Faris Aranki with Rory Sutherland and Elfried Samba on IQ, EQ, FQ and why smart teams still fail

0:16I'm really excited about this conversation. So Faris, we shared a stage together doing TED Talks in London about a year ago now, I think. I think it's just under a year. One, we bonded over the fact that we're both Arsenal fans, trauma bonding, as you can see. But then he went up on stage and he talked about something that really fascinated me because I was always the EQ, IQ guy. I always told people that, yes, IQ is important, but as it's been democratized with AI and tech, you need to be able to fuse that with EQ because you have to get people to feel something in order to be able to get their attention, but also earn their trust.

0:56but then ferris talked about something really interesting which is all about focus intelligence he put fq up i was like what is he swaying at me uh but then when he went into the the element and the the importance of focus yeah it actually made me realize that that's what community is all about like if you just try to uh put yourself everywhere at the start it's really really difficult for you to actually stick yeah but then i'm not gonna uh talk about it too much you're the expert here and I wanted to make sure that you had the opportunity to talk about it on the pod. But for those that don't know who you are, it'll be great for you to give them a summary and an intro about your work, what you've been doing, and then we can dive into the bottlenecks.

1:36Well, I think Arsenal supporter is all you need to know. No, thanks. Great scoffs. Great scoffs. Who am I? I'm a sort of reformed consultant, strategy consultant. I used to write strategies, used to be high IQ, and realized you can write the world's greatest strategy and give it to a team, a very senior team. We've paid a lot of money for it, but then they'll do nothing with it because either they're not working well as a team or they're distracted by other things. So I stepped away to work on that because I realized I was very good at disrupting these people and getting them to actually pay attention and work well together.

2:12And I built a business around it. So I go into teams, disrupt them, bring in that element of focus, challenge their behaviors and have a lot of fun along the way. So the framework, can you break that down for us? Because I obviously gave a very top line view of IQ, EQ and FQ. But then the way you articulated it on the TED talk was really fascinating. It'll be great for you to give us the idea. Yeah, yeah, I'll bring it to life. I needed a way to explain to these clients who are very clever and very senior why they were not succeeding at their strategies, why their companies were constantly missing targets.

2:51And the natural place to go was to say, well, look, you're all very smart people, but you're not naturally working well together. There's a missing EQ element. That's something they'd all understood and were happy to admit to. But I'd worked with many teams, if I was honest, that had a great dynamic and were very smart, but still were missing the trick. And when I went away and studied the 20 years of strategy projects I'd done, there was by far and away a population that succeeded. and they had this missing component of they were ruthlessly focused they pushed away anything else as a senior team as they like we're only doing these three projects we're only really doing this not only that they would anticipate what would go wrong with those projects and they would pre-solve them all right so this ruthless focus i was like you need that element but you can't just stand alone if you just only focus you're that guy who sat there with a you know project checklist going have you done this have you done this without any sort of empathy or really going is this even a necessary task so it was that combination of the three and as soon as i put it together in my head i was like it's like a bar stool right three legs one of them is always wobbly most people double down on the leg that they feel most confident on if they're smart people they'll throw more ideas at it if they're nice friendly people they'll be even friendlier but the actual skill is you've got to you've got to put the wedge of paper to to fix the the rocky leg so that's why i just sort of codified it as that iq eq fq it sounds like you're swearing but it found it really resonated with people and it was a simple way to go into business to say look it's not your fault you know it's not you're doing something wrong there's just this gap um in your how you're approaching things as a team so a colleague of mine in advertising who was at widen kennedy at the time shortly after jobs had returned to apple and jobs was not high on eq i think it's fair to say yeah and actually it was really quite unpleasant because these two junior staffers had gone in and presented long strategy documents to the agency.

4:48And then Jobs, I think, deliberately turns up late and goes, effectively, spends the whole time dismissing these people. It was horrible. Okay. Because I don't know what bollocks these people have shown you. But anyway, this is how I'm going to explain it. But the one really interesting thing is he just drew up on a board the 17 projects that Apple was currently pursuing and basically said we're getting rid of all but four of them now by the way what was quite helpful i think that wasn't just we're going to focus on these four it was these are the 15 things we're not going to do yeah so it was actually you know another person might have said right okay agency what you've got to do is focus on these three things but he actually said ignore all this stuff we're abandoning it and there would have been you know i imagine there was probably an early tablet in amongst the things and it was ipod um iMac of course that the colorful iMac which is probably the you know that and the iPod were the real just not the iPhone in a weird way were the decisive product yeah and he said effectively we're betting the farm on this yeah and um it was as I said you can't really use him as a as an EQ case study because this was an more or less an exercise as my friend said in ritual humiliation of the people underneath him On the other hand, the message about focus was beautifully clear.

6:09It was beautifully clear. I mean, one of the things I regularly do with companies, go in and say, how many strategic projects are you doing? And can you bet the number one response is we don't know. So we'll do a quick audit. And it's usually 150, 200. And I'll say, well, hang on a minute. Would you in your personal life run 200 simultaneous change projects or new things? And they'll say, no. And I said, so why do you think this organization, even with 10 ,000 people, can do that? Because you're giving everyone 200 choices of what to focus on, what's important. They'll always pick the thing that's closest to them.

6:42I said, the single thing, greatest thing you can do as a senior team is rationalize that. And that's when then we could slip to EQ because they go, well, they'll take me through and they'll give me a logical reason why each of those projects exists. And I'll say, well, that's not the point. So a classic technique that I use nowadays to do that is overnight I'll take away those 200 projects. I'll turn them into a deck of Pokemon cards with all their own data around how much does this project cost how many people are going to be involved how long is it going to take and then we'll sit and play an hour of Top Trumps in the boardroom because this helps them realise that it's not about is an individual project any good it's the comparison and they all revert to being kids and they start whining that my deck's not as good as his deck we may have to explain to the younger listeners what Top Trumps is it's an absolutely brilliant concept which deserves to be revived it does, it does But it really helps.

7:31It never fails to rationalize the pile. One is top trumps. I was going to say, I spotted it. OK, it was a schoolboy game, particularly a school child game, which was massive, particularly, I think, in the late 70s, probably. Yeah, 70s, 80s. And effectively, you drew a random hand of cards, which might be, for example, cars. OK, that were a typical top trump thing. It could be any, you know, it could be countries or anything you like. And there will be about six different variables. so it might be engine size 0 to 60 speed top speed uh you know cubic capacity of the boot whatever it may be okay and then when you effectively you took it in turns and if you and you'd play through your deck in turn and effectively you'd call out wherever your car was strongest and you know so if you drew a really small car you'd obviously go for something like fuel economy which would then beat a ferrari obviously and so the person serving as it were to use a tennis analogy got to choose the attribute you then won all the cards and the whole purpose was effectively to uh uh to to win the deck off everybody else i could go into more detail about deep strategy and top trumps but i think we'll i think that's sufficient as an explanation i never quite understand why they disappeared because they they were actually educational and entertaining well the reason i picked pokemon is that it was basically the same concept yes these cards had skills and you know attack abilities and i'd watch my nephews play with them constantly of course i thought everyone's just a big kid my first career was as a school teacher so my first way i look at all business meetings is it's just a giant version of the classroom so i'm going to gamify stuff i'm going to simplify i'm going to reframe just to unleash that inner child and or control that inner child um and so yeah i will always have a game so you know next time you're out with your friends play social media top trumps all right you're a big social media guy so if you're in a group pick a topic yeah right whoever you're serving right you pick a topic you might say most liked instagram post everyone has to get out their phone get their most liked and the winner you know gets a round of applause or a drink from everyone around them and then it goes to the next person they might pick uber rating they might pick you know it could be anything on social media it's just it's just a great interaction bit of competition a bit of fun change the dynamic um but that's really how i look at groups often because they're super smart they just often need to be what i call sort of have a speed bump so they they slow down their thinking or reframe it look at something different than it they'd otherwise be looking at people forget they're on the same team right like i think that's the biggest thing is that um a lot of the Sometimes there's a lot of empire building.

10:08There's a lot of people think that we realize that sometimes when we're talking about the concept of resources, we're like, well, if I'm just thinking about my department in isolation, then I may not have the resources. But if I look adjacent to me, somebody else is in the same company. They have a different set of skills, which is why I always find it very fascinating with the conversation around AI, because I believe that a job is a bundle of tasks, right? And there's certain tasks now that humans should just be leaning into because that was the purpose of their role, but there was like administrative tasks with the blocker towards doing that efficiently and effectively.

10:41And now you can utilize technology to do those bits. So you can lean into the human side, which is the EQ side, right? And for some reason, people seem to just say, okay, we can just do the same work with less people instead of we can use the same people to do more work, which also goes into like what corporations are actually like. It's more about preserving as opposed to actually progressing, which I find it really interesting. But going back to the concept of steve jobs i think i forgot who his mentor was but i listened to a a podcast where he talked about the fact that first steve jobs wasn't like that like he's he was more um uh empathic is one way more observant is what i think he was but he used to have so many reasons as to why he believed that apple was the greatest company or could be the greatest company and when he was like giving all the reasons as to why and then apparently his mentor said hey steve let me take all those ideas and put it in paper and throw it at you and see how many you catch right and he couldn't catch any he said like that's what you're doing right now but then again i throw one that's one vision it's easier to catch and then you deliver that in like three ways right and that's the thing that made him relentless about like focus it's kind of like i think a lot of the times people talk about investment and there's this whole concept of like seven streams of income doing all those different stuff but really they see that the best people focus on one thing and then that creates the different streams right and actually the most successful investors actually focus on one area uh what would you say about that yeah i mean uh we all know it it's uh our ego our boredom bias as i call it just proliferates and we want to get involved in lots of things i see you know the real reason i codified fq is because it's my biggest achilles here i like to go here there and everywhere be drawn in but you're absolutely right you really like i said the people i've met who are very successful you know i've had the pleasure of meeting adriana barrington the first lady to climb the 14 highest peaks in the world the youngest person at the age of 23 she only did that by deciding at 14 i'm going to spend as long as it takes i'm going to deprioritize absolutely everything else in my life or it's like the uh the british rowing team i think of the 1992 who had the mantra does it make the boat grow faster that's right and if not why are doing it right so of course i tell regular people you don't need to be that ruthless but you can probably let go of a few things and the sooner you do i think there's probably a secondary benefit to this which is that if you focus on let's say three or four things yeah those things take on the nature of a project yeah and the better way to really uh structure businesses is not really around managerial reporting lines.

13:25It's around the job to be done. Now, once you've got 14 things on the go, automatically, it's very similar in an advertising agency, when you have a pitch that everybody notices this works a lot better than everyday life does, because we have one clear objective. Everybody then instantly effectively plays to their own strengths. So the team performs this sort of magical thing, which I call, you know, almost emergent division of labor, where people don't do the things they're not good at and they double down on the things they're better at. And if you've got the right team to begin with, you end up with a kind of total football model.

14:05And the problem you have, I think, is that most businesses, once you enter the realm of complexity, you know, reporting lines, financial reporting lines, financial reporting denotes the structure of the organization. yeah and actually uh that is effectively uh i mean roger l martin writes about this the prop you know the proper mode for designing a structure is around what you're attempting to do not how the company is run yes and i think i think that's the that's a huge benefit you'll get yeah that's a huge benefit and i'd probably go one step further it's how you're incentivized yeah you know it's a reporting line is one thing but actually that hidden factor is the incentivization so going back to your sort of competing do you see your neighbor as a competitor or probably the most successful both culturally and you know profit successful companies i've seen are the ones that have one pnl you're not you know my success is is not competing against your success as soon as you introduce a second pnl that there's competition it's double the focus or people game the system or they game the system and um now i'm not saying you shouldn't do that because obviously once you reach a size but if you have the pnls by product or project as opposed to department then you stop these overlaps these fiefdoms these um and obviously there's a whole science and and uh there's another thing too which is i've become weirdly preoccupied with the difference between an average speed camera and a fixed speed camera okay okay because you're speeding.

15:36That's not irrelevant. But I've never heard anybody complain about an average speed camera, really, being done by an average speed camera. And the point is, that's what you might call it's a well-defined objective, but it leaves room for individual judgment. So in other words, between these two motorway junctions, your average speed must not be more than 67 miles an hour. that doesn't say that you can't hit 72 if you're overtaking a truck for 15 seconds yes and so it's the difference between a tightly defined fitness function which is you have to tick all these various boxes at given moments and one very clear objective where you have i mean there's a whole load of philosophical stuff about this which is essentially capitalism works to the extent that it it sets people objectives and gives them considerable leeway in the means by which they attain the ultimate objective yeah the second you try and make it soviet style which is that everything is quantified at a very very granular level you completely lose ingenuity yes and so there's something there i think about fundamentally i think um i mean you know what we're what we're often doing with businesses is we're producing fixed speed cameras everywhere yeah and actually it's deeply frustrating to people because it actually often runs counter to common sense or their instinctive driving ability, if you like.

17:02And what we're trying to do is to inject kind of quantification into smaller and smaller components of everyday activity, which I think looks intelligent. It's actually incredibly stupid. Not least because if you, you know, it's rather like a creative advertising brief. If you set one very clear objective, but leave it entirely open as to how that's attained. Quite frequently, by the way, there's a weirdly simple solution to the problem. Always, always. Yeah, one of my favorite activities is wargaming with clients, where we'll play out their strategy, play out what they're intending to do. And it's amazing how monofocus they are.

17:44They'll just always think how they've always thought. So one of the keys is to bring in a group of thinkers who think very differently. you know so one of the first war games i ran was during swine flu yeah i was working on a the pandemic preparedness team for the uk government and swine flu hit overnight and they thought that was the pandemic so we were mobilized and i'm an economist so i was with one other person was tasked with um when one of the pharmaceutical companies said we've got one factory can make swine flu vaccine um we're going to do a sealed bid for every government around the world how much should we pay so we were tasked to decide on the uk's behalf how much we should pay so i threw together a quick war game we played it with senior individuals in the department health and all we'd learned was that the higher you price you pay the more vaccine you're going to get all right no real learnings there so i then went and grabbed a graduate and i said do you want to play against your bosses and he said yeah and he said the first question he said is can i cheat and i said it's a pandemic you can do whatever you like so when it came to submitting his sealed bid he said we should take over the company and you know force them all and his second round bid was we should partner with the french right and then you know and the other senior people sitting around said well you're not allowed to do that against the rules i said there are no rules you know this is the whole point of a war game we need to stretch your thinking and get you really out of your comfort zone funnily enough uh the lady fantastic woman who did the pandemic response the vaccine program during COVID, was the first person to notice that because all the procurement people were trying to pay as little as possible.

19:19As little as possible, yeah. Her observation was, you can bid really high because if we end up with too much, we can sell it to somebody else. And this had not occurred to anybody else. Yes. Okay. It had not occurred to anybody else that having bought the thing, you had discretion over how it was used. and there's an incredible academic paper i think by it's colin camera and um george lohenstein a few others called the curse of and it's either called the curse of knowledge or the curse of expertise i can't remember which and they argue that there's this weird trade-off that comes with expertise which is the more expert you come come in and become in an area the less capable you are of seeing it afresh yeah so you get effectively more and more invested in your particular model of the world and this is why i think quite a few entrepreneurs have succeeded through sheer ignorance in other words they come along and something that everybody has just assumed yeah um never occurs to them yeah and uh so that it's very very interesting in that respect which is so one of the things you find is that people are actually remarkably bad looking beyond they're just they're standing too close to the picture that question can i cheat brilliant can i cheat always so yeah and it's usually you know people who are not wedded to the system you know there's there's a lot of research uh it's going back to rory's point if you put more fixed cameras it's really hard to start taking away fixed cameras yeah yes um unless someone comes in and sweeps them all away and starts again we're really bad at removing stuff as human beings is really interesting so because i i used to be in a in a department um i used to head up the uh the community and social department and whenever you would give me through a challenge at me i would try to solve that from my pov yeah i think that it's a community marketing pov and then when i started running a business i realized well i can barter with somebody or i can acquire something yeah or i can just ask for a favor or i can go on a pod right and ask somebody to be a guest because i want to work like there's people forget that there's actually a lot more cars that you can play yeah when you look at the bigger picture but as long as you know um what you're focusing on because the thing that we would be great to talk about is one with focus being so important yes why don't people focus let's start there first why don't people focus because uh and i use myself in a lot of these examples so i ask these questions of myself and then i go and sort of um try and challenge it's people don't like to think they can't do other things all right um rather than be defined by what you focus they feel like they're missing out by going oh no i could do that no i could do that and you see it with every time someone starts a business a particular services business they want to market to the world that they can do absolutely everything because their ego or their comfort is that yeah i can maybe you can but as a as a great old mentor said to me nobody's googling for somebody who can do absolutely everything right don't be afraid to unashamedly say i am the guy or i'm the lady who does this right and he went ps don't be too specific right if you're like very minutiae you're only going to find three people actually want that service but just own it you can still do all that stuff in the background but tell the world unashamedly this is what i do and actually you'll find you'll enjoy it more did i ever tell the story of when i moved to kent uh we got a parish magazine and there was an ad in the parish magazine about the size of two postage stamps and it was for a local handyman yeah and the ad simply said call ron because he was called ron the late ron atkins and it said uh call ron his phone number 01959 561234 and underneath a single sentence i do the small jobs the builders don't want and i actually got it when we inevitably called ron because we had a small job that the builders didn't want i said i have to say i've worked in advertising for 35 years and i think your advertisement is absolutely brilliant and he said well it's been working for 15 20 years yeah i've never had to change it it's absolutely clear it's an absolutely clear answer to a beautifully defined problem.

23:38And that business effectively, you know, it's even better because you're positioning yourself against someone else. So you're absolutely defining yourself beautifully there. And I think there's something there. Alex Hormozzi writes quite a bit about this. I don't know if you've read any of his books, which is effectively, weirdly, you can charge, what people forget is you can charge much more for a specialism than you can for a generalism. Yes. What people will pay for accounting software is fairly small. What they'll pay for accounting software that's designed for small family run gyms is actually much higher.

24:12Yeah. But no, I mean, that's really, really interesting because one of the other problems you get, I think, is instinctive benchmarking where people start looking at fixating on their competitors. Yes. And, you know, areas where they are inferior to their competitors, for example. and the net effect of all of this is you end up with a bunch of people in a in any kind of business sector become more and more alike yes yeah corporate isomorphism yeah yeah it becomes very similar and the thing is your focus could be something you're not aware of oh that's so i wanted to marry so i said earlier that i i sort of gravitated to focus because it is my achilles heel and i was like how do i marry up the fact that i live my life like a 1920s actor which is I'm a firm believer of try everything.

24:59And the reason I say it's like a 19th century, before CGI, if you were an actor in a film, if you're Errol Flynn and the script said you have to ride a horse, he had to learn how to ride a horse. And you had to learn a little bit of fencing. So I've always wanted to learn a little bit of everything just for curiosity. And I was like, how does that marry up with someone who's going around telling everyone to be focused? Well, actually, it's because I didn't realize until later on that my focus is that curiosity. Yeah. Right. It's not actually the skills. The skills are just the tarmac. The road is actually that curiosity.

25:32So once I realized that, it just gave me this focus to unashamedly follow those things. So I now, every year I'll pick up two new hobbies. Every week I'll reach out to 10 absolute random people. And through that I've met rocket scientists in Japan. I will visit at least two new countries a year. on this pursuit of curiosity. And it gives me that, not only that, it gives me that arc to explain what I do and why I do it. And people become fascinated by that curiosity, not necessarily the places I visited or the people I've met. To everybody else, it looks like it's not focused, but you're pursuing curiosity, which is the focus.

26:11And I think that that's really fascinating because I was going to ask about the downside of focus because they did an interview with Elon and a lot of the times people in tech are quick to automate things, right? Because they want to simplify and automate. And he said that actually you have to build it messy first, right? So you realize what to focus on and what to automate. Otherwise, if you default to automation and focus, there is the opportunity cost there as well. But then with that too, it's about understanding what is the forever focus, right? because you go through it in seasons and chapters, right?

26:56So there will be one red thread, and there's a lot of companies that thought that the business that they were in was the business they were actually in, but really they were in the movement business. Or, for example, that's what the Michelin brothers understood. They're in the movement business. They're not in the tire business, otherwise there wouldn't be a Michelin star, right? They had to pursue or encourage more people to move. And then the Michelin star - By the way, it was a necessary strategy because at the time, Michelin had something like 95 % of the French tire market. So there was absolutely no problem of trying to expand market share.

27:29So the only thing they could do is get people to drive around more. Funnily enough, Shell did a sort of similar thing with where they got John Betjeman to write the Shell guides to different counties. Oh, right. Exactly the same argument. Yeah. You have to actually understand, and it's far more simpler than people think, because I was listening to an interview with a man called Dankote. He's the richest African, and also the richest black person in the world, and he's from Nigeria. Technically, Elon is the richest African. yeah yeah technically Elon I just technically Elon but yeah yeah but he doesn't live in Africa anymore but but but but Dan Cote who was going to buy Arsenal ironically right and uh um they asked him well he said yeah it was only two billion at the time I was thinking about buying it but then I had this vision that I was focused on and I said do I buy Arsenal and that vision collapses or do I focus on the vision, reinvest back in my business and become a very happy Arsenal fan, like a bigger Arsenal supporter?

28:35And I said, you know what? I have this vision that I'm going towards and I'm going to focus on it to the point where he said he used to own property in the US, in the UK. But what would happen is people will call him up and say there's a problem with the property. There's this with the property. So he literally downsides his entire life to put it in this area of focus to allow him to get to where he needs to get to, right? I think his net worth is something like$35 billion or something like that, right? And Nike could buy Arsenal, but it was just not aligned with his focus at the time, right? So I think that that ruthless discipline to be able to say, this is the vision, this is the North Star, what we're looking to do.

29:12Anything that takes us away from that is not the focus right now. Signal versus noise, if you will. Interesting. By the way, there was a similar thing in the music industry, which is Brian Eno, I think, working with U2. and one of the band was massively distracted all the time and he just felt that they weren't getting full value and he said what's going on here you keep nipping out of the studio to look at things it's such my wife's just bought this brownstone in new york you know we're dealing with the interior decorators and eno said eno said i only own one house for that reason you know it's very very easy uh to uh actually by the way when you're very rich one problem is you look for ways to validate being very rich i think because i've observed if you look at luxury goods there are always why do those weird super premium tv brands exist and the reason is because if you're earning 15 million a year you go well what's the point of earning 15 million a year if i have the same tv as everybody else so moniker i have to go and look for some to the next it's Self-affirmation.

30:17It's expenditure of self-affirmation. It's worth me being really rich because it's only by being really rich I can buy a watch, which costs, you know, which is handmade by Swiss elves. And then you actually find that, yes, but you're setting that watch by looking at a £100 Seiko. Yeah. Or a£100 Casio. Yeah. And it's, you know, I mean, it's something I'm conflicted by, luxury expenditure, because Because in some ways, what you can do is you can actually spend in pursuit of self-validation and actually lose what it was that made wealth valuable in the first place. Because you're forever being hassled.

30:56Someone's ringing up saying, you know, the immersion heater needs to be replaced or whatever it may be. And actually, Eno's point was, and actually, the interesting thing is the musician said, I get your point. And he actually, I think he sold the house. He said, I'll go and stay in a hotel. That's a good friend, right? frame yeah because i was in i was in monaco um for the e-pre and i realized that it's basically a construct of that right like you'll see people that are well off but then because the other person's boat is bigger than the other person's boat everybody's just going into this like like game of who's got the bigger thing has got the biggest stuff and really when you think about what the true luxury is i was actually asking myself what what is actually what's actual wealth right and time so the fact that you can be able to buy more time and invest in things that take away from your time and focus there is energy right and then there's presence right can you be in the room right and and i think that a lot of the time there's also space right so can you have the space to breathe and do what you need to do right but i think a lot of the times we think we're going back to the whole analogy of they've convinced us to leave the village and buy it back at a premium, right?

32:09It's effectively the game of luxury, right? Very, very good observation. And you saw the uproar with the recent collaboration between AP and Swatch, right? You had people that bought APs, like, annoyed at the fact that people that are not within that category are about to buy into the brand. I'm utterly intrigued by that, because the earlier one was the Swatch Omega Speedmaster collab. Now, that was less surprising because, of course, watch does own omega yeah if i'm right yeah right yeah i believe okay sorry we might get watch nerdy now there were practically riots for people buying that thing now interestingly of course it isn't a watch is it it's a kind of pendant thing yeah um yeah i i was i i'm completely conflicted with that mostly i think it's a fantastic thing i think what they've done for all kinds of reasons uh and the analogy i'd use there is aston martin don't complain when you can buy a toy Aston Martin.

33:08Yeah. Because they realized that probably a third of their Aston Martin customers are Aston Martin customers because when they were a kid, they had the James Bond Aston Martin where you could actually eject a plastic thing, you know. And my hunch is that actually it's brilliant. Oh, yeah. And it'll make a lot of money. But I wondered about that. If you'd actually bought a, what is it called? It's not the Nautilus, is it? It's the, oh, God, I should know this. the it's um is it the royal oak is it is that what it's called i think so i think it's called that it's this absolutely classic watch and so the owners of the original are kind of peeved by this are they yeah yeah so so this whole conversation around the fact that um they there was there's actually a streamer that was talking about the fact that he spent 35 000 on a watch that looked similar but the actual original obviously this is now a pocket watch they later found out but at the time they thought there was an actual watch i see there was this whole conversation and uproar and and i was just like so this is why people actually buy what they buy they they people will claim that there's a value difference so there's like a there's like a quality difference but really it's very psychological and being able to like separate yourself from other people so that you are seen in a different category but but but the reason why i thought it was as somebody that's um if i had to describe what i do i'm a community architect right what i've realized is that they needed to get young people excited about their brand and but in a way that didn't deter their current brand if you saw the amount of people that queued up it was insane so now they're going on ebay i had a look this morning it's sort of 1600 quid yeah for this thing it's going to be even more and it was what are they 200 to buy is it something like that yeah i'm Don't be surprised if it's 10 ,000 now.

34:53Now the price is going to go up anyway, right? So all they did was instead of paying for it, which is why going back to what we said about not thinking in your box, what we like to ask people is first and foremost, what is your goal, right? And then I call it TSD. What do you want people to think, say, and do, right? What people, advertising companies tend to do is say, we'll do a video, we'll do a campaign, we'll get some influences. No, what do you want people to think, say, and do? And then let's reverse engineer that. What's the best way to get people to do that, right? And basically the cost of the whole collaboration, et cetera, et cetera, the amount of eyeballs, conversations, like shareability that's been driven, how much they've had to spend to do that.

35:40Like they had to spend next to nothing. Yeah. Yeah. And, and, but then the, the, the, the, the quality or being able to, um, um, um, distinguish themselves from everybody that customers did the marketing for them because their customers went on stream and on social saying, Oh, I bought this. Yeah. This is why I bought it. And this is why it's different. They didn't have to pay for that. So it's like, it's really, really smart. I think that it's going to attract. That's one of the worst things you can do for creativity is give someone a budget because one thing I'm obsessed with in marketing, which is almost always underexplored and the reason it's underexplored is that no one has a budget for it it's not very expensive is brand partnerships and brand collaborations which are effectively in biological terms they're a form of symbiosis quite often what it is is that you have a large established reputable company which partners with a young cool company And in a sense, they both benefit because some of the cool rubs off on the larger company and some of the scale and also the reputation of the larger company rubs off on the smaller company.

36:49So funnily enough, in the watch business, Studio Underdog, which is this cheeky Brighton micro brand, has partnered with this massively high-end Swiss company to produce something which has a little bit of both. and it's it's absolutely you're absolutely right in this modern world it's an absolutely ingenious way apart from anything else of generating conversations in places where they weren't previously happening expected yeah because if you think about the concept of influencers i think i think a lot of the times we as marketeers as industry people like to package things up in a way that we can understand which is not a problem but really influencers are a gateway towards a community they hold trust over a particular community and and what you've realized i always say that the perfect influence of collaborations is one when you're heading towards marriage which is that their followers trust that your marriage is real and they slowly become your followers as well and what you've got is people that are doing one night stands where they'll work with one creator then they'll work with another one and they'll work with another one and then people are just like oh you're just dating around so we're just going to wait until the next one It's problematic that because most value probably in any business isn't actually transactional.

38:03Yeah. Okay. Yeah. In other words, it isn't captured by any spreadsheet. Yeah. Very interesting thing I've always observed, which is that in the poorest part of society and the richest part of society operate largely through barter. Yeah. Yeah. In the poorer part of society, it's I'll look after your kid on Friday if you look after my kid on Saturday rather than getting in a childminder. And that works because you haven't got any money. And actually, it's because in some ways, the poor often have a better community than the middle class do as well. They have tighter knit bonds through necessity than middle class people do.

38:43Middle class people are trying to be sort of self-sustaining in a sense. but then at the very top level of society it's effectively a banker introduces someone to a politician in the unwritten but nonetheless probably solid expectation that the favor will be returned at some uh indefinite point in the future and the reason there it's non-transactional is because you can't charge for that kind of stuff okay you know you can't say oh yeah yeah sure i'll give you his phone number six grand right well there's a few politicians but also when you have a when you have a lot of money yeah an indeterminate favor um which might be repaid in the future is actually more valuable to you than cash yeah so you get this very strange thing which is the middle of things tends to be you know the spreadsheet doesn't do a bad job of capturing value there yeah but relational value of course is really fascinating because it never appears anywhere yeah the village and the premium And so exactly your point about the difference between running an escort agency and being in a marriage.

39:49Yeah, yeah, yeah. The advantage of the marriage is that you can contribute, you can invest in a relationship in all kinds of ways that can't be specified. Yeah. Okay. And so the value creation, I often think that implicit value exchange is the more valuable kind. But finance people don't recognize it because it never actually attaches to a number. yeah but then and here's the funny thing though is because we were talking about um the fact that if you look at the conversion funnel yeah and the way that people think uh going back to the fact that a lot of the times our business is done is to um um basically make it easier to understand in a spreadsheet right so everyone understands awareness consideration and conversion but at the end of the day going back to the analogy of marriage like you see it films all the time they say they got married and happily ever after but we know that's the start right yeah but you have to go there or you don't date somebody and then it's like it's done it's like it's advocacy right there's like other people talking about your brand there is defense in there like like when you mess up do people stick around right and then eventually what we call is community which is a constant conversion constant advocacy and constant defense signals done simultaneously over time how many people have you got in that bucket and we'd like to call that the brand's life insurance yeah you can pretty much predict when a brand's going to die by how strong that community pile is because if a new competitor comes in if times get a little bit hard a Taylor Swift fan's not going to put Taylor Swift on the shelf if she goes on tour she's going on tour with her right and I think that a lot of people forget that it's that focus on who is the people in that bucket yeah these are the people that have gone all through the funnel and they're the ones that trust your brand completely I think there's so many columns on a spreadsheet if we're talking that are just absolutely missing because we don't know how to measure them we couldn't possibly measure and maybe this is that way i will come in um and all of us you know what have i learned about humans over the years um and i'm always conscious when i say that it makes me sound like an alien but um we are really bad at estimating things yeah we are really bad at estimating particular own abilities so i'm not surprised daniel karnaman daniel karnaman yeah it's fantastic but you see it in organizations that's people go back to the numbers but you know relationships what price can you put on them you know a 15 minute conversation i i don't know if i just gravitated to this but i was constantly being told off as a junior consultant because i never did any work i would just go for constant coffees with clients i would spend eight hours in somebody else's office just having a coffee and a chat and my boss would tell me off he's like when are you doing your modeling when you're doing your analysis and i'd do it at 2 a.m till 4 a.m because were you in one of the big four i was in the big four and then the strathouses and so i was constantly like atypical by the way they don't really do strategy they don't they do planning they do planning and effectively they've i would argue the big four consulting firms have effectively prostituted themselves on the altar of the the billable hour this could be a whole podcast on its own yes it is it's it goes back to that that spreadsheet because i was constantly being told off for you know not getting the volume of work done and i would say but i am doing work right this is valuable there's just no metric for these things but it will be worth its return and lo and behold i'm seeing the return now because all my clients today are those people i'd go and have a coffee with uh i'd go and have a of course right and my peers are uh you know like how the hell are you you know doing this and i said well it didn't appear on any spreadsheet but um and and i think that just appears in all aspects of life right going back to focus and what are you having coffee with people when you could be producing a completely tedious power exactly yeah that no one will ever read yeah how dare you i've got a lot of those on my hard drive um but that comes back to the focus point right unless you know what metric really really is important yeah or what you really focus it's you will fudge and go for something that's slightly easier that is probably handed to you by somebody else okay this is critical and you will tell yourself that that is your metric that is your focus but it also it's a metric which loads of other people pursue loads of other people which inherently devalues it um this is this is really interesting because i've always asked this question if you're a brand you need to have a metric which is uniquely yours if you're merely benchmarking against the competition all you are is a commodity within a category yeah and by the way that benchmark the the the metric you have which is uniquely yours which may be two or three whatever it may be uh might be something weirdly trivial or eccentric it may be something that's not that easy to quantify yeah but it's ultimately what actually makes you distinct yeah and i think you're absolutely right a lot of individual people never mind businesses effectively inherit their success measures from everybody else sort of mimetic stuff and you and i find one of the weirdest things i had a conversation with rick rubin where both of us said one thing we've never understood is why not a single really rich person has thought, I won't build a yacht, I'll get an airship.

44:55Right? Yeah. Do you see what I mean? Yeah. Because most of the world's interesting things are actually on land. Yeah. Okay. One of the problems with those yachts is basically you've got to go and find a marina somewhere because being in the middle of the sea is actually incredibly boring. Right? And in fact, most of the time when they go from place to place, the owner isn't on board. The owner turns up and basically sits on the dockside and occasionally goes out to an island three miles away. to justify the whole thing and there is something there which is i think um uh really significant which is to you know not only what are we focused on but to what extent is our focus on something which is genuinely oblique okay yeah and i mean rory is great but he goes to ultra high net worth individuals i'm i'm here just for trying to get through life regularly so my metric The same reason I started the watch market, it's the Galapagos Islands.

45:48It is. No. Okay. So really, really weird things. You know, Darwin, basically, you know, clever guy, but he did have the privilege of being taken around the world on a big ship looking at weird shit. Yeah. Yes. Okay. And my general belief is that looking at, you know, the watch market absolutely fascinates me precisely because it's batshit insane. Yeah. Yeah. And super rich people are interesting. Yeah. Precisely because. No, no, because they're under the moon. but you know embrace that we focus so you know the classic example i tell people is biscuits right i'm british i'm also i love a biscuit right so but they're not good for the waistline so you know a metric i tell people to adopt is how many biscuits have you refused today oh right that's fq because i'll eat a packet of biscuits because they're there not because i woke up in the morning going do you know what one of my goals today is to eat a packet of biscuits so i needed a way to break that and remind myself of my focus so just by inverting and creating a metric of how many biscuits with your curiosity because if someone offers you a new biscuit you haven't tried before believe me rory i've tried new business but if it's completely if it's completely new i'll allow myself there by the way i hate to tempt you but fortimer mason has just opened a biscuit there's a whole new section of the store entirely dedicated to biscuits okay so uh if you if you want to if basically if your self-control fails yeah we'll go there yeah but i just want to let all the listeners know but you know i use biscuit but in the in the business world i'll tell a junior consultant like don't pride yourself on how many slides you created pride yourself on how many words you took off each slide lovely oh right i'll say something like imagine i'm charging you 10 000 pounds per word on a slide and you've just shown me one do you want to revisit it before i before you submit it they'll come back and it'll be 50 percent lighter or they'll got rid of the slide entirely i'm like brilliant now you're using real metrics that actually keep you focused and deliver value do you know what we say to people we say can you get somebody to sign something off on a whatsapp chat right right like can you send somebody a whatsapp message they understand the value prop they understand what goes into it and then they can say yes your lawyer will probably say it's probably not no no no but what i mean it's a verbal right so so like if you think about the the the process of presenting and on decks it's because you're you're going through a long-winded way to be able to articulate what you actually want to do for them and why it's valuable right yes it's visual it's a good way to share it to other people but really well it's a it's a combination of everyone's doing it so it's just the norm um you're trying to um it really reflects to me that the there isn't a strength of relationship yeah right because it's a bit like in my early days when i didn't have a lawyer i still don't have a lawyer i'd use my best friend who's a lawyer to look at over the contracts that clients would send me and he would go through with a legal mind and he'd say well this clause is terrible this one you want to renegade and i said to him look if we ever get to the point where we're analyzing clauses then the relationship is gone and my whole point of my business which is an eq business is pointless so i'm willing to sign up to these punitive terms because that's the approach and he would just it would just blow his mind no no well of course we'd take out some ridiculous side there was a time that uh a company almost owned my image rights but um and he stepped in but of course i mean i would be like it would be small things that he would fight over and i say look it it's not you know it's that because so powerpoint is there's so much more of fear conformity i don't really understand this person i'm still struggling to articulate it to myself this is the real reasons that we reach for just the the biscuit yeah and the reason why we said the whatsapp chat it's kind of like the same thing where we said at Gymshark, I used to say, what's the headline?

49:31If you can't put the concept in a puberty slash lad Bible headline, it's too complicated. Because what happens is the person you're pitching to is not the person you're pitching to. The person they're pitching to and where that travels is who you're actually pitching to. So if the CFO, if you are required to be in the room and a deck is required to be read for everybody to be excited, it's never going to go. It's not going to happen. But that's why I say that when you go into the WhatsApp, what you're doing is you're distilling the content into the simplest form so that it can travel but then also it's a measure of the relationship right because if you have to go into a formal setting like if you think about the concept of pitching and rfps to me i actually just like unsubscribe from them because i'm like so you're telling me are we actually measuring ourselves based on who's got the best concept or is this just like the hunger games right and it's a popularity contest really yeah so i'm just like well if we don't have a relationship with the person and we're just seen as like a service the way in the relationship business right so so so so i just unsubscribe from it so i'm like if i can't have a chat with you and we can talk about what it is we're trying to achieve there's not actually no point working together because it upsets the dynamics which is why i always found like if you look at like the investor space i've i've i think there was that there's a there's a post that went out that basically said going back to the concept of a focus.

50:55And here's where it can sometimes play like the wrong role is that it seems like every year there's a focus that all VCs focus on. But then really the best business to come out that year is usually somebody doing something completely opposite, right? And they actually miss where the real innovation happens, right? And I see the same thing in the agency market is people say, oh, this is how we do things. But then the gold is happening over here. And when does focus actually go against like progress yeah i mean hindsight is always a thing and everyone misses the the great uh white shark um that's it it goes back to what that we're talking of sharks there's a wonderful quote from scuba diving which i always share that which is it's the shark you don't see that'll get you exactly yeah it's an absolutely brilliant quote because it's it's it's both true literally and metaphorically um building on rory's point it's it goes back to what that mentor was telling me about be have your focus but don't be too focused right you need to keep your peripheral vision yeah and so it's a bit like you know years ago i used to mentor a kid and he would tell me you know his dream was to play for barcelona and i said you know specifically as a forward and i said that's a bit too specific you know what if you end up playing for arsenal are you going to be unhappy right but going that too granular that's me by the way but it's the barcelona croquet team realistically there we'll have a chat i've got some contact so it's about yeah if you go too deep yeah you are going to be you know really blinked you know and and in that in that forecasting you talk about i've done forecasting for years and we used to joke about how bad our forecasts were when i worked in an oil and gas firm like absolute spectacular we get it wrong and we'd have a we'd have a social about how wrong we got it and and at no point did we go well surely either let's just stop doing this activity because it's it's like throwing a dart at the dartboard trying to predict next year or five years time the oil price because you're not going to see in a run you're not going to actually there's a weird roger l martin uh comment on this i don't know if you're a fan of the red roger yes um he made the point that he he worked with a company where there was one person who thought that all forecasting was complete bollocks yeah he had produced very good forecasts.