Curious Worldview

115: Rory Sutherland | Alchemy: How Great Marketing Ideas Are Built Around The Profoundly Irrational

• Rory Sutherland • Episode 115

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The following is a conversation with Rory Sutherland.

He founded the behavioural science team within the Ogilvy group and is one of Europe’s most powerful advertising executives. 

To get a sense for his thinking and his incredibly interesting worldview he wrote a book called Alchemy, that argues great marketing ideas are often built around a core that is profoundly irrational.

This podcast touches on the themes of Alchemy but interestingly, Rory has applied them to different domains than those he covered in the book meaning.. this is totally new.

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00:00 – Introduction.
01:23 – How Nassim Taleb Has Influenced Rory Sutherland’s Worldview.
32:28 – C Elegans Worm Analogy & Covid.
41:38 – Banality In Social Media.
47:07 – What Is Taleb Like As A Bloke? + Interesting Questions About Social Engineering.
58:23 – System Design Complimenting Marketing & Advertising.
1:04:33 – Why It’s Important To Believe In Alchemy (Complexity) + Thinking About Nepotism.
1:14:40 – Signalling.
1:21:35 – Serendipity In Rory’s Life.
1:24:55 – Country Rory Sutherland Is Bullish On.
1:28:23 – Conversation Between Any Two People Of History.
1:31:00 – Afterthoughts & Ambitions For The Podcast.

Links To Rory Sutherland

Episodes Of The Curious Worldview Podcast Mentioned.

SPEAKER_01

The following is a conversation with Rory Sutherland. He founded the behavioral science team within the Ogilby group as one of Europe's most powerful advertising executives. To get a sense for Rory's thinking and his incredibly interesting worldview, he wrote a book called Alchemy, which argues that great marketing ideas are often built around a core that is profoundly irrational. There are strong echoes of Taleb in Rory's work, and Alchemy is probably my favourite book of the year. This podcast touches on the themes of alchemy, but interestingly, Rory has applied them to different domains than those that he had covered in the book, which means this is all totally new. In this chat, there is a lot of talk about social engineering, how Nasim Taleb has influenced Rory's thinking, an extremely sophisticated take on signaling, how banality plays on social media, and more and more as well. So do hang around to the end for my uh afterthoughts and also my ambition for the podcast. Um and you know, although this podcast maybe took me five hours to put together, it will only take you five seconds to review. So please pump that good juice into the multiple and various algorithms, swipe up your phone now, and bring Spotify reviews to a hundred before next week, and bring Apple reviews up to a thousand before the week after. Alright. With no further ado, here is the great Rory Sutherland. How did it feel to get Nasim Taleb on the book jacket?

SPEAKER_03

Uh that was pretty good. I'm a huge Talib fan, um, and I'd known him for some time, and we'd corresponded quite a bit, met for dinner occasionally. Um but um uh it was pretty much a you know pretty perfect uh kind of imprimature and uh he thoroughly enjoyed the book, which I mean, you know, not only to the extent of uh you know agreeing with much of it but also finding it entertaining and I definitely took the win there. Um I was I was absolutely delighted. Uh you know, not an easy man to please in some cases, but um uh I I've I've been a very, very long ad admirer. I think this whole question of uh statistical misrepresentation um is a much, much more widespread problem than we realise. It suddenly occurred to me there's a sort of problem, in fact, which is that if you think that statistical competence, roughly speaking, comes on a kind of bell curve Gaussian distribution, okay. Yeah, then really, really good statisticians are gonna be outnumbered sort of ten or fifteen to one by statisticians who are merely competent. Okay. Now in something like plumbing, sometimes you want a really great plumber, but quite a lot of the time a perfectly competent plumber, it's fine. Okay? They're not gonna do any harm. My concern with statistics is that um people who think they know what they're doing statistically can be spectacularly I mean, order of magnitude wrong and spectacularly dangerous. And I don't think we fully realize the extent to which you know fairly naive assumptions which highly intelligent people confidently make every day can quite often be wrong.

SPEAKER_01

Give us an example of those naive assumptions.

SPEAKER_03

Uh the whole question obviously of assuming things are Gaussian when they aren't, which then blinds you to black swans, hence hence the book. Uh also the extent to which I think businesses deal in averages. Because your average customer, in a weird kind of way, possibly doesn't even exist. And when you average something, and most most business information is aggregated and averaged. And the reason it's aggregated is that that's what the finance people care about. They care about totals. Okay? And so when you're reporting up, what you do is you add information together and then average it. Now, in that process, the really valuable information, which is about variance, difference, anomalies, etc., all the really significant information gets lost. And if we what we tend to do then, partly just for purposes of mathematical tractability, is we make the assumption that the world is smooth even when it's lumpy. And so, I mean, I I I'll give you a lovely example of this, which uh because you wanted a specific example. Um if you look at models for, let's say, investment in high speed rail, they don't make the distinction between saving a hundred people twenty minutes once a year and saving one person twenty minutes a hundred times a year. You know, effectively it's looked at as the value of high speed rail is time saved by people not being on trains, and it's assumed to be equally valuable and important whether it's whether a small amount of time is saved by a lot of people or a lot of time is saved by fewer people. But in terms of human behaviour, of course, they're totally different, because if I travel to Manchester from London once a year and save thirty minutes each direction, and so do a million other people do that, well what you've created is not really a game changer, it's just a mild convenience. On the other hand, if you make a computer railway twenty minutes faster, fewer people benefit, but they do benefit to the extent where it will actually change their behaviour. You know, you might be able to move to Canterbury because there's high speed one, okay? You know, because your hundred, two hundred times a year journey is now reduced by an hour. That's a big deal. Having having, for example, um, you know, uh, 200 people save one hour a year, is and that possibly, that possibly should have killed the Concorde, by the way. Uh, which is simply, and I I did the maths, okay, and I found out the person who'd used the Concorde most frequently. He was interestingly on the first flight and on the last flight of the Concorde. Um, and even in his case, and he was a complete outlier, complete weirdo, actually, to be honest, but even in his case, um uh it only save the Concorde only saved him something like 15 minutes a day of his working life. Something which could easily have been achieved by his simply moving a bit closer to the office. Okay? So, no, if every plane had become a Concorde, Concord might have been a bit of a game changer. But the number of people who travel between New York and London so frequently that it actually saved them an appreciable amount of time, uh, wasn't really great enough to make it worth the investment. Furthermore, what nobody really spotted is Concorde works brilliantly if you're flying east to west, but it's frankly a bit of a non-starter if you're flying west to east. Because when you're flying from New York to London, uh you already do it in three hours, okay? Uh you actually do it in nine hours, but you're asleep for six of them. Now, the problem with the Concorde is the flights out left London at, I think, if I've got it right, one of them kind of left at nine in the morning and got into New York at seven, and the other one might have left at midday and got into New York at ten. Both pretty useful. You've got a really long, really productive day. On the way back, I think I've got this right, you basically had to leave New York in the morning. Um, it and so Concorde doesn't really work. Uh an overnight flight works much, much better flying east uh than a Concord flight does. If you remember, I think one Concord flight got in, used to get in about five o'clock into London. That was the l I think it was the later one of the two. And that must have d um doing the maths, okay, f um that must have left New York at, let me see, nine o'clock in the morning. You know, day flights, if you think about it, are very, very rare. Airlines don't like them much because the plane's on the ground overnight. It's um I mean this is what I'm saying, is the world this is the other great phrase of Nassim's, which I think I think is the most important one. I think the subtitle of his most recent book was Hidden Asymmetries. In everyday life. And the two mistakes we make is we is for the purposes of nice mathematics, we assume the world is smooth when it's lumpy. Okay? And we assume the world is symmetrical when it isn't. Okay, here uh you're in Australia at the moment, presumably. Now in Stockholm. So you're in Stockholm. Oh fantastic. Okay. Well, here's an example of an asymmetry. Okay. Freedom of movement within the European Union. Can you really have freedom of movement in a kind of symmetrical balanced way when some countries speak English and some countries don't? Now the problem is that there are probably ten, fifteen million people in continental Europe who speak English well enough to take my job, potentially. Okay. If I moved to Poland, I'd be sweeping the streets. And it's simply a language. It's a language of Now, I I checked on the data at the time and discovered at the time we left the EU, there were more British born people working in Australia than in the whole of continental Europe. Wow. That's a great little insight. The population of Perth is one-eighth British born. Okay? But that's on the other side of the world. Why? Yeah. Well, the simple reason is that, you know, I you know, if you if you look at a country if you look at the Commonwealth and you created freedom of movement in the Commonwealth, well, okay. It's the asymmetry, it's easier for them to move to Australia than. I mean, I you know, I could well, I mean, legally I'm not sure I'd I'd be allowed to, but I could theoretically start an ad agency in India or Jamaica, right? You know, I I'm not sure I entirely master the uh you know the local dialect in each place, but I could I could theoretically operate a Ghanaian um advertising agency. Okay. Uh um and similarly, people from Jamaica can come here and indeed do very successfully work in advertising. Great, totally happy. It is at least symmetrical in terms of opportunity.

SPEAKER_00

Yeah.

SPEAKER_03

Uh you know, basically, English and other languages, um, it's a case it they're not reverse compatible. You know, to use the language of kind of plug adapters, uh, you know, what works in one way doesn't necessarily work backwards. And so that's just a classic case where something obviously quite important. Now, I'm not I'm not saying it was a game changer, I'm not saying it was a reason to leave the EU or anything of that kind. I'm just saying that the fact that nobody mentioned this as a possible issue is kind of interesting.

SPEAKER_01

Uh, and Taleb does that so well, doesn't he? He takes these things which are kind of on the face of it, quite obvious and almost instinctual, things you perhaps should have known beforehand, but then he just gives this really tight and uh attractive language to it, and all of a sudden you can make sense of it and apply it to different things.

SPEAKER_03

And here's the most important one, by the way, is Taleb's work on um uh IQ, possibly the most important one. Because we automatically, and I've fallen into this trap, tend to see humans, which I don't think they should, you know, I tended historically to see humans kind of ranked on a ladder. Bill Gates said this, he always believed initially in business, that any problem was simply a matter of throwing enough intellectual firepower at it. And, you know, if you put high IQ individuals in a place, you're more likely to solve the problem. And he very quickly came to realise, and particularly in fields like sales and marketing, that they're entirely complementary skills. Um and Taleb's work suggests that what we should be at the moment, okay, an awful lot of stuff, the sorting hat of higher education, assumes that people are rankable on a linear level, and that the higher up you do, for some reason higher education is considered to be a reliable proxy for your performance in the workplace. I don't think it is, even remotely, okay, but never mind that. But there is this assumption that, you know, uh if we allow the quality people to rise at the top, that's the basis of a successful um uh state. Now, actually, we should be gunning far more for diversity of opportunity rather than equality of opportunity. With equality of opportunity, we rank everybody on the same criteria, put them through the sorting hat, and put them on a ladder. Actually, what makes society work is complementary skills. And I learnt that going into an ad agency. There are people who have spectacular organizational skills who are a disaster if you ask them to write a memo. There are equally people who can solve a weird creative problem but are, you know, more or less enumerate. Okay? It's worth noting, by the way, that um I was looking at, you know, uh, you know, Faraday, Watt, okay, Stevenson, okay, they're all self-taught, intriguingly. I mean, I found that kind of interesting.

SPEAKER_01

Um, but um Taleb as well, largely self-taught, he would Yeah, I suppose you're right.

SPEAKER_03

Yeah, yeah, absolutely right. I mean, he went uh I think he went to Wharton, actually, so he must have had a business education.

SPEAKER_01

But the mathematics his education on risk and randomness, he would say, was uh self-taught, yeah.

SPEAKER_03

And what he did was he allowed his instinct to inform his theory and his experience to inform his theory. Yeah. Okay, rather than theorizing and then applying it to execution. Right. And the the order in which you do those two things is another great asymmetry, by the way. You know. You know, I mean, there are there are huge asymmetries of kind of sequence. You know, A and then B and B and then A are entirely different. So that's another example of this. But I mean what what's interesting to me about uh uh about the IQ question is that what Caleb shows is that now, okay, he would admit this that okay, um, you know, income is not a proxy for is not a perfect proxy for success. But nonetheless, you can't game it. And since most people try and be richer, it's not a totally hopeless uh measure of life outcome. I mean uh, you know, i i i i i i I mean you know, at a kind of larger scale level. And his point is that there is a correlation between IQ and income, but it's almost all driven by the left hand side.

SPEAKER_00

Mm-hmm.

SPEAKER_03

Once you reach an IQ of about a hundred, hundred and five or something, uh basically the the the slope comp pretty much levels off. Now, I'd still I mean I'll still have a debate with Nassim, and I'll say there probably are some fields like, you know, theoretical physics where there's probably a higher barrier. But basically what happens is that most of this correlation between um success and IQ is driven by the fact that if you have an IQ below 90 or 85 or something, there are incredibly few fields in which you can be genuinely successful. However, I mean and my point about that is the asymmetry of proxy measures and how reliable they are, okay? So if you I I would say that this is similar. If you took people and you said, okay, we're going to decide who gets to play cricket by how well they play football. Okay? At one level, it would be reliable, by which I mean people who are absolutely shit at football. Sorting for athletics, you know, basically have no, you know, hand-eye coordination, they're useless, they're immobile, whatever it may be. If you're absolutely shit at football, you're not going to be any good at cricket. You know. That would be not not a perfect assumption. You know, I mean, Babe Ruth was, you know, baseballer, but pretty fat guy, right?

SPEAKER_01

You'd cancel out a lot of noise in that.

SPEAKER_03

But you cancel you cancel out a lot of nonsense. Is it safe to say that the best footballers are going to be the best cricketers? Absolutely not.

SPEAKER_01

No.

SPEAKER_03

Okay? And so using the same kind of thing just because something correlates across a, you know, uh a wide range, the suggestion that it therefore correlates in a in a narrower range of deciding, for example, who goes to university, or indeed SAT scores. And I w I also accept I I have a bit of a dog in this fight because my great aunt was an anthropologist, I only met her once. My great aunt was an anthropologist called Beatrice Blackwood, and she was involved in the States, although she was a man uh with um early kind of IQ research. And one of the things she kind of noticed was that the the the effective axiomatic assumption with which IQ research started was that you know a Princeton professor was the highest form of human life and human intelligence, and therefore tests at which they did disproportionately well were considered to have great value. Whereas once you had a test, for example, memorization of poetry, in which, interestingly, say, um, Latinos did better than Princeton professors, right, they decided that obviously wasn't a valid test of intelligence because it didn't come out with kind of Princeton academics at the top. And my my my aunt was discomforted by this. You know, she was shrewd enough to go, hold on, this is you know, we're start we're starting here with a dog in the fight. This isn't a completely um dispassionate inquiry.

SPEAKER_01

Um something else I think Taleb uh says about IQ testing as well is applying the Wittgenstein's ruler to it. You know, are you measuring the test or is the test measuring you? Just because you take a um, you know, uh what pattern is this showing and what word is missing here and predict the next five numbers, you're not you're testing for a very narrow field of intelligence, and therefore society's then built around it.

SPEAKER_03

But how would you do on IQ tests? And my my my reason I'm confused is that the wordy ones and the numbery ones and the ones that are a test of logic, I'm pretty damn pretty damn good at, right? Okay, now some of that with the wordy things, I think is just doing classics.

SPEAKER_01

Also just practising for that narrow domain. It's not even a yeah.

SPEAKER_03

Well, I mean, quite a lot of word and verbal logic sentences require you to put words in the right order, okay? Now, I mean, you know, I you know, if you've done Latin, which is basically a language where the words are in the wrong order, okay. If you've spent seven years of your life doing math, you're pretty keen on cryptic crosswords or whatever it may be, okay? It's gonna help. Right? I mean, practice undoubtedly is gonna help. One of the strange things, I do cryptic crosswords, and after doing this in the book. And and weirdly, I can see anagrams in a my there's some weird thing where I know what it's an anagram of, and I know what the phrase is supposed to mean, and I can somehow in a way I can't explain. Without writing the letters down or crossing letters off, I can just go, you know, cook cart horse is an anagram of orchestras, for example. Okay, right? Okay. Not not very useful to be honest, okay, in the real world. But you just go, oh yeah, carthorse orchestras, yeah, bang. Okay, you don't even have to do the O R C H. But that comes after about four or five years of doing cryptic crosswords. And um uh so you know, I mean, undoubtedly my my my thing is that also there's something weird because uh the wordy ones, the numbery ones, the logical ones, yep, fine. Those fucking shape things can't stand the bloody things. I don't know. You know, you've got like a grid of like nine shapes, there's like stripy triangle, you know, circle that's white on the left, black black on the right, then the circle grows like a TV aerial on the top right hand side. I'm going, well they say, well, what what's next? I go, fucking elephant. You know, I mean, you know, that sequence and pattern recognition visually um I can do it if it's a if it's a word game, totally different. Well, something that's that domain dependent seems to have a bit of a I mean it's also it it's also I mean there are some very interesting people who claim to have done IQ tests which scored them very low. I mean I mean, okay, a hundred and twenty-four isn't low, but what's his name? The physicist, you know. Uh did the um uh rub uh the O-ring things for the space shuttle.

SPEAKER_01

Oof, sorry, mate. Dunno.

SPEAKER_03

But I mean, um I'll remember it in a second. But I mean, you know, he was a Nobel Prize winning physicist who claimed that when he did IQ tests he came out at 124. Well um he's one of the few physicists who'd actually be honest enough to tell you he got a hundred and twenty four.

SPEAKER_01

But you're also not you're not testing for what were the conditions on the day. Richard Feinman. You know, had he just had a meal, like all these things, you know? Oh, Richard Feynman was it? Yeah, now that's a great example of someone who Taleb would admire. I'm sure I've never heard him speak about him, I'm sure he would, because he's sort of like a um Yeah. Learns by experience, uh, etc. has these random eclectic interests, would class himself type of a flinur in a different way.

SPEAKER_03

And fascinatingly, his interest in physics came around with tinkering around repairing radios. Which is he started by basically it you know, it you know, tinkering with reality and then started to realise there were inferences and rules you could derive from that.

SPEAKER_01

Yeah. Yeah.

SPEAKER_03

Uh which is kind of you know, I've kind of fascinating route in. Uh but no, I mean this is this is a great example. I mean, you know, it's uh uh I and I thought that IQ work was incredibly important because I I I mean okay, this idea that you can use higher education as a proxy for who's employable strikes me as very, very dangerous. What you should do is give someone the real job to do and see how they do. And I think we're probably wasting a spectacular amount of talent because they're people who can do a brilliant job with a practical application. Who you know, I know people like this in advertising, right? If you say, here is a real world problem, can you solve it? They manifest um, you know, flashes of genius. But if you say I want you to write an essay on the Peloponnesian Wars, not entirely unreasonable. They can't be reasonably, they can't be bothered, you know, or it just doesn't excite them because there's no practical application for you know. And the number of people who are happy operating in abstractions is a s is a subset of the people who are actually happy and capable operating in the real world. And we're testing Testing for this weird skill around abstractions, which I think is, you know, is actually I mean, we you I mean, I bet you see this in programmers all the time. People who basically, you know, uh weren't necessarily academically particularly good, but when it came to programming problems could manifest kind of, you know, spectacular ability and concentration and um uh and and output.

SPEAKER_01

I think there's also a um there's a survivorship bias to the idea of being a programmer as well. So many people got it and the film became so saturated. It actually turns out it's not a particularly difficult skill to learn.

SPEAKER_03

Um and so you have I I I would have thought there might be a case where uh uh certain problems require you know, that it may be that 90% of what you do is relatively straightforward, but there are certain things. It would certainly be like that.

SPEAKER_01

It'd be the 80-20 distribution. Um forgive me for um belaboring the Taleb point. Uh it's just because I did something that he would be um terrifically disappointed and and and mad at. But I made a podcast which sort of talks about his work and uh sort of not reviews his books, but just discusses the ideas from the book. And I think one that is most influential for me and I'm projecting onto you now, I imagine it's very influential upon you as well, because it's something you would wrestle with every day. But it's just the idea of how can you predict a future of infinite possibilities based off a finite experience of the past, because you're there trying to um you know create attention, do something original, um you know.

SPEAKER_03

Uh there are well, first of all, it it depends on how far ahead you attempt to plan. And what's undoubtedly true is that you know one of the asymmetries uh is that all big data comes from the same place, the past. Okay? So companies that become absolutely obsessed with justifying their future activity on the basis of pre-existing data are to some extent, as Gerd Gigerenza, a big friend of Taleb says, they're over optimizing on the past. Okay, because the past was once one of many possible futures. You know, there was a you know, there was a there was a past version, very nearly experienced, of 2020, in which some bug didn't escape from the lab, right? Okay. Now, you know, um the the past, you know, the fact that all big data i essentially comes from pre-existing sources, and there are all kinds of biases in the kind of data that's available, not least, you know, what what's called in a AI the um alignment problem which is what's quantifiable isn't necessarily what's important. Okay. That um the confidence we attach to solutions derived from data, particularly when dealing with qu future questions, but e even actually when um uh when looking at explanations for past events has to be treated with great kind of scepticism. I I I mean, you know, I I look at this alignment problem, okay. There would be a correlation, okay, between people's happiness with a taxi firm and how quickly the cab turned up. You know, um I you know, I I I you know you'd find that correlation. Now, is that is that actually the main causation? Well, to some extent yes, because at the extreme, a taxi that never turns up, which by the way might not show up on the data, just to be clear, you know, there's that wonderful thing where you cancel trains to improve your um uh your punctuality statistics, which happens with British Rail, because a train that doesn't exist can't be late. Okay?

SPEAKER_01

Yep.

SPEAKER_03

But parking that, okay, there will be people whose taxi took an hour longer than they expected to arrive. And those people are seriously pissed off, and they're pissed off because the taxi took too long to arrive. Most, I would argue, psychologically, a large part of the disquiet is driven not by duration but by uncertainty. And it's simply that the longer you have to wait, the more uncertainty you experience. And Uber, in my view, solved that with a map. Because when you can see the taxi that's coming to your house and it's on the map and you can watch it moving and explain to yourself why it stopped, oh look, it's stuck at those traffic lights, okay? The mental experience of waiting, the pain, um, Tim Harford's written about this recently in the FT. Um, thankfully, crediting me quite a bit, the pain is driven much more by the level of uncertainty for which we don't have a mathematical unit, okay, than it is by the duration of the wait for which we do. And so, you know, I'm I'm I'm I personally I don't even believe in speed cameras, okay? In terms of using in terms of using AI to augment decisions, right? I'm pretty happy. If the human if a human and a reasonably sane person is there doing some double checking, should a camera be able to issue someone with a fine and three penalty points automatically? Now, okay, here's here's a question, okay. Uh there are speed cameras on the uh A13 out of London. This reminds me of one of the most bizarre conversations I had, which was um about a year ago, which was uh in relation to his book Noise, uh having a an extended conversation with um Daniel Kahneman about a particular speed camera on the M11 near Chigwell. Okay. This was an interesting question. So, one, if a speed camera catches lots of motorists, is that the fault if it now a disproportionately high motor number of motorists, there are two possibilities. It's a problem with the motorists, you know, you happen to have caught a stretch of road where boy racers love to, you know, welly it along in a you know souped-up citron, whatever it is, okay? That might be, or it might be it's a problem with the signage. In other words, you know, you have put a sign saying 50. Um, in other in other words, the the distance between the sign that forces people to slow down and the speed camera is too low because people will not slow down very dramatically for fear of someone hitting them from behind. Okay? Now that I think is the speed camera on the M11 near Chigwell. You're coming down the M11, let's be honest, okay, it's one o'clock in the morning, you're going 70x, maybe 80. Okay? Maybe you shouldn't be, different matter. But even if you're going 70, right? You come across this sign that says 50. What you do not do is decelerate by 20 miles an hour in the space of 300 yards, because if you do that, you're frightened someone behind you will basically rear-end you. Okay? So you leave it, you're going 60 by the time you hit the speed camera. Okay, maybe you're going, you know, I don't know, maybe you're going 57. Okay? Now my argument is the the very high number of um uh uh uh this is the Chris Hume uh Memorial Speed Camera, by the way, okay? You know, now the the very high level of people caught by that, it's something like the most profitable speed camera in Essex by a factor of three or something whacked like that, may well suggest that what you need to do is is basically redesign the road markings and the signage, okay, not continue to prosecute people. Because if you have a camera that's an outlier, as you said, you've got a Wittgenstein's ruler problem in a way.

SPEAKER_00

Okay?

SPEAKER_03

Are you measuring are you measuring the foolishness of the driver or the foolishness of the person who placed the speed camera? Now, if you take the eight this is really nerdy, isn't it? I'm sorry about that. But then you get into the the bad actors and the bad system design, you know, if you my my my other quibble with the speed camera is that uh someone should watch you know if they're gonna fine me, you know, whatever, ninety quid now or whatever, okay. Uh for 90 quid, you can pay someone, obviously, to watch, you know, 30 seconds of footage before the offense and 30 seconds after.

unknown

Right.

SPEAKER_01

All right.

SPEAKER_03

And you should be able to judge is there a contextual reason why this person decided to go faster than this? Okay? Now, I'll okay, I I've been caught by speed cameras where it's a fair cock cop. I'll come quietly, I was to blame, okay? But on one occasion, I was avoiding a guy who was obviously drunk and weaving all over the road, and the only thing I could really do, he might have been having a massive row with his wife. I couldn't quite work out what was going on. But he was basically weaving from lane to lane in a completely frenetic state. I thought, okay, go to the fast lane of the motorway, wait for him to weave over to the left and welly it to get the hell out of there. Now, anybody watching that incident, a cop, for example, or someone watching the video, would have arrested him before they arrested me. Okay? I mean they might have arrested both of us, right? Well, and I, you know, at least I could then give them my side of the story. But they didn't. They let him off for weaving all over the road, and they fined me for going too fast in an attempt to avoid him. Now, that's what I call about the contextual blindness, which is the model only knows what it knows. Okay, now I think a huge you know, another case in point would be the speed limit on the A thirteen is forty miles an hour. Nothing to do with pedestrian safety because there aren't any pavements and the whole thing has kind of, you know, um crash barriers along the side. It's done to increase the flow of traffic by slowing cars down so more cars pass a given point in in a given time, okay? Now, at one o'clock in the morning, maybe you shouldn't, you know, when the road is completely empty, maybe you shouldn't find people for going fifty. Because the reason the speed limit was imposed was in that case not necessarily a safety um motive, it was actually a traffic flow motive. And in that case, you should be sensitive to context, time of day, road conditions, and all that sort of stuff.

SPEAKER_01

Look, Rory, we could uh we could beat that horse really to death. Uh no worries at all.

SPEAKER_03

It's really important because we have, you know, weird things like um, you know, you know, a weird kind of Silicon Valley kind of death cult believes you can kind of quantify the world to a point where every decision becomes optimal.

SPEAKER_01

Yeah.

SPEAKER_03

And I mean, never mind.

SPEAKER_01

This reminds me of this reminds me of Taleb talking about the C. elegans worm and how much we don't understand complexity. Does that anecdote ring a bell to you?

SPEAKER_03

Uh no, you tell tell me.

SPEAKER_01

I I think so basically this worm is it has 300 neurons. And um with a neuron, each additional neuron doubles the complexity according to the amount of neurons that were in it before. So the difference between 300 and 301 is non-trivial. The difference between one billion and one billion in one is just completely unequatable. And um Taleb says, we don't understand how the brain of the Celigans worm works. We can map it out and we can say it has 300 neurons, but we don't understand how they behave with each other because the complex complexity is such. So therefore, how can we make any inferences about human behavior or the human brain? And that as an anecdote of system complexity, I think could match onto um so many things. Like you just say the Silicon Valley death death cult trying to use data to solve the world, you know.

SPEAKER_03

I mean, I do remember I do remember going to a talk at the Santa Fe Institute, which is open to the public, uh, and uh I pitched up and you had m the late Murray Gelman there, and you know, formerly an astrophysicist, saying, It's very simple. What you have to understand is the C. elegans worm is much more complicated than the sun.

unknown

Okay.

SPEAKER_03

You know, as a you know, as a physicist, you can basically say what's going on in the sun, but in this worm, you know, you have a degree of kind of complexity and emergence and God knows what. I mean, by the way, uh I naively kind of thought that um there'd be a New Yorker or New York Times or Atlantic article by now k saying, you know, um COVID, here's how it works, this is what really happened. But actually, in terms of the transmission, um okay, let's also remember one thing, which is that uh um science kind of failed on ventilation, I think early, and failed on the fact that it was airborne to a much greater extent than was believed. Okay. So, you know, we ought we ought to we ought to actually give science a kind of due process and say obviously it did a magnificent job of you know vaccine development, assuming you aren't one of the people who who believes otherwise, and I think it generally did do a pretty good job there. I agree. Okay, and you know, um you might argue that science might have created the problem in the first place by going and collecting shit from bat caves, which is not something normal human beings would instinctively do. Okay? A normal human being, basically faced with a cave in, you know, need batshit, would go, uh, it smells of shit, I'm not going in there. Okay? Now that's an evolved instinct, you know, disgust for theses, okay? It takes a scientist to go, no, on the contrary, I'm gonna, you know, put myself in a bit of PPE and I'm gonna go in with a shovel and then transport the stuff to Wuhan. Now, even if the lab wasn't the source of the leak, what the lab was doing and putting that lab in the middle of a city of 10 million people was proper whack, right? You know, if you're gonna have a you know, a good, you know, a good level four bio lab or whatever, any kind of lab like that, and they weren't even doing research. Put it in the desert level four. Uh you know, put it in some weird weird remote island, right? Don't put it in the middle of a city. For God's sake, I mean, geez, these, you know, are these people fucking idiots?

unknown

Right?

SPEAKER_03

I mean, so you know, even if even if the you know it was the wet fish market or you know, Mrs. whatever it is, you know, whatever whatever, you know, whatever whatever the cause was, what they were doing was whack. Okay? You know, and the gain of function tests were whack. Okay? I mean you should you know, so let's face it, you know, it's a bit of a score draw for science if it actually ends up solving a problem that it created in the first place, right? Um but I still haven't seen that piece that goes, hey COVID, basically this is how it works.

SPEAKER_00

Okay?

SPEAKER_03

I here's a weird one, okay. Now early on, being a bit of a you know, um maybe may maybe this was unethical of me to do this, come to think of it, but it didn't occur in the time. Early on in the pandemic, I went and bought a Phillips um Hepa air filter, which basically you turn on the room and it filters your air. I also opened the windows a lot. Um, long before this was advised. And I got a bit and I expected those Hepa air filters, at some point during the pre-vaccinated pandemic, I thought I'd better buy one now for five hundred quid 'cause they're gonna be going for five grand on eBay, you know.

SPEAKER_01

Never happened. Hmm. Interesting. Why?

SPEAKER_03

Well, I got a lot of weird people saying, ah, the virus is too small to be caught by a Hepa air filter. And my problem was the virus isn't travelling alone, it's riding on some particle of gob or mucus, right? Secondly, hepa air filters actually capture particles much smaller than they um because that's although instinctively that that could be a decent argument. I vaguely speculated that one reason why Germans might have done quite well in the early pandemic was they tend to sleep with the windows open. They have some really weird habits. Um but any talk of ventilation and also the whole cloth mask debate was kind of unfairly closed down, I think. Um because someone said, no, no, no, you know, there was almost a kind of absence of evidence, you know, issue where common sense decisions couldn't be taken because you didn't yet have a kind of randomized control trial. And we need to worry about that because if science is unable to actually operate by the sort of common sense and precautionary principles when time is of the essence uh you've got a problem there. Okay? Um and so I think I think there was something I I think it it's interesting though that we still don't have a kind of okay, this is basically how it works.

unknown

Yeah.

SPEAKER_01

You know, and let's face it, but isn't that explicable just because of the political chaos surrounding that subject, particularly?

SPEAKER_03

No, I I I I mean it probably is just a degree. Okay, so I was talking to Conrad Wolfson the other day, and he he said something that I'd also said, which is all the models of COVID transmission, okay, seem to assume that it was binary. You either got infected or you didn't. There was no consideration of the fact that the size of the initial dose might have a bearing on the course of the disease. Now this kind of apparently varies according to viral infections. There are there are ones which are initial dose dependent in terms of the course, and there are some which are a bit more binary. But obviously, what you do might be very, very different if you acknowledge the fact that the scale of infection, initial infection, might have a bearing on what happens next. You know, because you know that you know if you like, there are two there are two basic approaches. There's the absolute approach, which is you cannot afford to get infected. Okay. But there's also an approach which you might say includes cloth masks, which is every little helps. Okay? You know, and um then you might say, well, there's a further level of complexity, which is um, do you want people to get mildly ill? Because if people are mildly ill, they're more likely to wander about and infect more people. What you want people to do is to get seriously ill, because in that case they'll withdraw from society. And so all these things make the whole thing incredibly complicated because there's a there's a loop back between behaviour um and you know and and consequences, and once once behaviour is a factor in your model, you you you know, at that point you can't assume things like linearity, averages, smooth distributions, because human behaviour is has not and human perception and and human response to what we see and our interpretation of what we see has not evolved to maximize accuracy, it's evolved to maximize fitness. I heard a very interesting thing um uh on this book, which I do recommend, called the um uh it's called the um Algorithms to Live By by I think Brian Christian and somebody Griffiths, have I got it right? And um one of their interesting things is that uh, you know, we always talk about social media messing up people's perception because suddenly what you're experiencing isn't representative of life as it really is. Okay, because you know, things that are sensationalist or hostile or extreme uh gain much more saliency and traction and distribution than things that are banal. Yep. And you know, I I'd always been conscious of that particular thing, but he Brian Christian, I think, or possibly the other guy called Griffiths, makes the point actually that's true of just the invention of language. That once you have language Okay, stories are not representative of reality. And so our kind of Bayesian priors, our prior assumptions, are messed up simply by the existence of language because people will talk about freak events much, much more um frequently and to a much more appreciative and interesting and larger audience. If you said you know, I went for a walk today and not much happened.

SPEAKER_01

But we still do convey those banal messages through language, it's the same medium that will then go on and tell an embellished story. Uh would that necessarily be correlated to social media because you don't have the banal on social media because it just doesn't do any anyway.

SPEAKER_03

Well, I try I I tried this a wonderful experiment, which is going on Twitter, I challenge people to do it, and expressing a kind of moderate, considered opinion. Like, I find Piers Morgan quite entertaining in small doses, you know, but I wouldn't necessarily want to go on holiday with him. Anything like that, you know, if you went in an opinion, okay, try going on Twitter and going, you know, I think Rishi Sunak on balance is quite interesting as a Prime Minister, but I'm not entirely comfortable about da da da da.

SPEAKER_01

Yeah.

SPEAKER_03

Okay. Those things, those things basically go nowhere. You don't get any likes, you don't get any retreats. People go, What the hell are you posting that for? It's just a measure considered opinion. Okay? Whereas if you go and, you know, basically go, you know, it's either you know you're a Corbinista or some sort of, you know, whack job fanatic libertarian at the other extreme, okay? Those opinions uh, you know, have a kind of you know ludicrous artificial simplicity to them, which makes them if um make them annoying, but something that's really annoying is getting a response, right?

SPEAKER_01

There's also perhaps um this is me just instinctually thinking it, I don't know if this if it if this opinion has any merit or not, but there could be there could be a bias to your experience A B testing a um a milk toast opinion and then a a wild opinion because you have quite a large audience that's gonna interact with you. Um for the majority of people who have social media accounts, they can't really even trial A B test the difference between that at all, because in both cases it's going to be a relatively zero response. I don't know if that is an interesting, you know, I mean to put in there.

SPEAKER_03

Uh the uh the other thing that happens if you have a large number of followers, which is interesting, is uh you're very conscious of uh people's facilit people's uh that if you say anything to a hundred thousand people, okay, roughly speaking, one thousand people will misunderstand you. Either willfully or Accidentally So um uh sometimes it's will it's wilful incomprehension in the attempt to Most of the time, surely, yeah.

SPEAKER_01

Benefit of the doubt.

SPEAKER_03

But actually actually you've got to remember, you know, I mean okay, now very clear thing, okay. British English is not everybody's first language. Okay. I I don't mean, you know, I'm not suggesting that, you know, the people follow me on Twitter don't understand English, but British English has some peculiarity. For sure. Yeah.

SPEAKER_01

There's so much between the lines that they'll miss without a doubt.

SPEAKER_03

Quite, by the way, means a totally different thing in British English to American English, sometimes. And I can't explain it. Okay. It was quite brilliant, means it was really, really brilliant. But it was quite good means it was fairly good, but it wasn't that great. Okay? It's completely it's the the British English use of the word quite is completely whack, and Americans are at least consistent in it, okay? I mean the fact that it's used as both a sort of qualifier and a kind of intensifier.

SPEAKER_01

Yeah. And also uh like a negative inflection at the end of a sentence. Quite.

SPEAKER_03

Which means you are full of shit, okay? Yeah. Um so so you know, I mean, you know, there are various cultural things. I mean, I got a load of grief from Americans. I'm part Welsh, and I just tweeted a joke with a very cute picture of a sheep. It was really, really cute. And I I j I just um I I just tweeted the picture of the sh a very cute looking sheep, which is said Welsh Tinder just gets better by the day, okay? Now there's a peculiar thing there, a bit like, for example, in Wisconsin, um you uh th the the fans of the Milwaukee Brewers and the who would it be the Green Pay Packers or something basically wear huge wedges of cheese on their head against to own the insult of cheese head, which is applied to the population of Wisconsin, okay? Um, which I suppose comes from German actually, the Kaiserkoff, I think. You know, anyway but um in the same way, weirdly and and strangely, you know, Welsh people kind of own the insult around sheep shaggy, you know. You don't deny it that you just almost treat it as a badge of honour and then just move on. It's a you know, it's a known strategy that lots of groups have used. And and you know, owning the insult is a practice which is adopted I mean the N-word probably originates that way, I don't know. Okay? Right, where you own the insult among your own community. But I got a huge amount of abuse from Americans, you know, or a couple of Americans going, yeah, for God's sake it's 2021 or whatever it is, blah blah blah blah blah and I had to explain that, you know, this this is actually sort of self-deprecating humour, it's not abuse. And so it's very, very easy, you know, with a large audience to be misunderstood, um and then it's even easier perhaps to be willfully misinterpreted by people who just want to create some sort of, you know, spat. I'm sorry, let's face it, you know. Yeah, finish off your point. When you have a character limit, it isn't possible to write with a kind of you know nuance that you would you would enjoy when writing a book.

SPEAKER_01

Who would have thought?

SPEAKER_03

Yeah.

SPEAKER_01

Now this uh just to round off the point on Taleb, this might be a silly question to ask in public, but what's he like as a bloke? Um, because he has this giant public persona, and I I don't know how to make heads or tails of it. Um, I've personally found him lovely.

SPEAKER_03

I mean, uh he obviously, you know, you know, fires back abusively, um uh at a way that baffles a lot of people. But it took a while for me to realise that in many cases he's right to be cross because these statistical misconceptions uh are uh extraordinarily costly. Because in a weird way, what what w it's it it's that old thing at the beginning of I think is it margin called probably the big short, isn't it? It's not funny enough, Mark Twain never said this, I think. It's attributed to Mark Twain. It's you know, it's not what you it's not what you don't know that can hurt you, it's what you th think is true that ain't so. And so it strikes me that statistics give us this extraordinary confidence in the sense that we will quote a statistic as though it is, you know, a slam dunk end to the end to an argument when in reality it's nothing of the kind. You know, that statistics have the uh first of all, you know, uh uh patently the power to mislead, they can be used highly selectively. I was raising a question the other day which concerns me, which is that when we when we receive one of those papers from the government or, you know, the National Trust or whoever it may be, okay, who are looking at their diversity figures and they ask your ethnicity I'm not sure that we shouldn't refuse to answer, regardless of your ethnicity. Just say I decline to answer. And if enough people decline to answer uh now let me explain why this is a problem, because okay, ethnicity is undoubtedly a dimension, there is undoubtedly ethnic prejudice, okay? No one's disputing this, okay. But if you measure that, if you measure discrepancies and disparities between different ethnic groups to the exclusion of anything else, right? Okay, and your measure, your proxy measure for the diversity of a population is the extent to which it represents the ethnic makeup of a country. Okay. Um we're gonna commit some terrible, terrible offences where, you know, old Attonians of colour in the UK, you know, are basically, you know, recipients of a bidding war, whereas people from, you know, incredibly impoverished white uh backgrounds uh, you know, can't make it into university. I was talking to Conrad Wolfren about this, where he was at Eton, okay, and there was a guy there who was from an incredibly poor background, but who managed to get three or four scholarships, so he got because of an extraordinary mathematical talent or whatever it might have been, which meant he got to go to Eton for free, right? Yeah, really, really, you know, uh genuinely exceptional case. Okay. And it suddenly occurred to Conrad Wolfram that when he goes and applies to universities, they're going to be slightly reluctant to take him because their privately educated figures, okay, are measured against their state school figures. And this guy had patently been to a private school. So, regardless of any other factors or considerations in his background, he was at a disadvantage in the. I'm not even I don't I'm not even sure he's white, by the way, but it was still it was the anti-private school bias would still be taken as a kind of uh well, wherever possible, we'd rather take someone, you know. And then of course, what what do you do with grammar schools? They're in Kent, they're selective schools, okay, but you don't pay for them. Now th those schools, in a sense, enable universities to take people who've been de facto privately educated with a very in a very selective, rarefied environment, but treat them as if they're state school um uh admissions for the purpose of statistics. Now, okay, you will notice a correlation but you know, you wouldn't expect um uh let's say doctors or vets necessarily uh to reflect the ethnicity of the population. But it's it's interesting to measure. I mean, one interesting thing you'll find is that probably people of colour are overrepresented in medicine relative to the population, massively underrepresented in veterinary science. This is a point made by a friend of mine who's Sri Lankan. And he his explanation, not mine, don't shoot the messenger, is that basically, you know, South Asians just don't like animals very much. What?

SPEAKER_01

I mean uh it I would have suggested the the uh the cultural question, uh the idea of being a lawyer or a doctor is ex is just a much higher value in certain cultures than the.

SPEAKER_03

But being a v the there probably well, the other thing is there probably isn't what you like a role model of being a vet if you come from certain countries. I mean there could be all kinds of reasons.

SPEAKER_00

Yeah.

SPEAKER_03

What you'll also see, you know, along with disparities according to uh uh you know ethnicity, and we should measure that as part of a whole basket of measures, right? I'm not I'm not suggesting we ignore it. What I'm dis what I'm uncomfortable about is it becoming the only measure. Because you will see a huge correlation between people's educational performance and the number of books their parents had in the house. No one's asking for that.

unknown

Okay?

SPEAKER_03

No one's asking that information. Right? I mean, one of the interesting things which always fascinates me is the single biggest predictor of whether you're a doctor or not. Uh whether your parents are doctors. No, no one goes, this medical thing, it's a fucking disgrace, it's just nepotism, right? Yeah. They accept the fact that what you're exposed to affects your life choices to an extent. You know, if your dad is a professional footballer or musician or something, you are more likely to go into the music industry. And that is some mixture of some of it's probably nepotism. Because let's face it, you do have a massive unfair advantage in getting into medicine if your dad's a doctor, right? There's a my grandfather's a doctor, my father wasn't, okay? I have no fucking clue what houseman means, or like all this terminology, I've no idea about how you apart from like you better do biology at A level, I have no idea really how you go about it, okay? Whereas someone whose parents are doctor can basically grease the wheels in all kinds of ways. But for some reason nobody gets angry about this.

SPEAKER_01

It could also be because of the profession. Uh doctor is extremely honourable, people sort of accept that you don't get into it because of uh money, maybe it's not as necessarily as hyper competitive as some of the other, maybe more business finance tracks would be where they accuse of nepotism.

SPEAKER_03

Yeah, but I mean uh it is interesting that we we we we would consider nepotism, you know, if if WPP were run by three of Martin Sorrell's sons, we'd be a bit iffy about it. But if it happens at the level of a profession, I'm just saying, okay? You know, it um it's particularly complicated by anyway, I won't go into this whole thing. But what I'm saying is that okay, n no one no one's no one's claiming here that this is irrelevant or it's unimportant or that, you know, racism is exaggerated or anything like that. Forget about all that stuff. All I'm saying is that if you want to measure um, you know, uh some degree of whether a society is successful in promoting uh social mobility. It shouldn't be the only game in town. Okay? Now, okay, an inter interesting detail, okay, the you know, the US has been uh widely heralded for you have, okay, the current vice president, former president, uh Colin Powell, for example, etc. etcetera, okay. Um it's just interesting, right? Now, all of the three those three people, mm you know, undoubtedly are people of colour, mixed race in the case of um uh Kamala Harris. Just an interesting detail. All three of them have parents born in the Commonwealth, not born in the United States. So, you know, you know, in one measure they're the same, in another measure they're slightly different. It might be interesting to explore that. I don't know, right? Mm-hmm. So it you know, i the all I all I'm saying is that this is it it is complete and by the way, what you could end up doing is you could end up with certain sectors of uh you know a particular ethnic group becoming very economically successful, other sectors of the group being the victims of disadvantage and discrimination. But once you start averaging things once you start lumping people of a particular ethnicity together, you're actually losing information, aren't you? Because you're basically just generalizing to one factor.

SPEAKER_01

What we said before, smoothing it out. Yeah.

SPEAKER_03

And so, you know, you're treating as smooth something that's lumpy.

SPEAKER_01

Yeah, yeah. You know, now and you miss out on the important details, the defining characteristics.

SPEAKER_03

And actually the important stuff is probably the first stuff to get lost. So it would be things like Simpsons paradoxes, right? You know, that you know, they're obviously confounding variables going on in a lot of these things. Which is uh you know, uh okay, I mean, one one reason why vets tend to be white, by the way, is that probably people who go into veterinary science tend to grow up in the countryside. Where and the countryside historically of the UK had a much smaller ethnic population than the towns and cities, or particularly cities did. You know, other questions, you know, I I I make this point in, you know, in terms of say advertising. Most people in advertising don't necessarily weren't actually born Londoners. Now, what what ethnic mix should an advertising agency in London aspire to reach as a mark of diversity? Is it the composition of London? Is it the composition of the UK? Is it the composition of South East England? Because should it aspire to any set number at all? And also should you um I mean uh you know, is it is it I'm I'm just saying, is it safe to use one thing um as a because what you're suggesting in a sense is that the only source of inequality if you're not careful, you'll come to conclusions which suggest that the only cause of inequality, unfairness, and injustice in the UK is, say, racial or prejudice or um uh or gender prejudice, because those things are easy to measure, right? And you also can't lie about 'em. You I mean you could argue that when you fill in these forms, since it's actually not illegal to lie about your ethnic identity, I I I I I guess you could, I don't know. There's one form on the census, which is your religious affiliation, which uh there's no obligation to tell the truth, which is why everybody said they were a Jedi knight last time round. Now you know, I I don't know. Now just to be clear on this, I'd have no problem answering those questions, honestly, if I felt that the statistics were being handled with sufficient nuance and understanding of complexity not to that you suspect they're not being not to be abused or or you know, effectively hijacked for some purpose or other. I don't have that faith, to be honest.

SPEAKER_01

And something uh really interesting here as well, you know, we're speaking for sixty minutes now, um, and there's been no talk of marketing or advertising. Everything that you're thinking about is almost system design. You know, how can something be done better or done with more clarity? Um I I I found that a really, really compelling part of alchemy because you are this marketing guru, yet you're not talking about, you know, Coke campaigns, McDonald's campaigns instead, you know.

SPEAKER_03

I mean, there are really important lessons from complexity, by the way, which marketers don't necessarily understand. And when marketers do understand it, they don't necessarily relay it to other parts of the business. So I'll give you one example. The fact that the adoption of a new behavior or a new opinion, or anything else, tends to be kind of a sigmoid curve. I think it's explained by the fact that people are very driven by two default modes in behaviour, one of which is habit, okay? Any food eaten by a living organism, by definition, has not killed them, right? So the fact that we tend to eat things we've eaten before, and so on and so forth, to an extent, um, is uh, you know, has a basically, you know, imbued in us a kind of uh when in doubt, do what I've done before. Okay? You know, this shampoo was pretty good last time. You know, you know, what are the gains to experimentation here? What's the exploit explore trade-off, you know, um uh you know, buy the same shampoo. And similarly, we also have a default mode which is do what everybody else is doing, because if they're all eating the gr the uh yellow berries, then it's fairly safe to believe that they're safe to eat. Now, because this means that change in things, attitudes, behaviors, etc., is not linear or anything like it. I think once you understand that, you need to evaluate your advertising differently because actually the time at which your advertising might look most effective may be the time in which it's actually least necessary. It's when a product has already taken off and reached critical mass, air fryer world, okay? Did you see this? This thing, I've been I've been evangelizing the air fryer for ten years. There's documentary evidence on YouTube. Okay? And it was something that I always thought, along with Japanese toilets and a few other things, also electric cars, etc. It interests me because although it's a hard product to sell, once people buy one, they never go back. Multi-channel TV was like that in the UK. Nobody wanted it for decades, literally. You know, they might four channels is you know, four channels is fine, you know. But once people actually ended up with with with 60 channels or more, going back to four channels was kind of unthinkable, right? Yeah. Now, what's interesting about those products actually is exactly that, that they're ratchet products. They're very slow to sell mobile phones, same thing. A lot of people were highly resistant to mobile telephony, but once you get a mobile phone, the number of people who actually go, I don't want that anymore, is tiny. Now, understanding that um path of behavioural change, okay, and the fact that it's nonlinear, seems to me vital to understanding all kinds of things about the world, one of which being why perhaps large companies don't innovate successfully because they're too quick to kill things off. The question they should be asking, Nespresso only survived within Nestlé because for a couple of years they lied about their sales figures to head office. Yeah, they knew they were on to lied is such a such a strong word. But let's just say that's their biggest uh that's the biggest line. But it's a billion-dollar, you know, billion-dollar creation, fantastic thing. Innovative coffee. There we go, a bit of product placement. Um but the point I'm making there is that if you understand this, the question you should be asking of a new product or innovation is not what is the pace of growth of this category. It should be of people who buy this product, how many of them repeat by?

SPEAKER_01

Yeah, yeah.

SPEAKER_03

And that's you know, you know, Japanese toilet will be a case in point, okay. I've got one Japanese toilet. It will be ten years before I buy another one, but eventually when another toilet needs replacing, having experienced one Japanese toilet, there's no way I'm going back to dry ass wiping. Blabarbary. But uh under st when you understand those patterns of change, the world starts to make more sense. So, for example, you know, people who get really, really angry about right-wing bogey men, you know, because there are people who s are slow to pick up on some particular, you know, political trend or nuance or whatever. Okay? Or the fact that older people are resistant to listing their gender pronouns at the bottom of an email. Okay. Look, it's just how the world works. We don't change our minds simultaneously. Okay? There is a, you know, uh that most attitudinal change, and I would include that attitudes to same-sex marriage, attitudes to drink driving, for example, effectively kind of permeate through a population. There are still, you know, there are still, you know, unapologetic smokers kicking around the place. There are still people who unapologetically drink and drive, okay? But they're far fewer in number than they would have been in, you know, my parents. My parents didn't drink and drive. I'm not daubing them in here, right? But I'm saying a lot of their contemporaries did. And incidentally, you wouldn't stop someone in 1974 leaving your house in their car if they'd had a bit too much to drink, whereas I think now you would.

SPEAKER_01

Yeah. Well, back then it might have been socially unacceptable. Like, what are you doing? Now it would almost be socially. You'd almost wrestle them to the ground and say something. Yeah.

SPEAKER_03

Yeah. Well, it would have been yeah, we were in an awkward conversation to say, I don't think yeah. So all those kind of things change, and you know, as the context changes, our behavior changes. So let me explain in complexity terms why it's important that you believe in alchemy, okay? Okay. There's a downside to acknowledging complexity, undoubtedly, which is it's far less easy to be certain or absolutist or to actually um reach a single demonstrably optimal answer to a problem. That's the downside, right? And so because of that downside, people pretend things aren't complex where they are. When when they are. There's an upside to complexity, which is what Buckminster Fuller called trim tab, which is with enough exploration and indeed, I would argue, creativity, and with enough uh a combination of creative hypothesizing and experimentation, you can achieve extraordinarily large effects with extraordinarily small interventions. And so the uh you know, that what happens is if we are craving not good decisions, we're trying to make decisions that are easy to quantify and justify, we will pretend there is no complexity in the situation. We'll re we will rewrite it in a kind of Newtonian model, you know, linear Newtonian kind of two body problem model, and then we will pretend that our model the answer to the model is the uh is the answer to the problem. Okay? And that way we'll never get fired because uh You never get fired for doing something if your reasoning's good enough.

unknown

Okay.

SPEAKER_03

Even if the consequences are dire. Right. Okay? And so there's a huge bias in the corporate world towards pretending things are simple so that you effectively can practice what Gerd Gigerenza calls defensive decision making. A huge amount of the effort in business is actually asked covering disguised as rigour. Okay? People already know what they want to do, but they bring in a management consultancy to tell them in 200 charts why that's what they have to do. So that if what they do goes wrong, it's not their fault anymore. We hold meetings so that blame can be dispersed for a decision rather than concentrated on one individual. All this stuff. And Gil Rensermore said, if it weren't for defensive decision making, the economy could grow faster and we could all go home on Wednesday afternoons. Okay, so that's the one problem. The second problem is by pretending things are simple optimization problems with a demonstrably optimal answer, we exclude magic from the solution set. And when I mean magic, I mean merely things where a tiny little change in perception, a tiny little change in phraseology, a tiny little change in web design can have an absolutely monumentally large positive effect.

SPEAKER_01

Um and so um of which there are amazing examples throughout Albert.

SPEAKER_03

I mean, I at the moment think you could solve a lot of the problem with the bloat in higher education, okay? Um uh a very simple solution, okay? If you if you've worked and paid tax for two or three years, the cost of attending university in the UK should be half price. So you've proven you can hold down a job, you probably have decided you know what job you want to do and you want to study then to become better at it, therefore the price of doing that should be half the price of going to university straight after you left school. What's the point about that? How does that work magically, okay? It gives people who l who want to get a job straight after school rather than going to university straight after school a plausible narrative, okay, to enable them to go to employers and say, I did you know, I did think about going to university, but I've decided to do it later in life. Um at the moment, okay, that fundamental question of of where you where employers are using your university attendance, the fact that you went and how well you did, as the single dominant proxy for who they hire, or rather, at least the first filter. A second solution, okay, would be something I'd encourage in Ogilvy, we set prospective we do this in Ogilvie actually, you set prospective a um applicants a trial. Several trials. You judge those trials blind, only then when you've made your selection from the people conducting that trial, do you look at their educational background. That's just an order change, right? At the moment we use the educational background to do the filtration, and then we use interviews and, you know, final selection days to do the final selection. In some ways, if you reversed the order in which you did that, the the ludicrous kind of higher education Ponzi scheme would be seriously damaged below the waterline. The reason people the reason people need to basically, you know, get a fancy dan degree, um, is simply i i I I had a friend who he had a double first in maths, okay, from Cambridge. He was very brilliant, um, and I I said to him, um, he was at Goldman Sachs or somewhere like that, and I said, How long how long is it that you've been working in a bank where people still care about what degree class you got? And he said, It's kind of I can't remember the exact answer, but he said, It's kind of like a half-life. But after five or six years, nobody really cares. It's I see you work for this and you did this and you achieved this and you work with this guy and I respect that guy massively, so if he's happy to employ you, then I'm happy to employ you. All the other shit basically kicks in, right? So the you know, but the the reason the degree is so critical is that it's at a decisive moment in your life, it's the only card you've got to play. Now, if you change that, alright, by basically changing the kind of uh the sequence of recruitment and selection so that you didn't use degree class as the p principal sorting hat, okay? The entire business would be totally different. Now my argument is that by judging people on degree class, you'll end up with uh, you know, ten percent of people getting offered a hundred interviews and fifty percent of people getting offered no interviews at all, right? That's an extraordinary waste of talent. I mean, just telling you to know how weird it is, there's a guy I met who had a double first from Oxford in theology and philosophy, and he couldn't get an interview with a consulting firm because they prefer engineers. Oh, fuck off.

SPEAKER_01

Crazy, isn't it?

SPEAKER_03

Yeah, fuck seriously, fuck off.

SPEAKER_01

I feel that I feel that big time, Rory. I mean, I have a very average degree from a very average university, and I'm in a country, and I've been out of my own country for so many years now. There is um, you know, just how can I show some value to this prospective employer beyond my business degree in economics from UTS, a university nobody knows, you know, five, seven years ago. It's it's it's uh you know what you're saying, it really resonates. And how does it be?

SPEAKER_03

It also contains it also contains the absolutely insulting assumption that you gain human capital when you're in an educational institution, but you don't when you're in a commercial institution. I learnt far more my my first three years at Ogilvy than I did in my three years at Cambridge, right? Okay, you learn you learn a you learn by doing, okay? Yeah. And uh you know, and you know, okay, you know, looking back, I wish I'd done a year of psychology or something, but how do how was I to know that at the time? But you've learnt the psychology now. Well, yeah, I mean, my my father always complains he's ninety-four, and he got a third from Cambridge, I think. And he always complains, you know, since I left Cambridge, I've probably read, you know, I don't know, two thousand books on history. But according to the credentialist rule, I'm no better I'm I'm no better informed than I was age twenty-three, right? Seventy years of bloody reading count for silch. And in your case, okay, what we need to be creating Okay, it all depends it all depends really how you view the world. You can either view the world like Shakespeare, which is different personalities, different talents, different types, are all part of the fabric of what makes humanity magnificent, you know. You've got all these laughable kind of comic characters who are still, you know, you know, uh uh you know a valuable part of what it means to be human. And you put them all together in the right mix and you've got some sort of magic. Or you can view it as a kind of linear sorting hat where there are and and the the whole question of meritocracy assumes hierarchy. Mm-hmm. Okay? It assumes that basically everybody can be ranked on a kind of single scale in terms of their worth. It's absolute nonsense. The value of most people depends on their complementarity and their complementary relationships with other people. You know, if you want if you want to have a job for life, you know, I always say find something your boss is really bad at. Find a really talented guy who's going to move up the ranks, okay? Find what he's bad at. You know, maybe it's public speaking, maybe it's writing, okay? Maybe it's something like that. Be complementarily good at that thing. Right?

SPEAKER_01

Definitely, yeah. And that's probably more applicable now than ever.

SPEAKER_03

And my other suggestion is find two try and be quite good at two things. Okay? Because there are loads of people trying to be really good at one thing. Okay, you're up against impossible odds. Okay? Trying to be the world's best tennis player. Sorry, you're gonna fail, right? Okay, unless you have an extraordinary mixture of genetic luck, parents who are fanatical tennis players, God is rather your odds are zilch, right?

SPEAKER_01

But if you're a terrific data scientist and a tennis player, all of a sudden you're S suddenly you've got a gig now, and you've got a really interesting gig.

SPEAKER_03

You know, absolutely right. And and so so the the whole thing actually is um is making us think about the world in completely the wrong way. And and making us think about human talent in completely the wrong way. By the way, you know, a good ad agency, let's be honest, you need a few chin-stroking oxbridge types around the place, male or female. But why? I mean, why is that uh an absolute must? A, it's probably useful for credentials. Um B, there are things that chin stroking feeding back into the same problem that you've just identified. Okay, we would be much poorer uh as an ab you know, I'll you know, Paul Feldwick, I think, has a genuine beard. I don't think he'd mind being uh, you know, portrayed as a chin stroking, you know, intellectual type. And the advertising industry would be inordinately poorer without people like that. But it'd also be inordinately poorer without a bunch of people who joined after school and started in the post room. Okay? And advertising's actually it it's it's as interesting as a culture in many ways as it is as an actual business. You know, it's quite a distinctive but interesting culture. And the point is that what makes an advertising industri uh uh in uh agency interesting is the is the complementary relationships between different talents, entirely, you know in you know, and and of course it means you have a very weird mix of people under the same roof. But no, no, I mean you did no uh the other reason you probably need it is just confidence. That you know, it you know, and sometimes you needed it because some of your clients might be chin stroking Oxbridge types who like working with you know, all that sort of stuff. Okay.

SPEAKER_02

Right, right.

SPEAKER_03

You know, so what I'm saying is they're part of the ecosystem, you know. Uh, you know, just as, you know, false staff is, you know, i i is is part of the kind of fabric of humanity. You know, they're just people like that, right? You know, and um um so I think um I I I think that what we're trying to do instead, I mean, what I find slightly offensive about what you might call the middle class educated you know, right thinking Davos project is deep at the heart of it is one simple assumption, which is the world would be a better place if everybody were more like me. Okay? And it's you know it simply isn't true. And, you know, I mean it also it also um the the very weird sort of binary opinions prevent much more interesting discussions from taking place as well. So Okay immigration, okay. Are you for it? Are you against it? Neither. Okay? This is my response. Patently we can see some countries that have done it pretty well, and which have emphatically benefited. The United States. Um I mean even more so, maybe Canada and Australia, actually. Okay, sure, yeah, definitely Australia. Okay, Australia's done it pretty well. I don't know what they're doing, okay? There are also countries where it genuinely has you know i is not working yet. Maybe it'll work for example. Okay. I'm not gonna give one, but you know. Uh but I mean no, no. I mean, there are okay. There are you know, there are countries where it has posed a problem. There is a speed at which you do it, okay? Do you do it fast, do you do it slow? You know, in other words, do you do do you do it in jumps or this this is what a complexity theorist would ask you, okay? Do you do it in infrequent sporadic jumps or do you do it as a gradual stream? Um Is it f you know, um uh you know, and and you know, what is the relationship between a humanitarian objective and an economic objective?

SPEAKER_01

Very important question.

SPEAKER_03

Okay, d you know, okay, they're all really important questions, okay? Now um those are the questions we should be asking. We should be discussing how do we make this work well. Now instead it's become just a signalling competition where people, you know, basically are uh you know regarded as unfashionable to ask any questions.

unknown

Yeah.

SPEAKER_03

There's also, by the way, an ethical question which is if you're hiring doctors from sub-Saharan Africa, okay, are you actually piggybacking on their educational system? You know, uh uh you know, I mean, serious point, right? You're you're stealing people from where they're more needed.

SPEAKER_01

Are you are you part of the consequence of the best labour and human capital leaving a country that therefore leaves it poorer? Do you have an ethical problem with it?

SPEAKER_03

I'm just saying, so so but what's weird is that if you raise any questions, not necessarily saying I am opposed to it, because I'm emphatically not, okay, merely saying that there are successful ways to do it, there are unsuccessful ways to do it, um, there is a successful pace at which it works, there is a pace at which it almost certainly wouldn't. Okay? Yeah, and you know, you know, bluntly speaking, if you double the population of the UK in the space of a year, you know, it's not gonna work, right? It's not gonna turn out well. No. And there's you know, there's probably a kind of laughter curve around this sort of shit. But the point is that the why is it that we send people to really intelligent um educational institutions and they come out of it with almost a more kind of manichan good versus evil view of the world than they had when they went in. It's it's it's just kind of whack. And sudden you know, suddenly actually, you know, the fashionable nature of your opinion. You know, this is the great thing of luxury opinions, Rob Henderson writes about. There are certain things which people opinions which people wear really, for the purposes of sort of social approbation on signalling.

SPEAKER_01

That's very interesting. What what what's an example? Are you talking about, say, literally what you wear, your fashion as a signal of anything?

SPEAKER_03

Uh well, there is an argument that that it's kind of there could be an element of costly signalling, which is you know, e you know, is a very, very pro you know uh for example, you could be in favour of certain things which are actually har harmful in general, to signal the fact that you're rich enough or successful enough to be immune from the downside effects.

SPEAKER_01

Okay, yeah.

SPEAKER_03

They're all there's also massive hypocrisy in the sense that if you look at uh you know, elite liberal opinion, it's very, very easy going in terms of you know, things like divorce, for example, you know, um and so on. But if you look at their own behaviour, then they're very, very likely to stay married. So so there's a c you know there are also cases of kind of you know, do as I say, not do as I do, uh, which I think are disturbing. But read Rob Henderson on that, because his suggestions there are certain opinions which just become kind of they're like shibeleths, you know, they're kind of like you know.

SPEAKER_00

Yeah.

SPEAKER_01

Well, Roy, we've hit twelve thirty. Um I genuinely asked you one of the fifteen questions I prepared. Um just throw me actually, I've got ten more minutes, so throw me just a few real rapid fire ones to almost. Then rap perfect. We're gonna finish with three rapid fire that I like to ask every guest if possible. Alright. First of all, Mr. Sutherland, the role of serendipity, how has it shaped your life?

SPEAKER_03

Again, very sort of Tolibyan undertones, but I understand the extent to which many, many activities work simply to increase your surface area exposure to upside optionality.

SPEAKER_01

Well, thank you. That's a very textbook definition, isn't it?

SPEAKER_03

If you look at it, why do people go to business conferences? They don't necessarily go with a specific plan in mind. They simply know that if you don't go, you'll never get lucky. My daughters go to parties, they don't have a plan, they don't have a cost-benefit analysis for each party they attend. They simply know that if you stay home, not no upside will come to you, whereas if you go to parties, it probably will.

SPEAKER_01

And yourself in your own life, great moments of serendipity.

SPEAKER_03

The principal way in which advertising works, uh the principal way that advertising works is that fame, um, there will always be opportunities of which you yourself are completely unaware. If you're famous, those opportunities come to you, so you're not confined to the opportunities you know about. And therefore the value to fame is actually probabilistic. It's not kind of calculable in advance.

SPEAKER_01

Amazing. That's a great answer. But in your own particular life, um, one or two defining moments of serendipity.

SPEAKER_03

Oh yeah, I well I'll give you one which is a perfect example, okay, which is if you're in the public speaking gig, you should go and speak at some events that don't really make sense. Because um you can't evaluate a speaking engagement in isolation because the value of a speaking engagement consists of both it it itself and the chance you get invited to subsequent speaking engagements. And people say to you, how did you get to do a talk at Ken Global? Which was kind of decisive, I made the Eurostar joke. You know, you know, I occasionally appear on my kids' TikTok um thing, making that joke, much to their embarrassment. But the reason I got to speak there was I went and spoke at a conference which I really shouldn't have spoken at, for complicated reasons. It didn't make sense to go. Uh it was actually a conflicting client with a current Ogilvy client, and I said, Sorry, I've committed to go, I'm gonna go. Someone there then invited me to speak at Nokia Global, which was a much bigger event, okay, and then at Nokia Global, Chris Anderson from Ted was in the audience and he said, I want you to give a talk at Ted Global. There you go. Okay. And there's the my point there is that you if you assess everything by its immediately appreciable and quantifiable value, and not by its probabilistic value, you probably can uh you you're you're focusing yourself too narrowly.

SPEAKER_00

Mm-hmm.

SPEAKER_03

I I I think I think a fifth of people, you know, a fifth of you know, if you're a really successful company, which wasn't charged by the hour as we are, I'd basically say a fifth of your time should be going out potentially finding new recruits, talking to schools to encourage them to work in advertising. All that kind of s you know, low slow payback probabilistic stuff is underinvested in because of our need to justify every minute of our day.

SPEAKER_01

Again, amazing, and uh we could I'm sure I get the sense pull on that thread of serendipity quite a lot more. Um however, for this for the uh for the sake of time, um a country you're particularly bullish on, Mr. Sutherland.

SPEAKER_03

India. Um it's uh uh I I thought that our obsession with China versus India was imbalanced. Uh and India is growing nearly as much as China, but is doing it in a kind of organic bottom-up way. Which I think is fundamentally more resilient, okay, than s you know, having a a a Politburo full of engineers sort of planning cities in the middle of nowhere. And ultimately I think the uh strength enjoys, you know, I I you know, I I think ultimately it's uh it it's I it used to kind of piss me off, okay, having loads of business people endlessly bigging up, you know, what is, you know, a pretty top-down regime. Um uh it's gonna be more difficult to do business in India because it's inherently messier, but that's kind of the point, okay? Um also also, I mean, you know, um other countries that um fascinate me. Uh I I mean three I particularly loved. I mean, this isn't d if you invited me somewhere else, don't take offence. Um but Iceland absolutely in uh intrigued me, and also Israel I found absolutely fascinating as well.

SPEAKER_00

Yeah.

SPEAKER_03

Yeah. Um there's a the pace of the first of all, the level of interest in behavioural science in India is absolutely extraordinary. You know, uh I guess about a hundred. Well that's surprising. I've never seen it really No, no, no, because it it's a it's a high ambiguity tolerance culture. Uh it's the th i the the one of the great advantages uh according to one Indian friend of mine is that they're polytheistic, so they don't demand one theory to explain everything. Okay, so it you know it i it is in that sense you know it's got a high ambiguity tolerance. Um Israel, the level of creative, you know, uh the level of creativity was astonishing, you know, um, which is probably a response to circumstance, but I was absolutely beguiled by that as well. And Iceland. Iceland, you've got to go there because it's a short haul flight from London, but when you land you're on the moon, and the people were lovely. But those are just three examples. Actually, Canada, Australia, New Zealand, one of my things I big up is Australian New Zealand kind of intellectual life. Nicholas Gruen, you probably know the economist, do you from Oz? Based in Melbourne. But I always joke to the Australian kind of academics that they're a bit like Australian flora and fauna. They've kind of evolved slightly in isolation, so as a result, they're much more interesting than the people who've evolved kind of, you know, are you know evolved on a kind of massive continent. You know, the the very fact that you've kind of evolved separately um produces just more interesting thought, I think.

SPEAKER_01

That's a that's a funny insight to have, I think. Uh, economists are quite like Steve Kane fit.

SPEAKER_03

I know Steve, well, exactly the other example I was gonna give I was gonna read his audiobook. Totally original guy. I uh funnily enough, Ian McGilchrist when I said this also agreed with me when I was chatting to him, and he said he he similarly finds the appreciation of his stuff and generally the interesting stuff that emerges, particularly good in Australia.

SPEAKER_01

Nice. I'm really happy to hear you big up Australia.

SPEAKER_03

Absolutely wouldn't hesitate. I love the place.

SPEAKER_01

Yeah. Uh finally, Mr. Sutherland, uh a conversation between any two people of history, dead or alive, no language barrier, just someone you would like to listen a podcast between.

SPEAKER_03

Bloody hell. I'm trying to go. Exactly that question. And um Adam Smith would have to be one of them. I mean, you know, solving economics is really easy. It's be more like Adam Smith, okay? You know, cut cut out the obsession with kind of you know um Adam Smith would probably be one of them. Um and uh another one might be it might be someone like you know, one of those people, Herbert Simon or someone like that would be interesting. But uh who's Herbert Simon? Uh interesting. He's kind of f really in a sense the forefather of No, I'll tell I'll tell you the second one. I think the first behavioural economist, and and unfairly uh underrated Aesop. That's what you weren't expecting, okay? But Aesop is basically a collector of what you might call paradoxes and uh you know apparent contradictions in human behaviour.

SPEAKER_01

And you, a collector of paradoxes.

SPEAKER_03

I think, I think it was Aesop who um uh reading Aesop, I had a children's book when I was like eight, okay? And just uh three so Aesop, the three things I find really interesting are detective fiction. So another person who'd be high on uh there would be um uh you know um uh uh a possibly a great writer of detective fiction or Conan Doyle or someone of you know that that kind. Um crosswords, cryptic crosswords, where what you have to do is see what people don't want you to see. Okay. And I think there's a weird inference. I had this children's book when I was about six or seven, which is like illustrated Town Mouse and the Country Mouse, Illustrated Aesops Fables, which I for some reason loved. And I often wonder whether that was a kind of you know decisive early moment.

SPEAKER_01

So him and Adam Smith.

SPEAKER_03

Yeah, that'd be great.

SPEAKER_01

Yeah. Alright then. Well, Rory, um, thank you for being generous with your time. I uh really, really love your enthusiasm. I think it's very infectious, and I listen to Alchemy, and you can also hear the enthusiasm come through there as well. But um, thank you so much, sir. I really do appreciate you giving me the time.

SPEAKER_03

An absolute pleasure. Thank you very much indeed.

SPEAKER_01

Again, thank you so much, Rory. Absolute pleasure speaking with you. I genuinely got through 10% of the questions that I had scheduled. Um, you know, such as the air edition of his worldview. Basically, you give him any topic and he'll be able to riff on it that's interesting for a very, very, very long time. Other interesting things that I wanted to uh ask Rory about was say Salmon Rushdie, because he actually worked with him for a while um at Ogilvy, uh, getting uh Rory's like sort of gut instinctual response to how you would apply alchemy to podcasting, for example, things like this. But anyway, there will always be a next time. Finally, to you, my dear and generous listener. Thank you so much for listening this far through. If you have, I think it means that we can get a review. So, bring the Apple reviews beyond a thousand by next week, the Spotify reviews beyond a hundred by next week. Pump that good juice into the multiple and various algorithms. Swipe up your phone, leave five-star reviews, say nice things about the product because the podcast's uh algorithms, the indexing, it's all in the Stone Age. There's no discoverability. The only way to get these podcasts to spread is by lots and lots of reviews so people see it and it's a measure of authority. But thank you so much for listening. You're all a bunch of legends. I got a lot of podcasts recording next week. We've got a lot of backlog, interesting ones coming up. Keep telling people about it. Ciao.