Leadership, Optimism, and Addressing Global Crises with Local Focus: Interview with Blair Sheppard, Global Head of Strategy and Leadership for PWC
March 3, 2021
By Matt Miner, MBA, CFP®
Do you perceive challenges as you survey the landscape in your community, region, nation, or across the world? You’re in good company.
Blair Sheppard, Global Head of Strategy and Leadership for PWC, and former Dean of the Fuqua School of Business at Duke University, sees global problems and opportunities for local leadership.
Early in our conversation Blair told me he’s interested in these problems not for the sake of his own career of financial future, but because he loves his granddaughters; I appreciate this perspective.
Blair is a people-first leader, which always resonates with me. During my time at Fuqua, he emphasized that graduates of the school must be technically competent - without being technicians - and capable leaders - without being jerks! He’s continued to develop that philosophy in his role at PWC.
Key Takeaways
Find a place or problem you really care about, and then work on it.
Hold leaders to account: The only way to get good leadership is to ask it of people.
Beware of unintended consequences, even from your best work.
Blair asserts we’ve been preparing leaders the wrong way in business schools. He wants to develop leaders with a new set of skills held in tension. Future leaders should be tech-savvy humanists, high-integrity politicians, globally minded localists, humble heroes, traditional innovators, and strategic executors. Leaders will need the right training, and the right teams around them to aspire to these ideals.
Begin with what you can control and influence. This is my favorite take-away from our interview, and fits well with Steven Covey’s advice to focus our efforts on our circle of influence.
Step back, calibrate and begin to dream again. Life is short, so ask the questions, what do I really want to achieve and how am I going to make it happen?
Be consequential.
Don’t be envious.
Seek integration in work and life, because it’s all your time, and we’re not guaranteed any particular amount of it!
Modern life is lived in chapters, not as a vector. Manage each period as a platform to build forward-looking skills.
TRANSCRIPT
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[00:00:00] Matt Miner: Do you perceive big challenges as you survey the landscape in your community region, nation, or across the world? You're in good company. Blair Sheppard, global head of strategy and leadership for PWC and former dean of the Fuqua School of Business sees big problems but also opportunities for real leadership on a local scale to address these problems. Blair approaches global problems, not looking further down the road of his own career, but because he loves his granddaughters. What a terrific motivation. Blair's concern for people shines through in his words.
Whether you agree with every one of Blair's diagnoses and prescriptions or not, you'll benefit from the wisdom, compassion, and terrific stories and analogies that Blair uses in this interview. Today, we look at four global crises described by Blair and his team at PWC: wealth disparity, technological disruption, polarization of people, and declining trust in society's institutions. Demography and COVID-19 are accelerating these trends. Blair and I wrap up our time with a discussion of the MBA degree and a au courant model for career.
Hey, and welcome to the Work Pants Finance Podcast. I'm Matt Miner, your money guide, and Work Pants Finance is the show for MBAs, entrepreneurs, and other professionals who want their financial plan to work as hard as they do. Today's show is called "Leadership, optimism, and addressing global crises with local focus: Interview with Blair Sheppard, global head of strategy and leadership for PWC." You can read more at workpantsfinance.com/5.
[music]
Blair is a friend and former dean and professor at the Fuqua School of Business in Durham, North Carolina, where he's coming at you today. I'm here in North Raleigh, and Blair is now the global leader of strategy and leadership at PWC. We're here today to talk about his new book, which I've really enjoyed, consumed both as a paper copy and via audible this summer.
[00:02:05] Blair Sheppard: God bless you.
[00:02:06] Matt: [laughs] I know that you guys are going to enjoy our conversation. Blair, to kick us off, I guess I'd just ask if you would take a minute to walk us through a little bit of your history, and tell us what you're up to today.
[00:02:18] Blair: I'm a Fuquan from way back. I taught one year at McGill and then came to Fuqua. My entire career was essentially associated with Fuqua. We carved the exec ed business out, the custom business out and ran it as Fuqua corporate education for a long time, actually loved that job, could have stayed at it and then came back to be dean persuaded, "Duke, we need to build a campus in China," which for those of you who were around at the time, now it was controversial.
Got that off the ground, did my part in it, and then would've come back to teach, and I wasn't just ready to come back and teach yet, and so I'd looked at what you'd expect, dean or president of university, but actually got this offer from Dennis, now my former boss, to go run strategy and leadership for the network at PWC, which they had not had as a job before so it was to build it out in a way.
It was the elements of a CEO job that are fun, and I didn't have to make payroll, and so it was a cool little thing. And it's massive; we have 275,000 employees in 156 countries, and so it was an opportunity to try something new. It's been a lot of fun actually, Matt.
[00:03:29] Matt: It's just great to hear. I think building new things is definitely something that you've demonstrated a passion for just over the 12 or 13 years that I've had the chance to know you.
[00:03:38] Blair: Once or twice. They've been fun, though. They've been fun.
[00:03:41] Matt: This summer, I read your book Ten Years to Midnight, and my reaction to the book is that you've done a really excellent job diagnosing big problems. I think part of the reason at least that you wrote the book is because, like me, you find them very concerning. I wonder if you could just take a minute and walk us first fall through the Adapt framework and then I've got a few other follow-ups from there.
[00:04:03] Blair: Actually, I hadn't written in 20 years because I had been a regular professor who wrote and did what he was supposed to and then became an administrator and got pretty preoccupied with some of the things they were doing in the school so I never really wrote much. It's the concern I have about these issues that I decided to write again. I'm really worried, Matt.
I think we have a potentially wonderful future but only if we get our arms around it and go fast. Adapt essentially is a summary of some work we did. What happened is, in 2016, we were looking at our strategy and saying as it-- "The world's gotten gritty nasty. Is it still relevant?" So we did what you think of as loose social anthropology, interviewed people all over the world.
It ended up being about 60 countries where government leaders, our clients in the private sector, civil society leaders, just people of coffee shops. The same worries everywhere in the world. This was amazing to me, all levels of government, all levels of society everywhere in the world, and so the quick summary is the first word is an academic one, but it allowed us to say Adapt as the mnemonic, an asymmetry. What we mean by that is disparity, just the disparity across generations, across individuals, and across regions.
Disruption-- and we mean something slightly different here from what most people think of. What we mean is the unintended negative consequences of massive technology. We can talk, come back to that age. You think of it as a multiplier so a lot of people would say, "There's a bunch of old people in my country where we have the capacity to invent and others." Like in Nigeria would say, "We've got all these kids who are going to have no jobs."
Age is a multiplier of those first two.
Then the last story, you can think of the consequences, which is increased polarization in society, between nations, within nations, and the inability to come together and agree on things, and then finally you put all that together. We don't trust leaders or institutions very much anymore. In a way, that one worried me the most, Matt, because--
The others are huge as we'll talk about, but the reason that worry to me is that institutions are for people, what water is for fish. And so if we don't trust the legal system, we don't trust the education so we trust the tax system, the financial system, the political system, we don't trust the things that are just there to let us get on with life, it's hard to get on with life, so those are the facts.
[00:06:25] Matt: Like water for fish, institutions are the last thing you notice until you need them.
[00:06:33] Blair: Exactly, and then it's too late almost, because it's only when they're really broken that you know they're broken, and then there's a lot of work to repair them. The problem in part is if you believe [unintelligible 00:06:43] data, which I do, people think the system is not working for them, 18% of the people in the world believe the system is working for them. The rest are either very unsure or think it's working against them. Half the people in the world thinks the system is working against them, that's a bad thing, so it's a real worry.
[00:07:02] Matt: A lot of people probably listening to this show will be learning about your book for the first time. How do you think that they should begin to think about these things?
[00:07:14] Blair: The reason we wrote the book was really two pieces. The first is wanted people to understand that the crises we described in the book have a very short time period. If you think about human history to get solved, which is why they titled Ten Years to Midnight. What was interesting is they're all a decade. They're all basically if you don't fix them in the next decade, we're really in trouble and that they form a system. You can't fix one without thinking about the others.
One of the dangers we have right now in our political discourse, for example, is we'll talk about one of the issues, but as if it's independent from the others, and you got to do them together. The final one is to suggest the kind of rethink we have to do to begin solving them, and so I hope they read them from two standpoints. One of them is as a citizen of the world or as a member of a business or an institution and as people who are either leaders or hold leaders to account and have both those lenses.
[00:08:06] Matt: My Fuqua '09 peers are now mostly managers, directors. Some of them are senior executives with firms at this point. I wonder how you hope that people at that level of organizations or about 40 years of age, 20 years deep into their career, will engage with this. What is the way to do something about the problems that you've identified? I really agree with the problems. I'm perplexed about the solutions.
[00:08:37] Blair: [chuckles] It's a great question because part of the issue is you could say, "Blair, you're writing to leaders and you're writing to citizens," and we're caught in the middle of those two. Most of your colleagues or you could think of as middle managers, senior, middle managers and in a sense, you're in the vice in a way.
[00:08:55] Matt: It feels like that sometimes.
[00:08:57] Blair: Three thoughts if I could. One is find a place you really care about or a problem you really care about and work on it, make the place better or make or work on the problem. Become a citizen in a really serious way, and part of the point we're making a book is because the biggest disparity issue in the world is between places. It's not between people. It's actually between regions and places and cities and towns. Find a city town you love and make it better.
Second one is actually lead where you can. I think that the problems in the book are so pervasive that we need a billion points of light to steal a former President's rephrase it a bit, and everyone on this call has enough authority. There are things they have influence over.
I think the final one is really hold their leaders to account. I think we need better leadership than we have. The only way to get it is to ask it of people so prepare them better, frame the questions for them better. Put things in front of them more. If you're not a leader, just demand your leaders to be better, and help them be better. Control the things you can control and influence the ones you can't control.
[00:10:12] Matt: I think that's the only framing that is helpful in terms of doing anything is just to focus on what you can control. The fact that these problems are at massive scale doesn't mean that we should just throw up our hands, right? That's part of what you're trying to say in the book.
[00:10:30] Blair: Right. If you take this issue of climate as an example, let me just say this as an example. The point we're making related to climate is essentially, it's an unintended side effect of the industrial revolution. When the people who were the architects of the industrial revolution created it, their goal was just to make life better, products cheaper, life better, let people live longer, and they achieved it. Essentially, you could think about the industrial revolution is creating liberty really for a huge number of people in the world.
It was incredibly good, but it had several side effects in short term. In the long term, the one side effect that we have never dealt with is CO2 as an offshoot of the energy system that creates it. If you go back and say, "So what do we have to do to fix that problem?" We got to change the way we grow things and race things. We got to change the way we transport things. We got to change the way we build things. We got to change the way we manufacture things. We got to change the way we vacation even.
In part, every one of us has to adjust our corporation to actually adapt to those circumstances and deal with the risks associated with it, but also our own lifestyles. Now, I think the interesting thing is our lifestyles can be better. I'll confess to this, I'm a meat lover. It turns out that actually there's ways of grazing cattle that don't cause the harm that you have in the way we now graze cattle. If I insist on continuing to eat meat, much to my children's chagrin, I have to enforce the agriculture system to raise cattle the right way. Actually, they don't create net methane in the atmosphere. It's doable, and so every one of us touches it because it's every one of our lifestyles that causes the problem.
[00:12:17] Matt: I'll get you one better though. We've got an archery deer in the freezer already this season. We're eating on that.
[laughter]
[00:12:23] Blair: Actually, here's the important thing. Deer raised in the forest actually do not contribute that much to climate change.
[00:12:30] Matt: No, and they're going to be there anyway. [laughs]
[00:12:33] Blair: I like your answer a lot, yes. [laughs]
[00:12:37] Matt: Good deal. Blair, I wanted to ask writing a book is a huge effort. It's a big undertaking. You mentioned that you hadn't done it for a period of time. What were your personal goals for the book? What did you want to get out of it yourself or in your career?
[00:12:51] Blair: Actually, I'm at a point in my career I don't really care my career anymore, so the thing is-- seriously, I'm at a point where I can retire and say, "I feel okay about what I did." It isn't about career. It's actually-- so I have two granddaughters. It's about their future, really. There's a thing in this, which is, when I was at Fuqua, and when I was the head of Duke Corporate Education, I was pretty high profile, and I intentionally went to be invisible and PWC to help other people be successful.
My job was to have the line leaders of that organization be better leaders and have a better strategy and for the firm itself to be more successful but not really be up-front and center. That changed, and the reason it changed is because I actually think the things the book is about are unbelievably urgent, and it's up to me to do something about it. If I can be a voice, I'm going to be a voice. The biggest change was actually a shift in focus to be both internal and external because it's too important to just stay internal.
Therefore, we're doing this podcast. I would've said no three years ago, and that's not a career shift, it's actually the objective shift. This is the thing that's important about why did we write the book? We found these worries, and we started researching them. What we discovered is for every one of the worries, there was a decade before it got really dark. They were things where we had to completely rethink our approach. We had to put it in place we had to largely solve it, or it was too late.
In the kinds of things we're talking about, it usually takes hundreds of years to make the change. We need to do it in 10. I said, "If I really believe that, I’ve got to start talking about it, I’ve got to come out and do this." Then, we had to focus a lot on what can we do, and so where I'm going to go having laid the case for we've got Ten Years to Midnight, we now need to say, "What does it look like to find dawn?" That's what we're spending our time on now.
[00:14:53] Matt: I'm happy to be in this conversation with you on this important topic and also just to talk about your book with my listeners. Thanks for that. What do you say when someone says-- in every generation, people say the world is about to fall apart, and when it comes to investing, I always tell my clients that the foremost expensive words are, "This time it's different."
On the one hand, it's different every time. COVID is different than the financial crisis, and Vietnam was different than World War II. On the other hand, even if the challenges that you identify in the Adapt framework are right on point, tell us why you believe they're worthy of special attention right now. Maybe this gets to your timeframe question.
[00:15:32] Blair: Yes. I think Malthus is probably the person you accuse of being most wrong. Are we being Malthusian? Let me give you three examples why the 10 years and then why I think they are things we need to pay attention to. I think an important point is that part of the reason they didn't become problems is that people are resilient. We actually respond to the challenges, so the goal of the book is to make the book wrong. I hope it is in 10 years, I actually hope it's 8 years to dawn, but let's start with the prosperity problem.
What we mean by the prosperity problem is that across the lifespan, people have a circumstance where their future looks less attractive than mine did when I was at that point in life. People coming out are coming out with massive debt. They're coming out into a job market that doesn't look attractive. They're coming out with what's going to be a huge tax burden for the reason I'll describe in a minute. On the opposite end of that, in the private sector, 92% of people are defined contribution in the United States.
Let's stay with the United States. Of that group, more than half that are approaching retirement are going to retire essentially broke. Now it turns out because they don't have a pension and because their social security system's rickety anyway, we have people who have lived wonderful lifestyles retiring essentially with no assets saved to afford their retirement. That's a train wreck. Now it turns out I'm describing people who are between 55 and 65. If they look at all like the pattern of the past where they would retire somewhere over 60, between 65 and 70-- average retirement year's usually about 64, right?
Then, they actually got 10 years to fix that problem. That's a biggie, so now that's the smallest problem I'm going to describe. Second one, take the opposite end, the kids coming out. In Africa, there are 28 countries with a median age under 20. Total population of those countries is 885 million, which means we have a decade to find education in a job for half a billion people. Because the China solution, which is, "Let's do low cost labor and environmental arbitrage," as a way to manufacture goods or provide services, that's not available anymore.
For two reasons, we're not buying, we're localizing. We're not actually-- we're not increasing our spend outside the United States, and Europe, same thing. The second piece is they're competing with robots, AI who work smarter, cheaper, faster every year, and don't get sick and don't go to sleep.
The problem is, we need to invent an entire new view of economic development for half a billion kids, or they're not going to have something to do in 10 years.
Then the final one, if you take climate, which is the unintended consequence, death revolution, what we haven't done is we thought about climate, it's thought about the biological feedback loops. Let's look at what happens when we burn most of the forest down and we kill the coral, and then we release the methane from the Canadian and Russian Tundra.
You kill the lungs, and you're pumping something that's 10 to 30 times more heat-capturing than CO2 into the atmosphere. That's not a pretty picture. That happens in 10 years if we don't get the temperature under control. Actually, after the Paris Accords, our carbon production, CO2 equivalent production, went up again. It didn't go down, it went up again. It's 10 years, and at least two of the things I would describe as crises which are institutional challenges in climate I think are existential Matt.
[00:19:17] Matt: I guess that speaks to the urgency and the importance of what you're seeking to communicate in the book, so I appreciate that, Blair. On a more hopeful note, one of the points in the book that I particularly enjoyed-- and I don't remember what this acronym stood for so you can bring us up to speed, but was GAME. I want to ask you. First, for us on the show, can you say in a sentence or two what that's about, and then can you identify a similar context in the US where you see something working in the way that you saw that working there?
[00:09:47] Blair: The point of GAME is we're using it as an illustration of doing things massively and fast. There's two premises about the solutions. One of them is we have to change the way our systems work and how we think about them. But the other one is there's a few things that are so urgent we got to do right away. I think one of the things we have to do around the world is massive creation of small business and new jobs.
GAME is the Global Alliance for Massive Entrepreneurship. That's what it stands for. It was started by a guy who was a very successful businessman, and he ran one of the engine companies in India. Then, he ran Microsoft India. Then, he was a chairman of the second largest bank.
One day he just woke up and said, "Actually, this doesn't matter as much as the fact that we're going to have so many Indians coming out with no job, we've got to create business."
His goal is to create 10 million successful businesses-- successful, not startups, but successful businesses in a decade, half of them ran by women. I got to tell you, that's an ambitious goal. What's cool about it is it's this wonderful architecture at a national level, but then it's very, very local in its implementation. The next best example of that, not in the US actually, is probably the new UN development platform, which is trying to get public-private money invested in nations around the world.
If you think about the most recent example, the United States is something that was massive, faster as a response to COVID. Now it's not clear it was good. If I had said to you six months ago, "We're going to shut the US economy down overnight," you would have taken that bet. You would have told me, "Blair, you're wrong." It wouldn't matter what odds I gave you to taking that bet. Well, we did. I think the thing that we've discovered, if there's a silver lining to COVID, it's that we've learned we can do things massively and fast.
We just have to apply it to the right problems now. I can think of local examples, but you said, "What's happening at a national level?" I'll give you an interesting one, which is the way the NBA responded to COVID, is an example of a very quick decision that actually affected every other sport, because he actually took that decision. All the other sports had no choice but to do what he did. It was a case of a decision causing a massive fast response. It was probably the right response.
[00:22:07] Matt: That's interesting. I hadn't thought of that one exactly. I bet there are some PhD dissertations that can be written about how that got-- [laughs] [crosstalk]
[00:22:17] Blair: Exactly.
[00:22:18] Matt: One of the things that came immediately to my mind as I worked through this book was that immigration is an important variable related to many of the challenges that you highlight. On the one hand, I feel like immigration of all types is more out of fashion now than it has been at any time in recent history.
On the other hand, you alluded to this in talking about age earlier on, the need to fund social insurance programs like Medicare and social security may make immigration look like a great deal, especially here in the United States. I wonder if you could talk about how you think immigration may play into the Adapt framework.
[00:22:53] Blair: It's a really good question. We actually don't speak that much immigration in the book. I think the places that need it most are the older countries of the world. We're not the oldest by the way. Germany is the oldest country. Greece will soon pass it. Italy will soon pass it. The Caucuses will soon pass it, too. They need infusion of youth. The good news for them is there are going to be a lot of kids from Africa coming North, I think actually, so they'll get it. It's an interesting one for me to answer because I'm actually a Canadian originally.
I'm an immigrant, I'm a first-generation immigrant. My wife is American, goes way back, they came from Ireland before Ireland was a country, I think. I think the thing to recognize is that because the damage of Adapt has been differential around the world, if you don't help people fix it at home, they're coming, like it or not. If you take the Africa example I gave you, if we don't help Africa create massive educational uplift and work for the kids I'm describing, they have no choice but to go across the Mediterranean, go through the Lavant, they have no choice.
If we don't help Latin America and South America deal with the challenges they're grappling with now as a result of the issues in Adapt, they're going to come North, and no border can stop that much momentum. I think the other piece is, if you look at Silicon Valley and it's massive success, a huge number of people who started those companies were immigrants.
We owe the success of this country to people who came to work really hard and build a living for themselves. I think it's a no-brainer, but you don't want to have so much that it overwhelms the system. I think that's the risk that countries are in such dire straits that too many come, and the receiving countries can't handle them.
[00:24:47] Matt: Or the political backlash is so severe that something really terrible happens.
[00:24:51] Blair: Think about Hungary. Hungary is such a small country, has been overwhelmed with immigrants. The worry that is driving much of what you're seeing in Hungary is a view that they're going to lose their entire identity because there's going to be no Hungarians left on a proportional basis. That's an expected, understandable response. If we were thoughtful and managed it better and had immigration control because people didn't have to come, you wouldn't have that kind of reaction.
[music]
[00:25:20] Matt: Take action on a human scale by giving your financial plan the attention it deserves, go to workpantsfinance.com/start to schedule time with me and talk about your plan.
[music]
My favorite part of the entire book is the balancing paradoxes. If you can give examples of how those paradoxes are actionable to mid-level and senior-level people in business and government, type of folks you've been talking about.
[00:25:50] Blair: Happy to do that. It's actually my favorite part of the book, too, by the way. I'm glad you like it. The basic premise is that we've been preparing leaders the wrong way. It isn't the wrong way. They were the right leaders for their time, but we're in different times so we need a different kind of leader. The fundamental challenge is that people have to be able to do things that feel inherently contradictory.
For the first couple, let's use COVID as the illustration. What would be good is for everyone who's listening to think about the person they most admire in terms of how they responded to the challenges, and I'm willing to bet, they had the following characteristics. First one is they were humble enough to recognize they didn't know the answer to the problem and that they needed to seek broad input.
They didn't just go to epidemiologists. They didn't just go to health officials. They went to public health officials epidemiologists, economists, business people, leaders in civil society, and they got broad input related to what's the range of issues we have to consider as we make a decision. When they did that, they discovered there was no answer, no obvious right answer, but they knew that doing nothing was worse than taking action.
They had the heroism to decide. They had the humility to actually know they didn't know the heroism to decide, and then again the humility to actually go back and say, "I might be wrong. Let's go see how we're doing, and then assess that, and then make mid-course changes." It's humility and heroism in the same person. That's the first paradox.
If you think about a middle manager, many of us are at organizations where the projects we're working on have many constituents who don't agree with each other, have different starting assumptions, which you got to bring them together, where actually you don't know the answer, but you're afraid of showing that, but you got to have the ability to bring them in, get a point of view.
What you're going to discover, is there's no obvious solution, but you've got to have the courage to act because you need to take the decision, but then the humility to recognize that you're probably wrong and you need to course-correct. I think that's all of us have to do that every day now in life, actually. The second one is-- the really interesting thing about COVID is with both a very important technical problem and a very difficult human systems problem.
What you needed to do was be technically capable and able to assess data, evidence, scientific argument, but then you had to think about, "How do I apply that in a world where people are going to decide whether to wear a mask or not, whether to distance or not, whether to shut down, and how is it going to affect the economy?" You need someone who was a sophisticated humanist understood how people and people's systems work, but really deeply technical capable.
Think about this in work. How many people do you know are double E's and computer science grads who also studied deeply psychology, sociology and political science? Not very many. How many people who study psychology, sociology, political science actually were double E's? What we have to do, is as leaders, figure out how to get good at the thing we're not good at. If you're a great humanist, you better learn tech.
If you're a great technologist, you better learn people, because the risk of being a technologist is that you harm people unintentionally, which is one of the arguments we make in the book, and the risk of being a humanist that doesn't know tech is become irrelevant. Those are two examples that-- Then, the other four are globally-minded localists.
To me, this is in a way the most interesting one that actually the solution to many of the problems we described in the book are local first. It isn't that we're anti-global, because you'd say, "Blair, you're the last person in the world to be anti-global given what you've done in your life. You were the architect of Gamba and all that." I'm not rejecting globalism.
What I'm saying is the following thing. It makes no sense to put things together that are lousy, and so build thriving local economies before you worry about globalizing. If you think about the people who were really good again in COVID, they understood what was happening on the ground in a moment in their own country or their own city or their own town, but they were aware of what was going on in the larger world. I think all of us have to do that better today.
Then, the other three really quickly are essentially high-integrity politicians is small “p” which is people can bring people together, not people who run for office, but can retain their integrity in that process. Strategic executer, people who actually can have a vision but can make it happen.
Let's use COVID again. I think the most admirable people had really good insight and a really good strategy, but they delivered every day, every moment, every second. Then you revisited division, but they delivered it. They had big ideas and big constructs, but they actually were able to make them happen in real time. I'm missing one that, what is it?
[00:30:45] Matt: Yes, let's see. I'm looking through my list here. Is it strategic-- no, strategic executive you just did. Traditional innovator?
[00:30:49] Blair: Traditional innovator, this is really important, I shouldn't have missed it. The point in this one is if you think about the argument I was making, the institutions are at risk and businesses are at risk, you have to go back to your core purpose and your core ideas, the things that are central to who you are. Keep those and then innovate like crazy around them, and actually use the core premise to drive the innovation.
Think about policing today, right? I think if you say, "What's the way to think about working on the police force?" One of the answers is, "Why are we there in the first place, and what are the fundamental principles that are really critical to public safety?" Make it very, very few, very few, and then step back and say, "Okay, what do we have to look like in today's world with all the things we see we're doing that are unintentional or intentional and actually completely rethink the system?" What happens when you go back to the core or the original traditions of the place is it forces you to ask very honest questions of yourself.
This is the example used the book, it's Marjorie Pearson who essentially saved the economists in the financial times. She went back and asked what makes them important and then preserved that and then forced that to ask the question, "What are all the other things I have to do to keep this thing alive in today's world?" It's innovate around tradition, and it usually, if I'm a traditional, so I hate innovation. If I'm innovator, I break it first, and these are those as good.
[00:32:19] Matt: Well, I appreciate you walking us through those. If that was my favorite part of the book, the favorite question that I've been looking forward to asking you actually came from your business of giving podcast interview. In that you said you were part of training MBAs, presumably including me, some wrong ways of leading and doing business.
In fact, you touched on this just a minute ago in one of your responses. Just so I can fix my own education, I wonder if you could, if you could please expand on what's wrong with B-School education as it's existed up until now and what it should be instead, and are those changes coming?
[00:32:50] Blair: I don't know that it was wrong for the times, by the way. If you think about it, business schools became the thing right after the second world war, and just as we were trying to integrate China, India, and other massive countries into a market-based economy. If you say, "What do you need to do for that to occur?" First of all, you need huge growth. You need to adopt technology because the world doesn't work unless you have a technologically interconnected world, and you probably need some pretty focused measures of success, right?
What we taught in business school basically as globalization is good, global trade is good and globalization is uniformly good. Technology is the answer to most of our operational challenges, and that GDP and shareholder value are the things you should be measuring, the only things that matter. Now, it turns out, for the world I was describing, those were good answers because they drove what we needed at the time. The problem is they're incomplete, Matt.
If you apply something and complete again and again, it shows its dark side. Two examples of what I mean. The reason we have disparity is the combined effect of globalization and technology. We took work that was attractive work, blue collar work in Detroit and other places like that, moved it to other countries. We took other work and had it done by robots and AI. We eliminated from the workforce, the income stream, good paying jobs at $80,000, $100,000 a year, and replaced them with service jobs that were way less high-paying.
We moved it off shore, and we replaced it with technology. Because we measured GDP, we didn't notice it, because we said the country's doing great.
Because we focus on shareholder value, it didn't matter that we were destroying work, destroying income really is the way to say it. If we'd had a measure that said, "Look, GDP is important, but can we look at dispersion a little bit and inclusiveness as a measure? Shareholder value is important, but can we worry about what it's doing to our customers and our employees and the regions we're part of, the cities we're part of."
Globalization's great, but let's make sure we include as many people as we can in the benefits of globalization. Technology is great, but let's worry about its downside. What we need is a more sophisticated degree that actually as the compliment to the core ideas we taught you because I'm willing to bet. If I had stood up 20 years ago and said, "Globalization is really stupid, technology causes massive harm, and how can you possibly use GDP and shareholder value as measures," I would have been fired as a professor.
[00:35:32] Matt: Certainly, in the B-School crowd, that would not have been a mainstream viewpoint. Even within the window of consideration.
[00:35:41] Blair: Exactly. The answer is you learned half of it, you got to learn the other half.
[00:35:45] Matt: Well, and I'll just comment. Over the course of years but the one most recently-- I just finished a book by an Ohio State professor called Promised Land. His name is David Stevin. That's about what went on with the middle-class from, I think he dates it like '28 to '68 or '29 to '68.
But then, I also think of books that I've read over the years, Charles Murray's Coming Apart. He's a controversial guy, but I love his data. Then Hillbilly Elegy by JD Vance is a more of a human-scale or family-scale picture of some of these things. We got people documenting it. You're talking about doing something about it. [laughs]
[00:36:20] Blair: Exactly. I think the important point, though, is that when we say local first, I'm not saying don't globalize. I'm saying build thriving economy. When we say, can we worry about the unintended consequences of technology?
I'll give you two examples. If you read starting ideas behind social media companies, they thought they were bringing democracy. They were bringing people together and helping democracy. They really did, and they never anticipated they will be part of the cause was 16-year-old males causing committing suicide at accelerated rate and girls self-harm. It was never intended. The thing is, we just didn't think enough about what it might do when we designed it and therefore mitigate the negative consequences, just like the industrial revolution, didn't think about CO2 in the air. We'd need to be more sophisticated than we were before. It's going to be a tougher degree to get, I think, when we do it next.
[00:37:13] Matt: Which is easy to say and hard to do.
[00:37:17] Blair: Exactly, yes.
[00:37:18] Matt: Well, one of the things I've been looking forward to asking you as well, Fuqua's global expansion was a big theme during my time at Fuqua. I still recall the huge assembly with dancers from all over the world and a lot of excitement around that. I wanted to ask, how do you reflect on that time 10 years later, and with those 10 or 12 years behind you, what, if anything, would you do differently at Fuqua?
[00:37:40] Blair: That's really good question. I'm still a devout global interdependence guy. The reason in part is that the water shared in the world, the atmosphere shared in the world, all the evidence shows that global trade increases wealth. If you look at COVID, it was a global problem. The problem is that we were insufficiently cognizant of the side effects, and shame on us, right?
If you think about it, you think about the NCI person. With the idea was that a person would be a globalist and be a citizen of nowhere and be able to run the world interdependently. We weren't quite that way. We were still in American business school trying to get our students to be able to lead in a global environment. I think the thing we missed-- here's the analogy. I swam in college.
Imagine the world works such that we train swimmers so that there are only two or three people in the world who were world-class that were so good, that they are the only ones who could possibly get to the Olympics. It'd be a pretty uninteresting Olympics. That's sort of what's happening today. It turned out one of the tech companies two weeks ago traded for the Footsie 100 plus $500 billion.
That's concentration of the way I was describing. We're getting a few winners, a few massive winners, and it's both company and city and region. If you say, "How do you solve that?" The way you solve it is essentially you'd build swim clubs at a local level, and you'd have them compete within the city or the town and then the county and then the state and then the country.
Then, eventually some would go internationally. We do that all over the world. What I'm essentially saying is what we missed is what a lot of sports clubs understand and music understand, which is you got to have good local stuff going on or there's nothing to build on. I think we overemphasize one half of the problem and underemphasize the other half. I could be accused of that. You could say, "Blair, you're a major part of the problem," and that's a fair critique.
[00:39:53] Matt: But we're all learning as we go along, and that must include even you.
[00:39:58] Blair: That's the book, exactly. [laughs]
[00:40:01] Matt: Blair, this is a show about life and money. One of the things that I like to ask all my guests is what you love about where you are today with your life, work, and money.
[00:40:12] Blair: Let me start first with money, which is I'm in a point in life where I've been lucky enough, and we put enough aside that I'm not all that worried about, "Are we going to have a decent future?" The nice thing about that is you don't have to ask that question anymore. I'm not working to make money now, which is a wonderful position to be in now. It turns out, some awful thing happens in world I might change my mind but if the savings we put aside are in that kind of trouble, the world's in a much bigger problem and may not be able to live on return.
It's really not about life. Another thing and in a sense, I had this amazing affiliation, and then I had another amazing affiliation, and because of that, I'm pretty proud of what I've been able to achieve in my professional life. Fuqua was really good to be in PWC was really good to me. If I look back on my resume, I can say, "It's pretty good. There's things I would have done differently, maybe, but pretty good."
Now, it's actually about what matters in the world and how can I help. The reason with PWC is that I think we are in a position to really help deal with the issues that are central to the book and actually have both an opportunity and obligation. The thing I've learned is one person can do a lot, 175,000 can do a lot more, and 275,000 can do a lot more. It's humbling to know you're part of a system, but there's a pretty good coach at Duke that says, "When you're really a human being is when you're part of something bigger than yourself."
Then the final point is, I'm really lucky that one of my children-- his partner and grandkids live in Durham, and our other ones come back at Fuqua to do the accelerated MBA. We are close as a family in a way that's just wonderful. I'm happy. I hope I live a lot longer just to experience what I'm now doing.
[00:42:09] Matt: I love it. I appreciate you sharing that. It's wonderful to have someone with your experience on the show. One of the things that I'd like to ask is what general career and life advice do you have for folks who are maybe about 20 or 25 years behind you in their program?
[00:42:29] Blair: Well, as you remember, when you were in the program, one of the things I was really worried about is be consequential.
[00:42:34] Matt: Leaders have consequences.
[00:42:35] Blair: Exactly. I'm glad to have that phrase down. If there was ever a time we needed people to try to be consequentialist now, one of the things that happens when you're at the point in life you're at, Matt, is you've got a mortgage, you've got kids, you've got a career you're working on. Part of what occurs is, you hunker down, and you just make progress in life because those things matter a lot. I think the thing that I hope people do now is step back and calibrate.
I think this is one of the blessings of COVID. There are very few, but this is one of the blessings of-- calibrate what really matters and begin to dream again and say, "Life isn't that long, what do I really want to achieve and how am I going to make it happen and be consequential?" The second piece is, don't be envious. One of the challenges at this stage in life is that you're fighting so hard to be successful that you can look at others and say, "I wish I had that."
To me, one of the most important things at the stage in life you're at is be happy with what you have, and make it as good as it can possibly be. If it's not what you want, go do something else, but don't blame it on someone who sits beside you. It's your own choice. Then, I think the final point is, it's really hard, increasingly hard for people to find balance in life. COVID, just think about the pressure it's put on all of you, and identify with that because I was a surrogate parent for a three-year-old and a four-year-old.
It put massive pressure on people to try to keep balance at a time when it was really hard. I think that the advice there is find ways to integrate the two as much as you can. It's not a trade-off, and when it's over, the things that you remember are the things that you're really proud of having done and how you help the people that are close to you. Everything else falls away. You remember this, I use this analogy, which is if you're 90 years old, and your favorite great granddaughter sat on your knee, how would you feel about the life you conducted? Ask that question all the time.
[00:44:47] Matt: I appreciate that. Blair, with that advice for other folks, what's a piece of advice that you have benefited from in your life?
[00:44:54] Blair: [chuckles] This is an embarrassing story, by the way, Matt, I'm sorry.
[00:44:58] Matt: Okay, well, good. I'm glad we got to it.
[00:45:00] Blair: When I was in college, my first year in college, and I took an Honors Physics, and I was really, really, really good. I actually had perfect in two classes. In the others, you don't want to know what my grade was. I stepped back and said, "You don't want to be here, Blair, what are you going to do?" I went to go work in a steel mill and it allowed me to buy a TR4, which is the coolest car I've ever had.
It was a lot of fun, but there's this guy I work with who was a little older than you probably-- I thought it was an old man at the time, a little older than you, and we would go out every Friday night after work and just have a drink before he went home and I went home. In January of that year, he just stopped, put his beer down, slammed it down and said, "Blair, I'm tired of this. Quit talking about what's wrong with the education system or go back and fix it. Go back and become a PhD and get in the system, and fix it, or else just shut up. I don't want to hear from you ever again."
Essentially, his prodding was you care about something, go do something about it. Don't sit on the sidelines, don't carp. I went back to him 20 years after. It was when I was at Fuqua, and I think I was assistant dean or senior associate dean at a time. I described to him what I was doing. He said, "Blair, I'm a little worried you forgot why you went back," and his chide was I was focused on achieving in the academy that I had forgotten that actually I care that the academy could do better, and he gave me a kick in the pants twice and two best kick in the pants I ever got.
[00:46:31] Matt: That's a great story. Wisdom is where you find it, and I'm glad he spoke up.
[00:46:36] Blair: Yes, me too.
[00:46:37] Matt: Blair, besides your own book, which you've probably had enough of for a while, what are you reading right now?
[00:46:43] Blair: I've gone back to read the author of Drawdown, Paul Hawken. It's a great book, by the way, if you get a chance. But essentially, what he does is describe all the things we need to do to actually deal with climate effects. Then the other one I'm reading is Caste, which is a great book. It's a description of what occurred in the United States for its first couple 100 years.
It was essentially the equivalent and probably worse than what happens in India in the caste system and that actually, we're living with the consequences of that and that if you think about Black Lives Matter, you've got to think about it from a standpoint of caste. It's a fantastic book, and it was interesting because I think of myself as I'm a Canadian, I'm an immigrant. I'm a Canadian, lived in a town where the Underground Railroad actually finished.
They would get across the Niagara River and live in my town. I was full of myself always, and if you read the book, it's an interesting thing, because basically, her point is you bought the house, you may not have been responsible for building the house, but you bought it, and therefore you own it. Then she walks through all the ways in which the house was structured to create intentional disadvantage for a portion of the American population that we need to undo that damage. It's a brilliant book.
[00:48:00] Matt: All right, I appreciate you sharing both of those. As we get to the end of our time here, is there anything I haven't asked or any remaining comments you'd like to make?
[00:48:08] Blair: What one interesting issue for me is, how do you use the university as an analogy for the challenges were grappling with? Because I don't assume that everyone's on this as a Fuqua grad, but I assume that everyone on this is an MBA or graduate of university somewhere, and every university is in trouble right now. International students aren't coming because they can't, and therefore they don't have the revenue stream they need. They're not getting the money from the housing programs and cafeteria programs in school.
A lot of people are taking a year off as freshmen and therefore lacking new students, and they're not creating the same quality of educational experience because kids are online. If you think about what would it take for universities to respond to that problem in a way that would maximally benefit the students coming in to the societies in which universities operate? It's a great mechanism to think through all the issues in the book.
If you're trying to figure, "How do I make sense of what Blair's talking about?" Find a school you love, and think about how it's in trouble and how would you help to get it out of trouble. All the issues are pressing on universities in an interesting way. The other one is, the MBA itself has come under some challenge and criticism.
I think the thing we need to recognize is that the premise of stopping in the middle of your career and retooling so you can be better at what you're trying to do, both for yourself and for whoever you care about, but also be more useful in society is actually something we got to do more of, not less of. I think in a way, the attack on the MBA is fair, related to things I was saying, "We are teaching the right things," but we need more schools like that, and we probably need more degrees.
I think people should not think about their MBA as their terminal degree. They should think about it as their one-decade or two-decade degree and then go and get another one because we're going to need you again and again, and so I admire the people who are going back to get an MBA now at this time because they're retooling when we need them to, so be proud of your MBA. I guess that's the other thing I'd say.
[00:50:20] Matt: I appreciate that. I can relate to that doubly; both having done the MBA five years in on a traditional path and then having switched to financial advice after 10 years of post-MBA career. It's both rewarding and challenging, but it's what gets you closer to, just like you said, helping the people you care about. For me now, that's essentially family, friends, and clients. [laughs]
[00:50:45] Blair: Matt, there's actually one thing that I think is important to pick up on what you just said is, I think what we're going to do in the future is live our life in chapters, not in a vector. I was an assistant professor, associate professor, professor, senior associate dean, and dean kind of, right? I don't think that's how life will be lived in the future. I think it will be, I do something really interesting for 10 years, and then I shift to do something fairly different for 10 years, and I shift do something fairly new after 10 years. There's still a pattern in it, which is you.
You're still you but you should think about managing each of those periods as a platform where you're building forward-looking skills and have a lot of options on the back end so you can then dive to the next platform and then the next platform, then the next platform. Life is a series of jumps from chapter to chapter to chapter, and I think you're in your third chapter now, and so I look forward to seeing what your fourth, fifth, and sixth look like.
[00:51:38] Matt: I look forward to sharing them with you. Maybe a podcast will still be on tap so we can have another conversation.
[00:51:44] Blair: I can interview you. I can [inaudible 00:51:46]-- [crosstalk]
[00:51:47] Matt: You can launch your show, bring me on. Blair, It's been so good to be with you today. I wonder, is there any place that you want to direct people, either to follow up with you or where should they check out the book?
[00:51:59] Blair: Book's easy to find Ten Years to Midnight. There's only one book with that title, and whatever your favorite store, just go there. There's actually a site at PwC. If you say, Blair Sheppard, Ten Years to Midnight PWC, you'll go there. It's a summary of the book, and it can tell you where to go, and if anyone has a question or wants to follow up, you can email me at blair.h.sheppard@pwc.com, and I'm happy to respond.
[00:52:21] Matt: All right, well, thank you for being so generous with your time and your thoughts today. It's been an absolute pleasure to reconnect for too long and really appreciate you being here.
[00:52:30] Blair: Thanks a lot. It's been a lot of fun, and I appreciate the questions.
[music]
[00:52:39] Matt: Blair's interview was a pleasure, whether you agree with his conclusions or not, talking to people, working for love, not money, is always great conversation. There were so many takeaways in this show. First, find a place or problem you really care about and then work on it. Making the world better as a job open to everyone and it starts with performing well in your own work, taking a sick person a meal, or sending a note to a team member you know could use some encouragement. Hold leaders to account.
The only way to get good leadership is to ask it of people. A key factor in the world since Genesis 3, is that even when things go well, there are negative unintended consequences. The industrial revolution made life dramatically better for millions of people but created big emissions problems. Today, technology and globalization drive GDP and enterprise value but may hurt workers in the bottom 80% of the income distribution. Blair sees climate and institutional crises as existential.
This is a sobering thought; and the only antidote is to rest in the care of the one who holds all things in the palm of his hand while working as stewards of his creation and gifts. Blair and I agree on the importance of immigration in a way that doesn't overwhelm the system. Blair is brave to state the human fact that people will flow where things are better. No wall will stop them. This is what you or I would do, too, or maybe even have already done.
If you've moved somewhere, even within the US to achieve an important goal for your family or career, you've migrated. Like technology and globalization, immigration also has negative unintended consequences. These are easily seen in the US in the last century with what happened with native Americans for example. Blair goes on to assert we've been preparing leaders the wrong way. He wants to develop leaders with a new set of skills held intention.
Future leaders should be tech-savvy humanists, high-integrity politicians, globally-minded localists, humble heroes, traditional innovators, and strategic executors. Leaders will need the right training and the right teams around them to aspire to these ideals. We all start with what we care about and what we can control or influence. This is my favorite takeaway from the interview with Blair, and it fits well with Stephen Covey's advice to focus our efforts on that inner circle of control, which brings to mind two aphorisms.
First, it takes a steady hand to hold a full cup, so gain practice and experience having safe hands in order to help lead others. Second, Peggy Noonan, who was probably quoting somebody else once wrote, "Everybody wants to change the world, but nobody wants to do the dishes. Instead, if you want to change the world, start by doing the dishes. Do the simple, not always pleasant jobs and soon you'll have the opportunity to do something bigger." Blair advises we all step back and calibrate and begin to dream again.
He recommends we do this by remembering that life isn't all that long and by asking the question, "What do I really want to achieve, and how am I going to make it happen?"
[music]
Be consequential. Don't be envious, seek integration in work and life. After all, it's all your time. At the end of your life. You'll remember the things you're proud to have done. Modern life is lived in chapters, not as a vector, manage each period as a platform to build forward and to build skills. This show's got a lot to chew on. If you're looking for a place to start, I'd say this. Changing the world starts with you, your family, your church, your job, your neighborhood.
For a few people, this effort may include leading in a local community, in a state or province, region, nation, or even the world. Changing those things inside your circle of control is the focus of next Wednesday's show scheduled for March 10th, 2021. Until then, this is Matt Miner, encouraging you to make a financial plan that works as hard as you do.
[00:56:38] Voiceover: Matt Miner is a fee-only fiduciary financial advisor and founder and CEO of Miner Wealth Management, a North Carolina-registered investment advisor, where Matt provides personalized unconflicted advice to clients for a fee. He's also my dad so please be nice when you talk to him. Matt is a certified financial planner professional and holds a series 65 securities license. He earned his bachelor's degree in finance from Arizona State University and his MBA from Duke University's Fuqua School of Business.
Work Pants Finance is Matt's financial media business, where he talks about work, entrepreneurship, kids, and money, taxes, investing, and other personal finance topics, workpantsfinance.com exists to share wisdom and provide general financial information. It is not financial tax or legal advice. You're an individual and probably need personal advice for your specific situation. You should consider building relationships with helpful caring and competent professionals who understand your unique context and can provide advice that is tailored to your needs.
[00:57:33] [END OF AUDIO]