Trust & Transformation: Karthik Ramanna on Leading in Polarized Times

Karthik Ramanna and "The Age of Our Age"

• Karthik Ramanna is a professor at the Blavatnik School of Government at Oxford, and he has written a book called "The Age of Our Age: Leading How to Lead in a Polarized World" (2m10s).
• Ramanna was previously an accounting professor at Harvard Business School, where he wrote a book called "Political Standards" in 2014, which is about the politics of accounting standards setting (1m24s).
• He coined the term "thin political markets" and was part of a panel on the topic at a conference in December 2020 (1m44s).
• Ramanna's work also includes research on carbon disclosures, which will be discussed later (2m23s).

From Harvard to Oxford: A Journey of Transformation

• The Blavatnik School of Government at Oxford has a mission that contrasts with Ramanna's time at Harvard Business School, which may have inspired his new book (3m48s).
• Ramanna is at Stanford to discuss his new book and have a conversation with the audience, with 15 minutes set aside for Q&A at the end (3m11s).
• He has recently traveled to California, Chicago, and back to California to give talks, including one at Google two days prior (4m13s).
• The opportunity to serve as the first director of the Master Public Policy program at the Blavatnik School of Government at Oxford was first presented about 8-9 years ago through a headhunter, and after consideration and advice from others, the role was accepted (4m20s).
• The advice from a senior leader at the Kennedy School was that the opportunity to be at the beginning of something and help create something new comes rarely in a career, and being part of the founding of a new faculty can be a magical moment (5m23s).
• The experience of teaching at Harvard Business School was different from Oxford, with about 2/3 of students being American and 1/3 being international, and the classroom ethic was definitely American, whereas at Oxford, the student body was more diverse (5m52s).
• At Oxford, there were as many students from China as from the United States, and more students from Russia than from the United Kingdom, making it a tremendously diverse group where no truths could be held as self-evident (6m33s).
• The diversity of the student body presented both a tremendous learning opportunity and challenges, as different societies held different values and beliefs, such as the concept of elections and student leaders (7m1s).
• The experience of transitioning from Harvard Business School to Oxford was described as a tremendous ride, and the opportunity to be part of the founding of a new faculty was a unique experience (5m49s).

"How to Lead in a Polarized World": A Course and a Book

• A course called "How to Lead in a Polarized World" was offered, with the goal of figuring out how to lead in a polarized world, as the answer was not known, and it was taught in collaboration with the students (8m13s).
• The course featured eight friends who were CEOs or COOs from various sectors, including business, government, and the not-for-profit sector, who brought their biggest challenges in the age of polarization and their favorite piece of reading to the class (8m29s).
• The guests included the head of a large university hospital system in Europe, the commissioner of the Metropolitan Police of London, the CEO of a large business, and the CFO of the Tata Steel Group, among others (8m48s).
• The course was initially eight interesting conversations with no framework, but over time it became a required course in the curriculum after several iterations (9m45s).
• After a few years of teaching the course, it was decided to step back and take a break, as it was all-encompassing and required being "on" all the time (10m0s).
• A 10,000-word essay was written and sent to the editor at Harvard Business Review (HBR), who suggested turning it into a book, which became "The Age of Outrage: How to Lead in a Polarized World" (10m27s).

Navigating the Age of Outrage: A Framework for Leaders

• The book begins with the story of Disney and CEO Bob Chapek's muted response to the "Don't Say Gay" legislation, which led to internal criticism (10m56s).
• The book provides a framework for handling controversies in the intermediate and long run, rather than taking a specific stance on certain issues, and its ambition is to help leaders manage in the age of outrage (11m16s).
• Managing in the age of outrage is not just about managing outrage, but also about having a holistic way to think about it, as some outrage is legitimate and treating it as a PR issue won't make the problem go away (11m50s).
• The book aims to help leaders create space to advance human flourishing, mission, economic growth, and innovation in a deeply polarized world, rather than just being in firefighting mode (12m21s).
• The book is about the "how" rather than the "what," providing a strategy for leaders to arrive at and implement their approach in a polarized world, without directly engaging with values (12m45s).
• The book introduces a four-part framework rooted in Behavioral Science and other areas, which includes "turning down the temperature" to deal with outrage in a calm state, rather than an aggressive one (13m38s).
• The framework emphasizes the importance of managers turning down their own temperature, rather than just trying to manage others, as everyone is prone to aggression (13m56s).
• The science of aggression provides insights into navigating outrage, and simple things like understanding how to manage one's own aggression can be helpful (14m23s).
• To be self-aware of ambient conditions that provoke you as a manager, it's essential to recognize and put yourself out of those conditions, allowing for a more rational approach (14m32s).
• A significant portion of how we interpret the world is a product of our knowledge structures or lived experiences, which can be thought of as axioms, influencing our rational and logical thinking within a certain context (15m2s).
• To avoid bias in cognitive responses, it's crucial to surround yourself with people who have different knowledge structures and scripts, yet whom you trust, and who trust you enough to speak truth to you (15m29s).
• Creating groups that study and work across differences can help build trust and facilitate real learning, as people from diverse backgrounds bring unique perspectives (16m13s).
• The core part of the framework involves turning down the temperature and creating active listening communities to understand what's really going on (16m27s).
• The framework explores four further parts, including creating active listening communities, understanding which parts of a problem to address and which to ignore, implementing solutions effectively, and building resilience within an organization (16m33s).
• Building resilience in an organization involves creating redundancy and capacity to handle issues, rather than relying on heroic leadership (17m16s).
• Two valuable axioms for leaders responding to a politically charged environment are that no matter what you do, you can never address everyone's concerns, and that you will be criticized regardless of your actions (17m37s).
• As a leader, it's essential to acknowledge that there will always be someone who sees your response as insufficient, and you cannot see yourself as the whole solution to a problem (17m44s).
• Success as a leader in polarized times involves not trying to solve the whole problem, as the factors behind the age of outrage are complex and draw on many societal problems (18m8s).
• Leaders should not expect to be liked even if they're doing the right thing, as the world is deeply polarized, and doing the right thing can still result in being seen as the bad guy (18m27s).

Leading Through Crisis: The Case of Oxford University Hospitals

• A leader should have humility and perspective due to the nature of the problems and divisions in society (18m49s).
• The example of the chief medical officer of Oxford University Hospitals, who later became the CEO, illustrates a leader who embodied these principles, as she was an outsider who brought a fresh perspective to the institution (19m20s).
• The hospital system was facing challenges, including seven "never events" in the year before her appointment, which are serious medical errors that should never happen (20m56s).
• The chief medical officer's background, as the first woman, person of color, and person born outside the UK to hold the role, and not having an Oxford degree, brought a unique perspective to the institution (20m16s).
• A hospital had seven "never events," which are serious medical errors that should never occur, and brought in a new leader to address the issue, who discovered a disconnect between surgeons and nursing staff in the operating theater (21m6s).
• The leader created "patient safety huddles" where groups would meet every morning to discuss objectives and ensure everyone was on the same page, which led to some progress in reducing never events and improving staff morale (21m52s).
• The hospital went from seven never events to two in the first year, and staff morale improved, particularly outside of the surgical community (22m8s).
• Surgeons were considered the most difficult to manage, similar to violinists in an orchestra, but the new leader's efforts helped create an environment where staff felt more comfortable challenging surgeons if they weren't following procedures (22m27s).
• The COVID-19 pandemic hit, bringing uncertainty and a shortage of personal protective equipment, and the Prime Minister at the time, Boris Johnson, ordered that elective surgeries must continue (22m42s).
• The order was met with resistance from some surgeons, who threatened to revolt, and the chief medical officer, who was also the "gold commander" for the district, had to decide how to enforce the order (23m33s).
• The gold commander faced a dilemma, with some team members advising her to enforce the order and show her authority, while others suggested that the culture change efforts should be put on hold due to the crisis (24m0s).
• A leader turned over decision-making to surgeons during a critical moment, explaining that their authority would have a profound impact on shaping the behavior of other surgeons in the country, and this gamble paid off as the surgeons backed down (24m28s).
• This approach shows a sense of perspective, recognizing that some problems cannot be solved by one person and should not be solved by them, and involves taking huge risks that may be resented by others (24m59s).
• A leader's day during a pandemic can be overwhelming, with hundreds of emails received every 30 minutes, and it is essential to create a new way to approach this, rather than relying on one person to manage the situation (25m40s).

Navigating Politics and Culture: The Challenges for Leaders

• Sticking to an organization's culture during challenging moments requires bravery, and top-down decisions motivated by politics can be misaligned with the organization's culture, as seen in recent examples with the LA Times and the Washington Post (26m9s).
• Companies like Disney are inevitably part of the political landscape, and their actions can shape the culture of America and the world, making it challenging for them to claim they do not engage in politics (27m5s).
• Different companies have different strategies for dealing with politics, and while some, like Exxon, may be able to take a more divorced approach, others, like Disney, must navigate their cultural salience and the impact of their actions (27m37s).
• Disney had a LGBT-affirmative approach and a progressive creative approach, but when the "Don't Say Gay" bill was pushed through the Florida legislature, the company's response was that they don't do politics, which got the CEO into trouble due to the expectations set by the company's previous stance (27m44s).
• The CEO's attempt to make a donation to the Human Rights Campaign (HRC) was rejected, and he eventually lost his job (28m39s).
• Google values its employees highly, with a culture that emphasizes their importance, but when employees wanted to discuss the war in the Middle East and Google's response to it, the CEO said that the company couldn't bring politics into the workplace, which jarred with the company's previous messaging (28m54s).
• This response was jarring because it contradicted the company's emphasis on being a family and a community, and it highlighted the challenge of creating a culture where employees feel valued and empowered to make decisions (29m52s).
• The key to creating such a culture is to get employees to own the decisions and values of the company, rather than simply imposing them from above, as illustrated by the example of a chief medical officer who wanted to create a culture where surgeons would own the decision to continue elective surgeries (30m29s).
• This approach requires creating conditions where employees feel empowered to make decisions and take ownership of the company's values, rather than simply following orders from above (30m21s).
• The risk of this approach is that employees may come to a different decision than the one desired by management, but it is necessary for creating a culture of trust and transformation (30m54s).
• To create conditions for authentic conversations and decision-making, it's essential to have the right employees and the right process in place, and for the CEO to have a sense of perspective and be willing to acknowledge if they're the wrong person for the job (31m26s).
• The goal is to get conversations surfacing from the bottom up, especially in a polarized world where it's not possible to just assume everyone is aligned with a particular decision (31m45s).
• For employees who feel that their organization's stance on an issue goes against their personal values or the company's values, the advice is to focus on leadership rather than management, and to think about how to bring people with them in a way that doesn't deepen polarization (32m38s).

Power, Transformation, and the Vatican Bank

• The book grapples with the concept of power, which is often seen as having a negative connotation, but is necessary to get things done; it's defined as the potential to mobilize the energy of others to your ends (33m51s).
• To be more effective in a deeply divided world, employees need to figure out how to use power in a way that's additive to the organization rather than depletive, and examples of people who have done this from the bottom up or by managing upwards are explored (34m5s).
• Renee Brulard, a Swiss banker and lawyer, was the first layperson in recent history to be given a direct reporting line to the Pope, overseeing the Vatican bank due to its problems and need for reform (34m19s).
• The Vatican bank had resisted cleanup efforts by the US Treasury, which aimed to stop illicit capital flowing through the banking system, and had instead claimed to be accountable only to God (35m37s).
• The Vatican bank had made some good arguments for its role in providing financial services outside of traditional institutions, such as helping the resistance during World War II and the solidarity movement in Poland (35m53s).
• However, the US Treasury had categorized the Vatican bank as enabling terrorist financing due to its failure to meet certain requirements, resulting in its exclusion from the international banking system (36m32s).
• This exclusion had significant consequences for the Vatican, including the inability to use credit cards, which affected revenue from museum ticket sales, a crucial source of income (36m42s).
• Renee Brulard was tasked by Pope Francis to get the Vatican bank back into the international banking system without embarrassing the church, leveraging his experience in helping Liechtenstein return to the system (37m28s).
• A leader in a polarized organization, such as the Vatican Bank, may need to manage upwards due to the power dynamics at play, and this can be done by using external forces, such as public press conferences, to create accountability and drive change from within (37m42s).
• This approach can be seen as a passive yet effective way to transform an organization, as it allows the leader to incrementally commit to change and set expectations both internally and externally (38m15s).
• The leader's use of brutally honest press conferences can help to build trust and drive change, even in the face of significant challenges and complexities (38m35s).
• The story of the Vatican Bank's transformation has a complex and ongoing ending, highlighting the challenges of driving change in polarized organizations (38m56s).
• Leaders can deploy power in additive ways, such as by using external forces to create accountability and drive change, rather than simply relying on their formal authority (38m49s).

Leading in Polarized Times: Principles and Examples

• In times of crisis, such as the January 6 riots, leaders may need to acknowledge the context in which their organization operates and consider how their actions may be perceived by employees and stakeholders (39m21s).
• Leaders should consider asking seven key questions about how their organization's actions connect with the broader environment and what they are operating within, in order to develop a strategy that takes into account the complexities of the context (40m46s).
• The specifics of a leader's strategy will depend on the organization's purpose, mission, and values, but acknowledging the context and considering the broader implications of their actions is crucial in polarized times (40m35s).
• Leaders must consider how much to lean in and where to lean in during polarized times, and think about what they can do to address polarization, regardless of who wins in an election (41m3s).
• Chris Liddell, the former CFO of Microsoft, is an example of a leader who embodied a unique leadership model, being a numbers-driven and principled individual who served as Deputy Chief of Staff in the Trump White House (41m25s).
• Despite being a Romney Republican, Chris Liddell was appointed to the senior administration of the White House under Trump and served for four years, making him one of the few people to last that long in the senior leadership (42m1s).
• Chris Liddell started transition planning before January 6th and wanted to resign after the event, but the incoming Biden team asked him to stay on, making him one of the last people from the Trump Administration in the White House on January 20th (42m55s).
• Chris Liddell's leadership model is an example of what is needed in any administration, where leaders can embody a commitment to inclusive processes and keeping people in the conversation, even in a polarized world (43m48s).
• Leaders like Chris Liddell, who have a real understanding and appreciation for the importance of inclusive processes, are crucial in creating a more inclusive and effective leadership environment (44m24s).
• Leaders have successfully navigated polarized times throughout history, and it is hoped that this can be achieved in the current moment as well (44m37s).

Building Community and Trust: Rules of the Game

• When moving into a global role, one may realize that not everyone shares the same self-evident truths, and this realization can moderate one's perspective (45m5s).
• Interacting with people from diverse backgrounds, such as the 30-40 Road Scholars and Commonwealth Scholars in the program, can humble and moderate one's extreme instincts (45m27s).
• The program created three rules of the game to facilitate open discussion and community building, which were developed from the bottom up with the student government (46m2s).
• The first rule is that individuals should be able to engage authentically without feeling the need to censor themselves, as the community values their unique perspectives (46m38s).
• The second rule is that this freedom to express oneself applies to everyone in the community, and individuals must create conditions for others to do the same (47m5s).
• The third rule is that the community is a leadership community that prioritizes building a habit of leadership, which involves taking accountability for one's words and their impact on others (47m24s).
• This means that individuals are responsible not only for what they say but also for how their words affect others, and they must work to help others process and work through arguments (47m36s).
• Creating a community that values trust and transformation requires upfront acknowledgment that mistakes will be made, and most of these mistakes are not malicious, but rather a result of human error (48m8s).
• Giving people the benefit of the doubt and creating conditions for trust to develop early on is crucial for the success of such a community (48m32s).
• One approach to building trust is through activities that encourage vulnerability and teamwork, such as the "university tanks" exercise at Oxford, where students participate in simulated rowing Olympics (49m3s).
• This exercise helps students learn to work together, sweat together, and develop a sense of vulnerability from day one, which is essential for building trust (49m41s).
• The exercise also teaches students to pace themselves with others, regardless of their background or nationality, which is critical in a polarized world (49m57s).
• Seeding a culture of trust and cooperation early on is vital, as it allows the community to deal with polarization more effectively when it arises (50m15s).
• The first few weeks of a program or initiative, referred to as the "honeymoon period," are crucial for building trust and establishing a strong foundation for the community (50m27s).
• By the time polarization and politics come up, the community should have a strong foundation of trust to fall back on, which is essential for navigating difficult conversations and conflicts (50m46s).
• This approach is not limited to academic settings, but can be applied to businesses, governments, and other organizations (50m53s).

Creating an Antifragile Culture: Lessons from Stoicism and Organizational Design

• The concept of "never events" in medicine, such as ER closures, can be applied to other fields, and building trust and cooperation can help prevent such events from occurring (51m11s).
• An after-action review methodology was used to address ER closures, where everyone involved had to meet and discuss what happened, why it happened, and what the intention was, which helped deal with the incident at Santa Clara Kaiser and other places (51m40s).
• The after-action review process empowers people to figure out the situation, as every incident has a different reason, such as the inability to get people out of the ER due to a lack of taxis (52m25s).
• The framework of addressing a situation has a circularity, allowing one to join at any point, even when the situation is already critical, and the first step is to turn down the temperature (52m42s).
• Cressida Dick, the Metropolitan Commissioner of Police in London, faced a crisis during the pandemic, with data showing a high rate of stop and search, disproportionately affecting young black men, and anti-policing protests following George Floyd's murder (53m22s).
• Dick had to navigate the crisis carefully, as using the term "institutionally racist" could alienate the police force, which was 85% white in a city that was about 50% white, and she had to balance the expectations of her two bosses, the mayor of London and the Home Secretary, who had different political persuasions (54m6s).
• A situation involving Mayor Sadiq Khan and Home Secretary Priti Patel is described, where they were openly criticizing each other in the media, and Patel was dealing with multiple crises, including anti-policing protests and pushback from people who had lost loved ones during the pandemic (54m41s).
• Patel recognized the importance of the Met Black Police Officers Association in managing the crisis and brought in its head to help deescalate the situation, understanding that catalytic forces, such as institutions or individuals, are crucial in the first stage of deescalation (55m20s).
• The concept of anti-fragility is discussed, referring to the ability of a system or culture to benefit and grow from events of polarization, rather than being damaged by them (57m25s).
• The idea of creating an antifragile culture is explored, and the importance of promoting resilience at both the individual and organizational levels is highlighted (57m42s).
• The stoic philosophy is mentioned as a favorite reading on resilience among the protagonists profiled in the case studies of the book (58m10s).
• The author's personal experience working on the Integrity team at Facebook during the US 2020 election and dealing with polarization and crisis is mentioned, highlighting the burnout and cynicism that can result from constantly working in a polarized environment (56m40s).
• The author's transition to a new role is mentioned, with the goal of finding a less demanding environment, but the question of how to promote an antifragile culture is posed, seeking a sustainable way to benefit from events of polarization (57m17s).
• Stoicism is often misunderstood in modern academic philosophy as being conceptually less rigorous than other classical Greek traditions, and in popular culture as promoting clinical indifference to emotions, but a more accurate conception of stoicism is dialectical sophistication, which involves being careful about what one says and does, and having a sense of perspective on what can and cannot be controlled (58m13s).
• Leaders who have successfully navigated polarized times have often been influenced by stoic writings, which help them recognize what is outside their control and maintain their sanity in challenging contexts (58m59s).
• On an organizational level, creating a culture of relational contracts is essential, which involves delegating tasks to people, training them to exercise good judgment, and allowing them to fail in a safe and trusting environment (59m27s).
• This approach to organizational culture is necessary to build resilience, as it enables multiple people to address challenges and make decisions without relying on a single central authority (1h0m16s).
• A quote from Dwight Eisenhower to Jack Kennedy illustrates this idea, advising Kennedy to create an organization where only difficult matters reach the top level, and to avoid centralizing decision-making (1h0m28s).
• This approach to leadership and organizational culture is essential for building resilience and navigating challenging times (1h1m20s).