What this covers
Today on The Knowledge Project Shane is talking with Roger Martin, 2017’s number one management thinker in the world. Roger is the former Dean and Institute Director of the Martin Prosperity Institute at the Rotman School of Management at the University of Toronto. Roger discusses the hardest skill to transfer when decision making, patterns of good leadership, self-sabotage, the role of narratives in taking bold actions and integrative thinking.
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00:00:00 Introduction 00:00:05 Lessons From Your Mother 00:01:42 Fundamentals of the Education System 00:02:28 What’s Wrong with Business Education 00:05:46 Integrative Thinking 00:09:48 4 Steps to Integrative Thinking 00:16:16 Limitations to Integrative Thinking 00:22:25 MBA Model Silos 00:26:41 Blind Spots of Managing People 00:29:16 Overuse of Science and Analysis 00:35:50 Preparing for Multiple Outcomes 00:41:59 The Agency Problem 00:50:56 Skin in the Game 00:53:02 Commonalities Between Successful Leaders 00:58:14 Develop Courage in the Face of Fear 01:07:05 Commonalities in Failings of Leaders 01:09:49 Good vs. Bad Strategy 01:11:51 Advantageous Divergence 01:21:49 The Hardest Skill to Transfer When Decision Making 01:30:02 How do you Want to be Remembered?
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Martin argues that integrative thinking—the ability to hold opposing models in mind and synthesize superior solutions—is the core skill for effective leadership and problem-solving, and that it can and should be taught from grade school onward, contrary to conventional education that fragments knowledge into silos.
- Integrative thinking is teachable to children as young as grade 1-2 and they excel at it because they haven't yet internalized false either-or constraints
- Most business and institutional failures stem from applying narrow models to complex multi-domain problems rather than integrating multiple perspectives
- Leaders succeed by remaining curious about disconfirming data, maintaining deterministic hypotheses while staying open to revision, and loving people as sources of information they cannot see
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When you make a proto-decision about what you would do, you create data out of nothingness: information that would have floated by your head unnoticed becomes salient and collectible because your proto-decision makes it relevant to tracking.
“people talk about data as if data is sort of this sort of very kind of yeah i don't know what intrinsic thing it's not data is only data uh like it floats straight by your head if if you're not looking for it uh and what i interpret you saying in part is you will actually create data out of nothingness right so stuff you would not have paid attention to and wouldn't have collected as data you now collect this data because it's uh because your choice your proto-choice your proto-choice makes that that phenomenon relevant uh data”
Business schools teach students that analysis is the basis of good decision-making, but Aristotle, who invented science, explicitly warned against using the scientific method for the domain of human affairs where things can be other than they are, recommending instead that people imagine possibilities and choose the one with the most compelling argument.
“what we're taught in business school... is that a good business man or woman businessman in your case if you're going to be a good businessman shane you will make decisions based on analysis”
If you analyze smartphone adoption using historical data from 1998 (when they didn't exist), the scientific method would predict they would never be adopted, because there was zero usage, yet this prediction would be completely wrong because it violates Aristotle's principle that the scientific method cannot apply to domains where things can be other than they are.
“in 1998 did you have one of these within one armed lengths of you and you started to get hives if it was more than one arm length away no because it didn't exist the first one existed in 1999 and everything about human life is different now because because of that that thing... if you use the scientific method to understand how people interact with technology right you will demonstrate to yourself that this could never exist because you've crunched all the data how much do people use smartphones not at all right because they don't exist right you'll predict you'll predict that it'll continue to be”
The assumption that all else being equal allows you to prove narrow causal relationships is mathematically sound but practically useless because in the real world all else is never equal, and this assumption-based reasoning creates blindness to integrated systems.
“you've heard those guys all else being equal this that causes that right and and you and you and you know all those other things that you have to assume are are equal are not um but if you do hold them uh all constant then you can develop uh and prove a causal relationship between two things so it's sort of easier to write a paper do a study all of those things if you uh take a narrow narrow lens but that's just not helpful to the world”
The most valuable lesson in decision-making is patience: giving yourself time to roll ideas around as long as needed without premature closure, imagining diverse possibilities, asking what would have to be true for each to work, and assessing how likely those preconditions are.
“the most valuable thing that you've learned about decision making... i guess i think it is patience giving yourself the time to roll ideas around as long as they need to be rolled around and not feel the premature need for closure when i'm making a decision imagining a variety of possibilities and not stopping until i have a good divergent set of them then asking about each one of them what would have to be true for that to be a good idea”
Agency theory, the justification for boards of directors monitoring management, assumes managers are imperfect agents with self-control problems, but then solves this by putting foxes (board members) in charge of the henhouse (management), which is logically incoherent—if there's an agency problem, boards have it too; if there isn't, boards are unnecessary.
“the view of a board of a widely held publicly traded professionally managed company right is that we need to have the board you know mike jensen as you as i'm sure you know wrote about this with agency agency theory that that managers are imperfect agents right they have self-control problems they are not necessarily going to manage on behalf of the shareholders right and and so we have to we have to discipline them right to make sure that that the agency costs are not too high what's our tool well they report to a board of directors who represents who represents shareholders... did anybody ask the question what exactly are those board members would they not be agents just like management”
The core job of humans in deterministic domains (where things cannot be other than they are) is to understand causes so they can optimize; the core job of humans in possibility domains (where things can be other than they are) is to be the cause of the effects they want to see, i.e., to create new possibilities.
“he said the job of human beings in that former world is to understand the causes of the effects that we see so that we can optimize the world to that right we observe all these people who smoke getting lung cancer so we can optimize against that by trying to stop people from from smoking he said in the other part of the world human being's job is to be the cause of the effect they want to see right to change the world in in a better way by imagining possibilities and making those those new things uh come true”
Most fear is self-produced: people create their own fear through stories they tell themselves, and by choosing different stories about a situation, people can manage or eliminate fear rather than being ruled by it.
“we we create uh fear or make fear go away depending on what story we tell ourselves um and uh and my observation is that because people understand this and understand the debilitating aspect of fear”
Paul Pullman at Procter & Gamble introduced compact detergent (which he observed in Japan) to the US market despite analytical data not supporting it, making a $250 million bet that was arguably a 'fireable offense' if it failed, but it succeeded spectacularly and transformed the industry, destroying Unilever's US position.
“one of the things that really sort of propelled his his uh career because it was such a big success was going from i don't know if you remember this going from big fluffy detergent a tide would be in a big box fluffy that turned to compact detergent which he saw happening in in japan and said um we wouldn't want them coming here with that innovation and so so he led he led a a an effort to study whether to introduce it in the us and he introduced it despite the fact that the data didn't support it uh but the verbatims did the qualitative stuff that uh kind of was supportive enough”
Great leaders genuinely love other people and are interested in their foibles and complexity, rather than viewing people as annoying obstacles to tolerate; this enables them to be better leaders because people respond to genuine care.
“and i guess the last last one is just i i just don't know any what i think of as great great leaders who don't love other people right i mean if you think people are annoying and you have to put up with them and put up with their foibles rather than you genuinely love them uh then then i i think it can only be so good uh of uh of a leader”
Business schools and business leaders mistake hiring and promoting people who avoid delusional thinking as a virtue, but entrepreneurial economies depend on massive amounts of productive delusion—90% of startups fail, and this high failure rate only produces successful innovation because deluded entrepreneurs start them thinking they'll be the one success, not the nine failures.
“james march is one of the greatest i think management uh think thinkers yeah and he he wrote about about the importance of delusion and then okay because he said uh um the economy is underpinned by delusion in in that we do know that nine out of ten kind of startups expire with 100 of the the resources kind of wasted if anybody thought those were the odds that they personally were facing they wouldn't do it but they everybody is deluded self-deluded into thinking they're going to be the one not the nine”
The Toronto International Film Festival's introduction of the People's Choice Award exemplified integrative thinking: Pierce Handling loved everything about the inclusive community festival but wanted the international media buzz of exclusive festivals, so he created the People's Choice Award which got the buzz through public voting (maintaining inclusivity) rather than an exclusive jury, making the festival more inclusive while gaining the desired feature of the exclusive model.
“what pierce did is say uh it's come up with this this brilliant notion which is we can make uh the inclusive film festival even more inclusive in a way that gets us the one thing we want from the other model and that was the people's choice award right so the people's choice award said we will create buzz around who's going to win the prize but the prize won't be an exclusive prize of an exclusive jury that'll make the audience feel like well it's them it's all about them it's actually all about us so it made the festival more inclusive and got the one thing he wanted from the the other model”
Berkshire Hathaway's outperformance over decades is partly attributable to Buffett and Munger controlling about 40% of shares, which allowed them to sit on cash without pressure from activists, and to position for multiple possible futures rather than optimizing for one assumed future.
“if i look back and i look at berkshire hathaway's like track record one of the things i ascribe that to is that buffett and monger controlled about 40 of the shares until recently so they could sit on cash and not do anything and not worry about an activist investor or you know and what they were really doing i think personally is their positioning for multiple possible futures because they don't know what to do they have no degree of certainty in what the future looks like tomorrow so we're just going to sit here and position for all of these possible futures”
Great leaders maintain a deterministic model (hypothesis about how things will play out: 'if this, then this, then this, we're screwed') while being open to revising it, which gives them boldness to commit irrevocable assets to decisions without becoming paralyzed by uncertainty.
“the other thing is that they are kind of deterministic right so the great leaders are able to say if if this happens and then this and then this and then this and then this we're screwed or if this happens it will be on we'll be in the kingpins seed like the less good leaders sort of just say well we're just going to sort of bob and weave our way down the field and and see what see what happens they're not they're not deterministic enough um and so so i like i think stronger leaders are willing to have a hypothesis about how they think things are going to play out then be open to seeing seeing changes in that but that gives them the boldness to make decisions”
We are not taught curiosity about whether another person's perspective might offer insight into a reality we're not seeing; instead, we're taught to evaluate whether our idea is better than someone else's idea and then beat them into submission if we're right, creating a win-lose rather than integrative dynamic.
“we're taught to evaluate is my idea better than his or her idea yes no if it is then i should beat them into submission right or if it isn't i should say oh dear they're right and i'm wrong i kind of feel all terrible about being being wrong it's there's there's just not enough curiosity about a better a better way”
Large established companies have an internal system that prevents action unless there is analytical proof, which means they will not launch new ideas that haven't happened yet (since they cannot be analytically proven), leaving them vulnerable to an infinite number of startups, only one of which needs to successfully cross the moat to disrupt the incumbent.
“if if you have an internal system that makes that sets up that we won't do anything unless there's proof right then you won't do any of those things and there will be an infinite number of these uh these startups and it's interesting... the economy is underpinned by the infinite number of enemy that just keeps pouring over the over the you know your moat right and a bunch of them drown in the moat and whatever but it only takes it only takes kind of one to get across uh and that's and that's the problem”
If someone is not curious about disconfirming data and prefers to suppress it rather than absorb and mine it for insight, this is linked to disliking people, and both are linked to having an impoverished model of reality that makes it hard to commit boldly to strategic decisions.
“and i don't really like people uh that's a that's a sure thing right that's a that's a certain uh kind of disaster and you know it's the three things i talked about and if they're just not curious uh if somebody comes to them with disconfirming kind of data they want to suppress it rather than rather than absorb it and mine it for for everything they can they can get interesting enough that tends to you know those two things tend to be linked like it is a big system right which is which is you tend to like people if people are this repository of stuff you can't see and you're constantly learning”
Bond raters at Moody's and S&P before the financial crisis rated toxic assets AAA because the only people who would become bond raters at those firms are people who aren't good at rating bonds—if they were skilled, they'd be trading bonds and making more money at investment banks, so you inevitably attract the wrong people for the job.
“what would cause somebody to willingly sit in a chair called bond raider at moody's or or s p... i think the only logical answer you can come come to is that they are the only reason they would be in that chair is that they're not particularly good at rating bonds right because if they had a skill set that made them good at rating bonds what chair would they be sitting in it'd be trading bonds they'd be either sitting in a chair at goldman or morgan stanley or their own or apollo”
Great leaders' first reaction when someone presents disconfirming information is to ask 'Tell me more' and seek to understand what they see that the leader doesn't see, rather than defending the existing model.
“great leaders are are uh you know have as a core characteristic when somebody says something to them that doesn't agree with where their head is now... a great leader's first reaction is say more you know you know tell me tell me tell me more about why i want to understand why you think that what you see that i don't see”
When someone does something you wouldn't do or that strikes you as odd, asking 'What would the world have to look like for that to be the option I was engaging in?' is a powerful question that helps you understand alternative logics and opens possibility for integration.
“one of the things that strikes me about that i always ask myself when i see somebody doing something that i wouldn't do or strikes me as odd i'm like what would the world have to look like for that to be the option that i was engaging in right so oh that's good that's good that's that's a that's sort of a variant of the question i asked in strategy which is the most powerful question and strategy is what would have to be true not what is true”
The Rotman School's transformation from a $13 million budget to $130 million budget over Roger's tenure was enabled by creating a different economic model that aligned revenue generation with school budget allocation, rather than having the provost allocate fixed budgets annually.
“we created a completely different economic model that enabled the school to go from from you know having a budget of 13 million in the last year before i got there to 130 million in uh the last year i was dean we needed a new economic model because the university of toronto economic models were nuts and so you couldn't plan for the future”
Modern business has created a 'beam of light' mental model: projecting one predicted future with high certainty and optimizing for that future, eliminating margins of safety, when the reality is multiple possible futures exist and margins of safety enable pivoting when the world differs from predictions.
“i almost think of it as this beam of light we predict this beam of light into the future as if that's the only possible future and then we optimize for that particular future so we we um take away margins of safety in the supply chain”
A complex adaptive system has multiple feedback loops and second-order effects; pulling one lever (tightening hiring criteria for security) produces unintended consequences elsewhere (loss of creative problem-solving, higher costs), suggesting that institutional designers need to think through systemic consequences rather than assuming isolated lever-pulls.
“it is a complex adaptive system and and you think you can pull a lever and and just not affect anything else yeah yeah and yeah and somehow somehow everything else is gonna be exactly exactly what you want”
A mother teaching a child to think through problems by asking questions rather than providing answers is superior to traditional instruction because it develops the child's independent reasoning capacity and problem-solving power.
“she would answer almost no question... if you ask her a question she would typically ask a question back... she would say well roger what's the last time you are absolutely sure that you can remember holding it in your hand... that i think a whole lot about it and then she'd say well why don't you go to where you were when you last can remember having held it in your hand”
Canada's transformation from zero tennis players in the top 20 (before 2005) to three in the top 20 (most recently, tied with Russia) was achieved by Tennis Canada applying integrative thinking to combine the best features of the controlled French system and the open US system, rather than choosing between them.
“in the case of the tiff it was what we call a double down so pierce handling who was running at tiff at the time... we looked at the french system which is a more control oriented uh system in the u.s system which is a you know wild west kind of system and said how can we rather than choose between them come up with a better solution”
Organizational procedures and algorithms eliminate thinking by design: people follow procedures for standard cases, but when a situation deviates even slightly from the procedure, they become paralyzed because they've lost the ability to apply judgment and must wait for guidance.
“procedures are basically like an algorithm that you apply given a certain situation certain inputs and what i discovered is that it just eliminated thinking because people would go oh there's no procedure for the slight deviation from what would happen and i can't respond because at first you can but you lose that ability over time to actually apply judgment”
People often know their decisions won't produce desired results but make them anyway because 'defendable' choices (that won't get you fired if they fail) are preferred to 'right' choices (that might fail but serve the organization better)—this is especially true in politics and large organizations.
“often they know what they're doing is probably not going to have the results they want but it that it's it's sort of like doing um what's defendable versus doing what's right and especially in politics you end up doing what's defendable versus what you know is right um because you're you're never gonna fail if you do what's defendable yeah you don't get fired for buying ibm right”
Harvard Business School case studies are deliberately written as an 'art form' to illustrate one narrow tool, not to reflect real complex business situations—this trains students to see real problems as if they were cases designed around a single tool.
“the writing of harvard business school cases has evolved to this art form which is to write a case that illustrates one narrow uh tool uh and and so that's what the business school world uh spits out”
The most common failure mode in leaders is lack of strategic determinism: they refuse to make big choices and keep all options open, seeing what evolves and reacting—without conviction, they cannot take the bold action necessary for success.
“a lot of it has to do with this not being not having a sort of a deterministic enough view so the failure mode i see probably more than anything else is somebody who is what i think of as not strategic right which is that which is that they they sort of believe that they need to always keep all their options open not make big choices uh and sort of see what see what evolves and and then just react”
Strategy is a set of choices that enables winning in a chosen field (geography, market segment) by developing a value proposition superior to competitors in that field; bad strategy is chasing multiple things, not understanding your flywheel, having uneconomical models, or doing the same as everyone else while expecting unique success.
“i think about strategy as a set of choices that that enables you to invest in a given place uh to win whether that's geography or business or whatever so it it's it's that set of set of uh choices and what do i mean by winning i mean in the field of play that you choose you have a better value proposition for the customers in that space than uh than anybody else”
People coming from technical backgrounds (like computer science) often struggle to transition to management because their technical training rewards people for being told what to do and produces correct outputs, but people are biological systems that don't follow algorithms—a fundamental model mismatch.
“i had a computer science degree and then went into sort of the corporate world and then you know you start managing people and all of a sudden most of my computer science degrees are relevant right computers do what they're told to do you know if there's a mistake it's always with you people are biological systems they're much different”
Personal wealth ownership at material scale on corporate boards (more than three times annual board fees) is valuable for alignment, but unfortunately trivial for most board members, so the desired outcome of genuine board member skin-in-the-game rarely happens.
“it's sort of like it's three times sal you know they must own stock that's three times annual board fees and that's for those people unfortunately that's trivial that's trivial your desired desired outcome happens unfortunately and only as a small amount of the time”
Learning to slow down enough to hold multiple frameworks, explore raw materials from different logics, and recombine them is a teachable process that Martin has successfully taught through practice with actual business decisions rather than abstract instruction.
“i have a decent kind of track record of teaching if anybody wants to learn it i can teach people to do that how do you teach them how would you teach me i would just work with you i i think practices is is absolutely the best that's what i've gone to with the companies that i work with i just say uh shane what's what's a choice that you think you're facing and you say oh i really need to decide whether we're going to invest in this thing or that thing i think good okay and then i would just i would just work you through through a process”
The fear that Hollywood's most prominent actors represent is the character who faces fear and doesn't act fearfully—they remain charismatic, unblinking, and witty—because this resonates deeply with people who recognize their own fear and wish they could overcome it.
“that's why i that's why i i argue that the in hollywood the number one box office star of every era of movies played one character and that is somebody who faced fear and didn't act fearfully charismatic unblinking well-dressed james bond sort of ass bond yes or or tony stark right yeah like they they're they're the same or or arnold uh schwarzenegger or or humphrey bogart it's sort of the they all play the same character right which is hahaha you know this is i can wisecrack my way through this and and it's it is it resonates so deeply with people because they say if i if only i could do that in the face of fear i i would be sick successful”
Establishing too-frequent earning guidance and quarterly guidance systems forces CEOs to optimize for short-term results, causing them to pass on NPV-positive investments to make this quarter's numbers, which 40% of CFOs admit to doing, ultimately making companies perform worse than they could.
“there are you know studies that say cfos you know 40 of cfos freely admit uh uh that uh they will they will not make an investment that they know is npv positive uh in order to make this quarters uh guidance right so all all of that stuff is causing companies to to perform less well uh than they than they could”
A CEO can create discretion to make long-term decisions by building up slack and margins of safety, which short-term pressures try to eliminate, and this requires the CEO to consciously resist market pressure in ways that may look inefficient in the short term but enable positioning for multiple possible futures.
“a great a ceo... is that the part of the ceo's job is to create enough of that discretion so that they can do those things right that that they know are going to be in the interests long term like in your case building up some slack you know for the for the bad times uh because if they don't build that up they will be forced into the 100 efficiency now and that'll kill them sometime in the future”
Business schools fundamentally fail because they teach functional silos (finance, marketing, HR, accounting) rather than teaching students how to think across domains about actual business problems, which by definition span multiple domains sloppily.
“business schools do not teach the fundamental problems of business... what they teach are finance what they teach is marketing to teach us hr... there are no marketing problems there are no finance problems there are no accounting problems there are only business problems and these are problems that that span across sloppily span across a bunch of domains and and business education has abdicated it doesn't even try to to teach how you think across domains”
Board governance is mostly theater: it gives people comfort that oversight is happening, but the actual mechanism—boards disciplining management—doesn't work in practice.
“the idea that that a board will discipline discipline uh management is is just an absolute fantasy and that's a core kind of element of the logical structure that guides the workings of the capital markets the equity markets and and the widely held publicly traded uh companies it's just theater it is theater oh my god but it gives us comfort because we're like oh the board's watching out for us”
If you do the same thing as everyone else, you will get the same results as everyone else; to get different results you must deviate, but you must also be correct in your deviation, which creates the challenge of advantageous divergence.
“if you do the same thing as everybody else you're going to get the same results as everybody else so you have to sort of deviate if you want to deviate results but you need to create an advantageous divergence you have to not only diverge from what everybody else is doing but you have to be correct and that's extremely difficult and when you have it you need to like go all in and run with it”
Private companies and family-controlled companies with significant insider ownership will have competitive advantages over broadly-held public companies over the next 30 years because they can build balance sheets, maintain inventory buffers, and position for multiple possible futures without activist pressure.
“these companies will actually given what you're saying if that's correct they'll have more of an advantage over the next 30 years because they'll be able to build up the balance sheet because they have extra inventory and they can take advantage of sort of call it the professionalization of management in terms of model thinking which is eliminating slack eliminating and preparing for this next quarter and being hyper efficient on this next quarter”
Vance Oppermann's long-term board service at Thomson Reuters, with significant family wealth invested in the company, exemplifies skin-in-the-game board governance; he takes his job seriously and thinks long-term because his family's interests are aligned with long-term company health.
“a guy i'd love who is on for all the time i was on was vance operman and the oppermann family owned west their legal publishing company the best the best business in in time... vance you know ae was in it for the long haul uh last time i checked he's still on the board i've been off the board for like six or seven years so he'd been on the board for 20 or 25 years by now and and uh i don't know how much the operand family has in thompson stock but i think it's still quite a you know quite a bit”
America's capital markets were a competitive advantage from 1930-1980, helping companies grow and prosper, but by 2020 have become a detriment to American competitiveness because they force companies to remove managerial slack and optimize for the short term, which hurts long-term innovation and competitiveness.
“i think right that america had a huge advantage over the rest of the world for probably 30 40 50 years somewhere between 1930 and 1980 where it had the best capital markets in the world for helping companies grow and prosper uh i think in 2020 now america has got a capital market that is a detriment to american uh competitiveness because it is causing companies to behave in ways that aren't good for the company its employees america over overall”
Integrative thinking can be taught effectively to children as young as grade 1-2, and these young students excel at it because they lack the years of formal education that trains people to think in either-or categories and constrained choices.
“we now have teachers in this in the school system in ontario uh teaching as young as as grade one and two students uh how to do this and here's the cool thing they're really good at it they're really really good at it”
Intelligence agencies post-Snowden tightened hiring to select people with narrow backgrounds (good schools, good grades, no deviations), reducing security risk but creating a 'stormtrooper problem' where the collective organization becomes unable to creatively solve novel problems because it lacks the misfits and deviants who think differently.
“post bradley manning and pro edward snowden what they really tightened up was sort of the hiring process... to get into the agencies and to get a clearance you sort of like increasingly there's this narrow background you could have right you couldn't have gotten in much trouble you you know you generally went to a great school got good grades uh you didn't sort of stand out in any you know crazy way um... the problem is you get these people into an organization... and then you give them a checklist for promotions... and then all of a sudden they wake up at 30 and they're given a problem that you can't google... and you're not getting sort of the what i used to call the misfits or the deviants”
Widely-held, publicly-traded, professionally-managed corporations will be seen in 2050 as an insane model that created the wrong incentives, and the future will be dominated by more controlled companies (family-owned, private, or with concentrated ownership) that can think long-term.
“we're going to look back 2050 we'll look back on this period 19 40ish 35 40 ish to say 20 20 25 or 30 uh as this insane period where we thought the widely held publicly traded corporation was the optimal form and we're gonna we're gonna look back and say what were we idiots thinking you know that that's crazy it it didn't work uh it created created all the wrong uh the wrong incentives and we're going to be into a world of of uh more controlled uh companies”
The integrative thinking process has four steps: (1) push two opposing models to their extremes, (2) analyze how each works and what mechanisms produce outputs for different stakeholders, (3) identify what features you love about both models and look for integrative moves to combine those features, (4) test the solution experimentally.
“you start with the notion of of uh taking the two models let's say and and we often use the toronto international film festival as an example you say there are two models of running a film festival like toronto the community oriented film festival... then there's khan on the on the uh on the other side rather than saying let's think about something in in between right away you say let's push those to the extreme the completely exclusive film festival the completely inclusive film festival right and then and then you lay out how they work”
Roger took a calculated risk running a $14 million accumulated deficit for 4 years at Rotman School while trying to restructure the university's budget model, with the explicit verbal permission of the provost but without written approval, betting that the provost wouldn't lose faith and throw him under the bus, and framing this as necessary for the long-term mission.
“i said i'd be happy to be pay you a tax and right now our tax is is about you know two or three million dollars a year to the to of 13 million under this plan uh you can get you can have a 40 million dollar tax um but we need a different system... in the meantime can i spend the way i i was planning to spend and they said yes but this was just verbally and so uh i thought they were going to work this through the governance process maybe in six months or nine months it took four years yeah and in those four years i because we had to go into massive deficit 14 million dollar accumulated deficit”
Business schools attract and retain a small percentage of naturally integrative thinkers who would succeed regardless of education, then claim credit for their success while actually teaching them despite the school's curriculum, not because of it.
“business education draws in lots of people who would have succeeded without it they're the ones that small percentage of people who can integrate who just learned learned early on in their life one way or another long before they got to business school how to think integratively uh then they go to business school then they go out and think integratively despite what business school taught them and then the business school said see see like we made that person right”
MBA students with less work experience take fewer than one course in organizational behavior and HR, preferring finance and strategy courses, while Executive MBA students with 14-15 years of experience have an insatiable appetite for OB/HR, revealing that experience teaches what the curriculum obscures.
“our mbas at the rotman school have about four four and a half years of work experience our executive mbas have about 14 or 15 years of work experience so the mbas take on average less than one second year course in the entire ob hrm field right they just don't think that stuff is important uh at all right they load up on finance and strategy courses more so than any any other courses the embas have an insatiable desire for uh for obhr uh courses”
Decide as soon as possible or as late as possible, but never in between; this vocabulary from Randall Stuttman captures that middle-ground decision-making (forced early closure due to discomfort) produces bad decisions, while both extremes (decisive action or patient accumulation) can be good.
“a friend uh randall stuttman who gave me vocabulary around how i use approach decisions on it and never had vocabulary around it but he basically said you decide as soon as possible or as late as possible but never in between”
Grade 4 teachers could identify which grade 3 students had been taught integrative thinking with 100% accuracy based on behavioral and questioning differences, without knowing which teacher taught which students, indicating that integrative thinking training produces measurable, observable changes in how children think and behave.
“the grade four teacher you know came up came up to her you know at that at lunch and said uh you know in the first week uh let me name a bunch of names uh and uh and you tell me uh whether they were in your section of grade three... and our teacher is like well how do you how do how do you know that and uh and the grade four teacher just says they're like they behave completely differently they ask a different set of questions”
Martin told himself a story that the decision was right, it had permission, reversing course was an option if needed, and the worst outcome (returning to the US) wasn't actually catastrophic—this narrative enabled him to maintain course through 4 years of extreme personal risk.
“i told myself uh you know a story which is just roger are you doing the right thing or the wrong thing you know is this good for the school good for canada good for university of toronto or not yes did you actually ask for permission and they gave it to you verbally yes um and could you you know go back to the states go back to your old job and pick the pieces pieces up maybe you could never come back to canada again because you'd be such an embarrassment but but uh how how bad is that and i said yeah it's worth it”
The only legitimate reason to want to be on a board is belief that a well-functioning board is integral to the success of democratic capitalism; most other reasons (prestige, pay, camaraderie) create conflicts of interest that prevent effective governance.
“i think the only the only useful reason for wanting to be on a board is is that you think a well-functioning board is integral to the success of democratic capitalism now how many people think that that's the reason for being on a board not not many like and most of the reasons for wanting to be on a board are bad for the effectiveness of the board right so one reason for being on the board is it's good pay well if you think it's good pay then you will not you will not do anything to sacrifice good pay”
You can know absolutely nothing about a stockbroker except one thing with certainty: they're bad at picking stocks, because if they were good, they'd be running a hedge fund, not being a stockbroker.
“think about stock brokers right what's the only thing you know about about a person there's only one thing you can know absolutely positively without a shadow of a doubt about a a stock booker the only thing that's for sure you don't know if they're male or female young or old and but what you know is that they're crummy at picking stocks because if they were good they wouldn't be a stockbroker it would be a hedge fund”
Integrative thinking has limitations and should not be used when facing choices where one option is clearly superior (like lying on a beach vs. getting kicked in the groin); it is useful when you hate both options and feel pressured to choose between them.
“if if the choice is is between kind of lying on the beach or getting kicked in the groin um you don't need to use integrative thinking i'll take lying on a beach right but it's when it's when you feel like oh i i hate i hate the fact that i have to that i apparently have to choose here so you don't love uh either uh either option either choice and and you and that's the time that's that's when a little light should go off in your head”
David Naylor, when he became president of the University of Toronto, applied the Rotman economic model to the entire university, validating that it was a better system for long-term planning than the original model.
“then david naylor when he became c uh president of the university of toronto he applied the rottman system to the whole university it was a it was a better system for for being able to plan for the for the long uh uh for the long term”
Good board members are distinguished by psychographic factors (what they think about their role in life, their attitudes toward stewardship) rather than resume credentials (CEO status, financial expertise, diversity checkboxes).
“good versus bad board members the the key criteria are kind of psychographic ones... they're attitudinal they're they're what does the person think of his or her role in life right uh it's things like that not are they a sitting ceo or were they a ceo or do they have financial expertise or whatever”