CSPS Virtual Café Series: Confronting Our Urgent Global Crises - A Conversation with Blair Sheppard and Jessica Shannon (Video)
Description: This conversation with Blair Sheppard and Jessica Shannon from PricewaterhouseCoopers (PwC) is about the broad challenges confronting us today and some of the potential strategies to address them.
CSPS Virtual Café Series: Confronting Our Urgent Global Crises - A Conversation with Blair Sheppard and Jessica Shannon
Date: July 5, 2022
[The CSPS logo appears on screen.]
[Taki Sarantakis appears in a video chat panel.]
Taki Sarantakis, President, Canada School of Public Service: Welcome to the CSPS Virtual Cafe, where we bring interesting people with interesting topics and interesting dialogue in front of Canada's Public Service for the purpose of helping us think about things that we don't necessarily get a chance to think about during our day jobs, but also more importantly, helping us think about things that will help the public service tomorrow, because we know that we live in a world driven by change. If we constantly just kind of do the same things today, even if we do those things very, very well, we could find ourselves in a difficult situation tomorrow.
Today, we are going to have a really interesting conversation and it's going to be focused through the prism of four crises, and I'm not going to give you the four crises right off the bat. We're going to give each of them, we're going to go through each of them in turn. I think some of them might surprise you because on first blush, they're surprising if you put the word crisis in front of some of these concepts.
We are joined by Blair Sheppard, who is the Global Leader of Strategy and Leadership at PwC, and also Jessica Shannon, who is the Global Leader of Government and Public Services also at PwC.
[Panelists Blair and Jessica join the video chat.]
We are going to filter our discussion through a book that Blair has written called 10 Years to Midnight. Now, Blair 10 minutes to- 10 Years to Midnight, I was going to say that sometimes kind of living in 2021, it kind of feels like we're a lot closer than 10 years to midnight, but you kind of see the world going forward through, as I mentioned at the top, four crises. The first crisis is kind of interesting. You said, we're going through a crisis of prosperity. Now, when I was young, prosperity wasn't a crisis. Prosperity was something that we all aspired to as a society and as individuals. Talk to us a little bit about a crisis of prosperity.
Blair Sheppard, Global Leader for Strategy and Leadership at PwC: To tell you, I mean, that's exactly the point, which is actually the world works when people anticipate a better future and are trying to create it. When a large percentage of people think the future's going to be worse, then it starts to unwind. They fight over resources, they stop innovating, they stop creating, and we stop having a better future. The issue in part is just the simplest way to think about it is across the entire lifespan. If you look at people about to retire, let me give you the American data. In the private sector, 92% of Americans are self-funded or have a defined contribution plan, which means they better have saved a lot of money by the time they're 55, because they're going to live on it.
If you look at the people who are in that circumstance, 42% of them have less than $10,000 at aside between 55 and 64, but that means they're about to retire or they're close to retirement age and they have virtually nothing to live on. 60% have less than $50,000. If you go all the way to the other end, so the people coming out of school looking for a job, many of them have debt. They're sitting in a circumstance where the government has created a massive tax burden for them because they kind of had to. It's really hard to accumulate wealth because housing costs are prohibitively expensive. The thing we used to do when we thought about building wealth, we'd say we buy a home. Hard to do, they don't trust the capital markets.
The jobs they get are much less attractive than the ones we used to have. And so, they look at it and say, it just isn't worth it. I mean, why have... And then the ones in the middle who are doing okay, they probably have work, it's probably the kids from school, the challenge is because one of the other crises, they're likely to have a job transition in the next 10 years at a time which they have a lot of debt, and that transition is going to be really very dramatic. And so, if you go across the world and I can take a younger country and do the same story, take Nigeria, exactly the same story. Different circumstances, but across the lifespan, it's not that appealing. When that occurs for the majority of people in the world, we're in trouble. That's why we think it's crisis.
Taki Sarantakis: Jessica, why don't you give us kind of your initial take on the crisis of prosperity and then we'll jump into a dialogue.
Jessica Shannon, Global Government and Public Services Practice Leader at PwC: Sure. Thanks, Taki. I think Blair was spot on. The couple of things I would add, within this crisis of prosperity, we do have continually diminishing middle class. As you talk about the jobs coming out of school and looking less attractive, I think the invention of low cost and easily accessible debt has masked some of those challenges. And so, you're seeing, as citizens appear to be as prosperous on surface, are really struggling to be able to service their debt, et cetera. You have this debt that's masked the problem that's existed for a long time and it's now getting to that breaking point.
The other thing I would say, certainly we've seen in the last 24 months in the current COVID pandemic, governments have assumed a huge role in stimulus packages, which have increased money in the pocket of certain individuals or citizens writ large, but now have created a problem where people don't want to re-enter the workforce. We're truly having a problem with the labour force or lack of labour force in many markets. This is due to some of the distortion, I think, in the markets.
Taki Sarantakis: Are we saying here that we have too much prosperity or not enough prosperity or some third thing?
Blair Sheppard: If I take Jess' point, we've created an artificial circumstance for people who actually don't have prosperity that makes them feel like they're doing okay, but it's being funded through a mechanism they can't retain. I mean, the government can't simply continue to pump the kinds of money it's pumping in to keep people afloat. What you see though is an interesting circumstance, which is when they go back into the labour force, they're going back into the labour force with the same kind of work that was available for, what's interesting, they don't want to do it anymore. We've done a little bit about change the power of labour in a way through this process, but it isn't like there's great work that's going to pay them really well. And so, it's an interesting problem where in order to live, they need to work, but actually, they don't want to, because they've actually had a pretty decent life for their last year on the money that's come from the resource in government. That feels like prosperity, but actually, it makes it even darker when it comes to roost.
Taki Sarantakis: Well, let's park the last year because we don't kind yet know what COVID will bring in a kind of a sustainable durable form. You wrote the book before COVID. Talk to us kind of about the kind of the pre-government stimulating economy crisis of prosperity, because I'm still not kind of clear on whether we have too much prosperity, not enough prosperity, or I think what you're getting at is we have a kind of an artificial prosperity.
Blair Sheppard: What I was describing related to the last year was an artificial prosperity. If you go back pre-COVID and you go out a while at a point in which we simply can't afford to keep the stimulus going, you take those two times, we have too much concentration of wealth and too few hands. We have too little opportunity across a lifespan, and we have people unprepared for the circumstance we're about to face. If I'm a retiree, I don't have enough money to retire on all over the world. We have underfunded pension plans at a massive level. If I'm a person about to lose my job because technology's going to change the job, I probably have a huge amount of debt and I'm going to have trouble managing that transition. If I'm a person entering the workforce, it's not very attractive, and I probably have debt I'm bringing forward and I'm going to have a huge tax burden I'm going to have to cover through my lifespan.
Those are three pretty unattractive circumstances to be working from. It is real lack of prosperity and therefore lack of ambition, lack of effort. And so, I think part of what you're saying in the response to the stimuli is a predictable result of that is which is why bother, because it isn't worth it. But at some point, when the money goes away, it's a really... It will make it, I think 10 years looks closer to 6, 7 or 8, I'm afraid.
Taki Sarantakis: Jessica?
Jessica Shannon: Well, Blair, if I could just add into that, I think yesterday's cheap debt is today's stimulus. Pre-COVID, you still had the facade of prosperity, which was masked by other factors, not necessarily stimulus packages because as Taki rightly point out, we don't know where this is going to go, but even pre COVID, you did have this, it's just accelerated. I think on the question of not enough prosperity or too much, if you look at the macro level, at the very, very top level, you'll look at a country or a nation that has a lot of prosperity, but then you look within borders and you dissect the information, you have a massive chasm between the have, and the have nots. I think that's also what we're seeing. It's too much and not enough depending on which side of the spectrum you're looking at, but really a move of away from the centre and further on both dimensions, which is, that is going to be the issue.
Blair Sheppard: Taki, two pieces on that. One is I want to highlight Jess is now in Ghana. If you leave North America and go to Africa, Nigeria has 23% unemployment and at a youth level, it's 40, 50%. And so, it changes form depending upon where you are, but it's really unattractive everywhere.
Taki Sarantakis: If I characterize and tell me if this is an accurate characterization or not, the crisis of prosperity has two components. The first is in a country sense, you can have not enough prosperity and that's an obvious kind of crisis. The second is in a country sense again, when you have kind of sufficient or enough prosperity, it's that the distribution of that prosperity across age groups or population cohorts or professions or asset holders, labourers, salaried employees, is that the crisis of prosperity?
Blair Sheppard: Yeah. Take that within country piece for a minute. What you really have is in countries where there's huge GDP growth, really good GDP growth, you have massive concentration on that growth and a few hands, and it sits in wealth, not income. Then there's huge income disparities. That's the first point.
The second point though, is it's also regional. Apple traded at the FTSE100 plus $500 billion a while ago. That's huge concentration of wealth in one company and in one location in the world. You go across the United States, you have regions that are completely at odds with that story where they're just doing terribly. Same thing in Canada, a few cities doing really well, a bunch of smaller towns and cities not doing so well. And so, it's inter-regional as well as individual and it's inter-generational. Depending, you can cut it lots of ways, but there's someone on the bottom end of the scale and there's a lot more of them than it used to be.
Taki Sarantakis: Let me play devil's advocate though, Jessica, and go back kind of in time or in history. Hasn't it kind of always been thus, like, we kind of grow up thinking about the robber barons and Wall Street and large mining companies and the Gilded class and the day labour class kind of from kind of days gone by, hasn't it kind of always been like this? What's different about this era?
Jessica Shannon: Well, one of the things I would say, perfectly accept what you're saying. There has always been a wealth distribution spectrum. I think in some states of the world, you can easily make a case that some level of disparity is necessary, and some level of differentiation is required to have a productive society, to have motivation, to have aspiration.
I think what's different today are two things. One with globalization, you can take it on a magnitude much greater. When you were looking just within countries rather than across countries, that spectrum looked very, very different. That's one thing, but also there is a tipping point. There is a, everyone's in the middle and there's no opportunity and that's a problem. Then you get to a point of asymmetry or that wealth concentration and suffering gets to a point where it is too high and that creates both, as Blair mentioned, lack of motivation, but it's this logical extreme geopolitical instability. I think we are at that point where--
Taki Sarantakis: I love that notion. I'm going to close this section off with Blair, but before I do, I love that notion of the tipping point, because the thing that I describe, there were different tipping points, the great recession, wars, World War II, revolutions, et cetera. It's not so much that the past is kind of just playing out again the way it always has. It is that there are a lot of things in the past that when they get to certain levels as you articulated, Jessica, then certain things happen societally based so to speak.
Blair, close us off on this section, which is kind of from a perspective of somebody sitting in the audience who's kind of thinking about policy in an economic department in Canada, or a social department in Canada, or a security department in Canada, or a food regulator, or what have you, what's kind of their takeaway on the crisis of prosperity that you'd like to give them in a sentence or two?
Blair Sheppard: The first point is the thing you and Jessica just highlighted, which is throughout history when you get to the kind of disparity we now have, something bad happens and you don't want that. I mean, it turns out revolution takes a long time to recover from. War takes a long time to recover from and rejecting the system that kind of works, but just is creating disparities that are unsustainable is not okay. It also creates something we'll talk about it later, which is institutional distrust, which really is harmful.
Taki Sarantakis: You gave away one of the secrets!
Blair Sheppard: But I think the other thing is that it's not a redistribution problem in its own, because one of the things that people will say on a policy standpoint and the government will say, "Our job is to tax and redistribute." We've got to get distribution right in the first place. We have to fix the distribution system itself because it's broken in a way that will unwind. The key piece to that is massive kind of winner take all economic model that has to be rewound back in some way. And so, you can't just do it through taxation. You got to change the fundamental process.
Taki Sarantakis: Terrific. That's crisis number one, the crisis of prosperity. Crisis number two, the crisis of technology. This one's interesting because, in kind of in the first crisis we were talking a little bit about is there too much, is there too little, is it... We know not so much that we have too much tech or too little tech, we know that we have a lot more tech than we had yesterday, and we know that we're going to have a lot more tech tomorrow than we have today. Jessica, start us off on the crisis of technology.
Jessica Shannon: Well, I think technology is an interesting crisis because it's one, one of the biggest risks that we're facing today, but also the biggest opportunity that we have. And so, you're looking at technology being a great equalizer if used and deployed correctly, and governments can facilitate societies that have greater access to education, greater access to healthcare, but at the same time, we are in a bit of a crisis mode where we have proliferation of fake news using technology. We have Artificial Intelligence and the fear that will take jobs away. And so, citizens and humans are at an inflection point in the workforce and is my job going to exist tomorrow? You also then have, if my job does exist, will I have the skills to be able to deliver against it? Because the world of technology requires a much different skillset than yesterday's workforce had.
Then you have, kind of, how do I as a company or I as a government actually invest in the right technologies and upskill my teams while managing the cybersecurity risks that are happening? It's every day in the newspaper, you see another sovereign institution or another company having massive cybersecurity breaches. And so, you're looking at all of these facets and it's, I think, quite overwhelming. And so, we really are faced at an inflection point on technology.
Now, I think the last couple of years have, if nothing else, accelerated the need for technology. The world has gone digital very, very quickly and I think most governments and most companies are trying to upskill their people to be able to address that, but we really do have to get right how to do it in a thoughtful manner, which increases jobs, which increases skills, which increases education and healthcare.
Taki Sarantakis: Blair, again, I'm going to play kind of devil's advocate from a bit of a historical perspective. Aren't we just kind of talking about Luddism here, aren't we just talking about, oh, we're still learning how to use the internet? We're only in year 30. It took us 70 years to learn how to use the telephone and it took us 50 years to learn how to use television. We're only kind of in year 10 of social media kind of thing. Hasn't every generation had this kind of existential angst about technology? It's like, oh my God, my kids want cars. Oh my God, what's wrong with the radio? Why are people so obsessed with television? Radio gets you what you need. Is there anything different about this epoch?
Blair Sheppard: Two things, if I can. There's really two IT systems we have to worry about when you think about technology. One of them is the industrial technology system and its impact on climate, which we can get to. The second one is the one we're talking about now, which is IT as most people understand it. The thing about IT that's different from previous technologies is it's actually doing what makes us human. It's gathering data, analyzing data, taking decisions, making judgement calls and creating. Now, that kind of is, if you ask a person what makes us human and you add a motion to it, that's what's missing in a way. That's kind of what differentiates humans from other species in the world.
It's different in the form that it actually is more risky to our existence than we've ever seen. It's also more embedded in the thing that makes us special. It's embedded in our communication processes. It's embedded in our decision processes. It's embedded in our analytical processes. It's embedded in our judgement calls. And so, when you have that, the risks get greater. And it's true, we can fix it. And so, a crisis is not a thing that has to happen. It's a thing that humans can act on. And so, I don't mean to say it's inevitable. What I do mean to say if we don't act on it, it's pretty ugly.
Think about the circumstances where it's having a negative impact. First one is economic. It's one of the primary reasons for why there's wealth disparity, because network economies are winner take all economies. The second thing is it's going to create huge job transition. It will be really hard for people to do, because it's going to require whole new skills on the back end of that. And so, there'll be a lot of stranded work.
Now that's happened before, but actually, we don't have to have that happen if we plan for it and we manage it well, but if we do, it's going to create a crisis. If you take the second piece, which is actually societal, it really is undermining democracy. And it really is creating polarization at a level that's very, very scary. We're having trouble. And then finally, we look at the individual level, depression and anxiety in teenagers is at a level like we've never seen before in history. Unfortunately, the consequence of that is suicide and self-harm. Those are pretty serious. Had we had things like that before? Yeah. Workers and labour was hurt by machines, but it's really serious and it's getting worse faster.
Taki Sarantakis: Let me go back. Again, and Jessica maybe jump off of this or others, but it's 1995, the commercial internet is starting. We're democratizing the world. We're democratizing information. We're breaking the chains of the editor, of the authority, of the doctor, of the lawyer. We're now kind of empowering everybody. This is amazing. And then, even if we were having this conversation 10 years ago and people were talking about "tech is bad," it wasn't that long ago when tech could do no wrong. It wasn't that long ago when everybody was saying, "Be like Google, be like Facebook, be like Twitter." And now, we seem to have gone completely to the other end of the spectrum, which is, "Oh my God, tech is bad." What happened, Jessica?
Jessica Shannon: It's an interesting question. I think Blair hit one of the big changes as it his last remark is speed. The velocity of change has increased dramatically. Looking the pace of invention and change in 1995 versus today, it's of a massively different speed and people are having trouble keeping up to it. And this is one of the first times in the world that we are almost, I would say, technology is outpacing philosophy. We're looking at what we can do not necessarily always what we should do. Or we're looking at what we can do first. And so, that's a big paradigm shift.
Taki Sarantakis: I love that point because again, we've always had disruption in the past. The car has replaced the horse and buggy and the driverless car will one day replace the driver-centred car and then the flying car will replace the driverless car, et cetera. I think what's hitting people is exactly that point that you made, Jessica, which is the acceleration, which is the degree to which the disruption, which sometimes can be destruction, hits us with a frequency and a velocity that we've never really had in the history of humanity.
One of the things that I like telling people over and over again is: today is the slowest day of the rest of your life. It will never get slower going forward. Broadband will never get slower. Wi-Fi will never get slower. Artificial intelligence will never get dumber. It's only going to start getting smarter. If you're preparing for 5G, well, even if you're fully prepared for 5G, Samsung's already working on 6G and somebody's probably already working on 7G. That degree to which the velocity and the change is happening, that to me seems to be the fundamental difference between technology of today and technology of yesterday.
Blair, we had a Canadian thinker here named Marshall McLuhan who became famous for coining the phrase, the global village, amongst many other phrases. One of the things that I really admire about Marshall McLuhan is the following sentence where he said, "First we shape our tools and then our tools shape us."
Blair Sheppard: Yes.
Taki Sarantakis: I think that's what you were getting at earlier about things like mental health and things like suicide rates and things like people becoming kind of depressed and the like. Give us kind of a, again, close us off this section in terms of you're a policymaker, you're a program person, what's your relationship with technology? How can you, as a public servant, make sure that you use let's call it kind of tech for good as opposed for tech for not good?
Blair Sheppard: I would recommend everyone go back and read Marshall McLuhan because I think he actually had it exactly right that essentially, we create the thing that causes to be what we are next. I think he did it brilliantly. If you understand the way he talks about and how we ought to think about that, we need to do the same thing with existing technology. The difference is the stakes have gone up because it's more ubiquitous and it's controlling more of our lives. The impact is even greater.
It's individual and societal and economic across the board. Two things for any human being in the policy maker, the first one is: we need to increasingly become human-based technologists or technology-savvy humanists. That as a person who understands people as a policy maker, you better get technology or you're in trouble, but a person who understands technology, you better understand humans and human systems, or you're going to do damage. You're going to do really is serious damage. And we don't do that. Our engineering schools teach engineers. Our social science departments teach social scientists. We need to teach the two together and we need to think about policy with the two together.
The second thing is we have to create policies of the 21st century, not the 20th century. The notion of antitrust being the issue with the platforms, it's missing the impact the platforms are having. It turns out why do you need a government to do census when Google could do it instantaneously? I mean, many of the functions of government could just simply disappear. We have to understand that the threat to our social system is very different from the industrial era threat, and we need policies that match that threat.
Taki Sarantakis: Two last things on this section. The first is you gave a shout out to Marshall McLuhan, which I heartily, heartily endorse, but there's also Marshall McLuhan was kind of a little bit of a culmination of what we call here a Toronto School of people like Harold Innis and Eric Havelock, and even Northrop Frye, who were really kind of clustered together and seriously thinking about these issues. If you go forward in some cases, close to 100 years now, they really felt this stuff in their bones in ways that's remarkable, in some cases, kind of pre-television, let alone pre-internet and pre–Artificial Intelligence and pre-social media.
The second thing in this respect that's really, really interesting in terms of the crisis of technology is something that you just mentioned about kind of, these sectors or these companies or these industries or these technologies kind of competing with government. This is, again, something that I've been telling people over the last couple of years that if you think about it a little bit beyond kind of the day to day what are you doing, we're kind of starting to see a little bit of a formation of the Republic of Facebook and the Republic of Google, and the Republic of Twitter. It kind of becomes- and the Republic of Apple and which kind of republic do you as a citizen pledge allegiance to through who you interact with?
That becomes, over time, a challenge for the very notion of the state, because the state is based on physicality, but digital is the complete opposite of physicality. Digital doesn't care where you're physically located. And so, in that respect, it's a collision with the state. I think that's something that I wish we had thought about a little bit earlier in this kind of broader philosophical sense, because there is a bit of a battle going on below things like sales or market share or whatever there is, there is something else at play beyond the regular commercial profit motive thing that we've seen. Now, our third crisis is the one you already gave away, Blair. You talk to us about the third crisis.
Blair Sheppard: In a sense, you could take the two we just described, and we didn't get to the industrial technology piece, which I think is the most urgent of the crisis, in terms of the disruption piece and its impact on climate, but if you take all of those and put them together, there's a reason people don't trust institutions, and take where you just started. Our government institutions are established on a set of assumptions about the nature of connection between human beings that has to do with physical proximity. It has to do with implied geographies. What platforms are doing is sort of destroying that whole logic.
There's other forms of identity and connectivity that are being created. The problem is that that puts at risk, all of the institutions that are based on the previous assumptions, and it's all of them actually. If it's our education system, it's our political processes, it's our legal system, you just name it, it puts them all in play. Even changes the meaning of war, because war is about acquiring intangible assets. It's not about acquiring property, which is, we've built our military on the assumption we have to defend land. Well, that's actually not what you have to defend anymore.
It just redefines the whole piece. The challenge is institutions are trusted because they're slow to change. I can't have my education system be different every single day because I got to know what my kid's going to do and study and understand. I can't have the legal system change. I got to be able to predict the law. I can't have the energy system change, because I've got to build my house around the assumption of what the energy system is.
All the institutions that exist in society are governed in a way to make sure they change slowly. Turns out, can't do that anymore because they're under massive threat. And so, the real challenge is that the institutional fabric that allows us to live our life becomes increasingly unable to adapt to the threats to it. Therefore, we just can't live our lives. What do I have my kids study? How do I get my issues managed through the political system? Can I trust the law? Can I invest my money? I mean, and all of those things just day to day decisions, you just can't do. I think the problem there is if you think about the importance of the issues we described earlier, we need those institutions to be successful to solve those problems.
Taki Sarantakis: Jessica, it's 2021, the world is changing dramatically, it's changing rapidly, there's no reason to think it will change less slowly going forward. What are we going to do about these institutions? We've seen these institutions over time not keep up with society over time, whether you think of kind of church institutions, or community institutions, or the kind of the things that kind of held a community together. Those things were a lot of them, if not all of them, were in a way place-based or space-based.
Now, the institutions, two things are kind of happening. The first is the world is changing faster around them than they can handle in terms of meeting the demand of what the original institution was. The second is in some ways, it's not clear who the institution serves or who serves the people. I can become a citizen of Estonia from here in Ottawa, Ontario. I can click and I can kind of sign up for e-citizenship in Estonia or I don't necessarily have to go to a university down the street. I can go to any university I want almost, again, from my living room. How are institutions supposed to survive that?
Jessica Shannon: It's an interesting dilemma and certainly an existential crisis. If you think about, as Blair mentioned, what made institutions credible in the past was their inability to pivot on a dime. Now, a critical success factor of an institution being a going concern is its ability to pivot on a dime. A lot of what you're seeing, I think, when we about change, the hardest piece to change is the human element. Thinking about change management and getting people comfortable with change, I think from an institutional standpoint, one of the biggest challenges we have is getting your practitioners, your professionals, your humans within the institution comfortable with the cultural change that has taken place. That is one thing that has to happen is that change of hearts and minds, so to speak.
When we look at institutions that are more successful at those pivots and changes, it's those which are able to change the culture of their workforce, but it's also those that are able to disrupt themselves. We have some industries or some institutions that get disrupted and some that continue to break their model and disrupt themselves. I think that is what is going to be critical going forward in the institutional level is the ability to disrupt yourself rather than waiting for citizens to call for disruption, media, being a prime example, right?
Media in most instances has died a slow and painful death as they were unable to pivot to an online platform and they kept newsprint as long as they could and tried to monetize from newsprint rather than kind of that online, but the ability to disrupt yourself, I think will make or break institutions going forward.
Taki Sarantakis: Now, Jessica, I'm going to stay with you for a minute because you deal kind of day-to-day in government and public services. I don't necessarily want to talk about the Canadian government or the American government, but I want to talk about the notion of government and the notion of public service. You've said two things to me that seem to be kind of theoretically incompatible and simultaneously scary, which is if government institutions don't change, they become irrelevant or disrupted. Then the second thing you said, which is what makes it scary is that government institutions or institutions as a whole, but maybe particularly government institutions, they change slowly on purpose, like by design.
What gives here? If I'm doing math, one plus one, it's not going to work.
Jessica Shannon: Well, and I think that those two very facts are playing into, if you look at multiple surveys that have come out this year globally, looking at various stakeholder groups, governments right now around the world and as you said, not any country specifically, but around the world are deemed by their citizens perceived as the least trustworthy and the least competent stakeholder if you look at the stakeholder classes and I think it's playing out because of exactly these facts.
When we're thinking about maintaining credibility as an institution, I think many governments have gone beyond that point and they're now looking at how to restore credibility as an institution, because people are relying on private sector versus government for many of the things that they historically would've looked at government as the leader for.
Taki Sarantakis: If the world acts quickly and you don't act quickly, over time, people just kind of start to question your utility or your purpose or your raison d'être. Blair?
Blair Sheppard: I think what you have to do is recognize there's reasons why institutions change slowly. And so, we have to think about what is a governance process that allows us to take care of the things we care about and protect, but still change fast. Let me use a university analogy for a minute. Some of the most successful universities have found kind of expedited governance processes that still report to boards of trustees, but they get to take a decision and they cover all the bases. They just cover them really quickly. They fight it out really fast so they can move. What you can't do in an institution is throw away all the protections that keep it trustworthy. But the problem is if you let those protections do what they do naturally, it becomes untrustworthy because they create unsustainable outcomes. And so, you have to expedite governance. That's a hard thing to do in a political system, but you have no choice, I think.
Jessica Shannon: Well, Blair, I think one of the things, another example there is you need to memorialize agility because if you look at government agencies, rarely is there a crisis or any decision point anymore that is singular in nature. And so, memorializing and codifying the ability to work cross agency, cross ministry is going to really differentiate. I know that's very different than the traditional mentality of finance is set up to do what finance does, labour is set up to do what labour does, agriculture is set up to do what agriculture does. All of these need to work across the spectrum now. And so, creating a governance model that actually fosters and encourages and incentivizes that versus the traditional model that we have today, I think is going to be a critical success.
Blair Sheppard: Just to build on that, it's even across levels. If you take a federal structure, you have to worry, you can't just solve it at the national level, you got to solve it nationally, provincially or state level and city because elements of the system that make it work sit in all three of those. You have to create coordination mechanisms of a kind that usually we have, but they're way too slow. It's not just the cross functions within any level of governments across levels of government as well.
Taki Sarantakis: I really like that lesson for people in the audience, because it's not about throwing away governance. It's not about throwing away the role of kind of oversight or decision making or political control, democratic kind of checks, balances. It's about making them faster because if you don't make them faster, you're actually defacto throwing them away.
We often hear the phrase, the speed of business. I don't really like that phrase, but what I really like is the speed of need, which is if you are in a governmental institution and you are working somewhere, you have to work at the speed of need of that institution. That varies whether you are at a border, whether that's your food inspector, whether you're providing, you're thinking about childcare options or old age retirement options five years from now, you have to work at the speed of need.
If you don't, even if you're working really quickly, even if you're working as quickly as you possibly can, even if you're working faster than historically anybody has ever worked in that position before you, if it's not at the speed of need, it's not what's going to solve the problem and take solace in the fact that it's going to be harder on your predecessor tomorrow because he or she will have to work even faster than you in most realms. Blair, last word on this subject.
Blair Sheppard: Taki, the thing I want to highlight here is it's not just about speed, it's about scope as well. That's what makes it really hard. We have to change a lot of things simultaneously really, really fast. Let's take the climate example. In the book, we said we had 10 years to midnight, we probably have 6, because we underestimated biological feedback loops and we were looking at the best data we could, but actually we underestimated it. Turns out plankton are dying faster; forests are burning faster. And so, the degree which that occurs, it accelerates us getting to a point where it's really virtually impossible to reverse.
How do you change an entire industrial system in 6 years? That's what we have to do. We have to do it. And so, that's a speed problem, but it's also a scope problem. It's a massive scope problem. And so, the thing I want everyone who's listening to understand is get off your butts and get going because this, I mean, the reason for the word crisis, we don't use crisis easily in PwC. I don't use the word crisis easily. I'm one of the world's great optimists. I got to tell you, I'm terrified. And-
Taki Sarantakis: Well, you're one of the world's great optimists. I'm one of the world's great pessimists. There's a nice balance. As we move to who our last crisis, which is the crisis of leadership, this one, if I had any hair left, I'd pull it out because we're all leaders today. You can't walk into a bookstore without seeing shelves and shelves of be a leader, you're a leader. What's the crisis of leadership? We all know everything about leadership, don't we? Ever since we were little babies, we've been told we're leaders. Jessica?
Jessica Shannon: We started the conversation talking about prosperity and there's the too much and not enough all at one time. You have, as you say, everyone is a leader at one time, but no one is a leader when it comes to ultimate responsibility and accountability on global problems. If you look at climate, which Blair just mentioned, climate change is that perfect example where, who is the global leader who is going to oversee a crisis that doesn't know borders and doesn't recognize borders?
You look at COVID the same thing. Where was that global leadership mechanism to really help harness the collective versus country by country? You have governments in a really challenging position as it relates to leadership because on the one hand, you have these challenges that don't recognize borders and these new institutions coming up that don't recognize borders that you referred to. And so, you really need global solutions to global challenges.
On the other hand, you have citizens and stakeholders calling for country first solutions. When we had supply chain shortages, everyone wanted to make sure that they were protected first. You have the same challenges as it relates with vaccines and vaccinations around the world. How are we country first? And so, governments are really having to strike that balance between how do we step up and lean into global solutions and the global challenges that are happening at a very rapid pace, at the same time, make sure local constituents and local stakeholders are protected? I do think we have that crisis of everything and nothing.
Taki Sarantakis: Blair, what's the crisis of leadership from your perspective?
Blair Sheppard: It comes back to where we ended the last part, which is we're in a moment in time where the demands of leaders are different from what they've been for the last 50, 60, 70 years. And so, throw the books away, because the books were built on a theory of the way the world would work that we're actually leaving. I don't mean to say that some of the attributes of leadership are wrong, but I do mean to say that actually, you've got to recognize the nature of the presenting problem is different from what it was before, and therefore, how we thought about leadership is not adaptive. That's the first point.
The key argument that, and to me is that you've got to think about the kind of paradoxical elements we have to do, which is how do you retain tradition, but innovate at the same time? How do you be incredibly politically skilful, but high integrity at the same time? How do you be technology savvy, but understand people deeply and human systems? They aren't by definition contradictory, but they tend not to cohabit in very many people. We have to build it in more.
The other thing I want to add though that's really important to this is that it's really critical at a national level for the civil servant to understand two attributes of leadership. One is that they themselves are leaders and they need to assume the role. And second, that their job is to help people do something that's virtually impossible and recognize that and support them in that. We have to change the way we think of ourselves as servants of those who are trying to do the job of politics, because it's a virtually impossible job today.
Then the only other thing I'd say is I worry a little bit about the whole word leadership, because it's kind of egocentric. It causes you to think about myself and my own attributes and my own courage. Actually, what we need today is that people who don't care about themselves at all, but just care about the thing they're trying to help, the thing they're trying to fix. Forget your attributes, forget your characteristics, just go work on the things that matter. And so, I'd like us to take some of the egocentricity out of the way we think about "leader."
Taki Sarantakis: In a sense kind of leadership, that word is loaded with egocentricity as you mentioned, because in some sense, even though we never talk about it, if you have leaders in one or two definitions or classical definitions of it, you also have followers, and nobody ever talks about kind of followership. People, everybody's focused on leadership, but at a certain sense, it's like if everybody's running around being a leader or everybody's kind of following one person, so again, it gets to very difficult dichotomy of what is it that a person in a leadership position is kind of required to do today that they didn't have to yesterday? That's where I want to poke you both a little bit. Give me a leadership characteristic or two that has kind of served us well in the past but isn't serving us well today or won't serve us well in the future. Blair?
Blair Sheppard: I'd give you the two classes of characteristic, those things that are good at sustaining hierarchy. There's a lot of practises that sustain hierarchy-
Taki Sarantakis: Exactly.
Blair Sheppard: ... thought leaders. For example, how you manage information flow, how you manage decision making, who's in the room and isn't in the room when you have the conversation, decision rules and decision processes we advise leaders on, so any... Even the way we think about strategy, because in a sense we think about strategy is a thing you do, you go to the mountain, you think about it, and you bring the tablets down. Strategy is Moses. All of those need to be sort of set aside and say, we need to create models of leadership that are adapted to the nature of the problem we have today. That's the first characteristic.
I think the second one is there's some pieces that any of the ones that have to do with focus on yourself first. And so, you like the Toronto school, let's go back to an even more interesting school, which is the Greek School at the time of Plato. His fundamental argument was that if you are a leader, you no longer have self interest. All the attributes of leaders that have to do with self-interest should be thrown out the window because we can only afford leaders today who care about the society they're leading.
And so, the attributes of leadership have to do with politics and power and sort of keeping your control in place, just strike me as unfounded. I don't mean to say that we don't need to be politically skilled, but the piece is having to do with sustaining your platform of power is a problematic thing because it focuses on you and your needs and your ability to be in control in the future rather than the thing we have to solve. We need leaders who don't have self-interest and actually only have community interest at heart.
Taki Sarantakis: That's very insightful, Blair. One of my favourite definitions of leadership is kind of before you become a leader, and I'm not speaking of titular leadership, but just leader, before you become a leader, it is all about you and kind of once you become a, let's call it a true leader, it's all about what you just mentioned, Blair, which is about others. Jessica, what kind of, if you were to pick one or two things in terms of leadership traits that have served us well in the past but aren't serving us as well in today's society or maybe in tomorrow's society, what would be kind of your two cents on that?
Jessica Shannon: Well, I think one that's interesting historically, if you look at leaders historically, they were the most educated and most knowledgeable people that we had in society. I think today, it has shifted from I have the most knowledge to I'm asking the right questions. And so, it's much more of can I very quickly analyze and understand the nature of a challenge and be able to probe and ask the right questions because knowledge is at our fingertips? Versus I come in with the background information and expertise to be able to address something. That skillset has shifted quite dramatically, I think.
Taki Sarantakis: It's very different when you have the totality of the world's information kind of in your pocket in terms of being a leader versus one of the things in a leader in the past, one of the big skills was simply how do we figure out what we don't know even if it's just in terms of a fact, then how do we do that quickly? Where now, what is it like, over half a humanity has access to all of the world's or virtually all of the world's information at their fingertips.
Blair, I'm going to close with each of you with the inverse, which is, and Jessica kind of already went there, which is what are some leadership skills in the future that we should be actively trying to cultivate or develop or grow that we haven't necessarily thought of as "leadership skills" in the past?
Blair Sheppard: I'll give you two categories. The first one is the capacity to manage things that feel at odds with each other. I gave you three examples of that. It's growing more because of the nature of the problems we have.
Taki Sarantakis: That's the notion of be comfortable with ambiguity.
Blair Sheppard: Be comfortable with the paradoxes of the problem you have. You've got to respect tradition, but you got to innovate at the same time. If you break it first and then innovate, you're going to destroy the essence of the thing, but if you focus too much on the essence, you won't create the change you need to create. Be really good at technology, but understand it's applied in human systems. Be really good at strategy but understand strategy doesn't matter if you can't execute and we probably need to strategize while executing rather than keep the things apart. Be really politically skilled but have massive integrity. There's a set of things that feel contradictory and you've got to do them at the same time. That's the first one.
The second one is: raise it to a level and say, "What are the characteristics of a person that cause them to be able to do those things?" I think there would be three I'd put there. First one is tremendous self-awareness in context, which can sound egocentric but what I really mean is the opposite, and so, aware of the impact you're having on other people and whether it's the impact you want to be having or not having, because that's really critical. Second one is massive empathy and care, but if you don't care, step aside. If you don't empathize, step aside. I don't want you anymore. I think the third one is really where Jess went, is the capacity to bring people together and create really fast agile solutions.
Taki Sarantakis: Jessica, do you want to add to those, or do you want to give us a how on any of those, how to get there?
Jessica Shannon: I think that's a very comprehensive list that Blair just shared. I think the two I would highlight because I had, when you mentioned in my thought as well was the empath. The empath is a critical component of leadership now. Not that it always wasn't, but it is more than ever. The other is shifting from being an empire builder to a convener. And so, it's building agile teams, but it's also serving as a convening power.
Take it in the government context, one of the critical things is not that a government can do everything, but a government knows when to pull in different stakeholders and different actors to build a community versus an empire that are owned and constructed. I think from a leadership perspective, that ability to be a convening power is absolutely critical.
Taki Sarantakis: We started at 10 Years to Midnight, looks like we're 6 years to midnight, if not less. Blair, you're optimistic. Let's end on a note that's optimistic from each of you. Blair, Jessica, tell us one kind of thing that heartens you going forward, that it's not all doom and gloom, that this, there's a lot of noise, there's a lot of dynamism going in wrong directors, a lot of indices going in the wrong directions, but X gives me hope or Y gives me hope. Jessica and then Blair, and then we'll wrap it up.
Jessica Shannon: I would give two examples of things that give me hope although I do feel optimistic while there is massive time urgency and complexity. The first, as Blair mentioned, I live in Ghana. I spend a lot of time in Jamaica and countries which historically were viewed as impoverished countries, you look at Ghana and there are wonderful shopping malls. They're putting in environmental protections. You can't get plastic shopping bags anymore in Jamaica. I think the world has come together to address problems and the world is raising in totality, not necessarily increasing that asymmetry, but really, you're seeing innovation come from anywhere and everywhere in the world, not necessarily one or two countries anymore. That gives me massive hope.
And sheerly, the fact that we're talking about the issues. There were many times in the past where the world wasn't coalescing upon a consistent set of issues that needed to be addressed. The fact that we're having this dialogue, we're having the debate and together we're collectively charting a course forward, gives me massive hope that we will create sustainable solutions to today's problems.
Taki Sarantakis: The first step to a solution is often identifying that you've got a problem and starting to talk about it. Blair?
Blair Sheppard: I want to reinforce that one and say there's groups you just wouldn't expect to be talking about them and actually taking them as their first priority, which is private equity is actually more focused on sustainability than anyone in the world is right now. That's an interesting thing, because you would think about them as being the least focused on it. We're finding a lot of people with agency now very concerned and they're using their agency. The challenge is what Jess said, which is how do we bring them together to get a coordinated answer versus pieced answers, but I think I'm actually encouraged by the number of people who have the capacity to do something about it, who are now worried and focused.
I think the second one is this sort of goes back to a question you've asked all along really, Taki, which is the next generation usually finds a way to fix the problem of the previous generation. I'm kind of encouraged by the kids. The conversations I'm having with the people who are coming out and coming up and entering the workforce or entering the NGO environment or entering government. They don't have any patience and they want to get on with it, and it's constructive in a way when I came out, it was just after the '60s, it was more destructive than it was- I want to tear the thing down. They're actually looking for answers. And so, if you think about the people with agency, really realizing there's a problem, you think about the kids who have the energy really realizing problem, those who put together is kind of a powerful force.
Taki Sarantakis: Blair Sheppard, Jessica Shannon, thank you for your time. Thank you for your insight. Thank you for your energy, but most of all, thank you for being friends of Canada's Public Service. This was a wonderful discussion where we are not so much telling people what to think, but we're telling people to start considering these things in the broader context of how they execute their jobs in the government of Canada today and tomorrow as public servants. Thank you again. Be well. Take care.
Blair Sheppard: Thanks for having us.
Jessica Shannon: Thank you.
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