide in it like going for a CCS
project so we are a a company that can
deliver um the energy assets for a low
carbon future thank you good so you've
lived in the UAE I think Abu Dhabi for
many years obviously you're doing
business there all the time so we're
going to just pick your brains a little
bit on the view in that region and I
guess there's a for some people there's
an in conr in congruity easy for you to
say thank you around um cop 28 happening
in the region because for a lot of
people who are perhaps not so involved
there they think of Saudi aramco
literally the biggest company in the
world they think of the state oil
companies in AB Abu Dhabi Oman Qatar
Kuwait and so forth and they think this
is a region which of course was built on
oil uh and continues to invest in oil
and gas so how how do you make sense of
what they're doing is this is this their
attempt to sort of show to the world
that that they are part of the solution
rather than being part of the problem so
I think it's an existential question for
the GCC countries if you look at their
history the last 7500 years they've
built their wealth they've built their
geopolitical presence and and influence
based upon delivering energy to the
world and I say energy rather than oil
because um it has been oil and gas for
the last 100 years or so but ultimately
they they deliver the energy that we all
need to turn the lights on uh to to
produce the pet chemicals that that we
all use day daily and it's quite it's
quite interesting sometimes when you I
always like to talk to just stop oil or
Extinction rebellion and I normally take
my Petra fat lanyard off but I'll ask
them you know well how did you get here
and what are your shoes made of and and
what did you eat today and because
actually the oil and gas it permeates
everything we do so so the Middle East
has been the swing producer a massive
producer of the energy for the globe um
for for for decades
if as customers the world starts turning
to a net zero future which is the plans
is in law and so their customers are now
going to say to aramco to adnoc we need
energy but I want it to be zeroc carbon
or low carbon um that's if if adnoc or
ramco can't Supply that they'll go out
of business um so for them to retain
that that social Packa with their CI CI
citizens to retain their their Global
footprint to retain their business model
they're going to have to change to and
they are changing to a lower carbon
Energy Future um and they're uniquely
well placed in order to do that in that
not only are they able and have done so
for 40 50 years deliver large scale
projects they've got the infrastructure
for export they've got the
infrastructure internally for large
companies to deliver projects um and and
they have that interaction with customer
and Supply chains the shipping the the
import terminals Etc so that they're
there they've also now fortunately for
them made a shedload of money with the
oil price that they've got the enough
funding if they choose to to then invest
in the capex needed in order to build
those assets so it's a strategic play
for them and you've seen aramco and
adnoc uh moving faster and further in
the energy transition uh and they
they're they're part of the cop 28 and
cop 27 discussion around phasing out or
phasing down the view from the the
Middle East is very much oil and gas
will still be needed um we're still
going to need fertilizers and pet cams
for for well well past 2050 and what
we're asking for is net zero so overall
it has to be Net Zero so that means
you've got some emissions you can't do
we're not saying we have to all stop
Flying or stop using Plastics um but
you've got to then counteract that with
either direct air capture carbon capure
project so we've got the uh uh we've got
that Net Zero piece so for them it's
existential it's required and they're
well placed to do it so so talk about
some of the specific types of uh
projects that you see in the middle e so
for for most of the general public
they've heard of neom and indeed um it
was just mentioned in the previous panel
by Daniel um many people have heard of
Mazda um I mean you don't have to focus
on those but it would be quite good to
get your just your explanation of what
some of these major projects are that
we're seeing being so there's there's
two main strands one is to produce oil
and gas more efficiently so reduce
emissions reduce methane leaks make sure
that they are the lowest carbon
production of of uh of oil and gas that
will continue to need into the future I
think um the UA calls itself the the has
the lowest carbon footprint for per
barrel of oil produced because it's
actually quite easy to get it's not deep
water offshore in Brazil where you've
got pre-salt deposits that takes a lot
of energy just to get the oil out for
them it's it's abundant it's fairly
allow they've got the infrastructure so
cleaning up their emissions and making
sure there's no leaks and producing the
lowest carbon barrel of oil we need uh
that we will continue to need for the
for the future secondly they're looking
at low carbon projects the um I think
the largest solar farm is now in the UAE
Mazda was set up in 2006 actually run by
uh Dr Sultan aljaba um who's now the
president of well the leader of CEO of
adlock and the president of of cop uh
cop 28 uh so his his background for
instance has been in that for a while uh
petat were fortunate enough to be
awarded a main CCS project in habshan uh
just back in November for adnoc so
there's a lot of carbon capture work
going on uh along with solar there we're
starting to see some potential wind
projects particularly in the GCC that
can produce if you've got abundant solar
and decent wind you can start to produce
green hydrogen uh we see a lot of
activity in Oman for instance where
they've got uh very good um export
routes from dukham down in the South
that can go to Africa up the Su canal
and also to Asia and they're looking at
you know billion dollar scale projects
with wind and and and solar to produce
green hydrogen from water and again
that's another energy Vector they can
see so that's where we're seeing the
activity and which Technologies do you
see the most potential I mean the
previous panel we talked a little bit
about some of this but green hydrogen
carbon capture uh I think blue ammonia i
l do not know what blue ammonia is
apologies but I mean are there some
technologies where you think I mean
particularly in Middle East but perhaps
more broadly where you see the biggest
potential for actually reducing
emissions given that we're going to be
using um oil and gas for the foreseeable
future so I think it's going to be a a
wide fragmented mix of energy sources
and and vectors for transporting the
energy we've been really lucky the last
100 years our wealth industrial sort of
growth has all been in the globe um
being lifted up out poverty by
hydrocarbons as a bit of a monoc crop or
monoculture coal gas or oil highly
energy dense easy to transport uh and
can be used in a a multiple different
different ways from Aviation through to
you know Coal Fire Stations um as we go
forward in the low carbon world you're
going to find a really fragmented mix of
Technologies so in some places it might
be wind if you've got abundant wind some
places it might be geothermal uh it
might be Hydro right if you've got
somewhere like Norway with with Lo loads
of hydro facilities um you might find
that it's hydrogen again where where
that makes sense uh and you might find
that it's it's sustainable aviation fuel
so where we're seeing activity and where
we're focused on is in four main areas
one is carbon capture and we are uh tech
technology neutral as a company that
allows us to sit with a number of
different solutions whether it's a well
established aiming solution or hot
potassium carb we've been looking at uh
and even just yesterday quite a novel uh
a novel Solution that's that's basically
an organic solution um so carbon capture
we think is is where we're seeing
activity in the UK for instance you've
got these clusters coming up in tside
and uh humberside the Scottish cluster
Etc in the UAE clearly in order to get
low carbon um fuel out they're going to
have to start capturing some emissions
or direct air capture so carbon capture
is definitely one way of doing it and
that speaks to Net Zero because we're
going to have emissions so therefore you
need you need to capture some of the
remaining heart toate sectors hydrogen
is another uh key directive and we're
seeing a huge amount of that in in the
in the GCC I mentioned Oman hydrogen is
a really tricky molecule as my colleague
would call it it likes to escape it's
very small goes through valves Etc it's
also not particularly efficient because
you have to take electricity and water
by electrolysis uh to produce hydrogen
which is best then used locally if
possible because it's quite hard to to
transport um and if you want to
transport it long distances we're
starting to see it being used as either
ammonia so turning it from hydrogen into
ammonia so it can be shipped or used as
shipping fuel MK is looking at that and
others or we're seeing it as a ethanol
as well being used so there's a I think
is it Michael Li talks about the
hydrogen ladder which is is ruffle some
feathers but in my view if you've got
Electrify everything so if you've got
electrons and it's completely zero let's
use let's use electricity that's fine
but if you've got a stranded electron
sitting off the North Coast of Scotland
and the grid can't take it you have to
do something with it so you could use a
battery to then store it part-time uh
that's quite expensive in short term if
you can't use a battery and you can't
put it into the grid then you might as
well turn it into some kind of liquid or
gaseous fuel so hydrogen is the the The
Logical The Logical route use that
hydrogen locally um either blend it to
to make uh sustainable aviation fuel or
a methanol or ammonia for transportation
um is the it's the best way of using it
because that otherwise if you transport
hydrogen on its own even as a a liquid
organic or as a compressed that's
actually quite expensive in terms of the
energy penalty so those are the reasons
thank you um final question um bringing
it back to kind of the corporate level
and I was just looking online so adnoc
the Abu Dhabi National oil company they
plan to to spend 15 billion on clean
energy projects by 2030 they've got a
pledge to get to Net Zero by I think
2045 I looks on Saudi aramco's website
they've got a pledge to get to Net Zero
by 2060 that's an awful long time away
um they have a 1.5 billion
sustainability Fund in aramco but you
know they spend $38 billion a year on
capex so I guess my my question is you
know not withstanding all of this good
stuff you know is it is it enough right
I mean this is this is a good a good
effort it's progress but it does feel
like we're still you know going back to
what Yan says right at the beginning
we're still you know not getting
anywhere near where we we need to and I
guess it's a question to to you in terms
of how do both the companies think about
it but but also of course how do the
governments because in all cases these
are basically government controlled
companies so we can't completely
separate out the state oil companies and
the national governments how how are
they thinking about it how are they
talking about actually managing to get
to the uh to the ultimate Net Zero
Target so it is interesting because they
are setting they got targets 20160
2050 um and and they're getting pressure
to bring that further down they have
interim targets I think uh um KSA have
got a a 2030 Target to reduce by 280 odd
million tons per year uh uae's got a
2030 Target as well so they are they are
moving that direction however their
business model is also predicated on
selling hydrocarbons and energy to the
world so there's definitely a ying and
yang there in terms of how they do that
I think as a as a globe everyone is
agreed we've got to get to an N zero the
end point is set and we we're kind of
saying mid mid century is what we need
to do I think you we're horribly off
track right we we need to accelerate
absolutely clear um but it's us as
consumers right so there's a business
model there right how how do we change
our demand as well and it can feel
overwhelming as a consumer what
difference can I make as an individual
but I would strongly encourage everyone
to look at their what they're doing what
they're buying you vote three times a
day or more depending how hungry you are
on when when you eat right where's your
food coming from is it you know is it is
it is it carbon intensive meat is it
plant-based is it highly processed is it
packaged has it had how how many food
miles does it have we as consumers can
make that choice every day three times a
day on what you eat likewise how you
travel what you wear um
can you cycle can you take public
transport I think I've seen the climate
Action Report came out with we need to
build every um every year a public
transport system the size of New York
cities every year for the next 10 years
in order to you know again get people
because car mileage is still going up
and and while the battery electric
vehicle uptake is is is is on track that
still takes carbon intensity to to run
those vehicles and you've got to charge
them where's that electricity coming
from so I would really encourage you I
think we can all individually make a
difference and that's ultimately it's
those buying signals that will affect
the business models of what the of what
has produced and and we we have the
power indeed thank you good we are going
to take a break in one second um so
first of all thank you so much Alex for
a terrific
[Applause]
session

---

### think ahead: Challenging Contemporary Energy Systems
URL: https://www.youtube.com/watch?v=hJOeONgMszA

Idioma: en

so we move directly on to our next
session and I am going to welcome up
onto the stage Professor Derek bun a
colleague at London Business School uh
who's going to be leading a panel to
talk about challenging contemporary
Energy Systems Paving the way for
transformation Derek thank you thanks
here we go go yeah please
yeah so if you you
sit thank you Julian so um we have uh um
I a challenging set of issues to go
through at the moment I think the energy
transition and it's been with us for
about 20 years since the Kyoto Protocol
and uh it's had its ups and downs
various progresses have been made and
you know in some respects I mean I feel
that the uh the easy things might have
been done already and the big challenges
are are kind of facing us at the moment
and so to kind of put some of those
things in perspective we have we have
three guests who are both prominent in
their fields and can bring a lot of
expertise uh into this area I'm very
pleased to to welcome Daniel Hannah from
from barles uh Albert from um uh
Bloomberg new energy finance and Marta
basz from BCG I'm going to ask them each
to kind of just say about a minute uh
for about a minute about themselves um
and what they do and what their
expertise is and then we're going to go
into some of the big questions and I
will post post some some topics there
that I think um are kind of crucial uh
over the next uh 20 years really in in
kind of building on the energy
transition and making a kind of a a
substantial impact on decarbonization
and there will be an opportunity for for
questions uh both online and and from
the audience um in the in the way that I
think has been explained to you already
um if you just scan the the the QR code
and they will appear on my um my um iPad
here and uh I I have the the uh the
privilege of deciding which ones I might
I might kind of ask the group so if we
if you could just spend um maybe 30
seconds introducing yourself what you do
uh and your expertise so so um Daniel
please yeah uh Daniel Hannah the global
head of sustainable Finance at Barley's
Bank um we've got a commitment to
mobilize a trillion dollars of
sustainable and transition Finance by
2030 and to align our financing towards
the NetZero pathway and we are um also
investing 500 million in early stage
climate
Technologies perfect thank you Albert
you um first of all yeah thank you very
much for having me um I so I noted
earlier that I'm the only person here on
stage who's not an alumni of lbs so
thank you in particular for for
welcoming me here to speak today um so
my name is Albert Chung I'm Deputy CEO
of Bloomberg NF we call ourselves bef
for short um and we are the research
business within Bloomberg that focuses
on low carbon transition um so all we do
every day is think about um the past
present and future of of global low
carbon transition across energy
transport industry um agriculture uh
increasingly financed as well um and uh
I've been there about 15 years at this
point so yeah looking forward to the
conversation yeah and and I promised
that you would be an honor Alum us after
this thank you very much it is a
pleasure to be here I'm Martha Vasquez
I've been in Upstream oil and gas
exclusively for more than 20 years the
first 10 at the slom so have field
operations practical uh experience
experience and I have the privilege to
be leading at BCG the topic of the
decarbonization of the Upstream asset
and I would like to also make the
disclaimer that uh we firmly believe I
firmly believe that oil and gas demand
will decline in most scenarios and there
is a big challenge to make sure that the
pathway is clear on how we do this in
the most responsible and low GSG
emissions way and that is my Miss
thank you very much thank you we we'll
come back to some of those points I'm
sure in the next half hour so I I think
I'd like to start by by taking a kind of
a perspective view um looking at at the
current trends looking at in particular
the challenges in the trends and that
and I think Albert you'll be best place
to kind of start that off with your your
work at
Bloomberg um so I'll try and kind of
talk a bit about where where we see
things at the moment I think to work in
energy transition is is to kind of live
with contradiction and to have cognitive
dissonance every day because you're
always seeing record growth things are
always moving faster than ever and the
progress is incredible but at the same
time it's it's never enough and you're
never like the transition is never
moving fast enough so maybe just to back
that up with a few kind of facts and
data points that we see from BF um last
year for the first time we saw more than
a trillion dollars invested into low
carbon Technologies so think of
renewable energy plants um electric
vehicles battery storage hydrogen um
carbon capture stage all these
Technologies we know and needed to to
achieve Net Zero and a trillion dollars
is not a small number it's uh it was a
fantastic um and it grew 30% year on
year so I don't think there's that many
Industries growing 30% year on year so
that's really great um renewable energy
installations this year will be um
almost 500 gaw again up 30% from the
year before um 90% of new power plant
capacity that's being installed is clean
so almost all if you're building a coal
or a gas plant today you're an absolute
minority um and and shrinking um
electric vehicles we think um today
they're probably 14 or 15% of the market
globally which is an incredible
achievement we used to count the number
of countries that had 1% EV sales and we
the first country the second wow we now
have three countries that have 1% today
it's 14% globally and we think it's 30%
in the next 3 years so just in
incredible progress um however lots of
challenges um you will have seen um
we're starting to see offshore wind
projects being cancelled um or auctions
for offshore wind failing and that's
probably the biggest kind of red flag
that we've seen recently um and that's
because of supply chain disruption cost
inflation and there's this window right
now where the costs of key Renewable
Energy Technologies have risen and so
the project developers who signed
contracts in the last year or two to
deliver projects at a certain power
price now suddenly find themselves
unable to achieve those those power
prices that they they said they would do
so they're having to cancel their
projects and that's causing a lot of
pain and it's putting at risk some of
the the energy and climate targets of
certain countries and we're also seeing
Rising competition between countries um
we all know that these Technologies are
largely produced in Asia many of them
produced in China anywhere between 50 to
80% of the supply chain of these
Technologies is in China and so you have
the US Europe India other countries
stepping in and saying well we want a
piece of that pie so we're going to
start um putting in TR barriers and
subsidizing local production which is is
creating some tension as well and then I
think the going back to the cognitive
dissonance just with all that growth um
if you take that trillion dollars you
add in another 300 billion that's going
into Power grids investment which is
also critical for the transition you get
to about $1.4 trillion going into kind
of Net Zero compatible kit that's that's
being deployed at the moment um we think
we need to be doing three times that
much about $ four and a half trillion
dollar per year for the rest of this
decade in order to get on track for Net
Zero by 2050 so that's the scale of the
challenge um and we I know we want to
talk about hard toate sectors and so on
but maybe I'll leave it there for now
and we can come back to other challenges
as well yeah thank you very much that's
good and I think just where that that
those trillions are going to come from I
think um we we've got the third speaker
that can perhaps say a few things about
that um I'd like to ask you a little bit
about the the supply chain issues that
you brought up I mean to what do you
think those are temporary or do do you
think there really has been a structural
shift and that and that this this idea
that the costs are going to continue to
come down is now historic and that that
going forward the you know the supply
chain issues are crucial and possibly
becoming more crucial um there's good
news on that front um so um as I said
during the energy crisis because of
these disruptions um solar became more
expensive for the first time in 15 years
batteries became more expensive for the
first time in 15 years and and wind as
well all those things have been coming
down for a long time so solar is now
backed down and back down in in fact to
record lows and because the supply chain
responded very quickly that's been an
incredible turnaround just in the last
year so on solo we're we're in a great
place actually it's hurting the
manufacturers because they've they've
now
overinvestment year um in about a week
and a half um and I can't tell you the
result of that but I can tell you it's
yeah things are looking better and then
um wind is really the one that's still
having pain and I I do think it will
return to a downward cost Trend it's
just taking little bit longer because it
it's easier for the other Supply chains
to respond for a variety of different
reasons um the raw materials are um uh
smaller markets that can respond more
quickly the supply chains frankly a lot
of them are in China and Those comp
companies can respond more quickly so I
think wind is just going to be a little
bit slower to respond and that's why
you've just got this window where
projects are really challenged but
ultimately we we think it does turn
around yeah that's good to hear your
optimism we we may come back to some of
the those issues shortly I mean I'd like
to pass over to you now Mar and
particularly uh from the the oil and gas
perspective um in in some respects there
hasn't been quite so much progress there
as there has been in power generation
and you know I'd like to to kind of hear
your thoughts on on kind of what are the
possible easy wins that we might have in
the near term and what may need to
happen in in the medium and longer term
thank you thank you Derek just to ground
us on some of the facts the oil and gas
industry contributes to 5.1 gigaton of
emissions scope one and two this is
about 15% of the emissions in energy and
uh but when you put together the scope 3
emissions that is about
24 um gigaton which is more than 50% of
the emissions in energy and you are
noing so I think you some of you are are
familiar with this statistic it it is
material okay it it matters just
intrinsically from the footprint now I
started my introduction just saying that
um there is only one way going forward
which is a decline for the demand and
the supply of oil and gas still there is
a big role to play for this asset class
however not all the barrels are equal
okay and we believe that whenever uh
whenever we put together all the barrels
in the world uh both what is existing
what is in development what is in
Exploration what hasn't been uh explored
yet uh some of those barrels will stay
on the ground and the winning barrels
will be the low low cost and the low
emissions barrels now you you say we
haven't made uh enough progress there
the pressure I I want to make a third
Point around the pressure that is in is
high it has been high and it is
increasing is extremely hard and we will
hear more from Daniel uh and I was just
in a conference in in London uh over the
last today increasingly hard to get
access to Capital it is not debt but
especially when there is a uh a
transition from the big owner to the
meat and a small cap company um they
need to demonstrate that they are doing
this in the most competitive way uh to
get access to Capital Talent extremely
difficult to access the talent pool that
we have in this room and to actually
retain the great people that we have who
we by the way we need in order to
decarbonize other Industries as well
right and uh finally there is a huge
pressure and um on the tax front on the
fiscal front I think most people here
will have heard of the IRA in the US
Australia has made progress in methan
the the carbon border mechanism in
Europe but also the methan uh the methan
emissions tax Outlook all of that is
putting pressure this is an important
point to remember
now why else we haven't done enough
progress um I think what what we notice
is extremely hard uh for uh for
companies to T called the energy
trilemma I think for the last three
years this is a topic that we have
spoken at length but we can leave it so
vividly in new ways even in the UK right
in the UK that we have the offshore
petroleum licensing bill you know uh
being proposed at the moment so that we
can have annual licensing rounds there
is a big element of energy security okay
energy security that if countries like
the UK have it in top of Mind imagine
other countries in the world who are
very early not only in their energy
security but the second point is the the
economic growth element and on top of
that having to decarbonize and do this
uh with a net zero mindset is extremely
hard sometimes to to reconcile these
tensions and possibly the fifth point
that we leave every day whenever we work
with some of these companies is that
it's extremely hard to change the
context in which people work it is not
only about the operational and Technical
challenge or the commercial and the
financial challenge it's about creating
the context for people to make different
choices every day right the people who
are doing offshore and onshore
operations have to have the right
performance framework and incentives to
say hey I'm going to take eight hours to
restart this well instead of two hours
okay to minimize flaring because this is
one of the most practical l so to
transform each of these companies it
takes time it is not going to happen in
weeks so I can expect uh the earlier we
engage um the better but it will still
take uh months um and possibly the last
the six point just in direct answer to
what can we do today versus what might
take
longer this is a positive news by the
way but uh 40% of the emissions uh um I
mean there is a dark side but a positive
news 40% of scope one into emissions in
in in my industry is from methan uh and
it is has it is woring from one side but
on the other side we have viable
technically operationally and economical
solutions to Abate this emissions today
it is not IR realistic when a company
says by 2030 I will be zero mean
operations okay so this is really
important together with Energy
Efficiency in flaring there goes 50% of
the footprint okay now longer term what
people are what we need to bet uh to bet
on in order to really have a net zero
pathway is two main things
electrification for which Renewables or
nuclear or anything that is uh lower uh
G emissions is is really critical
enabler and carbon capture so ccs and
fortunately just to end in a in a
positive note part of the actions that
we see
many oil and gas companies taking is
actually launching these new businesses
right and I think if some of the some of
the gains in this very profitable
industry go towards launching these
businesses as soon as possible I think
it is a huge contribution to the energy
transition yeah thank thank you very
much M there's a lot in in what you have
said there um I I want to pick up very
quickly on a couple of points and then
then then then bring in bring in Daniel
I mean methane is very topical at the
moment and you right to suggest that
that that is a possible um significant
win that that can happen I mean as
probably most people know or not
everyone I mean methane is about eight
times as detrimental as carbon dioxide
in terms of emissions uh and and a lot
of it can be solved by better
operational performance um what's what's
the quality of a kind of international
government governance and audit and
uh in some way
authenticating the the the supply chain
for for methane I mean given that a
number of countries are putting in uh
regulations uh that oil and gas you know
should should have methane limits below
certain levels EU has just done that and
so on um I mean I mean is is the quality
of monitoring sufficient to be able to
kind of uh authorize that process yeah
no thank you Derek and uh
no
uh and and I would like to say more uh
no uh however in some jurisdictions
we're moving really fast and I think it
is the
combination uh when it works best we
have a combination of Market you know
pushing for a shareholder and the the
commitments of the companies but also
the fiscal and Regulatory support when
you put them together it can I think it
can be quite powerful uh to create not
only the pressure to have to do it uh
but also a way to monetize the low G
emissions hydrocarbons and the two more
points the certification of this low G
emissions gas is an increasingly
important topic and miq is an example we
work closely with them is an example of
a third party organization who says I
think we were talking before um it is
not about monitoring mean emissions at a
country level level it's hard to take
action we need to go to the asset level
to the facility level to be able to
track down and be able to certify hey
yes you know along the value chain this
LG cargo is indeed you know L um mean
emissions so yeah that is the
certification and possibly the last part
I just would like to give the audience
and the panelists here confidence that
we do see and we are working with
companies who are taking action to
prepare you know for more market and uh
government support and incentives but
also to be able to monetize these low G
emissions G emissions gas thank you and
then there's just one other thing that
that you you mentioned um and that that
I think possibly could link back to an
aspect that Albert you could comment on
um you you talk about the the kind of
the inevitability of of demand
Destruction for for oil um uh I'm not so
sure about that I mean a lot of that
depends upon the transportation sector
and the transportation sector basically
um in that context is all about
electrification and I just wonder um
what the scope is for electric vehicles
uh in uh third world countries in you
know in in Africa in in South America do
we really expect
Transportation uh in developing
countries to move away from diesel uh
and
I don't know I don't know if you want to
comment or maybe Albert first of all in
terms of of Trends you're seeing on
electrification I mean globally not not
just in um sure maybe just very quickly
I think um if you take our sort of base
case view from our long-term electric
vehicle Outlook um ro road fuel demand
Peaks sometime later this decade um and
then starts to decline from there um but
we we need to go a lot faster if we're
going to reach Net Zero and I think
Emerging Market countries are one of the
big um you know call it challenges um
and adoption in those countries is
really really far behind so when I talk
about the 14 or 15% penetration of EV
sales globally today um that's because
the big markets are doing that heavy
lifting China Europe uh us is catching
up and those are responsible for you
know I don't know the very large portion
of auto sales but it overlooks many many
many small markets where penetrations
are not or
1% um I think this can change I think
it'll change first in the kind of two
and three wheelers Market think of you
know bikes and um Tuk TS and things like
that buses as well I think those will
change first but even with cars I think
there's there's room for optimism
because we see in the second half of
this decade between 2026 and 2030
depending where you are in the world um
it will become cheaper to buy an EV than
to buy an equivalent quality internal
combustion engine 2030 2031 in Emerging
Market countries for cheaper cars so
it's a a bit further away in those
markets but it is coming um and that's I
think that's when it starts to become
interesting can can I can I come in here
because I I think it's worth just
stepping back I mean five years ago 1 in
70 new cars were EVS now this year we'll
probably be at what one in four one in
five and so just in five years we have
seen an exponential growth in EVs and I
take your point very much on on Emerging
Markets but actually here the majority
of mileage done in Emerging Markets is
two wheelers not four uh and you're
seeing in places like India huge
Innovation already on in terms of EVS uh
in terms of the two-wheeler Market but
then also battery swapping and the sort
of infrastructure around that that can
really start thinking about how you
create an ecosystem so actually India
kind of gives me hope that again you
know what what we have seen is
technology has consistently outperformed
the expectations particularly in places
like on Sola and and EVS I think the big
question if I if I can keep going uh the
big question for all of us though which
I think and Mar and Albert did a
fantastic job scene setting the one
thing we haven't talked about was
interest rates were a rock bottom level
for the whole last decade and a bit in
which we've seen this tremendous growth
so I think actually one of the big
challenges speaking as a as a banker is
you know is the transition affordable at
5% interest rates I I think that is and
you've seen that impact in the markets
in terms of valuations of some of the
very big renewable companies coming down
70% since their Peak um and it is
definitely getting harder to raise
capital for even great companies I mean
we work with a lot of early companies
and you know that process is now
probably taking more like 12 to 18
months when you know just a year ago it
was probably taking about six so there's
definitely the the trend has shifted and
I think it's important to reflect that
but and I think it was right that I go
last because money in some ways I think
is is the last thing to worry about I
think as as Mar and Albert very well set
out if the context works if if the
project works the transaction Works
money will find a way and I think
there's really two big challenges in my
mind that we need to solve for one is we
need to scale Renewables I think Albert
absolutely correctly talked about it
three-fold increase in Renewables needed
we need to Electrify what we can and
then power that through Renewables and
the second is that we need to really
tackle these hard to evate sectors that
Martha kind of talked about 30% of the
emissions that we need to reduce in this
decade is going to come from new
technologies that need to get Scaled up
so you take those two things and I think
that then presents two challenges um at
Barkley's we've funded Moray West which
is going to power half of Scotland's
electricity through offshore wind um and
in my past life I've done a lot of
renewable financing including the
largest uh concentrated solar Park in in
the world but the Big Challenge and the
big stat that sort of was missed out is
if you strip out the big countries China
and India Renewables are basically flat
since Paris and I think that's that's a
disaster so how do we scale financing
into the emerging you know the the
lowest the countries that have most
exposed from climate change and actually
have the biggest opportunity Elite R I
think is one of the big challenges we're
going to see more around things like
using the World Bank and other catalytic
type Capital crowd in the private sector
but really we've got to collectively
think about how do we go after uh and
really Electrify at PACE um and then
power that through Renewables and
Emerging Markets the second one is about
the hard to evate sectors so how do we
tackle other sectors where you can't use
electricity uh and power those through
Renewables and so that's going to need
new technology um Mar talked a couple of
those carbon capture hydrogen the likes
at Barkley we think the hydrogen Market
is going to grow Eightfold over the next
sort of couple of decades and we're
already starting to see momentum coming
in there but we need to move faster to
tackle climate change we've got to take
great ideas from ideation to IPO and at
Barkley we're trying to create this kind
of escalator to speed that up that's why
we've got some very focused Partnerships
around the early stage there's something
that we do with unreasonable and
actually I was with them yesterday with
20 new companies that are thinking about
all these sort of challenges um we've
backed 300 of those companies over the
last since 2016 they've gone on to raise
over 10 billion of financing employed
more than 24,000 of people um and some
of them have then gone unlisted we're
also deploying 500 million to support
these technology companies directly
through Equity carbon capture some Great
British companies like Brill power and
the energy storage or proteum which is a
hydrogen Solutions company but we've got
this Gap at the moment this kind of
scale Gap and broadly I think that we've
got very good as an industry at scaling
software companies right Facebook social
media these type of companies but the
issue there is adding a million people
onto those platforms is a marginal
increase in capital in climate Tech you
basically have an exponential increase
in capital you have more and more
Capital that you kind of need to deploy
and I think that the finance industry as
a whole is not very well suited for for
tackling this missing middle of capital
and that's something that we're very
focused on I think a couple of things
that will help the inflation reduction
act in the US the EU new green deal the
sort of work that the UK is doing around
providing cfd back stops for some of
these new technologies but overall we
need to innovate there to really scale
up these technologies that can tackle
the heart to evate sectors I'll pause
that thank you and and I think that that
queued into a number of things that I
was going to ask you about um but I mean
you mentioned hydrogen um and I mean I
mean hydrogen's to to me seems to be a
kind of a major challenge because you're
trying to kind of create a new economy
almost um o overnight it's not just you
you're bringing in something like an
offshore wind and it's going to kind of
slot in where there was previously other
kind of generation you know you you
you're developing something which has
got production infrastructure and Market
um I mean h how does that new economy
come in because you you've got the
demand the infrastructure and the supply
all of which don't exist at the moment
um I mean do do you see that being done
through major policy commitments or do
you do you see it being done through if
you like organic growth where the the
industrial sector does it first because
they need to do and then and then from
the industrial clusters it it spreads
out um it's clear that we need long-term
storage and it's clear that hydrogen is
the best solution for that
but I mean I I think I think the
investment will is it makes a lot of
sense but but how does that kind of
translate in into the development of the
sector so I think it's a great set of
question we probably do a whole panel on
just hydrogen and I'm sure Albert and
Mar have got very strong views on this
as well um I I'm not sure I agree with
you that it is the solution for
long-term storage I mean I think there
batteries um and deploying other
Technologies we've backed a company
called Energy Dome that use compressed
CO2 that can provide more than 24 hours
storage at a very cost effective rate so
I think there's a lot of innovation in
the storage but I think the challenge
where I see hydrogen fitting in is the
things where you can't use Renewables
and storage in a simple way and where
you may have excess renewable capacity
then I think to your point you could
then transfer it but the economics
around hydrogen I think are you know
there's a lot that we could talk about
there but to come back to your framing
which I think was right I think one of
the big challenges is we got a
coordination problem so you're a
professor of decision sciences and I
think is exactly right so you need both
investment from the producers and the
consumers but both producers and
consumer looking at each other and
saying well you go first and that leads
to a sort of suboptimal equilibrium and
so that's why I think policy has to play
a really key role the inflation
reduction act which I think you know
estimates and again probably these are
Albert's numbers I'm sure I'm borrowing
you know could unlock over a trillion
dollars in carbon capture and hydrogen
both of which have been mentioned big
policy tool we're seeing the hydrogen
hubs here in the UK as well I think
that's really really important um but
the key thing that we need to deliver I
think is kind of
from a to make a project bankable is
offtake and so how you can have
long-term off-take of these things which
really comes to this this point around
if you like the inflation reduction Act
is trying to pump Prime the production
but we need to see the consuming sort of
businesses effectively commit to
long-term off-take so if you look at I
was involved in financing the world's
largest green hydrogen project in in in
Saudi Arabia and Y and effectively that
was the key piece there was a long-term
off take often these places there aren't
now there is some discussions going on
in us and UK policy tools effectively
how do you provide that sort of support
in the absence of it as a temporary
thing and then get the private sector to
come in so I think this this is a very
live issue I think you put your finger
absolutely on it um and there's a lot of
work going on across the finance
industry and policy to think about what
are the solutions to tackling that but I
think Albert I'm sure you no yeah Daniel
Mak some really important points and
I'll just maybe build a little bit and
add a couple other other other points to
that I think um one thing that's
important to know about hydrogen is I
think there is now a a consensus a
narrowing consensus around where
hydrogen should actually be used and it
used to be this idea hydrogen will be
used everywhere and we use it in our
homes and our cars and I think all a lot
of those things have gone away and it's
really understood now there's some
really key applications where hydrogen
is required to decarbonized like steel
production um ammonia production
chemicals you know some some parts of
refining now the issue is that those are
big industrial companies whose products
are Commodities and therefore if they
are not competitive if they decarbonize
first but but become uncompetitive
because they've taken on a load of cost
then they lose so they they've gone
green but they go out of business and if
you want to buy green hydrogen today
it's probably going to cost you5 or $6
doar per kilogram depending where you
are in the world most of these
industrial companies say we need it to
be one or $2 per kilogram if we're going
to be able to uh switch to hydrogen and
still be competitive so that premium for
them like somebody's got to help deal
with that so whether it's government
mandate subsidies um uh things like that
but but what's interesting is when once
you feed that through so if you're a
steel manufacturer and you switch to
hydrogen and it increases your costs by
10% it makes you uncompetitive but for
the car manufacturer who's buying that
steel to make a car the car that's sold
at the end is maybe only 1% more
expensive and to us as a car buyer you
you would find that negligible you would
say I didn't even notice that so I think
there's to your point about off-take I
think there's really um an important
focus on how do you get the whole chain
to recognize this value or somehow kind
of connect the user through to the the
kind of green hydrogen whether it s kind
of green certificates or other programs
that can really connect it through and I
think that's where well we it needs more
work and more thought to figure that out
yeah thank you and in terms of the chain
Upstream I mean are are they oil and gas
companies enthusiastic about developing
their capabilities in hydrogen or are
they dragging their feet I think um um
more
broadly many of them are enthusiastic
not only about hydrogen but about carbon
capture and Renewables I think there is
at least um two examples and I hope it's
okay to expand Beyond outside of
hydrogen but just I think in the last
two weeks we heard the total energies is
a partner partly owner of the largest
offshore wind farm in Scotland and it
has just started 114 turbines so I think
that is a very tangible example of
something that a traditional oil and gas
integrated company is doing right to uh
to expand uh there is also I think over
the last six months uh exom Mobile in
the U in the US acquired a 5 billion
pipeline operator to support the carbon
capture agenda so I think it is we need
them in this business we need them in
the future in the future businesses and
I'm I'm very glad to see that thank you
can I ask the panel kind of a pointed
question on this um you know we we
understand how to decarbonize the
electricity system in this country for
example what what do we do about the gas
Network um I mean do do we expect
hydrogen to be the the solution for
decarbonizing the gas Network do we
think the gas Network should become a
stranded asset and we shouldn't use it
anymore I wean
do I I yeah let me go first because we
we we are the carbonizing gas networks
at the moment and by the way um we need
the gas Network to be transporting gas
low carbon for the foreseeable future I
think first before we I I hand over to
you to speak about the hydrogen uh
Network and most I would say 90 or 95%
of the emissions are methan leaks so
which we can actually aate today so I
genuinely feel really positive you know
about the Outlook this almost low
hanging fruit um to decarbonize the the
gas Network
there so by decarbonizing you you mean
putting hydrogen through the existing
network no I mean I mean transporting
gas with low G emissions impact I'm
talking about the operation
Transportation the switch no the the
switch of fuel that is a that is that's
a different topic right but the point is
that we will need gas between now in
2050 right okay yeah yeah but do you
have any thought on decarbonizing gas
yeah just to say you know we have our
own Net Zero scenario that we've built
at BF that goes out to 2050 and kind of
tries to answer the question of what's
the technology mix that will decarbonize
the global energy economy in that
Outlook in the net zero scenario we
still have oil we still have gas we
still have coal in 2050 um alongside
some carbon capture and storage a little
tiny little bit of carbon removal for
for some of the really really difficult
things so I don't think we're saying
these fields go away and and you still
need to transport the hydrogen if you're
going to have hydrogen in some of these
um facilities you're going to need to
transport the hydrogen as well so there
will be a role for molecules that will
be retained in a net zero world but it
will be smaller it will be quite quite a
lot smaller in some cases so I think the
challenge and the question for gas
networks is what does that transition
really look like for them how do you
avoid kind of um investing in stranded
assets and that there you need to go
much more in depth into what's the role
of this particular asset is there a
carbon capture inore storage facility
nearby which makes it Net Zero
compatible and so on it I think it gets
quite specific at that point interesting
do you do have a view on this Danel I
mean so the only thing I would add is is
also this point around carbon capture
because I think we're going to have to
use pipes to effectively transport CO2
the other way to to storage so I think
and I think I'll pick up on Albert's
point which is maybe to tie it a little
bit back for things like hydrogen but I
think we're going to see the emergence
of very large projects like neon but
then also there are going to be some
very specific on on site situations
where you're trying to decarbonize
something that's just very hard to do so
and then there'll be the emergence of
these sort of smaller projects there
kind of a barbell Outlook and I think
that context then becomes really key
because I think we can all model things
um you know very well now and you know
they've got some great modeling that BNF
and others have done but actually there
is the Practical context of when you're
trying to decarbonize a situation and
that may mean that you're using
something that from a model perspective
looks suboptimal but needs to be
delivered so I think we're going to see
these bespoke small projects that's
something that I mentioned proteum
that's where they're very much focused
and these really large Mega projects
that are going to kind of think about
how do we get things like green ammonia
and others to the most cost- effective U
Place possible thank thank you um I
actually wanted to to ask you a question
Daniel about infrastructure in general
and infrastructure financing um I mean
we we've we've spoken a lot about about
the Technologies which are coming in but
when you're thinking about
electrification in general the the
degree of network expansion that has to
occur is enormous not not just the kind
of the high voltage but but local as
well I mean um what what's the kind of
the the solution there I mean is a scope
for a lot more third-party Finance in
infrastructure ownership we've already
seen in this country for example
separation of the system operator from
from the the transmission ownership
which should open up the potential for
for you know independent investment uh
in a regulated way on infrastructure
assets is that an asset class that would
be
attractive um regulated asset class
obviously and more of that or I mean it
has to happen no no I think it's a very
good question I think it definitely does
I think we have seen infrastructure
become a sort of recognized asset glass
and actually increasing amounts of
capital going into financing it I mean
you're absolutely right I think the
amount of capital I think Albert touched
on this as well that needs to go into
grid infrastructure is is is very
significant we're going to have to see
um companies that own and run grids you
know increase the amount of investment
you know manyfold over the next um few
years and that needs to be financed I
think it will be financed through Equity
I think it'll be financed through
infrastructure debt and and the like so
um and then that effectively has got to
be paid at some point as well so I I
think I I think the capital actually for
infrastructure is is actually an easier
discussion to have because in some ways
that's scaling what we've already got
and I think you've seen a number of very
large funds like Brookfield and other
raise large amounts of capital to deploy
into these sort of decarbonization
stories and other things for me the
bigger challenge actually is this
scaling of the next set of Technologies
these sort of Technologies full the hard
to evate sector and that sort of missing
middle I talked about rather than say
the infrastructure financing I think you
know for the right project the right
sort of scope money will find its way
for that but I actually think the the
sort of this mid middle of capital for
how the sort of new technology the next
wave of climate Tech that's going to
require a bit more Innovative
thinking and and there's a thinking
there because um that that technology is
unproven and it's very high risk because
of that or be because it's kind of
economic role is not understood or or
yeah that it it may not be the right
solution it it's all of the above I
think it's all those situations and and
I think we should you know think about
EVS I mean to to to use an example just
to make the point but I think the first
EV came over like more than a 100 years
ago um we are trying to scale some
technologies that um not all I mean
hydrogen and carbon capture have been
around in some components but some of
these other areas we are trying to scale
technologies that are very
nent um and you've got effectively risk
on risk you've got new technology risk
you you've got infrastructure risk
you've got Le sort of regulatory risk as
well so I think it's there is a number
of different um Dimensions there that
even with you know certainty as I have
that we are going to see this kind of uh
decarbonization wave continue it's just
a question of how fast um you know for
an investor that's a very hard set of
risks to break down and so that's where
you know public private kind of
coordination can really work and I also
think coordination across um both within
the industry you know Insurance private
Equity Banks but then I think Albert
made a fantastic point which I hly agree
on we're going to have to start thinking
about value chain financing and value
change Solutions and how do you
effectively look through the entire
ecosystem and work out how to
effectively uh effectively create the
lookth through that allows that
situation to be bankable um across the
ecosystem thank you thank you very much
that that leads into uh a question which
is not a surprise in this institution
it's coming from the audience and that
is you know the the scope for for new
businesses for startups for for uh
Innovation uh for the kind of things
that that graduates from Business
Schools like to do um I mean do you see
the the this the energy transition being
a kind of a big established company game
or do you think there is a kind of
fertile ground for for a lot of new new
new innovation to to come in
uh and grow
yeah I'll ask yeah yeah I mean I so I
think it's both um I feel I'm going to
maybe repeat a lot of what Daniel's
already said but um I I actually think
the sort of startup ecosystem in climate
energy Tech has been pretty healthy the
last couple of years slightly more
difficult at the moment than it has been
but um lots of Venture Capital Money
available for those companies developing
new technology um much more hard tech
than I'd seen in the previous round I
think when we were doing this a few
years ago was a lot of software
companies trying to optimize this this
or that bit of the chain which is
incredibly important but I think now
there's an understanding that okay
there's some really hard Hardware based
issues like can you apply
electrochemistry to mind tailings to get
clean copper out the back because we
have an issue with copper production you
know really difficult things um that are
now able to attract capital or until
this year I would say we're able to
attract Capital to to to do exciting new
Innovations
um and and then at the sort of later end
and again I'm just repeating what Daniel
has already said but um there's a lot of
money available for sort of proven
Technologies infrastructure um funds um
you know obviously Bank debt and and
large large corporates so I again
apologies for saying what you've already
said but there is just this missing
middle right now for kind of the first
of a Kind projects um and so I'll give
an example from hydrogen so our team our
hydrogen team has this um market share
pie chart they produce which is all of
the kind of hydrogen electrolizing
manufacturers around the world and how
much market share they have or how much
production capacity they have and it
looks like a um like a sea urchin or a
like a dandelion or something because
there's just hundreds of tiny slivers so
if you if you want to develop a hydren
project how do you choose a vendor that
you trust is going to produce a piece of
kit that you can rely on for 20 years
when it's an emerging industry there's
100 suppli all of whom have just built
their first factory so it's almost like
you it's starting the company now is
doable but it's sort of how do you get
to the point where you're the The
Trusted one how do you get the finance
for that first project to demonstrate
that your thing works that that's where
the the tricky part is so can I I mean
agree with everything Albert says I'm
trying not to repeat it but my journey
around sustainable Finance really
started here at London Business School
um and I I with a few others launched uh
the first green online search engine uh
we had a bit of success planted like
250,000 plus trees H and then it didn't
work out and so I had to become a banker
instead of a
successful um but so do I think to your
question Derek absolutely there is a
huge space of that and I and I think um
there's a lot of innovation going on in
this sector I you know you can get quite
um sad and depressed I think about where
the state of of climate can be and you
spend any time with people that are
innovating entrepreneurs it really does
give you faith and I think you know some
of the stats that we've talked about
today you can see the impact of
technology and I think that's what's
going to really ultimately win this for
us right is just scaling great new ideas
and there's a number of different ways
to do it I think so you know I've
mentioned one of the Partnerships that
we have at Barkley is unreasonable
there's a focus one called carbon 13
that we're working on so if you've got a
great idea you know have a look you know
you can see we run a number of corporate
challenges as well so we've kind of
worked with some of the very large
companies say okay well how can they
decarbonize say ports and Southampton
we've got a Challenge on at the moment
you got a great idea on that have a look
on my LinkedIn you'll see a link to it
you can kind of go to or just email me
so I think this kind of ecosystem and
actually we just we're just about to
publish a research piece and 99% of the
people that we uh spoke to companies and
entrepreneurs said the UK is a great
place for climate Tech um and you know I
think 70% of the companies that we talk
to see decarbonization as a Big Driver
of value for them going forward so I
think there you know all the challenges
that we talked about absolutely are
there but 100% you know there's
definitely capacity to do it and I'm
sure there are someone sitting you know
many people probably sitting in this
room who've got a fantastic idea that's
going to make a big difference to this
whole situation over the next few
years I think that's a very good point
on which to finish this panel I think um
I think we've covered a lot of
interesting issues I think we've covered
a number of kind of very big intractable
problems to a large extent um but but I
think there there's more optimism in
this panel than I I was kind of
expecting to start with and so so with
that in mind I want to thank you very
much for your contributions thank
[Applause]
you

---

### think ahead: COP28 Expectations and the Role of Business
URL: https://www.youtube.com/watch?v=MU9Li2tUwTM

Idioma: en

all right good morning everyone uh what
a privilege to be here with you uh this
morning thank you so much for joining us
so when Katrina and Julian asked me to
speak at this uh wonderful event they
said you know we want you to speak about
the role of business and the
expectations about cop 28 I was like
wonderful great topic do I have about an
hour 90 minutes something like that and
Katrina turns and says you have 20
minutes I was like wonderful okay so I
made two promises to myself for today
one to keep it within the 20 minutes and
therefore I scripted what I wanted to
say to you but second and most
importantly perhaps a promise that we
should make ourselves for today is to
avoid the easy path of Doom and Gloom
when we look at the scientific facts
about cop 28 let's be optimistic let's
be proactive let's be more impactful
today so here it goes so as I'm sure all
of you know cob 28 presents a
significant ific milestone in our
Collective Journey towards climate
action as I'm sure you already know the
the conference of the parties start at
convening in 1995 that's three decades
that we've been discussing uh climate
change and the pro the challenge here is
to forge those global agreements and
reduce greenhouse gas emissions um and
do our best to mitigate climate change
impacts these conferences have been in
in fact instrumental in in fostering
this International cooperation and and
to some extent at least propelling
climate action hence for example the the
Paris agreement now there's no question
that the urgency to address climate
change is both clear and immediate right
some recent assessments that we know
they conclude that we have only a 50%
chance of staying within the 1.5 degre
Celsius and to do that we have a
remaining carbon budget of about 250
gatons of old CO2 how long is that how
long is that going to take us at cuted
emissions
six years six short years before we hit
the uh the boundary of only 50% chance
of of heating 1.5 now two months ago
September 2023 the global temperature
anomaly sounded alarms across the
scientific Community not only did we
witness the hottest September on record
but also 2023 is now on track to be the
warmest year ever with surface
temperatures being around
1.75 de warmer than pre-industrial times
and pushing this year's average to 1.4
de cels above pre-industrial levels
right the implications of this
trajectory couldn't be more profound and
of course the stakes could not be higher
the science confirms an existential
urgency to take decisive action so as we
head to cop 20 uh cop 28 unfortunately
the whole atmosphere is a little bit of
a cautious optimism at best um which of
course reflects the complex and
inherently political nature of global
climate neg negotiations and climate uh
diplomacy right the I I would argue that
the global communities expectations
remain at best cautiously optimistic so
of course the road to cop 28 is not
about policy alone it's a more holistic
effort it calls on us the business
Community to introspect to engage and to
mobilize in alignment with our
sustainability goals so looking at the
agenda for today's event and we do have
an exciting day ahead of us I'm
confident that our discussions are just
are not going to be just academic there
will have to be a call to action and
urging all of us from our respective
roles to realign our business strategies
our business mindset mindsets even with
a global sustainability agenda so
hopefully in sodim we also cultivate a a
more collaboration to tackle this quite
unprecedented challenges so as we go
through today's reach agenda I invite
each one of you to engage with an open
mind to embrace the spirit of
constructive but also Fierce debate um
and to cont contribute actively to our
discussions across the day and across
the various panels what I would like to
do next is share with you some of my
views about the expectations for cop 28
and in fact um the interplay between cop
28 and business strategy now first let
me start by saying it's important to
understand that cop 28 is not just
another annual Gathering but I do
honestly think it's a crucial turning
point this year we start at the
threshold of the first Global stock take
under the Paris agreement which is a
comprehensive process that evaluates the
process of this the progress of nearly
200 Nations toward the ambitious climate
targets that we collectively set in 2015
15 this stock take which started last
year is set to culminate at cop 28 and
it will reflect it will reflect how far
we've come or rather perhaps how far we
have not come uh in our path to uh uh to
confine global warming uh within the
thresholds of 1.5 to 2 degrees this
technical assessment um concluded as I'm
sure many of you may have read it with
the synthesis report in September
2023 and sadly painted a very dire
picture despite an increase in the
number of countries that adopting CO2
reduction targets the existing pledges
are not on track to keep temperature
rise under 1.5 degrees in fact global
temperatures are optimistically are
projected in the 2.4 to
2.7 degrees range by the end of the
century this is far beyond the parties
agreement targets so against this
backdrop cop 28 um will host and uh and
and and will'll discuss some key policy
discussions on some critical issues
including the establishment of the loss
and damage fund and the global momentum
towards phasing out as opposed to
phasing down um fossil fuels and CO2 um
fossil fuels now I do think that the
loss and damage fund it is a historic
development this fund is the first
United Nations mechanism to help
countries that have already suffered
irreversible
um climate driven damage however the
successful oper operationalization
beginning with the World Bank hosting
this fund um it does inevitably face
geopolitical tensions and reflects
broadly the challenges that will all
that will have to be addressed at cop 28
now developing and developed countries
have made significant concessions to
facilitate an agreement but big
questions still remain an answer about
who will contribute to this fund and
when now importantly though uh cop 28
has also is often described as the
implementation cop that's because the
conclusion of this stock take exercise
that I talked about earlier is supposed
to set a road map of uh how exactly
we're going to accelerate climate action
as I mentioned just now it's also the
stage where we hope to operationalize
this loss and damage fund and for the
parties to agree on the Frameworks that
uh that will enhance overall climate
resilience and
adaptation at the same time the
negotiations will focus heavily of
course on climate Finance with a
standing committee on finance preparing
a report on the developed countries
pledge to double adaptation Finance by
2025 so the emphasis there is not only
going to be on meeting the hundred
billion pledge that countries have done
in the past but also to start thinking
about post 2025 CL climate finance and
in fact update that that pledge and and
set a new Target for Global fin for
climate Finance now all of these
ambitious challenging and often
contested agenda items of course
reinforce the idea that cop 28 is about
turning previous commitments into action
and deciding uh concrete steps for
forward now these issues all of the the
ones I just mentioned of course
underscore the critical link between
these Global Climate policies and the
business landscape in fact the business
Community finds itself at the crossroads
um of these discussions with the
decisions that we will hopefully take at
cop 28 very likely to inuence to
influence a whole host of factors
including regulatory Frameworks policy
commitments investor expectations even
potentially consumer preferences so what
does that mean for us it means that um
there's a need to for a robust road map
uh in terms of how we're going to
realign our strategies with climate
Target and in so doing to set a
pragmatic um but hopefully optimistic
and ambitious path forward for business
in fact and this is a lot of the work
that I I do is in in terms of the
integration of environmental and social
issues into strategy more broad more
broadly we know that the business world
is already undergoing a profound
transformation A disruption as I often
uh call it it's um a slow but steady
shift from rhetoric to T tangible action
so this change is evident in businesses
not only in terms of innovating uh their
products to be more socially and
environmentally responsible but also in
terms of how they entirely restructure
their operating and business models
doing their best to align line with the
planet's uh limits so this fundamental
shift is motivated by several factors of
course to create value to manage risks
to comply uh with emerging laws and
regulations to better manage the
stakeholder ecosystem that actually
places these demands on business and of
course as part of the broader effort to
really redesign and reconstruct um the
entire infrastructure within which our
Industries operate now there's no
question my mind that the engagement of
the business sector um especially when
it comes to climate but also broadly
with sustainability issues has moved
from considered an optional extra
something wonderful to do on Friday
afternoon activity to a core and
fundamental element of strategic
management in fact you'll even see that
some some companies already think about
Beyond Net Zero and they talk about so
companies like Microsoft for instance
say not only will be Net Zero but we're
going to be net negative hoping to take
out of the atmosphere all the CO2 that
we have put in since the founding of the
company now just an example of several
commitments uh that reflect a growing
recognition uh that the urg of the
urgency of climate action and the role
that Us in other words corporate leaders
can play in D in really driving
sustainability forward now uh reflecting
at least some of the themes that we're
going to see at cop 28 and uh in the
various panels that we're going to see
today um is of course the the commitment
to renewable energy which has seen a
significant surch in recent year so give
you some numbers in 2022 the global
investment in energy transition
Technologies including Renewables re
reached a record high of $1.3 trillion
do um but even with those amounts the
investment Stills fall short of the
average annual investment that is needed
to remain on track for 1.5 deg the IIA
the International Energy agency
estimates that around 2.8 trillion will
be invested in energy in
2023 with over $1.7 trillion doar
directed towards clean energy which
includes Renewables nuclear gr storage
and low emission fuels now it's
important to understand kind of these
numbers Visa V fossil fuels because this
is a significant these are significant
increases in clean energy investment um
to give you a sense is 24% for
Renewables versus only 15% for fossil
fuels and again demonstrates this um
hopefully decisive shift towards um in
our investment priorities now even more
recently and ahead of cop 28 um over 100
CEOs from the alliance of Co climate
leaders have issued an open letter
urging both the public and private
sectors to adopt transformative policies
to accelerate decarbonization efforts
their message is clear without bold
action and enhanced collaboration the
goal of a 50% reduction in emissions by
2030 with remain Elusive and some of you
may have already seen the UN report that
came out yesterday um according to the
estimates we need a 45 to 50% reduction
by 2030 what are we on track on nobody
knows an increase of 9% so we're moving
at speed but in the wrong direction um
I'm I'm I'm going back on my second
promise of avoiding the Gloom so let me
return to my script um so um I believe
that this interplay between government
policy and political will to the extent
that it exists and we'll talk about that
in a bit and pro proactive steps by
businesses in fact underline what I
mentioned earlier as the essence of cop
28 which is to have an implementation
cop in fact I do think that the private
sector and the business sector's
commitment and importantly and this
reflects back to what Julian was saying
about business as problem solvers right
and therefore the Innovation
capabilities that we bring to the table
combined always with supportive
regulatory policies and Frameworks and
the necessary infrastructure are
absolutely pivotal for this
transformation or this transition to Net
Zero so let's be a bit more specific
let's go from the general to the more
specific and think about how potentially
these cop 28 discussions and potential
outcomes may affect or could shape or at
least impact business business
strategies I mean we all we're only
going to know once we see the outcomes
but let's let's play this thought
experiment so first there's no question
that at cop 28 we're going to see a huge
push to accelerate the transition to
clean energy um and this will require in
many cases a significant acceleration
perhaps for some companies it's going to
be a strategic shift towards embedding
sustainability more deeply within
operations and business models companies
will have to adapt by investing more in
renewable energies rethinking energy
procurement strategies and funding
Innovation aimed at reducing emissions
these alignment will have to move Beyond
environmental responsibility is it will
it is and will become even more so a
business imperative and is will be
motivated by of course the need to
create value regulatory pressures market
dynamics and in some Industries changing
consumer expectations I think that um
companies across across Industries are
likely to also emphasize the crucial
role of collaboration especially in
those Industries where the transition is
more difficult and is and and sticking
your head out first as a business can be
risky um but also collaboration between
businesses and government in order to
fundamentally transform the global
Energy System system and move away from
our unhealthy Reliance on fossil fuels
also this shift in towards sustainable
energy sources could open doors of
course to economic growth new markets
and and growth opportunities for
companies and I do think that those the
companies that do make those Investments
today or already started making these
Investments on more sustainable energy
solutions would benefit from potentially
government incentives top into these new
markets first and of course bu their
brands and reputations now to
effectively manage this transition
though it's also crucial for companies
to optimize their energy usage expand
their Reliance on G green en clean
energy sources and prepare for for
upcoming policy shifts that favor
environmentally friendly Alternatives
now navigating these uh challenges these
changes successfully is becoming
increasingly vital for businesses
especially those that do want to
maintain or enhance their Competitive
Edge in a very Dynamic landscape as I
mentioned earlier and and we discussed
this a lot in our classes here at lbs
looking at sustainability and the energy
transition As A disruption as opposed to
a path with a Rosy path ahead second
issue at cop 28 there's a growing
expectations that businesses will place
a greater emphasis on integrating nature
people lives and livelihoods Into
Climate strategies this approach isn't
just about reducing the negative impacts
right but hopefully going to move Beyond
and build an understanding about
improving the relationship between um
what companies do and the broader
ecological and social environment so I
both anticipate and hope that an agreed
upon policy framework will incentivize
companies to take more proactive
measures to ensure that their activities
positively contribute to environmental
sustainability and social well-being
this includes for example making Supply
chains more resilient to climate impacts
and actively supporting biodiversity for
example now this focus on on people
nature lives and livelihoods also
highlights the need for a more holistic
approach to climate action it calls for
companies to actively contribute to the
restoration and preservation of natural
ecosystems and it's broadly about
evolving from this idea of simple
compliance to laws and regulations to
actually focus on a regeneration which
of course will will benefit the planet
but will also benefit Society local
communities and so on um they um I also
think that um companies will ultimately
have to consider more carefully and
diligently the social implications of
their environmental strategies and
especially their transition plans to net
uh zero emissions this relates back
again to what Julian mentioned as
potential tradeoffs right because we
need to have plans that reflect a
transition that is both just and
Equitable and this could involve for
example creating jobs in GRE in green
Industries ensure ensuring Fair label
labor practices and supporting
community-led initiatives that enhance
resilience to climate change I think
that these type of strategies will play
an increasingly Central role in
corporate decision making as companies
uh seek to align their growth objectives
with the broader goals of sustainable
development and social Equity third the
focus on climate Finance at cop 28
highlights an important shift in
perception and handling of climate
related funding for businesses this
means um reevaluation of investment
strategies and financial moders models
to better align with the broader goal of
sustainable development especially in
developing countries indeed a key aspect
of the cop agenda is making climate fin
Finance more affordable available and
accessible and this may result in
increasing funding for green projects
enhance support for climate adaptation
Technologies in vulnerable regions and
greater incorporation of sustainability
criteria into investment decision making
I also think that within that context
companies are going to face huge
pressures for more transparency and
accountability about their climate
Finance contributions requiring them to
report not only on the amount but also
the effectiveness of their investments
in reducing emissions and improving um
resilience now third inclusivity in
climate action it's another central
theme of cop 28 and marks a shift
towards integrating a wide range of
perspectiv and experiences in addressing
climate challenges I think that for
businesses this means that future
strategies will likely need to Encompass
a broader spectrum of stakeholders their
interests particularly those of
marginalized communities and future
Generations this could result in
businesses adopting more Community
centered approaches ensuring their
practices not only comply with
environmental standards but actually
positively contribute to local economies
and their social fabric um finally I
think there's going to be a development
potentially on the legal front we know
that uh in recent years there's an
increase in terms of climate litigation
risk so depending on what decisions and
what commitments we collectively make at
cob 28 for for instance if we do set new
benchmarks and expectations it may well
be the case that businesses might find
themselves under closer legal scrutiny
to ensure compliance with these enhanced
standards so to summarize cop 28 will
likely influence significant shifts in
business strategies emphasizing the
urgent need for a transition to clean
energy integrating holistic climate
strategies that consider people and
nature and re-evaluating climate Finance
models the focus on inclusivity in
climate action will require companies to
adopt more Community focused and
socially responsible practices while the
rising Trend in climate litigation
underscores the need for robust legal
preparedness um I think that as we look
forward these tees will be crucial for
shaping the corporate approach to uh not
only climate policies but sustainability
more broadly now before I close my talk
it's important to address directly a
critical issue the not so green elephant
in the room so the yawning gap between
our Global Climate Ambitions and the
tangible actions that we take despite
this widespread consensus on the urgency
of climate crisis there's a trampling
disconnect between intentions and real
world actions and outcome within the
business Community our community there
huge gap between aspirations and actions
is equally apparent while many companies
have indeed pledged to reduce carbon
emissions and Achieve Net Zero targets
there's a prevailing trend of
overstatement and greenwashing this is
partly due of course to the still EV
evolving regulatory Frameworks which
don't give us clear understanding well
what does Net Zero actually mean but
might also be the fact that these are
very very long-term targets that often
constrain or avoid immediate action but
I even with these challenges I think
that the majority of companies genuinely
do strive and actually experiment
profoundly for ways to reduce their
carboned um footprint we I've also seen
a new phenomenon too by the way it's is
not just green washing uh more recently
we we' also seen green hushing right
where companies actually shy away from
disclosing the environmental effort
which again highlight a very complex and
evolving in this case political
landscape with respect to
sustainability um so as we approach cop
28 and and even Beyond cop 28 there's a
very pressing need to align these lofty
climate climate goals with concrete
actionable steps so ladies and gents
it's crucial to acknowledge the
challenges and inconsistency and the
path ahead a recent Stark and sad
illustration of this is the UK
government's uturn on their Net Zero
policies prime minister Rishi sunak
decision to delay the ban on new petrol
and diesel cars from 2030 to 2035 along
with easing Energy Efficiency targ
efficiency targets for rental properties
and backtracking on plans to replace gas
boilers with hit pumps exemplifies a
concerning Trend this comes of course
after president Trump with drew the us
from the climate agreement these steps
taken under the guise of a socalled
pragmatic approach do raise serious
questions about the commitment to
long-term climate goals in the face of
immediate economic and political
pressures or indeed populist or extreme
right-wing pressures this us U-turn is
not just a local misstep it sends a
disconcerting signal to the global
Community suggesting that climate
commitments can be relegated when faced
with daunting challenges or political
expediency this is a narrative we cannot
afford to entertain and as active
citizens should not tolerate especially
at a time when the urgency to act
against climate change is
Paramount nevertheless and despite these
challenges there remains a margin for
cautious optimism and a call to action
the road ahead in climate action is
indeed fraud with complexities but it
also presents opportunities for
transformative change the discussions at
cop 28 and the evolving business
strategies in response to these
conversations are not just formalities
let's grasp let's grasp this for a
second they are in essence survival
strategies for our economies our
communities and our planet so as we move
forward let us remember the words of the
former un Secretary General of the un
bimon who said there is no plan B well
because there is no Planet B This is Our
Moment to shift from incremental steps
to significant string climate action so
as we engage in today's discussions and
look towards cope 28 let's carry this
thought with us let's not only Envision
a sustainable world but let's actively
construct one our decisions our actions
will shape our Legacy one that we hope
will be marked by stewardship and
foresight as the book says let's be good
ancestors for the generations to come
let us challenge the status qu and
transform our Ambitions into tangible
actions for for our the future of our
planet hinges on the choices that we
make today so thank you so much for your
attention I wish you an enjoyable fierce
but productive day ahead thank
you
you just stay
there okay so thank you Janis thank you
terrific stuff we've got a bunch of
questions uh so keep them coming but I'm
going to pick up on a few of the ones
that have come through already um just a
little bit on the Regulatory and
governmental en environment and then
I'll move to kind of business business
issues um so question about private
initiatives
um and development of codes of conduct
actually let me ask you this specific
one I see mainly protectionist measures
such as the Border carbon adjustment
mechanism that taxes carbon and there's
also a question around uh carbon trading
markets what is your view of the
efficacy if you like of these types of
politically motivated attempts to to
manage these things sometimes for
climate benefit sometimes arguably for
yeah protectionist regions yeah so those
are two separate issues carbon markets
and the carbon border adjustment border
tax but I do think that um both
highlight the idea that even within the
system there might be market-based
solutions that we can take advantage of
so the devil is always in the details in
terms of how well do we design and
implement this market so in my view for
instance the fact that you might have a
carbon uh trading Market whereby you
reduce the carbon allowances for
instance in line with what science would
require us to do and therefore
constraining the market and in the
process um essentially pushing companies
to adjust their carbon emissions through
through an increasing price of this
offsets makes makes sense but the
question is how is it implemented is it
Global how does the European versus the
Chinese versus an American or the
Californian system change can we
exchange those globally because these in
a sense cannot be local markets because
we're addressing a global issue right so
again in those kinds of of of issues I
would I would go with with um um sort of
the devil is is in the design details
when it comes to the Border adjustment
tax I do understand the arguments that
it might be more protectionist but look
even the inflation reduction act in the
US um got criticism by the EU that is a
protectionist act now we haven't done
this before we need to navigate this and
these are all going back to the issue
that climate change and what we do is a
global problem it's the problem of you
know know of the commons if if you like
and we'll just have to work hard and
with political will to resolve them I I
frankly don't think there's anything
depending on you know how the the who's
going to pay for this tax I don't think
there's anything wrong in terms of
leveling the playing field and say you
know if you're producing in Europe with
low carbon and someone is trying to
undermine You by importing from
elsewhere with products that have been
produced with high intensity of of
carbon yeah of course you should be
taxed maybe that may create a race to
the top by other other comp countries
but again is going to be a design
feature what are you going to do with
those processs how are you going are you
going to increase the size of the
government are you going to redistribute
those tax proceeds back to the people in
a progressive or regressive way so there
again it's all about those design
choices that we make that will determine
the outcome and we will be coming back
to some of these issues around
government policy over the course of
today we'll also talk about measurement
and that was another question but I'm
not going to touch on it now let's go to
corporate strategy because you like like
myself I mean we're professors of
strategy we try to help companies to
make good choices somebody says I love
Colin mayor's definition of purpose the
one that I I used half an hour ago but
are there any good examples of big
companies who don't put growth and
profitability
first yeah frankly Julian I think that
this conversation of you know uh profits
first Milton Freedman said this Milton I
mean Milton Freedman is dead it's been a
long while so
in every sense right exactly so let's
let's actually have a more comp more
nuanced argument of what what's going on
here right so if if you look at the
business world there's no question that
if you see their stakeholder ecosystem
everybody is demanding that they do
things differently whether it's
customers investors governments
accountability in the supply chain and
so on and so forth so it's part of a
corporate objective right of course
you're a business you have to remain
profitable but the question is how are
you going to do this how are you going
to do this in a world where the
competitive lands is Shifting so
fundamentally because every single
demand that you're facing and these are
fundamental demands right we're talking
about your investors your customers and
so on you will need to adapt so this is
an adaptation Challenge and that's what
we so that's why I mentioned before it's
not a Rosy picture right I I don't agree
with this views that say oh you know
it's all about finding a stakeholder
finding win-win dance kumaya and the
world is going to be a better place it's
not it's a disruption and disruptions
are deadly think about you know Sears
Kodak Polaroid Blockbuster that was an
easy disruption compared to
sustainability so that's why I said that
sustainability has these two components
you have to start investing in a world
where these negative externalities are
going to be priced in so that's a higher
cost world and on top of that if you
have the foresight you also need to see
where will the opportunities arise right
but you have to do both and I think a
lot of the companies you know May in in
rhetoric for the focus on the
opportunity while misunderstanding the
elevated costs and while at the same
time not really building the capability
in order to build differentiated
position yeah so we need to wrap up I've
got one one final question for you I
mean you you absolutely as you lay out
the facts there's a risk of Doom and
Gloom as it were I avoided it though I
did try to avoid you did your best to
avoid but you know there are some un
escapable facts which are really uh
rather
uncomfortable um I'm wondering what what
makes you OB optimistic I mean there
must be some things that you see out
there you know in your conversations
with Business Leaders that that at least
give you some grounds for optimism I
mean and I guess I mean particularly
around businesses because those are our
our primary audiences a business school
what what do you see them doing do you
see any any role models that you can
really look to and say this is what
others should be yeah following I think
what the I mean in addition to being in
and I'm not saying this in a Cheesy way
but in addition to being in the lbs
classroom and seeing our current mbas
our embas across exeed even the the the
early careers seeing you know it used to
be the case that 15 years ago you have
to convince people about the why they
should care about these issues right
today they come in knowing all of these
facts and ready to and demanding of us
to tell them how on Earth do I do this
help me do this help me bring about that
change so that's one key component of
optimism the second one at the corporate
level is the fact that we are witnessing
and I think across the board and in most
indust is a profound level of
experimentation companies are truly
putting money into and and we are going
to see failures because these are
fundamentally difficult issues these
were issues that were always somebody
else's problem these were issues that
often they were under the rug like you
know meeting um all the greenhouse gas
emission gases for instance so there is
a um um a wave of profound
experimentation which we have already
seen paying off at least in some
Industries like electric vehicles
renewable energy and I think the task
the first task which was let's try to
instigate let's try to start the process
of change to a large degree has been uh
achieved and now so that's a point of
optimism and now the the the our key
challenge perhaps even bigger challenge
is how do we accelerate it right and I
think that even the fact that we got the
conversation to that point is a point of
optimism for me as well good a point of
optimism is where we will end thank you
thank you very much your thoughtful
ideas thank you everyone thank
you

---

### think ahead: Complex Climate Trade-Offs
URL: https://www.youtube.com/watch?v=XE9DPMV4ENM

Idioma: en

thank you very much Julian it's it's
really great to be here so what I'm
going to speak about is complex climate
tradeoffs so when we think about the
climate crisis we think it is so urgent
that we should stop talking and start
acting we might think about the Nike
logo just do it we don't need to talk
about issues such as this but the
reality is much more complex there are a
variety of tradeoffs where if we pursue
the climate agenda there might be some
other types of cost to society and we
need to be mindful of them and this is
absolutely not to downplay the scale the
magnitude the urgency of the climate
crisis but to number one recognize there
are other considerations and number two
if we don't recognize those
considerations then any strategy that we
have to address the climate issue might
run into problems and resistance
so there's three types of tradeoffs that
I will focus on in my talk
today so the first is the tradeoff
between climate and financial returns
now you might think well is it is that
even a trade-off to begin with if you
look at the letters from Larry thinkink
the CEO of Black Rock he claims that
climate risk is investment risk so if
you want to maximize your risk adjusted
Financial returns minimize climate risk
he also says investment conviction is
that sustainability and climate
integrated portfolios can provide better
risk adjusted returns to investors again
this suggests that there is a win-win
and no trade-off finally we believe that
sustainable investing is the strongest
foundation for client portfolios going
forward and you might think well this is
what Larry think says but maybe he's
talking his own book so let's go to a
more objective source so the financial
times so so they produced some really
impactful paper articles entitled The
ethical investment boom claiming the
outperformance of ESG strategies is
beyond doubt and many other
authoritative newspapers and media
Outlets have articles with similar
claims but the big concern with all of
this is the issue of confirmation bias
so what is confirmation bias this is the
idea that we accept a claim
uncritically if it can confirms what
we'd like to be true and this
particularly applies to ESG investing we
would love to believe that ethical
companies perform better and
particularly in the area of climate we
like to think that companies that
pollute the planet will meet their come
ups and later on suffer from high lower
Financial returns but the problem of
confirmation bias is that we will
believe things even if it's not backed
up by rigorous evidence and this was the
topic a TED Talk I gave at lbs a few
years ago called what to trust in a
posttruth world about how critical and
how Discerning we need to be on issues
that we feel very strongly about like
climate and indeed there's a book I've
written which is coming out next year
with penguin called may contain lies
about how careful we need to be with
simple statements which seem quite
appealing so how do we apply the idea of
confirmation bias to the examples that
I've already given if you go back to the
Financial Times article then a reader
wrote in and said well actually the case
on ESG investing is far from closed and
he highlighted a number of pieces of
evidence suggesting there sometimes is a
tradeoff maybe ethical companies don't
perform better and then if I go to the
Larry fin statements let me start from
the bottom and work up we believe that
sustainable investing is the strongest
Foundation but if we are to take some
action it has to be more than just
belief our investment conviction is that
sustainability can provide better
returns but again we want more than
conviction is their evidence and this is
why the heartbeat of what we do at
London Business School is not just to
tell nice stories but make sure that
this is backed up by rigorous academic
research and that's what I'm going to
apply to the first statement of Larry
thinkink climate risk is investment risk
so is climate risk investment risk now
the prevailing consensus is the answer
is yes and this is backed up by some
research published in a top Finance
Journal so the paper finds and I'm
quoting stocks are firms with higher
total carbon dioxide emissions earn
higher returns so more polluting
companies earn higher shareholder
returns and their interpretation is our
results are consistent with an
interpretation
that investors are already demanding
compensation for their exposure to
carbon emission risk so the idea is that
companies that emit a lot of carbon they
are risky why because there might be a
global carbon tax in the future and so
investors are only willing to invest in
these risky companies if they are
compensated for by a higher
return but let's think about this and
let's think about it critically because
what happened
if we replace carbon dioxide emissions
with another ESG Factor so let's replace
this with employee satisfaction so there
is evidence shown that stocks of firms
with higher employee satisfaction earn
higher returns now would the
interpretation be the reason for these
higher returns is that companies with
lots of employees satisfaction are risky
it's just too risky to have happy
employees and therefore we will demand
higher returns because we don't want to
hold stocks with happy employees
absolutely not we would not interpret
this as risk we would interpret this as
outperformance right so why is it that
companies with happy employees they do
better it's just these are better
companies they are generating higher
Financial returns because they are more
profitable and so that might be the
interpretation for the carbon emissions
result companies that emit more carbon
have higher profits why because they can
get away with polluting we don't have
sufficient government action on climate
change so there are polluting companies
which are able to generate higher
profits and those higher profits lead to
higher shareholder returns so there
seems to be a bit of ESG double thing
here where if we see a bad thing leads
to higher returns we say well that's
proof that it's risk and if it's a good
thing we which leads to higher returns
we say well that's proof that it is
actually good so the question is well
how do we disentangle if we have higher
returns is this a good thing it's
outperformance or is this bad thing is
it compensation for risk and the
standard way to do this is to do what's
known as an earnings surprise test and
so this is what I did in one of my
earlier papers where I looked at the
link between employee satisfaction and
long-term share shareholder returns so
how do you show that it is out
performance well what I did is I took
earning surprises so this is every 3
months in the US a company releases
their earnings and before they do so
companies like Goldman Sachs or my
former employer Morgan Stanley they
predict what the earnings are going to
be and I compare how these companies do
compare to what analysts were predicting
and I found that companies that treat
their employees well deliver higher
profits than what the analysts were
predicting and therefore the higher
shareholder returns was due to
outperformance not risk but we'd
accepted the early result on carbon
emissions without doing that
disentanglement we just accepted the
interpretation that we want to be true
so in a more recent paper with other
co-authors what we did is basically the
same methodology to try to disentangle
the for of the carbon premium why is it
that these emitting companies are
earning higher shell returns and to our
dismay we wish this was not the case we
found it was because they were
performing better they are delivering
higher profits why the absence of
government action means that they are
doing higher better returns than what
analysts were expecting and just four
earnings announcements per year can
already explain 30 to 50% of the carbon
premium so what are the implications
from all of this well number one it
suggests that sadly climate risk is not
investment risk so the message that we
can just leave everything to the market
because the market is pricing everything
in the market is already punishing
companies that admit we don't need
government action that is not correct
the market is not getting everything
right number two is that a low carbon
portfolio sacrifices is risk adjusted
returns why because emitting companies
are performing better now one could say
I don't care I believe the climate
crisis is so severe I willing to
sacrifice Financial returns to
decarbonize my portfolio and that's
absolutely fine but the goal of evidence
is just to highlight that there is a
tradeoff there is a sacrifice many
people will still be willing to pay that
sacrifice just like people pay more for
organic food but the goal of evidence is
to show that a sacrifice is needed and
finally there might be potential
tradeoffs for investors wanting to take
climate action between net zero and
fiduciary duty so if fiduciary duty
highlights that you need to generate
long-term returns to your investors
maybe pension fund beneficiaries then
these are complexities that we need to
address and my colleague Tom goling an
executive fellow has written an article
about this in a
lger okay so that's one tradeoff that
I've highlighted tradeoff between
Financial returns and climate carbon
emissions now the second trade-off is
between climate and other environmental
and social goals let's say we don't care
about financial returns or at least we
deprioritize them but we are concerned
about Society more generally not just
climate but other things there might be
tradeoffs with those other things
600
million what is that you might think
well that's the amount of investment per
month needed to achieve Net Zero no you
might think well this is the amount of
donations every year to exension
Rebellion or or just a oil
no 600 million is the number of people
in Africa who don't have access to
electricity so last month I was at the
world economic Forum in a for in a
session on a just transition and we were
talking about in a developed country how
we make sure that if we transition
towards renewable energy we don't lose
jobs for those employed in fossil fuels
and then a lady from Africa got up and
she said you all talk about a just
transition we don't have anything to
transition from right we don't have
electricity to begin with so you
responsible investors you can talk about
decarbonizing your portfolio but if
you're pursuing this too aggressively
then you're going to stifle economic
development for many many millions of
people so you might think okay just stop
oil that is a powerful statement but for
her it's just stop Economic Development
so this is one of the things which might
be an issue here do we need to recognize
that there are some countries which
don't even have access to electricity
this is again not to downplay the
severity of the climate crisis but to
recognize there other issues that may be
asked in the west we might not be aware
of and then if we go back to the West
what's go back to the jobs issue because
many of us I have to admit that despite
me working in this field I don't know
anybody who works in the coal industry
and the average age of somebody in the
coal sector is 55 years old so if he or
she lose their job then this could be
the human equivalent of stranded assets
how are they going to retrain and this
is something with long-term impacts on
their family if their children then are
less affluent and then cannot get the
same education that's something with
long-term implications which again us
perhaps we don't know these people as
much we might not emphasize or recognize
when we focus on the very important
issue of climate and let's say we don't
care about the social the social issues
with somebody whose goal is only to
maximize the environmental performance
there are also trade-offs with other
environmental factors so we talk about
carbon capture technology and then I've
heard statements like why do we need
carbon capture technology we have a
great carbon capture technology that is
trees why don't we just grow loads of
trees which sounds simple but sometimes
growing trees will consume substantial
water often in places where people are
already thirsty it will drive people off
land that is not a problem that many of
us in the west need to think about but
this is a serious issue we could say
well to Country X why don't you grow
more trees well there is an impact there
on humans what about emissions reduction
we can also try to have different types
of fuels say biofuels but sugar cane for
bioethanol and palm oil for biodiesel
those are great biofuels but they can
lead to monocultures and that reduces
biodiversity which is another emerging
environmental
issue and the final set of tradeoffs is
the tradeoffs between the portfolio of
an investor and wider Society so there
are many investors who are very well
intentioned are taking very seriously
the climate crisis and their goal is to
aim for portfolio
decarbonization or Net Zero portfolios
or climate aligned
portfolios but decarbonizing your
portfolio does not necessarily mean de
carbonizing Society so if I own some
fossil fuel stocks if I'm to sell my
shares I can only sell if somebody else
Buys so I'm not depriving it of capital
and notice this is quite different from
boycotts as a customer if I choose to
boycott a company then maybe the
products stay on the stores I am
depriving it of Revenue but the analogy
to investors divesting is not perfect
because I can only sell
if somebody else buys I am not starving
it of capital
immediately now others will say yeah we
get that but when you sell and somebody
else Buys in order to encourage somebody
to buy you have to sell for a lower
price if you drive down the stock price
then you make it harder for the company
to raise capital in the future and again
that seems a logical argument but again
if we think about this if you're an
investor
and you choose to sell every fossil fuel
company in order to reduce their stock
price and then make future Capital
raising harder well then what are the
incentives of a fossil fuel company to
reform they know that even if they are
best in class and putting in a credible
transition plan which is being
implemented they will still be divested
so this black and white view that we're
going to divest from everybody irrespec
of whether you are reforming just
because you're a fossil fuel company
that doesn't provide any incentives it's
just like if a company was to say my
policy is never to hire any ex offenders
well then this means if you're somebody
who's been in prison what are your
incentives to reform if you're not going
to be able to get a job afterwards so
this is why one of my more recent papers
with a couple of other co-authors what
that suggests that actually a tilting
strategy or the best-in class strategy
when I'm willing to hold maybe a fossil
fuel company if it's Best in Class if
it's taking action to reduce its climate
impact that might be better than blanket
exclusion and notice it doesn't apply
just to energy companies maybe I could
hold something in a hard to Abate sector
such as cement or concrete if I'm in
holding a company which is reducing its
usage of clinkers and that's something
which has a huge effect on the
environment maybe this is something
needed we still need concrete we still
need to build schools and hospitals yes
there are emissions associated with this
but can I hold something which is best
in
class and the final reason why that's
important is that sometimes you might
hold a quote Brown company a polluting
company but that allows you to engage
right so if you have a seat at the table
then you might be able to ensure that
the company has a plan and is putting
this into practice like as a professor
do I want to say look I have all the
very best students all my students do
very well or is your job to work with
students who might be finding the topic
more difficult and then you work with
them in order to improve their knowledge
and then end up doing much better than
they would have done otherwise and so if
You' like to learn more on this there's
a great Ted Talk by a lady called nilly
Gilbert who is the vice chair of a the
um the carbon trust which is working on
these issues and it's about how we need
to take a very nuanced view on these
issues which are often seen as black and
white and so let me then sum up before
we get to um the Q&A so all the three
tradeoffs that I've highlighted
emphasize that there's danger in binary
thinking so binary thinking is saying
that divestment is good holding it is
bad pursuing climate is good let's a
ignore all of the other objectives of of
society and also it's better to always
reduce our portfolio carbon footprint
not recognizing that this may mean that
somebody else holds the emitting company
and so this is exacerbated by some
recent developments so often people
think well we need climate action as a
regulator let's try to come up with some
rules and some numbers and some metrics
but with all of these things we think of
the toris and the hair more haste less
speed we need to take action but we need
to make sure that the action is
effective it doesn't backfire it doesn't
have unintended consequences so the
urgency of the issue does mean we need
to act fast but also we need to act
wisely so we currently have these
taxonomies in the EU saying well what is
good and what is bad but hopefully I
highlighted that there is no clear
distinction between good and bad some
something that generates electricity
could well be good particularly if it's
for people who otherwise would not have
access to it something like producing
cement or concrete we still need for
construction but if you're doing this in
a way which minimizes your impact on the
environment that could still be a good
thing what are ESG ratings they're
trying to measure the ESG performance of
a company and so this leads to some
investors trying to hold highly rated
stocks and divest from lowly rated
stocks
in order to show how committed they are
to uh ESG but again if I'm selling the
poor performers number one I'm not
providing them with incentives to reform
and number two I don't have a seat at
the table I'm not holding these
companies I'm not able to engage with
them to improve their ESG
performance and finally and more
specifically to carbon there are many
investors which will report their
portfolio carbon footprint there are
even some CEOs of asset managers whose
pay is linked to the portfolio carbon
footprint of what they're holding and
one of the big trends now in ESG is to
pay for ESG the idea is that if you care
about something deeply let's link pay to
it to show that there is bite to show
that you don't just have statements but
those statements have implications for
reward but again this is problematic
because you can simply reduce your
portfolio carbon footprint by selling
emitting companies and somebody else
buys it it's just like I'm going to
clean up the trash in my garden by
throwing it over the fence to the
neighbor right so I've reduced my trash
but I've have not done anything for
society and this is something which may
well be a consequence and also this only
looks at carbon footprint but not the
positive aspects of some activity that
generates emissions as a byproduct such
as the production of electricity or the
production of cement or conrete so what
might be the solution to all of this and
I might be biased being somebody who
works for an educational institution but
it is literacy and education but what do
I mean by literacy we hear often
financial literacy we now hear AI
literacy but maybe an important issue is
climate literacy so there was a lot of
action and a lot of excitement among
young people and groups like Extinction
rebellion and just top oil have
highlighted the criticality
of taking action but if the message is a
one-sided message we're only
highlighting the um problems of things
like fossil fuels and not the fact that
it might be providing electricity not
the fact that it might be currently
providing jobs that in the long term we
do want to phase this out but in the
short term there might be some real
consequences then we do have some
potentially quite strong policies which
are so extreme they may not be
implemented so I've seen some policies
suggesting let's ban all non-essential
flights well that would be devastating
to a number of countries which rely
heavily on tourism for the economy for
jobs for economic development and so
just to highlight that yes we do care
about these issues very seriously but
there are also many other considerations
around that I think this would lead to a
richer a more nuance and ultimately more
realistic conversation about climate
where we can suggest some ways forward
but both ways forward recognize the
tradeoffs and therefore they're more
likely to be implemented okay thanks
very much I'm going to give to Julian
for
the thanks Alex do you do you want to
sit down we we've got you want to sit
down yeah sure let's do that yeah let's
do it that way um so I've got a bunch of
questions um and and of course as as as
Alex was talking I was my thoughts were
being provoked I've got a few similar
questions um I mean you're raising the
the trade-offs you are absolutely I
think of course giving us a much more
nuanced view of those trade-offs than
perhaps most of us had had before um a
couple of the questions I'm going to ask
you this specific question in a second
but somebody says given that these are a
series of trade-offs what's the answer
uh somebody else says you know how would
you like us to move away from this
binary thinking let me sharpen the
question in the following way which is
you know we we work at Business Schools
we we we believe in markets um and as
you said yourself the market don't get
it quite right in this case so if we
have some sort of market failure we
almost always say then the government's
job is to step in and to sort of nudge
the market in the right direction so
inevitably that leads to questions one
of the specific ones isn't carbon
pricing the way forward tell us about
your thoughts on how governments can
help to resolve this if you like market
failure we'll get to the kind of
corporate response in a second yeah
thank you it's it's a great question so
so what does a market failure
essentially this occurs when there's an
externality so this is when a company
has an impact on wider society which
ultimately doesn't bounce back and
affect the company's profits in the long
term and so then the solution to a
market failure is regulation so one of
these could be to completely ban certain
activities so you might ban something
like child labor but something like
carbon emissions where we think there
could be benefits but also costs it's to
take the milder solution of of taxing so
that you are recognizing the full social
consequences of your action so this is
why I and a lot of economists and a lot
of um academics who work on this I'm a
strong advocate for a carbon tax so that
companies will face up to the
consequences of their actions because
actually the market is not failing in
pricing things the market correctly
prices carbon emissions under the
current regime which is not to punish
emitting companies because there's no
consequences so the market gets things
right given the regime but I'm
suggesting we we need a different regime
got it so that's and of course we know
there were challenges technical
challenges in implementing these things
but I I do completely buy into that
direction of travel moving to the
corporate side then and and and you
touched on this and I know you've
written about it elsewhere how should
what's your advice if you like to to the
these Chief Executives who are looking
at these trade-offs and they are making
this inevitable choice to some degree in
the short term between of course you
know doing good in the world versus
making profits we we know that that's a
stylized choice we know that the truth
is of course more nuanced how do you how
do you advise companies to to to resolve
that tradeoff I I think it's a great
question because some people might say
oh yes if the government is who should
deal with it but if the government isn't
dealing with it then the companies need
to step in I think if there are
tradeoffs and you're pursuing something
because you care about the climate and
there's a financial cost to that I think
this is fine so I think there are many
investors who will support companies who
make make some return sacrifices to
address the greater good we saw this in
um the pandemic where many companies
were giving products for free is this
because they're forecasting in the
future our reputation will be improved
by this and it's going to come back to
help us or is this because we think this
is the right thing to do and there are
many shareholders who supported
companies doing that or companies which
may be fur their workers and continue to
pay them rather than just uh laying them
off immediately so I think when you have
this message and you say well it's a
completely win-win we're going to do
something and there's never going to be
a financial cost then shareholders then
get upset if you deliver substandard
results but if you're upfront as to why
you're doing this I think this gives a a
a much better message and you're more
likely to be supported why do
shareholders invest in the company it's
not just to get a higher return in the
future but to get a higher standard of
living in the future right when I retire
in I know 40 years time I don't just
care about my income but whether the
planet is two degrees warmer or whether
we have a cus of society so there are
many investors and the Pension funds
survey their beneficiaries and they
realize that they don't just care about
financial returns they are willing to
pay the price of a trade of but just be
upfront that there is a price to be paid
and many in the audience remember Danon
the French company Emanuel Fab was the
chief executive who was very very uh you
know thoughtful about the environment he
I think they made them into a big uh
benefit Corporation he lost his job at
least in part because the board felt he
was wasn't delivering enough financial
returns any any Reflections on that I
mean did he just push sh say too far CU
a lot of what he did was things that I
think you and I would probably agree
were good things to be done yeah so this
is interesting so if you if you read
sort of how this is often portrayed they
say this was a Visionary CEO who wanted
to do the right thing but it was the
short termism of the stock market which
prevented him from doing so but the
reality was that he was that down on for
6.5 years so this was a long time period
and the company stock price was flat
whereas the kakah Hun which is the the
peer group that had gone up by 50% unila
other competitors have gone up by 50%
and why is this well Janis has also done
some work on this it's because of the
some poor strategy some poor strategic
decisions some poor acquisition some
poor corporate governance and so what
this suggests is that yes you can do
good things for the environment and for
society but you are also a business and
so the challenge of a CEO yes you do
need to deliver on ESG goals but you are
also business and you also need to
deliver in the standard stuff as well
indeed a final question um you and I
Yannis we we're all teaching our
students um we're hopefully doing a
decent job um are we teaching outdated
theories because there's a there's a
hypothesis out there that all of our
theory is rooted in this sort of
traditional shareholder based view of
the world and that that's somehow
actually teaching our students the wrong
stuff another great question and I have
incentive to claim that we are why so
the um textbook that I I I I learned
when I was an undergrad at Oxford and
when we started at Morgan Stanley was
principles of corporate finance by
brillian Myers I am now a co-author of
that book for the 14th Edition which
came out a few years ago I would love to
claim I completely rewrote the book
scrapped 30 years of outdated work and
I'm now I'm changing it but that's not
the case because actually in many cas's
traditional business theory is about the
longterm now it may well be that the
longterm 100 years ago was an oil
company engaging in Exploration and
production and that is not what we would
call long-term right now but that aspect
of investment that long-term investment
was something supported by business
principles what is shareholder value the
very first class in finance shows you
that shareholder value is the present
value of all future dividends right
until the end of time so somewhat
bizarrely maybe some of the concerns are
not enough focused on shareholder value
and this might seem heretical but the
problem is companies are focusing too
much on shortterm profit short-term
profit is not long-term shareholder
value long-term shareholder value would
say to a car company invest in electric
cars this is something which will cost
you in the short term but in the long it
will benefit you beyond climate
long-term shareholder value will say
invest in a diverse and inclusive
Workforce it will cost you in the short
term but it will benefit you in the long
term and I think the message that we
need to complete scrap the rule book and
go to something new that can be a
damaging message because then some
companies think we've been successful
for so long without this why do I
suddenly need to change or do I have to
go with something unfamiliar and untried
and untested but given that what makes
business successful and has done so for
centuries is a focus on long-term value
creation I think that message is
something which should still be getting
across perfect we are going to close
there thank you very much Alex for a
fascinating
talk

---

### think ahead: Meeting the Climate Challenge
URL: https://www.youtube.com/watch?v=_LE1nBUDaDQ

Idioma: en

[Applause]
thank you junian and uh thanks for
having
me thank you all right wonderful thank
you so much so uh let me briefly
introduce myself and then I'll I'll call
up uh the two panelists in the room and
we have a remote panelist as well so my
name is um uh Sylvia pavoni uh I am a
journalist uh I work for the financial
times group so not the company but the
sorry not the newspaper but the company
and I write for a new title called
sustainable views we focus as you can
imagine on sustainability and in
particular on policy and regulations so
all the stuff that may uh feel perhaps
not as sexy but actually is really
driving uh arguably the space uh but
during this panel we're going to talk
about the challenges that specific uh
Industries and companies face uh and not
tackling uh when uh considering climate
change uh so let me invite uh on stage
um Tom and Mata who are going to help us
uh through the discussion so Tom Grande
is the CEO of hybrid uh vehicles and he
will tell us he will tell you all about
the compan is fascinating uh and we have
Mata here who is the CEO of EDF
Renewables UK obviously perhaps we are
more familiar with what uh mata's
company does but uh surely is going to
tell us uh a great uh more detailed
about uh new projects and then joining
us remotely I'm sure we're going to see
him appearing on the virtual stage very
soon is Richard uh W hi Richard who is
the UK head of sustainability for hundas
bankin so welcome everyone right so we
are going to talk about of course the
challenges the companies face um dealing
with climate change so it's not a
particularly easy uh task um to uh to
handle um
but there are different levels of
success and different measures that uh
your companies and your industries peps
may want to see um to really help you
progress um and so let's uh maybe start
with some initial thoughts uh on what
you think uh on the kind of broader
risks that your industries face and
let's start with you Tom so you can tell
us a little bit more about what exactly
it is that you do um and then we talk
about specifics okay well um thank you
Sylvia I'm Tom Grundy I'm chief exective
of hybrid air vehicles and that puts us
squarely in the aviation industry uh
we're developing the world's most
efficient or most sustainable large
aircraft so we're really working to
scale up um technology that allows us to
make an impact on emissions from the
aviation sector and that's a huge
challenge so I look at what the sector's
dealing with overall Aviation is one of
the hardest sectors to decarbonize
um that being through the simple fact
that you need to lift your own fuel up
into the air uh before you can do
anything else useful so that
decarbonization challenge is very real
is very present um and uh and it's a big
deal you know uh aviation's 2 to 4% um
of our um climate forcing emissions um
the difference between the two and the
four being depending on how you account
for the non-co2 effects of Aviation
which are significant in themselves but
it's it's also an activity that only
really a few people around the world
currently use so about eight out of 10
people around the world haven't gotten
an airplane yet put those two things
together um and if you take one long
haul flight you've used up about one fif
of your own personal Paris climate cord
emissions budget so five Long Haul
flights for each of us and that's our
entire budget done um so big challenge
the head for
Aviation thank you Tomy and then we'll
talk a little bit more about the what
you're trying to what you're doing uh
with a company what you would like to
see happen so that Innovation can
actually um take us to to a much uh
better place in terms of uh our
environmental impact um Mata tell us a
little bit about the challenges you're
facing at the moment yeah so so good
afternoon everybody um so EDF renewable
is part of EDF group uh you probably
have heard of EDF group is one of the
world leader in low carbon electricity
generation so 90% % of the electricity
we produce come from low carbon
technology including nuclear Hydro wind
solar and we also do
storage so uh the the heart of our
purpose is basically to help uh achieve
Net Zero so that's that is basically low
carbon electricity electrif
electrification and uh helping people
use electricity decarbonizing their
their
footprint uh so there is a big role for
for our industry into uh into Net Zero
and just to give you a bit of a sense
today of you know uh energy usage 80% of
the energy we use or and more than 80%
comes from coal gas and oil so you know
that's where our emission come from or
most of our emission come from and if
you look at the usage of this energy 40%
is power more than 40% is power so
that's electricity and heat we've got
20% roughly around with transport and
another % industry and the rest is
building and construction so we have two
things to do on our side one is to
decarbonize elect electricity uh which
is entirely doable and then is to
Electrify to enable Industries transport
to be de
carbonized so those are the the
overarching challenges and then again
we're going to talk about what you are
doing um with your projects here in the
UK to to tackle them Richard over to you
so obviously you look at this from um a
different perspective you uh you work
for Bank banks finance all these
projects in theory that Mata and Tom are
working on but also you under the
spotlight um for your involvement in
some other parts of uh of the um economy
that um contribute to to pollution so
after this lovely introduction to what
to what the to the responsibility of the
financi financial services um industry
has tell a little bit about the
challenges you face yeah thanks so much
Sy and I wish I could be in room with
you today so apologies for that but um
yeah I'll come on to talk briefly about
the role of banks overall which you
started to sketch out there but just a
set of context handles Bank in itself is
a Swedish based northern European Bank
um so major focuses around uh the
Swedish domestic Market the UK domestic
Market again uh and and the Dutch
domestic Market those those are are sort
of um big and growing Footprints um
we're particularly uh focused I
mentioned the word domestic probably
three times there so that gives you a
bit of a sense that's that's sort of the
way that we work with uh local uh
branches and with uh individuals
householders uh small and mediumsized
businesses um for the most part but then
we do have a a significant portion of um
which is devoted to the the larger and
indeed largest companies within those
marketplaces so so that sort of frames
uh thinking that's Al also probably the
most boring part about handles Bank
really um because where we are known I
would say we're probably best known as a
values Le
organization uh one that uh has a has
roots in in responsible banking um and
that's particularly uh uh remembered
probably through through the financial
crisis uh both both in the nordics and
and then in uh at a global level um and
that's very much down to the business
model that we've operated now for for 50
of our 150 years which is about uh
empowering um everyone throughout our
organization to take uh responsibility
and to take decisions in their areas of
uh areas of focus um so what's that mean
for for for this whole agenda today well
it it's meant that we've seen fairly
early on our responsibility when it
comes to climate change and indeed to
the developing broader sustainability
agenda and we've set ourselves uh some
what we what we believe are ambitious
goals at least which I would say
probably best represented by the uh 2040
Net Zero goal which covers our
investments our lending and our own
operations as
well um you mention of course the the
the role the banks more broadly um and
the position they're coming from so so
we tend to divide that up as an industry
into thinking about uh Greening finance
and financing green so when we talk
about Greening Finance it's actually
making sure that our organizations
themselves are set up and governed in
such a way that uh in the shortest time
possible we we're at a point where every
decision uh that's made within the
organization
has a lens on it of of climate change
has a lens on it of nature of
biodiversity and sustainability and so
this um you know this affects the
operational developments of the
organization but of course the the
Strategic development of the
organization as well the areas it does
choose to go in um the directions
perhaps it chooses to move away from as
well um and i' probably say in that
context to what you were saying Sylvia
that it was a few years ago that uh
handles bank and
uh took the decision to um to have a
very minimal presence in the in the
fossil fuel sector for instance uh and
it's now you know what you might
describe as a nominal level with some of
the tightest internal guidelines around
that um that we're aware of in the
industry as well so these twin roles you
know we've got to we've got to treat
ourselves first as one might say but
also to then support uh in a in a sort
of strategically focused way the real
economy uh to understand its
opportunities understand its risks
understand climate change as Professor
Edmund was talking about um climate
literacy earlier on and I do think you
know in all of our
organizations um there there is a
challenge there to get that more nuanced
understanding um of of of the way
forward here thank you so much uh rich
and I hope uh you all in the in the room
and um watching us remotely can actually
hear clear clear audio okay very good so
right so the uh policies that uh Banks
and investors have put in place in terms
of where they wish Capital to flow and
of course some of them may exclude
certain parts of the industry and you
mentioned also uh Financial well not
Financial climate literacy um within the
financial services sector but also more
broadly uh throughout the economy and I
would argue also policymaking right
that's also very very important um
because of course whether your projects
and your companies surely would want to
get the support of private Capital be
it's through a bank or an investor um
they I'm sure would also wish to see
perhaps a stronger um support from
policy makers and from from Regulators
um how can can you tell us how you feel
about the current level of support that
you're getting for example for uh
innovate in in the aviation uh area and
what are the tension points
Point yeah it's a it's a very Broad and
complex space um the impact of policy on
what we're doing um the first thing I'd
say is I would split domestic policy and
international policy in the aviation in
the Aviation Space I'm not Aviation as
an industry is regulated under ik which
is a un body and that has some effects
for
example um on again under the Paris
Accords
um if you take off on a flight in the UK
and you land in the UK the carbon that's
been emitted by that by that flight is
the responsibility of London it's it's
on our carbon accounts here if if you
fly internationally it's not it doesn't
form part of uh part of the the UK
accounting and and that covers carries
on globally it falls to Iko which is a
un body and so policy starts from there
for international Aviation um and
therefore
uh it's multilateral it tends to be a
very long process um it's taken uh some
years for there to be a voluntary
offsetting arrangement in place within
the airline industry and if you come
back then to domestic Aviation that
really does um fit within the remit of
individual governments so where we're
finding um there's a lot of support for
what we're doing is in Nations that have
legislated for early Net Zero targets
and have explicitly recognized that
transport is a big part of that
mix and tell us which countries is yeah
so France is uh France has led the way
France has banned domestic flights where
you can take a train in less than two
and a half hours for example um Spain
looks like it's following our launch
Airline customer for our product um has
reserved 20 airplanes to go and serve
passenger markets in Spain um and I
should just say our aircraft that we're
developing is a is a large airplane it's
100 seats uh but but it flies a lot
slower than other aircraft so the idea
is you get there slower than the
airplane but you're going on very short
sectors so it's a small time Delta much
faster than the train journey and of
course there's lots of parts of the
world where you can't put the train
track in in the first place so it's
about being there with an efficient
airplane it's quite different for the
aviation industry to engage with that
compared to the tubes with wings flying
fast that we're all used to um
Andra we've got that um we've got that
traction because of policy um there um
the airplane is a um our technology is a
lifting Wing uh so we we take that bit
from um normal sort of aircraft
aerodynamics and then we add in some
lifting gas from the lighter than air
technology sector things like airships
um that blimps that people are aware of
and we mix the two so what we're doing
is using a little bit of lifting gas to
give us a bit of a head start Against
Gravity uh but not enough to have the
airplane floating like an airship ship
um that makes the economics much better
for the operator and um it means that on
these sectors domestic flights we can
deliver passengers to their destination
more comfortably quietly um and at a
price that's the same or below the price
of today's Jet flights between those
regions critically you get to your
destination with less than 10% of the
carbon footprint that you would
otherwise have okay so which are all
very interesting statistics what would
you like to see to
really from a policy perspective to
really help you develop this technology
so um from a policy perspective I think
Aviation overall and and our and our
policy view of Aviation is pulling two
different threads together one is the
economic benefits that Aviation brings
to society and the other is the
disbenefits the ex externalities
particularly carbon I think there's a
massive choice to be made here and I
think from a policy perspective we need
to be more honest about the costs the
environmental costs of Aviation I
actually price those in um versus the
benefits so ticket we play we pay would
have to be higher or subsidies well if
you look at it doesn't necessarily
follow because we forget the role of
Technology here so yeah if you look at
today's flights you can price in those
externalities and the price goes up for
the passenger demand goes down and but
but what you're also doing is
encouraging technology into the mix so
you take the technology that that we've
developed we have needed to move past
the hurdle of saying this is cheaper
this this doesn't require a green
premium for passengers before we can
start to have a conversation about um
emissions um so the lack of Taxation on
aviation fuel the lack of pricing of
carbon externalities becomes an extra
barrier that we have to get over if
those that can be changed it's
encourages more technology into the
market all right okay so the taxation
one of the big things um that we'll have
to look into thank you so much um M so
clearly the technology behind Renewables
is been long proven but there are still
a few economic and bureaucratic
challenges right so take us through
those yeah well I mean we speak in our
sector of energy transition so it's
moving from oil and gas moving into
Renewables or other low carbon
generation like nuclear so usually start
with setting some targets so uh most
countries have set some Target to
decarbonize electricity because it's
possible as you said you know we have
the technology to do it um so in the UK
for example it's 203 35 we're saying
that none of the electricity will Pro
will produce will come from oil gas or
or coal MH so the um and beyond that
then as I mentioned you know we'll need
to Electrify so we need to grow uh the
the generation capacity massively so we
we're speaking of huge growth of the
industry if you think about our industry
it's a lot of infrastructure so uh you
know there are big investment required
you know we speak of grid but Power
stations and so forth there is a big
supply chain behind so we are looking at
a lot a lot of investment and um and
infrastructure so the the policy is key
in setting the environment that will
enable this infrastructure or this
investment to happen um so it's key on
the planning side it's key on setting
the uh investment environment so that
people continue to invest and grow their
industry being supply chain or like our
s developers and operators um what we'
seen is you know Chang in policies I
think the uh I mentioned about targets
being set everywhere what we see for
example in North America or in Europe or
in China you know is is also the support
that is provided uh to enable that
energy transition so support in terms of
speeding up planning support in terms of
enabling supply chain industry to grow
uh and developers like ourselves to
invest in in their project um but there
is still a lot to be done because the uh
we've done the easy part of
decarbonizing uh uh you
know um phasing out the coal was the
easy part we've done it in the UK in the
last 10 15 years yeah now growing at the
pace we need we need a lot more uh uh
policy uh to to enable that and that
that is true not just of the UK but
across Europe across all over the world
of although you mentioned Co and they
did make a comeback right following
recent uh really sad events so the war
in Ukraine so actually we we started
seeing some calls being um relooked at
uh across Europe and of course that
remains uh a source of energy in other
parts of the world so I mean it's easier
to have an exclusionary policy for
example thinking about where uh Richard
would uh you know with with um not look
at um when it comes to Coal but then
it's not as easy for every jurisdiction
around the world and um and then there
are other events that take place that
make us rethink
about sources so what what can um your
industry do to really help make the case
for ditching completely those highly
polluting uh energy sources yeah but I
mean the uh electricity is not to
produce like or energy is not to produce
like a any other produce you you can't
stop from uh you know needing
electricity or driving a car uh so uh
you need it all the time so
unfortunately what we see is you know
it's a the high dependency that we have
in the energy sector so here in the in
in in Europe but like in many other
places it's it's mainly gas other places
can be cool you know if you Source your
your gas or coal from a region where
abolutely you can't Source it from uh
you have to make difficult choices and
it maybe switch back on some some coal
plants um so I think removing this
dependency is key uh and the policy that
will make sure that actually there are
incentives so that for example
manufacturing of solar panel doesn't
just happen in China or so we there is a
rule for making sure that there is
Industries uh locally being developed so
we are not as dependent as we are for
example in Europe of f fuel coming from
other other places I think that that is
a big one so we see industrial
Renaissance with nuclear the wind
industry in Europe has been strong hisor
historically but it has been challenged
recently I don't know if you heard about
orad which is a massive player or cement
really struggling financially because
there is not the financial support
needed and you know the supply chain is
slightly struggling to keep Pace with
the investment needed to meet the growth
so we see that we need to protect that
industry and there are other Industries
like solar for example we were the
largest producer of solar panels uh in
the world in Europe and St we generate
less than 5% you know 80% plus comes
from China so you you really need to
think industrial policy and strategy you
know it's not just uh it's just not just
enabling this project is making sure
that you reduce the dependency you have
uh across uh some sensitive regions so
so very quickly before um bringing
Richard back in so um there there is a
series of policies at European level at
least um that look uh exactly what you
discuss so for example Ro critical
materials uh and other
you know we can talk about the uh uh the
carbon pricing schemes and seum and all
of that all these wonderful acronyms so
are you seeing those as positive do you
think that they're actually going to
help at least this part of the world so
I think they the we have we have
instruments you know in uh in our
toolkit so you spoke about carbon prices
I think we need to uh it's carbon
pricing mechanism is too weak at the
moment to really make big shift so there
are other instruments but defintive
carbon is a key one that needs to be uh
just to give you an example on the solar
example uh the producing a panel in
Europe is 50 50% more expensive than in
China if we were just to price a carbon
element right yeah because in China uh
you know the carbon intensity of
electricity is much higher than in
Europe you know we will will reduce our
cost by 10% right so that will start
Bridging the Gap so you can see but it's
not a one Magic Bullet so in it all you
can see the policy is complex there are
many aspects to it and certainly carbon
is a is a key element to the uh to the
policy so do you think the CMA for
example which is the carbon board
adjustment mechanism is going to play a
role in this taxing for example Imports
that come from jurisdictions that don't
they're not seen as equivalent I think
it's essential that you've got this
right signal okay yeah so for example
you could see a Chinese manufacturer
coming to Europe and starting to produce
in Europe which would be a good way to
do a bit of Technology transfer it used
to be the other way around what we need
in this case is technology transfer back
to Europe so that's one of the tensions
that play out so this is a global
problem of course a global crisis but
then it's still a divided world uh and
we we need to navigate all of us through
these complexities absolutely and now
before bringing Richard be in just to of
course let you know that we we are going
the panels um panelists are going to
take a questions so I can see a couple
coming through already so make sure to
uh uh to to type them up if you would
like to uh to have any any if you have
any pressing uh issues that you would
like to raise with the our experts
Richard okay so I mean we we've heard of
course very interesting examples of uh
What's happen in terms of innovation
across Aviation and the Renewables um
industry and also pressure points um and
you I'm certain you're looking at all of
this uh and you have access to
wonderfully complex and and uh big uh
samples of data uh but how challenging
is it to actually understand where to
deploy capital um whether you're looking
at a certain industry or a certain uh
geography and is is this exercise
becoming easier what would you like to
see uh to help you um achieve
uh yeah I think um the challenge is
becoming uh clearer or maybe the
solution is becoming clearer I'm not
sure I would go as far as to say it's
becoming easier yet just listening to
mat talk then about the uh the policy
Dynamics uh that affect his business
you it just it just reminds of how
fishlyn so so that part um you know will
keep this fish complicated well into the
future um I think you're alluding
towards the the data aspects of this as
well um and I think uh we um sort of as
an economy as a whole and and certainly
in the finance industry are making and
have been making really good progress
around uh establishing data
standards um being able to then work
with our counterparties to ensure that
they sort of have a shared sense of
those standards and they you know they
are what they would expect or what
they're planning for as well um and of
course that's not the end of that
challenge either there there there's
plenty still to do you know if we look
at our own Gap analysis as it goes on
there are plenty of areas where we don't
feel we have sufficient um or or in some
Cas is high enough quality data for the
for the risk analyses that we might want
to do um or for the strategic um mapping
that we want to do as an organization to
to chart our Direction but then we
wouldn't have expected to at this stage
either so it is it is partly about being
comfortable with that ambiguity uh and
keeping pushing towards having a greater
level of granularity I think one
particular area um that I've probably
talked about ad nauseum in the past uh
that has
uh especially difficult challenge is is
what you might call well the sector such
as you can call this a sector um because
on the one hand they they they they're
just as heterogeneous as as larger
companies arguably you could say more so
but they typically lack the resource to
have dedicated focus on some of these
complex areas um not all of them can
afford to pay expensive Consultants
either um and so there is a real sort of
Market risk there economic transition
risk there uh that we need to try to
find a way of filling and I think gaps
have a sorry gaps banks have a really
important role in helping to do that so
there's there's an interesting project
just as an example right now uh that
Bankers for Net Zero that we're a member
of a UK organization is pushing forward
and that's called project perus and it's
trying to um work with uh industry
representative bodies sector bodies uh
and government to establish standardized
uh data criteria for smaller businesses
uh ones that will work for them but of
course will work for um the capital
allocation that we came into this
talking about so you know Banks being
able to see enough to make reason
decisions investors being able to do
exactly the same thing and all the way
back up the
chain in that sense is getting it's
improving as you was were saying through
these uh initiatives to to standardize
data now all of you here are part of
Industry that are heavily regulated uh
and and so in in your case uh Richard of
course you have the regulator also
looking at your own uh the way in which
uh the bank uh manages risk uh and risk
related to Financial Risk related to
climate um how is that changing the way
in which you feel the industry is moving
at least in
Europe I think in in very helpful ways
so um you know we have different uh
strands of of of uh
supervisory attention if you like uh on
the credential side uh the work that uh
the international central banks and
Regulators have been doing um around um
scrutinizing and and setting some
expectations on um risk management how
to identify the risks at at the
portfolio level but of course to do that
you need to you need to have good
systems in place to identify them at the
uh at the client level as well uh and
then how those move through your systems
uh integrate into your existing risk
analysis systems all the way through to
uh your you know the sort of Financial
and strategic end of things you know
what does this mean in in how many years
time for uh for the shape of your of
your balance sheets and the risks that
sit on it so I think I think that's
being really helpful I think it's been a
continues to be a collaborative approach
between regulators and the industry and
long may that continue um and then we
have the conduct strand um of of of risk
uh management through through our
financial conduct Authority and their
particular Focus complementary Focus I
would argue is is around uh governance
uh the banks and others have in place um
to ensure uh Integrity uh in the
marketplace so that um one's claims
match the reality at the entity level
just as much as at the the customer
level um and that the outcomes then that
are being delivered uh as a result of
decisions taken by these organizations
are in the best interest of of the
customers just as the credential
regulator might think of the same
question but say in the wider interest
of the banking system of financial
economy thank you so much Richard
question is actually flying in so let me
uh start the Q&A part of of uh this
panel so that there is a really
interesting variety of them I'm going to
start with one um that um is for you mat
in particular and so what do you expect
coming out of cop 28 of course we're
here uh today uh thinking that cop is
only a couple of weeks um um ahead of us
um what are your expectations from uh a
Renewables industry point of view uh
well there is I think a point which is
about the growth of Renewables and I
think it's about tripling Renewables uh
investment uh in in a very short term so
and of course I mean I'm sure you're all
very much aware but cop this year is
going to be hosted um in Dubai um and
heavily um attended by of course um oil
and gas companies Petro States so uh
many leaders so that that probably the
main point I think is is more leadership
into uh into the the N zero agenda
because it takes a huge commitment and
you know making the changes that we're
speaking about in the aviation industry
uh mhm enabling the banking world to
support the The Net Zero decarbonization
of the world takes huge leadership so I
think what I expect of a cup 28 is
leaders to show that they're ready to
lead the way to a net zero is what you
would like to see or what you think is
actually going to happen well I think
you will see commitment because people
cannot afford not to make progress so I
would think uh there will be progress
but there will always be compromises and
the question I think what would be
interesting is to see you know the
commitment that we the progress that has
been made commitment that we make to
accelerate yeah the the transition that
that would be what I'm looking for and
what is the sort of stance uh commitment
that leaders are willing to take yeah as
part of cup 28 all right so um thank you
Mata so let me um ask you Tom but also
um R mat if you like to comment on on
this other question so be because we
talked about regulation and the role of
Regulation and how it could be
beneficial uh to develop certain
um certain Solutions can it also hinder
do you think uh innovation in other
parts of the
world I I do and I think you know that
relates very closely to what I think we
might see come out of cop in our sector
and what I'd like to see come out
there's going to be a lot of talk about
sustainable aviation fuel as an example
which is a very nice solution if we can
get there economically because it just
drops into existing Technologies but you
know there are a lot of disbenefits
there there's environmental harms that
need to be taken into account there's
actually the economics there's the fact
that we've been trying to scale
sustainable Aviation fuels for over 10
years now we're still at 0.1% of
aviation fuel is actually sustainable
right now and I think there's an area
where um you know something that looks
attractive and gets a lot of focus can
actually hinder Innovation going on
elsewhere in the sector um I talked a
little bit about taxation I'd like to
see Aviation sto being treated as a
special case here there is no tax on
aviation fuel at all really today 37
cents a liter which is less than we pay
when we go to the petrol pumps here MH
that would be enough um by by some
estimates to tip the balance in favor of
hydrogen technology in aviation which
does offer the potential of real net
zero actual zero operations so it's a
it's a great case where actually over
focusing on one potential answer can
really hinder the ability to innovate
somewhere else that's got much stronger
longer term potential in my
opinion thank you um Richard uh mat
would you like to comment on this as
well so where the you feel the
regulation for example in the EU uh May
H Innovation elsewhere in the
world I can use I don't know if I yeah
yeah I can use a thre example today uh
death Nest so that's the department for
energy and Security in in the UK is
announcing a change to the cfd the
maximum price you can get through a cfd
auction cfd auction is a is a way to
enable renewable investment by fixing
the price for 15 years for for
technology so they are annual auctions
and what we had as the last auction is
no offshore projects uh securing a cfd
actually no projects participated
because the prices were too low and um
what we're looking for in in the UK is
not just fixed floating so the
foundation that are fixed in the sea but
floating uh because that allow to give
access to much more uh uh uh places
where to to build offshore wind and
today's announcement uh is a good
success for a good news for the industry
because we we've been arguing that
prices you know the cap prices at the
auction were too low to enable a supply
chain and developer in uh operator to
make this Investments and they announce
a 50% increase for example for floating
wind so we have a project floating
projects in in development there are a
few more uh uh developers operator in
the UK having one and the potential for
floating is huge across the world but in
the UK it's also a key technology to
enable Net Zero but this wasn't a
consequence of uh regulation in the EU
or no but it's a it's a I mean the
general the EU regulation uh you know
set some targets and some enbl so are
equivalent right in uh but it's just to
show you know the specific how policy
can really bring Innovation and enable
Innovation the impact the impct on that
it thank you Richard I wonder whether
you would like also to comment on this
point I would yeah only briefly add that
of course um you know policy makers will
only put 90 or 95% of their focus into
into what's going to be effective uh
within their locus of influence or the
locus of policy making um it's good when
we see that there has been some um sort
of international collaboration ahead of
ahead of major policy announcements and
um but we I suppose in reality we can't
always expect that to be the case and we
and we haven't with Ira just as much as
we haven't with uh some of some of our
EU policy But ultimately if it's
inspiring uh other jurisdictions to to
take stronger action as well as I
suppose we're seeing with the cbam now
committed for the UK uh then probably
it's ultimately to the
good all right thank you thank you so
much as we we keep on going back to to
those um highly complex uh and and
potentially very consequential rules um
so I I will try to to finish the panel
not too uh not with too big a delay
because I'm very conscious about um uh
what's going to happen next which I
think is lunch um but I still would like
to uh I still would like to um to pick
up a couple of other questions that came
in and of course the ones that you feel
uh the panel hasn't really addressed do
feel free to get in touch with all of uh
I'm sure you'll be very happy to um to
hear from every everyone um uh today um
and um continue the conversation so
we've been talking about policy and
regulation quite a lot but uh uh someone
is asking sure this is important what
about individual companies what can
individual companies private sector
companies do to improve things and I'm
going to also uh add another part to
this question which is about climate
literacy so what can companies do to um
go ahead with Innovation and really
tackle climate change but also as part
of this what are you doing what can
companies do in terms of improving
climate literacy Tom shall I start with
you uh yes so so I think uh it's a very
relevant and real question for for us as
a business um we have built the
technology that we've developed around
capability gaps useful places to operate
in the market on the one hand and the
ability to drw the emissions of the
overall sector where the technolog is
invested on adapted on the other I I
think you know I'm very aware that in
the middle of all of that we've got a
company to scale and as we scale that
company move our product into production
balancing the hard decisions um about
how far how fast do you go with
infrastructure projects how do you scale
up in the right way how do you trade off
speed to Market so the ability for
inservice emissions to be dropped versus
any impacts we might have along the way
and we don't we don't have all the
answers to that we're working to improve
our literacy as a as a leadership team
actually as anme without dedicated
resource in there to do that um so it's
the leadership it's the question for so
there it's about leadership but I think
it's also about engagement so the the
other example and the the the um the
example I have in mind you watching a
business alongside us we're about to set
up a a production line in the north of
England um business alongside that
alongside us there has invested heavily
in developing carbon literacy in its own
Workforce and it hasn't relied within
the company on top down yes leadership
but stimulating bottom up ideation and
Innovation within the business
operations I think that's a fantastic
model and one that we're looking to
develop and employ so you mean by that
being a becoming aware of uh carbon
literacy and your own impact your own
impact your own your own life at
individual level in the operations that
you deliver within the bus drive those
ideas up through the organization okay
so gathering this information and
sharing that that's AIT having
leadership highly committed to doing so
let me go to Richard uh next and then
I'll I'll we'll wrap up with you m yeah
I very much resonate with what Tom was
just saying there about you know from
the ground up and initiating uh but not
trying to spoon feed an organization I
part of that certainly um you know in
our organization is that you have
different knowledge requirements quite
distinct knowledge requirements in
different roles within an
organization um and so it setting a
framework setting an understanding
overall about uh you know in our case
our banks commitments uh and our bank's
view on where things are going where
they need to be going uh is enough uh to
to then give the you know the department
over here or the Frontline advisors over
here um the you know the direction they
need that to to start looking into the
issues themselves and it really takes
fire just like Tom was saying it really
takes fire when people start to come up
with their own ideas start to test some
other hypothesis and you know being
there to do to to to be the sounding
board for that and to help develop that
is so much more effective than you know
desiging the next year's mandatory
training whatever it might
so do for example your you know the team
involved in origination originating the
do they are they aware of the finance
the missions for example of a potential
deal is it something that they might
help is it something you're doing yeah
yeah that's that's what we're looking to
spread through the organization uh
making some pretty good progress I think
but it's uh it isn't something that
everyone switches on to overnight and so
you know we've got to do some degree of
calibration on that uh and we've got to
make sure we've got sufficient resource
in the organization as things progress
uh to be able to meet these needs but
you do have to be sort of a little bit a
little bit Fleet a little bit flexible
around this uh and in the end I suppose
that's certainly it's our decentralized
way anyway in the end we know through uh
through experience and that's a much
more effective way that just you know
try to drill things into people thank
you Richard mat last word yeah I mean
there the I really like the two points I
mean they they comes back to um uh you
know to make that transition we need
people to change their behaviors mhm to
change their behaviors in fact we need
to invest in so that people understand
what they can do uh what is expected of
them how can they do it so engagement
about understanding or impact is
essential skills uh to change the way we
do things is important if I just look at
you know what we how we try to enable
that with businesses something as simple
as changing the way you procure your
energy today uh into Renewables is quite
challenging because of the complexity of
the uh energy electricity market and
it's relatively simple you know that a
simple things to switch from let's say a
gas to a Renewables by with a corporate
PPA now if you look at the industry
looking to change the way they do their
process so chemical industry for example
we are investing into we're negotiating
with Des again so that the department
for energy Security in the UK uh a
nitrogen project so we will procure
green nitrogen to chemicals industry and
this chemical industry some in some
cases already have process and system
using estrogen in some cases they would
have to replace maybe burning gas into
estrogen that is a huge change in a
company you know changing the way they
process the industrial uh uh path so
there is not that that while the uh you
know the technology is there we know how
to do it the switch you know the uh is
we spoke about policy but we speak about
in fact is how people do things we have
to do things
differently so we need to invest into
people and people need to understand
what they can do to make that the
changes enable these changes wonderful
what the what a lovely way to uh to end
a panel that is uh organized by an
institution that of course looks at
training people and creating new skills
because of course um uh academic
institutions do also play a very
important uh role here thank you so much
for uh for joining us thank you so much
to Tom M and Richard for sharing their
thoughts I I found uh everything that
you guys have said fascinating I hope
you also found it fascinating too and
now um like a big round of applause to
for everyone and
um

---

### think ahead: How Regulation is Supporting the Path to Net Zero
URL: https://www.youtube.com/watch?v=HyC66Ybmhok

Idioma: en

our next panel how regulation can
support the path to Net Zero this is
going to be a panel like all the others
where you can ask questions uh but the
questions will be moderated uh by our
moderator our pan moderator and that is
same as last before lunch Sylvia please
I'm going to let give you the floor and
you can ruce the panel thanks very much
thank you so much uh it's good to be
back um so we started talking about
policy and regulation in the previous
panel and then judging by the the
comments that a few of you um uh submit
in the q& uh through the Q&A app there
was some push back right against policy
I mean so is it just policy should the
companies do more but actually quite a
lot of it I I would argue and maybe you
would expect that from me given that I
cover this day in day out for uh
sustainable views um a lot of this
really a lot of this area a lot of the
world of sustainability and ESG and then
we will continue actually talking about
a lot of this the big and ever expanding
alphabet soup that describes this area
is driven by regulation so in this panel
we actually going to uh to talk a little
bit more and really dive deeper into
what
regulation uh is looking at the moment
when addressing climate change but also
sustainability uh concerns and to do
that let me introduce you to our
panelist
so we have uh at the at my far right uh
lucrecia rlin who is a professor of
Economics here at the lbs uh next to her
we have Emily McKenzie who is technical
director at the task force for on nature
related Financial disclosures uh and uh
right next to me is Marcel Alber who is
assistant professor of accounting so he
can really give us some very detailed
interesting uh aspects of this um here
at lbs and joining us remotely uh is
jaier hiier who is the the CFO of hro a
s I can see your back uh your back there
it's a bage reclaim so uh welcome
welcome everyone so um regulation right
the first thing to I guess to address is
the language of sustainability and the
the language of Regulation because this
is becoming a very
confusing uh subject to address uh not
least because uh of the terminology that
uh we are ending up using so from ESG
environmental social and governance and
arguably already this a pretty clumsy
clumsy not particularly attractive and
some might say meaningless uh term to uh
other uh abbreviation such as csid sfdr
esrs issb issb and many other the NFD as
well so I issb is the uh the initiative
um of the uh of International Accounting
standard set ifs uh and uh it looks at
creating a global Baseline for the way
in which companies disclose information
around sustainability which can help uh
understand what companies doing the same
way that uh we mostly investors but also
other stakeholders uh are now um able to
understand what they do from a financial
perspective so look let me start with
you you're being um very active uh in
the developments of the work of the issb
why don't you take us through uh how you
feel this the language that is
underpinning sustainability through uh
the work that you're doing is is
developing okay thank you Sylvia and uh
you know it's very nice to be here with
you know a lot of people interested in
sustainability that's good uh so for
transparency let me say I'm a professor
of Economics that's my main job but I'm
also a trustee of the if s which is the
International Foundation for reporting
standards and um I think the this F the
ifs is the global standard Setter for
financial accounts so think what the
financial system would be like if we did
not have standards for financial
accounts so how would company you know
read
performance of companies around the
world how investor would you know read
this information if we did not have
global standards which are auditable
assur and so on so now the world is
changing there are new risk new risk New
Opportunities and uh you know the
climate uh uh risk is huge as has been
discussed it's not the only risk we have
risk related to depletion of nature we
have risk which are related to Social
and so on but these risk and
opportunities have to be taken in
consideration by companies investors
want to know
this information so we need standards we
need to achieve in sustainability what
20 30 years ago have been achieved for
for financial accountant for financial
accounting okay so the ifs after a
consultation with stakeholders companies
and regulator ask do we need these
standards and actually 20 in the last 20
years a lot of organization like this
sby the integration reporting Foundation
a lot of these organization actually
formulated some standards uh on you know
and these are private organization which
were followed by companies on a
voluntary basis but uh in a way so we
started this consultation in 2020 from a
situation in which there were lots of
Standards lots of initiatives lots of
you know different acronyms and you know
that was called in fact the alphabet
soup and so in our consultation we asked
do we need to
harmonize and do we need to aggregate
these different initiatives and should
should we do it as Financial Accounting
standard centers the ifs and actually
the result of the consultation was yes
yes yes and uh so then you know I led
the task force that actually you know
eventually uh let you know form the the
SSB uh um and I think it was a
fascinating work because it was the
result of of you know combination of a
bottom up process so something that
aggregating from something that was
actually already there in the market and
the top up process because in order to
be a you know a a an aggregator of those
initiatives we needed to have the
support of the Global Financial
Regulators which we got and so the
support of the iosco the market regulat
the G7 the G20 and so on and so you know
in 2021 at cop 26 we uh establish the
issb now Emanuel faar that the CEO of
donon that Julian talked about is now
the chair of the
SSB so uh and then you know the
standards are out so and I've been out
after consultation so they're going to
start uh you know kicking in from
2024 and um and these are standard for
the global market okay that's a very key
thing so that we are a global standard
sets why because the Capital Market is
global and so we need standards that
work in China work in Africa work in
Europe and work in the US this is not
easy because legal Frameworks and public
policy tools are very segmented so but
we need a global regulator okay so we
came out with this IDE idea of the
global Baseline so we uh you know we
have a concept which we uh you know we
ask companies to disclose standards
which are financially material and then
maybe we we can discuss later what that
means and then if there are jurisdiction
which are more ambitious that you want
to standards because they want achieve
the green deal like for example Europe
they have a top up okay but the
important things is that there is a
coherence between these different level
of disclosure so that the preparers and
the counters don't get crazy okay
basically we need something which is Rel
relatively easy and transparent and
understandable or otherwise there would
be a backlash yeah yeah perfect okay so
this is the issp and how many obviously
I can't see the hands if they would ever
go up uh uh back where you're looking at
us from your offices or homes but here
how many of you are familiar with for
example the ISB or the uh t a few hands
okay good wonderful
uh so my students of course all your
students yes I'm I'm
students wow you have been warned um so
um very important and relevant uh
initiative um
Emily why they need to have another
Global initiative that looks in this
case at nature so on the back of another
uh similar task force that we're looking
specifically at climate related
Financial uh factors why nature and how
does your work um gel with the ISB and
any
others yes there's increasing
recognition from from governments from
um Regulators from central banks and
supervisors from investors and from
companies businesses themselves that
nature more broadly than just climate
change we are experiencing historically
unprecedented loss of Nature and its
diversity uh driven by climate change
but driven by other things also is
creating material risks and also
presents
opportunities
um important Milestones have happened in
December last year we had the Paris
moment for nature where nearly 200
governments agreed to a set of global
goals and targets to Halt and reverse
nature loss so recognizing this as a so
a global
issue the network for Greening the
financial system which is a network of
central by 100 over 100 central banks
and supervisors also recognize that
nature loss creates R macroeconomic
consequences and risks to financial
stability so is core to the Mandate of
central banks and supervisors and we
have a growing number of investors for
example Black Rock Aviva others who at
norus Bank investment management which
is the biggest Sovereign wealth fund in
the world who are also recognizing that
their portfolios are exposed to these
risks and then you have large corporates
who are actually up the front line of
seeing pollinator collapse or water
supply issues or failure to be able to
get permits because of uh the impacts
that they're having um a variety of of
physical risks as well as transition
risks apply to Nature as a whole and in
many ways we've made tremendous traction
through thinking about climate change
and climate mitigation But ultimately
we're under one planet it has a number
of Earth Systems we know um from the
Stockholm resilience Center that
actually six of those nine if you think
of them as Earth system boundaries are
outside of their safe space climate is
just one of six so in many ways we're
just drawing it's like an entry point
into seeing the risks more broadly so
that's all backdrop for why nature I
think very clear argument for why this
is
presenting um implications for Society
at large but also for business and for
finance
um so why another initiative because
there was another initiative uh with
another four-letter acronym that has um
I think been hugely successful in
creating momentum around climate that
was the task force on climate related
Financial disclosures tcfd uh which
created a set of recommendations back in
2017 which um were around disclosure but
also around risk management for these
issues around climate and it's had huge
huge implications I think not only for
disclosure and uh for disclosure for
investors but also for improving
strategy governance and risk management
improving decision- making and capital
allocation so we tnfd saw that success
and also realized that climate and
nature are tightly interlined you can't
really think about climate risks and
opportunities without thinking about
nature because we know uh 30% uh of um
uh nature of climate risks are driven by
nature and and climate is one of the
biggest drivers of nature loss so we
thought we'd build on the same model the
same process we established a market Le
task force so we're actually not we're
certainly not regulation and we're not a
standard we're a set of market-led
recommendations because the market is
recognizing this is a material issue and
we see the issb as an absolutely
critical milestone for creating this
consistency it's already Consolidated a
large number of the alphabet soup indeed
tcfd sister organization has just
sunsetted and declared success because
their recommendations are now folded
into the climate standard as to that
issb has launched so we hope one day
also part of thef part of issb it is
folded in and they have declared success
since 2017 with isb's momentum so we
stand ready to support issb as and when
they have you know they've completed
their agenda consultation process see
where nature is a priority uh stand
ready we've worked very hard to create
the consistency with the standards so
that we'll make it as easy as possible
to to dock in so I think I think
generally I see the path of recognizing
these issues having the momentum to make
progress which sometimes needs a
four-letter acronym yeah but then over
time issb has created this really
important platform for that consistency
for the Baseline yeah and we've been
quite thoughtful about how we can then
enable that top up so the European
jurisdiction is helpful for us because
they've already gone further so how can
we make sure our framework can not only
help to meet the isb's B Baseline but
help sort of 10 10,000 or more companies
in Europe who also need to disclose on
their impacts regardless of financial
materiality perfect so the issb is
serving uh also as an umbrella for other
existing or pre-existing uh uh reporting
standards such as sby we mentioned and
also Incorporated um some of the uh
principles under TCF and and what you're
doing essentially is also helping
companies with their strategy right so
internally they they become more aware
of uh the importance and the impacts of
of nature nature laws uh on their
activities and again as you know there
are many other uh reporting Frameworks
and standards that have been developed
over the years um lots more to come uh
and Marcel coming to you now has have
any of these actually
helped well uh I'm obviously not in the
position to give a perfect answer to
that or any answer to that i' like to
take one step back and help us think a
little bit about um the the usefulness
uh of all of this I think um lcia and
Emily have given fantastic overviews of
where we are are really in the Practical
weeds one step back um something we
academics care about what's the theory
uh behind that and and why do we do that
does that make sense and to also give
you some insights into what do we do as
professors at lbs and with many
colleagues uh all around the world it's
thinking about is disclosure disclosure
regulation a powerful part of overall
climate regulation that can help us get
to a net zero and that's why we're here
so one could ask the question why do
that and look has given um a very
practical argument Capital markets need
this information of course so why not
say okay let's disclose as much as we
can it's not straightforward how to do
that well the reason is that disclosure
can also create costs for companies and
I think Kier will will uh confirm that
compliance cost somebody has to uh
report and file these uh reports that
why why we have so many accountants in
the world maybe but also all sorts of
other proprietary costs for example your
competitors see exactly what you do so
it's not straightforward that full
disclosure and full transparency is
always um the the perfect um
solution I guess the main idea here
behind climate related uh disclosures to
be a bit more narrow and the issp is
that well to help investors but also
induce certain behaviors of companies in
the sense that like sunlight is is the
best disinfectant so if we disclose
things have companies become transparent
then we can measure things and as as we
also say at Business Schools only what
measured uh can be managed so the key
question I would like to give a brief
overview of what we know does this work
MH disclosure General um does this work
and we have a bunch of studies um I
think Alex Edmund would say some of
those are more rigorous than others but
they paint a consistent picture uh
meaning that if we mandate companies to
disclose about their sustainability
activities and environmental outcomes um
more narrowly then they reduce
apparently um their their dirty Behavior
their pollution effect sizes here have
been documented to be relatively large
10 to 25% I don't know whether CFO like
kavier would would believe that that
companies reduce emissions by 10 to 20
uh% because they have to disclose so it
seems to work so it can be a powerful
tool a caveat of course these have been
effects found at the margin for firms
just being pushed in into this sort of
um mandatory uh disclosure regime like
in the UK since 2013 and my students
will know UK companies have to report on
greenhouse gas emissions and those
affected firms apparently reduced
emissions by a to 10% relative to
European PE firms however only in the
first and second year so this effect was
transitory so I think it's obviously an
important Milestone um to have a
globally a consistent disclosure
framework uh but that's only one um one
aspect of Regulation probably we need
more intrusive regulation as well uh to
help um get to Net Zero
okay so emissions have gone down and of
course then also we need to talk about
uh the numbers behind that right so that
this decrease is it because they
actually stopped emitting as much or is
it because they've used some other
instruments such as for example carbon
offsetting to reduce uh those stated
emissions but we'll talk about carbon
offsets as well which I know is one of
those really really hot subjects that
usually people like to hear about uh
Javier okay you are the one that
actually has to put together this data
disclose it I'm sure you have have
plenty of um investors and other
stakeholders asking you for that data um
tell us how complicated it is to uh to
put together a meaningful sustainability
report and and to look also the risks
that uh all these factors um have on on
a company such as yours right thanks
Sylvia and good afternoon I'm very sorry
for not to be there but um I'm I'm I'm
also here in the back at call trying to
make sure that you're having a
successful holiday for some of you that
might be tempted to go out this weekend
so and I think in terms of
sustainability well first of all I think
this is an absolute uh sift in the way
we operate as as as a business I think
particularly Aviation I think is a very
iconic uh
industry is is an industry that has this
perception that this a hard to evate and
uh and and and therefore for many years
I think at hro we have been really
working on sifting our overall strategy
because I think that becoming a
sustainable able business is not just a
matter of uh values it's a it's actually
a matter of of value and license to
operate I think if if we continue
creating a conflict between flying and
Planet uh Planet uh should and will win
and therefore I think the question for
us the way that we are addressing
sustainability is very much about how
can we protect the benefits of aviation
in a world free of carbon that is
ultimately carbon would is killing uh
the planet I think Aviation has many uh
has a critical role in terms of
delivering at least nine of the 177
United Nations sustainable development
goals but carbon is definitely something
that um needs to be removed and needs to
be removed at speed and therefore
urgency I think is one of the
fundamental things and I think sometimes
when we talked about regulation and
Reporting I think I think one of the
important things that we shouldn't
forget the goal of all of that I think
we we ended up where we ended up today
in terms of the impact on planet because
over two centuries we have been
optimizing our economies to a single
currency and that currency is Sterling
Pounds or US dollars but actually what
we have learned over the last couple of
decades is that in the process of
optimizing against that currency we have
neglected the consequences it has in
terms of creating
externalities H to to the planet and
therefore what we really need to figure
out now is how can we H change the
reporting how can we give enough uh data
points to investors to change the way
they measure success not purely in
economic terms but actually economic uh
terms adjusted by the impact on on
planet and that's and that's the
fundamental challenge how we can help
investors which is ultimately the goal
of all these ifs standards how we can
help investors to allocate Capital more
effectively against a slightly more
complicated metric which is a risk
adjusted a carbon risk adjusted economic
value and I completely agree with Lucan
actually is fantastic that the Lucan and
the other colleagues in ifs has created
the ISB because is the in my view the
most powerful and if there's a single
horse to back that's the issb to really
put order when it comes to
sustainability standard because I think
we all have a duty to provide uh data to
investors to allocate Capital more more
effectively I think part of my role as
CFO is that I spent U significant import
part of my time raising funds to fund uh
the terminals that hopefully you enjoy
in my career I have raised uh 44 billion
pounds of financing globally and I have
seen a huge uh increase in investors
seeking that uh carbon risk adjusted
value value generation that's why I
think is is really important the work
that is that is happening at this stage
unfortunately this stage is a bit too
complex uh there are too many standards
and um and I think that we all need to
keep uh co-creating uh this environment
where we try to move as fast as possible
because if there's one thing that we
don't have when it comes to
sustainability and and climate is is we
don't have too much time we are already
late and therefore uh trying to really
converge to a single uh platform which I
hope uh and we are working hard uh to to
make that happen is is the ISB and the
IFRS new
standards part also of my role is I
co-chair the European for leader
leadership networks in the UK to really
on on on reporting matters and uh and I
think that we are working quite closely
with the ASB to try to make the rules
simple and uh but also to create a safe
space where people can can report I
think one of the best news that has
happened also apart from the creation is
also the appointment of the leaders of
the SB Emanuel Faber L mentioned is a
pragmatist he has been a CFO and a CEO
before so he has suffered the
consequences of Po regulation and I
think that one of the great things one
of the great news is that he's an
absolute pragat is the same with Su
Lloyd the vice chair of of the ISB she
has been setting standards for many many
years and therefore I think the issb is
doing a fantastic job but they need help
and I think that the best way of helping
them to create a powerful regulation is
rather than complaining rather than
moaning about the regulator actually the
best thing that we can do is to put in
practice those standards as fast as
possible
so we can find the challenges that those
standards unconsciously or inadvertently
can create for for corporates so one of
the things that we have been doing at
hro but most of the big organizations in
the UK are doing is to take in a
voluntary adoption of the standards
voluntary adoption of tcfd tnfd because
I think that what we really need is
collectively to create standards that
can be flexible enough to create an
environment of trust because is the most
polluting company the ones that needs to
start disclosing early for those
companies who are have a perfect uh
sheet of paper and they are not
embarrassed to disclose they are not
going to be the ones really H helping to
remove carbon from the air or removing
uh or or supporting nature I think are
those who are H creating the worst
impact into that the the ones that needs
to see and that's why I think the ISB
also has done a very good job in terms
of creating clear guidance but again
being guidance not being too
prescriptive to try to avoid uh people
misreporting thank you so muchier so um
we still have uh in theory five minutes
to to have a little conversation among
us but then I we really like to open the
the floor to questions uh which are
already coming in so thank you so much
for submitting them essentially
reporting is good right we all want to
have uh pertinent information available
um too much reporting uh means that of
course there is a burden on companies
and you all the companies and CFOs I
speak to they have the same reaction
that you do Cav which came through the
video this deflation like oh there is
too much too many too many Frameworks
too much um too many requirements too
many standards so number one good there
is a global um effort to bring them
together but of course there isn't
really yet agreement um on uh I would
say on uh what um is important the key
important things to focus on because and
here we start talking about materiality
what is material to companies and
whether uh that should be the sole focus
of these reporting standards or whether
we should also try to analyze and
disclose companies impact on the
environment and on society which is the
point of view of the EU which has been
also very active uh in its regulatory
work uh and uh and um you know being
quite vocal as well about the importance
of of measuring impact in this sense
look let me come back to you so how do
you see this conflict because I think it
is a conflict isn't it being resolved
well uh I don't think it's necessarily a
conflict I mean there are two ways of
understanding this uh this problem first
let me Define it okay so uh at the F FRS
there is a tradition as standard seter
for financial accounts we have a concept
of materiality okay so that you disclose
what do you disclose what is financially
material so what makes a difference for
an investor to decide to invest or not
to invest in a company or for Capital
Market uh you know so is this this is a
very you know clear concept which has
been used for financial account and that
uh and this is the same definition that
we use for sustainability this has
certain advantage of transparency and
also it allows to relate sustainability
disclosure with financial disclosure
because you know at the end of the day
in you know maybe in the future we want
to have a fully integrated reporting in
which all these risk and opportunities
for the companies will be fully
disclosed now U the European commission
comes and says not only the European
commission but also the G or other
organization around there they say no
what we want to know is also what
companies
you know do impact on the environment so
we want the other side of materiality I
call that you know more impact than but
they call it double
materiality now um you know the double
the the the second part of materiality
of course is very difficult to Define so
material for whom material in what sense
material Horizon so you know it's very
difficult to measure so that that's one
you know but a public so an institution
which has a public policy tool like for
example the European Union which have
the legisl you know the the legal
framework to impose these standards they
may want to ask companies to disclose
what they think is useful for their
public policy objectives now as a global
regulator we are not we don't have these
tools because we have to serve a number
of jurisdictions which have different
legal Frameworks and different
objectives so we would not you know so
that would be uh you know just going
beyond what we are uh you know supposed
to do and what so I mean and this is how
you know we got we Define this concept
of the global Baseline in which say we
have this base which is the financial
materiality concept and then if a
jurisdiction has other objectives they
can put a double materiality on top of
it and the gri which is an organization
which uh is also is a private sector
type of organization has also developed
some you know standards that the is is
building on and we are working with the
EU and with the J to make this interop
operable okay to provide
interoperability now but one thing I
want to make sure that everybody
understand that to say to limit the
concept of materiality to financial
materiality that doesn't mean that we do
not have to look at Al the interaction
of what companies do with the
environment because of course you know
these risk and opportunities are very
much you know the two things are related
so in instead in fact in our standards
we ask companies to disclose about C CO2
emission scope one scope two and scope
three so we have also this metrics so
now if we look at the standards of
European commission and our standards on
climate we are very very similar and
what we are trying to you know what
we're working on now is trying to make
sure that it is clear for the
preparers what is SSB specific what is
EU specific and what where there is the
overlap now of course because on climate
transition risk are important what
happened to public policy has an effect
of what is financially material so you
know this connection is very important
for us so and uh and so you know so it's
not that mechanical okay that's yeah
thank you so there already a couple of
questions about the ISB so forgive me I
I'll have to uh stay with with L but do
perhaps you also have something uh to
add to to those points so one of them is
about uh well so G and sasb are they
going to disappear potentially yes now
but they have already not not g ssby has
already so s is part of the issb a gri
yeah so that's the direction of travel
um and another question is about carbon
taxation so we started talking about
carbo pricing um and uh the person
asking the question is is asking whether
the ice speak could ever become a sort
of
designer of a globally consistent and
integrated carbon tax system carbon tax
no I think it's you know I mean the
accountant are not going to solve the
climate transition problem okay so that
how much I you know I love the
accountants you know this is a very
complex which mean which requires
different tools and different policy
tools so the carbon tax is one of these
tools disclosure is about the
information architecture so we need to
have the information in order I mean for
Capital markets and for Public Policy uh
but you know disclosure uh once you
disclose it doesn't mean that uh you do
something you know you just disclose it
okay now you're not going to see
anality then you want to have ta we want
to have a carbon tax May and actually it
is my opinion that you need more than a
carbon tax because you also need
investment and uh you also you know you
need public investment and uh because
you know there is not just an
externality but there is also the need
to to build an infrastructure and also
to incentivize technology which is very
risky in the private Market may not
necessarily go for risk investment so we
have to think about a broad set of tools
just doing a little bit okay not a job
for not a job for the ISB but the
question about carbon pricing and the
global uh price for carbon meaning
either through um markets or through um
tax is there Mel what's are we ever
going to have a global uh and high
enough carbon price yeah hopefully
certainly we're not there countries like
going to blame it Germany uh does not
have a carbon uh tax but there was a
blueprint uh out there or there is a
blueprint out there since 2021 showing
how this can actually work because as L
has pointed out these types of
regulations tax law is jurisdictional so
you need individual jurisdiction like a
country or the you um to um to design
and impose the tax so your question is
how can this work at global scale
because we're addressing a global
problem of course um the blueprint was
um the global corporate minimum tax so
2021 many countries jurisdictions came
together at the oecd level as kind of
the organizer to agree on the concept of
a global corporate minimum tax and
that's now only two years later being
implemented in more than 100 countries
worldwide so this is the way it can work
uh companies um coming together at
events like cop for example in principle
agree on a design commit to a certain
level and then introduce it um at the
domestic or jurisdictional uh level so
there are processes and blueprints out
there and and hopefully um this will
happen okay so let me ask jaier and then
I wanted to ask a question to you Emily
would you like to see a carbon tax a
global carbon
tax well I think I think carbon costs
money and I think that you can call it
tax or you can call it uh a price for
for carbon I think it's uh to be honest
if we use an analogy I think that we saw
the case of Bitcoin a few years ago when
suddenly it was an exercise to try to
measure the whole value of the economy
against 21 million units h of of a of a
particular currency and that's why that
set a price for for for for that
particular currency I think with carbon
something similar will happen I think
that uh in the fible future we have a
limited carbon budget that collectively
we can use and therefore that's going to
create a quantification of uh of a
carbon unit that today I think is uh
from a shadow perspective is trading but
I think at certain point it will be more
than a shadow market and therefore
that's going to create h a price for for
every carbon carbon unit so I think that
the only thing I I I would disagree with
lucrea is that I I do believe that
accountants will be the ones sorting
climate uh change and the reason for
that is because we are the ones who can
quantify what's the cost of these
externalities and once that happens I uh
personally believe that that Capital
markets will play their magic and will
create the right incentives to uh
penalize the wrong behaviors and
incentivize the right Technologies to to
sort it out so as a prate accountant I I
I do think that we have a a huge role to
play all right account as a
revolutionary okay there is there is
certainly a comeback of of account as s
do you have an accounting background as
well I have an economics background but
I have a love of accounting you have a
love of accounting okay yeah so I am
also with Javier in the path of of of um
I guess moving from economics to realize
the reality of externalities to then
witness the gaps in policy and I mean
all of us taking responsibility for this
as as both voters and consumers to to
solve these externalities and in their
absence I see disclosure as a way of of
filling these missing markets addressing
them that it cannot solve all problems
we will still need uh policy and
regulation to play play a role um and in
the meantime uh coming back to your
point about what what we we can only
manage what we measure it is actually
increasing this recognition that yes we
have um produced Capital we have human
capital we have natural Capital that the
depletion of that natural cap is
something that we need to be accounting
for account you can bring us into the
accounting system and look at the
implications of it in terms of risk and
opportunities that will bring all of
this to life so I like Javier have great
faith in accountant saving saving the
world Wonder wonderful and so if you're
the questions coming in are about
tradeoffs and and one in particular is
about um the trade-off of for example
reducing uh emission through means that
may have a negative impact on nature how
challenging is it to measure those those
tra trade off are you looking at those
I'm sure you yes well there's a there's
a there's a downside and that there are
tradeoffs um you know for for um for
many different areas where we may be
looking at solutions for renewable
energy there may be then the source of
minerals for for fulfilling that that is
going to deplete um important uh parts
of nature but there are also upsides in
that there are potentially big solutions
for climate change through restoration
and conservation of I mean basically the
planet as a carbon s sink and a source
of sequestration that we can use to
solve uh the problem so I think yes we
need to be keenly aware of the
trade-offs and we need to be keenly
aware of the synergies and that's where
I think the very interesting challenge
uh I was talking to the credit here is
going to come for the issb now having
developed its first standard with a set
of General requirements for
sustainability overall and then taking
one size of climate now thinking about
the interactions of climate and nature
where there may be both synergies and
trade-offs and then of course the
important Dimension and all of this of
people at the at the heart of this yes
um so I I I mean I think it's a yeah it
and having started I I um I I sort of
switch sometimes thinking why why is
everybody so limited and only think
about climate mitigation not to be a you
know critique of this day's conference
having a focus of that but in many ways
it's an asset in that people have come
to think about this one issue and then
can use that as a bridge to thinking
about others that are connected um but
in some ways is it's so tough to solve
that one thing and coming back to the
reporting context with Javier right one
of the reactions uh we get when
presenting tnfd work would be oh another
issue but it's not just another issue
it's an interconnected issue you cannot
solve one without the other so we are
asking a lot of all of us to solve
interconnected problems and that's going
to be you know uh a really exciting but
challenging part of what we'll all help
issb to to address so to wrap up this
session and given that we're here
talking about this uh subjects um ahead
of cop let me ask you all to share just
a couple of minutes um about what you
think will actually come out of cop in
terms of Regulation I'm going to start
from um
Javier well I think I think hopefully
what it will come out of cop is a bit
more Focus um I think time is the thing
that uh we we do not have uh I think cop
is going to start focusing more in more
specific uh areas and I genuinely hope
that what we get is a bit more focus and
and simplicity which is what we really
need I think a carbon out today is uh is
much better than a unit of carbon out
tomorrow so I think that I hope that
what we get is focus and
simplicity a simpler system Marcel I'm
sure you agree with with that as well
absolutely I mean obviously a lot will
be um uh focus on on the global stock
Tech this year of course in in terms of
Regulation and bring this this together
with kier's ask or demand for Focus I'd
hope as an academic that we focus on
what we know really works transparency
in disclosure is very powerful and we
also know that um tax policy either as a
carrot providing incentives for
investment like through the inflation
reduction act or as a stick carbon taxes
can also provide very powerful
incentives for corporations to to change
Behavior if we focus on that uh I think
that would already be a success all
right so Simplicity and um effective
ways of changing Behavior ta Emily um I
think once again there's going to be a
strong emphasis at this cop on the
connections between nature and climate
so I think increasing awareness and
understanding that that is the Paradigm
we're moving towards and um and have to
move towards and then I think also just
continued momentum there will be
dialogues at cop between the market L
framework developers like ourselves the
standard Setters um like issb and The
Regulators like to continue on that
on on goinging dialogue which because
we're all moving with urgency fast but
these are complicated things to create
that consistency that everybody's asking
for is um toates that ongoing dialogue
you have to have very nimbly be sharing
things to make sure everything we're
doing remains consistent so I think
those conversations will continue
consistency thank you look yeah I think
that you know we have made the first
step which is uh you know we have now a
standard sets at least for climate and
then there will be a discussion about
how to go beyond climate but now they
the challenge is adoption mhm and for
adoption you really need a global
dialogue and we don't have a a global
dialogue I'm not particularly optimistic
about
cop uh and this is for just for what
concerns what we have discussed in this
panel but you know in general you know
that we need I mean according to the IMF
we need about5 trillion dollar annually
of a green investment every year from
now to 2030 a lot of that will have to
be private a lot of of that will have to
be coming from emerging markets and
money are not going to Emerging Markets
so I think that Emerging Markets is the
key issue and uh and also you know to
get that money in Emerging Markets we
need a global dialogue and also in that
you know that's is going to be you know
the main political issues is is there
okay so that of course so uh for a green
transition we also want it to be a just
transition that works at po same
government levels including um uh
supporting Emerging Markets uh
transitioning to uh to a Greener economy
uh and they of course agly and
effectively the most exposed uh to the
effects of climate change and also uh
you want to be able to channel private
Capital towards the the companies and
initiatives that are um arguably
hopefully better at uh tackling this
Challenge and so let's hope that
accounting will will help and by the way
if I can advertise so starting from next
week the wheeler Institute at Lando
business school will have uh you know
four lectures on standards and adoption
in African countries and we have a lot
of you know already demand for this kind
of also capability buildings which I
think is very important where business
school can have a role and you were
already you were saying that were
already uh there was quite already a
High um level of takeup which indicates
the interest that there is in this
subject so that's it thank you so much
for joining uh for joining this ation um
it's uh it's wonderful and the more you
get into the detail the more interesting
it gets uh I think uh so do keep on
following uh all of the panelist work in
this area thank you jaier also for
joining us uh all the way from hro from
uh from the floor um and thank you of
course to also to mcel to Emily and to
lcia and for anyone of course also want
in peps to have a look at the kind of
coverage we do at sustainable views on
policy and regulation come and check us
out at sustainable views
thank you again so
[Applause]
much

---

### think ahead: Climate Transition and Emerging Markets, led by the Wheeler Institute
URL: https://www.youtube.com/watch?v=jKanGWK6WmA

Idioma: en

thank you Julian let me start by
congratulating those of you whom I've
seen from early in the morning uh uh
today who who stuck it out clearly uh
highlights the both the importance of
the phenomena we're going to study we're
going to discuss uh but also the energy
that's behind uh uh behind uh all the
solutions that we will hopefully uh
discussing have been discussing all
along uh we have an absolutely star
studded panel uh here um and uh I'm
going to very briefly introduce
introduce some of them uh Nick Hughes
did my immediate right uh uh Nick is a
work in case study actually case studies
in the plural because uh at lond of
business school we teach a case on Mesa
the mobile money Service uh I see some
heads nodding you've heard you read it
uh um that Nick started in a in East
Africa that transformed um many
communities in East Africa and has
served as an inspiration for many others
uh around the world Nick then moved on
he's always on to the next big thing uh
that moved on to uh another uh
initiative M Copa uh which seeks to
address the 600 million number that Alex
Edmund uh Edmonds mentioned earlier
today which is uh the the the fact that
so many uh in Africa in particular but
around the world still lack access to
energy not just clean energy energy and
now mopa using some super cool
technology state-of-the-art in very many
ways uh uh addresses uh that challenge
of uh energy and Nick then moved on oh
by the way that's another lbs case
uh which all our first year MB is Du um
and then we haven't written the case yet
but uh Nick's current Venture is called
cavex uh which I'm sure you'll talk
about some more uh Nick and I also teach
a class uh called innovating for impact
at London Business School so Nick
welcome back uh uh antoinet another dear
friend of the school and of the uh of uh
this particular Community anet vermil is
the is the co-founder with John
of the galif foundation which which
forces us uh in very many ways partly
through Sher force of personality but
partly through the the the vision and
the and the importance of the phenomena
uh to look at areas that we often ignore
specifically the
oceans and uh Plastics and the oceans
and the impact that this combination has
on a whole bunch of other things I'm
sure anet could tell us tell us all
sorts of
[Music]
um scary statistics on on that
combination uh the galif antonet and
John have been oh sorry the vermilia
have through their Foundation been uh uh
wonderful supporters um I think we have
at least one galif scholar here uh and
from uh the scholarship that they they
have endowed at L business school
antonet welcome uh gor meta another case
study uh gorov um runs a remarkable
organization in India um called Dharma
life uh Dharma Life Works in 14 states
in India now 14 states in India is the
equivalent of you know the the
particular States inv worlded is the
equivalent of uh all of Europe and the
United States and a whole bunch of other
countries yeah uh one state alone is the
size of Brazil yeah so uh 14 States and
they work on um Rural Entrepreneurship
that has a social impact and energy is
one of the uh uh particular areas but
back to the the point that uh was made
in the earlier panel that it's not just
climate it's a whole bunch of other
things and each of them recognizes and
tries to address that uh in their own
way uh from uh from uh their vantage
point now the focus of the session is on
Emerging Markets we've heard Emerging
Markets referred to many times um and
and and so I I'll start the conversation
with just figuring out what's different
about Emerging Markets you know very
often uh the discussion is almost as if
um these are
victims um that oh gosh through our lack
of empathy or care uh we're causing
victimization uh uh to all of these
hundreds of Millions millions of or
billions of people or they're villains
yeah either they're they're you know the
oceans are rising and they you know air
is being polluted or they're the ones
cutting down the trees uh they're the
ones uh doing you know dirty coal etc
etc I suspect this group has a slightly
different perspective from experience on
Emerging Markets so let me start with
you Nick and then we'll go to the group
as a whole what is different in Emerging
Markets uh especially contemporary
Emerging Markets as we think about cop
28 yeah sure thanks well it's a pleasure
to be here um well I'm I'm a a
practitioner uh thanks for the plugs on
the cases but um you know when when I
look at um subsaharan Africa in
particular um I actually see a a huge
opportunity in front of us to think
about redesigning the infrastructure
that we can deliver clean energy to to
the 600 million people that are simply
Off the Grid I mean it's inexcusable
that number of people
cannot access grid technology today and
yet we have technology at our disposal
which can solve for that problem it's
just and I think the previous panel only
caught a little bit of the conversation
but it boils down to inertia in the
political systems it boils down to
financing um the practicalities of how
we design that infrastructure need to be
thought through so we shouldn't go into
Africa or or other parts of Asia and
start to think about centralized Energy
Systems I mean that's crazy if we landed
on the planet today and looked around we
both in terms of energy and in water you
would not design the systems that we use
today and in many ways similar to Mesa
you know when we when we were thinking
about empa we we were moving money
around on phones 20 years ago long
before we had Apple pay and iPay and
smartphones because we designed the
solution for the person that just had a
feature phone we have to think about the
way we design the next generation of
energy systems for people that don't
have the same needs that we've we've
grown into over the last 200 years let's
think about decensored systems let's
let's think about smart grids I mean
there was a conversation earlier today
about the rise of electric vehicles I I
I've been pestering the World Bank for
decades to give me a business case for a
smart grid it doesn't actually happen
because you don't have the anchor
consumption to use the energy on a grid
and you can't bet your get back your
capital expenditure but suddenly we've
got electric vehicles in the mix
suddenly we might have an anchor use
case to roll out smart distributed grids
properly and so you can a smart grid is
a grid where you you come onto a grid
it's been installed maybe it's us
clean energy at its source so in in
across Africa there's more solar energy
potential that we can actually use
across the globe there's geothermal
energy in especially in East Africa
that's that's under the ground it's it's
clean to access we could put that onto
the grid and the smartness comes when
you pay for what you use you don't just
build a a distributed a centralized
system push energy down load shedding is
happening all across Africa they simply
don't know where to put that energy the
energy companies are only interested in
there what they're called cni customers
the commercial customers they're not
they're not interested in getting to
households we've got a jettison that
thinking and design much more
appropriate systems where where they're
smart the energyy is going to where its
needs and and we give people the ability
to pay for what they use using using
fair pricing and um so so you know if
you look into that into that you know
whole you know where sort of I'm grossly
simplifying the opportunity because it's
complex and it's hard and it needs money
but the opportunity is there for us to
rethink the way we build um Energy
Systems and we do need to start doing uh
the talk earlier today about in
internalizing some of these external
costs we need to build in the pricing
for the global South that gives them the
incentive to move down this path and and
and I do think the Glo through
mechanisms like the carbon markets the
global North and the polluters can
should be we should be finding ways to
get that money from that Source down to
incentivize these new clean cleaner more
cleverly designed um infrastructure
systems great so I'm hearing you say the
word you use a few times was
opportunity um but then the
infrastructure necessary to create the
opportunity uh as well as the the some
you alluded to the interconnected nature
of the World perhaps that's a topic
antoanet more generally what is uh uh as
you look at developing countries uh what
what do you find what is your Vantage
Point so today I've been here by the way
thank you very much for having me and
it's really nice to be here and to have
this audience so I've been listening and
I it's it's very much where we're
looking at using technological solutions
to solve problems which is great and I I
think it's very much needed but we need
to realize that in a very finite World
we're using more and more resources to
do that and in the end where are we
getting most of those resources those
are from our emerging markets and in
addition to that most of the effects of
us doing that are actually affecting
those countries more than us because the
effects of climate change are actually
the consequence of extraction um and of
our industry in creating those
Technologies so it's not and again going
back to Alex um and his of
externalities um it's really important
that when we move forward we are really
considering how we move forward to solve
a problem that it is not solving one
problem and creating others and that's
something that we are very very involved
with you know if you think about it that
indigenous people who comprise 4% of the
world's population have been protecting
70% of the world's
biodiversity and so therefore I'm more
interested in how can we make
nature-based Solutions lucrative and I
hate saying that I hate the word
lucrative but it's got to be an
incentive that we are finding ways to
work also with those kinds of solutions
that sorry that can help um solve this
the the poly crisis because I think
earlier I think Julian was saying about
the planetary boundaries technically six
have been crossed scientists are well
it's seven and we've only got two left
so we really are running out of time and
so in in that respect when I'm looking
at uh at Emerging Markets boy we do
describe them as the victims but oh my
gosh I also work um in areas where we
are very closely in touch with people
who are incredibly creative come up with
amazing Solutions um but every day they
are faced in the oceans you can't go
anywhere where your Beach is not
completely inundated with plastics the
fish that they are fishing is complet
completely filled with plastics they
can't even sell some of it because it's
it's polluted inside and out so we have
to be so this is not just like it's them
it's them it's it's all interconnected
and all of us have a role to play in
that and that's what I actually enjoy is
looking at where can we all start making
those changes so I'm hearing you point
on multiple levels to the externalities
um so the negative effects that actions
here or there uh might have on those
communities that are not uh factored in
um I'm also hearing you say something
about the interconnections uh uh that
that exist we might come back to that
and I'd love to learn more about the
ocean context which you're you're so
closely involved in as well gorov uh
your point of view on Emerging Markets
you left a uh a career in finance uh in
in Europe to to uh head to India uh and
work in rural India what do you see when
you go to Emerging Markets what are the
what is the reality so I see I think
make three points I the first one is
actually a huge amount of inspiration
towards this challenge I think we can we
see um we can see good examples of
Emerging Markets deep frogging uh you
know versus you know outed markets I
think the solutions you find especially
I mean I work in rural India amongst
rural communities and you can see I
think how they actually adapt to the
situation in some cases there are
challenges and we come to that data but
I think the Innovation is amazing and um
also the other thing you'll find is that
traditional ways of uh you know
operating or living were actually
climate friendly so actually the these
communities are much closer to what it
used to be and if you actually go back
to the modernization leads to um I mean
modern things from Western countries
seem exciting and aspirational to people
people but then they are sometimes
causes of these uh you know these
externalities at the Village level so I
mean if you work with uh if you go back
to some of the I mean modernized some of
the traditional methods of of uh living
of uh kind of consuming you will
actually be able to be climate positive
neutral and what's an example example is
um example would be I mean I can give an
example so I I work on households I work
on micro businesses and I work on
communities and in the micro business s
if you look at I'll take an example of
art forms and art right I think we
consume traditional art forms so we we
looked at Supply chains of traditional
hand embroidery or traditional um hand
weaving and if you go back to the
traditional ways of doing this it was
all using natural ingredients and having
circular processes now you are seeing
using chemical paints using there's so
many ingredients now which are in the
Advent of massive scaleup being used
everywhere and they are being brought to
these art forms which destroys the kind
of pureness of them and makes them
environmentally unfriendly and these are
then sources of water pollution wasas
creation um un know climate air
pollution because of energy and health
health obviously implicitly there's uh
kind of other influences on the personal
health and and living conditions and
working conditions so I think that's one
thing I mention and quickly the other
thing would be um I mean there is that
is if you go back to that um the other
thing I see is uh why I changed and
wanted to make a difference was because
it's sad to see what the situation is in
a lot of cases so it's a huge hugely
important to help these communities
modernize um and get what they're
supposed to get I mean versus why should
be I think niiki mentioned it why should
they be off grit why should they be so I
think there's the other side of it is
that the poverty and the issues these
communities face is also you know
something which is a problem so one has
to find a way to solve that and uh have
some sort of just transition yeah I
heard you use the word modern modernize
and I also heard you use Trad tradition
uh so modernize in a traditional manner
somehow maybe you'll come to that great
now and that all of that allude to some
of the challenges maybe we could talk a
bit about the the challenges that you
you see we've heard a lot about the the
you know the need for finances resources
uh what challenges do you see um
question yeah more anybody yeah sure
um uh where to start so so um if we take
the carbon markets as a can I I'll use
that as as an example um they've been
around 20 years I I mean before I got
into the telom space I worked at BP I
went to cop 6 in the ha and I came away
from cop 6 and I thought I'm never going
to go to another cop and I weirdly I
find myself going back into these cops
now and talking about how we can use
digital technology to solve for it so so
what's the challenge with the carbon
Market is it's a lovely economic concept
we'll create a cap so we'll either put
it in with a compliance cap or a tax but
allow people to offset that by finding
somebody who's got some excess credits
to save that that's a beautiful economic
theory how do you make that work in in
practice and for 20 years they bumped
along and we've we've seen market
failure they've disappeared over the
last even over the last you know three
to four months some of this um outing of
greenwash where these flaky credits are
getting sold they're getting sold to
Brokers the money doesn't make it to the
projects there's a much better way to
run these markets and again I'm going to
come back to digal tools we can there
are several things we can do now to
ensure the Integrity of a carbon credit
we've got uh remote sensing imagery that
we can use to monitor oceans and
mangroves and forests we've got internet
of things that you can't go anywhere on
the globe and not be under a network
somewhere whether it's the gsm network
the mobile operators Network where it's
Elon Musk is going to continue pushing
out with his low orbit satellites
connectivity is there data collection
can be done you can aggregate things on
the cloud you can interrogate remote
data uh third parties can go right down
to the very source of the activity that
you want to attach a carbon credit to
whether it's a reforestation or
protection of some Mangrove or it's
displacing a petrol pump somewhere and
putting in a solar
installation the this is all possible
and we can but the challenge is how do
we how do we build that monitoring
infrastructure that gives us the
evidence that the clean activity is
happening and if we can monetize it
using carbon markets we can use those
micro incentives so companies that are
setting Net Zero goals and using carbon
markets properly first of all they
should be reducing everything they they
can in terms of their own emissions but
if they need to need use credits to get
to Net Zero then let's find a way to
give them confidence to buy credits from
the emerging economies and move that
move that money down to the projects on
the grounds that are now that are
following a cleaner energy path so but
it's it's hard to make that work you
need you need that blend of you need
some committed I think the Net Zero um
sort of the the use of the net zero
policy and companies signing up to it
has been brilliant because it suddenly
gives you buy side demand and the
regulations and the regulations need to
come and enforce it and I I think if we
can make those things happen we can
deliver those Solutions using digital
technology there's no reason if I wanted
to offset my journey into London today
and move 500 Shillings down to an Essa
wallet I can do that I can I can do it
now if I can give an incentive to a
small holder farmer to use a use a solar
pump there's no reason why I shouldn't
be able to do that and yet we keep
hearing about all these scams exactly
all these carbon phony carbon credits in
emerging markets absolutely and and
that's what with that again that's
inexcusable we have technology to
demonstrate the Integrity of the
activity on the ground and we should use
that technology wisely and just to make
sure uh we are following so can you give
us an example so I'm a farmer with a
water pump what happens this is an
actual case you're working on
you work so uh typically you might go
and spend let's say $200 if you can
borrow it probably from an MFR you'll
borrow $200 you'll buy a a pump you've
got a choice as a small holder farmer do
you want a petrol pump or do you want to
those solar pumps look good but it's
another three it's $300 not $200 okay my
running costs are low but actually I've
got if I've got to find $300 why would I
make that decision because cash is very
real for me I'm going to make the
cheapest I'm going to buy the petrol
because I can get $200 I'll buy it now
if who said you buy this you you take
this solar pump what you're going to get
is a monthly credit to your impesa
account that every single month you'll
get let's say a th000 Shillings 10 Bob
10 10 $10 to incentivize you to take
that path and or we can use that to
finance that pump for you so there
you're using small micro payments to
incentivize the right choice between
petrol pump or solar pump and the money
for it is coming from the carbon credit
would come from I'm I'm I'm
um let's think of a big water company in
the UK that's trying to get itself out
of a dark corner let's say t water I
I've got a I've got a I've got a net
zero commitment I've got to find 15,000
tons of credit I like that that's linked
to water strategically I can see the co-
benefits exist for the farmer in terms
of its clean water being used for
irrigation that's driving up social
economic benefits I'll P those credits
give me the data that that's actually
happened we can we can do we can
complete that Loop yeah uh so and I can
see why you started with the point about
infrastructure because all of this
relies on financial infrastructure uh
Communications
infrastructure uh uh even in places
where there is no road infrastructure
that's exactly right yeah we have this
incredible digital infrastructure to use
today amazing
antonet and back to the point about
challenges you see I I already see the
entrepreneur here coming up with
Solutions a perun nod to challenges and
we always go to the solutions which is
awesome maybe you have a more sobering
thought for us so well I think it's I
love listening because I'm like oh yes
there's that and there's that absolutely
I totally agree there's and there are a
lot of technologies that are being used
in and blockchain as well which are
super important to track the The
credibility of of many of the things but
I just I just want to give a a bigger
picture of my my my world view which is
is a Learning Journey um so I think I
don't know how many of you know here
that Plastics come from fossil fuels I
mean they are basically a direct output
of it um and because of the growth of
the EV Market um fossil fuel companies
are now focusing on Plastics as their
next Market which is a estimated growth
of up to 40% by 2050 and most of that
about 40% goes on single use packaging
so something that you get from your
supermarket and literally use for a
maximum of5 minutes or have in your
fridge for a week that's it and so what
happens to those those get recycled and
I'm def definitely using my ant hands or
waste to energy which is another set of
ant hands um and the reason is because
we've learned and we've tracked actually
I was just telling rajes that in crumble
Road tesos they put some trackers in for
recycled goods and they found them in
Slovakia and in Turkey for open litter
burning
so the point about recycling is it is a
very open loop and there are too many
holes in it and there is there's not
enough accountability waste to energy is
another thing is where we take our
Plastics and we burn them in
incinerators and say that they will feed
energy the problem with that is that
we've discovered that the off um gassing
are forever chemical products that are
even the who does not accept them there
dioxins furland pasas and these remain
in the soil and in us forever so we've
got to sit back and go hang on where's
the logic here what are we doing and the
other point about it is that Plastics
are also um contain endocrine disrupting
chemicals and poor rajes has heard this
100 times but basically at the rate that
we're going in the last 40 years male
sperm count has dropped 50% due to
endocrine disrup in chemicals and is on
track to hit statistic statistical zero
in about 20 years great news um so the
point is that we're dealing with a
product that is pretty foul and toxic
and we still keep using it and we kill
so that's up here this is where we are
what happens with all of that that stuff
is it gets exported to countries that
are IL equipped to deal with it in
climate condition that basically pour
them into the ocean with every Monsoon
extreme weather event or whatever so
we're dealing with an issue that is
social justice uh social injustice
environmental damage and human health
damage so what has been amazing for me
though has been not so much that we can
find solutions to deal with a problem
that is a problem it we're just
literally putting lipstick on a pig what
we really want to do is stop that and so
the ideal thing is to try and limit this
fire hose of plastic production there
are some ways that that is being done
which is happening right now in Kenya at
unep there's the the global plastic
pollution treaty where it's like the cop
but it's the cop of plastics and we're
trying to negotiate ways to basically
address the plastic life from production
to the end that is amazing because that
has been driven and started mainly by
people from countries that were the most
affected by this the Philippines
Indonesia Africa those were the
countries that were driving so much of
this we've also passed something called
the Basel convention which now regulates
plastic as a hazardous waste so you
can't export it to another country
without prior agreement so these are
huge steps forward but they're more the
legislative regulatory thing because the
market the free market before then only
allow owed for very unsustainable and
untenable Solutions um so in that sense
I'm those are the things that I'm seeing
on the regulatory stage on the other
thing within communities and I've often
told rajes about this is that there is
um one city in the Philippines basically
um they tried an experiment where they
got everyone every stakeholder involved
and they had plasticfree ordinances
targeting businesses and all the people
who were involved in plastic uh
collection were reallocated to collect
everyone's waste from their homes and of
that 80% of the community's waste was
diverted from being dumped in landfills
and it saved them
$750,000 per year in landfill and
transport costs and the waste workers
which is a social justice issue were
treated as formal employees so this
became something that was one of those
amazing Stories where it was just just a
win-win win and has kept
going
um I we'll come back to the point about
oceans and what I heard also from you
was uh the interconnected nature going
from Tesco to the Philippines or turkey
or Slovakia uh the interconnected nature
of this phenomenon because the ocean
surrounds Us in part but also Supply
chains surround us uh whether they are
Supply chains that were originally
designed uh as to be used a certain way
or not uh um gorov challenges and I
suspect you'll come up with Solutions as
well at least that's been the trend so
challenges that you see um as you seek
to make an impact on climate related
issues in Emerging
Markets so I think uh for me the biggest
elephant in the room is financing
challenge I think it's been talked about
that the capital required to address
some of these issues is huge and it's
not really clear how it will I think
we're have massive Gap and I think
that's we heard about a trillion dollars
and so on trillions trillions I think
it's more than that but I think if I
break it down to my context which is the
micro level I mean you would talk about
how do you mitigate for imagine a rural
farmer in female farmer in a village a
typical thousand household Village I
mean first they asked to mitigate their
their footprint which in the scheme of
things is probably doesn't sound that
much but you aggregate it it's a hugee
issue second they have to mitigate um or
kind of they have to mitigate but they
have to become resilient climate
resilient so they face they face the
issues I
think which are kind of caused by others
which they face in their crop in their
current water situation Etc so they have
to adapt basically their their practices
and then maybe yeah technology is there
hopefully there'll be Solutions but
mostly that technology is still too
expensive to finance for them right so
these are micro level challenges at the
let's say a single farmer or farmer
group at the Village level so you know
not all of that can be addressed with
it's Capital it's Behavior change it's
kind of mindset change it is uh who will
fund the loss and damages is there a
loss and damage fund there's talks about
this obviously at cop but you know how
do you bring it to that level I mean
even reaching it to that level we have
the tools we have the technology to do
this but it's a massive Challenge and uh
and I mean how do you explain to that
also how do you explain that to them I
mean like if you so we s working with
women entrepreneurs we trying to explain
this um yeah in some cases it's very
tangible so easy to explain but
especially the things which don't have
any immediate direct impact you know
because mostly that's the case or have
any direct benefit or direct consequence
uh you know require a lot more effort to
explain why the the fair question is why
should they be changing their behavior
whereas others have been allowed to
develop our Behavior change on their
part when we're full of inertia many
issues right in terms of norms or even
fairness so Justice becomes an issue as
well right fairness and Justice so I'm
just again probably being on the
borderline negative as well but I think
these are the real challenges I mean and
not Solutions comes next I'll honor your
sequence and and how are you addressing
that
challenge I think um it's a work in
progress but basically what we've been
doing is we've been trying to look at
these Market these failures and um and I
think some of them have um Clear
Solutions and those get adopted I think
if I look at the let's say the micro
business I'll go to the micro businesses
first I mean there's the solutions which
are Roi positive right so whether it's I
think we've been looking at um the big
issue at rural level is wastage of foods
right so a solar drying use case where
you can dry it's actually a very Roi
positive use case so these things then
Finance themselves and so you can start
with those uh the solar pumps are also a
good example at that in that context um
solar um because for irrig micro
irrigation I think they're efficient
Solutions solar cooling is still
borderline because the the cost of solar
scholing so you have basically three
categories one is things which are
automatically ready adopt ready
adoptable right and because the arrow is
positive and uh you have you have models
of financing which develop and
Technologies which Finance them with pay
as you go models then you have things
which are you need subsidy you need an
offset to actually make them uh and
again there we come to the point of can
we create outcome Payment Solutions
because the climate benefits which Nick
alluded to they are not really
translatable directly to that household
so you need an efficient access to
carbon markets uh through technology so
using usage tracking you know maybe
unique IDs through blockchain where you
can track it back um and then uh to
solve that so that could be done not the
expensive impact bonds which are being
propagated with 30 40% cost you can do
that with technology now so that's kind
of that's the second category and third
one is where the use case is still
experimental where you don't know I mean
there's a lot of innovation required on
the tech side to solve the problem and I
mean here um I mean there's there's many
examples
but that's kind of we group into these
three and then we can take at least on
the second which is interesting
especially given the finance backgrounds
of of a number of folks here uh I see G
Muki who's here who's done a lot of work
with impact bonds Etc um so the logic if
I understand well we're working on uh
some research together uh through with
the wheeler institutes and DL Labs on
so-called results based financing maybe
you could talk a bit about how that
links to potentially with climate change
uh yeah so I think the simple way if you
have this financing Gap um there could
be two ways either it has to be
subsidized or it has to be financed and
the cost of capital is an issue so we
are I mean creating a tech platform and
that's as an example uh not a plug which
just you can just use very simple
technology of image um AI based image uh
classification to prove that this
household uh is the one deserving it so
you can validate the kind of uh
targeting of such a household is most
needy through technology you can um
track the climate impact through sensors
where if only the usage gets paid I
think a lot of criticism of carbon
markets is that you're survey based
paying out the carbon benefits your
technology allows you to actually track
climate you know footprint and then
paying out against the footprint two
sensors and the third thing is that you
create a unique record that this thing
is not duplicated so this one household
actually gets this Ben business gets
this benefit and this is not repeated
and so you have some sort of trust in
the process to by creating a simple leaf
ID on the blockchain so that's a very
simplistic way and you can just prise
this uh directly so hope that answer
just relating to some of the points
you've made uh there's a there are a
series of questions coming through uh as
well I don't know if that's up there um
with there are questions coming through
from from the online panel um and one of
them is uh Alex Edmonds talked earlier
about the need for climate
literacy um how do we achieve this in
Emerging Markets what does that even
mean in the context uh lucreta made a
plug for uh this terrific webinar that
she's organizing on behalf of the
wheeler Institute on on uh climate
standards and Africa uh what about on
the Grassroots if those were not dialing
in the folks the the small holder farmer
or that Community member in the
Philippines or the or the uh Village
rural Indian villager what does climate
literacy even mean in those contexts
Anon I I think they're living it I think
they see it every day you I mean you're
in your if you're on a coast you're
seeing Front Line the amount of plastics
are hitting your Shore you're seeing the
fact that the weather is getting much
more extreme there are countries that
are going underwater right now um and
it's not just I mean I always again
carbon tunnel vision the these are
countries that are not just losing their
land they're losing their culture their
spiritual connection this is much bigger
um so I what I'm sort of when I hear
this I think that um we talk about
climate literacy that's because we're so
disconnected I think that when you are
front line you know full well what the
changes are and you're having to cope
with them front line and particularly in
in coastal areas this is a you know I
was in my home state uh in India uh
Kerala a few weeks ago uh and the person
who was cooking uh at this little hotel
we were in on by the beach uh was a
fisherman it turned out uh and we say so
what are you doing here instead of
fishing apparently that beach used to go
3 kilometers
out in my Homestead I had no idea uh and
and to him it's very palpable and his
children are not becoming fishermen
anytime soon uh they are doing other
professions and and so they see the way
the world is headed from their
particular initial uh unique uh
perspective um so and is that enough I
think I think obviously there are all of
us when we start looking at the
interconnectedness of what we're doing
you can sit there and say well maybe the
way that they dispose of waste or maybe
the way there are Chang changes but I
think that within Villages and we've
leared this that when you work with the
elders in the village they are super
important in um educating their their
communities on better ways and that's
probably the uh it actually started with
Al G with his climate talks educating
you know you you just keep going down
till you get to the point where there is
that level of education and literacy but
the level of literacy that you need
there is probably quite different to
Global Financial markets or whatever
which are too disconnected that's where
I think the the biggest true true but I
was thinking Nick of your example of the
small holder farmer with the pump that
farmer needs to trust that you will keep
giving the 10 sure every month yeah and
so at some level the farmer needs to
understand that there's somebody out
there who has a stake in whether he or
she uses the pump in a c a particular
kind of pump or not and and so there
needs to be some at least implicit
understanding of of cash flows and so on
yeah really but but um remember what
you're doing if you're getting 10 you
know a, Shillings or $10 a month to a
small holder farmer the the the benefit
of that is huge um you know this is the
the strange thing about carbon Market
you've got a you've got a dollar
currency and if if I'm T's war and I'm
buying uh you know I should I don't you
know I'm not picking on T water I'm t
water if I 10 10 pound or $10 per ton to
me if I'm after if I'm chasing 16 20,000
tons per year to hit my Net Zero the you
know I need to understand that you know
as a finance director I'm making
decisions about do I buy now at this
price and at this volume and there are
other things I might want to think about
like these co- benefits that that's a
different type of literacy to a small a
of farmer who's who's who's getting $10
a month $10 a month is going to drive
that you know that's what makes the
difference $10 a month is real income to
a small of farmer and you know it might
sound like we're fiddling around the
edge talking about one small hold of
farmer or one household but there are
literally hundreds of millions of people
like this and we have to think about how
do we create that at an aggregated level
then you start to see a material shift
but I would say bring it back to money
bring it back to some money in the
wallet of that small holder farmer or
money in the wallet of that household
that displaces their charcoal burning
because there's also health issues
linked there and they're getting a an
incentive payment to move across to
clean energy and when you you start to
multiply that by hundreds of millions of
people then you start to make a little
bit of a dent on on on the challenge and
it can all be done I think in the short
term longer term we're going to need
bigger Solutions we're going to need
direct air carbon capture we're going to
have to be pulling literally millions or
hundreds of millions of tons of carbon
out of the atmosphere we don't have the
technology to do that yet but we do have
the the the capability and the systems
to do this at at Big scale to do this
sort of shortterm stuff that brings
social economic impact and if we if we
link L to money link it to real money in
their wallet every month that's what
will drive Behavior
change yeah more of a behavior change
you're you're involved in uh lots of
activities on at the Grassroots level uh
that is around Behavior change some of
which is around uh around climate uh or
at least the environment yeah I think
definitely needed I think at different
levels I think at the house at the
individual level I think the government
of India's mission life is a good
example where you know there a policy
driven or I mean prime minister driven
initiative to get people to live in a
climate friendly way which I think is
not only an educational tool it's also
kind of creating a movement towards
changing your mindset to actually you
know save water reduce plastic all these
I think six seven behaviors they've
outlined and I think it's a great
example of a top- Down you know kind of
movement it still will have to view the
results but I think it's definitely
required and secondly I think the
business um micro business level and I
mean just adding to what Nick said I
think obviously the benefits passing on
the benefits will help but I think there
it's about pivoting and iterating the
business models where I think the
education would be around you know can
you help them actually you know have a
future proof uh business model uh and
the education would be around that and
using Tech and other things to to do
this because it will have to all pivot
and and iterate I see we have 2 minutes
and 14 seconds so I'm going to uh uh
wrap by asking you uh a question
question so throughout the day we've
heard and Anon did a particularly good
job of uh uh reminding us of all of the
challenges uh everything from sperm
counts to uh to
uh all the awful stuff that's happening
in the oceans
um it all sounds kind of
depressing although you've done a
remarkable job of giving us some you
know uh Solutions and reasons to um be
optimistic what keeps you going in this
where it seems like there are so many
thousands of uh players involved not
just a cop but much Beyond uh it seems
like these are such big problems with
all of these interconnections and all of
these inter externalities what keeps it
can seem futile sometimes uh perhaps
what keeps you going yeah it does feel
like it sometimes doesn't it but look
look look at how the world responded to
covid you know look we came up with we
shortened the R&D time you know by by
decades and B Solutions out that have
helped and you know we can have big
debates about you know about that but I
I think humans are are we would you know
I'm I am an optimist I do think we'll
find Solutions I think we are you know
as a as a race we can be quite ingenious
when we need to be um but as a just on a
pure business basis by 2050 one in four
adults on this planet will be on the
African continent as a business
opportunity why aren't we thinking okay
that sounds exciting what in four adults
on this on the planet
will be in subs and Africa if we're not
investing now in good Solutions smart
solutions for Africa then we're not
doing our job in in the you know in a
business yeah so big problems mean big
opportunities uh and you see that uh and
where keeps you going I think it's I
mean the fact that everyone's here in
this room it's it's the it's the
everyone is en engaged in one way or
another so I think I get my Hope from
action I hate just not doing anything
and all of us can do something if some
if all of you just left today and said
I'm going to do something today that's
one thing the other thing is high level
action that's what I look
for gorov you you I was you know you've
had two hours of sleep and this is not
ra frequent I know this and you're
working nonstop on these things I'm just
amazed at the level of energy you put in
what keeps you going thank you it's the
if you it's always a question of
perspective or you from which
perspective you're looking at it I think
for me it's working for the women
entrepreneurs in the village if you see
the challenges they face the challenge I
think the unpredictability and um issues
they they have I think it's just a tiny
thing for us to keep going it's
responsibility it's a duty it's it's an
honor to be able to do this so as long
as you can do it and that's what keeps
me going and it's always a question of
perspective thank you on that not note
of uh of Duty uh let's uh let's all do
our duty and I'll do my duty and end on
more or less on time thank
[Applause]
you

---

### think ahead: Fireside Chat Hosted by Christopher Caldwell
URL: https://www.youtube.com/watch?v=Bc5pYw7tppQ

Idioma: en

grateful thank you very much Julian it's
um thank you very much everyone for
coming here um my name is indeed
Christopher Coldwell I'm a um I'm CEO of
United Renewables which is a clean tech
investor and a renewable energy
developer probably more importantly
though I'm alumni of London Business
School member of the alumni Council and
also member of the the sustainability
group here so in delighted today to have
a far side chat with um a as rati uh who
is a award-winning journalist a um
senior reporter of climate so Bloomberg
and a person who has a frankly
unreasonable level of knowledge about
all things climate and amazingly manages
to stay optimistic in face of all of
that knowledge so I just say Julian
there without any further Ado um so it's
a great pleasure to to speak to you
thanks for thanks for this yeah thank
thanks for having me wonderful and
you've got such a um your leading voice
um but also very well-known voice
because you're also the host of a you
know phenomenal podcast uh for for for
Bloomberg uh but the theme for the day
is future Generations yes and future
Generations is both a source of great
optimism but also a source of great
concern uh concern because the the world
that we're living in the mother and
nature has tapped us on the shoulders
and said hey you cannot continue to be
acting as you're doing uh you cannot
continue continue as you are is giving
us warnings throughout the L now the
source of optimism comes from the fact
that well we're all working in this
industry and we're all working very hard
to to be making this right because of
future Generations you know and also
future Generations are the source of of
of Hope the source of the future so if
we can start by just asking um asking
yourself um from what's growing up in
India um what did environments and
nature mean to you uh so I grew up in a
small town which by Indian standards is
small it has about 2 million people uh
it's called nask and it's very close to
Mumbai uh and it's uh it's Wine Country
it's surrounded by mountains uh it's uh
it was a really beautiful place to grow
up in and uh you know my parents are
retired and and they live there and
maybe I will go back and retire there as
long as we don't make climate change far
worse um and so nature was very close to
uh uh us growing up cuz you know uh if
if he could drive 3 km we were at a
river 5 km we were in the mountains uh
and so Nature's always been an important
part uh of growing up but also uh the
other thing that has something that I've
carried through uh is we saw a lot of
change in the you know 20 years that I
lived in in India uh but also within my
family my grandfather never went to
University my dad did and was able to
send us to uh better schools and and and
eventually over here to study and be
able to talk to a very smart crowd so we
saw social Mobility alongside uh access
to nature which is something that I hope
everybody gets to experience not just
now but in future Generations too
fantastic and you're in your your late
30s now uh what generation do you
consider yourself a part of some of us
are you know like a different generation
to yourself unfortunately um and it's
it's a question that to me is very weird
because I don't think the generations
quite match up as they do in India
versus what's you know whatever you
define as generation x y z in in in West
so I I'm sort of you know happy to be
young
forever amazing amazing and how is your
reporting evolved over there over the
over the decades so uh you know I
started as a science student I did
chemical engineering then I did a PhD in
chemistry and so to me coming to the
climate problem from a science angle was
how I was introduced to it um and so uh
you know in all the work that I've done
I started from the place where uh we
understand that the science is dire and
we know that if we keep putting
greenhouse gas emissions into the
atmosphere it keeps getting dire that's
been understood for decades now so what
can we do about it and where can we
apply science that's how I started off
uh to look at Solutions uh and so uh
initially it was very much focused on
bringing my skill set to be able to
understand the solutions that that we do
have in front of us uh and how to scale
that up but in the process of reporting
as you know you mature as a reporter and
you expand your horizons on trying to
cover subjects uh you recognize that
there's only so much Science and
Technology can take you to a level you
need other things to make that
technology actually be useful to people
uh and so that's why I ended up writing
this book which is looking at uh trying
to bring people polic and Technology
together in different contexts uh and so
uh now it's not just about solar and
wind and batteries but also about
finance and laws and shareholder
activism to make sure that uh those
Solutions can be scaled in different
parts okay fantastic before moving onto
your book which we will get in get into
later on um interesting to have a little
conversation about uh your position as a
as as a journalist as a reporter um it's
pretty clear that climate is now part of
the mainstream media uh so thankfully
mercifully it's now been been taken on
by the uh by the by the fourth estate
but if you look at this in the context
of of Youth which is the the the frame
that we're we're discussing this today
and there's at least a perception that
youth is served by a different form of
media by social media and by other other
channels um how do you feel that the
that youth is represented um by and the
future Generations represented by
mainstream media you know con
conventional journalism um I think it's
it's a very good point there was a very
recent survey one that I can quote for
an American uh survey because it was
done by Pew uh we saw Tik Tok becoming
uh one of the biggest sources of news
for people under the age of 30 uh which
is interesting but scary to some extent
because Tik tok's algorithms are as with
any other social media algorithm
very easy to manipulate and we know how
much of a problem disinformation
campaigns can have um
and and yet young people do read good
journalism we know this from our own uh
analysis at at Bloomberg uh Bloomberg
News has a high pay wall uh but we do
have a web friendly uh output my podcast
is free my newsletters are free so we do
know when we do our surveys that young
people are reading us uh and so it's not
that just because yes Tik Tok has become
a big bigger source of of news that
everything's moved in that direction uh
but yes it's a the media landscape is
changing and one that we journalists
have to keep on top of I slightly
surprised that um Tik Tok is being used
as a way of getting the climate
narrative across because it's the
climate narrative is is deeply deeply
complex like we're here at an all day
events and we're barely scratching the
scratching the surface with with all the
the Deep levels of interconnectedness
here how do you do you see a place for
Tik Tok well one thing that as news
journalists we have to be very careful
about is we go where the audience is and
so you do have to figure out ways in
which you can simplify things not dumb
it down to the extent where they're
absurd but you can simplify things to be
able to fit it in a two-minute video
which is things these are things we've
made I've not put it on Tik Tok I don't
have a Tik Tok account but I have put
them up on YouTube and they do get
watched by hundreds of thousands of
people so uh yes I think you know you
are in the business as a journalist to
inform the audience and you have to do
that where the audience is fantastic
okay and you mentioned that your your
entry point to the whole kind of climate
debate uh was was from was as a
scientist but yet a few years ago you
wrote a book uh United We Unstoppable 60
inspiring young people saving our world
um how did that come about like how did
the and that gave a kind of very
unfiltered view from from youth how did
how did that happen so the origin of
that B was uh September 2019 pre
pandemic hopefully a time we all
remember uh it was when Greta thunberg
and uh and young people had come to uh
protest in enormous numbers we are
talking tens of thousands across cities
around the world and I'm talking about
September 2019 in the leadup to the UN
General Assembly where a lot of climate
conversations do tend to happen uh
however as as a journalist what I saw
was the only person and the name I
picked up was being highlighted was
Greta thunberg but she wasn't the only
one who story uh needed to be told
because there were all these people from
very different backgrounds some many of
them coming from developing countries
whose voices hadn't been heard and so to
me that was a place to try and allow
those uh young people and I had uh
everyone from I think 11 years old till
late 30s uh in the book and uh everybody
across uh all the five continents and
from 60 different countries so to me
that was a a chance and opportunity to
give young people the voice to explain
themselves uh and why they are taking to
the streets in such numbers and of
course Co happened and then we had to
stop protest but they are coming back
now so climate protests are are starting
back very ni so and did
that impact your journalism in any way
that they getting all of the insights
and views from the from from this
diverse script yeah it's impossible to
not have the work you do especially when
it's um learning about stories of people
and how their lives change also affect
you so to me I mean coming from a
developing country uh but also having
within a developing country uh a
privileged upbringing which is true uh
in in my case uh to recognize that and
be able to look back at other situations
that people have gone through and how
they've used them to be um more action
oriented so protest is uh I find you
know I've never been uh to a protest I
now as a journalist I likely never go to
a protest but I do find it a courageous
act especially what we are seeing around
the world now where protesters are being
uh criminalized and laws are being uh
brought in to take people who are doing
peaceful activities but label them as
criminals and so it is a courageous
activity and it requires a level of
commitment that is uh uh one that is
worthy of us understanding why some
people feel that they have to take those
steps sure yeah it's it's kind of hard
to argue against the moral case for for
protests and people putting short-term
disturbances now for the benefit of the
future but on the Practical side of it
there there are certainly arguments be
made of how impactful it is what advice
would you give to you know to Young
protesters so a lot of the the nice
thing about being a journalist and being
able to follow stories is many of the
protesters who are in my book are now
young people in professional careers so
I've have seen them going from their
lives as students to being uh being
people who now have jobs and many of
them almost everyone I know is working
in a climate sphere in some sense so you
can see that that uh desire to make
change happen once they recognize that
they also have the power to not just
make themselves heard but also be a part
of the solu solution they do take that
leap and that's a that's a hopeful place
to be yeah fantastic well we are um
running the risk of kind of generalizing
here like one of the themes of your book
is diversity yes um and how do we add
Nuance into that into the conversation
because you can't just say young people
as a block you know we need to have a
little bit more Nuance yeah well again
that's again as a journalist one of the
things that we are very focused on is
making sure that we hear from all
portions of society and all types of
people within Society so so we regularly
have uh audits that we do on our own
stories and look at what sources are we
quoting where are we getting our stories
from are we covering the regions around
the world that are being affected uh so
you know and yet the problems becoming
so big and so was that Things fall off
the crack so the most recent example uh
is there was an extreme heat wve in
Madagascar and we missed it and so we
had to have uh uh and you know we have
to meet as a group and be like how how
did we miss this uh you know how can we
avoid missing such an extreme heat wve
in a country where probably the the news
media didn't cover it as well and so it
didn't come up on our radar so what can
we do next time to not miss it so it is
a it is a conscious choice you have to
make to ensure that you are inclusive in
your coverage okay fantastic well I
think we we're pretty clear of the the
problems and which kind of takes us
along to the to their to to your book
clim capitalism um but fantastic great
congratulations just at a couple of
weeks now um but the the starting
premise of the of the book uh suggests a
need for for optimism and like your your
opening sentence is is a very optimistic
uh thought could you explain why
optimism is so important to you and why
you framed your book in this I would I
would call it possibilist so you know
this is a term I'm copying from Hans
rosling uh the late Hans rosling who uh
wrote a wonderful book called
factfulness and he makes the case that
if you look at progress we have made TR
tremendous progress and he charted those
out and had a wonderful way of
explaining to people how that progress
happened whether that's poverty levels
uh um uh hunger levels uh or uh death of
children uh born young uh all those
metrics were going in one direction for
a while some of those are starting to
reverse hunger is starting to reverse uh
and so to me what you know he got
labeled as an optimist just telling
people about progress but he said that's
not true what I'm saying is there are
possibilities there are possibilities of
progress and that we can learn from
those possibilities and apply them in
other places that's what the book is
about is trying to show where the
solutions are scaling what were the
challenges that people had to overcome
in different political circumstances
different economic circumstances uh and
how they can be applied in other places
okay fantastic and your your book is
essentially um a defense of
capitalism and I think it's pretty fair
to say the capitalism of the last 100
years hasn't exactly driven Us in the in
the right direction um but you we've had
you know inequalities we've had um you
know vast consumption of resources that
has led us to to a place which is like
frankly unsustainable right now but you
think we might be near a a Tipping Point
where where we have caused to be
optimistic that capitalism can can be
moving towards solving these problems
could you could you explain that I would
say it's a case for how you can tweak
capitalism to work for uh solving the
problem rather than worsening it uh
rather than defense of capitalism as it
has existed uh that's why the book is
climate capitalism that climate change
modifies capitalism uh and it's not a
book in the sense of making a
theoretical case it's going out to
places where that's happened uh and
again one thing that I don't have to
tell a business audience but there isn't
one form of capitalism what we have in
America in Europe in India in China are
all different forms of capitalism
they're all constrained by different
regulations different political systems
different economic capacities that those
countries have uh but what what we can
see is despite those differences there
are ways in which you can tweak it to be
able to deploy Solutions like solar in
India or carbon capture in the US or
electric cars in China and those are
solution sets that we can then apply to
many of the Technologies we talked
earlier in the day at this conference
around emerging Technologies like
hydrogen and carbon capture and direct
air capture or carbon removal all things
that will be needed but now we have the
road map on how to do them at scale in
all kinds of uh contexts sure
but as um an award-winning investigative
journalist who spends a lot of your time
popping hopium bubbles 100 yes 100% we
we we have um a capitalism has brought
us to a point where there's a lot of
like smoke being blown and there's
there's an awful lot of smoke screens
being being blown uh where we're we're
supposed to believe that we don't really
need to change very much because
there'll be big machines sucking sucking
carbon out our atmospheres and you know
so we don't worry guys it's okay um
where how do you balance that like so
the the need for optimism and the the
belief that there will might be near a
Tipping Point with the history of saying
that's well we there's most of the
things that are there that are there on
the rack now to save us probably won't
well as a journalist my goal is to try
and help audiences align themselves to
what the reality is because there's
always a gap what we perceive as the
reality versus what is actually
happening is there is always a gap and
that's probably why news journalists
hopefully even in a world of AI will
still be around uh but uh what I would
say is in a way I Define my beat as
covering Solutions and false Solutions
and you're absolutely right when
capitalism is being Modified by climate
there will be people who would want to
make a quick buck and so we are getting
a lot of green washy Solutions come our
our our way that makes for good
storytelling for a journalist it nothing
is easier if it can poke a hole in a
problem uh in a solution that is that
has problems but again while that is a
service that journalism provides and
it's a crucial service because if we
don't point to the problem I don't know
who else will do it at that level and
tell enough people about it
um books are a different piece I get to
sit in a story for years and be able to
make it make sure that when it's out in
the audience they can read it for years
uh and so that's why I wanted to take a
different stance where I'm not shying
away from the problems that are there
and there are many of those but to focus
on the solutions and how you can
overcome those problems and I feel like
both highlighting good Solutions while
calling out bad Solutions are board
services that need to be
journalistically done okay SS sounds
fair and another point that you you make
firmly is the importance of policy now
kind of pulling it back to our our
original theme on on youth um I think
it's pretty clear in the UK and a lot of
places around the world there is a
political bias preference towards
looking after older Generations rather
than younger and certainly more towards
current Generations rather in future um
how would you from a climate lens um
suggest that polic is is is tweet oh
that's an interesting one um it's also I
mean it that's down to the demographics
of the places you've just mentioned
right when it's an aging population
that's what the population is trying to
do that's not the case in India India's
median age is
25 uh and so you are you know many
policies that are oriented towards young
people if anything there is more uh
unemployment in India among youth uh
than there needs to be and it's sort of
a place where a lot of young people uh
and their talents may be wasted if those
young people aren't given jobs that's so
India has a youth problem whereas
invested societies it's an aging problem
um I think one thing that we can look at
least from a climate climate lens is
that there needs to be intergenerational
Equity that people in the older
Generations need to recognize that they
lived on this planet being ignorant of
the fact that climate change was being
rought under them now we are not
ignorant anymore we know the science we
know the responsibility of historical
emissions of many of the people who are
in the older Generations today many of
the countries that became rich on the
back of those emissions not knowing the
problem then but knowing the problem now
and so if there is a way in which and I
don't know what the policy level would
be but if there is a way in which older
Generations can be made to understand
that historical responsibility we may
get more support for policies that are
climate Progressive mhm okay okay that's
hopeful in a in a
sense so um one of the another one of
one of your kind of principles is is
again towards optimism um but it's quite
striking as you mentioned earlier on uh
quite how pessimistic on average the
younger generation seem to be um and you
mentioned kind of Cl climate protest as
a as a as a result of that
um what reactions have you had you
mentioned that you've seen um young
people do enjoy your your your
newsletters and journalism what
reactions have you had what
conversations have you had with with
young people on on your book yes uh so
there was a recent survey done of UK uh
young people in the UK and uh that
survey found 30% feel that we are
heading towards a doomis scenario a
cataclysm a catastrophe uh and that
nothing can be done about it which is a
very high percentage of people under the
age of 25 wanting to not
really uh participate in what is a
completely possible scenario where you
can participate in Solutions make sure
that catastrophe can be minimized if not
avoided uh and so my hope with the book
was to try and show that those Solutions
are possible that progress has been made
right we were on a track to 4° C warming
before the Paris agreement was signed
we're now on track for 2.8 that's the
most recent United Nations um report
that came out just before cop 28 uh and
so we've shaved up 1.2 de C from the top
it's still pretty bad at 2.8 uh but we
have time to be able to try and bend
that even further does that mean we
can't we can avoid all the problems
coming our way no right we continue to
put greenhouse gas emissions into the
atmosphere and thus we'll keep warming
the planet uh but we can try to minimize
the impact every .1 de celi matters as
as we heard earlier and speaking of
running out of time we are seriously
running out of time so if I can ask just
kind of one one final question a little
piece piece of uh advice to you know
people people in the audience and people
listening um how do you feel we should
be uh talking to younger people younger
Generations about the current
crisis um so I said my beat is trying to
tell you about Solutions and false
Solutions but what I often end up doing
is a layer below that which is how do we
talk about climate change uh and I think
one thing that I have found over my uh
seven years of covering climate change
is that every year the pace of change in
trying to deal with the problem has uh
changed and uh the pace of impact is
changing right it's all accelerating
both Solutions are accelerating and the
problems are accelerating ating so we
should start from the point talking to
any young person that we must recognize
that we are going to live for the next
few decades on a two track world where
climate impacts will keep getting worse
but climate Solutions will get keep
getting
accelerated if that is a world that
feels too dissonant well that's the
reality we are in but you can be on the
part of the solution and try and make
those impacts be as minimal as possible
yeah great and thank you very much for
the the U all the great work that you're
doing in trying to increase the pace of
the the positive outcome rather than the
negative that been a wonderful
conversation thanks for
[Applause]
much

---

### Think Ahead Podcast: How can AI be the answer to our environment crisis?
URL: https://www.youtube.com/watch?v=a7O9y2fVTlc

Idioma: en

there are many ways of using artificial
intelligence and banks for example have
been using it for credit card fraud
protection I mean there are dozens of
applications tell us why you think it
might be particularly helpful
in understanding and addressing the
environment
crisis so I would say more than helpful
it will be needed in a
word that is going through this crisis
if you look at you know the climate
science what it's telling us is a that
we're going to live in a even more
resource constrainted environment
starting with natural resources but it
will expand to everything we produce
from there is going to be more
constrainted and not as widely available
as it used to be and second the
variability of the environment is going
to increase so we're going to have less
re reliability in the availability of
resources the availability for example
of power of electricity production of
agricultural production this increased
varability is also going to make the
environment businesses live in more
complex got it and so given those two
things I think there's a push for
companies to be even smarter about the
way they make decision even more
efficient in the way they operate so
you're saying that we as academics at
Business Schools um the tools that AI
enables us to kind of build are
particularly well suited as it were to
to solving these types of problems
exactly and it's great also to see that
AI as a tool is still evolving and
improving because we're going to need
more and more of these tools got it I
want to to to home in on some of the
work that you've done as a management
scientist um there's one piece of work
you're quite well known for around uh
cleaning up the oceans uh which have got
too much plastic in them why don't you
just uh just give us a quick sort of
summary of what that's about what was
the problem that you addressed
addressing how did you tackle it so this
is a collaboration with a Dutch NGO
called the ocean cleanup and their
objective is to clean up 90% of ocean
plastic pollution in 2040 so of course
it's a very aspirational and ambition
goal um the idea here is to see plastic
as any emissions okay it's something we
emit actually millions of tons of
plastics are being emitted every year
into the ocean that comes from
Fisheries of course fish vessels but
also from landfills from plastic waste
and so on and so the idea here is
basically to build the equivalent of
carbon capture for plastic right okay so
the idea is if those emissions have been
made have happened can we take them back
from the environment and they different
ways to do so and so one particular
technology we've been helping them with
is trying to do this in the Open Sea mhm
so because of sea currents it turns out
that the plastic waste waste tends to
accumulate in in certain parts of the
ocean uh and in particular they've been
operating in the Great Pacific Garbage
Patch which is basically uh twice the
size of Texas three size the size of
France um and it's a plastic I mean it's
not of highly concentrated plastic it's
not a plastic island you cannot walk on
it but it's 80,000 tons of plastic in
particular region and because of
currents plastic everywhere from the
from from the earth or at least from the
Pacific tends to converge to that area
and so they've developed a big fishing
net they're dragging a net with two fish
trying to catch plastic this way the
issue is that this is quite inefficient
if you do it in a right random or or
stupid way and so what we've been
working with them is a routing algorithm
to route their system in the ocean right
to catch as much plastic as possible so
I I usually summarize that as a very
sophisticated example of Pac-Man you
know this video game where you need to
eat a lot of of food it's exactly the
same thing like we're Pac-Man with this
massive plastic collecting system and we
need to catch as much plastic as
possible given the fact that the plastic
is moving of course with the sea current
that the system does not move fast
because you don't want to catch any
Marin life and you also have wave height
wind SE current that's also impacting
your ability to navigate and so your
your contribution is to build an an
algorithm to sort of plug in a bunch of
data develop a way of modeling the the
movement of the plastic so that you can
tell the troller where to go next is
that correct exactly so here the the
idea and the core of the algorithm is
taking in data about where weather right
current weather weather forecast about
plastic movement which is also a model
from plastic dispersion and building an
algorithm that computes the optimal
route and computes the route that would
lead the best yield in terms of
collection to increase the efficiency of
the collect and so what we see is that
by being smart about how to navigate we
can increase the yield by nearly 60% on
average so over and above what they
would normally have collected you get
an extra 60% exactly just by being smart
in where you go in that massive and and
you're doing this in sort of in real
time because I mean I guess the weather
is changing Day by so we we update
dynamically the idea is to uh so we're
currently rolling out the algorithm so
that they can use it offshore uh when
they resume operation after the winter
and the idea would be to recompute let's
say something like every day U of course
you want to adapt to new forecast but
you also don't want to change every you
know every second because you don't want
to be shooting a moving Target either
right so um then I think something like
every day is probably what what we could
do we're helped a little bit by the
system because they collect the trash it
accumulates in a Zone like a trash bag
that they need to empty regularly and in
that case they need to stop okay so uh
we don't need to schedule for like a
full month ahead anyway uh So currently
what we're doing is trying to plan for
the whole week uh but reevaluating this
decision every day huh and are there any
other applications of this same piece of
research there are a lot of very related
problems that are highly relevant in
other use cases so for example um
they've been talking to a young startup
in France that is doing weather
forecasting for maritime routing and
here there's a also an opportunity just
for routing ships regular ships you know
uh that can maybe use the current to
reduce the amount of fuel they need so
there's also a big question especially
for the longer trip so if you're
interested in transpacific or
transatlantic trip it's usually
something that takes between one or two
weeks so there's a huge Challenge on
whether you can optimize these routes to
leverage SE currents let's go back to
the environmental crisis more generally
and there are so many aspects to that
from you know Agriculture and Wildlife
conversation to Smart Energy to waste
management I'm just going to pick on a
couple that I was reading about in
preparing for this podcast um so one was
Google Deep Mind and deep mind is the
the subsidiary of of Google that's based
in London uh they created some sort of
state-of-the-art AI model

---

### think ahead: Leading with Purpose in Turbulent Times
URL: https://www.youtube.com/watch?v=16HvH1bqYo8

Idioma: en

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so welcome to the first think ahead
event of 2024 leading with purpose in
turbulent times think ahead is London
Business school's topical event and
podcast Series in which London Business
school's leading faculty and other
Global experts explore today's big
business issues I'm randel Peterson I'm
professor of organizational behavior at
L business school and academic director
director of the Leadership Institute
I'll be your host for the evening today
we will explore the challenges faced by
leaders during times of Crisis and
uncertainty and hear recommendations and
suggestions from leading London Business
School faculty and Global leader Global
industry practitioners on how best to
manage teams through times of volatility
and stress so to start today's event we
have a question for the audience so get
on to slido on your screen select your
answer to the following question so what
is the key to successful leadership
during turbulent times is it number one
sticking to a clear plan number two
being reactive and adaptable three
acting consistent with one's values or
four having an ethos of take care of
others so as a results come in I'd like
you uh to introduce you to my panel I'm
pleased to welcome David phoh is an
associate professor of marketing at lond
business school um and teaches a class
on crisis management priia Mand is CEO
of stealth biotech and previously deputy
director of UK covid-19 vaccine task
force and Chris ail an entrepreneur and
business now and Leadership coach so
results are in so as we look at the
results here um it looks like we have an
over we have a very strong showing for
being reactive and adaptive and rather
less interest particularly in sticking
to a plan having an ethos of take care
of others okay so we'll see as the
conversation happens whether maybe we
might change your opinion along the way
let's see so we want to keep this quite
interactive there'll be an opportunity
for you to put your questions to our
panel please can you submit your
questions via slido using the Q&A box on
the right hand side of the screen so
welcome again to our panel um and we're
going to have each panelist just give us
a short introduction of you know your
background why you're here uh this
evening so David if I can start with you
sure sure thank you Randall so as you
said um I'm associate professor atom
business school in the department of
marketing so Randle is an organizational
behavior I've been in the school for 18
years now probably you are longer but um
so and my research looks at people's
decision- making especially in domains
like health and finance
um I've been also recently interested in
pro-social Behavior how people um how to
make people donate to social
causes like Randall said I teach a a
course on crisis leadership uh I taught
marketing for many years including
branding and I also teach behavioral
economics uh what all these courses have
in common um is interest in human
behavior so I was trained as a
behavioral
scientist um I'm interested in people's
um kind of mistakes Tendencies let's say
not always mistakes but um some kind of
Tendencies they might exhibit during
certain situations especially in
crisis um I work with companies as well
as NOS for for example for my class that
I teach at the moment we're working with
four NGS on issues such as education for
refugees uh peace building through
meditation and yoga and animal
safety great thank you David priia well
good evening everyone and thank you
again to London Business School for the
invitation and opportunity to
participate um on this inaugural uh
event so um I'm PR mande I'm an alumnus
of uh London Business School J 2002 um
as you've already alluded to I've got 30
years of life science experience across
big Pharma um galaxo fiser and others as
well as biotech and government um so I'm
Life Sciences executive I'm currently
CEO of a of a stealth biotech so um it's
startup company that we will be
launching very soon uh very exciting new
technology that's coming through I'm uh
you know privileged to be leading a team
around that um and I've had the
opportunity over three decades to lead
teams and organizations through times of
change transformational growth um and
crisis as well um as well as peace time
so I'm looking forward to the discussion
uh this evening so we hopefully I can
share some of my insights and some of my
uh some anecdotes as well um the peace
times haven't been that uh that long
because actually companies are always
constantly in a state of of flux and
change as it should be um as they
respond to the the evolving uh
macroeconomic and Global um sort of
impacts of of
society great thank you and welcome PRI
Chris hi thank you very much for
inviting me along I I guess um my
background is slightly different from
yourselves I come from a less of a an
Institutional large corporate
world I come from more of a
entrepreneurial startup scaleup and and
business ownership world so I'm I'm kind
of feel a little honored to be here
today to share My Views I'm I hope my
views will come in as helpful and
slightly different my experience has
been uh leading my organization over uh
15 16 years through a number of very
difficult uh financial times downturns
and I think a lot of my leadership style
was quite poor uh when I was running my
company so I learned a lot lot from
making mistakes and the best thing I did
was to uh I was very lucky to exit my
company and then uh be able to step back
and help others who are leading
businesses and I've learned a lot more
about good leadership and what makes a
good leader and what good leadership
skills are particularly in turble in
times as we've been through recently by
observing so for me I'm very very lucky
to be able to be able to stand back and
observe really what my life was and help
others uh improve the things that I did
hands up quite badly at points so yeah
great to be here and um I'm really
looking forward to the conversation and
some of the questions from the audience
and seeing if we can help people um be
better leaders all right great thank you
and welcome Chris and I'm sure we're
going to learn from that all right um so
there are three broad issues uh I
thought we'd talk about uh here this
evening the first one is really about
what are the risks why are we here why
is a turbulent time worthy of our of our
attention then we might talk a little
bit about maybe what are the
opportunities in it there's always
opportunity in in turbulence um and then
maybe one of the take-home uh messages
we would share with people about you
know their their own leadership in
turbulent times so let's kick off with a
conversation about so why are we here
what are the issues in terms of
turbulent times Priya I think you were
going to start yes so I thought the the
answer the responses to the earlier
question was was very insightful so we
talk about about risk in terms of risk
management and uh as any good
organizational leader will know one
should have some sort of business plan
uh where are we trying to get to because
then we can all make sure that we're
actually on the wrong right right course
um and that we but it has to be very
flexible and we have to respond to
emergent you know emergent strategy
change is a constant and we have to
learn to evolve and adapt so I think
actually from my perspective the ideal
response would would have been an
amalgamation of the reactive and adap
adaptable as well as the having a plan
in place um so risk management really
leads me to think around the sort of
organizational that I'm trying to build
and have been trying to build in the
past which is around building
organizational resilience I think it's a
very important phrase it's around having
risk management practices it's about
being able to thrive being able to adapt
being flexible but knowing where one's
going um going back to the point that
that changes are constant um in a
previous company when we were one crisis
um in particular which was covid um you
you mentioned that I was on the uh on
the UK vaccine task force but I was also
concurrently at the time a seite of a of
an immun oncology biotech company in the
UK um and I was fulfilling both roles
and um I coined this phrase walk the
risk run the plan so basically asked my
team to walk through every potential
risk we were running Global clinical
trials you know and everything from
sites being converted from cancer
therapies to now suddenly being
infectious disease units to the lack of
face masks the ability to you know to
secure consumables and reagents um the
whole number of risks staff not being
able to get on site and then to develop
a contingency plan around that that
wasn't to say that we were going to be
completely uh rigorous around that and
rigid around that plan but it was just
to give us a path to navigate it was
give us an ability to identify the guard
rails so we know how we're doing um and
to give you an example about you know
why that's important um security
protocols for example cyber security so
we actually had an incident whereby um
in the early days of covid um there was
some scare mongering and Rumor Mill was
was going into overtime that the
military were going to come in and
sequester our our PCR machines are very
expensive equipments everyone remember
their PCR uh that you had to do to see
if you had covid or not um and obviously
as a laboratory as a biotech we had a
whole range of analytical development uh
machines and methodology k hits Etc um
actually I can say that that wasn't the
case the military weren't weren't coming
in but of course the point was you know
folks um are alarmed there's anxiety uh
trepidation dare I say panic and at that
time it's very important to have some
sort of security protocols and to have a
bit of a plan um as it was uh as so
happened actually there was
opportunistic thieving that was going on
um and so you know at the time you know
vans not quite the 18 but Vans were
going around and and people were
professing to be um the military and
taking uh and and you know there was
this opportunistic thie thieving taking
equipment out of labs so um you know
again that's why I think it's very
important to build that organizational
resilience great thank you um Chris
David yeah sure I off the back of uh I
promise not to Nick your your your
phrase used earlier unless you don't use
it and I will okay fine I one of the big
risks that I've certainly experienced
myself firsthand in coaching other
Business Leaders is uh a lot around the
communication and opportunity so the the
risk that we see perceive is uh our
business is going to fail that that
we're going to run out of money that
financials become a focal point for for
organizations large and small uh and
we're not looking at the opportunity
that presents itself within that change
risk is a great uh driver for Innovation
you know when the chips are down when
business is tough It's that it creates
focus and when times are good we tend to
be very relaxed in the way we operate
the things we do there's no money issues
recruitment's great you know we just we
we're kind of um stuffed full of good
food and and and not waiting for
anything bad to happen so when it when
it does happen what I've seen firsthand
is that we can be quite reactive and we
can respond we can change that plan as
it fails as you mentioned in our earlier
conversation it fails at first contact
with the Enemy um but but the big risk
here is that we forget what we learned
during that time of Crisis and a couple
of years later we cycle through the same
mistakes again we relax we sit back and
we don't innovate we don't push
ourselves in our organizations forwards
and part of that I think is just learn
Behavior so what can we do to to to
drive a different way of leading in the
organization who can we look to in our
organization to lead not necessarily
those at the top and we'll talk more a
bit later on about that and how can we
use communication to as a much more
effective short and long-term tool to
tell a story that people remember
longterm and not forget how bad it was
and just focus on how good it is okay
great David yeah thank you just to build
off on the some of the points you made
um you talk about communication Chris
and I think another lever could be um
how we incentivize people in the
organization like um how we evaluate
people you know normal times as well as
crisis times you mentioned that during
normal times kind of there is General
kind of safety people kind of feel very
comfortable and actually don't innovate
don't try new things so that's a risk
during normal times yeah um one thing
that I I found doing some research on
related things that during crisis people
are worried about how they'll be
evaluated and and how they'll be judged
and they'll and they're worried maybe
for good reasons that they'll be judged
on whether they can deliver certain
results and and I think that's a very
natural con worry because you know in
crisis times we might think that we must
need you must reach certain kind of
outcomes and results you must we can
think that the viability of our
organization depends on reaching on
those results so these are natural
reactions the problem can be that if you
believe that you'll be judged only by
the results of of what you do you tend
to be more worried about
making a mistake you become more risk
adverse yeah exactly you become more
risk adverse you and and if you and risk
taking is necessary for Innovation and
in crisis we need to come up with new
ideas with new Solutions so and of my my
research with with some colleagues
showed that actually when people believe
they'll be judged only by outcomes they
take less risk yeah and I think crisis
can make people worry about outcomes and
and and think that they'll be judged
only by outcomes as opposed to some
principles some rules some guidelines
some values is that because organization
sorry do you mind if I ask a question I
know it's maybe very quickly is that
because organizations are traditionally
structured around that the only
measurement they really understand for
for their organizational behavior is
very kind of clearcut scorecard type
stuff sure so definitely there is a bias
towards judging employees managers by
results it's much more easy to document
easy to measure easy to report
compared to you know what is the process
that we got there that's more subjective
hard to articulate hard to communicate
but still I think you know many
companies that do lean in that direction
more companies like you said lean in
direction of outcomes and results I
guess what I would add lastly is that
during crisis time we lean even more in
that direction of results and outcomes
and that ironically can reduce
risk-taking can reduce Innovation is
exactly the time we need to be
Innovative excellent great so what I'm
hearing is just when we need a little
bit of innovation we put it the crisis
puts it at risk right those two things
come together right that that's the risk
that's the problem um and maybe we don't
have the right risk you know plan in
place either so we're kind of caught in
the headlights and now what right how do
we pick up the pieces and do something
so why don't we move on to talking a
little bit about maybe what the
opportunities are here um so looking
forward uh what um yeah what could we
what should we be looking for to happen
you know during during a crisis ideally
great question good so what should we be
doing during a
crisis
um lot of things well yeah well maybe
not actually maybe just one thing maybe
it's about changing what you've done
before like you know I'm touched on you
we tend to stick to a plan and then
we'll learn and we'll go back to you
know our old ways so maybe it's just
doing one thing and one thing that it's
proven to work I've seen work a lot is
Shifting the responsibility of decision
making of innovation down the
organization like right down to the
bottom so the newest uh youngest or most
inexperienced people within your
organization are employed to set the
strategy and direction of the business
moving forwards because because that
will reinvigorate and create new
Direction and be more risk-taking um I'm
going to mess this up a little bit it's
the it's the NASA Space Race Apollo um
moon mission that the average age in in
uh in Mission Control was something like
26 or 28 and most for most people in
there was their first job outside of of
leaving University and the reason they
succeeded is they'd never knew they'd
never known risk they've never operated
an an environment a business environment
where risk has played out so they're
prepared to Tak much bigger risks
because they didn't fear it so push
everything down the organization let the
people at the bottom the future CEOs
lead and and you'll have a completely
different organization that has a much
longer lasting impact and that way of
working becomes the norm not reverting
back to you know the sort of more
experienced people have been there and
done that but keep getting us in the
same hole that's my my view yeah and if
I can add to that I mean I think you
know we talk about crisis and and um
Cris and turbulent times as quite
negative connotation but it's actually
about change that's what the state is
and I think this it can act as a
catalyst for the opportunities so
talking about Innovation so you know and
and I recognize that I talked about the
importance of having an understanding of
the risks and having a risk plan it's
more about understanding what the
opportunities are as you look at the
risk mitigation so what I mean by that
is we know that Innovation comes
slightly from the margin of chaos you
need a little bit of ambiguity and and a
bit of chaos to be able to be truly
entrepreneurial and build that
Innovation an Innovative mindset mindset
that goes back to the the culture that
we want to create as well into into our
organizations and of course one can't do
that if you don't understand what the
known unknowns are and the unknown
unknowns so that's what you're trying to
do as you as you're trying to um have
these tools and systems and processes in
place to try and be able to manage that
culture um and I think you know going
back to the Innovation if you can look
at it as an opportunity as a catalyst to
be able to say how can we use this
opportunity to do things differently and
I and I um Randall you circulated an hbr
article which you've you've written um
around creativity and how actually
there's this sort of threat rigidity I
think is the phrase um which you know
when when everyone's a bit sort of you
know paralyzed and um I the other phrase
that I would use is analysis paralysis
so in times of the unknown unknowns
everyone goes to data and we saw a lot
of that in covid and I'll I'll hop back
to co but the stats on the news and you
know all the graphs constantly and
talking about infection rates and and
actually to be clear there was a lot of
unknowns at the beginning a lot of data
analysis quite rightly so where that
becomes problematic is when it actually
paralyzes anyone to making a decision
because actually the opportunity there
is to say we've got enough data we need
to move forward and hindsight is always
a marvelous thing so we took the
opportunity to to look at you know
understanding what was going on from a
RIS perspective was to then actually
push boundaries and actually to be more
Innovative and to be more productive but
the reason we did that we did that quite
deliberately it was actually a conscious
recognition that we were going to have
to work with The Regulators to move
things faster we were going to have to
let people work from home we were going
to have to protect certain staff as key
workers who had to get into the into the
labs you know there there's some really
foundational elements um that decision
had to be made and we couldn't drop to
the lowest common denominator in Cas you
know in terms of everyone is everyone
happy with this decision you know one
has to just move forward so I think the
opportunity there is to be Innovative to
be decisive and actually to try and test
test out new new ways of working and new
ideas and new products and you know but
within the the parameters of whatever
regulations one's operating in yeah I
mean the the upside of when you're in a
crisis is that people become more open
to different ideas in one way they they
they they they're fa they're scared they
want to they want to go back they want
reassurance but at the same time it's
like well if we think this will fix it
right they also are willing to allow
that maybe experimentation a bit in a
way that maybe they wouldn't have in in
kind of more normal times brilliant
example is homeworking I mean I think
preo it was sort of 3% of companies I
think postco it's gone up to whatever
the number is but you know number of
companies now showing that actually
people can work from home not not
permanently but you know as as a hybrid
approach um that it doesn't you know
drop off productivity completely as had
been originally um envisaged not
permanently because they're scared
they're not going to be able to have
fill the seats in their offices that are
very expensive and they need to show
some value for them because they're
traditional I think that's probably it
and I think there is some mentality out
there that says that if you're not sat
at your desk 9 to5 you're not working
but that's another probably another
session all
together well I mean I think of that
phenomenon is a kind of it's a Leap
Forward it was coming anyway the you
know the crisis brought it all forward
you know Catalyst it was going to happen
within the next decade anyway for for
other reasons so um you know we allowed
us to experiment early and move earlier
than otherwise probably would have
happened right that that's an amazing
opportunity so you know advances in
sequencing surveillance I mean what we
learned through that process having a
global pandemic globally uh
preparedness incredible advancement in
Technologies and from a sort of you know
um disease management surveillance and
and genomic sequencing and the UK is a
world leader in this space so we should
be we should be very proud yeah yeah
than the opportuni like thank you I
think organization first of all some
some things that just refer back to
Chris about like bringing to the bottom
or like listening to people in the
bottom empowering emping theming them so
it makes sense to me also because you
know you need knowledge or experience on
the ground cuz things are happening in
real in real time in a crisis so those
people probably have maybe the richest
knowledge the richest kind of the most
temporally proximate information that um
you probably need also they are maybe
less stuck on Old ideas maybe they don't
have they don't have those those hangups
those those experiences to hold them
back yeah Al I don't know how you feel
about delegating everything to the you
know to people I mean I guess you need
you need some kind of balance but I
guess you need to empower those people
we we keep our
jobs yeah probably but the re is right
the people at the bottom are waiting for
her Direction yes right and we don't
know what to tell them because actually
they're the ones closest to our
customer right and so the people at the
top are trying to make decisions without
information struggling right and then so
they're they're trying to decide what
direction to give I mean what I heard
over and over in the pandemic was you
know people want reassurance they want
information they I'm quite frankly I
don't have it like so what can I as a
leader what can I say I'm I'm stuck I'm
I'm and you so look I I kept talking to
senior exac about go back to the things
that you can talk about things like core
values strategy purpose right yeah in
order to help people understand that
we're not going to be a you know we're
not trying to do something different
we're trying to adjust to the situation
and at least gives them some
assurance that you know if they're
worried about how they're going to be
evaluated the same stuff is you know
much of the same stuff is still valuable
I think what's really interesting is in
those times of Crisis there is an
expectation I think um within the
business that the leaders have all the
answers and actually you know the
leaders are still listening to the same
radio report and the big you know the
news or whatever so um actually this is
a great opportunity to to for everyone
to say actually our information is
coming in hot off the press you know we
we talk about the pandemic um but
obviously this could be anything you you
know a natural disaster um you know you
know not to get political but some sort
of political event um that's preventing
companies from being able to
organizations from being able to operate
um and it could be any of those um and
and actually the information is coming
real real time and the organization
we're kind of in it together we need to
try and get through this and and that
sort of that comes back to sort of the
authenticity of the leadership that that
I think is really important you're
leading through these times is to be
authentic and transparent and you talked
about communication and storytelling I
think that's critical you know can you
cannot communicate enough during these
periods of difficulty yeah true it's
very true and how you communicate it is
one of those takeaways that you know a
person a leader who's a great
Storyteller who can take the complex and
make it simple and everyone there is
then telling the same thing they'll tell
their own version of it depending on
where you are in the organization you
might be more financial or more product
or more organizational or whatever it
happens to be but that simple narrative
about where we're going it just it will
save a business um it will make a
business Thrive a confusing narrative
over complicating the situation back to
the Moon thing for getting man to the
moon and back in the decade taking the
most complicated developments in history
of technology and the biggest challenge
ever faced and put into one tiny
sentence so everybody in NASA said we're
just there getting man on the moon
that's my job mopping the lose whatever
I'm doing yeah I I did a case study of a
bank in Egypt that was trying to survive
the revolution there right and you know
there was a run on the banks everybody
and they were expecting and the question
was you know do you most banks just shut
the doors shut people out you know when
this particular Bank was like no we need
to find a way to make sure people to to
to make sure they have actual liquidity
even during the crisis because that will
build trust and that's our opportunity
in the long run y pry and so they did
some amazing work kept the doors open
and at the end of it when everything
kind of settled back down again ended up
with more deposits than what they
started with before all this
significantly more because they were
able to see the opportunity and the
signal that then sends about
continuity um you can trust us you know
on this so even if the next run happens
Don't Panic you'll still be able to get
your money I love it authenticity great
transparency and simple story it's also
an opportunity for you to reflect on
your values so at that moment that bank
had the opportunity to see okay who we
are who are other people who we are
relative to them so it's an opportunity
also I think for individuals like during
Co for example we had so much time to
think about our lives and like what do
we want to do what are our priorities
family where do we want to live I think
also for organizations the opportunity
for thinking about where they want to go
it's almost like a a break an
interruption that gives opportunity to
think about where they are and what they
want to be or what they could be so and
and also for organizations to Pivot so
um you know I don't know if if folks are
aware but some of the um covid vaccine
Technologies were actually being
developed originally for cancer
Therapeutics or cancer Technologies and
then the companies themselves recognized
that we needed to to Pivot so um and
then companies became very very
successful on the back of that so um you
know it is an opport to look at the
technology look at the organization look
at the values and and look at the people
and the skill set um but then again you
know it one has to just say right we're
going to we're try and look at this
holistically as well as the values the
vision all of it together I think if I
could just pick up on your point about
storytelling um I remember learning
about this you know organizational
development while during my MBA at
London Business School and some of the
the simple Concepts really resonated in
later years actually less so when I was
younger but this idea of visioning um
and you know really simplifying the
message and the product and you know try
one of the things we learned when when I
was um you know in government was I had
a team of of civil servants and they
weren't deep scientists you know they
were historians they they' majored and
and they had you know uh Specialties in
lots of different areas and trying to
really crystallize what it is we were
exactly doing the goal being very
focused around the goal the vision the
storytelling
and um uh everyone will hopefully
remember jvt Professor s well sir
Professor I can't remember which way it
goes uh um Jonathan vanam who was uh the
deputy chief medical officer he used to
use these football anal analogies on the
television to explain very complex
science and how how we were doing in
terms of progress on our covid vaccines
so again that really links through to
the visioning storytelling uh
simplifying the Nar narrative and whilst
one is simplifying it it's actually an
opportunity to actually go is this the
right thing that we're doing yeah back
to the values
Etc
yeah lots of opportunity I that's what
I'm hearing from this conversation the
opportunities to rethink who we are what
we do but also reassure you know that
we're not going to be a we're still
trying to achieve the same thing perhaps
in a different way you can't guarantee
particular outcomes but you can still
talk process you can still talk values
you can still talk Mission and purpose
and those things are the things that are
needed to help and reassure people that
uh this organization is still the
organization you recognize right because
one thing you know people need a sense
of assurance stability right in the
moment that they Panic yeah right great
so how do we do that what are the what
are some things we can do as Leaders to
make sure that that actually happens uh
David you want to have a go sure sure I
mean you know it's a it's a it's a very
broad kind kind of objective how do we
do but know like building up what you
said about reassurance or what kind of
role the leader can play I'm going to
try to just take the perspective on
which I've been teaching and doing
research on which is understand human
behavior which I think we're all
interested in here and it's it's a very
important um objective I think for
leaders and I think specifically you
know we think of Crisis as these novel
situations um an uncertainty time
pressure unexpected new problem but I
think you know we do while crisis look
different human behavior in crisis is
actually more predictable so we know
exactly what's coming yeah we know like
you said like fear you said like the
freezing the the the reluctance to take
risk so those kind of things we know
that are likely to happen no matter if
it's how the exact crisis looks like so
I think good leaders I think can
anticipate how people might behave for
example if they are likely to take be
more cautious more conservative fearful
of blame that might be anticipated and
that reassurance you know can come
because I anticipate that to happen by
my employees by My People by my
customers and so on so I think a general
advice would be to try to act like a
buffer or like a mentor of human
behavior like knowing that by the way
they themselves Also may may also so
behaving a certain way so self-awareness
is also important for the leaders
themselves but let's say that they do
know and they arrested and they get
sleep and they eat well then they need
to worry about people around them that
might exhibit
those um less than desirable Tendencies
you know uh risk we talked about that it
could also be being entrenched in one's
opinions taking extreme view even
politically you know we didn't want to
go there Priya but we see now you know
in the middle list par is becoming more
and more extreme um and that's not
conducive to finding a good path a
future path to solve some problems
including conflict problems so that that
I think would be my general
recommendation like you know study behav
science take my courses
now sign but like like be interested in
human behavior as a leader and and and
and see how crisis creates risk and
opportunities like we discussed in terms
of human behavior a good leader should
be able to foresee what's coming with
beh with behavior with fore the exact
crisis but you can foresee the behavior
do we as As Leaders do we end up
panicking just as much as everyone else
and forgetting what we know and yeah
turning to the worst version of
ourselves I guess definitely but
self-awareness that you would is is a is
a good first step yeah yeah okay good
yeah and that the importance of taking
care of yourself so you can take take
care of others right because if as long
as they're feeling panicked there
there's a there's more risk that we
won't innovate that people will return
to old habits and if you know that item
that we had at the opening about taking
care of other people is a serious one
right if if other people people feel
okay then they're less likely to engage
in what we think of a stereotypical
Panic Behavior yeah right so taking care
of other people does matter right it's
non-trivial so our job as Leaders become
more around uh managing People's Health
and well-being than it does just running
a company when in times of Crisis so we
have to switch uh our our focus and
attention and Care maybe maybe a lot of
leaders just aren't armed with what it
takes to be a um you know I don't know
what the technical term is but to be
able to manage someone's well-being um
in that work environment as opposed to
targets like you know we've got to
produce more we've got to do better
we've got to cut costs and one of the
things that I um I come across and use a
lot uh and again I didn't do it when I
was running my business but I advise
people to do it now it's the idea of
crew resource management and that's
comes from flying I love flying I Fly
for Fun general aviation and there's a
very high death rate in general aviation
um it's a very dangerous sport because
you fly on your own so I'm in charge of
flying the plane navigating it problem
solving when a problem arises talking on
the radio you know everything I have to
do on my own even reading the the the
emergency checklist which should
memorize crew resource management is for
commercial airliners which are very safe
to fly in because over the years of
having accidents the the focus has
become not the captain is in charge and
it happens the same in in a medical
world in an operating theater the same
lessons were learned but that everyone
is equal and everyone has to question
each other on what's going on and you
you share the the task in hand when
there's a problem so in normal flying
Captain sits there and he's instructing
the first officer the first officer is
flying the aircraft my captain will deal
with radio first officer deals with
piloting in an emergency the captain
will take over but but then everyone is
delegating roles and task they have
their task but they will check and cross
check each other's decisions so that the
human era that causes 99% of crashes
doesn't happen because I'll say should
you be reducing the throttle should we
be going in that direction should you
know and and that's so in business I
think as leaders in times of Crisis we
actually close in trying to be the the
person who solves all the problems who
is my job as CEO is to lead the company
actually the time of crisis when we
should be managing our resour crew
resource better and working with a wider
organization working with our wider
teams but crosschecking each other you
know so not being afraid to challenge
your boss to say this doesn't seem to be
making sense this isn't the right
direction you know should you switching
that off yeah and if I could link to
that the the issue there is because as
Leaders sometimes you can fall into that
reactive trap which was actually the the
answer that came through is the the very
strong um you know Point uh so I think
um you know I mentioned this earlier but
I read somewhere about this concept of
listen to understand rather than to
respond and I think as Leaders it's
incumbent upon us to try and understand
the organization to listen to what our
people are saying what their needs are I
think I I really think the self-care
piece is really important but I also
think the recognition that no one's
perfect there will be times people feel
drained there will be times when people
need motivation and support um there
will be times when people will have to
apologize because they were tired and
maybe they were a bit Snappy on a on a
zoom call or whatever um so you know I
think if there's mutual respect which
goes back to the values point and a
recognition that we're sort of all in
this together and no one person has all
the answers and Perfection is the enemy
of good you know all all the sort of all
of those sorts of phrases then then one
can engage with the organization to
actually move through it and I do also
so just to add to that I think it's
really important to acknowledge that
it's can be sort of a defined time point
but generally you want to be able to
have a sustainable mechanism so that
after you're through this crisis there's
probably going to be another one which
you haven't anticipated and whether
that's a product safety issue or a
customer or a competitor activity or a
financing or a macroeconomic or a
microeconomic issue something somewhere
is going to undoubtedly happen at some
point so as much as you can I know
you're saying don't learn too much from
you know Look Backwards should look
forwards but as much as you can bring
that learning forward that's got to be a
good thing yeah yeah I mean the only
thing we do know is it will keep
happening yeah right they're going to be
sharp left and right turns along the way
and you know goodness knows exactly when
it's going to come and so I mean one of
the bits of advice I always offer you
know in leadership classes is use the
good times to prepare for what's going
to happen yeah right because if you're
not ready when that hits you're behind
right and you know what research clearly
shows amazing research showing that the
quality of leadership in a firm right
matters marginally on the upturn that's
the macroeconomics that really matter in
the downturn it becomes the number one
thing quality of the leadership and are
you prepared have you can you can you
talk yourself through these issues Don't
Panic take care of people and yourself
so that you don't end up falling in
these traps that we've talked about that
happen so easily yeah and I guess when
you look at um a crisis with an
organization it's not just about the
leadership and the and the and your
colleagues your employees it's the
shareholders or the p in your case it's
the public you know the the politicians
have got to respond one way but actually
everyone behind the the covid solution
has got to respond differently and that
then gives a real conflict that leader
so how does a leader manage both
internal communication and exter
internal communication and and that
becomes very very challenging because
the demands are so high that actually
you know not just folding yourself and
having a you
know a breakdown of just not being I
just can't process both sides of the
things and so in the end again I just
lock myself in and become you know this
is what I know and this is how I'm going
to
operate yeah and you know I'm thinking
back to the pandemic and thinking you
know I remember how tired people got M
right and and
you know people are going to you know
and making sure that that doesn't you
know when we get that tired right are we
thinking as clearly as we should be
thinking right that's when it's so easy
to make those kind of mistakes so it's
important just a quick anecdote um I'm
happen to see some CDC materials from
the uh mid 2000s might be getting my
date slightly wrong but it talked about
some guidance if there was to be an
epidemic or a pandemic um and it talked
about people staying at home even if
they feel well and there's a comment and
it says this will never happen ever and
Fast Track you know many years later
that is exactly what happened so you
know I think one it is really it's nigh
on impossible to anticipate what all the
problems are going to be and what that
turbulent time is going to look like but
if one has a good organization with the
right values and you know as as an
organization that's been built to be
resist iant with leaders who don't
aren't expected to have all the answers
and staff who are empowered to be able
to I mean you know it's it's sort of
like the the the cockpit where there's
this red light flashing I think with you
know and and everyone's just doing what
the captain said and no one's actually
pointed out that the the light is
flashing and the the plane's about to go
down um because which luckily doesn't
for the everyone's audience it doesn't
happen anymore no no but the point the
point is the individual clearly didn't
feel empowered to to say anything so
yeah well there's all the stories we
hear too about the nurse who didn't say
anything to the surgeon when they leave
the you know a piece of equipment or a
sponge in there black box Black Box
thinking is the book and it's a
excellent excellent Bible to learn how
to operate in that in that way of
working yeah you know who knows how much
they've actually happened but they're a
really good you know metaphor
description of what actually happens in
organizations where you know somebody in
the somewhere in the organization
somebody knows exactly what the real
issues are the challenge in the
leadership role for me is always like
who is that person where are they right
the solutions are here within our
organization yeah we know we call it
it's the hippo syndrome uh in in a
business it's it's the the decision is
made by the highest paid person in the
office so everything becomes a hippo
answer and that breaking that way of
working is a really important way of
changing an organizational values and
culture and structure and being more
resilient leadership because it isn't
down to that war person that that's you
know the highest paid person to make the
key decisions yeah if everything goes up
to the top of the tree and that it's
just down to that y it well I mean it's
impossible no matter who that person is
to meet all the demands and needs anyway
y right so it's just you have to find
ways to push things down or just you
can't be resilient you can't be flexible
you can't be agile um and especially in
a in a in a crisis so one interesting
thing on that point I know I Bang the
Drum a bit about bottom up leadership um
it's amazing how many organizations will
not bring in a decent amount of young
interns not degree level but young
people who have coming in who who bring
a completely different View and approach
on on how to do things because the
structure isn't in place to take
somebody who doesn't pass through a
standardized kind of recruitment process
so I think a lot of a lot of businesses
are held back because they just aren't
willing to take a risk on a different
type of recruit and it's fascinating
lots of companies have uh internships
when you look at the proportion of
interns compared to full-time Ohio who
come through the university route I mean
it's like 100,000 versus 500 um so you
know we there's I do sit here as we talk
thinking I wonder what the audience
thinking like great idea have you
actually sat in the business and really
tried to implement these things and
clearly you know we've all got great
experience so you know what what are the
things that you could really do to make
a difference you know what could what
out of all this conversation what can we
do ourselves as leaders that would
really shift over time you know to to
stop a crisis impacting our
organization and well I would say I
would say make interns uh the majority
of your Workforce over time and totally
change the way you recruit um so that's
my as I just Bang the Drum on that prer
what what's your I think it would be
difficult um I mean I I absolutely agree
in terms of having a diversified
Workforce I think it would be difficult
in certain industries for for from a
compliance perspective and just
qualification all the rest of it for the
pendulum to swim but I think absolutely
bringing in different individuals with
different perspectives different
experiences different thinking back to
the point about is should I mean I love
the the hippo analogy I'm going to be
using that um I think that's great
because I think there is a real danger
of that sometimes um and I think you
know you we should absolutely learn from
from the younger generation and we
should but they it can also be the older
generation they just have had different
life experience it is a balance don't
get me wrong I mean the world you know
it's not about turning it completely
upside down but I think you know that
just for me organizations can can have a
real big impact on how they they work by
Shifting the balance of responsibility
and Shifting the way they recruit and
think I think the key as well is having
it non-h hierarchical and that was one
of the things that I think we found now
I'm going for my organizational hat um
in terms of um during really difficult
challenging times if there is set of
individuals that you know has access to
the data that you need access to every
day you are not going to go through
layers to get to that information um you
know so you're going to have that direct
line you're going to make sure you set
up you know the ability to be able to
talk to whoever you need to so I think
that's really really important um but
yeah I subscribe to trying to bring in
as many Diversified um skill sets and
experiential individuals as you can well
I think particularly in times ter and in
crisis what research shows is that a
different perspective makes you think
more divergently makes you uh encourage
you just to like rethink problems in
fact the different perspective can be
totally wrong MH okay it's just the idea
that you get challenged with another
idea and think okay we're not going to
do that but actually there's a core of
an idea here yeah right so we were
talking about opportunity and I've I've
got a bit of a quick example um because
it was covid uh no one was traveling so
it was easy access to everyone everyone
was at home um but there was a good
oldfashioned stakeholder management type
event um where I got um we managed to
get a number of different agencies
groups all together individuals who
normally and I would it would take
months to set up this meeting um and the
comment was made to me afterwards was of
course everyone's at home we were able
to get on a zoom call and we were able
to look at policy very quick quickly and
then change policy that was I was you
know told later that that was pretty
much unheard of or would have been
unheard of because just trying to set
the meeting up in the first place would
have taken
months great David do you want to add to
that conversation about other things to
do no I think you know the the human
resource aspect is clearly very
important how you how you do that like
what like the kind of teams that you
talked about in in a flight or you know
whether it's about young people you know
it's about age necessarily experience
it's it's about people coming in with a
formed view of how business is done and
they fall into the Trap of not
challenging or not innovating versus
someone comes in like the NASA control
room who don't know what risk is so
they're willing to do anything to
succeed as in positive not tread on
people or anything but they just they
just have a it's just challenge it's a
different way of thinking yeah
definitely and maybe just lastly on on
your point about
learning um you know because people have
experience we we know we all went
through one big crisis but what do we
learn from a crisis is is you know is a
separate issue whether having gone
through it really made us learn and can
we use that learning and can we remember
how can we remember we just survive it
or we we grow we even want to remember
it like some just want to kind of I
frankly don't want to even think about
it very much those those periods that's
not I mean that's not very helpful I
think you know some things I should
think about what we did what we didn't
do yeah as is a professional as an
individual so I think U you know like
looking in
hindsight uh we distort some of the of
our
Recollections and that makes learning
more more difficult um my Distortion is
every every great idea is mine I think
that's a Steve Jobs
problem yeah and of course hindsight is
always 2020 always right and it is easy
to be but you have to really think back
could you have known to do it
differently yeah right that's a better
question than could I have done it
differently CU knowing what I know now
of course I should have done different
but could you really have known that in
moment way exactly if the answer is no
if the answer is could you have known
then you need a different kind of
response different kind of preparedness
it's to deal with something that you
couldn't know you could not have known
yeah you the resilience or or you know
the different kind of perspectives
because the specific way that you know
you probably would react similarly but
maybe how you deal with the uncertainty
y yeah and I'm getting some awesome
questions in here okay can I just one
point yes that we haven't mentioned
which I think is really important from a
leadership perspective which is about
having fun as well so using humor to
deflect um in terms of expel extra
stress or energy negative or positive
emotion um some of our you know some of
the the times when I've been with a team
and we've just just had even in the
midst of complete chaos or challenge um
someone has quipped a joke and everyone
has just burst into laughter and it you
just feel that dissipation of of all
that negativity and the emotion and then
and the ability to everyone sort of go
right we're going to do this and it
really builds bonds camaraderie I think
it's so important and I really learned
that myself when I was sort of working
with different teams over the years how
powerful a bit of levity a bit of humor
a bit of fun um and just sort of you
know even in the most serious of
occasions it's it's a great um you see
it with Emergency Services a lot you
spend time the services because you're
dealing with crisis every day dark humor
no no no no no no no actually not dark
humor because I think that it can be
misconstrued and and there have been
times which have been reported in the
Press where it's the wrong thing this is
about finding moments of of light and
happiness and fun and not forgetting
that we're human beings and we laugh and
laughter makes us happy and energizes us
and because you know you know the blue
light Services deal with you know
adversity you every single day then it's
so important and I think yeah it's a
great Point as businesses stop being so
bloody serious and have some fun laugh
enjoy yourself yeah yeah just you know
just having finished a big study on
jokes in the workplace okay jokes can go
wrong you're fair enough we could do a
whole we could do a whole session on
that I I'm with you but I'm 100% with
you on the have fun right and jokes are
one way but there are other ways to
think
having fun so if you don't mind I'm
going to pick up on a couple of these
questions here I think there's a couple
of I think interesting maybe challenging
ones so the first one is we're using the
word crisis a lot we've kind of slipped
into that language clearly Co was a
crisis but we're in somewhat more normal
times they're saying normal times okay
yes um how do we lead react to
turbulence that isn't a kind of a acute
specific
crisis I I'm I noticed that we were
saying crisis so I kept trying to move
the language away from that I think and
that comes back to the resilience point
which is change is a constant so
apologies I'm I'm going to be repeating
a little bit what I said earlier but I
think one has to recognize that if it
isn't a pandemic it might be a political
event it might be an macroeconomic event
it might even be a product safety issue
internally or a technology failure or it
could even be an HR issue it could be
anything there will be times where
things will be more challenging and
difficult than other times and so one
needs to build a organization that can
withstand that that would be my
perspective yeah I think you're
absolutely spot on and I'm sorry I have
to get back to Flying because it's
turbulence yes so as a pilot turbulence
has no impact on the aircraft at all
it's just Mo body of air moving and the
aircraft moves with that air as a
passenger you have no idea and you are
scared you
know bad turbulence very bad for
passengers Captain sitting in the
aircraft pilot sitting there no problem
at all no issue so what you know a
skilled Captain will do is steer around
the turbulence as best they can to
manage the experience of the passengers
because you don't want upset passengers
and I think as a boss sorry it's a bit
of a Cheesy analogy but that's kind of
what you need to do as a boss is how do
you take people through turbulence
giving them confidence keeping PE
keeping people calm knowing that
actually there you could go straight
through the middle and be massively
inovative and disruptive but you're
probably going to upset a lot of your
Workforce or you find a path through
with least turbulence that and and but
communicate and take people on that
journey and tell them it's going to be
all right it's going to be bumpy but it
will be okay I actually like the analogy
quite a lot thank you I've got loads
more about flying so just keep them
coming no but it's it's a good question
we did talk crisis you the way it's
Define it's often like a rare um
significant event that can affect the
stakes the the viability of the
organization or Society like it did for
us you know for Co for the whole society
often there is like time pressure so to
go to that person's question I think
it's it's a very good question you can
think about what are the some of the
elements that even in turbulent times we
have so for example the change I think
is a common element to Norm kind of
Crisis crisis there is a big change
currently we're also going through a
bunch of changes maybe multiple changes
time pressure maybe not because in
crisis there is time pressure at the
moment it feels like there is no time
pressure even though things are
happening that require change require
change of Direction but not maybe not
like at the moment like in next one hour
yeah so I think it's it's a good
question to think about what do we take
away from our crisis knowledge or crisis
experience that we can generalize to
current times and how are they
different yeah okay I think that
hopefully that answers the question um
let me pick one of the we've got loads
so I'll pick a few here
um how about this one um somebody's
pushing back a little bit on your the
idea of pushing down responsibility in
the business uh what if the current
culture of the organization just won't
allow for that and people at the lower
levels don't want to take responsibility
well I mean that's a great question
because it's what happens in 90% of
organization so it's atypical of of of
the challenge faced by trying to create
change an organizational change um so I
think there's there's two parts to it
one is um stand up and be heard and push
for that change change only happens when
people take responsibility people take a
risk take the lead on it um and you know
if you can Champion a bit of change if
you can get you know the sponsorship to
bring in a few young people or
inexperienced people in in your industry
and show that those people can bring
something different and for a temporary
period I can guarantee those people will
stay there permanently and it'll be the
the wedge that opens that that sort of
door to to change but is a massive
problem and and it's hard for a lot of
people to take that risk because their
jobs on the line because they're not
measured on risk- taking they're
measured on productivity yeah phone me
up and I'll come into the business and I
will tell the story and show the numbers
and help that person and anyone else
is's interested in making that change
yeah any other one to adds no I I think
you know as as I said before I think
some of those people will have better
information some of the people who are
closer to the ground will have and and
if leadership can you know can accept
that and and can um use that for you
know to improve to get to get their
input to get advice from them to get um
you know to get their ideas I don't
think choose either us or them but um I
think that recognizing that new ideas
are needed that some of the
key um most relevant and pressing and
immediate knowledge might be
elsewhere closer to the ground rather
than in our in our kind of higher level
kind of offices maybe that recognition
that's that might be one one thing that
leaders may need to acknowledge or or or
or or or accept as good leaders and not
scared
leaders um but ones that understand that
they just knew knew something new now
especially in those kind of times that
things are changing I think that's both
isn't it the um we there needs to be
empowerment at all levels of the
organization and Al one also needs to
remove the sort of hero mentality where
people think I'm I'm going to save the
day you know Night In Shining white
that's how I run my business for years H
it's so embarrassing you know
so so so I think it's sort of trying to
get that balance whereby you're not
putting all the decision making and all
of the problems on the shoulders of a
very small group at the top presumably
because we we assume most organizations
are a sort of pyramid structures and and
that actually some of that is shared
ownership of of the problem because then
one gets shared ownership of solutions
um so that's the way to look at it just
there one very quick anecdote I'll add
just very very quick uh when I was doing
some leadership ship training with Dale
carnegi uh I learned a lot about more
about listening and and one of my team I
had to ask question what can I do less
of is the most powerful question in
business ever ask everyone in your
business start with your partner your
wife your husband and say what can I do
less of and I had an hour and a half my
wife telling me what I could do less of
seriously and I was just like and you
can't speak so I I use it in the office
and one of my team Stephanie uh she said
to me can you stop answering my
questions when I ask them I'm not
drowning I'm just waving because every
time I ask you about something you tell
me the answer and you're right but I'm
not learning and it was an amazing
opportunity for me to change my
management style to just back to your
but listen but really listen active
listening and you know just taking on
what's going on and then asking
questions back not giving answers so
that person feels empowered to make
decisions it doesn't solve the question
that that's there exactly but as a as a
leader for any leader listening active
listening is the is the most important I
think leadership skill there is
yeah uh 100% on that one you know maybe
just lastly on this point I mean other
than like you know keeping jobs or or
hierarchy or structure we should also
acknowledge relating to that person's
question that the crisis or these kind
of changing times are opportunity for
things to change including including
structures of organizations including
power structures including in society
like you know who is valued we saw it
very clearly in in you know NHS keyw
workers versus other people so those
kind of things got questioned because
that was an opportunity for them to be
questioned and so those people that you
you refer to maybe it's an opportunity
for also change in the organization I
know it's a difficult one and the person
is right to say it's a difficult one but
it's something Champion that change of
an opportunity Champion change and if it
if it doesn't change that organization
go somewhere else because they'll be
respected and promoted in in in a
different organization that has the
right culture easy to say it's a bit
flippant but sometimes bravery is about
stepping away from what you're in and
and moving into something new yeah I
want to follow up on actually some of
the comments here with one of the other
questions about when it gets really bad
restructuring you know redundancies
those kind of things when you need to
cut cost quickly um on the one hand how
do you keep people motivated in a time
when they start to worry about having
your job mhm I had this conversation
today literally the a company an owner I
coach I had a boss at berer a Canadian
guy called uve and I think he's the CTO
at buer many moons ago and I resigned uh
to him and um he wasn't really upset and
disappointed about it and he said you
know it's good uh it's bad that you're
leaving but I'm glad you're looking for
new opportunities if it's not right here
for you and I didn't realize things
weren't right for you he said I think
everyone should should update their CV
every 6 months and if you're not not
updating your CV every 6 months you're
clearly not challenging yourself or the
organization you're working in and again
that can be seem very flippant but I
think is much on us as being employees
to keep pushing ourselves and pushing
the business as it is for the
leaderships to to drive that so on one
side I think you know time this this
change this need for you know decisions
you take control yourself and and you
free yourself in the workforce as a boss
as a leader
decisive um execution of Team structure
and planning I if you're going to make
redundancies you do them all in one go
I've done it and I've seen people do it
drip by drip and it destroys morale but
it's part of the plan you know if you
know if a good leader knows can foresee
not what the problem is but there will
be a problem what do we do when we're
hit with the the need to change our
Workforce what do we do when we need to
make redundancies and a clear
communication at plan will make
everyone's lives much easier than death
through four months of restructuring
consultation and HR talks and it's it's
a nightmare so oh please I was going to
say so I I've I've run restructuring
programs as well and I have to say um I
agree with a lot of what Chris has said
but I also sort of disagree slightly as
well about the the ability for
individuals to have personal capacity to
be able to cope because I think it's
quite easier the more sin you are and
the more confident you are that you'll
be able to go and Market your skills and
you've got transferable skills and and
be able to secure a new role far more
difficult if you've got a mortgage and
this has been your you know you you're
not really in that zone where you can
contemplate the openness of the
opportunity ahead and and I've I've had
to manage people who are more in the
latter as well as the former over over
the years and I think and and one can
give them lots and lots of advice and
counsel and there are special companies
that are set up to help individuals who
are going through redundancy Pro
programs and it doesn't matter they're
just it is grief it is trauma um and
that's how they're feeling and one just
needs to support them through that and
then equally there is the Survivor
syndrome on the other side of those
because you are trying to retain a
functional organization you know some of
the decision- making can be quite quite
challenging and difficult um and of
course you've got all the you know all
the employment regulation and the
compliance that has to be followed at
all times too so the whole thing is
fraught with with with difficulty it's
not easy I think any you anyone who says
it's easy personally I don't think so
it's not nice letting people go I've had
to let a lot of people go at different
times in different companies and I think
um you know that comes back to actually
link to what we were speaking about
earlier which is authentic leadership
style the culture of trust and integrity
and respect I think the most important
thing is treating people with respect I
mean there are horror stories of
literally you know CE CEOs walking in
thankfully none of my companies that
I've been associated with and putting
some people in one room and others in
the other and then going in and saying
to this room you're all staying and this
room you're all leaving or done see by
mass email or even
yes the non inv your office yeah or or
that that Friday afternoon Zoom call
yeah so but I think one has to just
accept it's a reality of life sometimes
organizations grow they grow OV exceed
capacity they change that they need to
Pivot they need to change their their um
skill set or whatever their competency
um base is and that is life all that can
be done as leader is to try and
recognize the individuals respond to
that differently and to help support but
could we as Leaders be giving our
Workforce the tools to take more control
and I get I get it if you're if you're
uh if you have nothing to lose you on
the start of your career it's easy to
move jobs I mean it's not easy but it's
less of an impact and if you're late on
in your career in a way you've kind of
maybe you've got past the point of big
Financial burdens and and it's less of
an impact for some but not everyone the
middle ground is always the hardest
because they've got the most at risk you
the person I was speaking to this
morning um you know someone's about to
have their first baby and they've got to
make them redundant you know three
mortgages just being first time
mortgages just being taken out so
there's things like that but if As
Leaders if one of the things we can
teach or en Empower or enable is a for a
Workforce to to have more of ability to
to take their careers in their own hands
to support people moving out of an
organization and coming back in you know
to not make redund not make resigns
you've got to work your your three Monon
notice period like okay I'm really glad
you're going what can we do to help you
what can we do to make life easier to
move through organizations and actually
that that's a really good point Chris
because we've been doing a lot of that
is as an industry in the biotech sector
at the moment which has been decimated
from a funding financing landscape many
technology companies and actually as
companies have been going through these
transitions you know HR and and the SE
Suite have been circulating CVS you know
this is a a great person I've got this
project leader any networking LinkedIn
is a great way of saying I'm looking for
it so there are there are definitely
ways to support cult change the culture
feel like resigning when we all started
out the thought of resigning was bad
when when you're starting when you've
got a mortgage and a family the thought
of resigning is a nightmare actually
moving around businesses should be an
easy thing to do it should we should
facilitate it sorry I do agree with that
well I mean I would just add two things
um to this conversation one what I
always say to leaders is if making
redundancies doesn't shred your heart a
little bit there's something wrong with
you be empathetic be understanding yeah
yeah because the single best predictor
of what happens to the rest of the
workforce is how you treat the people
who are leaving yeah yeah exactly right
and over and over too many leaders
forget
this um they forget that these people
will still be in their networks they
will still be friends with these people
people and if they were treated badly
that comes right back and then you think
okay so I'll be treated badly someday
which dramatically reduces commitment to
the organization so whatever you do have
a heart yeah right um David you want to
add anything to that no no definitely
especially in like I completely agree
like I'm in
Academia with a very small kind of world
you know like people people know each
other in other schools and and when when
people are m treed uh or you know or let
let go or in in ways that is that are
not very um respectful let's say that
that knowledge is shared like so
quickly and it and it persists for years
yeah it's very I I you know I just long
after things have even changed sometimes
right that's right that's right so like
you know the world is smaller than we
might think in in in those kind of
professional kind of context all right
we got time for one more question
question here and I think this one
should be I think should be
straightforward let's see so the
question is partly statement partly
question so isn't all this talk leading
to having a culture encou encouraging
intellectual honesty and psychological
safety to TI us through the turbulent
times is that the kind of sum of it
all can you read the question again so
digest it so isn't all this just leading
to having a culture of encouraging
intellectual honesty and psychological
safety to TI us over the turbulent times
no it's about it's about dramatically
changing the way that the organizations
are run by but the how leaders lead by
learning from experiences and and
persisting in that changeed behavior and
not defaulting back to your worst self
the next time something problematic
happens so I I think it's more it's more
honest um than that it's more about
making wanting to actually be a
different to approach work differently
approach leadership differently and be a
different person for me I think that's
what it should be okay so I think there
are elements of yes so I think the
safety is an interesting word right and
I think I assume that's coming again you
know assume that's coming from a place
of we talking about the red light and
the cockpit and and the the empowered
feeling safe that their careers are not
going to be jeid eyes particularly if
they've just pointed out to the captain
that he's not flying the plane through
the the the best way to avoid the
turbulence um you know period so um I
think there is an element of that um I
think it goes to the heart it goes to
the culture of the organization so so
Chris is correct as well that actually
you know foundationally one needs to
build the organization I'm going to bang
on about this word resilience again that
can withstand the change that is coming
and these are components of it but
they're not the be all and end all if
you do I think those two things
emotionally um intellectually and and
Psych ically safety um safe culture it's
not going to be enough it's not going to
be enough it needs extends beyond that
yeah okay David you yeah I mean you
know some of the conversation touched on
you know feeling that you're not going
to be blam for example that I can feel
like safety but but we also talked about
other needs we have you know the need um
to to feel um you know motivated or to
or agile or also um you know bring your
expertise or leaders seeking that
seeking that expertise or leaders
anticipating extreme reactions or being
entrenched into position so you know I
think
overall we talked about a lot of kinds
of behaviors or kind you know behaviors
including about seeking seeking opinions
from others um behaviors like um what
how we communicate so I think um
probably that comment plays a role in
some of a discuss but maybe a a broader
way of understanding human behavior in
in crisis and I would say it's it's back
to the pendulum analogy again if the
environment and culture is too safe in a
way where is the appetite for risk um so
and and actually we've talked about you
know not focusing so much on outcomes
and results and you you drive the
behavior around that but actually let's
be frank in the world we're in you know
companies need to survive they do need
to focus on on results um and
individuals need to thrive and they
should be focused on results so it's a
pendulum it's a balance about striking
the right sweet spot that works for the
sector industry you know the company the
ethos the values whatever it is that
works for that that sector to get find
out where that pendulum sits so that yes
you've got the right safe psychological
safety but not so safe that no one wants
to put their head above the parit
because there's no value to doing so
yeah right so it's a kind of yes and or
yes but yes I think that's yeah also you
know just generally acknowledging that
the topics we talked about are very
broad you know like the it's you how do
we deal with turbulent times you know
when I read actually the the the the
event description I got worried you know
like what there's so many things to say
about this so I think also from the
conversation you can probably take out a
few things dep depending on your context
you know probably some of what we said
might be relevant more to some people uh
some of what you said some of what you
said might be relevant more in other
context so you know there is no kind of
one just message here probably there are
several kind of ideas that are
interrelated and some might be more
appropriate than others in a given
context yeah and it takes lots of
different types of people to work in an
organization and make it succeed so some
people want exactly that others want the
challenge and and disruption yeah great
well I think we have to end there so to
the audience we have one final poll
question for you uh to end today's event
so the question is what are the most
desirable qualities in a leader empathy
confidence creativity or
accountability so submit your answer
using slido uh please can you also look
at that short survey and complete the
short survey using the link in your
slido your feedback will help us shape
future events here so um I mean overall
if I think about one the conversation we
started off by talking about what is the
risk what are the problems and we talked
about that people will panic and we
didn't want to use the word panic but
people will stress about this and when
they get stressed they may not do their
best work right they may not be as you
know there's a risk they could be not as
open as they should be um and it also
exposes any weaknesses on our our and
our risks and planning uh as well uh all
of which put the organization at risk
now on the other hand there's massive
opportunity here opportunity to
restructure rethink our organization
refresh our organization think about new
ways of working right um because people
are open to experimentation if they feel
safe enough so you know what do we need
to do well we need to make sure people
feel like we're taking care of them like
um they have the kind of core values and
and core of the
organization uh to heart um and uh we
talked about bringing in different
perspectives how important that is right
even if the perspective is wrong a fresh
perspective is always useful okay so I
think those are all great takeaways uh
from the conversation more complex than
just a simple you know strapline here um
but I think you know again hopefully
worthwhile so if we go back to our
results here I think we've shifted some
thinking panel right because we've got
empathy right as the number one followed
by accountability confidence and
creativity okay so with that I want to
thank our panelist today David priia
Chris for your invaluable insights um if
you'd like to view any of our previous
think ahead events or listen to our
podcast series please scan the QR code
that's on the screen now so uh thank you
for joining us today we look forward to
welcoming you to the next
event
a

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### think ahead: Traditional to Trailblazing - Strategies for Mid-Career Transition
URL: https://www.youtube.com/watch?v=5HY3-otqSkQ

Idioma: en

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welcome to this think ahead event from
traditional to trailblazing strategies
for midcareer
transition um I'm very pleased to
welcome you here today think ahead is
London Business Schools event and
podcast Series in which London Business
Schools leading faculty and guests talk
about the big business issues of today
um I'm Sarah Gordon I'm currently a
visiting professor in practice at the
London School of Economics I was a
journalist for many years former
business editor at the financial times
and I'm going to be your host for this
evening so a very very warm welcome now
our title our event title is midcareer
transition but frankly transitions in
careers are something that we're going
to need to think about at any age and at
any stage of a career so I hope you find
lots that's going to be relevant for you
um whatever stage you are in your career
and I know we've got people in the
audience from all over the globe and
from a whole range of different age
groups and backgrounds so um transitions
are something that's going to happen to
a lot of us in our career and uh
hopefully lots to take away from the
discussion with our fantastic guests
today so sometimes career transitions
are forced upon us uh by redundancy By
changes in our industry and sometimes
they're uh they can be the most
fantastic positive choice I don't think
I think it's probably fair to say that
they're never very easy career
transitions are challenging um they
throw a lot of questions about ourselves
our purpose um what we want to do with
with our lives um but we've got people
on the panel today who've had some both
um fantastic academic research into what
what can help in a transition and also
who've actually done it in real life um
so before we get started with the
discussion uh I'd like to run a live
poll uh to get some insights from you in
the audience about your current career
situation um and what those what that
question is going to cover is whether
you are currently considering a career
change within the next year um you're
going to be able to answer the questions
uh using the Q&A function on slid which
will be on the right hand side of the
screen and the questions will be yes I
am actively exploring a new
opportunity maybe I may be thinking
about Poss possibilities but I'm not
actively um searching or no I'm
satisfied with my current career
path so hopefully those questions are
coming up on the
screen for you and I'd ask you to vote
and whilst whilst we wait for you to
vote and for the results to come in I'm
going to introduce you to our Fant
fantastic panel of speakers
today um first of all Kurt budge who is
a former Chief Executive and a mining
exe in the mining industry and is now a
registered Forest yoga teacher and an
executive coach in training um great to
have you with us Kurt aminia iara our
second panelist is the Charles handy
chair in organizational behavior at the
London Business bus school she's written
a lot of fantastic um books and papers
on Career transition and runs courses uh
on transition planning uh for the London
Business School fantastic to have you
here today and finally our third
panelist Ross Jones who is now an artist
and a painter um but was a former
captain in the British army so uh some
really uh very diverse career
experiences across our panel today um
and I'm going to start by asking each of
the panelists to give an introduction to
themselves and their work and also the
transition that they've experienced so
if I can start with you Kurt please yes
so Kurt budge um I graduated from lbs uh
2004 and we're just about to approach
our 20-year reunion which is a bit of a
shocker um I'm a member of the alumni
Council as well since last
August lbs really was supposed to be a
period of transition for me um I I took
my MBA to actually get out of the mining
industry but uh on graduation I then
went and joined riotinto one of the
largest mining companies in the world so
um what what was clear at the time is
that while I was at lbs it was around
creating
possibilities and I found myself for the
next next 19 years sticking in the
industry in a variety of different
roles that and the last role was as you
said a CEO of a dual listed expiration
and development company for eight and a
half years seven and a half years of
which I was I spent trying to get one
mining project permitted and uh when
that permit finally came through um it
was preceded by a family tragedy a month
six weeks before um that's when my
questioning around what I was doing in
my career actually started that was uh
February 2022 March
2022 uh and a year later then I exited
my last role so I've been out now from
the mining industry for a year and uh
and really I've taken the opportunity to
to follow my Curiosities to explore my
passions to try a few things out one of
those was to qualify as a forest yoga
teacher um to do do this diplom in
coaching and positive psychology and
then to take a couple of courses with
lbs uh the business of artificial
intelligence and the career change for
over 50s uh and Beyond which uh yeah I
choose not to think of my age too much
because it's not a limiting factor as
far as I'm concerned but you know really
uh allowing myself the freedom to to
Really explore and again go back to what
I learned 20 years ago which was around
creating possibilities so yeah that's
where I'm at at the moment thank you
very much CT Amenia tell us a bit about
your work right so I'm Armenia and uh as
a typical academic I study and teach on
things that I don't do myself so I've
I've never made a big career transition
I've been an academic all my life but
this is one of the topics that has
fascinated me for more than 20 years now
studying how people make career
transitions what holds them back what
helps them move forward what are the
patterns at different stages are they
different uh what are the similari ities
and um working on a new book right now
looking at later career transitions
having studied midcareer pretty pretty
deeply over the last 20
years thank you Ross over to you my name
is Ross Jones I'm a conceptual artist
and painter I've been doing this for
about four years now uh I came to LBS
postm military where I was a
counterterrorism and counter poaching
officer so I travel around the world
with a small team and look for bad guys
um I came to LBS initially looking to go
to Consulting looking at the luxury
goods and Retail arm of Boston
Consultant Group went there and was
really looking for something that looked
a little bit more like my previous role
where I was in charge of a team and it
took me about a year of being at lbs and
really trying to understand what the
corporate world looked like and what
entrepreneurship looked like then I went
off to Berkeley for a little bit and
found myself in California
and snuck into a few art classes there
and just fell in love with the
industry when I came back to UK it was
it was me trying to figure out how to
make that balance with the fact that I
had an NBA and now had this love for
making art and making it work started
doing these weird conceptual projects
that I knew wouldn't make any money but
thought put passion into it an
experiment and found some investors and
collectors in my first year and haven't
looked back
since brilliant well masses to explore
in and unpick and all of that thank you
all very much um and before we get into
the discussion just uh a look at your
answers to the question that's an awful
lot of you are actively exploring New
Opportunities which is great and
probably explains why you're uh
listening to us today um and a lot of
you are still cure of you bit more than
quarter of you are open to possibilities
so hopefully this will our discussion
will give you some some more food for
thought um and good I'm very glad that
five of you are satisfied with your
career path that's fantastic but
hopefully you'll still find something to
take away um from from our from our
discussion today so I should I should
say before we get into the discussion
that I've done some big career
transitions as well not quite perhaps as
dramatic as as um two of our panelists
but I took voluntary redundancy from the
financial times in 2019
and I have to say found am minia's work
immensely helpful and supportive in that
in that Journey so uh you know very much
looking forward to to to hearing your
additional insights today um so I mean
if I if I can come back to you Ross I
mean it sounds very exciting your
transition did you experien it as
exciting and an opportunity uh how how
was it emotionally I think emotionally
it anything exciting is a little bit
chaotic but definitely I think a lot of
the excitement was around finding this
new world or career or um way of living
that I didn't think existed and the more
that you get into a new career or a new
system the more you kind of unravel how
little you know and that's where the
excitement is really knowing that
there's a whole new life to have did you
have moments of panic sure I I think I
still do I don't think they ever leave
it's a good sign sometimes having
moments of panic isn't it yeah and and
and Kurt obviously you had you know
you'd had this
um wanting to do a transition at a much
earlier stage of your career and then
coming to it in
2022 with you know some really painful
things happening to you as well as as
the recognition that you wanted a career
transition how how was it the the
transition for you was it as you
approached it did you feel excited did
you feel
worried I think the I mean the the the
exit is is an event so the exit from the
last role I
think uh coming out uh there was a
period where it was a bit of a get out
of
jail um relief being the CEO of a a a
public company you know it it's not
straightforward sometimes to leave and
so that I definitely felt um there was a
GU out of jail moment and a period a
period of reflection on the 19 years
period and what that informed me was
that my head had been responsible for
all my career choices for 19 years and
that I'd completely ignored what my
heart was saying on my gut was saying
gosh and uh and so that was a a huge
moment yeah as you can imagine and and
then it was a case of getting in a few
months out um and thinking okay now you
know again following my passions um yoga
being one of them but then also
reconnecting with the school the
school's very important to me and uh and
doing the alumni Council joining the
alumni Council and then doing the
courses hugely important and and day a
specifically herous course the career
trans the career change for over 50s you
know that thankfully was reinforcing
what I was doing naturally which was a
lot of
experimentation um it can it can be
there are there there can be very
uncomfortable moments though can't there
when one's taken such a big decision and
I think certainly in my experience
learning to sit with the discomfort was
actually very helpful yeah I completely
agree and uh the living with uncertainty
because you don't actually know what the
final outcome's going to be you know
you're doing lots of things um so I
you're running multiple work streams but
you don't actually know which one's
going to take the front um but I think
by to the the word that I think you used
or or Russ used around Adventure I am
treating this somewhat as an adventure
and and and trying to find a state of
flow as where I spent a long time trying
to find meaning and purpose actually I
think if I find things that excite me
and which drive me I don't actually need
to have the definition I have found my
meaning and purpose that's a good very
interesting way looking at it I mean
aminia you've you've you've talked and
taught many many people who've been
going through some very big career
transitions is there a theme to some of
the sort of challenges and uh issues
that people face in career transitions
is it possible to sort of say you know
there's the top five things that people
find difficult yeah and I I've been
asking about that for a very long time
so I have a sense of the of the big
patterns um so one of the big ones is uh
when you're in a role and um you know
what you don't want you're unhappy with
it you know it's not making your heart
sing but you don't know what you want to
do instead and so you don't know how to
get started and you've been taught not
to take action until you know what you
want to start with what are you shooting
for what's the
destination and so people feel that they
are that they just shouldn't do anything
at all that maybe I'm too confused I'm
going to make a dumb move and and they
don't realize that by not doing things
like you ended up taking some art
classes you probably weren't planning on
making that a career at the outset but
it's by doing things experimenting with
them sometimes just following your heart
you're not meaning for this to be a
career that you learn new things that
you get more in touch with what you're
interested in that you get out of the
kind of insular Circle
that keeps you where you are so that
that's the first one is thinking that
you can't take a move uh until you've
figured it out the other one is when you
have taken a move or a move has been
made for you and you find yourself in
this period uh that you've alluded to
where you're kind of betwix and between
you haven't quite left the old behind
the new isn't yet fully
materialized you've lost your sense of
identity as Anchored In what you used to
do you know it still is the barometer a
and so that sense of being in limbo you
don't know how to explain yourself to
people you don't quite know where you
belong it's a little bit lonely that's
when you get a bit scared and that's
when people get tempted to take the
wrong job because it comes to them it's
easy it's what they used to do as
opposed to sitting long enough with the
process to take one step after another
and start to discover so those are the
two the two biggest ones and what's your
those both yeah they really resonate
with with me and I could see you both
nodding during what and what what is
what is some some of the sort of
guidance and advice that you give to
people to help with those those two
challenges that you don't know the
destination and you have to sit with the
process so one of the things that I do
that is people find enormously
liberating is I asked them to make a
list of possible self and so instead of
saying where do you want to be in three
years time or in five years time I say
make a list of as many and as divergent
bunch of things that you can think of
and you don't really have to know that
much about them they can be completely
improbable they can be things that you
actually don't want to do but they're
possibilities just put it all out there
and and try to talk to some people about
it and and and see what happens and
people inevitably have some things
they're interested in which they could
explore by taking a course or doing um
some volunteer work over weekend or you
know one of my participants said I get
interested in something I buy a book
about it that's the first step it costs1
15 pounds no more it's cheap and I can
find out if I'm interested in more so
doing something and for people who
actually and this happens a lot who have
no idea whatsoever who have no interest
that's calling out to them I just say
well do something
extracurricular that again extracts you
from the context that so heavily defines
your sense of identity and and your
obligation to who you used to be just as
a way to start building some new
relationships to
start experiencing yourself in a
different way so I love that idea that
Trion of different selves see see how
they fit see whether you feel
comfortable in them excited about them I
love that idea and a huge part of that
is it gets you into new networks because
your old networks only reinforce who you
used to be they expect you to be in that
way uh they don't think you're likely to
be a good artist or entrepreneur they
think it's kind of funny they can't see
you that way so it's really liberating
to find yourself in circles where what
you're thinking about is actually
completely normal and why not yeah yeah
and that I like the dipping your toe in
as well you read a book have a
conversation is definitely a dip your to
don't have to you don't have to go 100%
Med because often people find that the
thing they thought they want it to do
they actually don't like it as much or
don't want to do it full-time or don't
want to do it for a living back back out
yeah yeah non-commitment yeah yeah
non-commitment it also also can be as
good as commitment the the does I mean I
I I I know that a lot of that will will
resonate with you Kurt but
in terms of what sort of helped during
your transition in terms of the sort of
support networks that you were able to
access was that important was that an
important part of the
transition yes I mean
specifically doing the humus course at
lbs and being within a small group of
people who were going through similar
experiences um that really that was your
support
Network and and then getting comfortable
with these Concepts around you know
going through the exercise of possible
selves and and thinking more broadly and
then pushing that out and thinking well
who do I need to speak to how can I
explore this what are the gaps between
where I am and where I would like to get
to to understand if this is a real
possibility this these were all really
um New Concepts for somebody that
considers that careers are quite linear
yeah and and you just go down a path and
you know from graduate school to
retirement and and so it was all really
refreshing and helpful to be thinking
about this and also to the re the the
reinforcement that my period of
experimentation that I'd sort of
stumbled on across was actually really
what I wanted should be doing um to test
out different ideas and I think
particularly on that midcareer
transition point I mean uh you know
we're we're we're R of Ages in the room
but we're none of us you know your
traditional undergraduate age and I
think maybe that that uh you know that
that
nonlinear career path is perhaps more
familiar to younger people nowadays but
I think for certainly when I left the Ft
you know in my 50s you know the idea
that you wed that you could actually
Branch off into lots of different and
new directions felt really quite
revolutionary yeah parents and in-laws
expect you to be finding another job
straight away in the same thing yeah in
the same thing and know when you say oh
no I'm studying uh to become a yoga
teacher they ultimately you know you go
from CEO of a public company to a yoga
teacher hang in a sec there's there's
something not quite right there yeah and
and so having that conversation and also
having um the conversation with my my
nearest and dearest and U being given
the time I think uh one of the points we
were talking about earlier was actually
gifting yourself the time to be able to
have this this period where you
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do get it out of your system because
otherwise if you do end up falling back
into the the same role too
quickly I I feel that there's wasted
potential yeah yeah yeah and what about
you Russ what support networks or what
support sort of the things that help you
through the transition what was most
important to you sure much the same as
what Kurt said in that I would say hey
I'm I'm an artist now make this big
announcement people go okay well Russ
has lost his mind a little bit maybe
maybe I need to help him um but I found
a lot of the negative voices and the
biases that I expected were more from
myself and it was confidence in what I
was doing and the more time I spent
actually doing the thing and becoming
knowledgeable
and uh a more valid contributor to that
industry the less those voices existed
yeah and I remember I had my first show
in London I invited all of my lbs
classmates to it they were in town and
it was this wonderful heartwarming
moment because up until that point I
thought everyone's going to turn up and
laugh at me but I know my Art's good and
when they came in it was just nothing
but positivity so when you do finally
make that transition people do want to
see the best in you and they want to see
the new version of you and what you're
growing to and what about your army
friends did they come to your ex yeah uh
what do they think of the new you
they're they're very very positive so
one of the things I had there was uh
some military ordinance that was brought
over from uh the Ukrainian war and they
helped me bring that over from Ukraine
through this and through the army supply
chain so yeah I'm still super reliant on
on the military and they're very very
supportive of anything they're they're
wild and I think that's that's quite an
important Point as well that even when
you make what look like very radical
shifts there is still threads and
connections with your former career and
your former self aren't there you don't
you don't you don't lose that connection
no not at all and I think one of the
cool things that I've seen especially
with art and I assume it's with
everything is when people come to an
industry with experience from elsewhere
they do bring skills with that just as
you would expect it with a new employee
in a company and having that come in to
Art which is generally considered not
very capitalist in nature not very
testosterone or operationally Reliant
it's it's quite nice to come in and say
hey like let's do things in this way and
maybe we could either be more capitalist
in our way of making money and improve
the business side of things you're
bringing a different perspective to that
to your new world yeah and people value
you for it I bet and and Emin if we if
we come back to how you when you're
thinking about and a load of our
audience are in the process of thinking
they may be going to do a big
transition can you give us a sense of
what what you think people should be
thinking about in terms of how you
prepare should you have a plan A A Plan
B should you give
yourself you know how much time should
you give yourself to prepare I mean I
think some some tips would be really
helpful for our
audience yeah um so um planning doesn't
always work right so where where it
really is helpful is um in terms of some
financial
planning um particularly if you want to
have a year off or some time off to
really discover it's good to have set
some money aside or it's good to look at
the spending levels or you know what is
it that's really tying you down because
of not always but often you do take a
financial head at the outset and so
planning for that is good other than
that it it's you know and also kind of
planning in terms of time if you want to
take a year off and take a course or
have some sort of sabatical that also
requires planning but there is a lot
that you can't plan in that it is
putting one foot in front of the other
and allowing yourself to discover and
find um things that you weren't
expecting find um that you don't so much
enjoy some of the things you thought you
might uh bumping into some new things
kind of following your nose as you do
something meet a person get another
contact dip your foot into another world
and so that there's a very iterative
aspect of it that is hard to plan ahead
for and I think that that that idea that
it has to be quite an open-ended process
is is really important isn't I me I know
one of the things that uh a lot of
people said to me is you know use your
network going and talk to lots of people
have lots of conversations but the very
nature of those conversations is that
they then say oh you must go and talk to
someone else who's really interesting
and you know you have to allow that
open-ended process to to develop
naturally I think don't you yeah now
there's a limit too I mean some people
get fed up with that at some point or
some people feel like okay now I've got
to get a real job because
you it's time um but there's also a
there's also a danger of cutting that
off
prematurely without having given
yourself the time to to know yourself in
a different way outside of that identity
that's so defined by what you used to do
so it's it's it's really hard to
describe this aspect of it because I
always contrast uh what I call the plan
and Implement model of career change
with the experiment and learn model of
career change plan and Implement you can
do when you know where it's going and
it's somewhat linear and you can get
help from head hunters or recruiters and
you're going into a fairly established
thing you can do
that once you're making a kind of a
nonlinear move um when the marketplace
is more difficult to identify so for
example even people who want to remain
in the management and Leadership space
are often turning to smaller and
mediumsized Enterprise or you're trying
to become an entrepreneur when it's more
unstructured you've got to experiment
and learn and take a more iterative
approach does do you have a num students
who who decide actually a career
transition is not after all the right
things yes absolutely absolutely just
now actually I just interviewed somebody
who's part of the course who um was
quite eager to get out and as quickly as
POS possible and and really was facing
lots of different constraints
geographical aging parents you know all
the stuff that real life is made of and
and she eventually realized that she
could do some things to tweak what she
was doing that would buy her more time
so she wasn't having to act in haste and
she was able to take care of some of
these contingencies so so sometimes when
you go through the process you
realize I'm actually better off staying
where I am or at least for now but
you've gone through the process yeah and
maybe making as you've described making
a few shifts or tweaks that make your
current situation more fulfilling yeah
yeah yeah yeah I mean um Kurt Russ has
talked about some of the negative voices
and the prejudices coming from within
him rather than from um from outside but
I mean you you came from an incredibly
traditional industry I mean you know and
and in the mining industry but also
public a publicly listed company I mean
it it's and and you've gone into a whole
an area which is I mean it's more
traditional than it used to be but it's
it's still not uh as traditional a
career choice have you met with biases
or prejudices from from people um and
and has that been
difficult I haven't but I think it you
know it be challenging to actually
explain if if I was going to make such
uh a switch but to herminia point it may
it may well be that one of the
possibilities is that I end up back in
the industry that I've always been in
but I go in in a much healthier State
yeah than I went I finished last May
because I've got things out of my system
but uh I could
see I would choose not to hang around
people that had biases in being brutally
honest because they're not going to
serve me going forward I think that uh
it is challenging the the
uncomfortability about you know because
people ask you well what's your plan as
soon as you've left the last role what's
your plan and you know these are
important stakeholders in your life um
and if you're saying well actually I
don't have a plan at the moment and and
for a period of time and that's really
challenging for yourself as well so when
you start to talk about negative
voices you know the Kurt's asking
himself okay what's your plan CT you
know we've been out now because the
clock is ticking three months go by okay
he needed a break then six months go by
then nine and then you're thinking well
C it's going to be a year soon and then
you've got all these uh thoughts around
well people always say you you know
youve got to get back at work soon or
else people will forget about you um are
there people saying that to you
uh you won't be able to get back into
the work you've got to be in the mix and
uh and so yeah it's it's a really
challenging period the the it doesn't
really matter about the biases going out
out there it's what's going on inside of
here sometimes and I think uh
again the Peri you need the period of
reflection I dropped a lot of bags that
I've been carrying as I would say that I
accumulated in my last role in my career
um more and more weight coming on to me
in in my backpack so to speak and uh and
when I exited the last role the period
of reflection I start dropping all this
stuff I start re-evaluating
events um putting more positive meaning
to them uh so yeah it's it's been a very
healthy process to go
through and and you you I mean you you
started with the idea that you were
provisionally going to aim for a year or
you know that was that had you decided a
time period or no I I thought a year was
when it was suggested to me I thought no
this is going to be six months and then
uh so I went May to September but then I
had all these courses I started signing
up for with the minia herminia started
in November I think it was October I
started the business of artificial
intelligence and in in the same month I
started the diploma in coaching positive
psychology so actually there was a
period of time where I was
busier not working than that had you
know it was as busy but it was really
really fulfilling
I mean quite a lot of people said to me
you need to give a big career transition
at least a year and I was saying to my
panelist before uh before we started
that I was within a job I think within a
month um so I'm feeling a bit like my my
time period perhaps wasn't long enough
but aminia do you is there do you advise
people to give themselves a particular
time period or do you leave that
open-ended as well
you know there's a lot of different
circumstances um when you really are
coming out of a job you've been in for a
very long time in a career you've been
in for a very long time and you're
thinking you might want to do something
different and you've got the means to be
able to take some time off it's really
helpful because um what people always
find is that the kneejerk is as soon as
you find yourself in this limbo state to
want to fill up the time time to feel a
little anxious about it and inevitably
what is going to come to
you right away is very similar to what
you were doing before and so it's not
necessarily going to scratch your itch
for something else so so that's that's
really the logic of
it how long did how long did your
transition
take I think it's always
ongoing when I look at projects that so
four years in now and I would say some
of the projects that I take on now I
drift towards things that are similar to
what I would have done two or three
years ago like I'll I'll take on some of
the more commercial work that looks like
that and I'll get a little bit stuck in
it and it takes quite a lot of effort to
say no this isn't this isn't what I
wanted I want to kind of go towards this
area of exploration but you always want
to drift back to your old self and
figuring out that balance point because
yeah and you have to be in to realize
you've gone too far one way or the other
and then you can reel it back in I want
to clarify something though because this
this point about giving it a year or how
long does it take makes people very
nervous this doesn't necessarily mean
you're spending a year or two years
without making any money at
all you know it's what often people mean
is you're not going to take on a huge
commitment that it's going to be hard to
back out of right away um so a lot of
times people are advised to to do
projects uh to do Consulting to do
things on a more Tim limited scale while
they're still exploring and kind of
getting over uh the old stuff and that's
a a step or several steps beyond the
buying the book dipping your toe in yeah
it's a it's another way of trying on
those different selves for size yeah I I
love the year as a metric because if you
buy the book on day one and you start
reading the book if you finished the
book great you've probably made it a few
weeks if you're still buying books after
a year and you want more and more you
know you're going in the right direction
so it's less like okay in a year's time
I'm going to see if this worked or not
but if you say hey I want to work in
coffee now if a year down the line of
you being involved in coffee You're
Still Loving it then you've made
progress towards that and it will just
naturally flourish yeah because there's
two different instances here one is and
that's the case you're describing is
your um you're kind of evolving towards
something and you're networking into it
and figuring out more this way more that
way um that takes more than a year you
know a year is nothing in terms of
figuring it out and finding your way
into those circles and being part of
that community and doing the work and
getting better at it a year is nothing
the other um year is are you going to
accept a job that comes to you that's
that's that's a different thing and and
there the the caution is just be careful
about taking something too soon when
you're still maybe either bruised from a
layoff
or just coming out of a role in which
you've had no time to think so give
yourself a little time to decompress and
to ReDiscover who you are but they're
they're two very different kinds of
situations and I think I think that is
quite important as well that sometimes
you know you've described the the the
burdensome backpack of being a CEO and
it does take time to recover as well
from from those experiences doesn't it
that you're you know you're not
necessarily the self that's um the most
you know making the most of
opportunities you need to give yourself
some space to recover from the from the
last job you did yeah and to to to use
the word that hinia describes uses
decompress very much you know coming up
for a um and you that's where giving
yourself time if you've got the
Financial Freedom to do it is is again I
I see it as a very healthy uh gift to
yourself to do that work but I'd also
like to pick up on something that that
that you said Russ about sort of going
into the was it the art gallery or you
know there's a there's there's a there's
a certain Randomness as well to your
description of your transition which I
really like because I think it reflects
the fact that you know many career
choices are seizing opportunities as
well isn't it it isn't you know yes it's
it's difficult to plan as am minia has
said you know plans often go wrong but
it's also that you simply don't know
what opportunities are going to come
along and making the most of those
opportunities I think for for our
audience one of the um uh you know one
often the challenge I think of being for
example in your 20s is that you think
you have to have a plan for the rest of
your life life and in fact so much of
life is just opportunism don't you think
I think the Serendipity of it all is
something that you should really Embrace
and I think where you position yourself
in that Journey will dictate how much
Serendipity happens so I I made the
decision hey I want to go do art and I
went to art classes and then when I came
back to the UK I started doing Street
installations and I just met more people
that could help me and because I had
already made the decision that that's
kind of where I'm going when someone
said hey I'm involved with this gallery
or we do these sort of things I knew
that that was enough of a signal to say
hey I I need to maybe build a bridge to
this person and learn more about them
and see if this is someone I want to be
closer to than my current Network and
and from your sort of you know your the
group of people you know and perhaps the
people that you were in the army with
how unusual is your experience I mean a
lots of other of your friends colleagues
making big transitions or is it still is
your experience really quite unusual
still I think uh industry specific it's
very uh novel but if I look at my peer
group that have really stayed with me
they they've all been involved in
something similar which is really
starting a company or taking on a fund
or something like that a lot of those
people are going through something very
similar I think when we look at starting
a business it's a very similar thing to
a career change you know you have to
manage your finances for the first year
you're probably not going to make any
money for two this might all go
completely wrong the idea might not be
validated you know you might be living
in the clouds but it's it's a really
similar experience to those people and
whether it's art or technology or a real
estate fund it's it's all the same game
I'm really just trying to build
something new that I think has value and
I think if this thing goes well I'll be
happy internally and maybe put food on
the table I ran I ran a startup for a
couple of years and it's it's the single
professional experience that was the
most rewarding and also the most
terrifying I definitely lost the most
sleep but it was it was so rewarding as
well it's it's it's a it's a
life-changing experience for sure for
sure and what about you how unusual are
you how unusual that am I yeah in terms
of your transition have have have you
know people in your former mining
industry colleagues are
they I think uh surprised beused
two two things you know um 2018 was
probably the year when things really
started to change for me and just prior
to that when I started practicing yoga
so um but yoga and taking a break from
alcohol th those two things in the
mining industry aren't that common so uh
and then if I start talking
to um because to to Russ's Point um
Serendipity awareness if you've got
awareness of what's going on in your
world out outside your world um then you
start to see opportunities and
possibilities and so that for me
um I've I've gained over the last few
years great awareness and so therefore
when I was in roll I was able to see
actually you know what this isn't really
working for me anymore and uh I need to
I need to take a break but uh yeah some
of the conversations I guess I I I spook
to my board when I was talking about
Forest yoga and not drinking and uh
spiritual practice but you know I think
again if I was to end up uh back in the
same industry I go in with a whole new
set of perspectives which um and in a
much healthier state which enables me
to both do work that is similar to what
I was doing before but for my own
fulfillment I'm doing in a very
different way yeah yeah and that that
sense of purpose is just so important
isn't it the the I mean my experience
mirrors yours and Russ's that I mean
there aren't very many people who've
been at the Ft for 20 years and then
leave and it's it's you know the the
mid-career transitions I I sense are
still relatively unusual rather than
becoming the normal we talk a lot about
the changing nature of work and the fact
that these big career disruptions are
going to happen more but um what's your
view aminia do you do you do you see it
becoming is it becoming much more common
definitely is it going to be the future
of work do you think definitely
definitely um you know just look at
recently the number of mass layoffs that
have happened in the business world and
so you know those are Forest transitions
but they're happening and and you know
and once that's happened once to a
person you you realize that you're not
going to stay forever in one thing and
you you think about what you're doing
very very differently we're going to
have more disruption due to
AI um we have um lots of people who burn
out and who feel that they are not
getting what they want out of their work
so I you know I see that a lot I teach
the sloes at London Business School
they're all there as part of making a
big career change
you know you've seen your cohort they're
all you know people come out of London
Business School or business school they
do something and in short order they
want to create something of their own or
they want to they want to do something
else we're living much longer and nobody
wants to do the same thing
forever um and uh you know uh employers
uh are not always as uh adaptable
as they should be if they want to keep
some of the best talent in what sense
just just give us a bit more color on
that oh in in the sense of uh allowing
people more flexibility in the sense of
being able to take a sabatical if you
need one in the sense of um not having
people chained to their email 247 you
know
it in in terms of allowing people to
thrive and flourish that would be a
fantastic another podcast what employers
need to do to stop people doing a midc
career transition but I sense am minia
from from what you're saying that you're
I mean you're you're a fan of career
transition I mean you think the idea of
a workpl a work life where there are
more of these transitions you think
that's a good thing can you see any
downsides I I think it it's a great
thing if you're able to follow your
interests and grow and develop in new
ways and um and do things that you enjoy
more it's um it can be very disruptive
as well uh when particularly when it's
foisted upon you and you have a labor
market that um doesn't value your
expertise or um you know
uh we still have a fairly
aist uh labor market and I've seen
people struggle with that a lot and and
and so there is an aspect of that flux
and flexibility that can be very
challenging for people but I do think
it's a great thing to be able to um to
flex and morph and um and you know we as
people were multi
faceted and to be able to express those
aspects just because you are interested
in business doesn't mean you don't have
an artistic side for example and so what
these changes allow us to do is to
express all the variety in us maybe not
always at the same time so in that sense
I think it's a great thing yeah well i'
I'd certainly agree and of course we the
three of us in the room who have had
this career transition we were lucky
enough to choose them so uh and that's a
very great privilege as well isn't it um
it's a nice segue into uh questions from
our audience which are flooding in thick
and fast and I'm I'm rather meanly going
to start with the one for you aminia
which says why haven't you changed
career that's very funny yeah why
haven't I and why you're so curious
about others changing careers it's part
of the same question funny thing is this
stuff about career change is something
that I stumbled upon I wasn't seeking to
study it it was um I had been I I had
been studying how people um how people
step up into um Next Level roles bigger
leadership roles within a career path
and I had especially looked at uh people
in Professional Services on the route to
making partner or MD or what have you
and and it came to a time in which the
people I was following were no longer
moving up they were all moving out and
it I actually started getting intrigued
with all of this during the.com boom
when people were massively looking at
entrepreneurial opportunities for the
first time and then massively looking
for something else once they went
busted and uh and I never looked back in
the sense that I found that so
incredibly interesting but I fell upon
it now why don't I uh want to change
careers I think I think Academia is such
a great job yeah and you know when I was
younger people used to say to me um
don't you want to you know just go out
and run something and now you know when
they're my age they just look at me with
envy and say how how can I get to
teach but um we are we do have the
freedom and the flexibility to reinvent
ourselves in terms of the research do
and the teaching we do there's no better
way to learn a topic than to have to
teach it and so um so I feel very lucky
to have chosen this
occupation and the range the huge range
of interesting people that one meets
them and that's what I'm finding at the
ls is That's So stimulating isn't it
yeah yeah yeah the thank you um sorry
starting with a with a personal question
but I'll I'll I'll I'll ask you to then
the the the another really interesting
question which is it's if you were to do
it again start well go four years back
and start your transition again are
there things that you would have done
differently any different approaches
different direction and if so what yeah
definitely definitely I I ran in as
aggressively as I could I was like great
I'm in and I think taking a little bit
of time to really uh understand where
you're going and set yourself up
financially will just reduce a lot of
the stress and I think as part of that
it's understanding the expectations of
the roles that you're going into you
know if you're going to transition
industry or role or function what what's
going to happen to your home life what's
going to happen to your personal life is
everything in order there or is stuff
going to start falling down because it
is going to happen and you're not going
to change the industry especially when
you arrive you're going to kind of fit
in at a much lower point but it's a very
natural thing to do to run into it
though isn't it because some of the
anxiety so that we were all talking
about I mean do you have any practical
tips for how you don't run into it I
think the way that a lot of people or
how I looked at the transition is that
there's a jump and I think you want to
delay that jump as late as possible and
assume that you're wrong treat it like a
a hypothesis oh I might want to enter
the coffee industry how do I disprove
that as fast as possible maybe I'm going
to go become a barista cuz that's going
to suck and maybe in two weeks of being
a barista on a Saturday you realize that
you don't like the smell of coffee when
you're around it all the time try and
sort of prove yourself wrong and do it
that way I had my proving myself wrong
phase about a year in and I was okay by
that point but it was a bit late to be
doing it completely agree you know it's
the whole point of experimenting with
small steps at first and then if you luy
you take a slightly bigger step but I
think wait if you can waiting in slowly
is better and in terms of that if I come
to you with that same question what
would you do differently but can I also
ask you pick up that point that Ross
Made around your you know your home life
and your family life do you have tips
for how you help the people closest to
you help you in your transition I'm not
the best Communicator so no is the
honest answer maybe that's I think the
uh the definitely on that front is
communicate overc communicate what
you're thinking what you're doing um so
there's some evidence of
action but I uh things that I would um
consider would be don't underestimate
underestimate the the amount of work you
need to do if you want to make a a
really fulfilling transition
so everything that I've learned uh from
herous course and working
identity is it's part of what I do now
and and going forward so really I
completed the course and the course was
over a bit too quickly so some of the
Practical things around networking with
we at eyes having conversations you know
going back to what we were talking about
awareness of possibilities and
opportunities um and the Serendipity
that will flow from that new connections
so this has become now part of what I'm
going to do going forward but um you
know because I don't haven't made a full
transition in in terms of what people
might say well you left the mining
industry you're going back into the
mining industry that's not a transition
but actually the person I am is is the
transition and and so but really uh to
get to get the real benefit don't
underestimate the work and conversations
are massively important don't sit at
home the other one is uh don't stay in
here get out there is is the one thing
that I keep telling myself over and over
again you just got to get out there get
started do something experiment learn
but I think that that point you make
about you you do also have to put in the
work yes you have to and I think that
picks up on something you were saying
earlier you know that you need to really
properly investigate and commit um to to
fully explore whether the choice is is a
is the right one VI and I think that
that that that Segways nicely into a
question that uh uh someone in the
audience has raised about which is not
the three of ours experience but how so
I'm going to put that put it to you
Amenia when you have an involuntary
transition as you described for example
in all those people who lost their jobs
in the dot bust um there's a lot of pain
and it can be extremely I mean my father
was made redundant twice in the 1970s
you know I've witnessed at firsthand how
enormously painful that can be and how
how much it affects people's sense of
identity and the question is how how do
you if you've had an involuntary exit
how do you maintain positive energy and
momentum that's a great question because
it's a huge
blow
um I think getting involved in something
that um reinforces maybe a different
valued identity something that you're
interested in maybe even something at
the level of hobby but that has you in
touch with other people that that
doesn't have you just kind of spinning
the wheels in your head is very very
positive taking a course or doing
something that makes you have a sense of
of Mastery something that you do quite
well giving a course maybe um sometimes
not jumping into the job search
immediately um because because your
pride is wounded and so you know take a
holiday do something that makes you feel
good but the the the other thing is um
is being able to talk about it with
other people and the question is where
you find them because it's such a sense
of Shame about being laid off and then
people put off on the networking because
what do you say and they kind of beat
around the bush and they don't connect
to people and it's it's really in having
those conversations that you realize
that it it happens more often than you
think and to more people than you think
and you move on and you do something
else and it can be actually a big gift
if it helps you get on track to
something that you'd prefer to do
instead so it it's similar advice in
that get out there and do some things
that are going to feel
rewarding and uh and and reactivate the
network yeah and and and also as you're
saying you know allow yourself to time
to recover yeah yeah be kind to yourself
um there's a there's a question about
whether you recommend whether you
recommend hustles as a way to further
explore transition interest and I think
that picks up on something that all of
you have said in particularly you and
Min around the trying different things
on I think would you all recommend side
hustles I would for sure for sure why I
think if you're in a if you're in a
career or function where you can't
slowly move towards what you wanted to
do and you've got an idea that you want
to explore not having the pressure of it
being your source of income straight
away and you having to actually turn
into a p&l it's just a great acid test
you're either going to love it or hate
it and if you can't fit into the time
around your work then you're probably
not going to be able to jump into it
full time straight away yeah I
completely agree now the the thing is
some people's work is so consuming that
they they really can't either in terms
of actual time or in terms of bandwidth
you know they're just
exhausted and and that's so that's more
Challen alling but it's it is the best
way to explore A New Path yes I think
that leads on nicely to another question
from our audience which is how how can
you in your transition how do you
identify that you're on the right track
which I think is a really nice question
you know what are the what are the signs
that you're I mean you had a good one
which is if you're still reading buying
the books at the end of year keep on
buying the books but how do you know the
opposite is there like a light bulb
moment when you realize you've You' hit
the I mean you had I have little metrics
all the way through it's something I I
think about a lot because of such an
aggressive Transit I didn't know art in
itself is a difficult place to make a
career so I had to really know am I
going to survive this route but
understanding what you really want from
the transition is is really important
and most of the time you can quantify
that you know am I looking for inner
happiness am I looking for free time am
I looking for work life balance am I
looking to make more money and just
having a a very pragmatic way of
assessing that 3 months 6 months 12
months lets you know if you're making
progress towards it that's that's that's
such helpful practical advice do you I
mean you're you're at a slightly
different stage aren't you than than
Russ but do you have you had moments or
sort of I mean they don't have to be
light bulb moments but indications that
you're on the right
track I just touch on quickly what Russ
said knowing what your outcomes are what
you really want I think that's something
that I've been figuring out and then
also measuring being able to measure if
you can do so I think I would carve my
year up in in terms of the studies so on
once the study period came to an end
that's when okay now this is starting to
get real because you know wife's looking
at me saying okay study's done now
what's going to happen next and uh it
definitely there was a period of time
where I was sign up for another course
not doing that but um yeah it's it's
it's very much a a case of
uh now I I I working towards an outcome
that I really want and I was explaining
the other day around you know really
cying to create an opportunity that is
shaped to me rather than me being round
pegging round hole for somebody else's
organization yeah so that's that's still
that takes some effort and that takes
some work and you described earlier very
clearly the fact that your career
choices had been made only with your
head and that you now want them to be
with your I don't know if it's your just
your heart or your heart and your head
gut gut is a big one yeah yeah the gut
is quite intelligent and it's amazing
how me specifically I managed to ignore
it for many many years oh yeah yeah that
resonates I want to say I want to say
something here though um because
sometimes you are in that messy period
period of confusion that messy middle
part and it's hard to
quantify those outcomes and it's hard to
articulate what you really want you
still know what you didn't want but it's
still it's still hard to
articulate and and so people do ask
themselves how do I get a sense of
progress and there's this idea of small
winds you know small things that make
you feel like okay maybe this has
promised maybe I'm on the right track
and you know sometimes it's being able
to um realize in in the course of
interviewing that um this role really is
not for me and I can say no for example
I don't have to jump on it or sometimes
it is feeling the reward of starting to
become more connected into a set of
people or community that you're really
interested in being part of and you feel
that sense of I want to be a part of
this or you know smaller smaller things
that give you a glimpse without you
being crystal clear on what are my
metrics and what do I want to achieve is
really important too but I I do think I
I those those the the concept of small
wins but also of metrics also as you
said you know knowing where what what
outcomes you're where you're wanting to
get to without it being a plan
specifically but knowing what outcome
you want all all very helpful tips and
and aminia there's a there's a sort of
follow on question here which is can you
please tell us about people who got
stuck in their transitions for years
never getting to the end of it where did
they where did they go
wrong I mean honestly the only examples
that I can really think of of getting
stuck and never getting to the end or
people who never do anything to begin
with and and and I discovered recently
thanks to my U PhD student that there's
a whole area of academic study called
career in action and it's a it's a
vicious cycle you want to make a move
but you don't do anything so it's in
action prolonged over time which
produces
self-blame I lack courage I have the
wrong mindset it's me which then erodes
confidence which then prevents action
and you're kind of so that's that's
honestly the worst that I have seen now
I I have seen people be unlucky and and
um seem to be doing all the right things
and always ending up being the number
two finalist for the role I've seen that
happen and I I don't see a ton of it but
it it can take it can take a while and
sometimes you do have to create a plan
be but the worst of it all is not doing
anything at all yeah and in fact there's
a there's a there's a question that
relates to that here sometimes you're in
a good job but you don't have many
opportunities to grow how can we
mitigate the fear Stay or Leave maybe
I'll throw that out to you fear is an
interesting one um understanding exactly
what you're afraid of and and really
exploring that I think you know there
been many times during my career that I
can really feel for the the person
that's asking the question um but I
think when you when you you stay where
you are then it goes back to this aspect
around untap potential you know there's
something that you're not giving to the
world and um and was talking about you
know I don't believe our careers are one
thing anymore I don't believe our lives
are one thing and uh and again that's
something that I'm trying to build in
into my career because we're
multifaceted so you know and if you're
if you're sitting there frustrated even
though it's a well-paying job
you're missing out on what life's really
about experiences and connections
and making a contribution yeah yeah
fulfillment there is an alternative and
I've seen people do it um you have a
really good job it plays well you're com
you're you do it well um you're
comfortable you you don't have to devote
buckets of time to it because you do it
well and then that allows you to have a
whole extracurricular life
that is very very rich I knew somebody
for example who was a you know a money
manager and he had it down pat and he
didn't have to spend a lot of time on it
and he developed um this whole other set
of activities as an artist um first as
an art lover then as an artist uh and
and you know that was his he didn't
expect to get paid for that much um but
it was what he loved and he had the time
to do it yeah and so he was happy with
the package overall it's a version of a
side hustle isn't it without the without
the huge transition now we're we're
we're coming into our last minutes um of
this uh in incredibly rich and
interesting discussion and we do you've
given loads of practical tips to our
audience which is wonderful but I think
we really want them to go away with um I
think Kurt it was your suggestion that
you know it what are you going to do in
the next two to three weeks that's
really going to get your career
transition thinking going and I'd love
to hear your one or two sort of top tips
for okay this is what you can actually
do once you've stopped listening to this
event you can go away and put some
things into action one of the first
exercises we did on the course was
around the possible selves so figure out
some alternative versions of yourself um
things that might interest you and then
find ways that you can learn more about
those areas um either speak to people or
you know buy a book find a course buy
that 50 so it's it's very much and how
then you can start to build that in as
you you move
forward yep so trying on trying on those
new selves dipping your toe into those
new selves what about you aminia top one
practice very very similar you put it
very well C don't stay inside your head
go out and do something a small
experiment a project a thing you sign up
for um two or three people you contact
that you've lost touch with but do do
something and have confidence that
that'll lead to a next step and keep
going Russ yeah for sure I Echo the same
thing which is contribute in some way
find some way to to build on things and
whether that's a project or content or a
Blog but actually try and create
something that shows that you want to do
it and I think that goes a long way to
prevent the voice in your head that
tells you this you can't do this and
that's your your main enemy I think with
any transition youve got to remember
that you're the main character and this
is your life and people will say hey no
you can't do that but you can thank you
that's enormously helpful and um I mean
I've taken away a lot of practical
suggestions from this discussion but
those those three summary points were
really important but I also think the
not being too wedded to a plan you know
plans can go wrong I loved your sort of
experiment experiment rather than plan
Implement um approach I think the the
sort of open-endedness of of the process
which I think you've all described in in
different ways and and also maybe
picking up on something that we've
touched on throughout the discussion
which is around the importance of
support and communicating
having those conversations both with
your Professional Network but as
importantly with the people at home so
that they can support you so that's and
I'm very grateful for those insights
thank you very much indeed and thank you
very much to our audience for joining us
today um couple of things before before
we wrap up um there will be a feedback
survey which will come onto your screen
and we'd be very grateful if if you
could complete that um will help us do
even better for future events um and
also to let you know about the think
ahead podcast and event series which is
on the London Business School
Channel um where you can see past
podcasts past events and also see what's
coming up in the future and the podcasts
are available on all the major podcast
channels as well um so
all that it remains for me to do is to
say a big thank you to our panelists
today to Kurt to aminia to Ross thank
you all very much indeed very good luck
with with the next stage of the
transition thank you to you our audience
for joining us today and goodbye

---

### think ahead: From ATMs to Algorithms: Assessing Tech’s Influence in Finance
URL: https://www.youtube.com/watch?v=8_wpOPkr7Cw

Idioma: en

what role does technology play in
financial services currently and what
should it be playing
realistically I in the role of
Technology especially International um
Information Technology uh in financial
services has been tremendous and it has
been for decades now I think we all
understand that the efficiency that
we've been seeing in fin everything from
transaction processing to selfs serving
and our ability to self serve relies
conf and Technology
capability um customer experiences
insights on customers that allow us to
tailor products and things like that is
so technology accessibility another one
uh remote areas have been Ser for mobile
uh sort of networks in UPI and other the
rails in India accessibility Financial
inclusion a lot of that has been done
through Technology Innovation all
together you know talk wallets uh to
crypta to all these things so I think
the role of Technology as an enabler and
I think that links very much with what
Andrew was talking about as an enabler
will continue um we will rely on it to
continue to increase efficiency increase
good experiences and all of this now and
I'm want to talk about a bit of about AI
because that's my thing day if we think
about for geni um especially gen because
AI I I will say has existed for a long
time despite all the novelty that seems
to be around around that um is becoming
the most
ER impactful on how humans and machines
interact it's completely disrupting how
we interact with technology as human
beings and that um is probably one of
the most disruptive Innovations if you
think about the internet and what it did
to financial services the smartphones
and what it did to financial services
gener is probably the next one
so answer your question what technology
is doing today enabling I do still
believe that what technology needs to
continue doing for us is enabling and
there has to be a role again for the
human in how to use it and to use it
safely and to make sure that it is
serving our serving us rather than the
other way around um but that's what I
say for technology is going to continue
to be a big enabler of financial
services and and of innovation in
financial services I completely agree
the the thought of centech is being
created to ultimately bring Financial
products that were typically for a very
few to the men you see picks being you
know taken up by almost half of Brazil
within a couple of months it's
fascinating to see and you know what
you've seen with the recent chat GPT the
fact that it can now help blind people
move about and understand what is being
shown on the screen just shows what can
really happen on the accessibility front
but one thing that's been really imper
important on this element is bringing in
wealth management to the people that
previously weren't very good at you know
looking after their finances and the
people that maybe hadn't had the
opportunity to have a wealth manager
before so you know this is where K and
I've got to come to you because yeah
we've got to find out a bit more about
the fact that you've been utilizing AI
since you said 2017 what's that Journey
been like yeah and I think I can break
it down into we use it so it's an a Cleo
as I mentioned is an AI Financial
assistant and so we refer to her as a
she she talks you like a friend and
using Ai and leveraging some open AI
models and some of our Pro rary models
and a few other open source models we've
built an AI that is meant to look at all
of your transaction information so we
connect to your bank account using plaid
and then that powers our transaction
understanding so if she's doing her job
she's looking at the inflows and
outflows and she's creating Dynamic
situations for you so the budget that I
get is not going to be the budget that
Andrew gets it's going to really talk to
him and say hey you're spending more
than you earn hey you're about to incur
a bank fee hey you are kind of like cut
back on Starbucks we'll do this
dynamically for you we'll make this very
engaging and it should really live
breathe with your actual behaviors so
it's not static in the sense of that it
it is what it is day one when you set it
up it should evolve as your financial
experience evolves with the company so
if you're paying your subscriptions on
time if you are paying your rent on time
we will kind of ingest all this
information and then that changes kind
of the advice and information that we're
giving you but then on the back end of
that that also changes our strategy so
we're a subscription business and we're
a lending business so we use all of this
information to also make sure that our
lending strategy is dynamic so we do two
things the amount of money you're
eligible for eligible for changes over
time so exactly I said if we can see
that you're paying your subscription on
time you're engaging with budget you're
engaging with savings and habits we will
change your eligibility amount and you
will increase your kind of lending
capacity over time but we're also
subscription business and we often serve
I would say more of a subprime
demographic and a younger demographic
who's often unaware of their financial
mistakes and the things that they might
be occurring so we do not take a
subscription and we do not take a
lending repayment if you don't have the
money in your account account so we know
when your money is getting paid when
your rent is being paid and when you're
likely to be able to afford that
subscription or that loan and so not
only are we kind of like training you
and helping you do this through all of
these models we're also protecting you
because we're not going to our kind of
motto is that we're not going to make
money by you doing poorly with your
money so there's no late fees there's no
predatory elements or fees associated
with this it's a subscription based
service so and that also helps our
business because failed transactions
cost money aers are not good for the
business so we can both use these models
to both help bolster our lending
capacity but also make sure that these
users are actually being helped it's
kind of a win-win scenario um and so in
the last two years we've seen massive
improvements in our ability to both
engage the chat and have it really be
predictive Dynamic and in speaking to
you about you as well as massively
improved our subscription and lending
business um I think we grew 150% of our
Revenue last year as a result a lot of
this incredible I mean it really does
speak to this you know if if we all
think of finances being you know the
business of reducing risk and improving
trust the fact that you've managed to
improve the trust with your customers
and then also reduce their risk and then
on the same time done the same to your
own books is absolutely fascinating and
and do you think that's going to enhance
in the future you can we talk more about
that balance between risk and trust and
you know do you think that all your
customers just automatically trust Cleo
is she you know immediately that kind of
just people feel very comtable talking
to her yeah and I I think we've seen
that I think our engagement in terms of
what you typically see someone engaging
with their bank or traditional Financial
technology application I think we're
about 4X to 5x the amount of time spent
actually using the application yeah so
we're definitely seeing kind of growing
user Behavior change and trusting her
more um I also think as you stick around
in retention improves on the app and
your lending capacity does grow I think
the trust that she is here to help you
and grow with do is we're really earning
that reputation and that's what we're
hearing from our users um and we're also
trying to figure out right we can't roll
out products and services to meet all of
our needs of our users constantly so
we're an AI assistant that's supposed to
help you save on taxes save on your
mortgage do debt
consolidation we can't spin these
products up fast enough or in a safe
enough manner so we're also figuring out
okay well how do we use this technology
to work with trusted Partners to say
okay it might not be clear that you need
money in lending from we actually can
recommend a loan that's probably a much
much doll a higher dollar amount than
our books can afford but we think this
is the right thing to do and so kind of
building that trust that we're not we're
not trying to Hawk our own products that
you necessarily we trying to serve
products and services that actually meet
their legitimate needs and therefore
build more trust amazing now you know we
are in such a heavily regulated industry
but we're not the only ones and Andrew
you you mentioned when we were in The
Green Room talking a bit more about
other Industries and and the kind of uh
intersectionality between the technology
and I believe you were bringing up a
concept within the medical industry
right yeah absolutely I mean I I thought
about this and I brought along a book
with me here's a book called Deep
Medicine by Eric toppal he's an American
physician and he has gone through all
the things that we have wrong with us
you know can have wrong with us as human
beings and ask the question is the
machine better at doing this or the
human being and in a number of cases the
evidence seems to be absolutely clear
the machine is is much better than the
human being look at a skin issue in
general folks if you've got a skin issue
the machine is better than the doctor
okay says the evidence here for a number
of things particularly which are complex
which are comorbid you got various
things wrong with you which are linked
to psychological issues you know frankly
a doctor is better and going back to my
theme of the combination of the two his
thesis which I you know think is pretty
powerful is well I actually allowing
machines to do a lot of things that
scarce human beings can't do is a very
good idea because that then allows the
doctors to spend more time with the
patients discussing the things that
really matter to the patients so again
in terms of saying is it AI or the or
the doctors the answer is no it's both
of them you know and one enabling the
other and I think that's a you know
that's a pretty good model in terms of
saying so what can happen yeah amazing I
always picture the robotic hand out
stretch to the the poor skinned hand as
the the human but but um you know we've
we've heard these this positive elements
this improve trust this improve you know
Bank balances of Cleo's customers but I
think there's we can't just be talking
in you know you know Rosy images right
Alysia I've got to get your perspective
on you know there's got to be some huge
fearful elements here I'm not setting up
with a a kind of closed question there
am I sorry but yo I'd love to get the
kind of maybe balanced discussion here
and there's there's more to discuss
right I mean I'm not normally like to
talk about the positives and the use
cases and all possible uh with uh with
artificial intelligence and any
technological innovation but is is not
um it wouldn't be realistic to think
that there's no risk associated to it
and we've had them with all sorts of
Technology Innovation we've had so far
so cyber security data privacy um job
loss I mean even even with the
technology Revolutions of the past like
the industrial Industrial Revolution we
had the people breaking the machines
because that was there was so there was
a a risk at that point and we we're
going to go and continue to have those
kinds of effects um one thing that I
would say is all of that will
continue uh what is happening with these
new technologies and I'm I'm again
talking about Aion intelligence and gen
and all of these things and and the more
digital um even uh the the technology is
also at the hands of the thread actors
so I mean I one one of the things that I
would talk a lot about in visa and is
precisely s that is protecting is how do
you protect a transactions how do you
protect the the End customer because
what we're seeing is that those thread
actors are going up the chain um and as
you put protections into in the
transaction um for to to control fraud
or to control authorization Etc they're
now moving into a more um what we talk
the front of it is digital identity fa
digital twins a fake synthetic personal
synthetic identities to sort of come
from the top of the funnel into the
transaction the financial services sort
of um so again all of these advances all
this Innovation also U sort of fuels
increase risk and that's something that
we need to to manage um again the type
of risk as well changes so with Gen for
example we have things a lot of more
misinformation thingses we have bias to
the end um because it allows it to to do
that uh with agents operating on on our
name things that uh potentially Andrew
is talking about when he talks about the
human and the role of the human is what
is the role of the human and what is the
impact in society that's not something
that necessarily wouldve been forced to
to ask ourselves and that's a risk it's
a risk about our own identity and how
individuals are going to see themselves
and there's an a a huge um impact as
well on responsibility and
accountability so who is responsible for
things are done by agents on our name so
not to talk about the Privacy so there's
a new type of risk coming up in a maxim
maximization of some risks where they
already and not to and now with that
gloomy sort of prospect I still think
and I'm still a very strong Innovation
and AI Enthusiast but all all of these
are things that we as a society and
Regulators andc need to work out if we
to actually rip the benefits of this

---

### think ahead: Eco-Chic - Sustainability in the Luxury Sector
URL: https://www.youtube.com/watch?v=pHYQPy46NyY

Idioma: en

[Music]
[Music]
[Music]
good evening everyone welcome to the
first thinker hent event of the Academic
Year eoic sustainability in the luxury
sector think ahead is London Business
school's topical event and podcast
Series in which London Business school's
leading faculty and other Global experts
explore today's big business issues my
name name is Amy n I'm an independent
consultant researcher and writer I work
with environmental think tanks and Nos
and contribute to the likes of Forbes as
well as my own platform sustainable and
social I'm delighted to be hosting the
conversation this evening tonight we
will explore the relationship between
luxury and sustainability we'll hear
recommendations and suggestions from
London's Business School faculty and
Global industry practitioners to learn
more about business models and Supply
chains the regulatory landscape
innovation and responsible marketing to
start today's event we have a question
for our audience using the slider on
your screen please select your answer to
the following question what do you
believe is the most important
sustainability initiative luxury brands
should focus on a supply chain strategy
looking at reducing carbon emissions in
production increasing transparency and
accountability B investing in The
Innovation development and use of
sustainable material s c ensuring Fair
wages and ethical labor practices or D
adopting secular business models like
repair resale and rental to minimize
waste and lastly e reducing
overproduction and promoting mindful
consumption I am very delighted to
welcome dfna Gore assistant professor of
marketing for London Business School
Emma bruny supply chain strategy
director for bbery and another Amy Amy
Nelson Bennett CEO of positive luxury
daphna Emma and Amy welcome and thank
you so much for joining us how can we
dispel the view that the luxury industry
and sustainability goals are sometimes
contradictory I actually believe that
there's no industry more naturally
equipped to be an early adopter of
sustainability than the luxury industry
because no other industry can as easily
build a financial business model off of
doing less doing it it better the the
the luxury industry it's you know
Central tenants are Quality non-c
commoditized Pro production craft
quality longevity durability you know to
buy things as an investment um
mainstream equivalents of of fashion
businesses that that's not going to be
as easy for them so in fact I think that
the the luxury industry and
sustainability have a massive crossover
in terms of philosophy and that that is
why the luxury industry actually has a
responsibility to be taking a very
strong leadership position on the
transition that's required from
businesses to become truly sustainable
we're always looking at how can we use
excess raw materials from previous
collections similar like you said it
doesn't do a brand any good to have it
sitting in a closet somewhere in rolls
so can we make something special out of
it can we make something fresh for the
customer as well of course you say
exactly what I would say if I bought
something that was sort of meant to be
special and I tear it or it gets worn
out I would love to know there's
somewhere sort of official that I can go
um and it's not so much luxury but I
bought a sweater from sheep Inc recently
and I got I don't if you know theyand
they're so great um and for those who
don't know they have sort of an NFC tag
that shows you like traceability all the
way back where the Sheep came from and
it's amazing but I think it was like two
weeks in I got a bit of a hole in the
sweater and I was like I can't believe
it it's my own fault but they have a
repair process that could have fixed it
for me in London in probably in like a
week which I just thought was such a
great service whether it was sustainable
or not I think I would have felt
grateful for that more broadly what do
you think the role of a luxury brand or
any brand for that matter is in
educating citizens why do you buy
something that you believe to be luxury
whether it's a bag a coat I don't think
you're buying it because it has a high
price tag usually or um because like you
just want to spend your money
frivolously usually it's because you
think it's going to last a long time you
think you could pass it down on
Generations you think it stands the test
of time and style and all of those
things are sort of rooted in like you
want to continue to use this item and
repair it and reuse it so I think as a
brand like it's one thing just to remind
customers like what are they doing when
they Shop with a luxury brand what are
they subscribing to and how can they
maybe push the envelope on that a little
bit more okay if you believe you're
buying a Burberry trench because you
think it can last decades are you also
happy to go on the journey with us to
repair when it falls apart to think
about how you can pass it on to your
children um to buy one that's made with
excess raw materials like I would say to
your point on starting with what's true
and then being able to build on it to
push the customer would work well versus
maybe trying to take them on a journey
that feels inauthentic to what you've
been doing as a brand I'm really
interested to hear your thoughts on how
luxury Brands can responsibly Market the
environmental and social impact of their
products and some examples of best
practice that you've seen across the
industry too I guess from my side I can
say like the bare minimum would be at
least putting your sustainability
attributes on your product listing page
like making the customer aware of what
they're buying in the hopes that when
they do their research on your website
or even don't do their research and they
just want to buy something nice they
happen to see that they're making a
responsible choice um again it's sort of
this two-prong thing where like I would
say that's not marketing that's just
information and it's also on the
customer to go and do that reading make
sure they're buying something that they
believe is the right choice um from a
marketing perspective I think we talked
a little bit on the ReUse of excess and
I think that's a great one because it's
dual purpose so it feels like marketing
for good not marketing for um sales sake
I suppose yeah so I I tend to think
about it I I don't want to be sarcastic
right I think that there are some
marketing campaigns that I love like um
giving your watch to your grandson or
doing something that is good for the
environment because it's good for
yourself as well so the incentives are
really important here and I find it very
um ironic or sarcastic that companies
actually claim to be more sustainable
than they are and the best campaigns are
com projects that luxury Brands actually
take the initiative and do something for
the environment and then they um show
their commitment they show their values
right so these are the best campaigns do
you think maybe some luxury brands have
some lessons to learn from people like
Patagonia who do great things in the
space
too I think so but that's a matter of
prioritization uh so Patagonia are
pioneers and leaders in this so they
they um put their money where their
mouth is right they they they actually
contribute a lot of um thought and
effort and money
to invest in their employees invest in
uh the
environment uh I don't know if every
company wants to go that far at the end
of the day uh but it's a familyowned
organization that's leaving quite a
legacy yes um and a lot of luxury houses
a lot of luxury brands are still
family-owned entity so I think it's a
fantastic not saying the Patagonia way
is right for every brand but the the
responsibility that family has taken um
the contribution they're making to the
Futures is it's a fantastic
example um you know and there's there's
other small examples if you look at
everlane they make you know great
accessories and things you go on their
website they tell you in relation to
some of the controversies we've seen in
the lecture industry you can see the
breakdown of why that product costs what
it costs they tell you they spent this
amount on shipping this amount on fabric
this much on the finished manufacturing
it's very it's quite simple you know I
could you could question some of it but
I think that that to me is is
marketing in a good way it's not I don't
think you should have a strategy for
sustainable marketing I think it needs
to be part of your brand and you have to
weave these things into a story what
what bad marketing is is headlines um
that that's never that's never a story
because there's no room for data or or
sort of verification of what you're
talking about but woven into Lu stories
and products nobody should be able to do
that better than the luxury industry
it's an it's an amazing opportunity for
for marketeers in the in the sector um
we'd love to see more Brands really sort
of boldly embracing that that sort of
creative challenge getting creative
directors talking about it talking about
it design stage you know to your point
the more emotional it is the the more
effective it is and there are stories
across all types of work that businesses
are doing which are really really
Amazing Stories If people could um get
comfortable talking about it yeah and
storytelling is such a powerful way to
share the information on the
environmental and social impact of
products um more broadly what do you
think the role of a luxury brand or any
brand for that matter is in educating
citizens whether that's on the impact of
their products or The Wider climate
crisis and have you seen appetite
amongst your students as well I'm really
interested
H uh so that's uh somewhere between the
customers and the employees I guess
um there is a very big gap between uh
what Millennials and gen Z and generally
customers say they want and what they
actually do right so the intention
Behavior Gap is very big in the
classroom people really care okay really
care it's a big conversation when we
teach
various cases we'll see people
students um talking about sustainability
talking about uh different rights uh so
that's a a big thing but in my research
I actually see that this intention
Behavior
Gap um is is more significant that we
would like to realize if you could uh
only take one luxury item that you own
to a desert island because you love it
so much from where time and time again
what would it be and
why
ooh is that uh the seel or papini any
anywhere
anywhere help us I was going to go
cheesy and say a berberry trench cuz
protects you from the elements but I
actually think it would be something
sentimental I've got like rings that I
wear from my grandmother and I think if
you're going to be stuck somewhere you
might as well have good memories from it
so I think I'd probably bring my my John
Hardy necklace plus I'm a buff and I'm
covered in it but it's the one thing it
doesn't need a battery I can wear it
24/7 it is it's got sentimental value my
husband bought it for me um it's I think
it never goes out of style but that
could just be me so it would be my one
sort of treat but that would always be
practical because it's it's it's not
going to stop working
yeah I guess uh maybe my Rolex nice uh I
can trade it I can know the time smart
and uh yeah
very
resourceful um if you would like to view
any previous thinker head fence or
listen to our podcast series you can
scan the QR code that will be appearing
on your screen any moment now and you
can tune in also on all major podcast
platforms I'm Amy and it has been
brilliant to have you join us this
evening and we look forward to welcoming
you to the next think ahead event series

---

### think ahead: Ripple Effects - The Global Economic Impact of the US Election
URL: https://www.youtube.com/watch?v=9870bYAiZfE

Transcrição não disponível

---

### Think Ahead Podcast: Tackling digital risks in the era of AI
URL: https://www.youtube.com/watch?v=m1NWF1IhH_A

Idioma: en

tell us a little bit about yourself and
what uh what sort of excites you in the
uh in the interface of AI and cyber
security in the last seven years I've
been working for silver for it's a cyber
security
startup and as you mentioned I've been
leading the AI machine learning data
science and cyber security
teams and for me the biggest challenge
of the intersection between Ai and cyber
security is usually when you try to
solve AI problems the fuel for for AI
models is data and cyber
security in particular it's very hard to
collect data because of compliance
because of privacy so you need to be
very creative about how you build models
how you collect data and you need to use
your experience in cyber
security to do that it's a great
challenge but I think in the last couple
of years the next couple of years we're
going to see huge progress in this area
I would love to to to hear more about uh
how AI is impacting uh seber security
and all all kinds of Digital Risk from
your perspective what is new in this
space What are the biggest challenges uh
Business Leaders are facing the biggest
challenge leaders facing in this area is
is the human factor most of the breaches
most of the exploits are caused by human
mistakes for instance uh if if I buy a
new tool that's supposed to block access
to my network from
specific IP addresses but I configure it
wrong it's my fault it's not the Tool's
fault if one of my employees uh click
opens uh a fishing email and click on
the link and by that grants a hacker
access to the network it's a human fault
and it can be physical thing if someone
just enter my office and steals them out
of my computer it happens more than you
might think it's a human factor and as I
said it's by far the most common reasons
why organization are breached or
attacked based on what I have seen uh
the hikers are also becoming more
creative these days in terms of what
kind of vulnerabilities they are uh
exploring right one thing that happened
seems to me more and more frequently
over the last few years was this what
we'll call uh uh supply chain related
risk yeah do you see more of more this
type of uh risk so it's keep happening
and in my opinion it will keep happen
about a year ago I think around May 2023
a hacker group named klopp breach more
than 2,000 organizations a lot of them
in the UK and big ones like the BBC
British airlines boots and what they did
is they
used public s software for transferring
files called move it they found what we
call zero day vulnerability in this
software and zero day means that it's a
vulnerability that was not known to
human till that day so hackers basically
found there are the first one to found
the first one to found it and they
exploited that vulnerability and
basically every organization who had
this software Move It software was
vulnerable whatever their size whatever
the industry and what the hackers
managed to do they stole more than I
think 60 around 60 million uh National
Insurance numbers Bank
details and it's not only the
organization's problem it's my problem
as well if my National Insurance number
is held in one of those organizations
the organizations basically now need to
deal with a ransom case because they
were asked for a ransom
but I think the main takeaway from these
kind of cases is that no one is safe I
mean everyone use third party tools and
use external external vendors services
and it means that everyone is vulnerable
and it's just a question it's just a
matter of time so I think for
organizations what they need to do is
they just need to prepare for this day
so it's probably good to have to take a
layer approach or what we call uh
defensive dep yeah right to uh to
protect your more sensitive data spend
time understanding what is uh your most
uh critical business process or what is
your most sensitive data I remember
probably a couple of years ago uh the
chip maker Nvidia faced a data brdge a
lot of their employee information was
exposed which of course is is horr it's
it's horrible but I think if you think
from nidia's perspective their most
sensitive data is probably their R&D
data yeah right if their new generations
of cheap design is uh bridged then
that's going to be a disaster for them
traditionally if we think about uh Cyber
attack a lot of them happens at least
the high-profile ones they happen to
large and very important Enterprises
because they are the obvious Target
right they have deeper pocket if I ask
them for more for money we I'll be able
to ask for more yeah but now if I think
about this type of supply chain
vulnerability uh if I'm a small
Enterprise I may become a Target because
uh I'm doing business with a large
organization hikers are become more
sophisticated what about our defense so
what kind of things uh can we do in that
in that front in terms of Defense I
would recommend leaders to do a couple
of things so first and it's related to
the to the previous discussion about uh
supplying chain attacks you need to
diversify the tools that you that you
use to protect your organization if
you're heavily relying on one specific
tool and this tool is being hacked the
chances that your organization will
recover are very low second you need to
foster a culture of cyber security by
the end of the day the bigger the
organization is the more vulnerable it
is because it just has more people if
the people are minded to security
whether is using strong passwords
whether they can take their computers to
uh what access they have they need to
the access management should be handled
carefully I think culture is one thing
diversifying the tools is
another and I think and it's quite
obvious the third one you just have
dedicated security team that will do
that that will think about the scenario
of what happened if the organization is
breached and chooses the tools and
Foster this culture now I I want to
change uh switch gear a little bit and
talk about ai ai is all over the the
this the place over the last uh two
years right since launch of tdpt how do
you see AI affecting the the space of
cyber security so a i affects the space
of cyber
security in a couple of aspects first
for the
hackers it gives them more
platform to attack so if my organization
use AI tools like dedicated agents or
Bots it's more tool that can be hacked
and it's
more ways for hackers to get in if we
talked about supply chain it's exactly
that so this is one other thing hackers
can do with AI is just leverage AI to
find vulnerability is to scan the
networks in general maybe to generate
fishing emails so they can just use AI
as a tool that will help them to Hau in
another perspective Defenders can also
use and should use AI to defend
themselves so if attackers use AI to
generate fishing emails I think
Defenders should use it to detect
fishing emails and to scan more
regularly the environment to make sure
that it's not breached and no one no
hacker is is in hikers these days can uh
can upgrade their game right using more
sophisticated AI tools we're also we
we're also seeing uh deep fake uh videos
as AI develops these type of tools are
becoming cheaper and cheaper do you see
AI bring in new forms of or from the uh
the hikers perspective more creative
forms of risk into introduce those type
of risk into the system a ey by itself
uh is a platform and attackers can
leverage this platform um to attack in a
more creative way for instance uh there
is a very trendy uh technique now that's
called prompt injection so if you have a
chatbot and this Chad bot supposed to
answer you based on uh on data but it
should prevent from you to to ask
specific questions but I'm a hacker and
I manage to ask the question in a way
that manipulates the chatbot and I
actually can get the information I want
another
example uh if I'm now using a chatbot
and I fed it with information I expect
the the answers to be based on this
information but what happen if a hacker
now now poison the data that's is fed to
this agent so this kind of poisoning can
manip at all the users that use the the
uh the agent so this rug poisoning is
also new technique that we didn't need
to to face until very recently with all
these kinds of uh new new types of
attack uh how how should companies
protect themselves against those I'll
stick to the example you gave about deep
fake a couple of years ago if I gave you
you a letter by the
CEO you wouldn't it could be me writing
it by the CEO but now we obviously know
how to deal with it you know how to
verify that this document is by or by
not a CEO and this is a process so we
need to create processes and culture
that will help us deal with these kind
of attacks so and we need to be aware of
what kind of attacks are there so I
think employees need to know what prompt
injection is is what rug poisoning is
what deep fake is if you know it if it
has a name it probably has a tool that
help you to protect by it and you need
to find the right tool it sounds like
there is well you are from a cyber
security startup it sounds like there is
a very vibrant uh ecosystem there that
tries to counter all this known effect
known uh vulnerability so for those type
of things uh being resilient being quick
in responsing uh applying common sense
like you said build a a common a strong
uh SE security culture or in General
Security culture will help us a lot and
I think you also need to build on
processes of what happened if you're
breached by a zero day so who should
handle this is it the security team is
it the ciso do you need to inform the
CEO
immediately how do you inform it to the
public if it's a public company so it's
also thing that you must plan in advance
not when it happened to you I also think
uh companies uh especially if you get
into deep into the AI space you need to
think a lot about how you intergrate uh
AI better with different type of uh
business decisions for example how you
acquire data for example if we think
about the lawsuit between open Ai and
New York Times yeah right New York Times
sued open AI for you using their data
for model training but without paying
them m in the long run if we look at the
development of a large language model or
other type of generative models
everybody acknowledge that we need a
huge amount of data yeah from a business
perspective we need to set up the
correct
incentive uh so that we can acquire uh
sufficient data in a responsible way we
need uh some regulation I would say some
reg some level of regulation uh which uh
governments all over the world
Regulators all over the world are
working on uh but we probably need a
little bit more International uh
collaboration and we also need a
Business Leaders to think about creative
ways to uh to handle this type of data
availability issue right as well as what
you mentioned uh before how do I ensure
the the data I used for my model
training is not poisoned it's of high
quality in the next 5 to 10 years uh
what do you think is going to happen in
this space what are the things Business
Leaders should should pay most attention
in terms of cyber security there are
more and more attack surfaces for
hackers and unfortunately they expand
faster because of AI so hackers can
leverage as we say AI to hack better and
they just have more platforms to get in
and it's very unfortunate but how need
one weakness one hole in the in the wall
to to get in but the Defenders need to
make sure there are no holes that's
everything is secured and I think the
mindset of searching for specific
vulnerabilities and make sure that
you're immune for them is not good
enough because we're going to to pH more
and more type of vulnerabilities so I
think the cyber security in Industries
and leaders should embrace the fact that
they need to leverage AI or any other
mechanism to address this issue in a
more systematic way they need to not to
be prepared to block and defend from one
specific vulnerability vulnerability or
a couple but a systematic way to make
sure they are secured from everything
this is one thing and and the second
thing I think the way to do it it's it's
I'm I'm going back to where we started
this interview is the human factor they
must Foster a culture of innovation and
they need to make sure all the employees
in the organization are aware of those
risk are aware that this attack surface
is expanding very fast and that they
need to be very cautious about it
whether it's with processes with the
rules uh the organization
enforces now you mentioned the SE the
cber uh attack sort of surface has is
expanding and it sounds like companies
needs to spend a lot of resources
protecting themselves but on the other
hand companies are also facing
tremendous amount of pressure for
pushing out new product for different
Innovation uh you worked as a startup
yourself how do you see companies uh how
should they best balance this right
between
Innovation and and security the answer
depends on the industry on the size of
the organization for instance I've
joined the startup when we were less
than 20 people so we didn't have the
budget but we didn't really have the
need to defend like a huge bank so what
we did is we gave our R&D Department the
responsibility to for the cyber security
to defend but in a way the potential
hacker that want to hack us are not
national state hackers and not group of
hackers are probably script kitties like
some some people who recently learned
how to haug and they want to try their
skills now when we are more than 400
people we need to be more organized so
we have a dedicated team we have a cisa
a chief information and security officer
and they are responsible to make sure
that we use the right tools for a
software company and they Foster they're
responsible for fostering the culture of
cyber security which mean they tell us
when we need to change the password the
every quarter we need to do for instance
um cyber security test just to remind us
what we are allowed and not allowed to
do and things like that even with your
own internal capability arguably you are
more capable than most of the
organizations in the world right uh yet
you still leverage on uh external
capabilities yeah right it's probably
fair to say there is no company no
organizations in the world who have the
internal capability just do this by
themselves so so there's always sort of
a mixture of internal and external
resources some of the organizations in
the world will have very specific needs
and very deep pockets might Implement
their own cyber Security
Solutions but they need to be aware is
that it's very very expensive and it
should be very very tailored to a
specific need so it's not a very common
case I I want to talk a little bit about
uh Digital Risk that is beyond cyber
security there is a upcoming uh concept
called uh digital trust right and the
idea is uh whenever I use a digital
system or digital service as a customer
I I have the expectation that uh my
information uh and my data are not just
secure but they are used in uh ethical
way how do you think uh different
organizations at different uh places in
their own value chain should handle uh
digital trust how would they actually
earn customers trust in terms of leaders
in organizations you have and you handle
a lot of data and what you must do you
must be aware that who is exposed to the
data whether within uh the organization
or external vendors and if though there
are external vendors that are exposed
you need to make sure what data they're
exposed to and you need to build a trust
or or have a contract about what they
can do and cannot do with the data the
key here is continuously continuous
learning and I think for for the leaders
perspective they need to be I very aware
of what are the not the risks of today
but the risks of tomorrow before we
close uh if I ask you to provide one
specific suggestion for uh for Business
Leaders in the space of cyber security
uh what would that be keep up with
technology always make sure that you
know what are the new trends what are
the new technologies we talked about the
attack surface how the attack surface is
expanding whether it's AI whether it's
something else so you need to be aware
of the of this and make sure you don't
have one plan and then you stick to it
revise it once in a while you need to
make sure that you're up to dat all the
time so it sounds like uh continuous
learning is is a one of the most
important things to do right especially
as the technology uh front is evolving
yeah okay thank you go for uh for all
the great you today thank you Alex

---

### Think Ahead Podcast: Resilience through disruption and transformation
URL: https://www.youtube.com/watch?v=7qZ_6c9gyuQ

Idioma: en

you and your people you you went through
a period of turbulence and constant
change in the seven years you were the
CEO of Pon first of all would you agree
with this assessment that you did go
through this terpul period and would you
like to add anything else about the
context you inherited p in
2013 yeah I I think the main thing I'd
add is that I think
most large incumbent companies that have
been around in business for any period
of time and you know person you know
over 175 years old are going through a
major digital transformation and that's
what I thought we were about to
accelerate you know we got to go harder
and faster there's a clear digital
transformation what we found instead
that we didn't see at the time lurking
in the Merks of the business was that we
were actually going to go through a very
very significant digital disruption
where the very basis on which we made
money was going to be fundamentally
broken and just to give you a couple of
data points on that um in my uh in the
year before I became CEO of Pearson we
sold 20 million college textbooks in
America right and students spent on
average about 600
$650 per year on textbooks and the like
uh by the time I finished we were
selling closer to 1 million textbooks a
year and the amount that students were
spending on their call where had halfed
from $600 to
$300 can you give us a few of the major
obstacles or major setbacks you you
encounter along the way over the seven
years you have been you were CEO yeah
well I think I think the first thing was
there was a
major strategic challenge that we had to
face that you alluded to in your
introduction and that was that we were
riding three horses yeah education which
was both publishing and testing
assessment certification and some sort
of interestingly growing digital
businesses trade books and business
newspapers and
information all three of those
industries were going through major
digital
transformation but the nature of them
was quite different and um I remember
Marty Barons who uh some of you may
remember he was the editor featured in
the film Spotlight about the Boston
Globes big big story uh and then by then
he'd been hired by uh Jeff Bezos to run
the Washington Post and he said the
first casualty of disruption on this
scale is sentiment sentiment sentiment
and what that meant was Pearson really
still owned penguin and the Ft partly
for sentimental reasons because they
were these iconic British Brands and
they were an important part of the of
the story and how we thought about
ourselves but if we were going to became
clear clear quite soon as we began to
see the scale of the disruption we were
going to face in the education business
that we could only succeed in education
if we essentially exited the trade
publishing and and and business
newspapers business and that's what we
and that's what we did and that's why
you know if we were going to survive if
we were going to prosper if we're going
to be the world's leading digital
Learning Company we had to focus
everything on education and we had to
take the tough decision to exit those
businesses so I think that that was the
big sort of if you like this the single
most biggest strategic challenge I think
we had to make then in terms of some of
the uh some of the challenges I think
the biggest single challenge we faced is
when I describ it as going from you know
selling 20 million textbooks down to one
and obviously you expect that's been
because you know usage didn't change
students were still using our content in
the same way you expect a com a a
parallel growth on the digital side
right and that didn't quite happen so
the the impact of the decline in the
analog sales was felt much faster than
the growth in the digital side and that
causes you a problem and the other big
challenge is it doesn't grow in a
straight line right what you find is it
sort of stays steady for a couple of
years and then you get a sudden drop and
then it stabilizes and then and then it
goes again what that means it's really
really hard to give the public markets
any clear sense you can give them a
sense of where it's going to play out
over a five or 10 year view we're trying
to predict the next quarter or the next
year's earnings it's very hard and
that's why so few companies stay public
through disrupting if you look what
happened in the music industry every one
of the major music players went into
chapter 11 went through different own
different private Equity owners and now
now that they're through the other side
they're coming back into public
ownership all our major competitors in
college publishing either went through
chapter 11 or were taken private went
through various different owners we did
all that we went through this as a
public company and that's a really hard
thing uh to do you talk about the public
uh markets and telling them in a way
that it's going to be a journey of
transformation it's going to take a long
time and the at at least at the
beginning it's more likely to go down
before you see the upside and so on so
it's one thing to passate the public
market but let's talk about people and
your your your employees you and your
employees because the same message you
were giving to the outside Market you
were giving to people inside and the
reason I want to talk about that is
because as an academic I know that one
major ingredient in making people more
resilient is hope that what they are
doing will get them the results and
again maybe allow me as an academic to
just give one academic study on this one
there a very famous study from uh I
think back in the 1930s a professor in
the United States did an experiment with
rats uh today it's perceived as cruel on
an cruelty on animal but nevertheless
let me allow me to to speak a little bit
about it basically he will put rats in
packets of water and watch how long they
will swim before they gave up and drown
and what he found was that on average
they will spend about 15 minutes before
they gave up and drown and the second
experiment he he will put the rats in
the water but just when they're about to
drown he will pick them up get them out
of the water allow them to dry to
recover and then put them back in the
water in a way giving them hope that
there's a way to get out of here and so
on and in the second experiment
unbelievable as it may sound the rats
continue swimming not for 15 minutes as
in the first experiment not for an hour
not for hours but for 60 hours 2 and a
half days they kept swimming and this is
an experiment which shows that when
people have a hope that you know I'm I'm
going through difficult times now but at
the end of the day I see uh resolution I
see a happy outcome they are willing to
try and again and again and again so I'm
coming back to Pearson you said that you
knew or you expected that it's going to
take time to see the positive results
how did you give hope to your people how
did you make them confident that we're
undergoing all this turmoil or this
turbulance or this difficult times but
trust me let's continue on this journey
because at the end of the day at the end
of a few years we're going to see some
positive results how did you communicate
that message and how did you persuade
them the lesson I'd been taught again
and again was this idea that uh profits
sustain a business they don't Define it
what defines it is doing something
really important and useful to
society what I
learned is the sustaining bit is
actually pretty important and when the
profits are under pressure so are you
and it doesn't matter how purpose-driven
you are as a business if you're not
making money you're not going to survive
very long so the sustaining bit is
really important and that's why we had
to take over a billion pounds of cost
out of the business cut the cost based
by 253 % this massive transformation of
the whole digital infrastructure on
which the company was built but what's
interesting is through that the defining
part also became more important that
what kept people going through the
profits warnings and the cuts in the
dividend and the loss of all these jobs
was the belief that we exist to empower
people to progress in their lives
through learning and the great
opportunity for us was to com by sort of
worldclass content with assessment
powered by technology and personalized
learning and make it much more
accessible and affordable and
democratize it and all of that and that
Vision really kept people going and
sustained us through this period of
through this period of great change I'm
very pleased you said that actually you
call it Vision uh we might call it
purpose we had a purpose and if people
believe powerfully in a purpose they
more likely to be more resilient and
again if I can mention another academic
study it's called change or TI where
hard patients were asked by their
doctors after their operations to go
home and stop smoking stop drinking eat
healthy exercise and so on and then they
followed them for a couple of years to
see what they did what they found was
that most of them all of them actually
when they went home they did what the
doctor said but then over time slowly
they reverted to the back bad behaviors
like smoking drinking and what they
found was that within 6 months 90% of
people went back to the bad behaviors
and only 10% sustained the effort and
kept on no not smoking not drinking and
so on and when they ask themselves what
is it so different about the 10% it was
purpose it was why do I have to stop
smoking why do and more specifically
they found that the 90% were basically
told if you stop smoking and if you do
all the things we tell you you you're
going to live longer or you're not going
to die whereas the 10% were given a
purpose that went beyond living or dying
which is do you want to be there uh when
your daughter gets married in in the
future to walk her down the aisle do you
want to you know be be able to play with
your grandchildren without feeling any
pain and so on so the the message there
was that when people have a purpose to
fight for and they believe in that
purpose it makes them more resilient it
makes them willing to keep on fighting
even when they fall down they will get
up and fighted more and it sounds like
you had a purpose like that I I think
that and I think it's
then I think the sort of immersion
Theory which I think is what you were
talking about with the experiment
referred to earlier is also the case I
would say that at the start you know 10
years ago yeah Pearson as a company
found change very difficult yeah because
um although the company had been around
for 170 years and it had been in and out
of lots of different business it
businesses and industries I think in an
analog world you have a a sort of a
change and then a period of stability
and then another change and then a
period of stability and in a digital
world um there's this idea that I Tom
fredman in writes about in in a a book
of his which is you know thank you for
being late I think it's called that um
as humans we change in a fairly sort of
predictable slow incremental way and
digital change is happening at an
exponential ever faster rate right and
what's I think is a major stress and
what really tests the resilience of an
organization is how do you close that
gap between the incremental change Pace
at which humans change and this
exponential change of technological
change and it's why the the final sort
of you know dear colleagues email I sent
to All staff in person on the day I left
was to uh to quote Bob Dylan I said you
know uh if you're not busy being born
you're a busy dying and that pearon had
been busy been born for 175 years and
long that made that continue because I
knew uh that my successor would change
things that I had introduced and
heralded and hold dear and it's that
ability to change and because I think
digital disruption is a contact spot
it's hard it's painful it sort of
fundamentally disrupts the business
model it makes you question everything
you think you know about yourself I a
few years before I became CEO I'd been
I've been diagnosed with throat cancer
and I went through a period of treatment
and I was struggling a little bit with
the sort of mental and philosophical
side of it all and I had a young
children at the time I didn't really
want to burden my my wife and them with
that so I befriended a Benedictine
priest H and he introduced me to a quote
from Martin Luther the which translates
from the laterally literally as the
cross tests everything and I don't think
you have to be remotely religious to
understand the significance of this it's
this idea that moments of existential
crisis like been diagnosed with
something like cancer strips away all
the superficial things that we think
about ourselves and re reveals who we
actually are at our core and I think
think the sort of Crisis that we went
through where you know the business that
have been driven $2 billion in revenues
and 85% grow Marin just collapsed
completely under our
feet required us to do something similar
to take a step back and who we are our
core and what we discovered is what we
did wasn't really analog or digital it
was we were brilliant at uh
convening uh the world's leading experts
on any any given subject in any given
field and taking what they knew in a way
that people could learn and share in
ways that were engaging and which were
proven from an educational point of view
and at certifying and assessing that and
doing that at every age and stage of
life and this was going to become more
important as we all had more jobs and
more careers throughout our working life
and that wasn't fundamentally analog or
digital but that was fundamental to our
sense of purpose and identity and how
did you
Discover it that appears because in a
way you're saying from the very
beginning a company has sense of why am
I here what am I adding value to what am
I giving the customers so you had that
150 years ago but in a way what you're
saying is that maybe every time it gets
duded or you lose it and in times of
Crisis like you just went through with
digital disruption rediscovering let's
say that sense of who identity of who
you think I think it was there and that
was why we had you know person had gone
from this conglomerate to making this
you know it's why we chose education
rather than the Ft or penguin that we
were going to focus on because we
thought that what we could fundamentally
focus on right but I don't think um it's
not enough I would argue it's it's it's
a prerequisite but it's not enough
because the risk is if as a COO all
you're talking about is you know the
light on the hill in five or 10 years
time and the big ground Vision right
that can actually be quite disempowering
for people working in you know the
company every day because okay John's
saying we got to you know there we're
going through this massive digital
transformation all be right in 5 to 10
years time but what does this mean for
me today tomorrow and that's why I think
sort of you know change is disempowering
when it seems vague and abstract and far
away and change is empowering if you
could can make it as immediate and as
concrete as you possibly can the people
who were most constantly highly rated
and regarded to provide the sense of
direction and the ballast and to tell it
as it really were was actually that
middle layer of management and I
realized they weren't the permafrost
they were the shock absorbers because
they were having to take the Grand
Vision of the big change and translate
it in what that meant for people on a
daily basis and they were having to
absorb All The Angst and uncertainty and
people seeing colleagues across who were
losing their jobs because of the big
changes and Transformations they were
having to make so I realized fundamental
to resilience was actually spending as
much time with those people as I
possibly could standing in their shoes
listening to them and acknowledging when
things were going wrong that it was a
sign of strength to change rather than
not to and that's a really and so this
importance about standing in the shoes
of others and really understand in that
I think it's fundamental middle
management are the ambassadors of change
at the end of the day and they are very
very important in you know not only
communicating but in driving the change
that my question is did you identify
specific members of middle management
that you want to use and utilize and did
you train them did you give them any
messages to so that they can be the
ambassadors of top management to the
rest of I would make sure whenever I was
traveling anywhere in the world I would
spend serious amount of time with with
the middle management groups we also
went for you know the the trendy way of
describing it is is radical
transparency but we would be much more
open if a big change was coming up
because I I think my experience is
making a big decision is the easy part
implementing that decision is the hard
part and the more you've given everybody
the context of the decision before it's
made yeah so the thing you all I think a
lot of um companies like Pearson that
have been around for a long time that
have been very successful it tends to be
quite a a differential environment and
people don't want to be seen as the
naysayer as the person who's sort of you
know so you get a lot of polite
resistance yes yeah and so what I became
to fear was the meeting after the
meeting you know the senior you know the
uh senior leadership team we'd made a
decision
and then everyone would go back to their
own teams and tell them what we decided
and then implementation would slow down
because suddenly oh well why have they
done that and why have they done that
and the worst thing that could happen
would say well well I agree with you but
you know John or the board have decided
so we've got to do it what you need to
do is get those objections up front
ahead of time so that by the time you're
sitting as a leadership team and having
that discussion you already have
understood and thought all that through
maybe one last thought uh John we know
again from academic research that what
makes people resilience is support uh
again from the change or die study the
10% of people who sustain their change
effort over the years were those that
when they went home they found support
from their family in in stop uh in
helping them to stop smoking helping
them to stop drinking helping them to
start exercise and so on so I'm just
wondering you know within Pearson to
what extent did you think about
providing the organizational support
that your people will need if they're
going to go through this terent period
over a long period of time I think
people often talk about resilience as if
like some people are resilient and
others are not resilient or organized I
don't think of it like that I think I
think of resilience as a resource that
we draw upon times that we need it and
then we replenish and rebuild when the
pressure's off a little bit and what I
found in the organization is you would
find people who would be unbelievably
resilient through some really hard
difficult
times and then something relatively
minor or trivial would happen and they
would struggle and what you realize then
is we've just push push them too hard
for too long and so thinking about how
you do take the time to rebuild and
replenish resilience I think is sort of
really important um and then I think
from my own personal perspective have to
say there were there were times in
person when I think I would have liked
it if people had complimented me on
anything other than my resilience you
know and I
couldn't worry about the fact that you
know for 20 years my predecessors the
industry had stuck up the price of
college textbooks twice a year massively
above the rate of inflation so we'd
created this huge secondary Market that
was now causing us so much problem or
that there was just Oodles of venture
capital cash going into edtech startups
that never had any chance of making a
profit but which you know caused those
huge disruption and challenges in the
short term what you had to focus on is
you know we have to shift from being
company that sells books to one that
delivers outcomes and if we help people
to achieve better results and outcomes
in their life then we will do well and
we will shift from selling a product to
being a business that survives on being
much more of a subscription and an
access driven business and to do that
we're going to have to massively take
the cost out of the business and we're
going to have to be have much more of a
learning culture so focus on the things
that are in your control than which you
can do and accept that there's a whole
load of other things over which you have
no control

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