Bonus: Peter Burling about sailing, risk and decision-making

0:01Merry Christmas everybody! We have a Christmas gift for you. Today we have an episode with Peter Böhrling, the best sailor of all times. Now, why is sailing interesting? Well, you know what? You can be ahead, win changes, and you are last, just as in financial markets. We talk about communication, we talk about planning, debriefing, learning from mistakes, how to deal with setbacks, etc. Super interesting. Tune in.

0:33Hi, everyone. I'm Nikolaj Tangen, the CEO of the Norwegian So-and-Wealth Fund. And today, I'm really happy to welcome Peter Berling. Peter Berling is a legend in sailing and won three America's Cup victories, including one recently, loads of world championships, like loads and loads, and Olympic championships as well. So you've been kind of dominating sailing lately. So welcome, Peter. Hey, thanks for having me. So the plan is to tease out what we in the business world and in the finance world can learn from the real professionals. first of all when you win do you celebrate success? yeah yeah I think you definitely have to celebrate the success I mean with every victory there's so much hard work that goes behind that building up to the to the competition I think you've also got to celebrate the end of a milestone even if it doesn't quite go as well as you would have liked but yeah it was definitely the last America's Cup was a really enjoyable one to celebrate for sure.

1:37When you say celebrate what do you mean? Like a cup of tea and that's it? It really depends. Normally after a competition you're pretty tired so normally you're just trying to enjoy the moment with everyone that's got you there. For an America's Cup environment there's 200 people in the team, there's all the friends and family, there's your own family. So yeah there's just so many people that have I suppose supported you along that journey and you know it's really nice to be able to share a moment with everyone just because generally you end up so busy in the actual competition phase that you don't get a lot of time to really enjoy it with the people that have supported you to be there.

2:17How long are you happy for?

2:23Quite a while. Happy is quite a hard thing to quantify right but yeah you really I I suppose, get that sense of accomplishment and pride of what you've managed to achieve. You know, I think the losses always hurt a lot longer than the wins make you happy for. But, yeah, either way, I think it just fuels you forward into the next adventure. Yeah. What do you think is the key to kind of keep yourself motivated for such a long time? You've done it now for many years, right? Well, for me, it's variety. It's doing things slightly differently. I think we're really lucky we're in a sport where there's an incredible amount of varieties and also the technology's evolving very quickly so you have different challenges you have to overcome on a regular basis.

3:13Sailing's quite a unique sport where it's very much a decision-making sport. You definitely do not get all the decisions correct. It's all about making one or two more correct ones than someone else and leveraging yourself and taking a bit of risk when you've got an opportunity to make a potential gain, but you're also knowing when to cut your loss. Which is why I like to compare investing with sailing. Because you can be ahead and then the wind changes and you are last, right? And so you lose. It's not because of you. And it's the same in finance. You're doing really well, market totally turns and you look like a complete loser.

3:51Yeah. Oh, I mean, in our sport, there's so much of... what is actually conservative and what is actually aggressive you know in a traditional sense it's very obvious to a sailor what conservative or aggressive is but you know when you actually play scenarios fully out to an end state it's quite hard sometimes to tell whether something is I suppose traditionally would have looked very aggressive but is actually what you think is the lowest risk option at the time or you know whether engaging with another boat and just kind of taking the conservative option is not actually a conservative option if you looked at it over a longer period.

4:28So yeah, there's a lot of, you know, whether you're trying to play against an opposition or whether you're just almost trying to time trial your race. Are you an aggressive sailor? Yeah, I think so. Yeah, my mindset's very much if there's an opportunity to make sure you take an appropriate amount of risk with it, you know, whether it's how you're sailing the boat. But in saying that, I think as a sailor, you want to be technically good across the board. You don't want to have any weaknesses. So you can use all the tools in the toolbox for a very cliche way of saying it and take what options you think are the correct ones at the time.

5:14Now, Ben Ainsley, who you beat in the America's Cup, said your team now is the best team sailing has ever seen. Now what do you think is your super strength?

5:29I think within a sport or a business you don't have one super strength. I think you have to be a, well in sport now everyone's very good. Everyone performs at a very high level but it's making sure you do all the little things really well. you come together as a group well, you work well with your engineers, you know your equipment incredibly well. And just the levels getting so high that everyone's playing at at the moment that you're always trying to look for these little wee gains that if you can find one or two little gains across an area, you very quickly get quite a significant jump. So that's what we try and do is, I don't think, just trying to continue to out-learn and out-improve our opposition.

6:17I think the rate of improvement is more where the teams get defined. What was the one thing you did better than the UK team? I think it's incredibly hard to tell. I say that because we don't really know the ins and outs of their program. But it was a pretty big beat. Very well. Yeah, we felt like we were really confident with our piece of equipment. and how we sailed that and how we dealt with the decision-making process around the boat. The America's Cup boats have become very interesting because where you sit on the boat you have a huge blind spot now so you're kind of really relying on the people on the other side of the yacht to help you make some of the decisions and to utilise their view at the time to keep you in the correct part on the race course and I think we did a really good job of that on our boat is making sure we're always making good decisions around the race course and distributed the load really well around the boat.

7:22It's become very technical in the sailing now. Yeah. Tell us about some of the kind of technicalities of it, some data. I mean, the boats are getting incredibly technical. Yeah, I think on the composite side, they'd be the most strained kind of composites out there in the world because we're pushing the boundaries very high. We have an incredible amount of monitoring on those so we can push right up against the limit and also that monitoring while you're sailing and then also the monitoring when you get back to shore to see if there's been any, I suppose, start of degradation on the components.

8:04You can pretty much go back in the data and look at whatever camera angle of whatever incident and hear exactly what was said on the comms. So it makes for this really kind of open, transparent conversations because all the data's there, all the comms, all the audio's there, so you can really get to the bottom of whatever's going on pretty quickly. What's kind of the coolest information stream you have when you were in a drive? I think your human interfaces is really interesting and has evolved a really long way. The way you interact with the boat, whether it's through the steering wheel or the control surfaces you use and then how that data gets projected back to you through the screens is a massive loop that continues to evolve very, very quickly.

8:58But also the way that now you can interface back with the shore. you can really cut down your iteration cycle time by having a lot of people watching live data and then actually going over the data and giving you more things to try. Are you allowed to communicate with them during the race? Not during the race, but that's more in the race build-up or on a training day. Once the race comes at three minutes to go from the race, you're shut off and you're in your own little bubble. so you've got to I suppose monitor a lot of systems on the yacht at that time as well make sure that things are all working as they should and that you aren't overloading anything on the package because I suppose there's a lot of things in the boat that are sitting right up against their peak loads a lot of the time so yeah I mean it's a really fun space before I got fully into sailing got halfway through an engineering degree in Auckland and yeah I really love that technology innovation side Do you like that more than a sailing?

10:01Do you like the tech more than a sailing? I wouldn't say more, but I think, you know, trying to get the most out of a bit of equipment and being able to evolve and adapt that bit of equipment as you go is something I really enjoy. Do you think the technology background has helped you? In the America's Cup and in sailing, I think in general, for sure, it has a really big benefit. In the America's Cup, it's very much being able to have a lot better conversation with the engineers and the designers, albeit they're at a much higher level than I ever would be in a specific field. Just being able to understand enough, I suppose, base principle around why something's doing what it should be doing or how the global structures kind of and the big picture items are coming together I think is really beneficial.

10:55but also then when you're trying to hedge one side or another of a problem just having a little more base understanding of what is actually going on within that situation is I think really positive. Do you train in simulators? Yep, the simulator's become a huge tool in the world of sailing like it has in the world of motorsport not only for I suppose designing the boat choosing kind of what compromises you want to make on the equipment because there's always, I suppose, positives and negatives to any decision. You know, there's times where you can, I suppose, take a gain on both sides of the coin, but there's a lot of times where you're trying to figure out where you're trying to position your package relative to where you're guessing your opposition might be or where you're guessing the forecast might be, which has become incredibly hard of late with the, I suppose, forecasts becoming so far off what they traditionally would have been if you looked at a five-year average.

12:06But yeah, the simulation has just become a massive tool, both in the design space, being able to make sure you're picking a good concept, also getting all your muscle memory around how you're using your user input devices, and then when it comes to the racing side as well, being able to get enough cadence out there racing. So do you have a simulator which looks like the place you sit normally when you drive? Yeah, we go with VR. And how much time do you spend in that simulator?

12:37It varies massively on how much load we're doing on the water at the same time. But, yeah, we try and make the simulator as close to reality as possible because it's, I suppose, really good for the practice racing side, but then also it means that you can design a faster boat because your simulator is actually as close to reality as you can get it. How do you prepare mentally before a race? Have you got a particular way of doing it? Do you do the same thing every time? No, I'm probably relatively low on my superstition factor. If you look at a traditional athlete, one thing I really like to do is make sure I come into a big event knowing that I've done all the preparation to the highest level I could.

13:28Knowing that you've done all the, I suppose, hard work and you've really maximised the time before the competition to make sure you're in the space you need to be, but also all your equipment and you're really comfortable with a lot of the decision-making processes, how things are going to unfold. so yeah it's I mean it's an interesting conversation when you talk to people about you know whether the when it comes to a competition they've been eagerly awaiting that competition for a few days or whether they feel like they're just ready for the competition when the competition arrives you know I'd say I'm more on the you know side of feeling like I'm ready for a competition on the first day of of the competition normally try and continue to be trying to progress right up to that and right through the competitions but yeah we've also done a lot of work with a few psychologists just trying to make sure you mentally get in the right headspace and I think it's a one thing in sport that has come a long way in the last 20 years is making sure and allowing people to be a lot more consistent with their players making sure you kind of have tools within your own quiver to to make sure you're ready to go out there and compete

14:40Moving on to Team Dynamics. So you have a partner, Blair Duke. You've been sailing together for a long time, right? Yeah, yeah. How long? Well, I started sailing with Blair in 2009. So, yeah, it's a wee while ago now, 15 years or something. Yeah. Yeah, we started our relationship in the 49er and then have sailed together on, you know, SLGP and also the America's Cup. So, yeah, we go a long way. Yeah. And you were in the 49ers, you were like consistently world champion over a long period of time. Yep. We won three Olympic medals together. Two ended up being silver. So the first one felt like, yeah, we were on this massive learning curve and never really got to the Australians that ended up beating us.

15:29So we were really happy with that silver and then went back. the next time around and didn't lose for the four year cycle won I can't remember how many events but quite a few on the trot and won with a huge margin at the Olympics and then in Rio and then obviously how big was the margin? I think it was a record I can't fully remember that's exactly right it was a record it was comfortable what's the secret behind a successful collaboration over such a long time? I think playing to your strengths a little bit me and Blair we'll be quite different people but in saying that we've got a lot of similar passions we both love the outdoors we're both really competitive and we both often share the same goal so you know just that understanding of you know that you're never going to make you know all the decisions right but you're both trying to head to the same place and you know it's not always you know full happy families you've got to be able to have good discussions and I suppose some people might see is like minor conflict but you've got to be able to have those healthy conversations in terms of how do you actually shift from where you are now to a better place and that's something that I think really keeps things fresh and pushes you forward.

16:46Now what does a disagreement look like between the two of you? It's relatively passive but it's more around discussion as to coming up with theories as to why something should work or not. Do you lose your temper? No, I'm pretty calm as a person. I think in our sport, if you lose your temper too easily, you can really throw away a lot of points or throw away opportunities to close out events. The margins are so small now that you just can't really allow that to happen. And what's the key to staying calm?

17:28I don't know. I think I've grown up in New Zealand where everything's relatively relaxed. Do you think anger has a place in management at all? I think you've got to show frustration at times. You've definitely got to make sure you let people know where the boundaries are. But you've also got to create an environment where people aren't afraid to be innovative, to try things, to develop, to take risk. So I think with everything, there's always a real balance. You want people to not be afraid to take risks. You want people to put their hand up when they make mistakes. And you want to really create that environment where people are really enjoying what they do.

18:10Because if you're enjoying what you do, it's so much easier to put in that extra bit of effort that you need to perform at the highest level. So I think environment is such a big part of what we do. and trying to give people the freedom to learn and grow and improve and see a progression in themselves. It's something that's incredibly important, but then obviously trying to push it in a really healthy direction for the team is really important as well. So, yeah, I think that part of how the feedback loop works is really important, how the debriefing works. So how do you debrief? I think we're really lucky that we have these moments where you get to compete and you get to put your cards on the table and see how things are performed and then go back and learn from that.

19:01So we generally would debrief. We'd make sure we get feedback from the entire group. Do you have a whole debrief straight away and then a bigger one or how do you do it? Yeah, we'd have a debrief after every day and then a debrief either whether it's periodically or after events, depending on how long it's been, and just when you're trying to, I suppose, make some good decisions about where you should go forward. I think having a little look back is always an incredibly healthy thing to do at that stage and not be afraid to make change. It's also making sure you debrief the wins just as much as the losses.

19:44I think you can always learn a lot by what things have worked really well in a win but also there's, even in a win, there's also a lot of things that you still want to improve and get better on. So most people I don't think are consistent enough on their review processes and their feedback loops as to how people can improve and get better. Does it strike me that these feedback sessions in sport are much more honest and transparent than they are in business and in many other places in society? yeah yeah i think in sport you have a a lot less um avenue to hide so you know if you're if you're not completely honest and transparent people can tell that's straight away um but also everyone's there trying to to push for the same outcome so you've that's what i was trying to talk about before with the environment you know you want to create an environment where people are honest about whether they think something's worked or not and aren't afraid to put their hand up and say something if they think it's not the amount of time you can waste going around in circles where someone's made a small mistake there and you haven't quite figured that out and they haven't put their hand up the inefficiencies that can flow on from something like that are massive and time is always the enemy you know in sport you've got a hard deadline of a competition normally that you're building up against you know that time's the only thing you can't slow down it kind of keeps marching so you know how much efficiency you can gain through the debriefing process and people being honest but also willing to I suppose push the boundaries enough and put their head out at times to take something on um you know i definitely feel like one of my main roles within the america's cup is really managing a bit of that risk profile and kind of understanding a lot of the the big global decisions and how likely that is to to result in us not being able to do a race or not being able to do a training session or and or what compromises we're going to have to make to to keep a bit of equipment in one piece and that's all you know a lot of it's efficiency related as well.

22:06So this focus on process rather than results have you always been process oriented? Yeah yeah I think I've always been very process orientated but one thing I would say is you need enough flexibility within a framework to be able to create innovation and to continue to improve also if you get too process focused and just go through and that's you and off you go then you end up quite stagnant and it doesn't progress so I think you you need enough structure that people know where they should be what tasks they should be doing but you need enough I suppose space within that structure that they can grow and take risks and do different things and then to rebuild that that process on a regular enough basis that it's still relevant to what you're doing at the time so yeah I mean you go back to an efficiency thing like the process you're doing at the time to on an efficiency thing is is so important and you know even if you look at the the amount of meetings you're having how productive everyone in that meeting's being at the time they're in the meeting you know whether people are sitting in a meeting to say you know two words and they've kind of wasted an hour of their day or whether they're kind of fully engaged and it's a download of information to a wider group there's so many points in a campaign in a sporting environment where you can gain a lot of time in your day or you can lose a lot of time in your day and not just for one person for a wider group which is I mean exactly the same business If you're having a meeting, you want people to feel like they can walk into the meeting and if they're not engaged in that meeting to be able to not feel obliged to be there and go out and do something else.

24:00And yeah, just the efficiencies you can derive from that, I suppose, flexibility within a process is so key. Tell me about the communication. So you sit on each side of the sale, right? So you can only see half the course? Yep. so you're pretty dependent on communicating with the other guy yeah so in the America's Cup I sat on the starboard helm that's the I suppose skipper of our boat and then I had another helmsman on the port side, Nathan Outeridge who sat on the other side and then we had two trimmers essentially sitting in front of both me and Nathan so Blair sat on the port side and guy Andy sat on the starboard side but yeah at certain times you can't see very much that way or you're concentrating very hard on keeping the boat going fast.

24:47So what's the key to good communication? Well, on the yacht, we all talk through a headset. So it's very loud. So you have your earmuffs on and you have your microphone right in front of your face. So you talk at a, for us, we try and talk it like we're talking here at a normal volume. And you can say things so much quicker if you're talking at a normal volume rather than having to yell. but yeah being very careful of I suppose your phrasing in our communication loop is really important making sure you have ways of getting information across very quickly so you don't clog up the comms loop because essentially only one person can talk at a time on that comms loop and knowing kind of who should be feeding in what information at what time so you're expecting to to hear something from a certain voice is very key as well.

25:39And you told me before that even if you are 500 meters ahead or 500 meters behind, you cannot discern the difference in your voice and your level. Yeah, you shouldn't be able to really tell. And normally we'd have a few checks and balances within that if say there's a lot of action going on or it's a kind of very busy thing or there's kind of some indecision around what exactly we should be doing at a certain time and things are getting a little bit heightened, like having a good way of bringing things back down to the level they should be is really critical. But generally for us, heightened to not, to a bit quiet, is I suppose a very small band compared to what most people would operate within.

26:27But yeah, you get to know people well enough and you compete with them enough that you know that whether they're working in a good window or they're feeling a bit of tension in a scenario. That's the joy of sport. You get to go out and compete against the best people in the world and see how good you really are. You've got absolutely nowhere to hide because everything's on the broadcast. There's so many camera angles. There's so much data out there that you've got to really go out there and put your best foot forward and be judged from that. You mentioned there were 200 people on your team. What's the key to be a good manager of 200 people?

27:10Well, personally, I quite like a relatively… I'm sorry, just to get it straight. So on board the boat, you are how many? On board the boat, we're eight. Yeah. So it's two drivers. Two drivers, two trimmers, and four power-related roles. Yeah, so they're basically biking, right? Yep. Yeah, so in this America's Cup, it was all biking. So that was really cool. And then you have obviously your reserves on both sides. So the power-related guys end up rolling through, I suppose, people just because it's very intensive. You have a level they've got to perform at. And then we have in the design group, you have a lot of people there.

27:55And you can also communicate directly to them when you're training. you have people on the chase boat you have your safety people, you have your boat builders you have a massive amount of I suppose little projects going on but I think having a really good structure within that where you have a lot of people taking a lot of responsibilities is really important not sure I answered the question at all

28:35now you began sailing when you were six right yeah it was a little while ago now um but yeah i grew up in new zealand so grew up in and around the water and actually my dad had sailed when he was younger and kind of stopped sailing and got my brother into it so i was getting dragged along to start with and then decided it'd be more fun to go and give it a go than sit on the beach. I think we're very lucky in New Zealand that so much of our nation is surrounded by water and so many people live so close to the coast. It's a generally pretty warm climate, especially if you compare it to somewhere like Norway where a lot of the year you couldn't actually go and sail.

29:18In New Zealand you can sail all year round and it's just something as a young guy getting out there and kind of making some decisions with what to do with your boat and getting to race against some other people I found really good fun and it's been an amazing journey. So when you grow up in New Zealand, you have to kind of choose, I'm either going to do sailing or rugby. Yeah, or soccer, football is getting incredibly popular now as well. What do you think explains New Zealand's success in sailing?

29:55I think if people knew it would be easy to emulate but yeah I think we've as a nation we're relatively innovative people and we just have a really good affinity with the water most people have so many fond memories of the water when they grow up and just love being in and around the water I think that's just led through to a really high level of sailing in our country and for as long as I can remember, it's just always been that way. I think success breeds success in a lot of ways as well. We've got an amazing pool of people to be able to ask questions to, get advice from. Do you compare notes with the rugby team?

30:42We spend a little bit of time with them, actually. What do you learn from each other? I think the sports are incredibly different and incredibly similar at the same time it's something that the All Blacks have done an incredible job getting such a high winning percentage over such a long period of time and just continue to build those systems and resilience and continue to evolve themselves as a rugby team it's been pretty amazing to see how they have their their ebbs and their flows but they always seem to continue to perform at that super high level so what are the similarities just seeing how the decision making process works you know making sure all the athletes are really empowered to get the most out of themselves but then also feed into the team at a really high level you know how they onboard people you know how they build resilience within their group you know I think yeah it's really cool to see or to be able to learn from such an amazing team Do you also do the haka before sailing?

31:49I'm not too good at the haka to be honest I'm more I'm more trying to relax into my day I'm a pretty low key person so yeah I find that just with the adrenaline of an event you've got to go up a little bit and find a good level for yourself but that's that would be a bit too intense for me One place where you're not relaxed is your view on the climate and the state of the ocean So you started Live Ocean, right, together with Blair a little while back. And so tell us, what is Live Ocean? Yeah, Live Ocean is a marine conservation charity that Blair and myself founded in New Zealand five years ago now.

32:31So it's amazing looking back how much has happened during that time. You know, we in New Zealand have the fourth largest ocean space in the world. I mean, the ocean's the thing that connects nations. It's really the heat sink of the world. It absorbs 90 % of the heat. It does so much of the heavy lifting with oxygen production. If you start talking about biodiversity, the ocean's really where a lot of that is left on the planet we live on. And it's such an amazing thing that we race on that we felt like we really had to do our piece to protect it. Normally you'd wait till the end to get your career when you weren't too busy to take that on, but when we went and started talking to the science community and a lot of people in the area, it felt like the issues were too urgent to wait, and now it's been a really cool journey.

33:32What do you do? What does the foundation do? So the foundation takes promising science and helps accelerate that and continues to promote the outreach. So we started off with a project around Albatross actually, which sailed around the world in an ocean race in 2017. And when we're sailing through the Southern Ocean, you, I suppose, feel pretty out of your depth. You're on this small boat in the middle of absolutely nowhere with the weather systems down there are so powerful and there are these albatross just cruising around almost checking you out, wondering what on earth you're doing down there but they just do it so easily.

34:20And yeah, the albatross more tell a biodiversity and how much they're a sentinel species so if they're struggling then the ocean's struggling and we chose a species to track that have been monitored by our Department of Conservation in New Zealand for the last 20 years. And in that last 20 years, the breeding population had decreased by 70%. And to be honest, they have no predators on land, the species we were following. So the Antipodean albatross is an island 250 miles off the southeastern corner of New Zealand that you have to get a permit to land to. It's pest-free. it's a I suppose a very isolated bit of the world but yeah still the species was absolutely free falling it's scary to see how quickly things can be changing in a negative way unless you really shine a light on the issues some really great work you do there any particular motto or slogan you live by?

35:33These are tough questions. No, I don't think I have a particular, I suppose, motto that I live by, but I like to be relatively efficient with my time. I like to never be afraid to take on a challenge, never be afraid to put myself out there, and just to continue to learn and improve. I feel like you've always got so much. you can learn from people, you can absorb and you can get better. So yeah, for me that's really the challenge and I'm really enjoying it. And if you were to give advice to other young people? I think my favourite bit of advice is to make sure people really enjoy what they do.

36:17I feel like life isn't massively long and you've got to really be passionate about what you're doing and enjoy it. especially if you're really trying to get ahead and excel in that field because everything's hard work to a certain extent and if you really enjoy what you do, it's so much easier to put in those extra hours or that extra little project or bits and pieces to really get ahead and push that area forward. So make sure you have fun with what you do. Well, Peter, life may not be long, but you have achieved more things so far than most people do during 10 lifetimes. And it's very clear that you're enjoying it.

36:58So a big thanks for being here. Awesome. Thanks for having me.