The Great Unmasking

In his speech and interaction with Des Dearlove, Daniel Pink dwells on the symbolism of the mask and what it has meant not just for the US but businesses and countries across the globe.

There are a couple of things going on at a big level during this crisis. One of them is a great unmasking of what is going on in business and the world. The mask is going to be the metaphor that defines this crisis. A part of that mask is an unmasking of several different things that were hidden in plain sight that we are now forced to reckon with. One of those things being unmasked is the apparatus, both private and public, that we have built to respond to certain kinds of threats. The U.S. was not as resilient as it was thought to be, in part because it was not prepared for this crisis. We did not have the infrastructure, the frames of thinking, or even the muscle memory to deal with threats like this virus. This is one unmasking at the national level.

There is an unmasking going on about the future of democratic capitalism as well. It was showing its cracks all over the world, and it can be seen in the rise of nationalism and a dangerous strain of identity politics happening here. It can be seen even in small things like the last Business Roundtable before the pandemic saying that shareholder value is not everything. It unmasked at the corporate level what obligations do companies owe to individuals, and what obligations do individuals owe to companies? Another unmasking is that of inequality. We knew about this in terms of income, but now we are seeing that it is something even more profound. Some people can do their jobs from home, but other people have to go out and do their jobs in person with others, and they are more at risk.

The crisis has raised some interesting questions about what leaders do and whether the leadership traits that are necessary for this kind of environment are portable to other kinds of environment.

The crisis has raised some interesting questions about what leaders do and whether the leadership traits that are necessary for this kind of environment are portable to other kinds of environment. One of the leaders doing a great job is the Prime Minister of New Zealand. She has a sense of urgency, is extraordinarily transparent about what she knows, what she doesn’t know, and about where the future was going to be and is also extraordinarily empathetic. The public gets a sense that she actually understands their concerns. These are the qualities that seem to be valuable but are missing in some countries like the U.S. A part of it is a function of the American system. There are 50 states, and each one is dealing with it in their own way, but a sense of intense national resolve that might have been there during World War II cannot be seen now.

We undervalue empathy as a leadership skill, in part because it sounds soft, but it is more fundamental than we realize. We nominally prize urgency and decisiveness in leaders, but at the level of a government and large company, the situation often impairs that. There are several speed bumps along the way to making quick decisions and having a sense of urgency and a lot of compromises. Besides these, another important quality is leadership is integrity. Some leaders say one thing and do another. For instance, they issue cost-cutting regimes and still take their private jet everywhere when they issue edicts to other people. This hypocrisy hardens the cynicism, which is one of the biggest barriers because cynicism prevents us from getting at the truth. In summary, transparency, empathy, urgency, and integrity are enduring characteristics in a leader. This moment thus offered a way for us to see what are the principles of effective leadership.

One of the other things unmasking is a fair degree of scientific illiteracy among the public, and certainly among the leaders. Angela Merkel, Chancellor of Germany, demonstrated great leadership, but it also helped that she was a scientist. The number of scientists in public offices in the U.S. and many other countries is minuscule. In these countries, there seems to be in public life a certain degree of demeaning of the experts. There are a couple of factors behind that. One of the great things about technologies is that it gives everybody a platform, and while that has led to undeniably positive things, the dark side of that is that anybody can say whatever they want. The darker side of that is the toxic combination of individual choice and algorithmic recommendations that send people to these echo chambers where they reinforce things that they already believe, irrespective of the truth. A grand consequence of that is people are unsure of what is true. There are a large number of people believing in conspiracy theories about the virus. One of the remedies to that at the leadership level is transparency.

This is also a rare opportunity to recast the social contract, in terms of the relationship with the state as well as with the economy.

A remarkable thing to see at this time is human nature. There are no police officers on the corner enforcing social distancing norms, but people themselves, who are doing this because it is the right thing to do. That tells us something positive about human nature.

In the corporate world, there are a few alarming things that can be seen. A lot of things that happen in the present can be a signal from the future. One of the incredible signals at the policy level in the States is the universal basic income. If it was proposed in the 1990s, it would have been immediately rejected, and now people are talking about it. Another signal is that the unemployment benefits that Americans are getting right now are more than they made on the job. They are getting more from their unemployment compensation than from their salaries and wages, which is not a good thing. It means that people who are working 40 hours a week cannot support their families. This is another part of the unmasking. Hence, one of the questions we can ask ourselves is, is this a signal from the future?

This is also a rare opportunity to recast the social contract, in terms of the relationship with the state as well as with the economy. One of the things that we should do is rethink the status quo. A lot of times, we take something that is status quo and accept it as a fact when it is often an accident. So, one of the things that we should reassess is the role of companies. In the U.S., we have relied on companies to serve a quasi-welfare state role. In America especially, we require companies to provide health insurance, pension benefits, child care, et al. this is now being exposed as a bad idea for two reasons. Firstly, most companies are not good at it, and companies answerable to shareholders cannot be trusted to do that effectively. Secondly, businesses should be allowed to focus on their business, rather than be in the healthcare business or the pension business. This is an open question about what companies owe their employees and what employees owe their employers. We probably do not have a good answer to that right now.

An interesting development in this crisis is the change in the countries’ approach towards spending. In the blink of an eye, everybody across the political spectrum suddenly became Keynesian. It is as if, in a pandemic, we are all Keynesians. There are some interesting issues regarding that, which touch on business. For instance, it is possible that going forward, the Federal Government is going to own a substantial amount of corporate debt and that is going to put the U.S. government in a role that it is arguably bad at. 

The fact that such a significant portion of the population was able to switch to remote working in a very decentralized way signals that it could be a significant change.

On the side of democratic capitalism, there have been questions raised on the efficacy of democracy. Some authoritarian systems have handled the crisis better than democracies. To understand that, social psychologist Michelle Gelfand’s work on tight cultures and loose cultures can be helpful. Tight cultures are more rule-based ones. Loose cultures are ones that are more norm-based and often allow a little bit more individual liberty at the expense of that. All cultures, to some extent, are mixtures of both tight and loose. We see that this is the time for tight and the best example of that is South Korea. However, as we think about governance writ large, countries should be bilingual and ambidextrous, so that they can be tight or loose depending on the need of the moment. The COVID pandemic is a case where being tight at the outset was the right thing to do.

There is also a perception that it is a tradeoff between livelihoods and the economy. However, this idea of public health and economic growth is not a tradeoff. They go hand in hand. The economic devastation is incredible, and the number of people who are suffering is alarming. There is a utilitarian strain in parts of the world that is essentially saying that a couple of million people have to die, that a larger good of 298 million people surviving is worth more than the 2 million who will die. This is unacceptable. In behavioral terms, another example of hyperbolic discounting can be seen, wherein people will not do things in the short term that will benefit them in the long term. So, staying in for a couple of months might keep the economy going 10 years from now. Instead, going to the beach now in large numbers could end up hobbling the economy for many years.

Des Dearlove in Conversation with Daniel Pink

Des Dearlove: Do you think America is losing world leadership and we are seeing a shift of power from the West to the East hastening in real-time now? 

Daniel Pink: It could be, but again, things like these do not change everything. Deepening trends are already in place, and one of those is the geopolitical move toward China being more influential and the Chinese model of authoritarian capitalism competing with what is now a pretty tattered form of democratic capitalism.

Des Dearlove: How long do you think we have got if we are going to make a big cost correction?

Daniel Pink: It is probably shorter than we think. There could be a tendency for people to revert to old habits and old ways of doing things, and my hunch is that the length of the opportunity is a function of the length of the crisis. The longer the crisis goes on, the longer the window opens. 

Des Dearlove: The U.S. has got an election coming up, so there is an opportunity to potentially have a different leader. What do you think about that? 

Daniel Pink: American politics right now is extraordinarily unpredictable. Donald Trump’s supporters are resolutely still for him regardless, but a big part of the country is not. It is a question of who is going to turn out to vote. It becomes complicated because how are we going to turn out people to the polls when they have to stay six feet away from each other and so on. 

Des Dearlove: What do you think about the future of remote work?

Daniel Pink: The fact that such a significant portion of the population was able to switch to remote working in a very decentralized way signals that it could be a significant change. One of the most important things in predicting behaviour is the default setting of the behaviour. For a long time, the default for white-collar work was going to an office, because that is where the work is, where the tools for work and colleagues are. It was the default behaviour, so it was unchallenged. Now, people would challenge the default and choose to work from home if they have errands to run or someone sick at home to look after.

The curiosity is about whether the default would end up switching that for white-collar workers, that is, default becomes working at home and going to the office only when people have work that has to get done in the office. That default has enormous ripple effects on commuting and pollution. One of the biggest effects of this pandemic is going to be on real estate. If work default changes, real estate business and commercial real estate business is going to be in upheaval. There are going to be empty office buildings all over the urban centers of the world, at least for some time. With the steep rise of e-commerce, we are going to empty shopping malls, at least for the short term. So, creative people can find new ways to repurpose those spaces.

Des Dearlove: If you were writing a speech today for a president and you were trying to reimagine the future, what would you put in that speech?

Daniel Pink: I would go hard and soft. I would talk about the importance of being empathetic and caring for each other, and also of resolve and sacrifice. I would marry those two trends in a way that I can say is somewhat Churchillian. Toughness in resolve coupled with empathy and caring is the leadership we need right now.

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