Opinion
Management consulting gainshare agreements are a scam
“A game share agreement is a management consulting scam where you claim a certain percentage of the cost savings you identify in year one.”
Opinion
Sutherland: Shareholder Value Focus Prevents Effective Innovation and Customer Investment
“The shareholder value movement's totally incoherent because over what time frame which shareholder... What are you optimizing for? It's a completely incoherent nonsense, which is very, very friendly to stock market analysts who want a ready supply of quarterly…”
Opinion
Sutherland: Economics is creatively limiting by reducing motivation to bribes and fines
“The problem of economics isn't only that it's wrong, it's that it's incredibly creatively limiting, because it tends to posit a very one-dimensional view of human motivation, and therefore, if you wish to change human behavior, the only two ways you can do it …”
Opinion
Sutherland: Shareholder value short-termism creates psychopathic, untrusted businesses
“And I think the problem with the shareholder value movement, by the way, and short term targets in business, is you're creating in businesses with a focus on the short term, you're creating psychopathic businesses, you're creating businesses which consumers in…”
Insight
Sutherland: AI must present options because humans require comparison to choose
“At the very least, you'll have to show them three or four or five skiing holidays from which they choose. Because we can't really choose in the absence of comparison.”
Opinion
Companies should shift 20% of marketing budgets to top-tier call centers
“Probably 50% of the time I would advise to a client,
Take 10 to 20% of your marketing budget and spend it on upgrading the call center.
Pay the people too much.
Get the best practitioners.
I think it's perfectly legitimate in some organizations there should be…”
Opinion
Publicly traded companies are incentivized to behave like psychopaths
“PLCs, or companies on the NASDAQ, or the, you know, stock exchange, are incentivized to behave like psychopaths, because they're optimized around short-term transactional value, not long-term relationship building.”
Opinion
Sutherland: Tech-Driven Management Optimizes for Metrics Distant from Customer Needs
“When you allow tech bros too much power over decision-making, along with their running dog lackeys in kind of management consultancy, You're optimizing for something which may be very, very distant from what your real-world customers really care about.”
Insight
Marketing is fat-tailed, making hourly billing a fundamentally broken compensation model
“My argument is that marketing is actually fat-tailed. So is innovation, and R&D, pharmaceutical research, science, ok? In other words, five to 10% of what you do delivers perhaps a 110% of the value, and therefore paying people by the hour and demanding that e…”
Insight
Individuals should dedicate 50% of effort to maximizing exposure to positive optionality
“50, 50% of your effort in life, once you ensured the fact that you're not going to starve to death, die, etc., you know, you've looked after your children... Should be attempts to get lucky. In other words, what Nassim would say, I love this phrase increasing …”
Insight
Sutherland: Much Luxury Consumption Is Self-Signaling Rather than Status Display
“Quite a large part of this stuff is actually signalling to ourselves. Which is, you know because I'm worth it. I deserve this. I'm the kind of person who drives this. It provides me with a kind of ego boost, a sense of reassurance, whatever it may be.”
Insight
Buying a massive television is an economically rational decision for low-income households
“If you haven't got much money, TV as a source of long-term entertainment is spectacularly cheap. So having a really good television on which to enjoy it, because you're not going to go Porsche racing at the weekend, you know, you're not going to be there, you …”
Insight
Sutherland: Truly innovative ideas require more marketing, not less
“Big innovative new ideas don't require less marketing, they require more. Because you're asking people to, at the initial stages, you're asking someone to do something that nobody else has done, and you're asking them to do something they haven't done before.”
Insight
Tech competitors battle on specs until someone builds a UI that wins
“The lesson of all tech is that loads and loads of geeks compete through, for technological numerical superiority by some measure or other, And then someone else comes along with a cute user interface and makes all the money. It's basically Steve Jobs. Yeah. No…”
Insight
Sutherland: Engineers dislike marketing because consumers prioritize human design over technical metrics
“And so their failure to understand the wider context within which they were operating, which is the job of marketing, Is exactly the reason nerds hate marketing, because they think in a perfect world, nerd metrics win out. But the consumer is much more bothere…”
Opinion
Sutherland: Apple made a mistake by cancelling its urban electric car project
“I lost faith in Apple when they cancelled the car. Because I thought you, they had the brand power to create, for places like New York and London, a form of microtransport, which was really, really cool, really, really efficient.”
Insight
Changing human psychology solves problems much cheaper than changing underlying technology
“Do not define an objective which is designed to serve human beings without considering psychological factors, because you might be able to solve your problem very, very cheaply and efficiently by changing the psychology, not by changing the technology.”
Insight
Sutherland: The biggest economic waste is great products ruined by bad storytelling
“The biggest source of economic waste is when people produce something that's objectively brilliant, or they produce an invention which should be life-changing, But then they tell the wrong story about it, and it doesn't sell.”
Insight
Sutherland: Silicon Valley incorrectly assumes automating narrow tasks makes humans redundant
“This is a criticism I have of Silicon Valley, that what they often do is they take something that a human does, they define its role very, very narrowly, devise an algorithm or a technology which replaces that very narrow role, and then assume that the human b…”
Prediction Not checkable as stated
Sutherland: Pedestrians will exploit driverless cars because they always yield without retaliating
“Now, if we take this in in the driverless car situation, we'll know that when we want to cross the road, we just walk out in front of a driverless car, because it's always going to stop. Now, this may cause the passengers in the driverless car to lurch around …”
Insight
Big Four accounting dominance is driven by corporate blame avoidance
“So that's why there are only four big accounting firms in the world, ok? If you appoint one of the big four and they cock up, everybody blames PWC or E&Y or whatever, ok? If you appoint a small boutique accounting firm, it may be better, but if they cock up, n…”
Insight
Sutherland: Advertising agencies falsely pitch intuitive ideas as sequential logic
“You actually invite the client in and you pretend that you arrived at this insight or flash of imagination through the deployment of sequential logical thought. And of course the whole thing is a complete misrepresentation of what happened. What you did is you…”
Insight
Sutherland: Non-utility hobbyists are essential to break out of innovation local maxima
“It was really the hobbyists and the neophiles and the kind of weird people who are doing it for all manner of non-utility based reasons, who are the people who are probably essential if you're to get out of kind of local
Local maxima in innovation in a way.”
Insight
Sutherland: Human decision-making prioritizes catastrophe avoidance over outcome maximization
“And so that hunch that actually what we're doing when we make decisions is looking for ways to minimize the worst case scenario. Reliable signals that the worst case scenario isn't going to be that bad or that likely. Almost more than we're attempting to maxim…”
Rory Sutherland