Speaker 1:
From the library of the New York Stock Exchange at the corner of Wall and Broad Streets in New York City, you're inside the ICE House, our podcast from Intercontinental Exchange on markets, leadership and vision and global business. The dream drivers that have made the NYSE an indispensable institution of global growth for over 225 years.
Speaker 1:
Each week, we feature stories of those who hatch plans, create jobs and harness the engine of capitalism, right here, right now at the NYSE and at ISIS exchanges and clearing houses around the world. Now, welcome inside the ICE House. Here's your host, Josh King of Intercontinental Exchange.
Josh King:
Maybe back in the early days of the show, I mentioned that I got my start in corporate communications working for an insurance company, specifically the Hartford Financial Services Group. That's NYSC ticker symbol HIG. The folks with a giant stag as its logo, keeping a keen eye out on the land he surveys, ever watchful for unusual and unexpected events.
Josh King:
It's an apt metaphor. Many of us consumers think of insurance companies stepping in after a loss to assess damage, adjust a claim and make a payment against a premium. But do you know how insurance companies really thrive? They mitigate risks before they happen, through the underwriting process. The less they have to pay out in claims, the more they make in investment returns.
Josh King:
Take the case of Benjamin Whorf. He worked for the Hartford back in the 1930s. He was an engineer, but he also studied linguistics and anthropology at Yale. It's unclear whether his parents thought that was a waste of time, but his bosses at the Hartford apparently didn't. They sent Mr. Whorf to investigate a suspicious series of warehouse explosions, where the culprits seemed to trace back to empty oil drums, still suffused with flammable fumes ignited by careless warehouse workers, grabbing a smoke on their break.
Josh King:
That's where Mr. Whorf's excellent education at Yale in linguistics and anthropology came in. He found out that the word empty, plastered on those drums gave the midday smokers a false sense of security, that it was safe to light up. Whorf was an engineer. He knew how the warehouses blew up. That was part of the investigation, to be sure. He was also a linguist and an anthropologist, which told him why the warehouses blew up.
Josh King:
You stop the cigarette smoking in fume filled warehouses, you explain to the workers that empty doesn't mean safe, they stop exploding. Benjamin, you're a genius. Our guest today stands at the metaphorical bridge of the Starship Enterprise on Gene Roddenberry's Star Trek, sandwiched between Captain James T. Kirk and his humanistic really anthropological mission to explore new life forms, and the coldly analytical Mr. Spock offering the logic and data to run their ship.
Josh King:
Sometimes filtered to the amped up human judgment of Bones McCoy is saying when times get tough, dammit, Jim, I'm a doctor, not an anthropologist. Our conversation with the Financial Times is Gillian Tett, on the benefits of getting out of your fishbowl. How anthropology opens up the lens for understanding human behavior, and her new book, Anthro-Vision: A New Way to See in Business and Life. It's all coming up right after this.
Josh King:
Now, a word from ABB Ltd, NYSE ticker, ABB.
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Josh King:
Gillian Tett is Chair of the Editorial Board and Editor at Large in the US for the Financial Times. She writes weekly columns, covering a range of economic, financial, political and social issues. In 2014, she was named columnist of the year in the British press awards, and was the first recipient of the Royal Anthropological Institute's Marshall Award.
Josh King:
Gillian is the author of four books, and her most recent one Anthro-Vision: A New Way to See in Business and Life is now out from Simon & Schuster. Welcome, Gillian, inside the ICE House.
Gillian Tett:
Great to be here.
Josh King:
Just when we thought we were through COVID, comes this Delta variant and the former president talking about trust in vaccines. You tweeted back on July 12th, so, I'm going to quote you here, "It's another sign why you cannot best a pandemic with medical science alone. You need social and political science to understand the challenge now."
Josh King:
Gillian, doing your best Captain Kirk, what do you say to Spock and McCoy and the rest of us to use social science to make sense of the moment that we're in now?
Gillian Tett:
Well, I think we need to realize that the last few decades we've been in awe of medical science, or computing science, data science, all of these hard quantitative sciences. I'm not saying those aren't useful, they're brilliantly useful, they could help us navigate the world. But one thing we've learned from COVID is that you cannot just use quantitative sciences to make sense of the world, create good policies, create great investment strategies.
Gillian Tett:
We've seen that actually getting people to obey pandemic rules was as important as actually understanding what was happening with a pandemic, in the early stages of COVID-19. We're now seeing that even with the best medical science in the world, and the best data science, and logistical science, you can't beat a pandemic and get a population vaccinated without looking at culture.
Gillian Tett:
Culture is one of those things that's very frustrating to talk about. It's like trying to chase soap in the bath to define what culture is. But when you ignore it, you suffer. Insofar as anthropology is a discipline dedicated to cultural analysis, in many ways, anthropology is about risk management.
Josh King:
Talking about risk management then, Gillian, what was Benjamin Whorf's superpower when the Hartford assigned him to investigate that suspicious series of warehouse explosions of unknown cause?
Gillian Tett:
Well, Benjamin Whorf's key superpower was not so much just having the anthropology background, but by knowing that you can't take anything for granted. Social sciences, the parts of the world that we ignore or take for granted, or just overlook because it seemed so boring and obvious, or geeky and dull, social sciences really, really matter.
Gillian Tett:
In the case of the Connecticut warehouses, what was going on was that the workers had labeled the drums that didn't have any more oil in as empty. In English, the word empty sounds incredibly boring. You're trained to just ignore it. When something's got full slapped all over it, your eye's automatically drawn to it. That we regard empty as being something that's just not worth our time talking about.
Gillian Tett:
The workers were paying all the attention to the full oil drums, and smoking next to the empty ones, even though they were full of flammable fumes, which could ignite. But there's a much bigger lesson there that goes beyond oil drums, which is that, if you look at things that are labeled free in today's world, which get ignored by economists, because free sounds boring, because we're trained to focus on money, then you suddenly see things that are labeled free, like the data for services swap that goes on in the tech world, which is incredibly important that people tend to ignore.
Gillian Tett:
You can go on and on. All these areas of our life that we ignore because they're not seen to be center stage in terms of what we consider to be culturally valuable.
Josh King:
Let's back up though a little bit to where it starts for you and where the book starts for you, Gillian, by your own admission, you grew up in the staid corner of suburban London. Perhaps with some global adventure flowing through your veins, given that your great grandfather fought in the Boer War, and your dad lived in Singapore until he and his mom fled the advancing Japanese in World War II. How does this give you that insider, outsider perspective, that really is a thread throughout your book?
Gillian Tett:
Well, one of the key messages of anthropology is that, to cite a Chinese proverb, a fish can't see water, we can't see the cultural assumptions we've inherited from our environment and our surroundings, unless we jump out of our water, jump out of our fishbowl, go and swim with other fish or ask other fish what they think about us.
Gillian Tett:
Learning to jump out of your fishbowl is something that some people do instinctively, some people learn because they've been tossed across borders in their childhood, moved around between different cultures, or somehow inherited through folk memories with their family history, a vision and knowledge that there is actually a life beyond that fishbowl. In my case, I grew up in a very staid, middle class, suburban area of London. But had in my family background a lot of travel and basically passed on to me through stories from my parents, grandparents, and I had a yearning for adventure.
Gillian Tett:
I went off and did a PhD in cultural anthropology, which is a discipline devoted to studying cultures all around the world. Went to a part of the world that seems and seemed then very exotic to me, many Westerners, which was Soviet Tajikistan, just north to Afghanistan. Spent time studying the culture there and learned that actually, cultures, which can initially seem very alien and different, actually aren't, when you take the trouble to immerse yourself in someone else's point of view and really get to know people, see them on their own level, get a worm's eye view, not a bird's eye view.
Gillian Tett:
A lot of my cultural assumption of prejudice has challenged that experience. But then I came back to the west, and had my worldview challenged all over again, because I then learned to look back at my own fishbowl of the media world, the City of London, the financial sphere, and look at that with fresh eyes, and see all kinds of things that I hadn't noticed before.
Gillian Tett:
The beauty of anthropology is that it really is a win-win. You manage to go out and make the strange seem familiar, get empathy for another point of view, which we all desperately need in a world that's globalized and polarized. But then you can also then flip the lens and see yourself much more clearly, which we all need to.
Josh King:
I think at some point, when you were studying anthropology at Cambridge, maybe it was after, at one point thought of it as committing intellectual suicide. When did you turn your view about it and take a more positive view on all this work?
Gillian Tett:
Well, I think a lot of people listening would think that studying anthropology is like committing career suicide or intellectual suicide, because, I'm constantly asked by people who say to me things like, "Well, my kids say they want to study anthropology. I want them to go and do accounting. Will they ever get a job?" Which by the way, I say, "Yes, they will do. So, don't panic."
Gillian Tett:
I guess I began to realize that anthropology as a discipline had real value to looking at the world. When I came back and became a journalist at the Financial Times, and started using the framework that I've used to study Tajikistan. In my case, I was looking specifically at Tajik wedding rituals as a way to see how the Tajiks were navigating their Islamic and communist identity.
Gillian Tett:
But I realized that although that topic sounded light years away from the city of London, or Wall Street, at the end of the day, we're all human. We're all shaped by tribalism, in the sense of social groups. We all have rituals, and symbols and ceremonies that shape our lives. We all have mental and cultural maps about how we think the world should work, which it never actually adheres to. Groups always have creation myths that define how they operate.
Gillian Tett:
Exactly the same tools are used to look at those themes in Tajikistan are just as relevant for looking at Wall Street or your average C-suite in any corner of the business world. Or if you like the White House.
Josh King:
Gillian, so many of us will never get the incredible opportunity to go to Tajikistan and see one of our cousin's get married, bring us inside a Tajik wedding ceremony. What does it reveal about the overarching geopolitical beliefs of the time that we might miss?
Gillian Tett:
Well, Tajik wedding rituals are big, elaborate ceremonies that go on for several days. People generally have a hard time often in the West imagining where Tajikistan is or what it looks like. Shut your eyes and think about Afghanistan, the pictures you've seen on the TV screens with big snow capped mountains, and then added electricity. Take out the black veils that women wear in Tajikistan and put in really brightly colored stripy tunics and headscarfs, that's what women were there, and that's Tajikistan.
Gillian Tett:
They have these big, elaborate wedding rituals. Essentially what I uncovered by looking at these wedding rituals and as an anthropologist, one of the guiding principles is that you go and live amongst the people you're studying, if you can, and live as one of them.
Gillian Tett:
In my case, I wore Tajik clothes, spoke Tajik, lived in a high mountain village and looked after goats, swept the floor, did all the chores with the other families and stuff. In the course of looking at these wedding rituals, I realized that one of the really big questions at the time was how Soviet communist identity interacted with Islam.
Gillian Tett:
There was a dominant presumption amongst the Western policy community, at the time, and this was the middle and late 1980s, that if any part of the Soviet Union was going to have a rebellion and break up, it would happen first in the Muslim areas, because Westerners presumed that Islam and communism were essentially impossible to reconcile.
Gillian Tett:
I went to study that, and in fact, I realized by looking at the wedding rituals and seeing life on the ground, that it simply wasn't true. That actually the community I was in had found a very good accommodation between the Islamic and communist systems by essentially dividing space. They compartmentalized their life so thoroughly into an Islamic sphere and the communist sphere, there wasn't huge tension.
Gillian Tett:
It turned out, in fact, I was correct, because when the Soviet Union did break up, the rebellion happened in the Baltic Republics, not the Islamic areas. You can say, well, that's kind of interesting, but that's kind of ancient history. But it really reveal two things. One is it really pays to use a worm's eye view, not a bird's eye view on life sometimes, and to try and discard your prior prejudices, or essentially, to challenge them.
Gillian Tett:
It also shows that actually looking at rituals and symbols and ceremonies and spatial use and things can reveal a mental worldview, which can be fascinating. Several years later, I went to an investment banking conference on the French Riviera, totally different sphere of life. It was a European securitization forum. I did that in 2005, I used exactly the same technique I'd used to deconstruct the Tajik wedding rituals for looking at this investment banking conference. It was that, that essentially enabled me to predict the looming financial crisis in 2008.
Josh King:
Let's dive into the financial crisis in 2008 a little bit, because we mentioned it earlier on, we weren't so focused on what these derivative products were all about at the time. Your reporting certainly frustrated the subjects that you were looking at, but it was also, so eye opening. I should note that the founder of Intercontinental Exchange, Jeff Sprecher, also saw issues with credit default swaps and the clearing space generally and set out on a technological solve of the problem. What did you and a few others see at the time that a lot of other people were missing?
Gillian Tett:
Well, what I saw was probably different from Jeff Sprecher, and that he was probably looking at it with all kinds of fundamental analysis, or their good knowledge of having traded markets for years. To me, the first trigger was back in 2005, on the French Riviera, when I walked into an investment banking conference and went, wow, I'm back in Tajikistan. Because in some ways, investment banking conferences for the financial world, are like wedding rituals in Tajikistan.
Gillian Tett:
In the sense that they are gigantic, ritualistic ceremonies that pull together a scattered tribe, and enable people to redefine and recreate their social bonds, and to create a shared worldview, and that's really important, to create a shared cultural base of assumptions.
Gillian Tett:
When I looked at all the rituals that were happening in the investment banking conference, what I noticed were four key features about the culture of the financiers back then. Firstly, that they acted and viewed themselves as a tribe set apart. They joked that they actually have more in common with each other than people inside their own banks or their own geographical neighborhoods. They were linked by virtue of the fact that they all had access to a Bloomberg terminal. I used to joke they're all part of a Bloomberg cyber village, and they spoke a language which most people didn't understand. Not Tajik, but banker speak, all those acronyms; EDOs, EDS and stuff like that.
Gillian Tett:
They knew that that language gave them power. It was a bit like the priests in medieval Catholic church who spoke financial Latin, and the congregation didn't. The congregation couldn't be bothered to challenge them too much, because they thought they were getting the blessings. In the same way, people outside this group didn't really challenge the banker speak.
Gillian Tett:
But they also had a shared creation mythology. The mythology at the time was very much around the culture of liquification. What was driving a lot of the financial innovation in 2005, was the idea that you could create perfectly liquid markets, and innovation was supposed to make everything more and more liquid and easy to trade.
Gillian Tett:
It was wrapped up in this very, almost evangelistic creed about how this would be better for everybody and the world. Looking back, there were huge fundamental contradictions in this whole rhetoric. To cite two quick ones, one was the fact that, spreading risk around and liquid markets was supposed to make the system less risky. But the techniques for doing it were so opaque, that actually it was introducing more risk in the system.
Gillian Tett:
They claimed it was all about getting the perfect free markets and market-to-market accounting systems in place, but the products they were creating all this the CDO squared, were too darn complicated to actually Trade. They generally weren't being traded. There weren't any free market prices.
Gillian Tett:
In retrospect, it was very obvious that these contradictions were there. But at the time, they couldn't see it because they were such a tribe set apart. The last really important point was, when I looked at their PowerPoints and their screens and all the things they presented to talk about this, they would say things like, "We're doing all this to serve ordinary people." But there were no photographs of faces anywhere in their presentations.
Gillian Tett:
To me, what that signaled was that their vision of finance was very abstract and disconnected from real life and real people. There's a wonderful scene in the movie, The Big Short, based on Michael Lewis's book, where some hedge fund traders go and actually meet a pole dancer in Florida, who's taken out subprime mortgages, and they're shocked by what's going on.
Gillian Tett:
What's shocking in retrospect, was not what was going on, but the fact that so few financiers could actually see the consequences of what was happening because they were in such a social bubble. I went away from that conference and put these things together, and basically wrote pieces saying, this is a tribe which drunk the Kool Aid, subject to a lot of groupthink, and in danger of spinning out of control, because there weren't people outside the system looking in, or vice versa.
Gillian Tett:
Now, I can't stress strongly enough, this pattern is not remotely unusual. Every single professional group out there has a creation mythology, including journalists of some sort, which is riddled with contradictions. We're all, as humans, liable to become captured by tribalism, groupthink, et cetera, et cetera. That's part of being human. It's not unusual. We're all like this. But the issue is, what happened in 2008 showed why it pays to think about the cultural patterns that shape our work and other people's work, and where they are both acting as a force for good and bad.
Josh King:
You used the same insider, outsider skills to analyze the FT's coverage that revealed something that you call the iceberg effect that left only equities really above the waterline, something that most of us at ICE were certainly nodding in agreement to. But why does this happen?
Gillian Tett:
Well, to try and be fair in the book, I do try and fit the lens and look back at my own professional lot and myself. Hands up, I reveal a lot of my mistakes I've made, when I've often got lazy or beset with tribalism myself.
Gillian Tett:
Because one thing I want to stress is Anthro-Vision isn't like a single magic wand or switch you flip on and suddenly, hey, presto, you're wise all the time. It's something you have to constantly keep working at like getting fit or overcoming anger. The minute you think you got it licked, guess what? You start backsliding.
Gillian Tett:
But journalism, as a profession, has a number of challenges. First of all, it's organized and dominated by people who think that having command of language gives you automatic credibility and power and a right to essentially have respect.
Gillian Tett:
The reality is that not everyone in society thinks that way, and we call that in the era of Donald Trump. It's beholden on journalists to be humble and recognize that the epistemology, the mental processes that they use to make sense of the world, might be theirs. Just because it's theirs doesn't mean that everyone else shares it, or necessarily that everyone else thinks is right, or that it is right. That's the first point.
Gillian Tett:
The second point is that journalism is beset by the same kind of silos that we see in the real world. Typically, journalists and organizations create structures that would optimize to cover the world that existed 10 years ago, because, internal bureaucracy is a check flow to change.
Gillian Tett:
You'll have a banking team, you have a politics team, you'll have a tech team, that will be in separate, competing departments. If a story is basically cutting across all of them, like how do you regulate crypto right now, it can be very hard for journalists to cover that effectively. But the other problem is that the way that we define what a story is, is subject to its own cultural patterns, and rhythms and rules.
Gillian Tett:
In 2005, when I was trying to write about credit derivatives, the problem I faced is that, one, if it's got acronyms, it's a kiss of death, you can't get it on the front page, usually with loads of acronyms. Which by the way, conversely, means that if things are wrapped up in acronyms, they are hidden in plain sight. The easiest way to hide anything in the world today is to give it an acronym, which no one can understand.
Gillian Tett:
Basically, journalists want stories that have faces events, step change events, quotable quotes, big numbers, which need to be verified by two or three sources. Now, that's great, because that's basically what journalism should be about, to ascertain the truth. But the reality is that, in the early parts of the 21st century, the equity market fitted that profile in the sense that you had visible faces, who said things on the record with tangible numbers that were quoted on stock market exchange boards, and you had drama, and you often had bad news as well, because journalists usually want bad news to report, not good news.
Gillian Tett:
But the derivatives market, the credit derivatives market, which is developing very slowly and elliptically with very few numbers out there at the time, very few faces and seemingly very little drama, that didn't fit the pattern of a good story. So, it was harder to report on.
Gillian Tett:
Now, we at the FT, I think probably did better than most of our colleagues, in fact, all of our rivals, we think, because we have this concept on the FT called a scoop of interpretation. Which means it's not a scoop of actual factual knowledge, but a scoop of interpretation about how the world's changing. We did try and cover it, and I spent a lot of time, courtesy of an editor who gave me a lot of freedom, trying to find ways to make the world of credit derivatives sound exciting. But it was difficult because of these cultural patterns about how we define what a story is.
Josh King:
If the first half of the book was ever turned into a movie, Gillian, the final shot might be Alan Greenspan walking up to you and asking for some advice on how to understand anthropology. How did that play out?
Gillian Tett:
Well, when Alan Greenspan went in front of Congress, soon after the crisis, and said, there'd been a "flaw in its thinking." A lot of people scoffed, which is kind of understandable, because people were angry about how blind he and many others have been about the crisis, because they had trusted blindly that markets were self-correcting, and that free market forces would remove any of the excesses over time.
Gillian Tett:
That would turn out to be wrong, because they'd not paid enough attention to the tribalism of finance and how that distorted incentives in a way that kept the game going. But Alan Greenspan recognized that. He said there was a flaw in his thinking. He later went out and did lots of reflection, and came up to me afterwards and said, "Can you recommend any good books about anthropology?"
Gillian Tett:
I was absolutely stunned at the time, because he had seemed to me to be someone who epitomize the anti-anthropologist. It later turned out that was sort of half interested in anthropology, what he really wanted to know at the time was what he could do to look at people who he'd considered to be exotic others, and exotic weird cultures. Which in his eyes, at the time, were the Greeks, because it was the onset of the Eurozone financial crisis when he came to me, and he wanted to know why the Greeks had this, in his eyes, irritating habit of not behaving like the Germans, when it came to attitudes towards debt.
Gillian Tett:
That's really valid, interesting, it's half of what anthropology does, which is to try and understand people who seem weird to us. But then the other half is trying to understand ourselves. I said to him, "Well, listen, by all means, go ahead and read about the Greeks. But there's some great books about anthropology I can recommend, which will tell you things about Wall Street, and also about the community of Central Bank governors. The studies of central banks by anthropologists.
Gillian Tett:
I have to say, he didn't seem quite so interested in those books, which is, again, part of being human. I'm not blaming anyone here because nobody wants to take a mirror up to themselves, usually. But as an anthropologist, I passionately believe there are these two fold aspects of anthropology, making the strength familiar, i.e. getting to understand others, and flipping the lens and making the familiar strange.
Josh King:
Making the strange familiar, making the familiar strange. After the break, Gillian Tett the Editor-at-Large US at the Financial Times and I look at use cases where Anthro-Vision reveals the problem and solutions facing the world. That's all coming up right after this.
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Josh King:
Welcome back. Before the break, Gillian Tett, the Editor-at-Large US of the Financial Times and I were discussing her career, from embedded anthropologist to a leading voice on economics and finance. Gillian, the New York Stock Exchange's lobby contains this recently completed and installed display that my colleague, our Chief Archivist, Pete Asch, put together. It ranges from Campbell's Soup Company that's NYSC ticker symbol CPB that chose the imagery of their cans from the 1890s to the ones that you can actually find on the market today. How does Anthro-Vision explain why sales are impacted by the outside of the can over time, despite the actual condensed soup remaining relatively unchanged for well over a century?
Gillian Tett:
Well, one of the messages from anthropology is that we're all shaped by what Clifford gives the American anthropology, which is called the webs of meaning. We all have basic material needs, but that's a very small part of what shapes how we live, how we spend our money, how we consume most of us about webs of meaning, and that we attach to items.
Gillian Tett:
Those webs of meaning can change over time, they can change between geographies. They're often very rich, multi-layered and contradictory. But just take the example of Campbell's Soup, anthropologists have actually studied Campbell Soup, and the ways that Campbell's Soup can connect with consumers, or not connect with consumers.
Gillian Tett:
They point out one of the contradictions around Soup is that if you go and do opinion polls of consumers in America, and ask same mothers, and this survey was done back in the 1980s, and '90s when it was mostly focused on mothers, before people realized that fathers cook too. But if you ask the mothers, do they like cooking at home? They tended to overwhelmingly say no, it's a chore, I hate it.
Gillian Tett:
That implies that people want to have convenience. For a long time, Campbell Soup was marketing its products purely under convenience; open a tin, clock, out it comes, isn't that great? Then anthropologists went and did what anthropologists do, which is different from pollsters, which was instead of asking people directed questions, they just sat down and observed. It's a hallmark of anthropology is you just try and start off by not even assuming you know the right questions to ask, you just observe and listen and have undirected conversations.
Gillian Tett:
That showed, actually, even though mothers were telling pollsters when asked directly, do you like cooking? Do you enjoy it? They'd say no. If you actually listen to them talking about it, it was clear, they have a lot of pride wrapped up in food preparation, and regarded it as a very core part of their identity, and their role in the family, and were quite resentful about that being ripped away suddenly.
Gillian Tett:
They realized that actually, in a world where family is no longer something we inherit automatically, but is part of our pick and mix culture, we deliberately feel that we have to create, which by the way, is a totally alien concept almost anywhere other than late 20th century West, this idea, you have to create a family. But actually, food preparation was seen as being a key ingredient, if you like haha, of creating a family.
Gillian Tett:
Actually, selling suit on the basis of strengthening family ties, creating the family, creating a sense of warmth, and all those aspects is probably a better bet for a can of soup, than selling it just on efficiency and convenience. The key point is this, people are shaped by these cultural assumptions, they don't understand. If you ask them direct questions, they may not actually reveal them, or even talk about those assumptions.
Gillian Tett:
It's not just about the individual, which is what a lot of consumer research is focused on, in terms of looking at people's psychology, it's also about the group patterns that we actually absorb and inherit, which need to be understood in context.
Josh King:
Companies can also use the tools of anthropology and turn them inward. Mary Barra, the CEO of General Motors, that's our NYSC ticker symbol GM, is the topic of an entire podcast series, exploring her work turning the company around. You use the car giant as an example in the book. What was happening at GM, and how do you convert observation into meaningful change?
Gillian Tett:
Well, General Motors deserves a lot of credit for having had the insider wisdom or one person at General Motors to bring in anthropologists, really started in 1980s, to study not so much their consumers, which is how most companies use anthropologists, and they do, to study themselves. They basically used an anthropologist to go around and look at different practices inside GM.
Gillian Tett:
One day she was studying what was happening inside factories and why the union conflict was happening, and realized very quickly by observing the factory workers and people on the assembly lines, that what the managers in their C-suite thought was happening was completely different from what was actually happening on the ground, and that the conflict between unions and managers was a symptom of a problem, not the cause of the problem.
Gillian Tett:
Separately, she went and looked at why General Motors' attempt to create a merger between a team of German engineers, Tennessee engineers and Detroit engineers, to create a small car in the latter part of the 1990s. She looked at why that went very badly wrong.
Gillian Tett:
At the time, people who were tracking that project inside GM thought it was because of linguistic problems between the Germans and the Americans, or because of scientific and engineering problems because they couldn't get their different car designs to mesh together.
Gillian Tett:
In fact, the anthropologists realized, in fact, the biggest problem was actually cultural problems, and not just between the Germans and American, but between the different groups of Americans from Tennessee and Detroit. What was really interesting was that it played out in some really practical ways, like the different groups had different attitudes towards what a meeting was supposed to be.
Gillian Tett:
The web of meaning around the concept of a meeting for each different factory was different, and different is in really fundamental ways. They kept calling meetings to try and resolve the problems, and that made it worse because each group started with a different assumption, unstated assumption about what a meeting actually was going to be.
Gillian Tett:
The point about this is that, the insights were fascinating. Tragically, General Motors didn't actually put most of them into practice, the reports were written, they got rather buried. In many ways, what Mary Barra came out two years later and said about the reforms of General Motors were exactly what the anthropologist had been calling for 30 years earlier.
Gillian Tett:
Back in the late 1990s, they were thinking about how do we overcome cultural differences between German engineers and Tennessee engineers? Today, the question is, how do we overcome cultural differences between, say, computer geeks who know all about self-driving cars, and metal bashes, who know all about how to make a car and urban planners who might be thinking about mobility, and the lawyers? How do we cope with those professional cultures, which are so different? That's a very live question today.
Josh King:
Your writing has several examples of brands being actually lost in translation, but one that stood out to us here at the Exchange was Nestle's Kit Kat, which went from being an outsider brand in Japan, to being exported back to Europe, as an outsider flavor. How does the web of meaning allow the same thing to have multiple truths?
Gillian Tett:
Well, I love the Nestle example, because I find it actually quite inspiring, to be honest. One of the things I try and stress in my book is that culture doesn't exist as boxes, and you can't rank those boxes hierarchically. It doesn't have fixed boundaries. Instead, culture is more like a river, in that we inherit these assumptions from our surroundings, they are immensely important, but they are constantly, subtly moving and changing, and new threads come in.
Gillian Tett:
It's hard to actually draw the boundaries about where one culture ends, another begins. What happened with Kit Kat is that you have a British biscuit, which was incredibly British in its branding and perception, created originally from a company created by a Yorkshire Quaker that was brown, and was sent all over the world, originally as part of Rowntrees and then Rowntrees was bought by Nestle.
Gillian Tett:
It didn't do very well in Japan. In the early part of the 21st century, some local Japanese managers noticed that sales of Kit Kat was spiking in Kyushu, the Southern island. When they looked into it, they realized that the reason it was spiking was because some local Japanese teenagers had noticed that Kit Kat sounds like a Japanese phrase [foreign language 00:37:57] in Japanese, which means, we shall overcome. They were giving each other Kit Kat bars, ahead of exams as a good luck token.
Gillian Tett:
Now, it would have been really easily for the Nestle managers to go, "God, that's weird. Strange Japanese. That's not part of our British branding, have a break, have a Kit Kat," was a global slogan. To just ignore it, or to laugh about it.
Gillian Tett:
But instead, they'd leaned into it, and they started very subtly marketing their Kit Kat bar in Japan, as a good luck token for exams, linked to a tradition in the Shinto religion in Japan, of having these special tokens from Shinto shrines, as special good luck charms.
Gillian Tett:
They did it so well, that within a few years, half of all Japanese teenagers were either giving or receiving a Kit Kat bar as a good luck token. There were photographs of them going into their exams, literally praying to their red Kit Kat bars.
Gillian Tett:
Then Nestle leaned in even more and started taking this brown, sweet, chocolate biscuit and injecting all kinds of Japanese flavors into it and changing the color. You had soy sauce Kit Kats, wasabi Kit Kats, green tea Kit Kats, Hokkaido cheese Kit Kats. They experimented so dramatically that within a few years, Kit Kat had become a souvenir that people visiting Japan bought as a souvenir of Japaneseness, not Britishness. Then they decided to bring the matcha green tea green Kit Kat back to England, and they used a factory in Germany to make it. In a sense, you had the whole wheel go full circle.
Gillian Tett:
Today, when you look at a green tea matcha Kit Kat, is it British? Is it Swiss? Because Nestle is a Swiss company. Is it German, because it's made in Germany, or is it Japanese? The answer is, it's all of those blended. That shows that culture is a moving, shifting river of different strands, which, in many ways can be incredibly creative and exciting when you actually bring the strands together.
Josh King:
Let's come back to North America from our foray in Japan, and Europe and the Kit Kat. A little bit toward the antithesis of what we might think of as what is implied by, we shall overcome. The insider example in your book, at least to our US listeners, might be Donald Trump's election in 2016. Would a greater knowledge of the WWE, for example, that's our ticker symbol, WWE, of course, change how journalists understood his big league chances of winning the election?
Gillian Tett:
Well, that part of my book is, and that theme is really about a confessional. Because I have made lots of mistakes in my career, and one of them was to get really pulled into this rather elite journalistic assumption, that command of words is what gives you credibility to not just pontificate as a journalist, but to essentially have power in general.
Gillian Tett:
Out of that presumption, which shaped journalists, because guess what, our own craft is all about words, we automatically tend to assume that people who are in politics or elsewhere, who speak in a way that we recognize and applaud are automatically more powerful and should rightfully be in positions of power.
Gillian Tett:
Donald Trump, obviously, up ended that, dramatically. He did so, partly by directly attacking journalists, but also by attacking what we might call the epistemology, which is the body of knowledge or the nature of knowledge that journalists work with, which is really founded on this idea of sequential, what we would call rational thought, and direct analysis and deconstruction of words.
Gillian Tett:
The reality is that journalists, myself included, have been slow to recognize often, that the way we think is not the way that many people in America or West think, and people often present their sense of arrogance on our part. They've always been slow to recognize there are other ways of communicating.
Gillian Tett:
Back to WWE. Someone said to me, "Well, listen, if you want to understand Donald Trump, stop reading his speeches, or trying to parse his speeches, go to a wrestling match, and you'll understand what really drives him." So, I did.
Josh King:
Which arena did you go to?
Gillian Tett:
I went to Madison Square Garden. It takes you straight back to anthropology, rituals, ceremonies, symbols matter, social groups matter. Nonverbal performances matter enormously, whether it's a Tajik wedding, or an investment banking conference, or a wrestling ring.
Gillian Tett:
The reality is that Trump is probably best known to much of the American audience before the presidency, on television, not through the Apprentice, but through wrestling. When you go to a wrestling match, you realize that his performative style as a politician was all about borrowing heavily from the wrestling world. There's the aggression, the whipping up the crowd, the mock fighting, the mock battle of the name calling, the taunts, all of that was taken lock stock and bow into politics on his campaign.
Gillian Tett:
What's fascinating there was that, first of all, many of the elite didn't even realize that was going on, because they'd never been to a wrestling match, because it was more of a mass market entertainment, and his supporters were far more likely to go to wrestling matches. Secondly, that famous quote from [inaudible 00:43:45] that basically, his supporters took him seriously, not literally, journalistic and literary not seriously. When you go to a wrestling match, you realize that nonverbal communication, non-literal communication can be a really powerful tool for actually communicating with people.
Josh King:
Talking about misinterpreting the same word, and talking about something that was happening on the periphery of this campaign, how did the word Cambridge and what we associated with it lead you to gain a new perspective on how labeling things free on the internet was actually, in some ways, the digital version of our old friend, Benjamin Whorf's, oil barrels, or empty oil barrels?
Gillian Tett:
Cambridge Analytica was broke a couple of years after the election, they were starting to break. During the election, the whole scandal around Cambridge Analytica and the way that targeted data and analytics and manipulation had played into the campaign, the ad tech space. For me, I was fascinated because I'd actually stumbled across Cambridge Analytica very early on, partly because in an earlier iteration of the company, they'd actually use anthropologists.
Gillian Tett:
What fascinated me about the scandal around Cambridge Analytica and the whole 2016 campaign, was actually, although it was presented as a political story, and it was a political story, in some ways about misinformation and external interference, it was also a story about economics. Because what you saw so clearly on a massive scale was that companies were developing this two way trade of hoovering up data from people in exchange for services.
Gillian Tett:
The people giving out data for free, and getting back free services. What was happening with Cambridge Analytica was just one tiny part of this massive ad tech business that was driving social media and so much of tech. The problem with the word free, like the word empty, is that it sounds negative and boring, is an absence of money. We live in a society where economists and investors assume that money is everything, and what you need to track.
Gillian Tett:
But anthropologists have always known that societies are held together by exchanges that aren't just about money, there's other types of exchanges, including barter. One way to see what's happening in the tech world today is that there is a massive barter trade going on, as people swap data for services.
Gillian Tett:
People might say, "Well, that sounds ridiculous, because barter conjures up images of cavemen sitting around swapping beads for meat or something." But actually, there isn't another word in English language to really describe this. The reason, I think, we should talk about barter is because it shows the importance and scale of what's going on, and it gives a clue about how to build a tech world that feels more ethical to consumers and politicians.
Gillian Tett:
The key point is this, I don't think most consumers want to mediate these exchanges with money, because that would be inefficient. Actually, swapping data for services in this way is quite efficient. But they want to change the terms of trade or barter deals, and change the terms of trade to give consumers more power in that relationship, I suspect you need to do things like make it more transparent, for starters. Give consumers the ability to terminate trades, and most crucially, give them data portability, the ability to have barter trades with multiple providers competing with each other.
Gillian Tett:
There's a leaf that the tech industry could take from the financial world, which is to put the onus for data portability onto tech companies, like the onus for bank account portability is put on the banks. I'm suggesting that we should basically recognize there's barter going on, and use that recognition to try and build fairer terms of trade.
Josh King:
Talking about building a tech world that feels more ethical, or at least to parents like me, more comfortable. Over the past year, and frankly, well before that, our smartphones are tethered to the rest of the world. Can you explain your revelation of the social silence causing teenagers to escape into the phone that my wife and I see in the backseat of our car every Friday and Sunday?
Gillian Tett:
Well, I have the same issue and the same obsession, because I've got teenage girls as well. What's fascinating about that is that there's been so much [inaudible 00:48:16] and debate in recent years about, how do we stop teenagers from being addicted to their cell phones? Almost all of that debate has been focused on the cell phone and the teenager. That's the obvious visible noise in their debate. It's like the equity markets back in 2005, it grabs all the attention.
Gillian Tett:
But there's a wonderful anthropologist who worked for Yahoo, and Microsoft, who said, "I'm going to look at how teenagers use their cell phones in context, and essentially, just observe them first and foremost, rather than asking them directly questions."
Gillian Tett:
When you do that, you realize that the part of the equation no one talks about the social silence is the real world, physical context in which teenagers live. If you dial back 100 years ago, teenagers had a lot of physical freedom to go and walk around towns, roam, collide with the unexpected, and to test boundaries physically in the real world.
Gillian Tett:
Even 50 years ago, when I and you were growing up, teenagers would congregate in shopping malls, they would cycle to school or cycle around to meet their friends. They would walk on the streets. What has happened, though, in the last few decades, is that middle class parents in America have increasingly controlled their physical movements, either by having great concern about stranger danger and driving them everywhere, or by simply over scheduling them to a point where teenagers aren't roaming shopping malls anymore, or roaming the streets in packs as much, in most parts of America.
Gillian Tett:
The only place that they can really roam without parental controls or oversight and collide with the unexpected, and congregate in groups without parents watching is online. That's, of course, become even more extreme during COVID.
Gillian Tett:
I'm not saying that's the only reason why addiction has happened amongst teenagers at all. But it's one reason that we need to include and debate, and to try and make sense of it. It comes back to the key point about anthropology, that you can achieve an awful lot in life by looking at things through a quantitative lens. But if you don't look at the context in the widest possible way, if you don't move from having tunnel vision, to lateral vision, then you're going to miss half the things that really matter in life. Whether you are a parent who's frustrated, whether you're a policymaker, whether you're a CEO, or whether you're an investor.
Josh King:
As we wrap up, Gillian, whether protesting against climate change, inaction, or the Me Too movement, ESG is now really a revolution. Starting with the soft underbelly of the Soviet Union today, what have you learned about understanding when a movement ferments into a full revolution? Did that shape your decision to start the FT's Moral Money?
Gillian Tett:
Well, I started the FT Moral Money because I realized that once again, I as a journalist, I'm being a bit arrogant, most journalists a few years ago thought that ESG was just pious BS. I used to joke it was about eye rolls, sneer and groan, because your average company, when they started talking about it looked like they had something they wanted to hide.
Gillian Tett:
Then I realized that, that was my perception, not what actual FT readers were thinking, they were interested in that for other reasons. I pit into it. I quickly came to realize that ESG was originally driven by activist ideals, and was seen as a tool of activism. It is in some ways, but today, it's really blossoming and exploding because of risk management.
Gillian Tett:
Essentially, companies and executives and investors are realizing what I've been talking about with Anthro-Vision, which is a need to move from tunnel vision to lateral vision, to look outside the edges of your model, or your balance sheet, or your big data set, and try and see around corners, and look at things in context, and look at the consequences of what's happening. That's what's driving ESG, it's about risk management, just like in some ways, anthropology is about risk management. It's about checks and balances in the system.
Gillian Tett:
We started the platform, Moral Money at the FT to try and tap into it, and it's been an astonishing success, huge demand and interest in the platform. Of course, ESG issues keep rising and rising. In many ways, it's a reaction to what the US military calls VUCA, volatility, uncertainty, complexity and ambiguity, or simply a realization that you can't use just tunnel vision tools to navigate a very complicated world. The image I use, which to capture this is, if you imagine our balance sheets, our economic models, big datasets are like compasses. If you walk through a dark wood at night with a compass, you don't want to throw that compass away, it's really useful. But if you just look down at that dial all the time, and never lift your eyes up, you're going to walk into a tree, and bang your head, or trip over a tree root.
Gillian Tett:
Anthropology gives you that ability to look up, look around, to check out for checks and balances, to, if you like, embody a stakeholderist vision. That really matters in today's world.
Josh King:
Hold on to the compass, hold on to the smartphone, but cast your eyes away forward and look forward, look all around you, take a good 360 degree view of the world that you're in.
Gillian Tett:
Absolutely. That is what I'm marketing, and I think most people instinctively recognize that, which is why ESG sustainability themes are rising.
Josh King:
Gillian Tett, thank you so much for sharing that with us and joining us inside the ICE House.
Gillian Tett:
Thank you. Great to be on your show.
Josh King:
That's our conversation for this week. Our guest was Gillian Tett, Editor-at-Large US of the Financial Times and her book, Anthro-Vision: A New Way to See in Business and Life. It's out from Simon & Schuster, available wherever books are sold. If you like what you heard, please rate us on iTunes so other folks know where to find us, and if you've got a comment or a question you'd like one of our experts to tackle on a future show, email us at [email protected] or tweet at us @ICEHousePodcast.
Josh King:
Our show is produced by Pete Asch, with Production assistance from Stefan [inaudible 00:54:37] and Ian Wolff and Brian Hopkins. I'm Josh King, your host, signing off from the Library of the New York Stock Exchange. Thanks for listening. Talk to you next week.
Speaker 1:
The information contained in this podcast was obtained in part from publicly available sources and not independently verified. Neither ICE nor its affiliates make any representations or warranties, express or implied as to the accuracy or completeness of the information and do not sponsor, approve or endorse any of the content herein. All of which is presented solely for informational and educational purposes. Nothing herein constitutes an offer to sell, a solicitation of an offer to buy any security or a recommendation of any security or trading practice. Some portions of the preceding conversation may have been edited for the purpose of mental clarity.
