Episode 83 · 21 March 2024 · 49:21

83: How to future-proof your workplace with Rory Sutherland of Ogilvy & Mather

Featuring Rory Sutherland

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Exploring the future-proof workplace with Rory Sutherland
panel interview#future-proof workplace #rory sutherland #workplace trends
Flexible work: the future or a fleeting trend?
panel interview#flexible work #rory sutherland #diary of a ceo #workplace future
Rory's take on reinventing the workplace
panel interview#rory sutherland #workplace reinvention #ideas #book
Ogilvy's approach to flexible work
panel interview#ogilvy #flexible work #agency culture
Rory's vision for a Zoom-based agency
panel interview#rory sutherland #zoom #virtual agency #advertising
The misguided pursuit of efficiency through technology
panel interview#efficiency #technology #flexible work #future of work
The importance of team dynamics over individual brilliance
panel interview#team dynamics #individual brilliance #bezos #leadership
The productivity debate: quality vs. quantity
panel interview#productivity #quality #quantity #work
Rethinking retirement: a gradual transition
panel interview#retirement #gradual transition #aging workforce
Engage with us: your thoughts on work and productivity
panel interview#engagement #work #productivity #mcdonald's

Show notes

How to Future-Proof Your Workplace with Rory Sutherland

Guest: Rory Sutherland — Vice Chairman of Ogilvy & Mather, author, and one of advertising's most original thinkers on behavioural science and the psychology of work.

What if the biggest threat to the future of work isn't AI, remote work, or the return-to-office debate — but our obsession with measuring productivity?

Rory joins Al and Leanne for Part 1 of their two-part series on future-proofing work. Together they unpack why flexible work isn't a passing trend, why the "productivity panic" is often fuelled by commercial property interests, and why the best teams aren't built from individual superstars.

From the Purdue chicken experiment to the doorman fallacy, Rory challenges the assumptions we hold about efficiency, team dynamics, and what an office is actually for. Expect plenty of ideas that don't make sense — until they do.

Top 3 Takeaways

Question who's funding the narrative. Rory suspects much of the "return to office" propaganda is quietly backed by the commercial property industry. Before you buy into the panic, ask who benefits from your beliefs about work.
Productivity isn't just about measuring output. Most organisations are optimised around "exploit" with no space left for "explore." The best teams — like the surgical team Rory describes — work on trust, rhythm, and finishing each other's sentences, not individual metrics.
Efficiency isn't the same as effectiveness. The doorman fallacy shows how we define jobs narrowly to justify cutting them, ignoring the hidden value humans add. Sometimes the best investment is the person who makes everyone else feel welcome.

Connect With Us

Get in touch, book a call, or find Al and Leanne on LinkedIn — all in one place: truthliesandwork.com/connect

Mental health support: findahelpline.com — UK: Samaritans 116 123 · Mind 0300 123 3393 — US: 988 — Australia: Lifeline 13 11 14

Truth, Lies & Work is part of the HubSpot Podcast Network.

Full transcript

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Al ElliottThe dirty little secret is that most businesses think they know their customers. They have the data, the records, the history, but it's scattered across 3 teams and 4 systems. And in our case, it's about 216,000 spreadsheets, which means nobody can actually use it.

B — REVIEWWhat you should be doing is using HubSpot, because why? HubSpot connects it all— every interaction, every support ticket, every conversation— into one platform every team can work from. So when sales talks to a customer, marketing already knows the full story. And when you know more, you grow more.

Al ElliottNice. Check out hopspot.com, the agentic customer platform for growing businesses.

Rory SutherlandI suspect a lot of those articles are kind of weirdly funded by the commercial property industry, I, um, to an extent. Or they're just grumpy people who basically are close to retirement And are pissed off that the younger generation might, might have access to a freedom that they never enjoyed.

Leanne ElliottHello and welcome to the Truth, Lies and Work podcast, brought to you by the HubSpot Podcast Network, the audio destination for business professionals. My name is Leanne. I'm a business psychologist.

Al ElliottMy name is Al. I'm a business owner.

Leanne ElliottAnd we are here to help you simplify the science of work. And you might be thinking, whoa, Leanne, Whoa, what happened to Truth, Lies and Workplace Culture? What happened to simplifying the science of people? What happened to helping us create amazing workplace cultures? Well, my friend, you are behind. Go to LinkedIn.

B — REVIEWWe did a live.

Leanne ElliottWe explain it all. We've, we've had a little shake-up. We've had a little change. And if you want it, we explain. We've already explained everything. All right, don't come for me. Okay, honestly, Al, what are we talking about this week?

Al ElliottWe're talking about the future-proof of work. But before we do, just because Leanne was too grumpy, because we have just— we have, we have said this a few times in a few events on This week. Although, to be fair, if you do— if you did join the work— the, the live that we scheduled, you'll see that it's about 3 seconds long because I pressed the button about 15 minutes too early and we accidentally went live. And it's just all you could hear was me going, how do I turn this off? How do I do this? How do I stop it? Oh my God, I've gone live. So, uh, to be fair, you might have missed that. But yet the, the reason behind it, behind the whole Truth, Lies and Work rather than Truth, Lies and Workplace Culture, is very simply just to expand the conversation. There's lots of things that we want to talk about, lots of guests who want to come on who don't really fit into the workplace culture side of it. So So I thought, let's expand the conversation to work. So that is where we're starting off this week. We are talking about the future of work, and it's a 2-parter. So in part 1 today—

Leanne ElliottFold 1.

Al ElliottFold 1. If you know, you know. Part 1 today, we talk about future-proofing your office, and next week we talk about future-proofing your career. And we've got 2 amazing guests for you, both authors and both experts in looking into workplace culture trends. This week we have the amazing Rory Sutherland, who is the vice chairman of a Tiny little advertising agency called Ogilvy Mather. Joking, obviously. Just in case you haven't heard of Ogilvy, it was established in 1948 by the famous David Ogilvy. Rumor has it that Mad Men was modeled on the Ogilvy agency. And in fact, I think one of the senior women in Ogilvy was the inspiration for Peggy. I believe it currently employs over 17,000 people across the world. Rory is not only the vice chair, but also founded the behavioral science unit within Ogilvy back in 2012. Now, he's published 3 books, but the one that really caught my eye last year was called Alchemy: The Surprising Power of Ideas That Don't Make Sense. Now, next Thursday, we bring you part 2 of this Future of Work series with the amazing Isabel Berrick, who's a journalist and host of the Financial Times Working It podcast and author of a brand new book called The Future-Proof Career. Handy. This out in a few days' time. You can preorder it using the link in the show notes, and you should. I got an advanced copy of it via PDF, and it is really, really good. Good. So let's kick off today with the future-proof workplace.

Leanne ElliottYes, I remember, Al, that you were very excited after hearing Rory, um, on Diary of a CEO podcast. Um, and I, I believe Rory was quite generous with his time.

Al ElliottYeah, we had 2 sessions and each one an hour, and we talked about everything from diarrhea to bees to retirement to Georgism. I mean, it got real deep, real quick. He's a really fascinating guy and someone who you could genuinely listen to for hours, which I did. So it's quite the challenge to fit this into just 40 minutes. So we decided to focus on just 3 key questions. First, question 1, is flexible work the future? And then I asked him how Ogilvy approaches it. Number 2, is the office dead? And who's actually behind the campaign to get us all to go back? And number 3, why is productivity the focus for 2024? And also why that's not really the right way to do it. So let's kick off with answering the big question: is flexible work the future?

Leanne ElliottI mean, regular listeners will know that Al and I have been fully remote since 2013. Like, we were so pre-pandemic, the pandemic wasn't even a little blip on the horizon yet. And over that time, we've lived and worked in more than 200 Airbnbs and hotels in 47 different countries, and we are very much fans of the lifestyle that remote working and flexible working brings. I mean, at times it can feel a bit like we're leading a made-up life where we can, and we do, travel anywhere with our laptops and our little 4G router. Um, but yeah, we're not the only ones who have been thinking about this. This is one of Rory's many predictions.

Rory SutherlandIf property prices continue to rise, And electric car technology continues to improve, and Elon Musk's Starlink thing actually works well, a proportion certainly of the younger population, with the invention of what I call the electric Winnebago, the electric motorhome, might actually go permanently nomadic. Because if you think about it, okay, if you've got a big American motorhome, let's say you, let's say you buy Okay, you know, 50 acres of Kent woodland and you put a big shed in it to store your shit. Okay, so you can always park there, but you've got, let's say, 200 kilowatt hours of juice in a battery. Okay, in your motorhome, you can effectively go off the— and you've got Elon's Starlink thing. You can effectively go off the grid. Permanently. I jokingly said the one thing they haven't quite cracked is the toilet. Okay, what they— what someone needs to invent is like a microwave toilet that desiccates your stool so that you can dispose of it easily. Okay. But, but actually, okay, the cost, you know, the woodland you could buy for £30,000, the motorhome, let's say it's £100,000. That's quite a lot better than an apartment, and you can drive around in it.

Leanne ElliottI know you've seen plenty of articles where there's been quite a bit of pushback about flexible work. So where is this coming from? And why do people seem to resist it so much?

Rory SutherlandSo one of the things that does interest me at the moment is the, effectively, the extraordinary skepticism about the benefits of flexible, hybrid, and remote working. And indeed, I'd include in that the 4-day week, by the way. Now, the reason I'm astonished by the skepticism, okay, and these strange articles in The Telegraph and The Times, which are always, everybody must get back into the office immediately, this is a disgrace, okay, is what I suspect is it's very largely evidence of what I call Puritanism bias. In other words, the idea of no pain, no gain.

Leanne ElliottHmm.

Rory SutherlandNow, the history of technology over the last 150 years has plenty of examples of gain without pain. But what fascinates me about the workplace is that— genuinely fascinates me— is we've introduced technologies like email, which I think are probably productivity vampires. I think they're a catastrophe. I think the open-plan office is a disaster. Okay, we've got rid of things like general jollity, staff entertainment, you know, sort of expense accounts. We've imposed more and more regulation from HR and finance to a point where most people in a job feel they're working for those ancillary functions.

Al ElliottOne of the biggest arguments about flexible work is that there's no way to measure productivity. Now, we'll come to productivity in the last segment of the episode, but we asked Rory if flexible work is any less productive than in-office work.

Rory SutherlandIn most jobs, nobody gives that much thought to productivity except in a very narrow way. And, you know, one of the things that interests me is there's quite a lot of evidence that open-plan offices are bad for productivity. There's a lot of evidence that one of the single best things you can do for productivity is Giving people multiple monitors, which again makes, let's say, hot desking much more difficult. If you want to have multiple monitors, you need a constant place generally. It's not essential. But what always interests me is when you do have evidence in productivity, businesses don't really act on it very much. But there's a wider question here, by the way, which is that there's the short-term effects of flexible working, which may be net negative to a small degree. Then there are the long-term effects, which are almost certainly extremely positive. And I don't mean, by the way, fully remote working. I think in certain conditions that works. One of the interesting things there would be, I think I'm right in saying this, But there's a very significant reduction in sickness time caused by allowing people to work flexibly. And I think that's for the very simple reason that there are illnesses which leave you unable to work, but they're a small subset of illnesses that leave you unable to commute. I also think that you'll probably see more entrepreneurialism arising from flexible work because a lot of people will put the free time they garner into golf, but there'll be a percentage of much more important people who put their free time they've suddenly gained into a side hustle, a gig. And some of those side hustles will actually prove successful. There's the very simple argument, but the main reason I'm in favor of flexible work to a degree, and it's obviously what the ratio is obviously varies, and that does leave a coordination problem Which is you don't want all your team coming in on different days.

Al ElliottOne of Rory's superpowers and the basis of his book is that he's fascinated by ideas that don't make sense. He has a term called psychological, in other words, using psychology to triumph over logic. So what would Rory do if we were able to go back 80 years and reinvent the workplace?

Rory SutherlandSo I would argue that the intelligent thing we would have done had we gone back to 1960 is said, okay, if you are going to have both parties in a relationship working, a 4-day week would be a hell of a lot better than a 5-day week. Then you have the problem, okay, that what if only one of you can negotiate a 4-day? Well, there's not much point in having leisure if your wife or husband is still going to work, right? That's not really leisure. So it created this— and so you get these unbelievable things, which are just what I call— How would you describe them? It's basically a kind of gridlock. Behavioral gridlock is the way to describe it, using the analogy of traffic. The greatest case of behavioral gridlock of all, which I think is absolutely appalling, is the fact that in the United States you only get 2 weeks paid vacation. And I don't think there's even any mandatory paid vacation. Most people get 2 weeks. Nearly all Americans would like more, but it's impossible. Who's going to put the bell on the cat? Okay, if you're the first person to demand more vacation, you look like the lazy guy. And a large part of this city flight you see in the United States is basically a middle-class strike. It's saying, I'm not going back to the status quo ante because we finally have an upper hand in the negotiation in that when, when more flexible working became a norm, you no longer hurt your career prospects by being the one person who worked flexibly. The first person to jump in any of those new behaviors always takes a disproportionate hit.

Leanne ElliottThe 4-day work week. I mean, it's such a contentious issue, but it's been around for a while. Richard Nixon championed it in the 1950s, you know, where he saw a future where, to quote, backbreaking toil and mind-wearying tension will be left to machines and electronic devices.

Al ElliottThat boy could talk, couldn't he? He really could put a speech together.

Leanne ElliottYeah, he had, he had a way with the words. Um, and yet here we are amidst a burnout epidemic stemming from, I mean, let's be honest, backbreaking toil and mind-wearying tension. Joe O'Connor actually posted about this on LinkedIn recently. He's the co-founder and CEO at Work Time Reduction, and as we found out when we interviewed him back on episode 36 of the podcast, the 4-day work week can and does work for a lot of companies. Rory's suggestion is that a 3-day weekend is the optimal time span to have a balanced life.

Rory SutherlandBut the loss of 35 hours of discretionary time per household, okay, now I'm not making a gender point here at all. Absolutely no reason why it can't be the woman who goes out to work and the bloke who basically goes and sorts out the car servicing and does the shopping and the childcare. Not a gender point at all. It's just saying that the units to some extent of older humans tends to be the family. And suddenly, okay, you have this situation where literally if your car needed servicing, okay, it was a problem, right? Because when am I going to do this? Now, I had a friend who, I had a friend who had a very interesting observation. He said the bank holiday weekend, the 3-day weekend is perfect.

Al ElliottYeah.

Rory SutherlandBecause you get to do all 3 things. I said, what are all 3 things? He said, at the end of the working week, you need a day where you socialize and you do fun things. You need a day when you catch up with all your admin, you get your car serviced, you go and buy something, you get your shoes repaired, you get your haircut, right? And you need a day where you do nothing at all, just to unwind. Sabbath. Okay. And he said the problem with the 2-day weekend is you always end up doing 2 of those 3 things.

Al ElliottOkay, so this is great in theory, but what about the 17,000 employees at Ogilvy? Is Ogilvy really eating their own dog food?

Rory SutherlandOgilvy has opened the door to that. And I have to say, I'm, you know, it's not often I'm something of an HR skeptic some of the time because I think that Those jobs of recruitment and remuneration and reward should actually accrue to practitioners rather than to a separate business discipline. In other words, if you're a creative director, it's your job to hire people, motivate people, incentivize people. However, I have to say, I think Ogilvy HR did the right thing on flexible work. I'll describe our policy very happily.

B — REVIEWYeah.

Rory SutherlandIt is 2+1, which is you have 2 core days a week, which are the same for your whole team. So wherever possible, everybody in a team is in at a given time. Now, that also means that you can make better utilization of space because effectively you have, you know, obviously different teams have different core days. The second point is it's +1, which is you have 1 flexible day. The third point, which I was particularly delighted by, is everybody gets 4 weeks a year of what's called working from anywhere within obviously tax and legal constraints. So people who, let's say, have to go and look after their parent after a fall or indeed want to go to Ibiza, can do so and continue to work without taking that as part of your vacation allowance. I thought that was enlightening. And really intelligent. The final point is that you have 2 core days plus 1 flex day. The flex day is you go into the office on one of your non-core days, unless you have to go and visit a client or go and give a talk or go to a conference, in which case that would count as a flex day. Okay. Now, the final thing they did, which is really smart, or you could just argue realistic, is Nobody's core day is Friday. So that opens the door to people who want to work a 4-day week, which partly means, by the way, that, you know, people can use Friday as a bit of an introvert day if they want to go into the office and be a bit quiet.

Al ElliottWith over 40 years in advertising, Rory does know a thing or two about the industry. So imagine if Rory started his own agency next week. How would he structure it? Well, this answer was pretty easy.

Rory SutherlandOkay. Very simple. I know exactly what I do in the advertising world. I'd started effectively an agency, you know, just as there were digital agencies being started in the early '90s. I'd actually start a Zoom-based agency and I'd make it work not one-to-one. I'd make it work one-to-many. I'd effectively sell expertise through subscription, a kind of glorified Substack, actually, where you have both private brand-level conversations, but also frequent presentations and webinars on subjects of category significance, let's say. And I would sell, instead of selling it, sort of selling myself or my colleagues' time at, you know, let's say £90, £100, £150 an hour, one person at a time, I'd sell our time at £10 an hour to 150, 200 people simultaneously. Effectively, what, you know, what you need to do is you need to discover the new processes and new approaches which effectively extract the value from any new technological possibility. The possibility to have high-quality conversations with network effects without booking a hotel, having catering, you know, getting all these people in cabaret seating, you know, the kind of thing you used to do for conferences without any of that extraneous expense, without any of those geographical constraints, the opportunity to sell an idea to anybody in the world. Through high-quality conversation and presentation strikes me as an extraordinary opportunity. I would adopt a Nassim Taleb barbell approach to colocation, which is very frequently for several days at a time, I would have the staff in that organization get together somewhere, Ibiza, you know, London, it doesn't really matter. And I would have people very intensely, almost to the point of a campus, very intensely co-located, for about 20 to 25% of their time and entirely free to go anywhere they like for the rest. There's a guy called Nick Bloom at Stanford who does the big research on remote flexible working and all this other stuff. We need to be doing— when I said that's what I'd do, that's where I'd start. And then I'd continue to experiment. I'd continue to experiment with different options, different ratios, etc. Because there is the potential here for a Zoom boom. as Noah Smith called it, literally for an extraordinary increase in service sector productivity. The problem with— okay, most of the British economy is service industries. Most of the developed economies are service industries. Service industries have never enjoyed the absolutely miraculous kind of Fordist improvement in productivity that manufacturing was able to achieve.

Al ElliottOkay.

Rory SutherlandAnd this, I would argue, Synchronous conversations, regardless of geography, is one step towards a kind of Fordist revolution in the productivity of service industries, but only if they reorganize themselves around the technology. Every business should be reworking its processes around what this technology makes possible. And I think we've— partly because of my puritanism bias, that I mentioned, and partly, you know, the effort-reward heuristic. I think we've treated this with suspicion when we should be greeting it with open arms.

Leanne ElliottI feel that we've answered our first question: is flexible work the future? The answer is yes, but not necessarily 100% remote. The office has its advantages. So let's spend the next few minutes talking about the office.

Al ElliottWhat would a future-proof office Rory suggests that the recent RTO, or return to office propaganda, might not actually be coming from the companies and the bosses themselves, but the landlords who rent the office space. And it makes sense— if there's no offices, then the landlords make no money. Now, what if we said all collectively, screw you, to the commercial giants who own these swathes of office space and just did things on our own terms?

Rory SutherlandI suspect that some of those articles in The Telegraph and The Times ranting about everybody must get back to the office. I suspect they're funded in some shape or form by the commercial property industry, right? If you had loads of articles going, hey, smoke cigarettes, they're great, everybody would say, I bet those are funded by the tobacco industry. Okay. Now, when you get a load of articles going, everybody must get back into the office, there's no substitute for colocation. True, but not 5 days a week. I suspect a lot of those articles are kind of weirdly funded by the commercial property industry to an extent, or they're just grumpy people who basically are close to retirement and are pissed off that the younger generation might have access to a freedom that they never enjoyed. But there may be an element where old people are grumpy at the idea that they had to work 5 days a week in a bloody office, and they're damned if these young people can get away without doing it. There are lots of reasons why those articles are written. I think those articles are dumb because the intelligent thing to say is this is a worthwhile experiment, end of. Okay, the early stage. But then you've got these articles going, it was found that people working From home were 3% less productive, right? Well, can I make a suggestion? Why don't you get your staff to work an extra half hour a day when they work from home? Because they'll take that swap. Okay, you know, commuting plus getting dressed, having, you know, having a shower, doing all your bloody ablutions. Okay, all that shit's like an hour and a half out of your day. Would you say, I'll work an hour and a half an hour longer if I can work from home? any given day, well, that's your productivity problem solved, right? I mean, it's not difficult, okay? You know, the maths isn't really that hard, is it? Okay, so, you know, get them to work a bit longer. I think that's a worthwhile exchange.

Al ElliottOkay, so we shouldn't cancel our rental agreements just yet, but going all in on flexible without carefully thinking it through is just as bad as mandating this RTO, return to office, just because that's how we've always done it. That said, Rory doesn't have too much sympathy with these real estate giants.

Rory SutherlandSo anything that frees people up from the tyranny of their landlords or the tyranny of locational requirements strikes me as potentially economically valuable. So that, in a very, very long digression, is why I'm very, very— I'm not a total evangelist for complete remote or flexible work. But I am very, very opposed to people who take a very narrow, Luddite, knee-jerk, hostile view. We need everybody back in the office. That strikes me as sort of effectively turning your back on a potential game changer. Now, this is what Jeff Bezos would call a two-way door. If we try too much flexible working and in some aspects it doesn't work, we can walk back through the door. Okay? If you close the door to begin with, you'll never discover the upsides. Bezos has this fantastic phrase, it's a 2-way door. In other words, don't argue this to death because it's a reversible decision. It's something we can test. And therefore, we don't have to get our reasoning absolutely perfect to begin with because our process through this in this journey is going to be iterative and informed I, I love that idea of a two-way door.

Leanne ElliottI mean, say what you want about Bezos, and believe me, I do, uh, but he, he has had some fairly good ideas. If we're to believe that Mad Men was based loosely on Ogilvy, then what did Ogilvy look like when Rory first joined in the 1980s?

Rory SutherlandI'm now the vice chairman of an advertising agency. If I'd been the vice chairman of an advertising agency like the size of Ogilvy in 1988. I would have had an office like Mussolini. Okay. I probably would have had a chauffeur. I'm not making this up. All right. I probably would have had my own sommelier and a walk-in humidor, you know, and a, you know, a sort of, you know, a huge desk and, you know, button-back leather chairs and shit. I would have had, you know, probably fresh flowers on my desk every day. My own sommelier, perhaps the company mixologist would come by. I'm slightly exaggerating this, okay, but not by much. It was actually worth getting to the top in 1988. There were kind of material rewards that made it worthwhile. Now I'm the vice chairman of the company and I leave a home where I have Nespresso machines, fridges, SodaStreams, You know, I have, you know, I'm watching you here on a 55-inch 4K monitor. Okay. I have really reliable broadband. I have £400 worth of microphone equipment bought with my own money. Okay. And when I go into the office, you know, they say, here's a chair and here's a plug. Now, sorry, that's not fucking doing it for me, right? I mean, genuinely, I'm not entirely exaggerating when I say This is the contrast between being the vice chairman of a large organization in 1988, 1990, 1992, and now in an open-plan, hot-desky environment. You turn up in exactly the same position and you have far less technology and comfort than you have at home. Sorry, it's not happening. Forget this. Now, where's the money gone? Where's the money that used to be spent on the chauffeur gone? I wouldn't mind this if all the money was going to shareholders. Or was going to employees in the form of improved salaries. But it's not. The money we saved on the sommelier and the chauffeur is being spent on increasingly large HR, finance, compliance functions, procurement functions. It's all these weird kind of like people who've just like— it's a kind of corporate oncology that have just grown all over the place. I mean, you know, and actually the people, the people who are actually engaged in productively performing the functions for which the business is designed are now in a minority in numbers. And they're often the least powerful and most overworked people in the whole organization because they're under permanent scrutiny from people from finance because, because they actually perform the function for which the organization is designed. Right.

Leanne ElliottWe will be back after the break with more from the legend that is Rory Sutherland.

B — REVIEWDid you know that the UK's number one management podcast— that's us, by the way— and the UK's number one marketing podcast are both on the same podcast network?

Al ElliottWe actually have a lot in common. We both use behavioural science to help people do better at work.

B — REVIEWAnd we both had to wrangle Rory Sutherland on an episode.

midroll (Phil Agnew, Nudge)And 2 out of 3 of us are devilishly good-looking.

Al ElliottAnd you're not gonna say which. Phil, host of Nudge, UK's number one marketing podcast. It's brought to you— we need to do this in 3s—

B — REVIEWthe HubSpot Podcast Network, the audio destination for business professionals.

Rory SutherlandSeamless, seamless.

Al ElliottTell us about your latest episode, Phil.

midroll (Phil Agnew, Nudge)Uh, we've just done an episode on fake fandom and how New York indie bands are paying agencies to create fake TikTok videos about how much they like their work. And we talk about the behavioural science behind fandom and how that encourages people to enjoy the music and all of that good stuff, and do some big things about how this affects the world of politics, business, and brands as well.

B — REVIEWIt is, it's such, it's such a good show. Of course, you'll hear all the stuff you want to hear about how to grow your business by using behavioural science in your marketing. But there's also just some really interesting episodes that'll be right Personally, I enjoyed Can Balsamic Vinegar Make Beer Taste Better?

midroll (Phil Agnew, Nudge)It can.

B — REVIEWAnd Are We All Just Status-Seeking Monkeys?

midroll (Phil Agnew, Nudge)I am.

Al ElliottGo and listen to Nudge wherever you get your podcasts.

B — REVIEWBut come back.

Al ElliottYeah, come back.

midroll (Phil Agnew, Nudge)Definitely come back because Nudge isn't as good as this. So come back.

Rory SutherlandI'll cut that out.

midroll (Phil Agnew, Nudge)Keep that in.

Al ElliottOkay, welcome back. Let's crack on.

Leanne ElliottOne of the biggest pros for flexible working is that you can get more done. When you get into what Cal Newport calls deep work, you know what I mean? You're working, you look up, you expect it to be 11 o'clock in the morning, but actually it's past lunchtime. It's 10 past 4, and you're going home in an hour. Us psychologists call that a state of flow. But it does mean that we can have switching costs, and the productivity cost of switching tasks is real and cumulative.

Al ElliottMm-hmm.

Leanne ElliottWhen Al and I work, we do tend to sit in silence. We work away and we'll email or we'll send a chat or WhatsApp if we have a non-urgent question. And it might sound daft, but this allows us to concentrate on this kind of deep work. And particularly if you're working in a big team where you'll have lots of different ways of thinking, neurodiverse people, particularly someone with ADHD, being interrupted enrages them. As you would have remembered from our episode with the anger professor a few weeks ago. But there is an argument. By not being in the office, by having this asynchronous communication, are we missing out on the spontaneous want a coffee, love chats that happen in a busy office? And if we are, then what benefits are not being realised?

Rory SutherlandIf you read the wonderful book Algorithms to Live By, what you see is there's a mental thing called switching costs. Every time you switch your attention, Okay, you effectively, your brain has to kind of reboot. And so the more frequently you shift your attention, an email is basically one massive, great permanent distraction. Every time you shift your attention, your productivity basically plummets. A very good book, by the way, Algorithms to Live By. I really recommend it. And so we've introduced all these technologies. We've also made the office, I think, you know, in many ways email has made the office slightly joyless, because it means everybody's busy all the time, which means there isn't the serendipity and banter and so forth that you used to have. And in fact, we've also created an office environment where nobody really has very much free time, which means that the conversations that used to be both the reward for and the kind of, I suppose, the stimulus for going into a social environment like an office, have disappeared. But then a technology comes along, which after all delivers the real promise of the internet, which is you can do things from anywhere, which means people are spared the time costs of commuting. They're spared the time costs of also cleaning your teeth and getting fully dressed and all that crap in the morning. They give people extraordinary flexibility to time shift. So maybe they take a bit of leisure in the middle of the day when it's Sunny and work in the evenings. Extraordinary benefits to people who are carers, single parents, even dual parents, anybody who has caring responsibilities, massive thing. Huge, huge time savings because cost savings because you're not paying to commute so much. Enormous cost savings if you take the opportunity to go and live somewhere less expensive to work. Okay. And all those things are fantastic. But because for the first time, it's the introduction of something into the office that staff actually enjoy and like, it's treated with 10 times the suspicion of any other technology. And I think that's genuinely whack.

Leanne ElliottI really enjoy how Rory is equally happy arguing for and against ideas. I think as a psychologist, it's so important that you do, because I love the answer, it depends. Because it does. There is always new evidence coming up. We can't always have an opinion that's set in stone. We've now discovered what a future-proof office might look like. I believe that was question 2, Al, fold 2, if you will.

Al ElliottIt was, it was question 2.

Leanne ElliottSo now let's look at the final piece in the puzzle. Is the future of work focusing on productivity?

Al ElliottNow, as Rory said before, the biggest argument against flexible work is Productivity or the lack of, but there seems to be this fascination around squeezing every single drop of productivity from your team. As an example, when we prepare each episode here, I always plan a better episode when I leave a gap between editing the interview and preparing the structure of the interview— of the episode, sorry. This means I've got time to ruminate on the problem and almost always wake up with a better idea of how to structure the episode. So, is productivity really the key metric we should be measuring here?

Rory SutherlandMost organizations really, I mean, you know, if you think about film companies, pharmaceutical companies, the things that really make the money, the things that are really valuable are actually a tiny but sometimes unpredictable part of their overall output. You know, publishing is the same. You know, a few blockbusters have to pay for all the also-rans. And if you create an atmosphere of efficiency where everything everybody does all the time has to be valuable, what you're doing is you're optimizing for the average and you're incentivizing mediocrity. And that's where I bring this back to bees. Bees accept the fact that there's 80% of their work is quite rightly efficiency-driven. It's exploit. It's how do we take the information we already have and make the most use of it? But 20% of bee activity is exploratory, which is where— what don't we know? Where else might there be pollen? Is there a chance of us getting lucky? Okay. And what we're doing in organizations now, which not only makes them less productive, but also makes them much less interesting to work in because they have— because individual people have their autonomy stripped away. Okay. Their ability to make sort of discretionary judgment is stripped away.

midroll (Phil Agnew, Nudge)Yeah.

Rory SutherlandWe're creating these organizations which are purely optimized around exploit and have no space left for explore. But you see this absolutely everywhere. The shareholder value kind of movement is actually destroying shareholder value because it makes it more important for the organization to perform incremental improvements in notional efficiency. And effectively, organizations, by trying to use efficiency and cost cutting, as a means of value creation are actually destroying themselves. In the medium to long term, the reason there are no beehives or bee nests where everybody obeys the waggle dance is because there were and they all went extinct. The only bees that survived were the ones that realized there was a trade-off between explore and exploit.

Leanne ElliottLet's talk teams for a second. On paper, you could put together the world's best team, full of superstars. But is that the right way to do it? Well, imagine the, the brilliant Jürgen Klopp. If you don't know, shame on you. But imagine Jürgen creating a team of football players who on paper are amazing, but they've never actually worked with each other. How is that gonna go on match day one? Rory recently experienced minor surgery, and what fascinated him was the natural connection between 3 people in the operating Theater.

Rory SutherlandWhat was interesting is the team, which comprises an oncologist, a surgeon, and an anesthetist, always work together. Okay. They always do this operation as a 3. And I was sort of conscious because I wasn't under general anesthetic. It was a spinal block. So I was probably, you know, a little bit sedated and probably had a bit of a fentanyl hit or something. But I was conscious for this operation.

Al ElliottOkay.

Rory SutherlandAnd listening to them was fascinating because they were kind of finishing each other's sentences. You know, they obviously worked together so often that they knew exactly— they had a kind of shorthand between them. And I did a lot of the conversation I couldn't understand because it was like 33, 32.4, 1 for, you know, but it was absolutely clear that this was actually a team. Okay. And it was— now, to someone who's in hospital administration, you just go— anesthetist A, we'll have oncologist B, and we'll have, you know, surgeon C. Okay. And we'll just mix them up. And they won't really form any of the same strengths that you have when you have— this is effectively the ergodicity problem that one thing happening 10 times isn't the same thing as same as 10 things happening once.

Al ElliottOkay.

Rory SutherlandAnd yet, for purposes of most both assessment and process design. Most processes are designed as if the people are in— each individual person is entirely interchangeable with another person of the same rank. And that's just not how humans work.

Leanne ElliottWho is pushing this productivity agenda exactly? Who's the person who insists that we measure every employee by what they produce? I mean, is it fair to blame the managers who prefer spreadsheets to conversations?

Rory SutherlandMost data is collected for aggregation. And so the people at the top don't actually know what's going on. They just know the average of what's going on. And so they look at something like, they look at the spreadsheet, which shows what do we make money from in an advertising agency? And they go, we look at on average, the most profitable thing is this. But if you looked at where the value was created, Okay, it will be somewhere completely different. It will be, you know, freakishly good ideas created once every 7 weeks by someone you can't necessarily predict in advance. Okay. And so when you get an appalling misalignment, this is where I bring it back to the puritanism bias. You know, effort-reward. The effort-reward heuristic is really what's at work here. Okay. There's a very strong effort-reward heuristic. reward heuristic, which is this is effortful, therefore it must be rewarding. Okay. And sometimes that's good. Sometimes it's absolutely right. I'm not saying, hey, gain but no pain. Okay. But I'm saying that a less painful way of doing something is more likely to be a more efficient way of doing something than it is likely to be deserving of suspicion.

Al ElliottDoes this mean that we have to delegate as much as possible to AI Or tech? Should we be removing the humans as much as possible? One of the most systems-driven companies on earth is actually McDonald's, and they've been phasing in screens for customers to order from for quite a while. So is the future of McDonald's, and maybe all service-based industries, robots and tech?

Rory SutherlandI don't see McDonald's getting rid of the human any day soon because some people prefer it that way. Okay, some people want some weird order because they hate the pickle. Or whatever, and maybe it's not possible to customize on the screen.

Al ElliottThat's great.

Rory SutherlandWhat McDonald's offers you is great because it's a suite of technologies which, according to your circumstances, temperament, age, and level of technological proficiency, you can choose those technologies for interaction that you like the most. Where it becomes problematic is where the screen is imposed. What then tends to happen— McDonald's are too intelligent to do this, okay? And they also have the sales data that tells them not to do it. it. Okay, which is— but what a lot of people will do is accountants will come in and they'll go, it looks like the screen is the lowest cost to serve. So we're going to force people to order by screen. You go to supermarkets now, Waitrose, right? Posh supermarket, Sevenoaks. Sevenoaks is my nearby town, is pretty minted. Okay. But they're more or less forcing people often in their 70s to use the self-checkout. This is what happens is that Once you, once you allow the accountant's preferences to trump consumer preference, you end up with a complete decline in variety choice and also in resilience as well, because you're forcing everything through the lowest cost channel. It's too easy to sell technology not on the basis of the improvement in the experience or the value creation. It's too easy to— it's much easier to sell technology and justify the cost on the basis of cost reduction than it is to sell technology on the basis of value creation. And as a consequence, most technology is sold the way it's easy to sell it, which basically leads to job destruction.

Leanne ElliottOkay.

Rory SutherlandIt's the doorman fallacy, which is mentioned in my book. You know, we'll get rid of the doorman. We'll define the doorman as the man at the hotel who opens opens the door. We'll replace him with an automatic door-opening mechanism, and we'll lay claim to the cost savings. And it all seems great and logical until you realize that only about 20% of the doorman's job is opening the door. He also provides security, recognition, status, you know, and taxi hailing, luggage carrying, and a whole load of other shit.

Al ElliottOkay.

Rory SutherlandWhich you conveniently chose to omit in defining his job function when it was appealing to you to make a case for the cost savings from automation. It's not that AI scares me because it's going to develop superpowers and destroy the world. It's simply because anything that is cheap is catnip to fucking finance people, because cost savings are both quantifiable and punctual, whereas value creation is hard to quantify in advance and genuinely a bit slower to manifest itself. So we've created short-termist financial measures, which woefully predispose companies towards cost cutting rather than value creation. It's always money off, not value on.

Leanne ElliottAs a business psychologist, I live for data. And as Al mentioned, Rory's book is full of research studies and stories, especially about bees. You need, you need to read the book. But we did get a little bonus story about chickens and how optimizing using data only can lead to tears.

Rory SutherlandBut let me end up with a story not about bees, but about chickens. Okay, it's called the Purdue University Chicken Experiment. And they tried taking chickens in kind of chicken farms, which are kept in cages of about 10. Okay, they're not free range. Apologies for that. Okay. And they measured the eggs that each chicken laid, and they bred from the most productive chickens.

Al ElliottOkay.

Rory SutherlandAnd then they tried a separate experiment Where they bred from the most productive cages. In other words, they said this cage produces more eggs than that cage, so we'll breed from these chickens, not the other chickens. Well, okay, we'll breed from the most productive cages. The other experiment, they bred from the most productive individuals. When they bred from the most productive individual chickens, you created psycho chickens who pecked each other to death and were a total catastrophe, and the cages produced very few eggs indeed.

Al ElliottYeah.

Rory SutherlandWhen you bred from the most productive cages, the productivity of each cage went up and up and up. And you need to be measuring efficacy at the level of the group, not at the level of the individual. And they're all— The group doesn't have to be particularly big. It could be 5 or it could be 50. But that's the correct way to incentivize and measure. Once you take it down to the level of the individual employee and treat individual employees as though they're substitutable and fungible, you're getting the maths wrong.

Al ElliottWell, there you have it. It's a short introduction to Rory and his ideas that don't always make sense, but also more importantly, we are talking about a really important subject that I think is on the lips of everyone at the moment. So if you haven't already, go and buy his book or go to the Diary of a CEO podcast with Stephen Bartlett and listen to his interview. I think it's about an hour and 20, I think, Really interesting stuff there. So the links to Rory are in the show notes.

Leanne ElliottYes, another great interview with a phenomenal thinker, and hopefully you have a better idea now of how you can future-proof your workplace. If you like this, I would ask you to hit that follow button, that subscribe button. It really does help, but also more for your own sake. Next week we are shifting from future-proofing your workplace to future-proofing your career.

Al ElliottYes, next week we bring you the amazing Isabel Berrick, journalist and host of Financial Times Working It podcast and the author of a brand new book called The Future-Proof Career, which is out in a few days. But before we go, we had to ask Rory what his thoughts were once someone's work life is coming to an end.

Rory SutherlandWe haven't talked about retirement. Now, one of the things that strikes me as very unfair to labour related to capital is that you have to choose an absolute hard-set date of retirement. What that means is that you force your employees to play a game of chicken with their own mortality and their own health. Leave it too late, okay, and you have a fantastic pension, but you spend your retirement basically exchanging business appointments for medical appointments or not being very well or not being able to travel. Okay, leave it too late is dangerous. Go too early is dangerous. You either run out of money or you get The freedom— one of the things I think that's important is the freedom for employees to taper off towards the end of their working lives, perhaps only tapering off to zero when they become incapable of doing any work at all, is another possible injection of new and entirely voluntary and preferred employment. Retirement strikes me as fundamentally dumb. The idea that you work 5 days a week and you commute in 5 days a week, and then one day you stop doing that entirely is a ridiculous sort of watershed moment between effectively money and no leisure and leisure and no money. Okay. Forcing people to make that trade-off at an absolute set date where you go from 100% employed to 0% employed. By the way, I think it's bad for people as well. I think what would happen if I retired completely is I start getting neurotic about my neighbor's tree overhanging my fence or something. You know what I mean? I just exchange one set of worries for— your wife being a business psychologist will know about this. You get these people who kind of retire from some high-demanding job and they just put exactly the same kind of nervous energy into their retirement as they did into their job. Well, that's both bad for your health and actually economically completely unproductive and probably extremely annoying to your neighbors as well. Okay, you can't be a one-day-a-week chief executive, but you know, there must be a lot of retired accountants who could actually be pretty good accountants 2 days a week. Okay, they didn't— those people did not retire because they wanted to stop work. They retired because they wanted to stop commuting.

Al ElliottWe would love to hear your thoughts, so go to LinkedIn and you can chat to us. Just search LinkedIn for Truth, Lies and Work, you'll find our page. There will be an episode or a post about this episode, which Leanne will be responding to your questions. Tell us what you think. Tell us what we got wrong. Tell us what Rory got wrong, if you dare.

Leanne ElliottYes, at your own risk. I'm not gonna shield you from that, to be honest. But no, we really would love to hear your thoughts. And, and yeah, be sure to tune in next Tuesday, when we will be bringing you our first, our first Tuesday episode, our first episode shaking it up a bit. Working title is This Week in Work. We'll be covering some news stories, we'll be debating the hot topic, um, of the moment, which will probably still be remote work, and we will have us answering some of your questions, some, a bit of a, a bit of a career surgery from some challenges that we have found people experiencing. If you would like to have your questions answered on a future episode, get in touch. If you'd like to be on a future episode, get in touch. Just make sure That pitch is, is, is good.

Al ElliottAnyway, rant over. Anything else to add, my love?

Leanne ElliottNo, that is it. Thank you so much for joining us, and we will be back on Tuesday.

Al ElliottSee you soon. Bye-bye.

Leanne ElliottChickens, chickens, chickens! And hopefully you have a better idea of how you can future, future, future, future. Yes, another great—

Al ElliottYes, another great—

Leanne ElliottUm, and especially next week because we're shifting from the future-proofing of workplace— no, we're not, because we've already done it. This is Thursday. Is this today?

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