Introduction
Research has shown that partaking in creative outlets creates stronger social relationships, reduces stress, and allows us to develop a deeper appreciation for the world around us [1]. It also helps boost confidence, foster innovation and develop extended social networks [2]. Not to mention improving mental health, reducing anxiety and helping to combat dementia [3].
But don’t just take our word for it. Gavin Clayton, executive director of the leading mental health and arts charity Arts and Minds, conducted research over a seven-year period in which participants experiencing stress, depression, and anxiety partook in activities such as sculpture, oil painting, and printmaking. The study found a 71% decrease in feelings of anxiety and a 73% fall in depression. Around 76% of participants said their well-being increased and 69% felt more socially included [4].
A similar study at Drexel University found that 75% of participants experienced lower cortisol levels, a marker of stress, after engaging in 45 minutes of art-making [5]. Other research has found that writing helps people manage their negative emotions in a productive way, and painting or drawing helps people express trauma or experiences that they find too difficult to put into words [6].
The healing power of art
Shereen Bar-or Becerra, Creative Arts Therapist and Founder of Art Therapy Collective in New York, says that “if variety is the spice of life, creativity is the seasoning…When we practise self expression through nonverbal means, we are able to organise and process difficult emotions and increase our capacity for frustration tolerance while inherently improving our quality of life and capacity for joy.” [7]
“The arts can bring a feeling of playfulness to places you’d not expect to find them,” says Nils Fietje, of the WHO’s regional office in Copenhagen [8]. As such, art is often used as a way of healing. Fietje was specifically speaking about the role of clown doctors when making the above statement. These doctors are from Red Noses International, working at emergency accommodation centres in Moldova following the Russian invasion of Ukraine.
In a similar vein Rachel Clarke-Hughes, head of engagement at the Playhouse Theatre in Derry City, works with victims and survivors of The Troubles so that they can share their personal testimonies on stage with live audiences. “It’s about truth, healing and reconciliation through arts and storytelling,” she said, speaking to the Irish Times. [9]
Wounded civilians displaced by war and survivors of intense national trauma are extreme examples of art being used to heal. But it can and does also help fix more day-to-day struggles.
Art vs workaholism
Productivity culture is at a fever pitch. We must all have a primary and side-hustle. We must be seizing the day, getting up at 5am, being the hardest worker in the room, doling out high-octane productivity mantras on LinkedIn and consuming them back triple-fold. We must work ourselves into the ground until we’re so burned out that we’re not useful to anyone, least of all ourselves.
Or, we could treat our minds and bodies with a little respect and find some balance.
“Workaholic culture insists that being successful means making big sacrifices outside of work, even at the expense of personal health, but I’ve come to believe that it’s not all or nothing,” says Kenny Mendes, Head of People and Operations at Coda, speaking to Forbes. “I urge younger workers to think about sustainable high performance over a long career — it’s a marathon, not a sprint.” [10]
Mendes sees creative outlets outside of work as pivotal to that longevity. He says that not only will it be a stress release, offering all the aforementioned benefits, but it will improve your at-work performance as well. “Finding an outlet that helps clear your mind and gets you into a different state of flow leads to better performance during your 9–5,” he says. [11]
Keeping art separate
Despite Mendes’ insistence that an outside hobby makes a positive impact on work performance, others insist it’s important to keep your creative outlet entirely separate from your working day-to-day. It’s not an additional side-hustle, it’s not a self-improvement tool –– quite the opposite, it’s a way to detach and unwind.
“For me, I like to think of leisure in its purest sense — that is, it is time away from work, not facilitating it,” said Thomas Fletcher, chairman of Leisure Studies Association and a senior lecturer at Leeds Beckett University. “Is a hobby actually leisure if we are making money from it?” [12]
Fletcher argues that in viewing our hobbies as something that can add richness to our work, we have got things entirely inside out. We should instead be using our work as a way to add more value to our life. “In thinking about the relationship between work and leisure,” he said, “I would argue that rather than thinking about how leisure can promote greater productivity at work, a more important consideration is about how work inhibits our leisure time.” [13]
Art for women
Eve Rodsky, author of Find Your Unicorn Space: Reclaim Your Creative Life in a Too-Busy World, argues that women, in particular, are in need of space to pursue a creative outlet.
“The expectations on women, especially after they have children, are that we will be happy and fulfilled by staying within three boxes,” she says. “(1) We’re allowed to be parents of children. (2) We’re allowed to be partners. (3) We’re allowed to make money because we have to help our household. If you want to be an acrobat, if you want to be a baker, if you want to be a mountain climber, or if you want to pursue anything for yourself, society will shame you back into one of those three boxes.” [14]
Rodsky argues that society has come to view men’s time as significantly more valuable than women’s time. “Society views men’s time as if it’s finite like diamonds, and it views and treats women’s time as if it’s infinite like sand,” she says. “And when you have that type of discrepancy it leads to internalised guilt and shame for our own time choice.” [15]
She cites the fact that even in our supposedly equal society, school nurses will always call the mother parent over the father to come collect their sick child from school. The mother’s day can be put on pause. The father’s time should not be interrupted.
Rodsky says creative time or unicorn space offers women sanctuary from the world of deadlines, expectations and other people’s demands, while also serving as inspiration for other aspects of life. It is “not just a hobby,” writes Elizabeth Pearson, profiling Rodsky in Forbes, “it’s an essential element of a woman’s life, supporting both [their] career and personal well-being.” [16]
Getting started
For those unsure how to get started in their creative outlet, Wendy Raquel Robinson, an Emmy Award-winning producer, philanthropist and actress, suggests starting with classes. “Even if it’s just online, if you’re not ready to dive into a class, you can join or even just watch a class online. Even just watching a YouTube video on how to do something to pique your interest. Start with watching, learning, taking notes, and getting a good feel for it.” [17]
Robinson also advocates journaling. “Start with writing your thoughts out every day. It’s cathartic and also, when you look back and see the growth from month to month, it’s powerful.”
Meanwhile, Bar-or Becerra says, “The best way to begin anything is to follow your feet –– lean into what makes you feel present. Self-awareness is required for active engagement so begin by noticing the moments that bring you joy or grounding. Being creative and intuitive can be as simple as learning how to create cohesion and connection with your internal and external world.” [18]
What can leaders do?
In a survey conducted by the World Economic Forum, 90% of business leaders highlighted the importance of creativity in remaining competitive [19]. As such, it behoves managers to do everything in their power to support their staff’s creative endeavours, inside the office and out.
It may seem like it’s not the manager’s place to intervene in creative matters. Speaking at a two-day colloquium at Harvard Business School, Intuit co-founder Scott Cook wondered whether management was “a net positive or a net negative” for creativity. “If there is a bottleneck in organisational creativity,” he asked, “might it be at the top of the bottle?” [20]
During the conference, leaders came to a useful realisation: One doesn’t manage creativity. One manages for creativity.
Cook told the story of an eye-opening analysis of innovations at Google: Its founders tracked the progress of ideas that they had backed versus ideas that had been executed in the ranks without support from above, and discovered a higher success rate in the latter category. Companies need to break past the “lone inventor myth” in which they’re reliant on one supposedly genius founder to innovate alone. It’s an unsustainable model.
Other suggested creativity hacks are to not allow any bureaucracy into the initial creative stages –– let creatives work freely before deciding whether or not an idea is possible. Putting a ceiling on things too early can restrict creativity. Also, leaders should make their teams diverse –– in race, gender, age and thought. Having a wide range of viewpoints helps creativity grow.
Leaders can also make sure they support staff in their creative endeavours outside the office. Ray Corral, founder of Mosaicist in Coral Gables, offers grants and space to his workers to help develop their own individual pursuits. On top of that, each year his whole team gets together to create something new unrelated to the work they do. “This annual tradition fosters personal growth and satisfaction and injects a fresh, innovative spirit into our workplace,” he says. [21]
Why you need a creative outlet
Creative outlets offer an endless list of benefits: improved mental health, less stress, greater productivity, inspiration, a way to unwind and disconnect, a way to forge new communities, and a way to combat workaholism. Its benefits can be especially helpful for women, who need time to pursue their passions free from societal pressure to adhere to some reductive norm. Classes and journaling can be a great way to start, but the truth is only you know exactly what it is you want to pursue –– follow that urge. And if you’re a manager, do everything you can to support creative outlets in your team. A workforce that is happy and creative benefits everyone.
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The value of creativity with Pat Stephenson – Podcast
From Creative Visionary to World-Renowned Artist: The Inspiring Journey of Paul Hughes – Podcast
Sources
[1] https://www.mciinstitute.edu.au/wellbeing/creative-outlets
[3] https://www.ncbi.nlm.nih.gov/pubmed/16439826
[4] https://www.mciinstitute.edu.au/wellbeing/creative-outlets
[5] https://drexel.edu/news/archive/2016/june/art_hormone_levels_lower
[6] https://www.medicalnewstoday.com/articles/320947.php
[12] https://www.nytimes.com/2018/05/10/smarter-living/the-case-for-hobbies-ideas.html
[13] https://www.nytimes.com/2018/05/10/smarter-living/the-case-for-hobbies-ideas.html
[19] https://www.weforum.org/agenda/2019/04/5-things-you-need-to-know-about-creativity/
[20] https://hbr.org/2008/10/creativity-and-the-role-of-the-leader
Introduction
The latest survey by GOBankingRates, involving over 1,000 US adults, revealed that 57.65% are considering a career shift in the coming year [1]. Meanwhile City & Guilds Group research revealed a third of British people want to change their job. [2]
This desire for change is in part generational, with the same GOBankingRates poll finding that 83% of Gen Z consider themselves to be “job hoppers” [3]. But as Tomas Chamorro-Premuzic, a professor of business psychology at University College London and Columbia University, writes in Harvard Business Review: “Contrary to what people think, career pivots are far less dependent on age than on other, organisational, psychological, and contextual factors. In other words, there is no such thing as the “ideal age” for a change; instead, other factors should be considered.” [4]
According to the US Department of Labor, the average person will change careers 5-7 times during their working life. Approximately 30% of the total workforce will change jobs every 12 months. [5].
So, what is the best approach to handling a career pivot? This article will help explain how you should decide whether you want to change careers, what might drive that change, and offer advice for how to best position yourself to transition smoothly.
Why change?
Herminia Ibarra of the London Business School divides the causes for change into two key categories: Situational drivers and personal drivers. [6]
Situational drivers, which also can be thought of as external drivers, are market forces such as the economy, the state of your industry, a restructuring in your company or emerging opportunities elsewhere. An example might be people who sense that AI will soon nullify the need for their existing job. As such, they are choosing to pivot careers now in order to not become collateral damage later.
Personal drivers, which can also be thought of as internal drivers, involve your personal experiences and preferences or network. An example might be people who chose to transition during the pandemic. While the pandemic was obviously an external event, for a lot of people it served as a wake-up call and inspired them to start pursuing a path that better aligned with their skills and passions.
Whatever your reason for pivoting, it’s first worth considering whether doing so is the right move.
Should you pivot?
Before pivoting, you should ensure that you’re certain it’s what you want to do. In Harvard Business Review, Dorie Clark, a marketing strategist who teaches at Duke University’s Fuqua School of Business, suggests some easy ways to do that. [7]
First, you could transfer internally or reinvent your existing job. Turnover has been found to cost the employer up to 2x the employee’s annual salary and the number of resignations spiked in 2021 to a record 47 million voluntary departures. As such, companies are increasingly desperate to retain their talent. Before quitting for good, why not explore an internal transfer? Perhaps that will be sufficient to sate your desire for something new.
Second, be sure to validate your interests before doing anything drastic. Clark writes of a woman who always dreamed of quitting her job to become a florist. Except after spending a day shadowing a florist, she discovered that a large part of the job consisted of working in cold temperatures, which was a no-go for her. Oftentimes our grass-is-always-greener mentality means we’re assessing our idea of a job not its reality. Before pivoting, be sure to do your homework so you have a full picture of your day-to-day requirements.
Third, speak to those close to you. Your loved ones want what’s best for you. Obviously you would hope they support you, but they may be able to offer some third-party perspective that you are missing. If they raise doubts, think about those doubts and come up with a response that either nullifies them or shows that you have at least considered them, even if you’re willing to take a risk all the same.
The final suggestion Clark makes is to “stretch your time horizon.” In practice, that means asking yourself whether your pivot requires you to quit your job right away. If you’re going to another industry, perhaps you would be better placed if you dedicated a certain amount of time to bolstering your skills in that new industry around your current work first. You could undertake an evening or weekend course, network, or study on your own time. That way you won’t take a financial hit but can still move on when you’re good and ready. If doing so, be sure to make a schedule for your new learning that you can stick to, be it two hours twice a week, all day Saturday, whatever. Without a rigidly adhered to schedule, it could recede into just another dream.
Professional identities
We’ve already mentioned Herminia Ibarra’s notion of personal drivers. Chamorro-Premuzic expands on that idea. To him, these pivots all boil down to our ‘professional identity’.
“Our identity is influenced not just by our past work experiences,” he writes, “but also by our projected ones. When we feel that we are headed in a direction that is not congruent with our self-concept, such that our perceived “actual self” is out of sync with our “ideal self,” we are motivated to take action and change.” [8]
We can offer practical advice for how to handle a pivot but realistically whether you should or not comes down to your own intuition, that feeling in your gut. Most of us have experienced it at some point or other, be it in work or a personal relationship. If you’re feeling deep down that you’re on the wrong path, it probably is time for a change.
A shift in mindset
Writing in the Financial Times, Elizabeth Uviebinene, author of The Reset: Ideas to Change How We Work and Live, writes of her pivot from a banker to a writer and brand strategist. She says the secret to a successful pivot is to adopt a student mindset and let go of ego.
Adopting a student mindset makes your pivot more exciting and less daunting. Uviebinene found that “starting from a place of, “what do you want to learn?”, allows you to consider opportunities you may not have thought of, in fields that do not immediately translate as a good fit.” [9] Maintaining that approach allows her to keep learning and growing rather than acting as if there is some grand end destination.
Making the pivot
Once you’ve decided that a pivot is what you want, there are a number of tips that can help you get ahead.
Elizabeth Grace Saunders, a time-management coach and author of How to Invest Your Time Like Money, advocates four key principles: (1) Accept the time commitment (2) Pick your focus (3) Layer in learning (4) Designate time. [10]
Accepting the time commitment is the start. Making a successful pivot will require sacrifices. You may see less of your friends and family, or lose your weekends. If you’re constantly battling the urge to maintain the life structure you had before with your new ambitions, you will find the process frustrating. It’s better to accept that, at least for a time, things will be different.
Once you’ve made the commitment, pick your focus. Research what is required to thrive in your new field. Do you need to go back to school or complete a certification course? If so, focus on that. Perhaps you can self-teach the necessary basics. If so, do that. If networking is key, put the time into finding out who could help you and reaching out, as well as finding networking events you can attend.
Layering in learning is the process of transforming activities you already undertake into opportunities for growth. If you always listen to a podcast on your hour-long commute, listen to a podcast or audiobook that is related to your new field.
Designating time is key. It’s also vital to ensuring the first step works. You don’t want your whole life to become a sacrificial act, never seeing friends, becoming isolated from your family. Designating time both helps ensure you have structure for learning and that you have a life outside of it. It could be two hours after work twice a week, or four hours on weekends; the specifics will depend on your requirements. But try to make sure it’s the same every week so that it becomes habit. That way you won’t feel guilty when you’re seeing friends or family outside of those structured hours.
Writing in Forbes, Cheryl Robinson, author of The Happy Habits Club, also suggests crafting a narrative for your pivot [11]. You will have transferable skills from whatever previous roles you’ve filled. And if you’re undertaking the steps above then you’re also on a path to developing the necessary new ones. But potential employers will want to know why they should choose you over someone whose experience already lies in this field. By crafting a narrative about your move –– why it matters to you, why this area is your passion –– you can help alleviate any doubts that this is just an impulsive decision. Your CV and Cover Letters are a great place to push this narrative.
Courses in Ireland
Ireland offers a number of adult learning services that can help workers make a transition. The Irish Times notes that, “Within the State sector, education and training boards (ETBs) have a dedicated adult education guidance service staffed by guidance counsellors and information officers, who offer support to those with the greatest need as well as those seeking support to change career direction.” [12]
The etbi.ie website provides a link to all adult guidance services offered throughout ETBs nationwide.
Meanwhile, last June, Taoiseach Simon Harris, then Minister for Further and Higher Education, launched more than 11,000 free or subsidised places on college courses “aimed at those who may have taken a degree in a specific discipline but who wish to change direction within their general area of expertise to one with very good employment potential.” [13] The government funds 90% of the course fee. The other 10% is paid by the participants.
How to approach a career pivot
Whether it’s down to situational drivers or personal drivers, career shifts are becoming increasingly normal. The advent of AI will no doubt create further need in the coming years, while the attitude of Gen Z and younger millennials suggest the trend is likely to continue.
Once you’ve decided that a career pivot is right for you, it’s time to adopt a shift in mindset. It may be difficult to return to a student attitude, especially for those who have already had a successful career in another field. But a desire to keep learning is necessary to maintain excitement about the switch and alleviate some of the more daunting aspects. It also allows one to continuously grow rather than getting complacent or stagnant.
A successful pivot comes from accepting the time commitment, picking your focus, layering in learning to your existing activities, and designating time so you have a solid schedule and can maintain a work-life balance. It can feel scary to start again. But the likelihood is you already know deep down whether it’s something you want to do.
More on Change
What is the “Fresh Start Effect” and how can we use it to our Advantage?
Sources
[1] https://www.nasdaq.com/articles/over-half-of-americans-are-planning-for-major-job-changes-in-2024
[2] https://www.ft.com/content/76800ee9-6442-4c18-9615-68ac4ac41b61
[3] https://www.nasdaq.com/articles/over-half-of-americans-are-planning-for-major-job-changes-in-2024
[4] https://hbr.org/2023/08/what-to-ask-yourself-before-a-career-pivot
[6] https://flora.insead.edu/fichiersti_wp/inseadwp2004/2004-97.pdf
[7] https://hbr.org/2023/02/how-to-make-a-career-pivot-without-taking-a-pay-cut
[8] https://hbr.org/2023/08/what-to-ask-yourself-before-a-career-pivot
[9] https://www.ft.com/content/76800ee9-6442-4c18-9615-68ac4ac41b61
Introduction
Loyalty is not what it was. As with everything in the modern world, the pace has upped and the foundations have grown a little shaky. It’s less and less common for someone to stay at the same company all their life. The expectations of employees have changed and the expectations of companies too.
So, what does workplace loyalty look like in 2024? This article will assess the benefits of loyalty, how it has changed with differing generational ideals, the downsides of having too much, and how to garner it in an increasingly transactional world.
The benefits of being loyal
Management experts say staff who are loyal to their employer are inclined to invest more time and effort in their jobs [1]. Unsurprisingly, this increased engagement tends to lead to better performance, which in turn makes loyal workers more likely to gain promotions and higher pay. Being loyal to an employer is also found to reduce job-related stress [2]. Loyal employees feel like they belong at their company and are more likely to actually fulfill that standardised CV promise of ‘going the extra mile’.
The downside of being loyal
While loyalty is of course generally a good thing, it can go too far. Overly loyal employers can be liable to commit unethical acts to either prove their loyalty or as a result of it. Equally, overly loyal employees can be taken advantage of by employers.
In terms of the former, examples are rife. At the Toshiba headquarters in Japan, leaders led employees to believe that they would receive a near lifetime appointment if they demonstrated commitment to the organisation, its goals, and its people. The carefully cultivated loyalty of staff allowed senior managers to get away with an accounting scandal for a prolonged period of time. Employees knew about the scandal but didn’t speak out. In the west, the Enron debacle is another obvious example.
Research backs up the theory that too much loyalty can lead to ethical breaches. A study conducted by the University of California, Berkeley and Harvard Business School found that “loyal” fraternity students were less likely to cheat on a puzzle-solving task than their less loyal counterparts. That is, until they were told the task was competitive, with the importance of beating rival houses to win a cash prize stressed. Suddenly, the loyal students became far more likely to cheat than their less loyal counterparts, even without being explicitly told to break the rules. [3]
Research published in the Journal of Experimental Social Psychology has found that the more loyal an employee is, the more likely they are to be targeted for exploitative practices by their manager. Employers expect a level of self-sacrifice from these employees. They feel comfortable asking them to work late or while on holiday, or to undertake tasks unrelated to their job duties without extra reward or pay.
“Employers take advantage of loyal and passionate workers because they believe that for [them], the work itself is its own reward,” says Neil Lewis, an associate professor of communication and social behaviour at Cornell University and author of a 2021 paper that also found employers likely to exploit overly loyal employees. [4]
“It’s a double-edged sword: loyalty has benefits for both employees and firms, but it can also keep us from seeing and doing things that need to change…It is useful to periodically step back and reflect on why we are loyal to particular people, things, or ideas.”
The changing landscape
Bruce Tulgan, author of It’s Okay to Be the Boss and The Art of Being Indispensable at Work, writes in Forbes that “loyalty isn’t dead –– it’s just changing” [5]. He notes that with the rapid-pace changes brought by globalisation and drastic technological advancements, younger generations have grown up in a state of flux.
“Gen Zers are comfortable in this rapidly changing web of variables,” he writes. “Uncertainty is their natural habitat: they’ve never known the world any other way.”
The pandemic obviously exacerbated the sense of instability for a number of young workers. The data for their yearning for meaningful work was borne out in the Great Resignation and Quiet Quitting phenomena. Unlike workers of old, millennials and Gen Z do not hand over their loyalty to their employers unquestioningly because they’ve come to see that they are unlikely to receive it in return.
Gallup’s latest state of the workplace report showed that half of the 122,416 employees who took part in a global survey were looking out for new work [6]. Amongst global turbulence and a side-hustle culture, it’s hardly surprising that workers are unwilling to put all their eggs in one basket. “No job is risk-free today, so it’s imperative you are intentional about how you actively manage that risk,” says Christina Wallace, senior lecturer at Harvard Business School and author of The Portfolio Life. [7]
Tulgan points out the misdiagnosis often given to younger employees by their older cohorts. “For a lot of leaders and managers, the takeaway is that young people today are less loyal. But loyalty shouldn’t be confused with blind obedience. Instead, they offer the kind of loyalty you get in a free market –– that is, transactional loyalty. This is the same kind of loyalty you extend to your customers and clients.” [8]
Amidst the understanding that their careers are going to have to be more dynamic than the generations that came before, younger workers want something in exchange for their loyalty. “Gen Zers are not about to do tasks outside the scope of their position in exchange for vague, long-term promises of rewards that vest in the deep distant future,” Tulgan continues. Mainly because they’ve seen all their adult lives that the long-term doesn’t exist anymore; the future is far too fragile to put their faith in.
As attitudes of workers have changed, the attitudes of those hiring have too. As such, showing loyalty by staying in a job for a long time can actually be seen as a negative.
“If you’ve only been in one industry, in one business, it can make you a little bit one-dimensional,” says Jamie McLaughlin, CEO of New York-based recruiting company Monday Talent in an interview with the BBC. “You might look at that [longevity] and go, how motivated is this person? Why haven’t they wanted to move? It can signal that professional development has stalled, or that workers have a smaller network.” [9]
Christina Wallace agrees. “I do think staying at a company too long is risky,” she says. “You start getting comfortable. Maybe you slow down on networking or stop looking at what your market rate might be elsewhere. You don’t keep up with how job descriptions in your industry are changing and whether you’re doing what you can to stay current.” [10]
With young people criticised for moving too much and overly loyal employees being exploited and thought to lack ambition, the modern climate can feel like a lose-lose. But work trends expert Samantha Ettus suggests there is a happy medium. “These days company loyalty is a rarity, so when I see someone who has stayed at their previous company for three-plus years, it’s meaningful,” she says. [11]
Though she also warns against staying much longer. “If you are at a company for more than seven years, it flags a potential lack of ambition,” she says.
Cultivating loyalty
Employees may be uncertain as to how loyal they should be to their company given the ever-changing landscape and the potential drawbacks of over-investing themselves. But employers will always want loyal employees. As noted earlier, it leads to better performance and creates a better atmosphere. So how can employers work to earn loyalty from their staff?
Obvious answers are promotions and pay rises. But these are not always possible and, let’s face it, most of the time businesses would rather avoid doling out more cash if they can help it. Thankfully there are other techniques too.
Writing in Harvard Business Review, Stephen Trzeciak, chief of medicine at Cooper University Health Care, Anthony Mazzarelli, co-president/CEO of Cooper University Health Care, and Emma Seppälä, a faculty member at the Yale School of Management, argue that the key consideration must be compassion. They define compassion as empathy plus action.
“Contrary to what many employers currently believe, the recent wave of employee attrition has less to do with economics and more to do with relationships (or lack thereof),” they write. “The data support that employees’ decisions to stay in a job largely come from a sense of belonging, feeling valued by their leaders, and having caring and trusting colleagues. Conversely, employees are more likely to quit when their work relationships are merely transactional.” [12]
They note that neuroimaging research shows people’s brains respond more positively to leaders who show compassion, while a compassionate culture has been linked with lower employee emotional exhaustion and less absenteeism.
They provide a slew of evidence-based advice as to how to be a compassionate leader, broken down below:
- To start small: A Johns Hopkins study found that giving just 40 seconds of compassion can lower another person’s anxiety in a measurable way.
- To be thankful: Meta-analytic research shows that gratitude makes us more others-focused and motivates us to serve others.
- To be purposeful: When you see an employee is struggling, instead of asking yes or no questions like “Do you need help?”, ask “What can I do to be helpful to you today?” or “What can I take off your plate today?”
- To find common ground: When we focus our empathy on just “our people”, it can reduce our compassionate behaviour on balance overall. Try expanding your empathy and compassion further afield.
- See it: When an employee goes “above and beyond” to help someone else, let people know.
- Elevate: Elevation is the positive state we experience after witnessing another person’s compassion, moral excellence, or heroism. Research shows both compassion and rudeness are contagious.
- Know your power: Imagine if compassion was your superpower. What possibilities would that open up in your career and life?
Workplace loyalty in 2024
Loyalty in the workplace has changed. Workers are unlikely to stay at one company all their lives and are perhaps ill-advised to do so. Doing so might lead their company to exploit them or cause other potential employers to perceive them as unambitious. Equally, barring rare exceptions, workers cannot expect their workplace to show unwavering dedication to them.
A lot of people blame young workers for their lack of loyalty, but it’s simply that their loyalty is different. Having grown up with and become accustomed to instability, a transactional form of loyalty suits them better. It helps ensure they’re not putting all their eggs in one wobbly basket. For employers looking to foster loyalty in their staff, pay rises and promotions are the obvious answer. But compassion must also play a role. We are all human at the end of the day. Sometimes all we need is to be seen and treated as such.
More on Employee Retention
Employee Retention: the Hows and Whys
Creating and fostering cultures of meaning
The Role of Empathy in the Workplace: Impact and Implications
Sources
[1] https://iaap-journals.onlinelibrary.wiley.com/doi/10.1111/1464-0597.00020
[2] https://psycnet.apa.org/doiLanding?doi=10.1037%2F0021-9010.78.4.552
[3] https://pubmed.ncbi.nlm.nih.gov/32868412/
[4] https://www.ft.com/content/be583262-8bc7-4ad0-884c-792656093c22
[6] https://www.ft.com/content/be583262-8bc7-4ad0-884c-792656093c22
[12] https://hbr.org/2023/02/leading-with-compassion-has-research-backed-benefits
Introduction
We’re all aware of the inherent dangers in taking risks. We’re generally less aware of the dangers in playing it safe. In a business context, that’s because there used to be some merit to playing it safe –– to having ambition but pacing oneself, choosing a slow, incremental trajectory over a fast, steep one. As Doug Sundheim, author of Taking Smart Risks: How Sharp Leaders Win When Stakes are High, writes in Harvard Business Review: “The dangers of playing it safe aren’t sudden, obvious, and dramatic. They don’t make headlines. They…are hidden, silent killers.” [1]
Without risks we wouldn’t have put planes in the sky or man on the moon, nor have any of the everyday innovations we take for granted. But for each of history’s bold risk-takers, there were many more steady, risk-averse contemporaries sitting on the sidelines. And for a long time there was nothing wrong with that. As Steve Dennis, a strategic advisor and author of Leaders Leap: Transforming Your Company at the Speed of Disruption and Remarkable Retail, writes: “A heavy focus on business optimization and continuous improvement was eminently sensible. Until it wasn’t.” [2]
Things have changed.
Dennis writes of the large-scale disruption we have seen in recent years. Businesses like Airbnb, Netflix, Uber, and OpenAI did not simply emerge as major players in their respective industries. They totally reshaped how those industries functioned.
“Many brands that moved far more cautiously, or that are currently slow-walking their transformation efforts, have dramatically increased their risk of irrelevance,” Denniswrites. “Or even set themselves on a path to extinction.” [3]
Such companies tend to follow a path of what Dennis calls “infinite incrementalism”. Essentially, every year these companies would offer a slightly better version of what they had always done. That’s no longer enough. Not with the speed of change we’re accustomed to in today’s world.
Rishad Tobaccowala, the former chief digital officer of Publicis Group and author of Restoring the Soul of Business, says that in recent years we’ve moved through three distinct “Connected Ages.” [4] Each “Connected Age” changed how we connect and do business. We went from e-commerce to smart devices, to 5G, VR, the cloud, and AI.
The state of business today is unrecognisable from what it was twenty years ago. And who knows what it’s going to look like twenty years down the line? No one is quite sure and there are no guarantees. But the idea that one can just drift along at a snail’s place without being left behind feels increasingly naive. As the landscape shifts, businesses must shift with it.
Dennis concludes, “Faced with constant and accelerating change, doing what we’ve always done but just a little bit better may feel safe, but it is often the riskiest path we could possibly choose.” [5]
Rethinking our relationship to risk
To stop playing it safe, companies need to reassess their relationship with risk. Of course risk can bring failure. (As we’ve established, playing it safe can too.) But those failures don’t need to be failures. Through a shift in mindset, they can instead be viewed as opportunities for learning.
“If we are open to taking more risks, it’s more opportunity for diverse experiences and more opportunity to learn and grow as individuals,” says Jon Levy, author of The 2 AM Principle, speaking to Forbes. “It isn’t the success or failure, it’s who you become in the process.” [6]
This approach is in line with that of Microsoft CEO Satya Nadella. Nadella moved Microsoft from a “know it all” to a “learn it all” culture [7]. That meant that rather than condemning staff for taking risks that failed, he would reach out to congratulate them after a “failure”. What he understood that many don’t is that you can’t simply praise the risks that work and condemn those that don’t. You have to create an environment in which your team feels comfortable failing and doesn’t fear facing recriminations if things don’t work out. Such an approach can shift the mindset of the whole company.
Any cricket fans who witnessed the ‘Bazball’ revolution of the England team these past few years will have seen this approach in action. There was no change to personnel, just a change to messaging. If a player got caught on the boundary in the old administration they may be admonished for trying to hit a big shot. Under the new management, they were told “next time hit it even harder.” England had won just one Test from their previous seventeen prior to the change in approach. Following it, they won ten out of twelve.
Of course not all risk is good risk. There are many situations in which caution is a better option. The Silicon Valley mantra of “move fast and break things” has its uses, but it is not necessarily advisable to adopt it wholesale. As Dennisnotes, it might be better to move fast and fix things [8]. To do that, one needs to assess whether they are dealing with an actual risk or a perceived one.
Unlike actual risks, perceived risks are the ones we’ve bigged up in our minds out of a fear of the unknown. It’s not sending off that job application because you’re afraid you’ll get rejected; not trying that new strategy because you worry it might make you look stupid. Such fears are rational, human even. But they serve little purpose. As Eric Hutto, Chief Executive Officer at Diversified, writes in Forbes, “You can’t build a futuristic company when leadership has a legacy mindset that focuses on risk management over taking risks that could result in better performance.” [9]
One need only look at Amazon to see what can happen when a company takes a risk rather than settling for incrementalism. Jeff Bezos could easily have continued as a very successful online book retailer. Instead, he upscaled. The rest is history.
How to implement risk
A 2021 McKinsey study found that more than 80% of executives say innovation is among their organisation’s top three priorities, yet less than 10% say they are satisfied with their company’s performance. Meanwhile, 61% say their organisations are not adapting fast enough to stay ahead of disruption and 78% believe it is increasingly challenging to know which disruptive forces to prioritise. [10]
There is an appetite for risk. But that appetite is being outweighed by fear. The good news is that, ironically, there are ways to implement risk in a relatively risk-free way.
If you’re trying to cultivate a culture of experimentation, Dennis advocates for finding ways to “shrink the change” [11]. By that he means breaking complex and seemingly overwhelming initiatives into a series of more manageable pieces. In other words, don’t try to overhaul everything in one fell swoop. And don’t obsess over the final destination. Take it one step at a time.
Meanwhile, Sundheimrecommends creating a culture in which you question everything.
“What does this business look like in five years? What are our customers worrying about today? What will they be worrying about tomorrow? What are our employees seeing but not saying? Where are we communicating effectively? Where are we failing to communicate? What strengths aren’t we capitalizing on? What opportunities are we letting slip through our fingers? How would we try to beat ourselves if we were our competitors? What weaknesses would we exploit? And where are we settling for “good” when we should really be going for “great?”” [12]
Questioning everything helps ensure you don’t slip into a place of complacency and stagnation. As Sundheim says, it makes it “more uncomfortable to play it safe than to think critically and take risks.” [13]
Writing in Forbes, Rhett Power, CEO and Founder of Accountability Inc., recommends three risks that are usually worth taking, even for those who are generally risk-averse. They are: (1) Moving forward without substantial investor support (2) Hiring on a tight budget (3) Growing your business. [14]
Moving forward without substantial investor support forces one to focus on only the most essential components of their business –– a useful exercise for anyone. Hiring on a tight budget is important because it stops one from taking their team for granted, overloading them with work in the belief that they can pick up the slack. It might work short-term but long-term leads to burnout, resentment and lower-quality work. If you can’t afford to hire full-time, get someone part-time.
While acknowledging that growing one’s business too fast can be a nail in the coffin, Power says that “the risks associated with growth are worth the opportunity to see more success for your business and your team.” [15] To grow successfully, he recommends not conflating overheads with infrastructure and having an operational infrastructure that transcends your employees and management team.
The dangers of playing it safe
Taking risks is dangerous. But so is playing it safe. In a fast-moving global order in which the foundations that held up industries for decades can crumble almost overnight, infinite incrementalism can be a silent killer. Companies need to be open to risk.
To start embracing risk, businesses must first shift their relationship with it. Risk is not an opportunity for failure, it is an opportunity for learning. That does not mean moving recklessly. Rather, it means assessing whether a risk really could be perilous or that’s simply a perception. Companies want innovation. They need to accept that they’re going to have to take some risks to achieve it.
More on Risk
Innovation: Gains, Risks, and the Grey In Between
Sources
[1] https://hbr.org/2013/10/the-hidden-dangers-of-playing-it-safe
[2] https://hbr.org/2024/03/why-playing-it-safe-is-the-riskiest-strategic-choice?ab=HP-topics-text-28
[3] https://hbr.org/2024/03/why-playing-it-safe-is-the-riskiest-strategic-choice?ab=HP-topics-text-28
[4] https://hbr.org/2024/03/why-playing-it-safe-is-the-riskiest-strategic-choice?ab=HP-topics-text-28
[5] https://hbr.org/2024/03/why-playing-it-safe-is-the-riskiest-strategic-choice?ab=HP-topics-text-28
[6] https://www.forbes.com/video/5193863769001/why-you-should-take-more-risks/?sh=1a7db99e1351
[8] https://hbr.org/2024/03/why-playing-it-safe-is-the-riskiest-strategic-choice?ab=HP-topics-text-28
[10] https://hbr.org/2024/03/why-playing-it-safe-is-the-riskiest-strategic-choice?ab=HP-topics-text-28
[11] https://hbr.org/2024/03/why-playing-it-safe-is-the-riskiest-strategic-choice?ab=HP-topics-text-28
[12] https://hbr.org/2013/10/the-hidden-dangers-of-playing-it-safe
[13] https://hbr.org/2013/10/the-hidden-dangers-of-playing-it-safe
Introduction
In his latest book, AI: Unexplainable, Unpredictable, Uncontrollable, AI Safety expert Roman Yampolskiy highlights a core issue at the heart of our continual AI development. The problem is not that we don’t know precisely how we’re going to control AI, but that we are yet to prove that it is actually possible to control it.
Yampolskiy, PhD, a tenured professor at the University of Louisville, writes that: “It is a standard practice in computer science to first show that a problem doesn’t belong to a class of unsolvable problems before investing resources into trying to solve it or deciding what approaches to try.” [1] Whether or not AI is ultimately controllable has not yet been proved solvable. And yet, today’s tech giants push ahead with development at breakneck speed all the same. Yampolskiy contends that this lax approach could have existential consequences.
What is AI Safety?
AI Safety is a bit of a catch-all term but can broadly be defined as the attempt to ensure that AI is deployed in ways that do not cause harm to humanity.
The subject has grown in prominence as AI tools have become increasingly sophisticated in recent years, with some of the most nightmarish doom scenarios prophesied by the technology’s naysayers coming to look increasingly plausible.
The need to guardrail against the worst of AI’s possibilities led to the Biden administration’s AI Executive Order in October 2023, the UK’s AI Safety Summit a matter of days later, the EU AI Act, which was approved in March of this year, and the landmark agreement between the UK and US, signed earlier this month, to pool technical knowledge, information and talent on AI safety moving forwards.
The push and pull, as ever, is between how much regulation, if any, we should be putting on AI –– whether we are stifling its potential for innovation by doing so, or simply taking sensible, even vital precautions.
The sudden firing then re-hiring of CEO Sam Altman by the OpenAI board last year was supposedly based on concerns he was neglecting AI Safety in favour of innovation to the point of negligence. This theory is circumstantially backed up by the emergence of Anthropic, a rival AI company set up by the brother and sister duo Dario and Daniela Amodei in 2021, after each of them left executive positions at OpenAI over concerns around the company’s handling of AI Safety.
Meanwhile, Altman, Dario Amodei and Google DeepMind chief executive Demis Hassabis were among the signatories on a one-sentence statement released last year by the Center for AI Safety, a nonprofit organisation [2]. The open letter, signed by more than 350 executives, researchers and engineers working in AI, read simply: “Mitigating the risk of extinction from A.I. should be a global priority alongside other societal-scale risks, such as pandemics and nuclear war.”
The stakes couldn’t be higher.
Unexplainable
A much-vaunted notion is that of ‘explainable AI’, defined by IBM as “a set of processes and methods that allows human users to comprehend and trust the results and output created by machine learning algorithms.” [3]
Put more simply, as the name suggests, after AI performs a task for the user, it will then explain how it did it. Except, as the gap between our intelligence and the ‘superintelligence’ of AI continues to grow, it will soon reach a stage where we simply will not understand how the technology achieved its aims, no matter whether or not it is programmed to tell us. As Albert Einstein said: “It would be possible to describe everything scientifically, but it would make no sense. It would be a description without meaning –– as if you described a Beethoven symphony as a variation of wave pressure.” [4]
Yampolskiy pushes the analogy further, saying: “It is likely easier for a scientist to explain quantum physics to a mentally challenged deaf and mute four-year-old raised by wolves than for superintelligence to explain some of its decisions to the smartest human.” [5]
He notes that it would potentially be possible for AI to only produce decisions that it knows are explainable at our level of understanding, but that doing so would require the AI to knowingly not make the best decision available to it. This, of course, would defeat the point of using such advanced technology in the first place; we are already quite capable of making the wrong decision on our own.
Unpredictable
Given that AI is not explainable, it is in turn necessarily unpredictable –– how can you predict the actions of something you don’t (and can’t) understand? As is already the case with black box AI, the term used to describe AI models that arrive at conclusions or decisions without providing any explanations as to how they were reached, we will be in the dark as to how AI achieved its aims and what it might do to achieve future ones. We may be able to set goals for AI and be accurate in our prediction that it will ultimately achieve them, but the crucial how will be lost, even to the technology’s own programmers.
Yampolskiy comes to the conclusion that the “unpredictability of AI will forever make 100% safe AI an impossibility, but we can still strive for Safer AI because we are able to make some predictions about AIs we design.” [6]
Uncontrollable
AI advocates believe that we will be able to control it. They say that even Artificial General Intelligence (AGI) –– a system that can solve problems without manual intervention, similar to a human being –– will be imbued with our values and as such act in our best interests.
Even Nick Bostrom, a philosopher and professor at Oxford University, whose bestselling book Superintelligence: Paths, Dangers, Strategies showed him to be far from an optimist when it comes to this topic, has commented that, “Since the superintelligence or posthumans that will govern the post-singularity world will be created by us, or might even be us, it seems that we should be in a position to influence what values they will have. What their values are will then determine what the world will look like, since due to their advanced technology they will have a great ability to make the world conform to their values and desires.” [7]
Yampolskiy argues the other side: “As we develop intelligent systems that are less intelligent than we are, we can maintain control, but once such systems become more intelligent than we are, we lose that ability.” [8]
He suggests it is more likely that our values will adjust in accordance with that of the superintelligence than that its values will be shaped and constrained by our own. As the technology reveals itself to be of greater intelligence than any human who has ever lived, it is only rational that humanity will heed to its ideas, as it has done to any number of great thinkers in the past.
The only way to control AI in any real sense, then, would be to put such limitations on it as to constrain its many potential benefits, to the point it ceases to be the revolutionary technology so fervently preached by its advocates. This is the great conundrum, the unsolvable debate: progress with vast, existential risk or safety at the expense of development? As Yampolskiy puts it, “unconstrained intelligence cannot be controlled and constrained intelligence cannot innovate.” [9] It’s one or the other; someone has to decide.
The deciders
“Regulating technology is about safety, but it is also about the kind of civilization we wish to create for ourselves. We can’t leave these big moral questions for AI companies to decide,” writes author of The Digital Republic: Taking Back Control of Technology, Jamie Susskind, in the Financial Times. [10]
And yet it increasingly feels like that’s precisely what we’ve done. We may read about the drama of Sam Altman’s firing and rehiring or of Elon Musk’s recent move to sue OpenAI and Altman himself, but these events play out like soap opera storylines in the headlines. Very few of us actually understand how far this technology has already been pushed, let alone where it’s going.
“The companies that make these things are not rushing to share that data,” says Gary Marcus, professor emeritus of psychology and neural science at New York University, speaking to The Atlantic in December. “And so it becomes this fog of war. We really have no idea what’s going on. And that just can’t be good.” [11]
Eliezer Yudkowsky, a research leader at the Machine Intelligence Research Institute and one of the founding thinkers in the field of AGI, has written that,“if we had 200 years to work on this problem and there was no penalty for failing at it, I would feel very relaxed about humanity’s probability of solving this eventually.” [12] But the precise problem is that the tech giants today are not taking their time. They don’t want safe AI in 200 years if they can have some form of AI today. The only thing that seems to matter is cornering the market. Such short-termism could have devastating consequences.
There is some hope that AI itself could provide the solution. That it might use its superintelligence to find a solution to the problem of how to control it. Though sharing it with humans would be self-defeating in the extreme. Unless superintelligence comes with a heavy streak of masochism baked in, this seems an unlikely scenario.
The unsolvable problem of AI Safety
Yampolskiy writes that “the burden of proof [to demonstrate AI is controllable] is on those who claim that the problem is solvable, and the current absence of such proof speaks loudly about the inherent dangers of the proposal to develop AGI.” [13]
An unexplainable, unpredictable, uncontrollable AI superintelligence will drastically re-shape the world order, perhaps even overhauling it. AI Safety is needed to stop it. While recent measures are plenty, none address the problem of the AI control problem. Meanwhile, in Silicon Valley, development continues at a pace. It is easy to write off AI critics as prophets of doom or enemies of progress, but to proceed without proper safety provisions in place is to open a door we may not be able to close. As Yampolskiy surmises, “the chances of a misaligned AI are not small. In fact, in the absence of an effective safety program, that is the only outcome we will get.” [14]
More on AI
Combatting Cybersecurity Risks
The EU AI Act: What you Need to Know
The Ethical Minefield of Artificial Intelligence
Sources
[1] Yampolskiy, R. V. (2024). AI: Unexplainable, Unpredictable, Uncontrollable. Taylor & Francis Ltd.
[2] https://www.safe.ai/work/statement-on-ai-risk
[3] https://www.ibm.com/topics/explainable-ai
[5] Yampolskiy, R. V. (2024). AI: Unexplainable, Unpredictable, Uncontrollable. Taylor & Francis Ltd.
[6] Yampolskiy, R. V. (2024). AI: Unexplainable, Unpredictable, Uncontrollable. Taylor & Francis Ltd.
[7] https://mason.gmu.edu/~rhanson/vc.html
[8] Yampolskiy, R. V. (2024). AI: Unexplainable, Unpredictable, Uncontrollable. Taylor & Francis Ltd.
[9] Yampolskiy, R. V. (2024). AI: Unexplainable, Unpredictable, Uncontrollable. Taylor & Francis Ltd.
[10] https://www.ft.com/content/b259b126-225b-4158-90a0-abebfd0119fc
[11] https://www.theatlantic.com/newsletters/archive/2023/12/ai-tech-instability-gary-marcus/676286/
[12] Yampolskiy, R. V. (2024). AI: Unexplainable, Unpredictable, Uncontrollable. Taylor & Francis Ltd.
[13] Yampolskiy, R. V. (2024). AI: Unexplainable, Unpredictable, Uncontrollable. Taylor & Francis Ltd.
[14] Yampolskiy, R. V. (2024). AI: Unexplainable, Unpredictable, Uncontrollable. Taylor & Francis Ltd.
Introduction
The risk of cybercrime is on a steep upward trajectory. In North America it has risen by 61%, in Europe, the Middle East and Africa by 66%, in Latin America by 58%, and in Asia-Pacific by 74% [1]. According to the U.S. Cybersecurity and Infrastructure Security Defense Agency, 47% of American adults have had their information exposed online from cyber criminals [2]. Meanwhile, in Ireland, cybercrime is the number one threat when it comes to financial crime, with fraud and tax evasion taking joint second place [3].
A recent investigation by Mandiant revealed that governments, businesses and financial institutions are the three primary targets of cyber threats [4]. Meanwhile the firm Cybersecurity Ventures unveiled that global cybercrime financial damage will reach $10.5 trillion by 2025 [5]. That figure would make it the world’s third largest economy behind only the U.S. and China.
It’s vital that businesses start putting cybercrime front of mind. This article will dig into the reasons for cybercrime’s increased prevalence, the core steps businesses need to take to protect themselves, the role of AI, and the impact on small businesses.
Why is cybercrime on the rise?
As well as the obvious reasoning of technological advancement, cybercrime is rising for three reasons. First, the pandemic. In the US, nearly 470,000 phishing attacks were launched by hackers in the first three weeks of March 2020. About 9,000 of those were related to COVID-19 –– a 667% increase from February [6].
The pandemic forced remote working on a number of businesses. All of a sudden staff were working from home, potentially with less secure connections. Equally, staff were more likely to fall for a fake email from their boss or IT department when at home than they would be if they were in an office together. As we will address later, innocent internal errors are a key cause of cybercrime. The home/hybrid working setup makes such instances more likely.
Second, Russia’s invasion of Ukraine. Targeting of users in NATO countries by Russian hackers increased over 300% in 2022 as compared with 2020 [7].
Third, China. According to US officials, the number of attacks from China has intensified greatly in recent years. “The People’s Republic of China represents the most critical threat [among cyber risks],” General Timothy Haugh, head of US cyber command, said while speaking at a Vanderbilt event earlier this year.[8]
The cost of cybercrime
UnitedHealth, a hugely successful American conglomerate, suffered a ransomware attack in February.The company reportedly paid a $22m ransom to a BlackCat hacker group [9]. But the initial payment is just the start of the cost companies suffer in the wake of such breaches. UnitedHealth reported an $872m first-quarter hit from the attack — and warned that number could potentially reach $1.6bn. That’s not to mention the reputational damage. Customers lose trust. All of a sudden things can tailspin quickly.
Meanwhile, the IMF has warned that “the probability of a firm experiencing an extreme loss of $2.5bn as a result of a cyber incident” had now risen to “about once every 10 years”. [10]
In Ireland, Banking & Payments Federation Ireland (BPFI) stats show fraudsters stole nearly €85 million through frauds and scams in 2022, an increase of 8.8% on the previous year [11]. Meanwhile, the HSE attack of 2021 still lives long in the memory. It is the largest known attack against a health service computer system in history. It also demonstrates that the cost of a future breach may not solely be money, but human lives. Companies can’t afford to take any risks.
Cybercrime considerations
Despite the growing risks from cybercrime, a number of businesses have been slow to act. Brandon Wales, a top official of the U.S. Cybersecurity and Infrastructure Security Agency, has suggested boards up company investment in cyber defences and ensure management are treating hacking threats as a core business risk. [12]
That comes from the top. “This needs to be driven at the board level,” Wales said, speaking at the Wall Street Journal’s CIO Network Summit. “You don’t want to start thinking about cybersecurity after your network has been brought down by a ransomware operator.”
There are two broad approaches to take: Cyber Risk Management and Cyber Resilience. Cyber risk management is the preventative aspect. It’s about monitoring risks and identifying threats before they happen. Cyber resilience is about equipping oneself with the tools to recover quickly in the wake of any cyber incident.
Within those pillars are more specific issues to address. Writing in Forbes, Rob Harrison, SVP of Products & Services at Sophos, breaks down the specific risks companies face into three categories: external risks, internal risks, and cloud risks. [13]
External risks are an attempted breach from an external source. That can be from cybercriminals, hacktivists or nation-state actors. The type of attack can vary from ransomware to distributed denial-of-service attacks.
To combat external risks requires regular monitoring of the threat landscape. Technology changes fast and cybercriminals are innovative. Organisations need to be proactive in ensuring their defences are up to date and that they have the appropriate countermeasures in place.
Internal risks involve someone with system access compromising security. That can come by way of an employee, partner or third-party figure. It can be intentional or entirely accidental. Sometimes someone will be deliberately stealing data –– they could be a victim of extortion or harbour ill-feelings toward the company. Or it could be an entirely innocent mishandling of data with devastating consequences.
To combat internal risks requires having a sturdy and constantly evolving security system in place. But it equally is about building a culture. Training employees on the importance of cybersecurity and how to manage data securely is vital. Writing in Forbes, Justin Slaten, chief information officer at Venbrook Group, LLC, advises not relying on only once-a-year training, arguing multiple sessions are needed. “Training sessions throughout the year will create a well-prepared and vigilant team capable of warding off savvy scammers,” he writes. [14]
Cloud-based services are something the majority of us make use of daily in our personal and professional lives. The cloud is deeply practical, but it almost became a trope for comedy shows to reference the fact that no one really knows how it works. Harbouring all one’s data in this liminal space comes with risk.
To combat cloud-based intrusions, companies should be using encryption, multifactor authentication and regular audits. Not to mention ensuring all data is backed up elsewhere –– you don’t want the data stolen or deleted by a bad faith actor to be the only records you have.
Decisions for businesses
Businesses face some key decisions as to how they’re going to address cybercrime. The first is whether they are going to handle their cybersecurity in-house or rely on a third-party vendor to do it for them. Both options have pros and cons –– one offers trade expertise, the other system control. Third-party cybersecurity firms are likely to offer better know-how as to how to protect your business but the option also introduces third-party risk.
Third-party risk, it should be noted, does not just come from cybersecurity firms you contract but from any third-party technology service your company makes use of. Slaten writes that, “As you embrace third-party technologies in a quest to offer better service, you also open the door to unseen and future threats with new updates and service changes.” [15]
Jason Hart, chief technology officer for EMEA at Rapid7, recommends businesses re-examine the role of the chief information security officer [16]. Often this role is awarded strictly for technological prowess, but as Hart acknowledges, it’s crucial now for them to share the attributes of a COO. They need to be able to think big picture, lead transformational change and spot which aspects of the business are most affected in a breach.
There’s no wrong or right answer when it comes to in-sourcing or out-sourcing. Each company must decide what best works for them.
Human vs AI
Another choice businesses must make is how much to rely on AI in their cyber defence versus relying on human agents.
Harrison writes that, “Driven by the economics of ransomware, organizations will likely face human-driven rather than automated attacks. To defend against human ingenuity, you need human defenders.” [17]
Others suggest AI defences are needed. Sam King, chief executive of the security group Veracode, says: “You can now take a GenAI model and train it to automatically recommend fixes for insecure code, generate training materials for your security teams, and identify mitigation measures in the event of an identified threat, moving beyond just finding vulnerabilities.” [18]
Bartosz Skwarczek, Founder and President of the Supervisory Board of G2A Capital Group, defines AI’s key attributes when it comes to combatting cybercrime in real time as (1) its ability to monitor and analyse behaviour patterns, detecting and acting on anomalies (2) its ability to predict the outcomes of unusual behaviour (3) its ability to implement preventative measures, such as preventing deletions, logging off suspicious users and notifying operators of the suspected malicious activity, and (4) its training and machine learning capabilities –– by training itself to “remember” previous incidents and actions, its ability to identify suspicious activity, predict outcomes and prevent criminal initiatives continuously improves. [19]
Another advantage of AI is that using it for mundane, time-consuming and repetitive tasks frees up the human workforce to think about the big picture. Meanwhile, with more than 3.5 million unfilled positions in the human cybersecurity labour force in 2023, for many, using AI will be a necessity not a choice [20].
AI systems are currently far from perfect. Its advocates expect it to improve drastically in the coming years. Still, some combination of human and AI defence seems the most effective process now and moving forwards.
AI-driven cyber security cannot “fully replace existing traditional methods,” warns Gang Wang, associate professor of computer science at the University of Illinois Grainger College of Engineering [21]. To be successful, he says, “different approaches complement each other to provide a more complete view of cyber threats and offer protections from different perspectives.”
Impact on small businesses
Small businesses are generally speaking less prepared to deal with a potential cyber attack –– they lack the resources to implement a strong defence system or to adequately train their personnel. According to a Grant Thornton International Business Report from 2023, one in three small-to-medium businesses in Ireland fell victim to cybercrime between May 2021 and April 2022 [22]. One in three were also reported to have paid out to cybercriminals, with €22,773 the average payout.
There is talk that the government plans to create a national anti-ransomware organisation and offer cash subsidies to small businesses to help fight cybersecurity threats. Michael Kavanagh, CEO of the Compliance Institute, told The Irish Times that, “The timelines for this are unclear but there’s no doubt that the move would be laudable and welcomed with open arms by many businesses that continue to be plagued by ransomware attacks.” [23]
For the majority of small businesses, such support cannot come soon enough.
Combatting cybersecurity risks
Cybercrime is on the rise. Technological advancements paired with geopolitical instability have contributed to an increasingly fractious security environment. The cost of a cybercrime attack –– financially and reputationally –– can devastate a business. As such, greater precautions need to be taken. Businesses must decide whether they’re going to invest in their in-house cybersecurity unit or offset the duty to a third-party. Equally they must find the balance between human and AI defence measures. Small businesses especially lack the resources to adequately defend themselves and will be reliant on potential government support. But businesses of all sizes should be taking steps to better defend themselves.
More on AI
The EU AI Act: What you Need to Know
The Ethical Minefield of Artificial Intelligence
Sources
[1] https://www.ft.com/partnercontent/google/situation-critical-fighting-back-against-cyber-threats.html
[3] https://www.irishtimes.com/special-reports/2024/03/29/cybercrime-a-major-threat-to-small-businesses/
[4] https://www.ft.com/partnercontent/google/situation-critical-fighting-back-against-cyber-threats.html
[6] https://blog.barracuda.com/2020/03/26/threat-spotlight-coronavirus-related-phishing/
[8] https://www.ft.com/content/bfe01131-1ae0-4df8-bdfe-3447def01053
[9] https://www.ft.com/content/bfe01131-1ae0-4df8-bdfe-3447def01053
[10] https://www.ft.com/content/bfe01131-1ae0-4df8-bdfe-3447def01053
[11] https://www.irishtimes.com/special-reports/2024/03/29/cybercrime-a-major-threat-to-small-businesses/
[18] https://www.ft.com/content/35d65b91-5072-40dc-861c-565d602e740e
[21] https://www.ft.com/content/35d65b91-5072-40dc-861c-565d602e740e
[22] https://www.irishtimes.com/special-reports/2024/03/29/cybercrime-a-major-threat-to-small-businesses/
[23] https://www.irishtimes.com/special-reports/2024/03/29/cybercrime-a-major-threat-to-small-businesses/
Introduction
In his new book, The Anxious Generation: How the Great Rewiring of Childhood Is Causing an Epidemic of Mental Illness, social scientist Jonathan Haidt argues that growing up with smartphones has had a devastating impact on Gen Z. It has spiked levels of anxiety and depression. It has increased feelings of loneliness and friendlessness. It has made people more risk averse and led to global educational declines in maths, reading and science [1].
He makes the case for banning the use of smartphones in schools and not permitting social media use before the age of sixteen.
But it’s not just teenagers who are hooked on their smartphones. In a 2022 Gallup poll, nearly 60% of Americans said they used their phones too often [2]. Meanwhile, people in Ireland spend an average of 4.5 hours on their phone a day [3]. Only 10% of that time is spent talking to someone in a phone conversation. The rest is given over to scrolling.
A lot of that scrolling takes place at work.
Smartphones in the workplace
A recent survey by Screen Education showed that employees waste, on average, more than two hours per work day using their phones. The average person checks their phone 150 times a day, with studies showing that the mere presence of a smartphone reduces our cognitive ability by taking attention away from other tasks [4].
A great deal has been written about how technology has brought the workplace into our personal lives. But an underrated topic of discussion is how it has also brought our personal lives into the workplace. For example, a recent Qualtrics and Google study found that 29% of employees say it is difficult to resist checking personal notifications while at work [5]. A lot of those personal interactions take place on phones.
The same study found that 80% of consumers use only one phone, and about half use that phone for both their personal and work life [6]. It’s hardly a surprise that people are struggling to separate the professional from the personal when they use the same device to govern both. It’s especially unsurprising given we are growing evermore reliant on our smartphones for work activity.
A recent survey on behalf of Samsung Ireland by Opinion Matters found that almost 70% of Irish people rely on their smartphone for work [7]. Almost a third said they needed their phone in order to be productive.
Unsurprisingly, given Haidt’s findings, this level of phone use is especially pronounced amongst young people. 76% of millennials were found to rely on their phones to do their jobs, with 26% saying they checked on their devices “consistently” [8].
Almost half the respondents said they would be lost without their devices. This points to a core issue regarding smartphones: their addictive nature.
Addictive symptoms and no flow
In their article ‘Smartphone addiction, daily interruptions and self-reported productivity’, Duke and Montag write that: “Though not an official diagnosis, several researchers have demonstrated how classic addiction symptomology may be applicable in the context of smartphone overuse, including loss of control (e.g. distortion of time spent on the phone), preoccupation with the smartphone, withdrawal symptoms and negative effects on our social and work lives.” [9]
The fidgety, compulsive aspect of our relationship with our phone is a problem not just because of the time spent on our phone. It also affects how we’re working when not on our phone, preventing us from achieving a “flow” state.
Flow, as coined by Mihaly Csikszentmihalyi in his book of the same name, refers to a state in which we are fully absorbed by an activity, forgetting about space and time, whilst being very productive. It’s that feeling of disappearing into an activity and re-emerging some time later, surprised to learn how much time has passed.
Even small interruptions have been shown to take one out of a flow state. Interruptions as brief as 2.8 seconds were found to disrupt participants’ flow of concentration and lead to increased errors on a sequence-based cognitive task [10]. Meanwhile, it’s been shown that it takes an average of 23 minutes to get back to a task after experiencing an interruption [11]. Checking your phone or simply seeing it flash or vibrate can be enough to ruin a moment of focus. What Duke and Montag term the “checking habit” is so ingrained in many of us that even without receiving a message we will feel an impulse to reach for our device. This is especially true if it’s in sight. The presence of a phone has been found to distract us even if the phone is turned off [12].
Participants in Duke and Montag’s research admitted to spending more time on their smartphone while at work than they felt was optimal [13]. In other words, they were aware of the negative effects but continued all the same. It’s a relatable shortcoming, and yet another similarity between the addict mindset and that of the average smartphone user. Worse still, research has shown that much of our phone checking is done unconsciously and that there is a significant gap between how much we think we’re checking our phone and how much we really are [14].
Put more simply: We know our smartphone use is negatively affecting us. We think we use our phones too much. We are actually using them even more than we think.
Smartphones are the ultimate office distraction –– which is why they are a problem for employers. The average employee loses 720 work hours due to distraction every year [15]. Those lost hours are felt in profits. As such, it’s no surprise that businesses have tried to fix the problem.
Battling the smartphone
As with Haidt’s recommendations for schools, some businesses have attempted to ban the use of smartphones in the workplace. Amazon warehouse employees were required to leave their phones at home or in their vehicle before stepping inside the premises, although that ban has subsequently been revoked [16]. Meanwhile, a 2022 report noted that one-fifth of companies based in Berlin implemented some form of smartphone ban [17].
In some workplaces, phones are banned not for reasons of productivity but security. Having some form of ban in place is common practice in data centres, manufacturing plants, research and development labs, and executive conference rooms. This is to prevent potential corporate espionage by way of the remote hijacking of smartphone cameras and microphones. Not all of these bans will be hard bans –– i.e. regulation against bringing them into the premises. Some will be as simple as signs prohibiting use in certain areas, with other designated use areas available.
The problem with an outright ban on phones in the workplace is that, unlike with children in schools, employees are grown adults capable of making their own choices. Many would baulk at an employer trying to dictate whether or not they could use their phone at work, seeing it as draconian overreach.
On top of that, evidence suggests bans don’t work. In fact, they can make the situation worse.
The case for phones
In their study in the journal Internet Research, Whelan and Turel found that the revoking of a smartphone ban made no impact on employee productivity. However, employees who were banned from using their phone at work suffered increased stress and greater levels of work-life conflict [18].
This is backed up by the findings of a new study conducted by the University of Galway and the University of Melbourne [19]. It found that personal use of smartphones in the workplace can reduce stress and help employees achieve a better work/life balance. It also found moderate mobile phone usage to have no discernible impact on employee performance.
Employees who were able to use their phone reported being able to help with family issues during the day, helping to reduce pressure on their partner. The ability to handle their personal communications throughout the day also meant that they were not inundated with a day’s worth of messages the second they left work and so could avoid being suddenly overwhelmed.
Writing in Forbes, Tali Rapaport, co-founder of employer branding and candidate engagement platform Puck, argues that rather than trying to reduce employees’ time on phones, employers should be trying to find ways to introduce mobile-friendly communication practices. “If employers want an engaged pool of candidates and existing employees,” she writes, “they need to meet them where they’re at –– on their phones.” [20]
She goes on to argue that with staff shortages a growing problem, and the retention of quality talent a priority for most businesses, it is essential that companies take steps to move towards employee ideals. “The companies that act now to implement mobile-friendly communication practices will be better able to address staffing shortages with quality talent and reduce attrition of talented employees. A company that doesn’t communicate in a way that resonates well with the workforce will fall behind a competitor that does.”
Other solutions
There’s no one right answer to managing our relationships with smartphones, be it in the office or in our personal lives. Some common solutions are to take one night a week away from technology, as advocated by Laura Mae Martin, Google’s executive productivity adviser [21]. If that’s not possible, maybe try to set 15-minute phone-free breaks in your day. You could take a walk or go to grab a coffee without it. “Anything you can do to create an environment that makes it as easy as possible to distance yourself from the phone will be helpful,” said James A. Roberts, an expert on consumer behaviour at Baylor University and author of ‘Too Much of a Good Thing: Are You Addicted to Your Smartphone?’ [22]
Mindfulness has also been shown to help. Practising meditation improves impulse control and executive function, as well as helping to counter shrinking attention spans. Developing greater awareness can help reign in bad habits [23]. As suggests Richard J. Davidson, founder and director of the Center for Healthy Minds at the University of Wisconsin-Madison: “When you become aware of the urge [to grab your phone], simply ask yourself, ‘Do I really need to do this right now?’” [24]
70% of employees say they would prefer greater separation between their work and personal life on their phones [25]. That would suggest that whatever we’re doing currently isn’t working.
In an article in The Atlantic, Haidt includes a quote from ‘Walden’, Henry David Thoreau’s 1854 reflection on simple living. “The cost of a thing is the amount of…life which is required to be exchanged for it, immediately or in the long run.”
The data would suggest that we’re currently exchanging too much of our lives –– at work and at home –– for time on our phone. It could have a significant cost.
More on Productivity
How to focus and become indistractable with Nir Eyal – Podcast
Manage Your Energy, Not Your Time
How Much Should You be Working?
More on Mindfulness
Mindfulness, Meditation and Compassion in the Workplace and in Life with Scott Shute – Podcast
Schopenhauer and the Workplace
Sources
[2] https://news.gallup.com/poll/393785/americans-close-wary-bond-smartphone.aspx
[5] https://www.qualtrics.com/blog/phones-affect-work-life-balance/
[6] https://www.qualtrics.com/blog/phones-affect-work-life-balance/
[9] Duke É, Montag C. Smartphone addiction, daily interruptions and self-reported productivity. Addict Behav Rep. 2017 Jul 19;6:90-95. doi: 10.1016/j.abrep.2017.07.002. PMID: 29450241; PMCID: PMC5800562.
[10] Duke É, Montag C. Smartphone addiction, daily interruptions and self-reported productivity. Addict Behav Rep. 2017 Jul 19;6:90-95. doi: 10.1016/j.abrep.2017.07.002. PMID: 29450241; PMCID: PMC5800562.
[12] https://www.theatlantic.com/ideas/archive/2023/11/home-internet-landline-amazon-smartphone/676070/
[13] Duke É, Montag C. Smartphone addiction, daily interruptions and self-reported productivity. Addict Behav Rep. 2017 Jul 19;6:90-95. doi: 10.1016/j.abrep.2017.07.002. PMID: 29450241; PMCID: PMC5800562.
[14] Duke É, Montag C. Smartphone addiction, daily interruptions and self-reported productivity. Addict Behav Rep. 2017 Jul 19;6:90-95. doi: 10.1016/j.abrep.2017.07.002. PMID: 29450241; PMCID: PMC5800562.
[17] https://link.springer.com/article/10.1007/s10683-021-09715-w
[20]
[21] https://www.nytimes.com/2024/03/21/well/social-media-phone-addiction.html
[22] https://www.nytimes.com/2024/03/21/well/social-media-phone-addiction.html
[24] https://www.nytimes.com/2024/03/21/well/social-media-phone-addiction.html
[25] https://www.qualtrics.com/blog/phones-affect-work-life-balance/
Introduction
The term ‘burnout’ was originally coined by the American psychologist Herbert Freudenberger in the 1970s [1]. Although initially its use was exclusively reserved for those in “helping” professions such as doctors and nurses, today burnout’s grip does not discriminate by profession; it extends far and wide. Today’s workforce is twice as likely to report that they are “always exhausted” than they were twenty years ago [2]. Meanwhile, a 2023 survey of US workers reported that 59% were experiencing burnout, of which 71% were Gen Z and 65% millennials [3]. This is a problem in the ascendency.
In 2019, the World Health Organization (WHO) officially classified burnout as a medical diagnosis, including the condition in the International Classification of Diseases, defining it as “a syndrome conceptualised as resulting from chronic workplace stress that has not been successfully managed.” [4]
Burnout is generally easy to notice. Employees suffering from it are likely to show a lack of energy, sometimes to the point of exhaustion, a newfound sense of negativity and cynicism for their work, and a loss of productivity and/or drop in performance levels. In terms of the immediate impact on the workplace, employees experiencing burnout are 63% more likely to take a sick day, 23% more likely to visit the emergency room, and more than twice as likely to be actively seeking a different job. [5]
Why are we burned out?
Burnout is not new, but its pervasiveness is. That’s likely because its causes are accentuated by the work structures of modern life. According to 2022 survey data from the recruiting firm Zippia, 86% of fully remote workers experience some degree of burnout in their job, as opposed to 81% among hybrid workers, and 70% of those working fully in person [6]. Given remote forms of working were only recently normalised, that could be a contributory factor in burnout’s rise. A more obvious reason would be technological advancements. The majority of us now have email on our phone and a decent-quality laptop or computer at home. That has allowed work to spill out well past traditional working hours into evenings and weekends. There is no off switch or escape hatch.
It’s common to try to fight burnout with a quick holiday, rest day, or temporary lessening of hours, but any changes need to be more fundamental and long-term. Short-term approaches amount to little more than sticking plasters on a shattered bone. Burnout is a problem that develops over time; it can only be fixed with time too. If the tank is empty, simply driving slower isn’t going to fill it up again.
Not only do holidays not necessarily fix the problem of burnout, they can actually compound it. A recent MyBioSource survey of over one thousand US workers found that 50% of employees said taking time off left them feeling drained for at least a week upon return. Meanwhile, 44% reported experiencing exhaustion and 32% increased anxiety when returning to work after a break [7]. Such problems are going to be especially resonant if staff have to overburden themselves catching up either after or before their rest –– not only will the catch-up period be stressful, but the knowledge that the work is piling up while they’re away will impair their time off.
Witnessing the proliferation of burnout in workers, a number of businesses have taken to addressing the problem through ‘wellness days’ or ‘mental health days’, in which staff can take a day off every now and again to focus on their well-being. Well-meaning as this may be, it is an insufficient solution to a problem that’s roots run far deeper and are unlikely to be mended by a single day of rest. As Jonathan Malesic, author of The End of Burnout: Why Work Drains Us and How to Build Better Lives, writes in The Atlantic: “We might think of a mental-health day as a form of workplace avoidance dressed in the language of self-care.” [8]
All that is not to say that there is no use taking breaks. A 2014 study found that doctors in Japan who had two to four days off a month were more than three times more likely to suffer from burnout than those who had eight or more days off. But to truly address burnout one needs to make fundamental changes to work structures, not simply take a brief break before returning to the exact same approach that caused the problems in the first place.
The need for meaning
It can be easy to think burnout boils down to a simple misalignment between work and rest –– work too many hours without sufficient rest and you will be burned out; rest more and you will be fixed. But it’s more complicated than that. In fact, research shows that the number of hours one works is not the principal cause of burnout. There is something more innately human at play.
“Misalignment burnout happens when we constantly engage with environments and in activities that go against our innermost values and beliefs, leading to a disconnect between our true selves and professional identity,” writes Mark Travers, Ph.D. in Forbes. [9]
Working a job that we feel offers value to the world or that we feel we offer value to is key to avoiding burnout and having a healthy relationship with our work more generally. A 2015 study published in the Journal of Managerial Psychology found that when employees feel like they fit well with their organisation and their specific role, they’re less likely to experience burnout [10]. When it comes to overall well-being, the quality of one’s work experience has been found to be up to three times more important than the number of hours worked [11].
Also vital to having a thriving sense of professional value is a level of autonomy and support –– are we trusted to do the work? Is there someone there to help us on the difficult days? In his book Dying for a Paycheck, Jeffrey Pfeffer writes of workplace autonomy: “If through their actions people cannot predictably and significantly affect what happens to them, they are going to stop trying. Why expend effort when the results of that effort are uncontrollable, rendering the effort fruitless?” [12]
In terms of support, Harvard Business Review reports that there is a significant correlation between feeling lonely and work exhaustion [13]. Bill Hudenko, Ph.D., global head of mental health at the digital care company K Health, points out that “burnout is not an individual failing, rather it is a systemic issue that stems from a disconnect between expectations of workers and the leadership or conditions of the workplace.” [14]
The role of managers
Steve Salee, Founder and CEO of Wildfire Strategies, writes in Forbes that too often the burnout diagnosis puts the onus on employees to fix themselves. They are told to meditate, exercise or take some time off. In other words, to sort themselves out. Salee prefers a different term for this dismissive attitude employers can show towards their workers: moral toxicity.
Moral toxicity “describes the cumulative experience of being disregarded, unprotected, undervalued or dehumanised by an employer. It’s a potent cocktail of disrespect, injustice and emotional erosion that, over time, can poison the entire workplace culture,” he writes. He says that we saw a prime example of moral toxicity at play during the pandemic in the way exhausted healthcare workers were treated. To describe what those workers were going through as burnout, he says, “ignores the deeper ethical breach at play.” [15]
Whether staff are suffering from burnout or moral toxicity, employers have a duty of care to their workers. A Gallup study found that employees who felt cared for by their manager were 70% less likely to experience burnout. [16]
Dr Steven E. Pratt, M.D., senior medical director at Magellan Healthcare, suggests a number of policies and strategies that employers can put in place to prioritise employee care [17]. These include encouraging frequent breaks, offering healthy food options in workplace dining areas, providing education on positive health habits, and encouraging open dialogue about stressors and ways to manage stress.
Every individual’s relationship with work is different. Some will burn out easier than others. Good management involves a tailoring of approach according to how staff are likely to respond. Too often managers create an achievement-at-all-costs atmosphere and act as if any negative fallout employees feel is a result of their individual weakness rather than any systemic problem.
As Christina Maslach, a psychology professor at UC Berkeley and one of the foremost burnout researchers in the United States, puts it: “The phrase ‘If you can’t take the heat, get out of the kitchen’—it’s sort of saying: The kitchen is what it is, and you’re going to have to figure out how to deal with it, without ever saying, really, ‘Does the kitchen have to be that hot?’” [18]
There are of course steps individuals can take to improve their own sense of well-being and to counteract burnout –– ideally before it manifests, rather than relying strictly on reactionary measures. Yoga, meditation, exercise, a regular sleep schedule and having a social life outside of work are all suggested, as well as being disciplined in cutting off work hours at a reasonable time, especially difficult in the age of remote working.
And if a job proves too demanding or so unfulfilling that you feel yourself draining, it could be a sign that it’s time to move on to ventures new. As the Dalai Lama advises, “If you feel ‘burnout’ setting in, if you feel demoralised and exhausted, it is best, for the sake of everyone, to withdraw and restore yourself.” [19]
More on Burnout
The Million-Dollar Impact of Burnout & Busyness Culture
Personal Leadership Through a Performance Mindset with Laura Piccardi – Podcast
Rethinking the Workplace with Prof. Deirdre O’Shea – Podcast
Sources
[1] https://spssi.onlinelibrary.wiley.com/doi/abs/10.1111/j.1540-4560.1974.tb00706.x
[2] https://hbr.org/2017/06/burnout-at-work-isnt-just-about-exhaustion-its-also-about-loneliness
[8] https://www.theatlantic.com/family/archive/2022/11/workplace-burnout-mental-health-days/672111/
[10] https://www.emerald.com/insight/content/doi/10.1108/JMP-12-2012-0404/full/html
[12] https://www.theatlantic.com/politics/archive/2021/03/how-tell-if-you-have-burnout/618250/
[13] https://hbr.org/2017/06/burnout-at-work-isnt-just-about-exhaustion-its-also-about-loneliness
[14] https://www.forbes.com/health/mind/signs-of-work-burnout/
[16] https://www.gallup.com/workplace/237059/employee-burnout-part-main-causes.aspx
[17] https://www.forbes.com/health/mind/signs-of-work-burnout/
[18] https://www.theatlantic.com/politics/archive/2021/03/how-tell-if-you-have-burnout/618250/
Introduction
Through the late-nineties and early-noughties, neoliberal-optimists-in-chief bristled with confidence that they could steer the world toward a more enlightened, mutually tolerant and co-dependent global order. Such hopes proved naive; the end of history was just the beginning.
The last ten years have been marred by rising populism, the pandemic, and bloody conflicts, the current wars in Ukraine and the Middle East the most notable examples. Such global turbulence affects businesses – and leaders. As David S. Lee of the Hong Kong University Business School surmises, “Most CEOs came of age during a period of globalisation, when free markets and trade were assumed to be net goods. But the ground has shifted” [1].
Leaders – even experienced leaders – have not had to deal with the level (and variety) of problems currently facing the world. On top of the aforementioned conflicts and political unrest, which impact everything from supply chains to employee morale, there have been shifts in the level of engagement businesses are expected to make regarding social issues. Not engaging, or engaging in the wrong way, can quickly prove damaging, maybe even fatal, as many businesses have found out the hard way.
On top of that, attitudes to work have shifted. Millennial and Gen Z workers have values and expectations that differ drastically from their Gen X and Boomer colleagues. These shifts in working values were only exacerbated by the pandemic, in which the in-office 9-5 ceased to be part and parcel of the working experience. In swathes, employees began asking themselves whether they were truly satisfied with their lot. The answer came in the form of the Great Resignation and quiet quitting; people wanted more.
AI poses greater challenges still. How soon will the technology become sufficiently sophisticated to start displacing human workforces on a large scale? How will that overhaul be handled, by businesses and governments? And how will the human animal, conditioned over millennia to find worth and meaning through work, react to no longer being needed?
It is the job of great leaders to meet these challenges.
McKinsey predicts that by 2027, 75% of the companies listed on the S&P 500 will have disappeared [2]. To be one of the 25%, leaders need to face these issues head on, as well as putting structures in place to ensure they’re as prepared as they can be for future unknowns.
Where do you work?
In the wake of the war in the Middle East, Houthi militants launched attacks on shipping vessels in the Red Sea. The attacks caused enormous disruption, prompting a collective shift in supply chain routes to avoid the area, with the requisite delays in shipping timelines and ramped up costs an inevitable result.
This follows on from the Ever Given fiasco of 2021, in which one of the world’s largest shipping vessels found itself farcically stuck in the Suez Canal, blocking the route off to other suppliers for a matter of six days. Add to that the fallout from Covid and you have a clear reminder that existing supply chains are at the mercy of the world around them. And these problems are coming thick and fast.
As Nitin Nohria, the former dean of Harvard Business School, writes of what he refers to as leadership’s ‘new zeitgeist’, “Leaders can no longer assume that trouble may strike once every three or four years and be managed by outside crisis consultants. Instead, companies must prepare for a steady stream of upheavals—and hone their in-house skills for dealing with them” [3].
A growing subset of firms are looking to capitalise on increasing demand from companies for advice on how to navigate a world in turmoil. In October of 2023, Goldman Sachs set up an institute to analyse geopolitics and technology. Prior to that, Lazard and The McKinsey Global Institute set up similar ventures. Whether it’s done in house or managed by external consultants, the consensus is that these problems aren’t going away. Solutions are needed.
As a result of the barrage of incidents affecting supply chains, a number of companies are looking to pivot their supply bases to less politically challenging countries in what is sometimes known as “friend-shoring”. Others are choosing to move their supply chains to their home nations. Each of these moves comes with its own regulatory challenges and periods of adjustment. For companies choosing to stick to the area of turbulence, Ziad Haider, McKinsey’s global director of geopolitical risk, notes that they “need to use a lot more care and diligence to make sure there isn’t, for example, forced labour involved in that supply chain” [4].
There are no easy options. Do you stay or do you go? Stick or twist? Do you rely on instinct to decide or trust in third-party consultants? Do you set up your own internal consultancy, seeing it a necessary investment in what are proving to be difficult times? All of these considerations and more fall to leaders, who are expected to have clear answers to complex questions.
Reputational risk
In the past, the answer the CEO gave would likely have been based on one consideration only: which option best serves our bottom line? Nowadays, other factors are at play. Namely, reputational ones.
Haider raises the question modern leaders must confront: How do you maintain a global footprint but be ready to answer the question about why you are in that problematic market?
“The bar for explaining where you are and why you’re there has gone up from external stakeholders, be it media or parliament, as well as internally, from colleagues. That’s something companies are having to balance. What you say in one market very quickly shows up in the other market, so you can’t get away with shading your messaging too much, either,” he explains [5].
After Russia’s invasion of Ukraine, companies were quick to distance themselves from the country. Admittedly, that was partly for legal reasons, with heavy sanctions dealt Russia’s way. But the companies also acted with awareness that Russia had become a persona-non-grata; to do business with them would have been reputationally ruinous.
But what about in cases where there’s less consensus as to the villain of the story? Critics are quick to point to double standards in the way businesses who were quick to pull out of Russia are fine to do business with Saudi Arabia, for example, who waged a similarly destructive war in Yemen and brutally executed an American journalist. Finding a clear position amongst nuanced global standings is difficult – also exemplified by the inconsistency of the West’s approach to China over these past decades and the difficulty businesses are having responding to the Israel-Palestine conflict.
The death of the global chief executive
In the Financial Times, fellow at the American Enterprise Institute think-tank Elisabeth Braw writes that “the era of borderless enterprise may be past. Geopolitical tensions are rising, leaving business in the line of fire. Suddenly companies’, and executives’, nationalities matter again” [6].
Braw cites the California-based space transportation start-up Momentus, valued at $1.2bn, that parted ways with its Russian CEO and co-founder Mikhail Kokorich over US national security concerns.
“The fact that some countries aren’t getting along doesn’t mean businesses should discriminate against certain nationalities,” Braw writes. “But it does mean that they should get used to a reality in which they can be attacked as country proxies.”
To be from the “wrong” country can lead to one having their home nation’s ideologies thrust upon them by association. As with supply chains, companies are looking at which countries – and whether consciously or not, which people from those countries – are worth the hassle. It’s unlikely to take the form of outright discrimination. Rather, if deciding between a homegrown hire or someone who might require additional vetting, companies will default to the easy option. It is, of course, horrifically unfair for someone’s career prospects to be potentially hampered by their place of birth. That doesn’t mean it won’t happen.
“We’re seeing that nationality is starting to matter a lot more,” says Andrew Grant, a senior partner at McKinsey. “Leaders must work to hold their organisation together when many of their employees are subject to much more nationalistic forces than they used to be. The leaders we speak and engage with are quite concerned about how to nurture a global culture in a world that is nowhere near as sympathetic as it used to be” [7].
What can leaders do now?
For all the creeping nationalism in enterprise, Grant reminds us that there’s no right answer to complex geopolitical pain points.
“No one has a monopoly on the right perspective. It’s really important for global companies to understand that these are very three-dimensional problems that they should view from a truly global, not just national, lens. The right stance is rarely black and white. And even if it’s black and white today, it may not be black and white tomorrow” [8].
In order to meet the times head on, Lisa Pollina, a global financial services executive and member of the Board of the Atlantic Council of the United States and the Council on Foreign Relations, says leaders must find solutions that (1) protect employees (2) weigh the impact on stakeholders (3) safeguard the bottom line (4) prioritise the organisation’s well-being beyond just the profit model [9].
She suggests boards meet frequently to monitor ongoing events, which move at a pace, and regularly review both past decisions and the evolving political landscape.
Haider says boards should take a granular approach. “Every month, the board needs to look at the top five markets of geopolitical concern and create a clear game plan about what will be done to manage those risks—and that starts with having a common set of facts” [10].
This last point is crucial. Coming up with a productive pandemic strategy would have been impossible for a board whose members couldn’t agree on whether or not the disease was real. Basic facts must be established and agreed upon before any substantive progress can be made.
Leaders must also provide employees with a clear direction of travel. José Luís González Rodriguez, a partner at ActionCOACH in Spain, says that the most effective way to align on facts and ensure everyone is singing from the same hymn sheet is to make use of data.
“In my experience, a significant percentage of business decisions are made without the necessary information, simply because the company data is not structured and up-to-date,” he says. “No one would think of driving a vehicle without looking at the dashboard, and similarly, we should not run companies without one. This is especially relevant in the digital age, where data has become the most relevant asset in every industry” [11].
More than anything, leaders will need to be adaptive. Things change quickly, both in global circumstances and in-vogue attitudes. A good leader will be tuned in to the prevailing winds of the time and have a nose for future trends too. They will adapt to the circumstances around them as well as to the feelings of their staff, with an empathetic approach that brings the best out of their multi-generational teams, whose values likely differ worker-to-worker. Equity, work-life balance and flexible work culture will all need to be factored in amongst the conflicts of the day.
Leaders today face a more diverse set of problems than ever before. Those that can navigate those tricky waters unscathed will be in the minority – and rewarded all the more for it.
More on the Future of Leadership
Leadership in Focus: Foundations and the Path Forward
Mastering Change and Complexity: Strategic Leadership in an Uncertain Business World
Embracing Ambiguity: Leadership in the Liminal Space
Modern Skills for a Modern Boardroom: A New Look at Leadership
Leadership Lessons from Obama and Other US Presidents – Podcast
Sources
[1] https://www.cutter.com/event/leading-era-geopolitical-turmoil
[3] https://hbr.org/2022/07/as-the-world-shifts-so-should-leaders
[6] https://www.ft.com/content/4635c387-1ecf-41ce-82f4-592691dfc894
Introduction
More than one-quarter of the workers in G7 countries will be 55 or older by 2031 [1]. In the US, that figure will be reached by 2028 [2], with the number of workers over fifty having increased by 80% in the last 20 years and the number of over-65s having tripled [3]. In the UK, there are now 185% more over-65s in the workforce than there were in 1992 [4]. Meanwhile, the UN projects the number of working-age people in South Korea and Italy will decrease by 13 million and 10 million by 2050 [5]. The number of working-age residents in China could shrink by 200 million in the same timeframe [6].
These changes are profound. Demographic shifts will drastically alter countries’ global standing and socio-economic performance, while forcing a rethink on domestic policies regarding pensions and immigration. Life in old age will soon look very different to how it does today. People will be working deep into their sixties, seventies, maybe even eighties. This will have a colossal impact on businesses.
An ageing workforce
Global talent shortages are projected to lead to more than 85 million unfilled jobs by 2030. This will result in annual revenue losses of roughly $8.5 trillion [7]. One way to fill these vacancies is to break from the traditional mould of generally hiring graduates or younger workers by instead hiring older employees. Bain & Company estimates that approximately 150 million jobs globally will need to shift to workers 55 and older by the end of the decade [8].
Despite the necessity of these changes, take-up is slow. In Forbes, Sheila Callaham, executive director and Board Chair for the Age Equity Alliance,notes that “talent management processes such as recruiting, hiring, promoting and retaining tend to exclude individuals under 24 or over 40. The result is a 16-year criterion for talent” [9].
Part of the problem is age discrimination. A recent AARP poll reported that 78% of older workers said they had seen or experienced age discrimination in the workplace, the highest level since AARP began tracking the question in 2003 [10]. A recent SHRM survey backs these findings up [11]. It found that 26% of workers aged 50 and older said they’d been the target of age-related remarks in the previous six months, with 72% of that grouping saying the experience made them feel like quitting their job. Meanwhile, US census data from 2022 showed that the only group in the country to experience an increase in poverty was Americans aged 65 and older [12].
A lot of the discrimination against older people in the workplace is bred from baseless preconceptions regarding performance. A pre-pandemic report for the British Medical Association revealed that while parts of the brain that deal with things like working memory may degrade in middle age, overall age-related cognitive decline is not typically pronounced until you reach at least 70, and only 5% of people over 65 show signs of cognitive impairment [13].
Regarding productivity, the report concluded that: “The main finding is that healthy older people perform equally as well as their younger counterparts” [14]. In other words, not only is discrimination against older workers morally wrong, it is based on a false premise.
In fact, in some regards, older workers are preferable to their younger counterparts. A 2023 Wall Street Journal-NORC survey of Americans’ values found that three-quarters of over-65s said hard work was very important to them personally, compared to just 61% of those in the 18-29 age bracket [15].
“It makes great business sense to hire experienced workers,” said Heather Tinsley-Fix, senior adviser for employer engagement at the AARP, speaking to the Wall Street Journal. “More companies are also recognizing the need to include age in their diversity, equity and inclusion efforts” [16].
Robert Sheen, founder and CEO of Trusaic, a technology company focused on pay equity, DEI and healthcare, writes in Forbes that employers “report that older workers tend to have superior problem-solving and interpersonal communication skills, possess a strong work ethic, offer a deep understanding of customer service and bring a larger perspective to bear on their work and that of their teammates –– all of which complement the skills that younger workers bring to the table” [17].
This final point is crucial. A multigenerational office dynamic leaves companies best placed to succeed, with older employees working in tandem with younger ones, each bringing their specific skills to the table while learning off one another. And for all the talk of differences between the generations, their values have actually been found to co-align.
The Institute for Employment Studies and the Centre for Ageing Better found that older workers desire “meaningful and intellectually stimulating work, job security and opportunities for learning, mentoring and career progression” [18]. Flexibility and being part of an organisation whose values they identify with were also found to be pivotal. These align entirely with the oft-reported on values of Gen Z workers, whom many commentators like to treat as though they were an entirely separate species.
It’s no wonder, then, that the Organisation for Economic Cooperation and Development (OECD) found that age-diverse firms have lower staff turnover and higher productivity rates than their benchmark peers [19].
The cost of discrimination
The US Equal Employment Opportunity Commission (EEOC) reportedly resolved more than 12,000 age-related discrimination cases in the 2022 fiscal year, more than the 13,000 cases in 2021 and over 15,000 in 2020 [20]. Some of the payouts in these settlements ran into the millions. One would hope workplaces would be disincentivised from indulging in age-based discrimination for the right reasons, such as they want equality or recognise that older workers have a great deal to offer. But if not, maybe the fact that such discriminations would be financially damaging, not to mention reputationally ruinous, will prove sufficient.
An absence of preparation
An AARP global survey of employers found that around 4% had implemented programs to integrate older workers into their talent systems, with slightly more than 25% saying they were “very likely” to explore doing so in the future [21]. Only 6% were found to have policies in place related to unbiased recruiting processes.
According to the Centre for Ageing Better, only one in five employers are discussing the ageing workforce strategically and nearly a quarter admit they are unprepared for the growing number of older workers [22].
Clearly then, in spite of the stark need for older workers, businesses are not sufficiently prepared for the transition that is soon to take place in the workforce.
Sheila Callaham writes that, “It’s crucial for company leaders to understand age demographics, just as it is to understand other vital demographic figures. That means dissecting age demographics according to the talent pool, hires, development, promotion and retention” [23].
And yet further AARP research revealed just 42% of companies provide their managers with the training and support necessary to effectively manage a multigenerational workforce, while only 39% focus on how to avoid age discrimination in recruitment or hiring, and 38% focus on how to avoid age discrimination in providing access to training opportunities [24].
Managers must do more. An older workforce is a certainty. There’s no excuse for not making the necessary preparations now in order to achieve success in the future. One technique that has been found to work is implementing programmes of lifelong learning. As noted earlier, older workers are not dissimilar from their Gen Z counterparts in their desire to keep learning and improving, and to work for companies that have a structure in place that allows them to grow rather than stagnate. If people are going to be working longer, the last thing they want is to feel stuck.
A 2023 Transamerica Institute report backed up the notion that lifelong learning opportunities are valued by older workers and are a proven method for attracting and retaining them [25]. That said, the same report revealed that only 28% of the nearly 1,900 employers surveyed offer specific training to address generational differences and help prevent age discrimination. There is much more work to do.
Managing an ageing workforce
Ageing populations are affecting the entire world and could lead to a total restructuring of the global order. With widespread job shortages and people working later and later into their lives, it only makes sense for firms to start hiring older workers to plug the gaps. Not only do they offer experience and a strong work ethic but they can help younger workers to thrive. For too long, older workers have been at the mercy of baseless discrimination. Companies that are serious about facing the new demographics of the future will need to show they are serious about providing a discrimination-free work environment that offers lifelong learning opportunities in order to entice and retain older workers. Those that don’t will feel the demographic shifts first and hardest, and may never recover.
More on Diversity & Inclusion
Diversity and Conflict for a Plural Workforce
The Evolution of Great CEO Leadership
Sources
[1] https://www.bain.com/insights/better-with-age-the-rising-importance-of-older-workers/
[5] https://www.nytimes.com/interactive/2023/07/16/world/world-demographics.html
[6] https://www.nytimes.com/interactive/2023/07/16/world/world-demographics.html
[7] https://www.kornferry.com/insights/this-week-in-leadership/talent-crunch-future-of-work
[8] https://www.bain.com/insights/better-with-age-the-rising-importance-of-older-workers/
[11] https://www.shrm.org/about/press-room/new-shrm-research-details-age-discrimination-workplace
[13] https://ft.pressreader.com/1389/20230529/281887302684607
[14] https://ft.pressreader.com/1389/20230529/281887302684607
[15] https://www.wsj.com/articles/do-older-workers-work-harder-some-bosses-think-so-c4088c7d
[16] https://www.wsj.com/articles/do-older-workers-work-harder-some-bosses-think-so-c4088c7d
[18] https://ageing-better.org.uk/sites/default/files/2017-12/What-do-older-workers-value.pdf
[19] https://www.oecd-ilibrary.org/sites/15f92878-en/index.html?itemId=/content/component/15f92878-en
[22] https://ageing-better.org.uk/news/uk-employers-unprepared-ageing-workforce
Introduction
A recent CNBC poll found that 58% of US citizens believe it’s inappropriate for companies to take a stance on social issues [1]. The number is 48% for those aged 18-34. Crucially only 43% said they felt it was appropriate for companies to take a stance. That’s down from 62% in 2018 and 70% in 2019. In other words, public attitudes are shifting.
A separate Gallup and Bentley University poll found different numbers showing the same trend. Pollsters found that 41% of Americans felt businesses should generally take a stand on current events, down from 48% one year prior. Fewer than 30% of respondents felt that brands should weigh in on international conflicts [2].
This last figure is striking, and given current global events hints that this trend will continue. Over the past decade, it’s become not just acceptable but expected that major brands will weigh in on the issue of the day. From Black Lives Matter to #MeToo through issues around gender identity and abortion, consumers wanted to know they were not giving their hard-earned cash to enterprises they deemed to be against their principles. For their part, brands were happy to play along, appeasing consumer desires and sometimes outright cashing in on them. All that changed on October 7th.
The Middle-East conflict
“The last 10 days have been a pendulum swing moment for CEO communication,” said Dominic Reynolds at public relations company Kekst CNC, speaking to The Financial Times in the wake of the horrific October 7th Hamas attack on Israeli civilians [3].
“Since the pandemic, the direction of travel has been towards CEOs taking positions on social issues that matter to their customers or their people, even if there’s no link to business operations,” he went on. “We’ve observed that trend go into reverse this month. Our clients are anxious to show caution around this conflict, understanding that perceptions can be shifted by superfine nuances of language and tone.”
If that was true in the immediate aftermath of October 7th, it’s even more true now. As the conflict continues with no obvious end in sight, the Gazan death toll grows higher day by day while international support for Israel seems to be shifting from blanket to conditional. Meanwhile the fervour of feeling on both sides runs hot. Millennia of history haunt this conflict. It is complex and not likely to be fixed by a snarky Twitter post, despite many users’ attempts.
The level of complexity and nuance, paired with the strength of feeling on both sides, has dictated that companies who had proved themselves more than willing to wade into the waters of topical global issues over recent years now stand silent, conspicuously so. Because unlike some of the other social trends, this time there is no Big Bad to wag a finger at, no agreed upon villain of the piece they can ride the wave of feeling to publicly decry – no sexual abuser, racism, invading autocrat. It’s complicated geopolitics, and they hadn’t prepared for that.
Companies have trapped themselves in a corner. Vocally picking one side is a contentious move that would guarantee substantial backlash from the other. But unlike businesses of the past, they cannot just stay silent either. To distance themselves under the auspice of social issues being outside of their remit would have been fine – and expected – for decades. But they changed that when they first started chiming in on current affairs a few years ago. The question now is can they put Pandora back in the box.
Moral brands
Writing in New York magazine, Sam Adler-Bell observed that part of the reason for the fervour we’re seeing amongst citizens is that they feel helpless as to how they can affect what’s happening. “When our government is this unresponsive, it makes sense that Americans look closer to home for moral clarity,” he writes. “Powerless to influence actual policy outcomes, we settle for battling over discourse” [4].
In her article ‘The puritanical eye: Hyper-mediation, sex on film, and the disavowal of desire’, Carlee Gomes argues that at the dog-end of late-capitalism, “our ability to consume is the only remaining thing that’s ‘ours’” [5]. She makes the case that this is why audiences now want art and media from “unproblematic” artists – the last vestige by which we can express our morality is through what we choose to consume; if what we consume is made by moral figures, we too may be moral; if what we consume is made by monsters, we in some way share their sins. Her argument works equally well for why consumers have turned to “unproblematic” brands.
57% of global consumers buy or boycott products because of a brand’s stance on political or social issues, according to an Edelman’s Earned Brand survey of 2017 [6]. Nearly a quarter of consumers who said they prefer to buy from brands that share their beliefs are willing to pay more for those products. Aware that there was money to be made by taking the “right” stance, brands acted accordingly.
It represents “a real opportunity for multinational brands”, said Richard Edelman, CEO of Edelman, the world’s biggest public relations firm according to revenue. “Brands have to take on bigger issues of the moment” [7]. And so they have.
Research by the Public Affairs Council in 2016 and 2021 shows how drastically the types of issues brands are willing to engage with has changed. In their 2016 survey, the dominant themes were sustainability and education. By 2021, “more than 80 per cent of companies said they were engaged in civil rights issues such as equity on race, gender and sexual orientation, and more than 70 per cent said they were public in supporting gender identity equality” [8].
Essentially, culture war topics were adopted as a business model. “The data show us that 67 per cent of people will try a brand for the first time because of its position on a controversial issue,” said Mark Renshaw, global chair of Edelman’s brand practice [9]. “That is customer acquisition. And they’re willing to pay more for those brands. You can gain customers and they will be better and more financially viable customers for you.”
Chris Padilla, head of global government affairs for IBM, called this transition to what some dubbed the new era of ‘corporate political responsibility’ as “the biggest single change I’ve seen in my job in the last 10 years” [10].
But as with any sudden change of such a scale, one must wonder whether businesses were really equipped to face the new state of play – one of virtuous engagement – after so many years of silence.
The new era
In the age of social media, companies learned quickly that by engaging with trending topics, their posts would receive greater traction. As such, the existing advertising model went out the window in favour of brands adopting ‘personas’ online. Soon breakfast cereals were freely discussing their experiences of racial discrimination while cleaning products bemoaned their anxiety. For someone newly wading in, this was through the looking glass stuff. Long gone was Michael Jordan’s infamous “Republicans buy sneakers too” approach to sales. Instead, online personae representing products representing brands would showcase their corporate values through deliberately personal engagement, with no topic off the table. In fact, engaging with topics of greater controversy was more likely to earn brands traction. They didn’t want to say anything controversial, however, just to engage with that space.
In her excoriating piece in The Atlantic, ‘Brands Have Nothing Real to Say About Racism’, Amanda Mull observes how “instead of taking concrete actions, many companies interpret consumers’ push for social responsibility as a strong desire for them to make vague statements about even vaguer values, such as “equality” and “community,” when something racist dominates the news” [11].
She goes on: “On top of the incentive of attention, companies feel the need to weigh in so that they don’t come across as apathetic. At the same time, they know how fraught strong political statements can be. That’s when you get language so bland, it borders on inanity—the blight of “inequality of all kinds” and the need for “meaningful change.” Companies who have no business associating themselves with anti-racism movements are trying to say the right thing without upsetting anyone, walking right up to the line of politics without stepping one toe over it.”
Mull’s point is undeniably true in the main. However, some brands’ toes did step a little further than most. Nike’s Colin Kaepernick campaign is the prime example. The company gave a voice and platform to the ostracised NFL star, who at the time was unable to find a team due to his taking a knee during the national anthem as a show of protest against racially motivated police brutality. This was not a wishy washy social media statement, it was a company putting its money where its mouth is. Controversy ensued, with some burning their shoes in protest and a 3% dip in Nike’s stock, equivalent to a $4 billion loss in company value. However, that stock soon bounced back, and then some. It regained its losses, grew by 5% and achieved a record high on the stock market [12]. The risk paid off.
Writing in Forbes, Juan Isaza, Vice President of Strategy and Innovation at DDB Latina and the President of DDB Mexico, observes that “many brands saw Nike’s audacity as the new gospel: boldly supporting social causes would invariably benefit brands” [13].
But just because it worked for Nike didn’t mean it would work for everyone. Many will remember Kendall Jenner’s infamous Black Lives Matter advert that Pepsi quickly pulled after the backlash. More recently, last year Bud Light collaborated with Dylan Mulvaney, a transgender influencer, and released a special edition beer. A number of the brand’s reliable consumers called for a boycott and the company’s sales plummeted by 10.5% between April and June. By July, Bud Light sales had declined 26% [14].
The lessons
Why do some brands benefit from wading into social issues while others come undone? One theory is that it comes down to consistency. Nike had a history of sponsoring black athletes and supporting black causes. The Kaepernick campaign took this a step further but it aligned with how people viewed the company, or at least didn’t drastically verge from it to the point of appearing cynical. Bud Light had no history of alignment with the LGBTQ+ community. Without existing credentials in that sphere, the decision to suddenly engage looked potentially disingenuous and opportunistic.
Founder & CEO of communications and investigative research firm Marathon Strategies, Phil Singer, writes in Forbes that the three things companies need to keep in mind when weighing in on social issues is to keep it consistent, to remember that the internal is as important as the external, and to put their money where their mouth is [15].
By keeping it consistent, he is referring to the above point regarding only engaging with topics for which brands have existing credentials. US corporate adviser Penta Group agrees, saying, “We advise clients to engage on political and social issues based on the relevance to their organisation and the severity of their impact on the company” [16]. Companies should not needlessly wade into unknown waters where they lack any foundations.
When he says that the internal is as important as the external, he means that companies should not just be thinking about how stakeholders will react but how their employees will too. “Look after them [your employees] rather than immediately turning all your attention to the outward facing statements,” advises Megan Reitz, professor of leadership and dialogue at Hult International Business School. “Your primary responsibility is to the impact on people who you have a direct relationship with” [17].
This point holds particular relevance for how companies today are handling Israel-Gaza. Many offices, especially in multi-cultural major cities, will have people with family or friends who are directly affected by this struggle. It is deeply sensitive, and likely weighing on them. Colleagues and employees should be looked after first and foremost. Certainly before making any decisions as to whether the company will weigh in on the topic, companies should consider the potential impact that decision will have on its workers.
When Singer advises companies to put their money where their mouth is, he is addressing the issue Amanda Mull raised in her piece on the empty words offered by a number of businesses looking to gain cultural cache by exploiting pernicious trends.
“These things cannot be just statements from CEOs,” says Chris Allieri, founder of Mulberry and Astor, a PR consultancy. “They have to be followed up with actual programmes and commitments. If they are going to take a stand on an issue, they have to make an investment along those lines” [19].
Turning tides
In his Forbes article, Juan Isaza argues that consumer appetite for brands to take social stances is diminishing [20]. He suggests that amongst biting economic troubles, consumers may be growing more pragmatic, as well as reaching a state of fatigue from the endless cultural battles that consume the modern world. Potentially, too, he posits, consumers are growing increasingly critical of what they see as opportunistic companies looking to cash in on real-world problems, as exemplified by the Bud Light story.
What comes next?
It could be that the window in which consumers wanted brands to be active in their corporate social responsibility will prove to be a short one, at least on more divisive issues (as opposed to topics like climate change, on which consumers still universally want companies to take action.)
A lesser role for businesses might suit everyone. “Frankly, a lot of CEOs and boards would like to be able to diminish the degree that they’re called upon to engage on these questions,” says Aron Cramer, chief executive of corporate social responsibility advisory group BSR [21].
When it comes to the ongoing conflict in the Middle-East, the impact it will have on how brands choose to engage on social issues moving forwards feels trivial in comparison to the tragedy so many are facing. Which is perhaps why it would be for the best that there was a severance between such real-world crises and polished statements about “corporate values”. One man’s suffering should not be another’s marketing opportunity. Some things are more important.
Sources
[3] https://www.ft.com/content/80bd2644-b810-4d6e-8a9c-d4a08432d9e4
[6] https://www.ft.com/content/7aef7e9a-52af-11e7-bfb8-997009366969
[7] https://www.ft.com/content/7aef7e9a-52af-11e7-bfb8-997009366969
[8] https://www.ft.com/content/5ceffa36-899a-4457-919f-b70902162f64
[9] https://www.ft.com/content/7aef7e9a-52af-11e7-bfb8-997009366969
[10] https://www.ft.com/content/5ceffa36-899a-4457-919f-b70902162f64
[11] https://www.theatlantic.com/health/archive/2020/06/brands-racism-protests-amazon-nfl-nike/612613/
[16] https://www.ft.com/content/80bd2644-b810-4d6e-8a9c-d4a08432d9e4
[17] https://www.ft.com/content/80bd2644-b810-4d6e-8a9c-d4a08432d9e4
[18] https://www.ft.com/content/80bd2644-b810-4d6e-8a9c-d4a08432d9e4
[19] https://www.ft.com/content/7aef7e9a-52af-11e7-bfb8-997009366969
[21] https://www.ft.com/content/5ceffa36-899a-4457-919f-b70902162f64
Introduction
The EU AI Act was endorsed by the European Parliament on Wednesday 13th March. It is expected to become law in April following the formality of final approval from further member states.
This is a landmark moment. Last year the Biden administration signed an executive order requiring major AI companies to notify the government when developing a model that could pose serious risks, while Chinese regulators have also set out rules focused on generative AI. But the EU AI Act is a significant step up when it comes to the regulation of artificial intelligence and could serve as a blueprint for how global governance handles the technology moving forwards.
Dragos Tudorache, an MEP who helped draft the AI Act, said: “The AI Act has nudged the future of AI in a human-centric direction, in a direction where humans are in control of the technology and where it, the technology, helps us leverage new discoveries, economic growth, societal progress and unlock human potential” [1].
While by definition the act only covers EU territories, its implications stretch further. No companies, even and especially the tech giants based across the Atlantic, are going to want to forgo access to Europe. As such, in order to work in the EU, they will need to comply with its regulations. “Anybody that intends to produce or use an AI tool will have to go through that rulebook,” said Guillaume Couneson, a partner at law firm Linklaters [2].
The European Parliament has precedent of making influential first moves in tech regulation, as evidenced by its General Data Protection Regulation (GDPR) and Digital Markets Act (DMA). The EU AI Act is likely to have an equally global impact.
“The act is enormously consequential, in terms of shaping how we think about AI regulation and setting a precedent,” says Rishi Bommasani, who researches the societal impact of AI at Stanford University in California [3].
Although, as with all things artificial intelligence, there are a number of unknowns. Other governing bodies will be monitoring how the EU AI Act progresses closely. Couneson notes that “the EU approach will likely only be copied if it is shown to work” [4].
What are the laws?
The EU AI Act seeks to set a definitive definition of AI that is also broad enough to cover the diversity of AI’s current use-points and any potential future developments. As such, drawing from the OECD’s definition, the act describes an AI system as: “a machine-based system designed to operate with varying levels of autonomy and that may exhibit adaptiveness after deployment and that, for explicit or implicit objectives, infers, from the input it receives, how to generate outputs such as predictions, content, recommendations, or decisions that can influence physical or virtual environments.” [5]
The act plans to regulate AI according to a tiered system based on perceived risk. Systems that carry “unacceptable risk” are banned in their entirety. Such systems include those that use biometric data to infer sensitive information such as a person’s sexual orientation or gender identity.
Also outlawed are government-run social scoring systems that use AI to rank citizens based on their behaviour and trustworthiness, enabling Minority Report-esque predictive policing. Emotion recognition, which would give schools or workplaces the ability to monitor workers’ emotional states and activity by monitoring facial tics and body posture, is prohibited. As is the untargeted scraping of facial images from the internet or CCTV footage to create facial recognition databases. There are exceptions. Biometric identification systems can be used in special circumstances such as in the prevention of a terror threat or in sexual exploitation and kidnapping cases.
For lower-risk systems such as Generative AI – the term for systems that produce plausible text, image, video and audio from simple prompts, the most prominent example being ChatGPT – developers will be forced to tell users when they are interacting with AI-generated content, as well as providing detailed summaries of the content used to train the model, which must adhere to EU Copyright law.
It’s unclear if the law can be retroactively applied to existing models. For example, in the cases of alleged copyright infringement for which The New York Times is suing OpenAI and Getty Images is suing StabilityAI. A number of writers, musicians and artists have also raised concerns that their work was used to train models without their consent or financial compensation.
Moving forwards, open-source models which are freely available to the public, unlike “closed” models like ChatGPT’s GPT-4, will be exempt from the copyright requirement. This approach of encouraging open-source AI differs from US strategy, according to Bommasani. He suggests that “the EU’s line of reasoning is that open source is going to be vital to getting the EU to compete with the US and China” [6].
People, companies or public bodies that issue deepfakes will need to disclose whether the content has been artificially generated or manipulated. If it is done for “evidently” artistic, creative or satirical work, it will still need to be flagged, but in an “appropriate manner that does not hamper the display or enjoyment of the work”.
High-risk AI systems like those used in critical infrastructure or medical devices will face more regulations, requiring those systems to “assess and reduce risks,” be transparent about data usage and ensure human oversight.
Fines will range from €7.5m or 1.5% of a company’s total worldwide turnover – whichever is higher – for giving incorrect information to regulators, to €15m or 3% of worldwide turnover for breaching certain provisions of the act, such as transparency obligations, to €35m, or 7% of turnover, for deploying or developing banned AI tools. More proportionate fines will be used for smaller companies and startups.
The reaction: The (tempered) positives
“Europe is now a global standard-setter in AI,” wrote Thierry Breton, the European commissioner for internal market, on X (formerly Twitter), leading praise for the bill [7].
The lobby group Business Europe also acknowledged its historic resonance, with director general Markus J. Beyreris describing it as a “pivotal moment for AI development in Europe” [8].
“We finally have the world’s first binding law on artificial intelligence, to reduce risks, create opportunities, combat discrimination, and bring transparency,” said Italian MEP and Internal Market Committee co-rapporteur Brando Benifei [9].
However, many who generally approve of the bill – or even euphorically celebrated it – also tempered their praise with reservations, mainly regarding whether it can be effectively put into practice.
Dragos Tudorache, MEP, demonstrated both sides when he said, “The rules we have passed in this mandate to govern the digital domain – not just the AI Act – are truly historical, pioneering. But making them all work in harmony with the desired effect and turning Europe into the digital powerhouse of the future will be the test of our lifetime” [10].
This is the prevailing sentiment. Actualising these ideas will be difficult. In a similar vein to Mr Tudorache, after showing his support in saying that the bill was pivotal, Business Europe’s Markus J. Beyreris also noted that: “The need for extensive secondary legislation and guidelines raises significant questions about legal certainty and law’s interpretation in practice, which are crucial for investment decisions” [11].
Jenia Jitsev, an AI researcher at the Jülich Supercomputing Centre in Germany and co-founder of LAION (Large-scale Artificial Intelligence Open Network), a non-profit organisation aimed at democratising machine learning, showed even greater scepticism. “The demand to be transparent is very important,” they said. “But there was little thought spent on how these procedures have to be executed” [12].
The reaction: The negative
Those above considered the legislation to contain good ideas that would be difficult to implement. Others consider the ideas themselves to be wrong. The bill’s leading critics tend to fall into one of two camps: (1) those who think the bill is regulating too much (2) those who think it is regulating too little.
Those who think the bill is regulating too much are of the opinion that applying limits to AI development does nothing but quash innovation, slowing our progress and potentially denying the benefits truly powerful AI could bring.
Cecilia Bonefeld-Dahl, director-general for DigitalEurope, which represents the continent’s technology sector, said: “We have a deal, but at what cost? We fully supported a risk-based approach based on the uses of AI, not the technology itself, but the last-minute attempt to regulate foundation models has turned this on its head.
“The new requirements – on top of other sweeping new laws like the Data Act – will take a lot of resources for companies to comply with, resources that will be spent on lawyers instead of hiring AI engineers” [13].
In general, the major tech players are not enamoured with the idea of regulation. This is hardly surprising given that it will serve to limit their potential profits. “It is critical we don’t lose sight of AI’s huge potential to foster European innovation and enable competition, and openness is key here,” said Meta’s head of EU affairs [14].
Last year OpenAI chief executive Sam Altman caused a minor stir when he suggested the company might pull out of Europe if it cannot comply with the AI Act. Though he later backtracked on this statement, which was likely made as a way of applying pressure on regulators [15].
Anand Sanwal, chief executive of the New York-based data company CB Insights, wrote that the EU now had more AI regulations than meaningful AI companies. “So a heartfelt congrats to the EU on their landmark AI legislation and continued efforts to remain a nothing-burger market for technology innovation. Bravo!” [16]
After the preliminary bill passed in December, Innovation Editor at the Financial Times John Thornhill wrote that, “The conjugation of modern technology tends to go: the US innovates, China emulates and Europe regulates. That certainly appears to be the case with artificial intelligence” [17].
French President Emmanuel Macron seems to agree. “We can decide to regulate much faster and much stronger than our major competitors,” the French leader said in December. “But we will regulate things that we will no longer produce or invent. This is never a good idea” [18].
Macron’s scepticism was to be expected. As talks reached the final stretch last year, the French and German governments both tried to water the bill down, pushing back against some of the strictest ideas for regulating generative AI, arguing that the rules will hurt European start-ups such as France’s Mistral AI and Germany’s Aleph Alpha [19].
This move was heavily criticised by those who feel that the bill regulates too little. Civil-society groups such as Corporate Europe Observatory raised concerns that European companies and Big Tech were overly influential in shaping the final text [20].
“This one-sided influence meant that ‘general-purpose AI’ was largely exempted from the rules and only required to comply with a few transparency obligations,” watchdogs including the observatory and LobbyControl wrote in a statement, referring to AI systems capable of performing a wider range of tasks [21].
After it was announced that Mistral had partnered with Microsoft, legislators raised further concerns. Kai Zenner, a parliamentary assistant key in the writing of the Act and now an adviser to the United Nations on AI policy, wrote that the move was strategically smart and “maybe even necessary” for the French start-up, but said “the EU legislator got played again” [22].
Digital-rights group Access Now said the final text of the legislation was full of loopholes and failed to adequately protect people from some of the most dangerous uses of AI [23].
Kilian Vieth-Ditlmann, deputy head of policy at German non-profit organisation Algorithmwatch, which campaigns for responsible AI use, agreed. “We fear that the exemptions for national security in the AI Act provide member states with a carte blanche to bypass crucial AI regulations and create a high risk of abuse,” she said [24].
Next steps: For business
In wake of the act, PwC recommends all businesses that deal with AI take the following steps.
Firstly, to create an AI exposure register that allows companies to assess their exposure to all AI-related risks. Second, to risk-assess each of the use cases you have identified in your AI Exposure register in line with the EU AI Act Risk Assessment Framework so as to mitigate any potential risks and breaches. Third, to establish appropriate AI governance structures to manage the risk of AI responsibly in line with the EU AI Act. Fourth, to implement an upskilling programme and roll out awareness sessions to equip stakeholders for responsible use and oversight [25].
Next steps: For Ireland
Writing in the Irish Independent, Jim Dowling, CEO of the AI firm Hopsworks and associate professor at KTH Royal Institute of Technology in Stockholm, says that the EU AI Act can be an opportunity for Ireland.
He particularly focuses on the “regulatory sandbox” provision included in the bill, which means that national governments will be able to provide infrastructure support for their local AI companies to build out their AI with state support. Dowling argues this “regulatory sandbox” can “create a nurturing space for European and Irish companies to build globally competitive AI platforms before the wave of massively capitalised US-based companies, such as Sam Altman’s OpenAI, dominate the global AI market” [26].
He likens the opportunity to that taken by China in the 2010s, in which they legislated to protect their nascent cloud computing companies – Tencent, Alibaba, and ByteDance. The combination of regulations and large-scale investment “gave their local cloud computing companies time to grow from seeds into global cloud computing giants.”
He thinks the EU AI Act can do the same for Ireland, but that the time to act is now. Ireland “has a budget surplus and not many legacy companies to support. If we invest now in AI, the EU AI act will give our companies the time they need to create network effects within Europe, and then be ready to take on the world.”
The EU AI Act
Artificial intelligence is both a threat and an opportunity, no amount of legislation is going to change that. Overregulation threatens to stall progress and innovation. Under-regulation threatens our civil liberties or perhaps our very existence. The EU AI Act is a landmark moment, but there will be many more landmark moments to come.
More on AI
The Ethical Minefield of Artificial Intelligence
Sources
[2] https://www.wsj.com/tech/ai/ai-act-passes-european-union-law-regulation-e04ec251
[3] https://www.nature.com/articles/d41586-024-00497-8
[4] https://theguardian.com/technology/2024/mar/14/what-will-eu-proposed-regulation-ai-mean-consumers
[5] https://www.lexology.com/library/detail.aspx?g=4ba63092-0cc5-447b-bae9-157afd91c11e
[6] https://www.nature.com/articles/d41586-024-00497-8
[10] https://www.irishtimes.com/business/2024/03/13/eu-parliament-embraces-new-ai-rules/
[12] https://www.nature.com/articles/d41586-024-00497-8
[13] https://www.ft.com/content/d5bec462-d948-4437-aab1-e6505031a303
[14] https://theguardian.com/technology/2024/mar/14/what-will-eu-proposed-regulation-ai-mean-consumers
[16] https://www.ft.com/content/a402cea8-a4a3-43bb-b01c-d84167d857d5
[17] https://www.ft.com/content/a402cea8-a4a3-43bb-b01c-d84167d857d5
[18] https://www.ft.com/content/2b18b3e7-5b92-4577-9c8e-6db2bdd016d8
[19] https://www.irishtimes.com/business/2024/03/13/eu-parliament-embraces-new-ai-rules/
[20] https://www.irishtimes.com/business/2024/03/13/eu-parliament-embraces-new-ai-rules/
[21] https://www.irishtimes.com/business/2024/03/13/eu-parliament-embraces-new-ai-rules/
[22] https://www.irishtimes.com/business/2024/03/13/eu-parliament-embraces-new-ai-rules/
[23] https://www.wsj.com/tech/ai/ai-act-passes-european-union-law-regulation-e04ec251
[24] https://theguardian.com/technology/2024/mar/14/what-will-eu-proposed-regulation-ai-mean-consumers