Season 1 Episode 20 The World of Work with Lynda Gratton
Full transcript of the conversation on the world of work with Lynda Gratton
Explore the Full Transcript of a Profound Conversation on the World of Work with Lynda Gratton
We invite you to delve into the comprehensive transcript of an enriching discussion on the world of work with the esteemed Lynda Gratton. This transcript is specifically from episode 20, season 1, and offers profound insights into the ever-evolving landscape of the workplace.
Gain in-depth knowledge and valuable perspectives as Lynda Gratton shares her expertise on current work trends, future predictions, and strategies for thriving in the dynamic business environment.
Chris: I thank you so much for speaking to us today. It’s a real honour and pleasure.
Lynda: I so appreciate the conversation.
Chris: Thank you. So you started your career as a psychologist-
Lynda: -Still am!
Chris: And your Ph.D. was written on Maslow’s hierarchy of needs. I thought it was a wonderful paper. What first brought you into the field of psychology, and how has it related to the future of work?
Lynda: Well, I’ve always been fascinated with work. I’m one of those kids who worked from the age of eight with my first paper round. And then I worked on assembly lines in the Chocolate Factory, and waitressing and so on. So I understood work really early on. What I was interested in, and still are, is the relationship between work and people. It’s that interface that really fascinates me.
Once I joined London Business School that got wider, because I looked at organizations. For example, in my elective on The Future of Work, we start with the whole world, and then go down: what are the forces that are changing the world? What does that mean for companies? What does it mean for teams? What does it mean for you? So the psychologist is still there.
Chris: In your classroom, what have you learned from teaching about the world of work?
Lynda: What I’ve done from the beginning of my career here at London Business School – I’ve been here for 30 years – is I run a parallel life. I have my teaching, but I also have a consortium of companies, up to 40 companies, that I actively research with. I learn from both of those, from how students think about the world and how leaders think about the world. I also connect them quite a lot. So for example, in my elective, some of my companies go and teach my students. I try to connect the student learning to what’s going on in larger and complex organizations as tightly as I can.
Section 2: A love letter to corporations
Chris: A few years ago you wrote a book called The Key, which was described as a love letter to corporations. You were very positive about the place that corporations can have in society and the impact that corporates can have, as long as they make changes. In the face of big challenges, including in climate and technology, how do you think corporations have done in relation to that? Have they fulfilled your love, or is still unrequited?
Lynda: Oh, I’m still in love with corporations! Some I love more than others. I certainly love corporations a lot more than I love politicians and political leaders at the moment. I think the difference between political leaders and corporate leaders is the selection process to get to the top of BP or Equinor is rather different from the selection process to become a Prime Minister or the leader of a country.
I wrote The Key specifically to address the question that my MBA students were asking me: what do corporations do? What I realized – and this is really what The Key was about – is that there are capabilities that companies have: their capacity to innovate; their capacity to create complex shareholder ecosystems; their capacity to really leverage their distribution. Those three capabilities were things that I felt could really make a difference to the world. In The Key, I talk quite a lot about how corporations can make a difference in the world, and I’m still positive about that. I still work with CEOs on some of those issues.
Chris: Very good. You mentioned politicians aren’t exactly popular these days, which is very true, but arguably neither are corporations. And there’s a lot of stick towards Big Tech now. There has been a lot of stick going towards the oil and gas industry for a long time; fast fashion in particular is getting an awful lot of stick. Is there a realistic path back, reputationally, for these corporations or is regulation needed – and can we trust the politicians to be doing that?
Lynda: That’s a really interesting question. The truth is that if you think about a corporation, it’s the people, the employees, and it’s the product it sells. Now, if you think about that, most of us trust the products that we buy. You’ve just flown last night; I don’t know if you flew British Airways, you might not like British Airways, but you trust their product. You got onto that plane. So the first point is that people often trust the products. We might hate technology companies, but we all have iPhones, and so on and so forth.
The second thing I’m interested in is how employees feel about their corporations. In the main, people are engaged with their organizations, or else they leave. So I think the challenge really is the rhetoric between what a corporation says it’s going to do, and what it actually does. That’s where trust begins to erode: where companies make far-fetched claims about the impact they’re having on the environment, and anyone who looks deeply at that realizes that’s not the case.
I think the other point is, frankly, the world is on a very tough course at the moment. We are speaking at just the moment that politicians around the world are talking about climate change [at COP]. We’re all deeply worried, but where we’re pointing fingers at who’s responsible for this, the truth is all of us are. The fact you got on a plane last night – you’re responsible. The fact we’re sitting here with all these lights on – we’re responsible. That’s one of the things that I talk to my students about in my program. My lecture on The Future of Work is that this is a multi-stakeholder issue and it’s a tragedy of the commons, which is to say everybody would like to blame somebody else when in fact the tragedy of the commons is that we’re all responsible.
I think that’s really where we stand at the moment. But there are some great CEOs who are trying to make a difference to the world. I’ve always felt that corporations well-governed can be very positive forces, but that governance is really important.
Chris: Yeah, and that’s part of the reason why we do this. Because we think that there can be a really positive impact from speaking to MBA students, people who will then be going out into the world of work, into leadership positions and hopefully they’re able to influence their organizations. The organizations can filter down into society at large.
Frankly, if you get the organizations to be going to net zero, that 60% of the problem. Us as individuals, we’re a far smaller part of the issue than the organizations. What you’re doing in your classroom – putting climate and the environment at the centre – is really important.
Section 3: Pandemic Lessons
Chris: If we can move on a little bit, to lessons from the pandemic and trying to draw parallels between that and climate change. Clearly there’s been quite a change. How sticky it is or not, I’m not sure, but there’s been quite a change in the way people work as a result of the global pandemic.
And you use a really interesting model to describe the pandemic, the freeze-unfreeze model, and how that type of big shift has caused us all to rethink the way we work. And it’s been quite successful. Why has a similar change not happened in relation to climate –another big global issue?
Lynda: That’s a brilliant question, isn’t it? And I’ve been asking myself the same questions. Speaking of the pandemic for a moment, you perhaps remember I wrote the Harvard Business Review article on making hybrid work. And my lead in case was Fujitsu. The reason I chose Fujitsu, a Tokyo-based Japanese company, is because of all the countries in the world who find it difficult to change working practices, it’s Japan. And yet within a week, Fujitsu had moved 60,000 people from their offices in Tokyo into their home. It took them three days to do it. If you ask them to do it as a strategy, they’d say it’s a five-year program. It’s just impossible.
You know the analogy of throwing the frog in the boiling water? We were thrown into the boiling water. I think that just showed how astonishingly adaptive we are, the fact that we did adapt so quickly. And I think that’s a lot to do with technology; the fact that we could all use Microsoft and Zoom platforms, the fact that we had Internet connections into our homes, that made a massive difference.
Even ten years ago, I don’t think it would have been the same. One day, all over the world, all companies got thrown into boiling water and they either clambered out of it as fast as they could or they boiled to death.
I think the problem with climate change… just to go back to the pandemic, it was a relatively simple outcome in the sense that you could look to pharmaceuticals to say: when are you going to be able to find a vaccine? You could look to governments to say: how are you regulating how we mix with each other? You could look to corporations and say: I want to work from home, I want to be safe. I think the challenge with the climate is we are frogs boiling really, really slowly. Of course we’re boiling a lot faster now, but we haven’t had that moment of ‘unfreeze’. It’s very complex.
When I teach, I open my program at the London Business School on The Future of Work with climate. I usually get one of the heads of strategy from one of the large oil companies, very often Shell, sometimes BP, to talk about how they’re thinking about it. One thing they all talk about is the complexity of the challenge. The fact that there are multiple stakeholders. The fact that during the pandemic, we just use a technology that was already there, Microsoft and Zoom were already there, but here we have much more complex technology. So the technological challenges are great.
The behavioural challenges are great also. We aren’t changing our behaviour. You’re still getting on a flight; I’m still I’m on a flight next week. I’m sorry, I don’t mean to blame you – I’m the same. I’m still living in a house that’s probably overheated and driving a car that’s not electric. You’re probably doing the same. So none of us are doing everything we need to do, in the way that we did with the pandemic. I spent one year sitting in my home during the pandemic. You did as well. Nobody’s done that for climate change.
Chris: Very true. So what lessons can the communicators of climate change learn from the pandemic?
Lynda: I It’s a question I haven’t really thought about, but I’m not sure that there is very much that we can learn from it. The pandemic was an extraordinary event. I’ve written a book, Redesigning Work, which was really based on our experiences of the pandemic and what it’s taught us. In my own mind, I haven’t made any connection between the two. I think throwing a frog into boiling water is entirely different than being the frog in water that’s heating up. So I think what we can learn is that complex problems require multi multi-stakeholder solutions. And I think in the case of the pandemic, governments just threw money at that. Technologists, particularly in the pharmaceutical industry, worked on it night and day – you know how heroic they were.
We just don’t have that sense of emergency with climate. And even though you see the terrible photographs that we’re seeing this week, as everybody meets to talk about climate change, the truth is we don’t really yet see it as a personal problem for our own safety, in the way that we did with the pandemic.
Chris: Going back to the kind of the pandemic, and the changes that happened there for a moment. Are you glad change has happened? Even last night there was a big announcement from Twitter saying everybody’s got to be back in the office. Goldman Sachs and many others have made similar announcements. Are you optimistic that the ways of work will remain changed?
Lynda: I do. In fact, I’m just writing my follow-on HBR article. Four years after the last one was published, almost four years since the pandemic started, there is absolutely no question that things have changed. Now, what we’re going to see is a lot of differences between organizations because of the companies themselves. So, for example, the investment banks have a view that to be highly productive, people need to be seeing each other. I think that’s perfectly reasonable. Nobody’s changed. If you don’t want to be in the office all day, don’t join Goldman. The deal is clear, and I think that’s really important – just make the deal clear.
Then, of course, there are the consequences of that deal. One is that you have to pay people more because for them, not being at home takes away some of the benefits. So you have to do that. And secondly, there’s a whole bunch of really smart people who won’t join you.
You’ve got to figure these things out, and that’s why CEOs are paid so much money. They’re paid to figure that out. In the case of Twitter and Elon Musk, he’s a very unusual character. Here we have a maverick running an organization, and his behaviour is very predictable. He did the same with Tesla, so I’m not surprised by that. My guess is that he’ll lose quite a lot of people, but he doesn’t care because he wants to lose them anyway.
In general, most organizations are adopting hybrid working for some of their employees now of course, in any company. I’ve just written a case on Mars, and Mars have factory workers and they have office work as well. The factory workers are tethered; I went round to a factory yesterday actually, and the people cannot work from home. My son’s a doctor, he can’t work from home. So 50% of people actually can’t work from home. Then you have to be more creative about, for example, the scheduling of time. And certainly that’s what firms have learned. They’ve learned that they can reschedule time to bring more flexibility. I think it’s going to move from just talking about should we be in the office, to thinking more broadly about flexibility.
And I think that we also have to acknowledge that for people who are tethered to their work, we have to think about flexibility around time just as much as we think about flexibility around place.
Section 4: Skills for a net-zero world
Chris: Right. So for the net-zero world, assuming we are going to go there in working life, what are the particular skills that young people should be looking for? What skills would you look for if you’re hiring somebody with a net-zero future in mind?
Lynda: I sit on a chair the World Economic Forum, Council on Skills, and when we looked at the future of skills, one of the things that came up really clearly was the fact that more jobs were going to be in the green economy. So I think from an individual perspective, it’s a mindset. I see it in some of my children. Some of them have an absolute mindset around low carbon, and you can see that in the fact that they walk and cycle everywhere. They don’t take planes ever. They sit at home with duvets because they don’t put the heating on. They don’t eat meat. So I can see what that that looks like; I can see what a low carbon life lifestyle looks like. And I think it’s amazing that they’re doing that. That’s a mindset.
With regard to industry, green jobs are a growing part of industry. What I’ve written privately for companies is about the transition into a green economy: what will that mean for skills? And I think the main thing that I notice most, as we move into a green economy, is that the structure of organizations change. So if you think about an oil-based economy, then the multinational oil companies are enormous and they function as bureaucracies. I don’t mean that as a put-down –well-functioning bureaucracies are great to have around. That’s why our lights stay on.
Whereas if you take a look at a green economy, then what you see is a lot more players, a lot more innovation, much more risk in terms of capital. Large companies aren’t used to that level of risk. There are lots more entrepreneurs, lots more failures. What you’re getting is a movement of skills from learning how to be part of a large, complex bureaucracy to being part of an agile ecosystem, with different sets of skills in terms how you build fast, how you learn fast, how you work with each other.
For example, one of my areas of interest is the distribution of electricity and how you build the capability to do that. Because in the end, the oil companies are moving into becoming energy companies, and the distribution chains are entirely different. So all of that requires a different mindset. I think that transition is really important. And part of what I talk to my students about here at London Business School is that they are now going to be members of complex stakeholder groups where they’ve got to learn how to understand other stakeholders. They’ve got to realize that government and regulations play a really important part in that, where they have to work with companies that are very different from them. That capacity, the mindset to realize that you’re working in a multistakeholder world is really crucial.
One of my worries is that it’s very difficult to train people how to do that. I don’t think we do a particularly great job at London Business School. I don’t think any of the business schools do, but that’s why the Energy Club and all the other clubs we have at LBS play a really important role to help our students understand that the world that they’re going to inhabit requires them to be empathic and understanding and able to listen to other people’s points of view.
Chris: Very good points. I know with the Energy Club, one of the most powerful things we had pre-pandemic were the meetings. We had people standing in front of the room giving lectures with rooms packed full of people, and at the end of that you all had a networking session afterwards and you made really good connections. That was the time, in the Energy Club, that I made connections. And then in the pandemic everything went virtual.
Lynda: And now we’re back again, so you’re still going to be making connections. I’m a member of a number of networks, and part of that is that those connections are really important. For example, quite a lot of the new ideas around energy creation and storage will come through entrepreneurs, they’ll come through a VCs and private equity, so that combination is much more complex than running an oil company where your main asset is your geologists and their capacity to find oil. That’s an entirely different set of capabilities.
Section 5: Habits for humanising climate change
Chris: You’ve got a very strong sense of the human in all of this. Humans should be at the centre of work and of life in general. But the climate change debate or climate emergency and energy transition debate, is pretty impersonal. It’s focused in on big numbers, the amount of carbon in the atmosphere, thing like that that don’t really hit home with people. It’s very abstract. Why do you think the human element is missing from their current climate transition discussion?
Lynda: That’s a really good question. One thing we know about the human brain is that it likes stories more than it likes data, in general. So that’s why, if you read my books, I always bring personas in; I always talk about people. For example, one of the things that I’m concerned about is as people age, how do they do that productively and healthily? Rather than a book giving people masses of data about aging, what Andrew Scott and I did in A 100 Year Life – and indeed in our next book that we wrote together, the New Long Life – is we brought in personas, people, peoples stories, and we weave the data into it.
When I work with companies, I always advise them to use personas. I think the difficulty with the climate change, which is a bit like smoking, really…what they found with smoking campaigns is that when you confront people with pictures of these terrible lungs and so on, they just look away. I think that’s the challenge that you face, is that the reality is so terrible that people want to look away and say: I don’t want to talk about this. How do you then connect to the human? I think you connect to humans through habits, rituals, practices and processes. That’s where human behaviour is. It’s not created, but it’s actually shaped by our everyday routines, our everyday habits.
For example, one of my everyday habits is I don’t get into the car to come here. I always walk even when it’s raining. I have a raincoat that I wear; it’s just a habit. And the more I do it, the more I like it. So I hardly ever get into the car. I went to the Barbican last night to listen to the marvellous London Symphony Orchestra, and I walked there. It took me 65 minutes, but I did that.
What you have to do – and when I say you, I mean those of you who are really leading the charge on climate – you have to help people think about what would be the daily habit, the daily routine that would make a difference. I know that people think: it’s too big for me, I can’t do anything about it. But actually what we know is that when people change their habits, they also begin to engage in some of the bigger questions. So the fact that I walk to work makes me feel better about climate change, even though what I’m doing is a minor thing. So then over time you expand those habits. Maybe the next thing is I say, I’m going to cut back on flying. I’m going to take the train to Davos. Those are steps.
Health has been really good at that. This 10,000 steps idea, which is as you know is completely made up…people will say to each other, how many steps have you done today? If you can relate this to people’s everyday habits and make them feel great about what they’ve done, then I think that’s part of it. But of course that’s just to do with individuals. You also have to work at the level of corporations, and that’s because corporations and governments play a regulatory role which is beyond anything that individuals can do.
Chris: I guess there is a danger that people may think: oh, I walked into work, and when I get into work, I don’t need to do anything more about it.
Lynda: Well then, your role is to help them know the habits once they get into work. What should I do now that I’m in work, that would make a difference? And I think building on these habits bit by bit…it’s like [the programme] ‘Couch to 5k’. It isn’t that they say to you on day one: run 5k. They say: walk to the end of the road. The app that takes you from couch potato to running 5k takes months, and every day it builds on it. I think that’s really what we need to think about with humans, is to build habits and routines that bit by bit get reinforced and that move us in the right direction.
Chris: We probably need more academics to be thinking about that, and what it might look like for particular industries and for particular times.
Lynda: I think that’s a good point actually. It’s interesting at London Business School now, we’re trying to pull all the academics together who are interested in climate change. But really, we should have been doing that years ago. I’ve just talked to you about habit formation; we have people at London Business School who look at habit formation. Could you help us think about what would be the habits, or how would you create habits around reducing your carbon footprint? So I agree with you that a more focused approach in schools like ours could be a real help.
Chris: Speaking to some of your colleagues, one of the initiatives that London Business School signed up to – with great fanfare and articles in the Harvard Business Review, in the Financial Times –was the Business Schools for Climate Initiative. If it achieves half of what’s on paper, it would be really good initiative.
Lynda: But wouldn’t it be great if every single person who graduated from London Business School had a clear and articulated view of what they could as individuals, what they could do as a team and what they could do as a corporation when they start leading companies? One of the reasons I stay at London Business School and love teaching is that I’ve been here for 30 years and we had our alumni coming back earlier this week and last week. There are people leading major companies whom I taught 30 years ago, and that’s a great feeling that you could have impacted them. In fact, some of them say: you made a difference to the way I think about being a leader. I think that’s what we’ve got to really engender: that every single person who leaves London business School, as well as they become leaders, they know what it is they’re supposed to do.
Chris: What I would love to see is for sustainability to be part of the MBA, a core component of it. I know it’s not that easy because all of the MBA lecturers and all the faculty need to be weaving that into their structures. It’s a long plunge.
Lynda: But we do that; I mean, we are doing that. What we’re doing at the moment is at least making the threads. So, for example, people didn’t realize that I teach a whole class on sustainability in The Future of Work. I get the head of strategy for Shell to come in and talk about how their scenario planning is going. This is what we’re thinking about the future. So we are joining up the dots and in the second year we are providing a sustainability thread, so all students that are interested in sustainability know which electives they should be taking to help them along the path.
Section 6: Transitioning from oil: industry, labour, culture
Chris: Fantastic. Changing tack a little bit and going back to some work that you mentioned, particularly having the oil majors coming in and speaking to your class. It’s clearly a difficult time for the for the oil industry. It’s kind of a twilight industry, it’s facing massive transition and a lot of challenges as organizations to try and recruit and retain staff. And people who are currently in the industry might be looking to retrain and reskill. You’ve studied BP’s kind of Beyond Petroleum campaign in the early 2000’s, and that obviously didn’t go so well. But now the oil and gas majors seem to be doing an awful lot better in their messaging and in their transitioning. What is the difference between the less successful and the more successful companies that are making this transition?
Lynda: It’s a sector that’s has to, and will, transform. For me it’s like the telecom sector. If you look at AT&T or British Telecom, they had to go through massive transformations as they moved from fixed lines and telephones – I don’t know if you remember having a telephone and a fixed line! – to the Internet and digital. Although people didn’t notice that transition, it was a massive transition. It required laying off a lot of people, reskilling people and so on. The transition that the oil companies face… as an oil company, you either say, I am just going to get the stuff out of the ground as efficiently as possible and then we close – and I can see why some companies might not be saying that, but that’s really what their strategy is. I think a better strategy is to use the enormous resources they’ve got, both money resources but also skill resources, to make that transition.
But that transition is extremely difficult for an oil company because what it takes to run an oil company is not anything like what it takes to run an integrated energy system. Energy system integration is a high-risk business. It’s made up of multiple partners that have to be worked together. It’s got complex, regulated regulation. So one of the questions that you could legitimately ask as an outsider is: would any of the oil companies be able to make that transition? Are they capable of doing that? Wouldn’t it be better for them just to stick to getting oil out of the ground, which we need?
I mean, if we didn’t have oil, the lights wouldn’t be on. We all know that. I think there’s a lot to be said for helping them to make the transition. It’s basically a transition that looks at skills you have to reskill in a very, very significant way. It’s a transition that looks at structures. You have to move from a bureaucracy to a much more distributed organization, and it’s also importantly a transition about risk.
When you think about running an oil company you’re looking at a 50 year horizon, probably longer than that sometimes. If you’re in a in an energy company where you’ve got multiple sources of energy, sometimes your risk horizon is very, very short. You have to very quickly make high risk decisions, some of which are going to fail. So there’s also a mindset shift in terms of how people think about risk and how they think about the resourcing for risk. So these are very complex transitions. It would be great if our major oil companies, particularly the European ones, were capable of making that transition.
When we get the head of strategy for Shell to come and talk at London Business School – and remember that Shell were one of the companies that pioneered scenario planning, so Shell have been saying for years, ‘this is what’s going to happen with climate change, this is what we’ve got to do,’ and they’ve been running those scenarios –so they come to teach my class actually scenarios to help them think about, how do you manage multiple scenarios? They have big investment capabilities, so I’m hopeful that they can, particularly in Europe, make that transition.
Chris: You need to have a very understanding investor base, and there’s a big divestment movement out of oil and gas which complicates matters. The US majors particularly seemed to be just doubling down: we’ll just keep on doing what we have been doing, and we’ll just do it better and cheaper. It’s the Europeans who have been trying to make the transition to the front, as a broad sweep generalization.
Lynda: Yes, absolutely. And you know, I have a lot of sympathy for people who are anti oil. But the truth is, if you look at the UK energy mix at any point in time, we could have a windy day like today when 20% of all our energy is created through wind; and tomorrow a high, high depression comes into the UK, there’s no wind and there’s no wind farms working. So that 20% has got to be found like that *clicks fingers*. How is it found? You put your gas turbines on, or you pull up your generators and that’s a very complex issue.
Here’s an idea: one of the things that fascinates me is on a daily basis, we know exactly where our energy is coming from in the UK. Just as we look at where what’s happening with the stock market, every single day we should say, isn’t it brilliant that 20% of all the energy in the UK came from wind? But unfortunately today is not a windy day, so we’ve had to fire up the gas turbines.
I don’t think people have any sense of how our energy is created and it’s your fault that they don’t. So when you ask how do you help people understand that, you should be helping them understand where the lights come from, where the electricity comes from. Especially for young people, I don’t think they have an understanding that right now, if we took oil out of our energy mix, the lights would go out. They need to see that every year renewable energy is increasing. So instead of the Financial Times every single day saying, this is what’s happened to markets, they’ve gone up or down…why don’t you just go straight to the core? Every day the F.T. should say, this is the renewable energy we’ve put into our system today, on a daily basis.
Chris: That’s quite difficult to compile…
Lynda: No, not at all. The data is already there, because I see it every day. So it’s not difficult to compile, it’s actually already available in the UK energy markets.
Chris: And you do have something similar to that in Denmark. They do give that type of information.
Lynda: And of course we’re really fortunate the UK because we have the continental shelf, and we have wind, and I don’t think people realize what a huge asset that is for us.
Chris: Absolutely. And if you have solar panels on your house, you are absolutely in that mindset because you have a look and go, I spent this amount of money on the system, and that’s how much the savings are. Turn on all the lights and plug in all the cars, get the neighbours around to plug in their cars, because it’s a sunny day!
People who have taken that extra step, to have a heat pump or have solar panels, are already in that mindset. There are also there’s things like, in Connecticut where people have been giving grants for things that might seem a little daft, but for an electric lawnmower because they see that as the gateway drug to electric cars. It’s just it’s a way of changing your changing your mindset.
Lynda: Yes, but we’re talking about two different things here. One is people understanding where energy comes from on a daily basis, and the second is their use of it. They need both of those data sets. They need to know that today, 25% of our energy came through wind; and they also need to know I switched off all my lights, therefore my own personal energy went up.
I think it’s the combination that’s going to be really important to help people to change their habits, and also understand of the energy markets. I think it’s extremely poorly described, actually.
Chris: At the moment – understandably so – people are only really caring about the cost of the energy rather than how it’s made up. You might end up in a discussion about, how much is that kilowatt cost versus that kilowatt cost on a comparative basis, of gas versus wind versus solar. And again that would that would help the arguments today, and certainly most of the time, towards renewables.
I fully agree with you. We do need oil and gas right now. But what we should not be doing is investing in more oil and gas infrastructure that locks that in for the next 20 years, so we’re still dependent on it. If we could be investing more and more in renewable sources…
Lynda: I absolutely agree, there’s no question about that. And going back to your question about what was different about the pandemic: the day that everybody had to get people out of the office into their home was a massive investment day. Companies had to basically create a digital infrastructure that was home-based rather than office-based, and they had to invest in that. So that investment was made very quickly. Whereas, as you say, the lock-in for oil and gas is still there. So persuading companies to move their investment into renewables is going to be crucial. That’s where governments play a role.
Chris: A much more difficult question, because there’s a lot of sectors that really struggle and a lot of communities that struggle – so if you’re very tied in to say coal in the US or even the miners’ strike issues in the UK. and fisheries today in the UK again – we’ve got industries that are very much tied into the local community. But change is inevitable. How do you deal with that in a sensitive way; the balance between the need for change, but also the need to protect these cultural identities?
Lynda: That’s a really difficult question, and it’s one that I think very few countries have been successful at confronting. If we take the miners, for example, it was known for many years that the UK was not a good place to bring coal out of the ground for a whole set of reasons. But as you said, that was tied into feelings of community. What has been successful – and in some of the U.S. cities that have been coal mining cities, for example, or steel working cities – it’s required an enormous focus on signalling what the new jobs are, and then ensuring investment in those new jobs and then enable people to upskill and reskill.
But when you think about what that is, at the heart of it is new industry, and that’s been extremely difficult to create in those areas. But part of the reason it works slightly better in the US is the US workforce in general are more mobile, so they’re prepared to move from a place where that industry is depleting, to a place of growing industry. In the UK, and Europe as well, we don’t have that level of mobility, or community links tend to be stronger and deeper. So it’s an extremely difficult problem. Thinking about what is it that a miner could do; if you were trained as a coal miner, what are your adjacent skills? And part of the challenge that we’re facing now with the oil industry is if you take a look at some of the primary jobs in the oil industry or the gas industry, how could that person transition to another job?
What we know about reskilling or upskilling is people do not move from being a coal miner to a software programmer. That’s not an easy move. What we have to do is to find what we would call adjacencies. What is it that the coal miner does, or the steelworker does, that actually could then help them move into an into an intermediary position that would help them, for example, to become a programmer? In general, the US have been better than we have in the UK at working out what those pathways are.
But that’s a piece of work that all of the gas and oil companies need to be doing now. You saw that in telecoms, which was in my view the last major sector change, where AT&T (particularly in the US) built pathways that said, this is how you would move from being a linesman, looking at digital, looking at the lines that are coming into a house, to becoming much more digitally literate because the future really is about digital skills. So encouraging people to develop those skills is going to be primary to that transition.
Chris: Just as an aside: over the last ten days I’ve had six different people, all from tech companies, call me and say they either have been told that they’re on the way out, or they’re worried that they’re going to be on the way out, from household names.
Lynda: The labour market works a bit like house prices. It becomes overheated and then it goes down to a more stable level. And this is what’s happening: tech companies were very popular, they paid a great deal of money so people went to them; and the tech industry is now recalibrating, and people will move into companies like yours, which is great. It’s creative destruction. If one were to take a Schumpeter approach with the old companies, you’d say: they’re oil companies. Once they’ve done their job, they should be destroyed, that’s the end. And the people in them should go to other places. There is an alternative scenario that says that these are not companies that can make transitions, they’re companies that take oil out of the ground. And when they’ve taken that oil out of the ground, that’s it.
Chris: From my point of view, the really good thing is, because a lot of very smart and talented people were attracted into tech, if there’s a contraction there and it allows for a leakage of people to be coming into the energy transition, that’s good.
Lynda: That’s the marvel of labour markets. They’re very adaptable, especially in Ireland where you have a real tech hub anyway, they move very easily between sectors. One of the things that the oil companies have to realize is that when they were recruiting some of the new people, they weren’t in competition with other oil companies, They were in competition with Amazon and Google. And that that was a real insight for them, to think that actually those are our competitors for the labour market.
Section 7: Advice for the next generation
Chris: But you wonder how your current MBA classes are thinking about it. I was in the US last week in a room full of people who were half climate enthusiasts, and the overriding feeling was: this is great! We’ve got this Inflation Reduction Act, and how on earth do we deploy all of this capital? The problem was too much capital and not enough people. How does your MBA class feel about moving into this this type of space?
Lynda: One thing I would say about the MBAs at London Business School at the moment is they’re very entrepreneurial. I see them wanting to set up their own businesses, more than I’ve ever done before in the 30 years that I’ve been working at London Business School. And they’re going either wherever they’re passionate, or where they think the money is. And sometimes it’s a combination of both. So for example, they’re setting up a whole bunch in the renewable space. That’s amazing because the energy transition is a transition of many players. It’s not a transition of enormous companies, monolithic companies that pull all the resources into them. It’s an ecosystem, and ecosystems are brilliant for entrepreneurs and startups. So I would I think it’s wonderful that so many young people are so determined to make a difference, and so determined either to set up a profit or a not-for-profit. Quite a number of them, as you know, are setting up not-for-profits, because they’re so passionate about sustainability.
Chris: Fantastic. I am conscious of time, and you’ve been incredibly generous; so what we normally try and finish up on is a little bit of advice. Just speaking to people who might be starting out their careers, or maybe are going to finish off on their MBA and are looking towards a career, hopefully in renewables or hopefully in sustainability: what advice would you give them for the future? For another 70 years, potentially, of working life?
Lynda: What I say to my MBA students – and I would give this advice to any young person – is first of all you’ve got a long life ahead of you, and that gives you a lot of opportunities to do many different things. So the most important thing is you don’t have to rush. If you want to go into a start-up on sustainability, then do it. Be courageous, because even if it doesn’t work, there’s still plenty of time to retrain to do something else. So I would say follow your passion, be courageous and be determined to be a lifelong learner.
Chris: Thank you.
You can watch the full video conversation with Lynda on our podcasts page.
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