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Recently, the leadership team
of an American supermarket chain
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decided that their business
needed to get a lot more efficient,
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so they embraced their digital
transformation with zeal.
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Out went the teams
supervising meat, veg, bakery,
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and in came an algorithmic task allocator.
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Now, instead of people working together,
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each employee went, clocked in,
got assigned a task, did it,
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came back for more.
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This was scientific
management on steroids,
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standardizing and allocating work.
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It was super-efficient.
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Well, not quite,
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because the task allocator
didn't know when a customer
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was going to drop a box of eggs,
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couldn't predict when some crazy kid
was going to knock over a display,
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or when the local high school decided
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that everybody needed
to bring in coconuts the next day.
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Efficiency works really well
when you can predict
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exactly what you're going to need,
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but when the anomalous
or unexpected comes along --
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kids, customers, coconuts --
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well then efficiency
is no longer your friend.
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This has become a really crucial issue,
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this ability to deal with the unexpected,
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because the unexpected
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is becoming the norm.
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It's why experts and forecasters
are reluctant to predict anything
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more than 400 days out.
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Why?
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Because over the last 20 or 30 years,
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much of the world has gone
from being complicated
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to being complex,
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which means that yes there are patterns,
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but they don't repeat
themselves regularly.
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It means that very small changes
can make a disproportionate impact.
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And it means that expertise
won't always suffice,
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because the system
just keeps changing too fast.
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So what that means
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is that there's a huge amount in the world
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that kind of defies forecasting now.
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It's why the Bank of England will say
yes, there will be another crash,
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but we don't know why or when.
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We know that climate change is real,
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but we can't predict
where forest fires will break out
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and we don't know which factories
are going to flood.
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It's why companies are blindsided
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when plastic straws
and bags and bottled water
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go from staples to rejects overnight,
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and baffled when a change in social morays
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turns stars into pariahs
and colleagues into outcasts:
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ineradicable uncertainty.
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In an environment that defies
so much forecasting,
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efficiency won't just not help us,
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it specifically undermines and erodes
our capacity to adapt and respond.
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So, if efficiency is no longer
our guiding principle,
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how should we address the future?
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What kind of thinking
is really going to help us?
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What sort of talent
must we be sure to defend?
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I think that, where in the past we used to
think a lot about just in time management,
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now we have to start thinking
about just in case,
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preparing for events
that are generally certain
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but specifically remain ambiguous.
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One example of this is the Coalition
for Epidemic Preparedeness, CEPI.
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We know there will be
more epidemics in future,
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but we don't know where or when or what,
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so we can't plan.
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But we can prepare.
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So CEPI's developing multiple vaccines
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for multiple diseases,
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knowing that they can't predict
which vaccines are going to work
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or which diseases will break out.
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So some of those vaccines
will never be used.
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That's inefficient.
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But it's robust,
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because it provides more options
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and it means that we don't depend
on a single technological solution.
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Epidemic responsiveness
also depends hugely
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on people who know and trust each other,
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but those relationships
take time to develop,
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time that is always in short supply
when an epidemic breaks out.
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So CEPI's developing relationships,
friendships, alliances now
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knowing that some of those
may never be used.
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That's inefficient,
a waste of time, perhaps,
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but it's robust.
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You can see robust thinking
in financial services, too.
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In the past, banks used to hold
much less capital
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than they're required to today
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because holding so little capital,
being too efficient with it,
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is what made the banks
so fragile in the first place.
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Now, holding more capital
looks and is inefficient,
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but it's robust because it protects
the financial system against surprises.
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Countries that are really serious
about climate change
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know that they have to adopt
multiple solutions,
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multiple forms of renewable energy,
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not just one.
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The countries that are most advanced
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have been working for years now
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changing their water and food supply
and healthcare systems
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because they recognize that by the time
they have certain predictions,
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that information
may very well come too late.
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You can take the same approach
to trade wars, and many countries do.
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Instead of depending on a single
huge trading partner,
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they try to be everybody's friends,
because they know they can't predict
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which markets might
suddenly become unstable.
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It's time-consuming and expensive,
negotiating all these details,
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but it's robust because
it makes their whole economy
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better defended against shocks.
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It's particularly a strategy
adopted by small countries
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that know they'll never have
the market muscle to call the shots,
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so it's just better to have
too many friends.
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But if you're stuck in one
of these organizations
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that's still kind of captured
by the efficiency myth,
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how do you start to change it?
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Try some experiments.
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In the Netherlands,
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home care nursing used to be run
pretty much like the supermarket:
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standardized and proscribed work
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to the minute,
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nine minutes on Monday,
seven minutes on Wednesday,
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eight minutes on Friday.
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The nurses hated it.
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So one of them, Jos de Blok,
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proposed an experiment.
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Since every patient's different
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and we don't quite know
exactly what they'll need,
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why don't we just leave it
to the nurses to decide?
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(Laughter)
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Sound reckless?
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(Applause)
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In this experiment, Jos found
the patients got better
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in half the time
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and costs fell by 30 percent.
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When I asked Jos
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what had surprised him
about his experiment,
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he just kind of laughed and he said,
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"Well, I had no idea it could be so easy
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to find such a huge improvement,
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because this isn't the kind of thing
you can know or predict
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sitting at a desk
or staring at a computer screen."
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So now this form of nursing
has proliferated across the Netherlands
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and around the world,
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but in every new country
it still starts with experiments,
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because each place is slightly
and unpredictably different.
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Of course, not all experiments work.
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Jos tried a similar approach
to the fire service,
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and found it didn't work because
the service is just too centralized.
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Failed experiments look inefficient,
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but they're often the only way
you can figure out
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how the real world works.
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So now he's trying teachers.
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Experiments like that require creativity
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and not a little bravery.
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In England --
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I was about to say in the UK,
but in England --
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(Laughter)
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(Applause)
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In England, the leading rugby team,
or one of the leading rugby teams,
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is Saracens.
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The manager and the coach there realized
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that all the physical
training that they do
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and the data-driven conditioning
that they do has become generic.
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Really all the teams
do exactly the same thing.
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So they risked an experiment.
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They took the whole team away,
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even in match season,
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on ski trips
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and to look at social projects in Chicago.
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This was expensive,
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it was time-consuming,
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and it could be a little risky
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putting a whole bunch of rugby players
on a ski slope, right?
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(Laughter)
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But what they found was that
the players came back
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with renewed bonds
of loyalty and solidarity,
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and now when they're on the pitch
under incredible pressure,
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they manifest what the manager calls
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poise,
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an unflinching, unwavering dedication
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to each other.
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Their opponents are in awe of this,
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but still too in thrall
to efficiency to try it.
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At a London tech company, Verve,
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the CEO measures just about
everything that moves,
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but she couldn't find anything
that made any difference
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to the company's productivity.
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So she devised an experiment
that she calls Love Week:
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a whole week where each employee
has to look for really clever,
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helpful, imaginative things
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that a counterpart does,
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call it out and celebrate it.
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It takes a huge amount of time and effort,
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lots of people would call it distracting,
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but it really energizes the business
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and makes the whole company
more productive.
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Preparedness, coalition-building,
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imagination, experiments,
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bravery:
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in an unpredictable age,
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these are tremendous sources
of resilience and strength.
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They aren't efficient,
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but they give us limitless capacity
for adaptation, variation and invention.
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And the less we know about the future,
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the more we're going to need
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these tremendous sources
of human, messy, unpredictable skills.
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But in our growing
dependence on technology,
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we're asset-stripping those skills.
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Every time we use technology
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to nudge us through a decision or a choice
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or to interpret how somebody's feeling
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or to guide us through a conversation,
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we outsource to a machine
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what we could, can do ourselves,
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and it's an expensive tradeoff.
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The more we let machines think for us,
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the less we can think for ourselves.
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(Applause)
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The more time doctors spend
staring at digital medical records,
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the less time they spend
looking at their patients.
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The more we use parenting apps,
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the less we know our kids.
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The more time we spend with people that
we're predicted and programmed to like,
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the less we can connect with people
who are different from ourselves,
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and the less compassion we need,
the less compassion we have.
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What all of these
technologies attempt to do
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is to force-fit a standardized model
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of a predictable reality
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onto a world that is
infinitely surprising.
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What gets left out?
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Anything that can't be measured,
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which is just about
everything that counts.
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(Applause)
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Our growing dependence on technology
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risks us becoming less skilled,
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more vulnerable
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to the deep and growing complexity
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of the real world.
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Now, as I was thinking about
the extremes of stress and turbulence
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that we know we will have to confront,
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I went and I talked to
a number of chief executives
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whose own businesses had gone
through existential crises,
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when they teetered
on the brink of collapse.
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These were frank,
gut-wrenching conversations.
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Many men wept just remembering.
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So I asked them,
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what kept you going through this?
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And they all had exactly the same answer.
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It wasn't data or technology, they said.
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It was my friends and my colleagues
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who kept me going.
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One added, "It was pretty much
the opposite of the gig economy."
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But then I went and I talked to a group
of young, rising executives,
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and I asked them,
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"Who are your friends at work?"
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And they just looked blank.
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"There's no time.
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They're too busy.
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It's not efficient."
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Who, I wondered, is going to give them
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imagination and stamina and bravery
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when the storms come?
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Anyone who tries to tell you
that they know the future
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is just trying to own it,
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a spurious kind of manifest destiny.
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The harder, deeper truth
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is that the future is uncharted,
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that we can't map it 'til we get there.
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But that's OK,
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because we have so much imagination
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if we use it.
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We have deep talents of inventiveness
and exploration, if we apply them.
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We are brave enough to invent things
we've never seen before.
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Lose those skills,
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and we are adrift,
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but hone and develop them,
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we can make any future we choose.
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Thank you.
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(Applause)