There are several compelling reasons why you should take my friends at Beyond Budgeting Institute seriously!
Below you will find 10 reasons why budgeting and traditional performance management practices cause significant problems and therefore should be replaced.
Did you know that:
Budgeting prevents rapid response. You need to respond rapidly to unpredictable events but the annual budgeting process was never designed for this purpose.
Budgeting is too detailed and expensive. Budgeting is highly bureaucratic and very expensive (often absorbing 15-20 percent of management time).
Budgeting is very quickly out-of-date. Many of the key assumptions change frequently (such as commodity prices, exchange and interest rates and of course customer demand) causing confusion and much rework.
Budgeting is out-of-kilter with the competitive environment. Today’s drivers of success are concerned more with fast response and continuous innovation than managing people and budgets.
Budgeting is divorced from strategy. Budgets are based on functions and departments rather than strategic themes. The chances of the goals and plans of many disparate functions and department being aligned with a coherent corporate strategy are often negligible.
Budgeting stifles initiative and innovation. Budgets tend to support an authoritarian management regime that stifles innovation
Budgeting protects non-value-adding costs. Cost budgets are usually compiled and agreed based on prior year outcomes. There is little time or incentive to understand and challenge the root causes of costs allowing huge amounts of waste to fester and grow.
Budgeting reinforces command and control. Budgets were designed to enable functional leaders to manage the organization from the center thus local decision-making is usually delegated within strict budgetary controls.
Budgeting demotivates people. When starting a new job most people are highly motivated to maximize their performance. But soon they learn not to fight the system but to ‘go with the flow’. This means doing little more than their job description specifies and the minimum to achieve their targets. Budgets are aligned with McGregor’s Theory X. The assumption is that people will only do the minimum required unless there is an additional incentive to do more.
Budgeting encourages unethical behaviour and increases reputational risk. Aggressive targets and incentives drive people to meet the numbers at almost any cost. This can lead to unethical selling and ‘creative’ accounting placing the CEO’s (and the company’s) reputation in jeopardy
In only nine years, Buurtzorg has grown from a great idea to a very successful neighbourhood nursing organisation with almost 10,000 employees in the Netherlands. At the core of this remarkable success is a unique leadership philosophy.
Buurtzorg (‘neighbourhood care’ in Dutch) is a wonderful example of the Beyond Budgeting principles in action.
With this case report, the Beyond Budgeting Round Table (BBRT) shared with its members a great example of the extraordinary levels of competitive advantage and performance an organisation can achieve, solely due to its innovative management model.
Background and the case for change
To describe Buurtzorg, we have to start with its founder Jos de Blok. Originally, Jos studied economics but shortly after, he decided to follow his vocation and educate himself to become a nurse. For 15 years, he worked as a nurse; first at a hospital and later as a district nurse in the community. For reasons that I come back to shortly, he quit this job and went on to work in the health administration in various leadership roles. This lasted for about 10 years, when in 2006 he decided to establish Buurtzorg.
To start with, Jos found his work as a district nurse in a local community to be very inspiring. The job obviously involved a lot of contact and interaction with patients, it included a large variety of activities, and work was coordinated in a team of local nurses. This, however, ended in 1993 when Dutch politicians decided to ‘professionalise’ community care. Jos refers to this as a disaster. The local teams became integrated parts of much larger organisations, managed by managers. Instead of focusing on delivering solutions for people, nurses were now delivering products. In order to become more efficient, the many different activities were detailed, coded and time measured. Nurses had to specify their time spent with patients in a wide range of product categories; this created confusion and took away time and focus from patients. Many nurses found these new working conditions degrading.
With the specification also came specialisation, which was an even bigger disaster for patients than it was for nurses. Some patients experienced having up to 40 different health care workers in their house every month; all of whom asked the patients the same questions about their situation… i.e. not a very human way to treat people who are already weak and insecure. This also meant that the personal relationships between patients and nurses were lost, to the extent that nobody felt responsibility for the care of the individual patients.
Buurtzorg at a glance
Nine years after its foundation, this is Buurtzorg:
• Highest client (patient) satisfaction
• 40% lower costs then peers
• ‘Best employer’ prize 5 years in a row
• 9,700 nurses taking care of 75,000 patients in Holland
• 850 self-managed teams, freed from admin and intervention
• Minimal bureaucracy
Like in many other countries, the Dutch system was inspired by the apparent efficiency gains in companies and industries of mass production. This is sometimes referred to as ‘new public management’. More and more managers took over the profession, and consequently (albeit with the best of intentions), hierarchy and bureaucracy increased significantly. Focus decreased on the employees who actually did the work, not to mention the patients. This is a classic example of the separation of decision making from work, which leads to poorer performance.
Much to the surprise of legislators, the ‘new public management’ had exactly the opposite effect of what they expected: In 10 years, costs doubled and quality decreased dramatically. However, instead of challenging the obviously flawed assumptions about the new way of managing, more of the same was practiced: Nurses were, for example, provided with even more specific plans that had to be adhered to, and deviations had to be explained to managers. Consequently, this created even more dissatisfaction with the system and further reduced the time available to patient care. Not surprisingly, costs continued to rise and quality to go down.
Buurtzorg: the foundation and rapid expansion
In 2006, Jos and a few friends decided to do something about the deteriorating situation. Based on their experience from the 1980’s, they knew that this could be done in a much better way. Therefore,they established a not-for-profit nursing organisation based on principles of trust and self-organisation.
In early 2007, it started as a bit of an experiment with only four nurses, but it soon picked up and more teams were established. After a few months of operation, the same thing happened again and again: Small teams of nurses developed networks with hospitals, doctors and pharmacies etc. in the local community. They worked and organised themselves according to the new principles and within months they had so many patients, that they had covered their initial costs and were profitable. Many nurses wanted to work for Buurtzorg, and by the end of the first year, they had nurses working in 10 different locations.
The teams were more profitable than intended and this provided a sound basis for the expansion, which went very fast. From 2008, they established 10-20 new teams of nurses every month. And by November 2015, when we conducted our interviews at Buurtzorg, the number of nurses working for them in the Netherlands stood at a staggering 9,700.
Jos explains: “We didn’t have problems to manage the growth since the teams were managing themselves. Another contributing factor was that we have always avoided any kind of bureaucracy.”
Buurtzorg is a remarkable success story that has gathered a lot of attention from both inside and also outside the Netherlands. It needs to be told and widely copied in the opinion of this curator.
Below are highlights of their achievements:
• Buurtzorg has highest client (or rather: patient) satisfaction in the country.
• Despite the fact that Buurtzorg has higher educated nurses than peers, their costs are far lower: Compared with peer organisations, they spend some 40% fewer hours of care per patient because their patients need care only about half as long; they heal faster and become more autonomous.
• Buurtzorg patients use far less medicine, which is a great benefit to both patients and the Dutch government.
• Buurtzorg has ranked at the very top of the ‘Best Employer’ list for the last 5 years in a row.
• Buurtzorg has also shown to be very profitable. This was not the intention, but it has made it easier to fund growth, experiment and develop the organisation.
Buurtzorg’s management model
In the following, we review some of the key elements that make up Buurtzorg’s unique management model. Readers familiar with the Beyond Budgeting principles will find a great resemblance between these and the elements below. As you will see: Buurtzorg is a great example of the Beyond Budgeting principles in action.
A key element of their successful model is a clear purpose that ties the whole organization together. In this case, the purpose is in line with nurses’ natural vocation: Helping patients lead better lives. The task of the teams of nurses is thus to take the best possible care of their patients, which translates into helping them recover their ability to take care of themselves as much as possible. It is up to each team to figure out how this is best done for each individual patient.
Every Buurtzorg employee knows what good performance looks like and what is expected of him/her. Experience shows that clear and noble purposes are far more powerful than strategy plans and financial targets to inspire people and drive performance. One of the reasons is that purpose comes without the negative side effects of plans and targets.
Buurtzorg believes in the power of sharing information; also because this makes it a learning organisation. For this purpose, and to support the local teams of nurses in their daily job of taking care of patients, they have developed their own unique IT-system. This has many purposes and features:
• It provides teams with confidential patient information, and nurses are responsible for continuously updating this.
• It is a platform for sharing ideas, news and other information; as well as for seeking advice.
• Planning and scheduling work. This also provides a basis for statistics about capacity utilisation etc.
• The system provides teams with their actual performance metrics. Performance data are shared for the purpose of self-regulation and learning
In building the system, Buurtzorg deliberately split the administrative process from the professional processes, so that all the administrative and bureaucratic work is done without interfering with the day-to-day job of the nurses.
In order to give maximum attention to their patients, Buurtzorg avoids activities that do not support the purpose of taking care of patients. This means deliberately avoiding the introduction of a lot of the elements associated with traditional management: strategy, budgeting, targets, forecasting, business reviews, management meetings, variation analysis, rules and regulations, etc..
Small organisations that want to grow usually copy such management tools from the more established ones. Sometimes such tools are introduced with the help of consulting companies and / or inspired by business schools. The result is usually the same: as the small company grows, it loses the agility, spirit and benefits of being small – and very often it becomes rigid, bureaucratic and in some cases even a sad place to work.
Not least due to the founder’s own experience from before the government introduced its disastrous way of working, Buurtzorg has resisted all attempts and pressures to go in this direction.
Trust and autonomy
These are also central elements in Buurtzorg. The teams of nurses are completely self-managed. They are not just empowered by Jos or the hierarchy; they have power because there is no hierarchy with any decision-making power over them. When shown such trust, nurses take on the responsibility of taking the best possible care of their patients. The concept of self-management is a great way to avoid one of the main problems of traditional management; namely the separation of decision making and work. This also contributes to making it a very attractive work place:
Five years in a row, Buurtzorg has been at the top of the ‘Best Employer’ list in the Netherlands.
Customer / patient focus
The above-mentioned purpose has naturally created a very strong customer / patient focus. At Buurtzorg, nurses generally spend a lot of time together with new patients to get to know their situation, needs, background, etc. Based on this, the nurses have complete freedom to come up with individual solutions for patients.
A very interesting (but also obvious) finding is that this way of working leads to far less hours needed in patient care. Why? Because patients become better much faster. Over time, Buurtzorg spends approx. 40% less time together with patients than their peers; this is a massive efficiency increase and it even comes with much happier patients!
With small and dedicated teams of nurses working with and around a clearly defined group of patients, it is no wonder their patient satisfaction is very high; it is by far the highest in the country.
“In Buurtzorg, we don’t use organisational charts,” says Jos de Blok. They have a simple structure that makes such charts redundant. The organisation has three parts: Teams of nurses, coaches and the head office.
The core consists of self-managed teams of educated nurses that work out of a small office in their local community. Each team has some 10-12 nurses, which means that there are now a little more than 850 teams across the country. Even though the teams are self-managed, there are times when they need support, so they have some 20 coaches (approx. 45 teams per coach) that help teams in several ways; primarily coaching about how to make teamwork work. The coaches are not managers; they have no say on the actual work of the teams and are not responsible for the teams’ results.
The modest head office with 40 people is located at the outskirts of Almelo, a small town in the eastern part of the Netherlands. The role of the head office is to act as a service centre for the teams and the coaches; i.e. help them do their work better. In addition, the head office takes care of those activities that they have found made sense to centralise and standardise. The latter includes support and admin within accounting, IT, sales contracting (customers are insurance companies and municipalities), salary administration and housing (agreements re. each team’s local office). These limited staff functions are also organised in teams with a minimal level of managerial hierarchy.
The head office can provide guidelines but they have no decision-making power; they are truly a service centre. As mentioned above, there is a small team that takes care of salary administration (contracts and salary payments); but there is no HR department. Those other tasks that usually belong in a HR function (like recruitment, training, development, feedback and communication) are either performed by teams locally, by Jos or not at all.
Except for Jos de Blok (founder and CEO), no one in the organisation has a management title. Further, there is no management team, and there are no fixed meetings. This frees up time to focus on how to become even better at helping patients and solving problems. Meetings are only held when there is a specific need; not because they have been scheduled.
Buurtzorg and the Beyond Budgeting principles
If you compare Buurtzorg’s management model with our 12 principles, you will find a striking resemblance. We cannot claim that Buurtzorg was inspired by us. But what is very encouraging and much more important, is that an increasing number of organisations, independently of each other, are finding new and better ways of managing their businesses; ref. also Frederic Laloux’s great book: Reinventing Organizations, 2014.
Why is this? Because command & control is failing; and because there are better ways to design and manage work.
Buurtzorg is a great example of a company that has managed to find such a way.
This organisational model ensures optimal coordination, and with no bureaucracy on top of it, it becomes both very effective and efficient.
In general, management processes are kept to a bare minimum. Only the ones that support the core decentralised service delivery and those required by law (compliance) are done. Everything else is regarded as potential waste that should be avoided. This means that Buurtzorg’s process are carried out dynamically based on the underlying (continuous) rhythm of patient activities; adjusted for events as they happen. Buurtzorg does not have the calendar year as the default basis for its management processes, as is found in most organisations.
Guidelines instead of targets
At Buurtzorg, they know that short-term financial targets come with significant negative side effects. Accordingly, they do not use such measures.In order to assist teams when making certain decisions and when assessing their performance (which is what targets are often used for), they have developed a number of guidelines. One such measure is the percent of nurses’ available time that is spent with patients. Based on analysis, they know that good financial performance is achieved when this figure is at a level of 60%.
Accordingly, teams are measured on this parameter and their performance is visible to all. When a team is significantly above or below this level, such information is addressed by the local teams of nurses and is part of their ongoing (self-regulating) considerations and prioritisations.
Another example of a financial guideline is the amount available for new teams to establish their offices, for training, etc.. Teams can deviate from the guidelines; these are only there to help – not to be followed rigorously. By treating teams with such trust, teams respond by acting responsibly… so what we find is improved performance because of trust and the absence of detailed targets and management intervention.
Achieving more with less… brilliant!
A team of eight people at the head office handles all financial administration for Buurtzorg. Two of these employees are responsible for preparing sales invoices and two others are responsible for checking purchase invoices. The rest of the team (four persons) handles bookkeeping, accounting, controlling and reporting. On a monthly basis, the team prepares a simple set of financial statements including profit & loss and a balance sheet. The P&L is broken down per team of nurses and they receive their results in the before-mentioned common it-system. Teams are measured on what they can influence. For example: As the teams are not responsible for sales or negotiating terms with customers (the commercial agreements are handled by a small team at the head office), Buurtzorg’s total income is averaged out and divided between the teams based on number of hours together with patients. This way, the teams’ focus remains on patient care and efficiency, which they can influence locally. To nurture teamwork and the sense of belonging, everything is done to help teams perform better as teams. So, even though data is available about the efficiency of individuals, this information is not used. The purpose of the internal financial reporting is learning for continuous improvement. Therefore, the information is provided and transparent to ensure teams know how they are doing; also compared with others. Deviations are regarded as learning points, and are not subject to (traditional) managerial scrutiny, control or variation analysis. Buurtzorg does not ask its teams of nurses and coaches to spend any time preparing financial forecasts, budgets or the like. They simply do not see the need. At head office level, they now and again make limited high-level financial forecasts in order to balance cash flows, which during the rapid expansion has sometimes been under pressure. This view on financial management is sometimes referred to as “sense and respond” as opposed to (traditional) “predict and control”
It will probably not come as a surprise, that Buurtzorg does not make use of any incentives in the form of bonuses or the like. Every employee has a fixed monthly salary. For the nurses, the salary level is slightly above that of nurses employed in the public sector.
Humanity above bureaucracy
Buurtzorg’s management model has been very successful on all of the above mentioned parameters.
In addition, it is also extremely beneficial for society, which is why the Dutch political parties now support the spread of this way of working throughout the country. Ernst & Young has estimated that the Netherlands could save € 2 billion annually if all care organisations were as effective as Buurtzorg… not to mention the benefits in terms of increased quality of life for both patients and nurses.
Talking about the achievements Jos de Blok says: “Just by doing nothing, we achieved all of the above. We don’t have an HR department, and we do far less of the traditional management stuff like controlling and commanding people what to do, and this is how we get far better results.”
Buurtzorg is a fantastic story about how a simple coherent management model that serves a very noble cause can also be extremely effective.
Ref, W.E. Deming: Out of the crisis, 1982 and John Seddon: Freedom from command & control, 2003
Patient focus – avoid bureaucracy
The focus is on the patient – and to take the best possible
care of the patient. Everything that does not help the patient (i.e. waste) is avoided.
When your top team fails to function, it will likely paralyze the whole company.
Few teams function as well as they could. But the stakes get higher with senior-executive teams: dysfunctional ones can slow down, derail, or even paralyze a whole company. McKinsey in their work with top teams at more than 100 leading multinational companies, including surveys with 600 senior executives at 30 of them, they identified three crucial priorities for constructing and managing effective top teams. Getting these priorities right can help drive better business outcomes in areas ranging from customer satisfaction to worker productivity and many more as well.
Get the right people on the team . . . and the wrong ones off
Determining the membership of a top team is the CEO’s responsibility—and frequently the most powerful lever to shape a team’s performance. Many CEOs regret not employing this lever early enough or thoroughly enough. Still others neglect it entirely, assuming instead that factors such as titles, pay grades, or an executive’s position on the org chart are enough to warrant default membership. Little surprise, then, that more than one-third of the executives they surveyed said their top teams did not have the right people and capabilities.
The key to getting a top team’s composition right is deciding what contributions the team as a whole, and its members as individuals, must make to achieve an organization’s performance aspirations and then making the necessary changes in the team. This sounds straight-forward, but it typically requires conscious attention and courage from the CEO; otherwise, the top team can under-deliver for an extended period of time.
Make sure the top team does just the work only it can do
Many top teams struggle to find purpose and focus. Only 38 percent of the executives McKinsey surveyed said their teams focused on work that truly benefited from a top-team perspective. Only 35 percent said their top teams allocated the right amounts of time among the various topics they considered important, such as strategy and people.
Address team dynamics and processes
A final area demanding unrelenting attention from CEOs is effective team dynamics, whose absence is a frequent problem: among the top teams McKinsey studied, members reported that only about 30 percent of their time was spent in “productive collaboration”—a figure that dropped even more when teams dealt with high-stakes topics where members had differing, entrenched interests.
Correcting dysfunctional dynamics requires focused attention and interventions, preferably as soon as an ineffective pattern shows up.
Finally, most teams need to change their support systems or processes to catalyse and embed change.
Each top team is unique, and every CEO will need to address a unique combination of challenges.
Developing a highly effective top team typically requires good diagnostics, followed by a series of workshops and field work to address the dynamics of the team while it attends to hard business issues. The best top teams will begin to take collective responsibility and to develop the ability to maintain and improve their own effectiveness, creating a lasting performance edge.
There is a lot of expertise in any organization. It often remains within the individual and rarely gets to benefit others in the peer group.
When newer Managers encounter difficulty, they usually don’t know whom to approach.
They are hesitant for various reasons but mainly out of fear of appearing dumb.
There is a need for an informal setup in the organization that promotes collaboration by encouraging the (expert) Managers to coach the (novice) Managers. An internal network if you will.
Problems are a constant for any Manager – how does she solve them? She most often seeks the help of a peer or a senior Manager within the organization. What happens if the senior Manager has a problem?
She asks another one and so on via their internal network (of trust). All it takes to start such a network is for one Manager to help another. Reciprocating help then becomes the normal. In this way all the Managers in the organization will coalesce in a way that no formal roles or hierarchies will. The camaraderie between Managers will be infectious, thanks to this small gesture. It just takes one person to start the process – could that be you?
• Increased goodwill between Managers within the organization
• Best Practices sharing by an informal network
• Problems get solved as quickly as they arise
Bureaucracy is the biggest obstacle. As long as there is no sign of this being an official initiative, the network will become self-sustaining. It may take a while for it to evolve – but once established, it will be very effective in binding the whole management team to a common purpose.
As C-suite leaders you should prompt, even start, such an initiative. Just watch it grow – it will be truly empowering both wide and deep within your organization.
It turns out that intuition is not really intuition at all.
Just like the invisible, inseparable quarks that underlie the protons and neutrons in the nucleus, rules of thumb (ROTs) are the fundamental, sometimes invisible, particles of CEO decision-making. They are the building blocks that underlie what CEOs describe as “intuition” or “gut feel.”
Ask an experienced CEO how she/he made a major decision and their typical response is “intuition” or “gut feel.” Yes, analysis also plays a role, but intuition was found to be a major or determining factor in 85% of thirty-six major CEO decisions that we studied.
Some were good decisions, some were not, but regardless, intuition seemed to always rule the roost.
But what is it?
After persistent and deft questioning, CEO’s will identify, sometimes to their surprise, judgmental heuristics — ROTs — that go a long way towards explaining their major decisions. It is these building blocks that we must examine in order to discriminate between “good” and “bad” intuition.
After CEOs identify a few ROTs, a torrent of supplementary ones often follows. Some CEOs argued, however, that they use values for guidance, not ROTs. But values alone don’t provide clear guidelines. Only when they are operationalized into ROTs do they serve as decision-making tools.
At Odebrecht S.A., a large ($22B) Brazilian conglomerate, the CEO and founder’s grandson, Marcelo Odebrecht and the rest of the company’s leadership are dedicated to upholding the company’s core values: trust and partnership. But when it came down to actual decision-making it became clear, after considerable probing, that the company operated with four basic ROTs derived from these overarching values and passed down from generation to generation of Odebrechts:
1. Decentralize operations
2. Decentralize strategy
3. Promote only from within
4. Partner with your customer
These ROTs guided CEO Marcelo Odebrecht when, despite serious misgivings, he decided to support his Brazil Director’s call to take over the construction of the Pan American Games facilities in Rio de Janeiro from another contractor. Marcelo did not interfere in his Director’s decision because of his commitment to his ROTs (#1 and #2) and because the director was a long-term employee who had “drank the Odebrecht Kool Aid” (ROT #3).
Business leaders ignore their intuition at their own peril. When Gustavo Cisneros, the CEO of the Cisneros Group, was considering a 50/50 partnership with AOL to establish AOL Latin America, his board, his family and his management team were united in endorsing the deal.
On the other hand, Cisneros had a gnawing feeling that Latin Americans were different from U.S. customers, and they would not pay a subscription fee to use the internet. But because everyone, including AOL’s intense and charismatic leaders — Steve Case and Bob Pitman — saw it as a great deal, Gustavo sublimated his intuition. Five years later, after a bankruptcy filing and nearly a billion dollars in accumulated losses, Gustavo regrets not having paid more attention to his “intuition.” Now Gustavo has a new ROT: “Never make a deal if it doesn’t feel right with your intuition.”
Bill Amelio, former President and CEO of Lenovo, learned the same lesson, even though he’d deliberately produced his own set of personalized rules of thumb, after taking on the challenge of merging Legend Computer and the IBM PC division into what we now know as Lenovo.
Here’s Bill’s list (amended following the merger, as described below):
1. Identify and concentrate on the critical few decisions.
2. A call is better than no call.
3. Give your decisions a short leash. Quickly pull back in case of mistake.
4. Trust your intuition.
1. Communicate the critical few decisions effectively and repeatedly.
2. Don’t tolerate jerks.
3. Build a team of people you can trust and rely on.
4. Trust your intuition.
1. Get feedback early and often and act on this feedback.
2. Earn the trust and confidence of others.
3. Demonstrate vulnerability to gain credibility.
4. Play to your strengths.
5. Trust your intuition.
To build a new management team he could rely on (ROT — People #3), Amelio demoted a man who had contributed much to the development of Legend, someone the Chinese refer to as a “made man.” Bill went through the right process and got his Chinese Chairman to sign off. But he ignored his intuition and the body language of the Chairman when he responded cryptically that as CEO he had “full authority to decide.”
The result was a major debacle in which Bill was faulted for ignoring the values of Chinese culture and caused a significant loss of trust. Amelio consequently added “Trust your intuition” (ROT — Self #5) to his rules.
Discovering, and continuously updating, rules of thumb is an important task for every CEO. It is a fundamental element of self awareness. Yes, values and beliefs are important, but it is really ROTs that operationalize and bring down to earth what really guides CEO decision-making. These rules can then be identified, challenged and adapted as circumstances change.
I recall the very first conversation I had with Patrick Mataix when I asked him how he entered the world of executive search. I quickly realized I had encountered ‘a meeting of minds’ moment based on an ethical dimension seldom encountered in my traditional world. Here was someone with whom I passionately wished to work.
It was soon established that CEO Worldwide was born out of Patrick’s frustration with the headhunters and consultants he encountered as co-founder and COO of Vistaprint (NASDAQ: CMPR).
Exasperation at their inadequate answers and relaxed approach to deadlines – as much as their lacklustre candidates.
He went on to say that it seemed the recruiters were almost mocking all the time and energy he was investing in developing the business internationally: raising funds, opening subsidiaries, acquiring and restructuring businesses.
He was permanently looking urgently for managers in France, UK, Germany, the US…
All of his problems boiled down to quickly finding the right person, in the right culture, with the right profile, at a reasonable cost; to either help him do things faster and more efficiently, or run a portion of other fast growing business.
While meeting C-level executives, he could clearly see that he was not the only one wasting time and money in endless, costly and infuriating processes, that were highly inadequate for the pace of their international development.
IT WAS TIME FOR A CHANGE
He founded CEO Worldwide in 2001, because as an entrepreneur, he recognized that cross-border executive recruiters could not keep putting themselves before clients and commanding ridiculous fees for the privilege. It was not sustainable then and certainly isn’t now as ‘digital’ enables productivity gains – particularly in terms of financial savings and time-line – to directly flow to the client effectively handing back control. The client is front and center of the CEO Worldwide service culture.
Since then CEO Worldwide have placed 1000s of candidates who have truly revitalized businesses in multiple sectors across the world.
Our purpose continues to be to offer the C-suite a way of hiring ‘…the best certified executive talent on the planet.‘ at speed, without any up-front financial commitment and for a flat fee unrelated to the agreed remuneration and specific for each region. We shall do this by constantly adding pre-selected top performers meeting or exceeding our clients’ requirements. For those that are INVITED to the CEO Worldwide community we seek – free of charge – to accord them unrivaled opportunity to showcase their skills both by written word and via a dedicated YouTube platform.
As we look at things that impress us technologically we also have a certain trepidation, because we’re told that robots are going to take our jobs. “Yes, the internet is wonderful,” we may say, “but robots, I don’t want those.”
I don’t mean to make light of this because robots are going to take a lot of jobs. They’re going to take a lot of blue collar jobs, and they’re going to take a lot of white collar jobs you don’t think they can take. Already there are robots that can dispense pills at pharmacies. That’s being done in California. They have not made one mistake. You can’t say that about human pharmacists, who are now free to be up front talking to you while the robot fills the prescription.
Much of this is discussed by author Kevin Kelly in his new book The Inevitable, with the subtitle Understanding the 12 Technological Forces that Will Shape Our Future. It’s incredible what robots can do and what they will be able to do.
Automation Really Is Taking Our Jobs
To me, just the fact that one of Google’s newest computers can caption a photo perfectly — it can figure out what’s happening in the photo and give a perfect caption — is amazing. Just when you think “a machine can’t do my job,” maybe it can.
What kind of world is this we’re moving into? I understand the fear about that. But, at the same time, let’s think, first of all, about what happened in the past.
In the past, most people worked on farms, and automation took away 99 percent of those jobs. Literally 99 percent. They’re gone. People wound up with brand new jobs they could never have anticipated. And in pursuing those jobs we might even argue that we became more human. Because we diversified. Because we found a niche for ourselves that was unique to us. Automation is going to make it possible for human beings to do work that is more fulfilling.
How is that? Well, first let’s think about the kinds of jobs that automation and robots do that we couldn’t do even if we tried. Making computer chips, there’s no one in this room who could do that. We don’t have the precision and the control to do that. We can’t inspect every square millimeter of a CAT scan to look for cancer cells. These are all points Kevin Kelly is trying to make to us. We can’t inflate molten glass into the shape of a bottle.
So, there are many tasks that are done by robots, through automation that are tasks we physically could not do at all, and would not get done otherwise.
Automation Creates Luxuries We Didn’t Know Were Possible
But also automation creates jobs we didn’t even know we wanted done. Kelly gives this example:
Before we invented automobiles, air-conditioning, flat-screen video displays, and animated cartoons, no one living in ancient Rome wished they could watch pictures move while riding to Athens in climate-controlled comfort. … When robots and automation do our most basic work, making it relatively easy for us to be fed, clothed, and sheltered, then we are free to ask, “What are humans for?”
Industrialization did more than just extend the average human lifespan. It led a greater percentage of the population to decide that humans were meant to be ballerinas, full-time musicians, mathematicians, athletes, fashion designers, yoga masters, fan-fiction authors, and folks with one-of-a kind titles on their business cards.
The same is true of automation today. We will look back and be ashamed that human beings ever had to do some of the jobs they do today.
Turning Instead to Art, Science, and More
Now here’s something controversial. Kelly observes that there’s a sense in which we want jobs in which productivity is not the most important thing. When we think about productivity and efficiency, robots have that all over us. When it comes to “who can do this thing faster,” they can do it faster. So let them do jobs like that. It’s just a matter of — so to speak — robotically doing the same thing over and over again as fast as possible. We can’t compete there. Why bother?
Where can we compete? Well, we can compete in all the areas that are gloriously inefficient. Science is gloriously inefficient because of all the failures that are involved along the way. The same is true with innovation. The same is true of any kind of art. It is grotesquely inefficient from the point of view of the running of a pin factory. Being creative is inefficient because you go down a lot of dead ends. Healthcare and nursing: these things revolve around relationships and human experiences. They are not about efficiency.
So, let efficiency go to the robots. We’ll take the things that aren’t so focused on efficiency and productivity, where we excel, and we’ll focus on relationships, creativity, human contact, things that make us human. We focus on those things.
Automation Really Does Make Us Richer
Now, with extraordinary efficiency comes fantastic abundance. And with fantastic abundance comes greater purchasing power, because of the pushing down of prices through competition. So even if we earn less in nominal terms, our paychecks will stretch much further. That’s how people became wealthy during and after the Industrial Revolution. It was that we could suddenly produce so many more goods that competitive pressures put downward pressure on prices. That will continue to be the case. So, even if I have a job that pays me relatively little — in terms of how many of the incredibly abundant goods I’ll be able to acquire — it will be a salary the likes of which I can hardly imagine.
Now, I can anticipate an objection. This is an objection I’ll hear from leftists and also from some traditionalist conservatives. They’ll sniff that consumption and greater material abundance don’t improve us spiritually; they are actually impoverishing for us.
Well, for one thing, there’s actually much more materialism under socialism. When you’re barely scraping enough together to survive, you are obsessed with material things. But, second, let’s consider what we have been allowed to do by these forces. First, by industrialization alone. I’ve shared this before, but on my show I had Deirdre McCloskey once and she pointed out that in Burgundy, as recently as the 1840s, the men who worked the vineyards — after the crop was in, in the fall — they would go to bed and they would sleep huddled together, and they basically hibernated like that for months because they couldn’t afford the heat otherwise, or the food they would need to eat if they were expending energy by walking around. Now that is unhuman. And they don’t have to live that way anymore because they have these “terrible material things that are impoverishing them spiritually.”
The world average in terms of daily income has gone from $3 a day a couple hundred years ago to $33 a day. And, in the advanced countries, to $100 a day.
Yes, true, people can fritter that away on frivolous things, but there will always be frivolous people.
Meanwhile, we have the leisure to do things like participate in an American Kennel Club show, or go to an antiques show, or a square-dancing convention, or be a bird watcher, or host a book club in your home. These are things that would have been unthinkable to anyone just a few hundred years ago.
The material liberation has liberated our spirits and has allowed us to live more fulfilling lives than before. So, I don’t want to hear the “money can’t give you happiness” thing. If this doesn’t make you happy — that people are free to do these things and pursue things they love — then there ain’t no satisfying you.