Watch Jonathan Kreindler’s keynote at the 2019 Collision Conference, where he discusses the broad-reaching societal implications of toxic workplace cultures at companies like Wells Fargo, Uber, VW, and what some of North America’s most innovative companies are doing to mitigate these risks.
I’m very excited to announce that Mike Friedman has joined Receptiviti as Chief Analytics Officer and Head of Product. Mike was previously Managing Director, Data Science & Analytics at Scotiabank. For almost two decades years Mike has been building and managing large teams of data scientists and engineers to design, develop, and deploy advanced analytics and artificial intelligence based systems across the bank, including Scotia’s Corporate and Investment Bank, Global Transaction Bank, and Commercial Banking.
I was introduced to Mike in 2016 by one of our advisors, and we quickly developed a great working relationship. Mike’s theoretical and practical knowledge of artificial intelligence, and his experience designing and building highly complex analytics systems that simplify business problem solving was incredibly appealing. I knew early on that we wanted to bring him onboard. In addition to his professional experience, Mike holds degrees in Commerce and a Master’s in Management Analytics from Queen’s University. He is a Chartered Accountant in Canada, a Certified Public Accountant in the U.S., and an adjunct lecturer at Queen’s Smith School of Business.
Our customers hold us to an incredibly high ethical standard, and as we continue to scale it’s increasingly important for us to bring on established leaders like Mike who have deep expertise in ethical AI and are highly regarded both in industry and academia. There’s an elegance and empathetic nature to Mike’s data-driven approach that is quite rare, he’s relentless when it comes to simplicity and actionability, both of which are critically important when building systems that people actually want to use.
As we continue to grow our customer base and partnerships, expand our research and the capabilities of our platform, Mike’s experience will be a huge asset and driving force into 2019 and beyond. I’m delighted to welcome Mike to Receptiviti’s leadership team!
See the Betakit article for more information about Mike.
Next week we celebrate Martin Luther King Day, the American Federal Holiday honouring the life of the great civil rights leader. Despite its date moving from year to year (always the third Monday of January), the day is intended to mark his birthday.
I’ve always loved MLK Day -- not only because it falls near my own birthday, but because of the stories and memories I associate with it. My grandparents tell stories of fighting in the civil rights movement, of feeling as though Martin Luther King was speaking directly to them, urging them to write letters, attend marches, and bring together the people of their small farming communities to fight for a better future.
And of course, like many Americans of the younger generations, MLK Day brings memories to me of being a child in grade school. I remember watching an old, shaky, black and white film clip of Martin Luther King speaking to a huge crowd of people. I remember realizing that if I was so moved and inspired by his words so many years after he spoke them, they must have been immensely powerful at the time.
At one point King spoke directly to my grandfather, in the form of a telegram encouraging him to continue gathering the people of his small college to participate in the civil rights movement.
The speech that I remember watching in school was of course the one containing the famous phrase “I have a dream,” which is often used to refer to speech as a whole -- the I Have a Dream speech. This phrase is so powerful on its own that it has since come to define not only the speech it was spoken in, but also King’s approach, message, and movement as a whole.
What I never learned as a child however, is that this phrase (and the refrain that followed it) was not part of the script that King had prepared to give that day; it was a “Hail Mary” thrown to uplift a sobered crowd.
On August 28, 1963, approximately 250,000 attendees were gathered together for the March on Washington for Jobs and Freedom, intended to show mass support for President Kennedy’s civil rights legislation and to advocate for further civil and economic rights for African Americans.
People traveled for many hours from across the country to be present for the march -- they filled buses, trains, and airplanes, converging on Washington DC despite media expectations that the march would be a risky and even dangerous event. The crowd marched from the Washington Monument to the Lincoln Memorial, where they sang and danced, waiting to hear the already-famous Martin Luther King speak.
King began his speech with masterful rhetoric, interweaving references to the Emancipation Proclamation, the Declaration of Independence, the Gettysburg Address, and the United States Constitution with anaphora and allusions. His speech discussed the continued hardships and inequalities faced by African Americans, highlighting the distance between the world idealized in these historical documents and the realities of daily life for African Americans. The crowd, previously celebrating to the singing of Mahalia Jackson, was sobered.
It wasn’t until Mahalia Jackson, who had seen King speak about dreams before, shouted "Tell them about the dream, Martin," that King abandoned his script and began an improvised rendition of a refrain used in previous speeches -- one about his dream for a better future.
As King described a world in which children are not judged by their skin colour and freedom rings from every hill and mountain in America, the crowd cheered; this strong imagery helped them to share his dream. Despite the masterful rhetoric of the first segment of the speech, it is the second segment of the speech that children recognize over 50 years later.
“I Had a Dream” Speech Analysis
The thematic and tonal shift is clear when we analyze his speech, as seen in the graph below. As King moves into the second segment of the speech, he shows a warmer, more communal, and more socially inviting persona. He also shows a dramatic drop in some thought patterns often associated with depression, such as and focus inward towards the self and a disproportionate focus on negativity and pessimism.
Most notably, this shift toward a more optimistic, positive, and warm perspective pushes King’s already high persuasiveness even higher; this shift matches audience impressions of the two segments of the speech both at the time and today.
From countless studies in the fields of psychology, business, and political science to Jon Gordon’s bestselling book on the subject, the importance and power of positive leadership has never been so clear -- and King’s historical speech can serve as one of the best examples of this timeless and well-documented phenomenon.
In only 1,600 words, King used intellect and emotion to appeal for tolerance and fairness. He established weight and credibility by referencing historical documents, then channeled warmth and positivity by painting a picture of a better world.
As we celebrate Martin Luther King Day this year, we reflect on his words, his voice, and his message to Americans and the world on that day in 1963. Who knows how many his words could still inspire, and to what heights -- who knows what dreams may come?
We frequently speak with some of the most progressive executives and leaders from many of North America’s largest companies to glean their insights on how they are creating, managing, and measuring corporate culture in their organizations.
The following is the first in our monthly series, where we sit down with veteran banker Mark Caplan. Mark has spent 25 years in various executive and management positions at BMO, Scotiabank, and the Bank of Canada. He most recently served as the President of the Global Risk Institute (GRI), the preeminent source of ideas on the management of emerging risks and trends for financial service organizations. In our discussion, Mark shares his thoughts on the industry's current approach to risk, the need for better use of people analytics, and the distinction between risk culture and culture risk.
Receptiviti: How has the perception/conversation around workplace culture and risk changed throughout your career in the financial services?
Mark: It’s changed immensely since I started. When I began as a trader in the early 90s, there was no expectation that a company should adjust itself to benefit or attract employees. Every institution had its own culture, and people that didn’t fit in would leave. Financial institutions in particular had unspoken but uniquely strong cultures that were difficult to disrupt. Some people describe the prevailing culture in banking as a ‘locker room mentality’. I wouldn’t conceptualize it that way, but it certainly was male dominated. You had straight white men with alpha personality types running trading floors and trading businesses, and people who fit with that culture were embraced. But the concept of talking to your employees, assessing their engagement or stress, and fostering a culture that supports their needs, that’s all fairly new.
A lot has changed since then, some of which is attributable to the 2008 financial crisis. Prior to the financial crisis, transgressions were thought to be made by rogue traders. When an employee did something bad it was viewed as your company being tapped with the unlucky stick - you hired the wrong guy. But people started realizing that transgressions aren’t idiosyncratic, they happen a lot and in many cases they’re endemic. Now, having spent the year at GRI talking to CROs, CTOs, and governance professionals, it’s clear that culture is very much on the minds of senior regulators and big financial firms. People are realizing that culture can be a huge source of risk, as well as a huge competitive advantage if you get it right. This sense of ‘who are we, what makes us different, and what are our sources of risk’ – that conversation is happening everyday now whereas before it never was.
Receptiviti: What would you identify as the prevailing approach to people risk today, and do you consider it effective?
Mark: I’ll start by saying no, it’s not effective, but not because of a lack of desire or focus. I think the problem is a lack of tools. In terms of current techniques, you see a lot of things like employee surveys, whistleblower hotlines, and statements of mission/vision/ethics. I wouldn’t recommend against doing those things, but they aren’t sufficient for successfully mitigating risk. Large institutions with endemic conduct issues had all of those but were still vulnerable, so more advanced methods should be implemented.
The problem is not that executives don’t care about culture, it’s that most executives don’t know what to do about it. From a practitioner perspective, no one is really leading the way in terms of setting forward best practices. Companies don’t want to be led down blind alleys and, in some cases, they don’t even want to know what’s happening. The question becomes: do we want to know that we lost a billion dollars, or should we just turn our heads and keep doing what everybody else is doing? You’re getting a bit of a first mover problem. These things tend to travel in herds so if one person finds the secret sauce, everyone follows behind them.
Receptiviti: What would you suggest as a better approach to risk and culture management than what exists now?
Mark: I think that technology is the answer to better managing risk. Analytics can inform behavior better than anything else. Banks originally managed credit risk by hiring, training, and moving analysts up the ladder. Then, they started looking at analytics to examine things like portfolio diversity and expected loss, allowing people to better understand and adjust their risk profiles. Culture risk is the same in that it should start with using analytics to understand how your staff are behaving, so that you can change the inputs to create a better risk profile. It’s not just about finding misconduct, it’s about understanding this huge asset that you’ve invested in and being able to see how it’s performing. I can’t see any way to do so other than through tech-based analytics.
Receptiviti: How should risk culture play into a company’s larger workplace culture strategy?
Mark: I think people get the concepts of risk culture and culture risk confused. Risk culture refers to your approach as an organization to the assumption or the taking of risk. A good risk culture is one in which the existing incentives encourage people to take appropriate risks and discourage them from taking inappropriate ones. In contrast, a bad risk culture is one in which people get huge bonuses when things go right and fired when things go wrong, without consideration of why that outcome happened.
Culture risk is about the behaviours and norms within an organization. When the behaviours and norms are not what you think they are, when people are misbehaving or there’s misalignment or misconduct, it means you have culture risk. Culture risk is the responsibility of your CEO and board of directors, it’s part of the broader culture function. Conversely, your risk culture should be within the purview of your CRO. They are responsible for ensuring that your approach to risk – such as the incentives and deterrents that exist within your organization - is effective. Most CROs are required to have a view on things like whether people are being paid appropriately, if people are exhibiting the right risk culture, and if certain individuals should be sanctioned. It’s that independent risk function that directs the company’s risk culture.
Receptiviti: Senior officials in major Australian and European banks have said that changing their toxic culture will take up to 10 years. Are there ways that cultural change can be facilitated or accelerated that companies aren’t utilizing?
Mark: First, I have no idea how they could know the time frame that it would take to change their culture. It’s likely that they grappled with strategies to improve their culture and realized that it wouldn’t be an overnight thing, so they pulled a number out of the air and said it will take 10 years. If it was really an existential crisis they would get it done faster, and there are tools that would enable them to do so. But it’s important to understand that there are no solutions to culture or risk problems. A company's culture is never going to reach a point where its fixed or perfect, it just needs to be kept within a range that’s relatively safe.
In terms of expediting culture change, I think it starts by gaining a solid understanding of where your culture is currently, which requires the use of analytics. A lot of people get frightened by analytics because it’s uncomfortable to find out information about others. But my advice is for companies to start using them, because that information will help create conditions that better serve their employees. It’s similar to data science 5 or 10 years ago, when there were reams of data and people had to experiment to figure out how to use it. I would say that companies need to take the same approach with analytics - to start, see what they find out, iterate, and go from there.
Receptiviti: What would you say is missing from the current conversation about culture and people risk? What aspect(s) are banks failing to focus on that could be beneficial?
Mark: I think financial institutions tend to focus very heavily on misconduct as part of culture. A lot of the previous analytics have been around keyword searches to prevent misconduct like insider trading and conduct violations. I find this kind of sad because holistic culture analytics would allow leaders to identify areas for misconduct while also providing a much richer sense of what’s going on in the company. This would better position them to develop a culture that supports their objectives.
Whoever can foster a culture that effectively attracts, develops, and retains good talent will have a big competitive advantage. Goldman Sachs used to be that, they had a recipe for attracting and incentivizing the right people, which made them very difficult to compete with. We saw something similar with Jack Welch’s (of GE) approach, which focused on all aspects of people management from intake to progression and diversity of experience. The advantage that comes from getting culture right doesn’t last forever, but it does translate to a significant competitive advantage for a long period of time.
I’m very excited to announce that Alain Chesnais is joining Receptiviti as our new Chief Technology Officer. To say that Alain is a seasoned technology executive would be a significant understatement. As both a software engineer and data scientist, Alain has spent his career building products, teams and companies that solve very difficult and technically complex problems.
Alain has been a tireless innovator in the industry for over 30 years. He’s held technical leadership positions at Tucows, TruSpectra, ATI, and Alias|Wavefront. While at Alias|Wavefront, Alain spearheaded the development of 3D graphics application Maya, which received an Academy Award for scientific and technical achievement in 2003. Most recently, Alain co-founded Trendspottr, which was acquired by ScribbleLive in 2017.
In addition to his professional experience, Alain has held esteemed industry positions such as President of the Association of Computing Machinery from 2010-2012 and ACM SIGGRAPH President from 2002-2005.
We’ve been looking for a very specific person to take this role, and Alain fits our needs to a tee; his industry pedigree, technical achievements in engineering and machine learning, and his understanding of the complexities of building research-based products make him the perfect person to help us scale.
As we continue to focus on research, expanding our platform, making privacy and anonymity core tenets of our software, and of course, satisfying our customers, Alain’s experience and knowledge will power our growth into 2019 and beyond.
I am thrilled to welcome Alain to the Receptiviti team!
If you want to learn more about Alain, check out the full press release here.
At Receptiviti, we are incredibly proud of what we’re accomplishing — and especially proud that we have proven that human-centric technology does not need to compromise personal privacy in order to deliver outstanding value.
Receptiviti’s mission is to help companies create and maintain people-first workplaces where culture is prioritized and recognized as the key driver of organizational health and overall business performance. We believe that doing so requires a fundamental shift in the way that culture is understood and measured.
To achieve this, we have engineered privacy and anonymity as core structural elements of the Receptiviti platform. You see, we firmly believe that sustainable technology mustn’t only protect personal privacy, but should NEVER retain personal information in the first place. We have just published our ethical guidelines — they direct Receptiviti’s business practices, govern our research, and serve as a foundation for the products we build.
We commit to upholding these guidelines in every facet of our work, and we will consistently revisit them as we continue to grow and learn.
Take a look — we welcome your feedback!