• Northland Wealth

The Artisan Podcast: The Future Workplace – Rethinking The Office



The Future of Work

Exploring the topic of, "The Future of Work?", with one of North America’s leading Executive Coaches and Strategists, Ian MacFarlane and Northland’s Co-Chief Investment Officer, Joseph Abramson.


Issues to be discussed on this webcast include:


• Key strategies for executives to navigate the increasingly difficult environment.

• Why the tight labor market is about to ease.

• Important megatrends in the future of the workplace.


Ian MacFarlane of IPM Strategic Research is an experienced senior executive with a global background, who is dedicated to helping individuals and teams lead, thrive and find their strategic advantage in competitive and rapidly changing environments. Prior to this role, Ian held the role of SVP & Chief Strategist with Bank Credit Analyst in Montreal.



Make sure to check Northland Wealth’s YouTube Channel for more episodes.


 

Transcript

SPEAKERS

Joseph Abramson, Ian MacFarlane


Joseph Abramson

Welcome to the Artisan Podcast, where we share insights from some of the world's leading minds. Today, we have Ian MacFarlane, one of the most brilliant and creative people I've ever encountered, we actually co launch the hugely successful global asset allocation service at the bank credit analyst. Ian is now one of the leading executive coaches in North America. And he's here today to share insights on the future of work, and joy. So in my wife works at Airbnb, they recently announced a policy that allows any employee to work anywhere in their country, for example, a US employee can work from home as much as they like, and in any city that they like, in the US, is this the future of work?


Ian MacFarlane 1:03

I think it's just the tip of the iceberg. There's an old cliché, which said that the pandemic accelerated trends, which were already evident, and certainly the advance of technology, and the ability to work remotely was already in place. What was missing is the willingness to to actually make that transition. And in the end, it was a pandemic, which took over from that human willingness and put it in place anyway. The issues here are not just about where you're working, but how you're managed and how you set yourself up, and how you contract with your employee or with your employer rather. And I think there are a number of things to bear in mind here. It's difficult enough to manage a herd of cats, as you know, working in the financial services industry for so long, put those cats in their own home, and try to manage them. And that problem is multiplied many times over. So we could talk ad nauseam about all the different aspects of how the future of work will unfold. But there's one thing above all else which will predominate, the need for more effective leadership. And I make the distinction between leadership, which is about getting people to do things per se want to do them, that intrinsic motivation, and management, which is about getting to people to do things in the most efficient way possible. But really kind of at the end of the day, relying on next extrinsic motivation, what's your paid your bonus, etc. survey after survey says the world is changing. And this is more than just the sort of old adage which was trotted out by Carl Jung says, we spend the first half of our lives being ambitious. And the second half of our lives being looking for meaning, we're now looking for meaning from day one reflects the type of society which we're living in.


Joseph Abramson 3:04

So what would be the advice that you give, you know, leaders in this world, where, you know, maybe 3040 50 years ago, people were looking to make a buck. And now you know, they, they require meaning. But over and above that, you know, if we look at the last 30 or 40 years, there just hasn't been the hardship that we saw, you know, among our parents generation that lived through the Depression, that lived through World War Two, that lived through the Cold War, like really tough times. So when something came up, they really had the resiliency to deal with it. Whereas if we look, most recently, even the recessions with the exception of 2007 2008, were quite shallow, and policymakers just immediately flooded the economy with liquidity and fiscal spending. So there just wasn't as much pain. So what kind of advice do you give managers where workers are both demanding meaning, but also, it's very difficult to criticize, and it's very difficult to guide. So what is the advice you provide in this environment?


Ian MacFarlane 4:18

Well, I think it's the onus is on all of us to advance our leadership skills and advance our management skills. So have a great one and thinking about systems and complex adaptive systems, which is the basis of evolution. They evolve through being tested. And when they are tested, they're up to the task. And very often what you find is people hold a certain point of view, and then for a long period of time, then very suddenly that changes and the system has to adapt to that new reality. And what is clear now is a most of my clients are situated in the technology sector, the pace of change is much more rapid than most human beings can encounter can manage withdrawal. And what that in turn means is, you have to have some anchor, what's the anchor, around which she determined your day to day actions and how they that fits in with the bigger picture.


So leadership is about articulating a clear vision. Leadership about it's about listening. Leadership is about having a clear idea of the way you proceed in an organization. And leadership is about understanding how you can make the system work for you to get what you need, done, done. And that requires a much larger set of skills and being a bureaucrat of following a set of rules. It requires creativity, it requires adaptability. I think it was MacArthur who said he said, rules are made for the obedience of fools, and are many meant to be broken anyway, wouldn't go that far.


But rules are no more than a guideline, and cognitive agility, adapting to what the US military back in the late 1980s, called the VUCA. world, a world which is volatile, uncertain, complex and ambiguous, has to come to the fore. And that means that kind of amidst all of that, what is your vision? And how do you articulate that vision? How do you get a buy in from people. And it's not like a command and control structure. It's more like a the skills of persuasion, the skills of getting people's intrinsic motivation, going, getting them to do the jobs, because they want to do them. And the trick about intrinsic motivation in the literature is very well summarized by Daniel Pink is threefold.


One is to actually give people independence. So you may need to determine the what and the why, but the how rests in their hands. So micromanagement has always been a bad thing micromanagement in the current environment is an absolute catastrophe. The second element of that intrinsic motivation, which stems from that first point, is giving people the ability to perfect their art, or there Mattia, or their skill set. And that's really about education. But there's that, that's also about trial and error. And that childhood error only works in an environment, whether it's psychological safety, and that psychological safety means you can speak up, you can give your point of view.


And if you if you do fail, you move on. So back in the 1960s, we coined this phrase for the kind of motivation or goal setting, and we use the an acronym SMART, Specific, Measurable, Actionable, Realistic, and Timely. And we thought that yeah, maybe if you cheat to that, 100% of the time, that was a good thing we now know, no, it's important to set goals, which are challenging enough. So you fail now and again. And it's through that reflection on failure that advance occurs. And so organizations, which encourage people to try things, and don't necessarily punish them for not succeeding are the ones which tend to be at the cutting edge. And I would almost argue that the old sort of game of setting goals, which are kind of easy to meet, and therefore, that you manage the expectation of your leadership, that's not very conducive to surviving in the modern world.


Joseph Abramson 8:51

And so if we bring it, you know, kind of home, so to speak, you know, this this work from home trend? Is it going to continue? Is it going to reverse? Are we going to kind of the the normal business will adapt what was previously in technology, where you work from home two to three days a week and go into the office. The other days? Where do you see, you know, the trends over the next, you know, 235 years?


Ian MacFarlane 9:26

Well, the secular trend is definitely towards, if not completely working from home, at least a hybrid model, the cyclical trend as the labor market begins to tighten, and that's already evident, for example, in the technology sector, might be that employers demand more of their employees to be live. But underlying all of that is the fact that the underlying trend is definitely towards remote working. And what the pandemic did is it highlighted the negative as Facts have close living with within societies, as well as the advantages, so it's now more balanced. So, and I think the other way of thinking about this as well, as we will talk about the end of globalization, or at least globalization reached its peak prior to the pandemic, I think what remote working has done is it's actually pull, pull that into question. And now the issue is, what if people want to work remotely from wherever they want to work?


How the policymakers impose restrictions on their ability to do that? Where does that tax liability fall. And at the end of the day, the new normal is what people adapt to. And once it's a new normal, it's very difficult to change back. So I think the die is already cast in terms of that remote working. And that has a myriad of implications right that way across psychology, economics and politics. If you think back at what's caused, the world, which we're in, it was combination of three things. One is technology. And the ability of technology to replace a lot of jobs, but more to the point to enable people to work remotely.


The second element of that is a geopolitical one is lack of leadership. And there's this feeling of almost a lack of control of the ability to sort of, for policymakers to get behind what was going on and, and try and get on the front foot and change that in some way. And the third element of that is that some of the societal trends which are put in place by the postwar baby boomers, and were continued by generation, why it's actually changing, to the extent that if you can't afford your own home, because housing has become unaffordable. And if you are faced with these existential issues, like climate control, our global warming rather, and you're faced with these existential issues of how do I find meaning amidst all this chaos, I mean, this change, I mean, people are not going to be working for the same company for 20 years going forward. We've already seen the demise of the defined benefit, salary schemes and move to a more defined contribution.


And the uncertainty that briggate brigands and the onus it places on people to be actively responsible for a future, as opposed to take a passive role and allow somebody else to do it for them. All of these things that are still very much in play. But I think the one thing above all else which is in play, is that it took two millennia for us to evolve to where we are today. In terms of our personal interaction, our reality as human beings is created in a relative sense, the theory of mind is about how we interact with other people. So used to say, for example, boss, you say, for example, don't talk about your salary to everybody else. And they were actually trying, and it was as a professional thing to do. But they were actually trying to defy human nature, which is always to relate your your, your own position to everybody else's else's position. And as you move towards this kind of remote working model, and not being in the presence of other people, we don't know what long term implications that's going to have. For example, there are certain critical periods in the evolution of the human brain. So students and kids who are being educated afar, we don't know what the long term implications of those on those kids are going to be. Just one way. Secondly, you know, when we're talking now, as we're talking, now we're talking live, you're receiving my message a little bit after I deliver it, and that's deliberate. That was, that was set up security reasons. But subconsciously, the brain is having to adapt to that. I can't see your body language beneath your chest, for example. And that's difficult as well. And if you've ever tried to do a presentation, we've had loads of people in front of you on Zoom, you have to constantly try and bring them into the conversation. And we simply don't understand yet enough of how that's going to impact the nature of leadership, the nature of motivation, and, and how our kids evolve going forward.


Joseph Abramson 14:29

I'm gonna, I'm gonna push you a little bit on on those three implications, the economic, the technological and the social, and, and begin, you know, with with the social because it seems like the work from home and the general trend in the workplace is an acceleration of the atomization that is a real characteristic of of modernity. And this is a substantial acceleration and The argument among preeminent sociologists for quite some time is that this leads to an enemy of loneliness kind of makes sense. But that's really tied to, you know, physical characteristics like suicide. And we're currently seeing just an epidemic in terms of anxiety and depression. And do you think that part of that is related to this acceleration in the atomization of society, because, as you correctly said, we're not built for this. And, and then the second point, so, so really to speak to that social impact. And then the second point is, what does a manager do about this epidemic of anxiety and depression, which is, of course, affecting their workers,


Ian MacFarlane 15:53

I forget which person said, youth is easily deceived, but is quick to hope, because it's quick to hope. But what I see in my coaching practice, for example, a lot of young people talking about, they don't want to bring kids into this world, they don't want to get married, they don't want to have kids because they don't want to actually subject them to the way they see the world evolving, particularly in terms of the climate issue, but more in terms of inequality in terms of more in terms of that loss of meaning. And we see that in the data in the US, for example, even prior to the pandemic, a certain part of the US population, I people, white, blue collar workers, their life expectancy was falling for the first time in the post war period. Don't think that's unrelated?


And some of the studies have demonstrated that to that lack of purpose. So it is what is your anchor through all this rapid change? What do you look for? And that sense of purpose is very important. Coming back to that statement about Carl Jung made earlier on? It's essentially about the trying to find that meaning What's your anchor through all of this, and the two elements that anchor, what are your values, what's important to you? How your day to day activities, actually contributing to meeting those values, and taking a regular check in on those. But beyond your values, your values can change, right? What's important to you at 20 is not necessarily important to you at 35, or 40. You'll know that well in terms of being late father, but the the issue here is beyond your values, your purpose, and that purpose remains recently constant over time. So for organizations, which had that mission statements up on the wall, which nobody ignored, which nobody's everybody ignored, and nobody really focused in on as they were walking in every day. That's very important. But beyond the mission statement, it's more like, Okay, this is what we do. But more importantly, this is why we do it. And it's beyond those bottom line earnings, there is a bigger thing at stake. And that's coming back to that picture of that intrinsic rather than extrinsic motivation.


Joseph Abramson 18:04

So then, maybe on to the economic implications of this trend. Because, you know, right now, we're just seeing this incredibly tight labor supply. You know, if we speak to our clients, or some of the firms that we manage it to seems impossible to get workers impossible to hold workers. Just very, very difficult. We also see that in the in the macro data and in the wage growth, yet, you're saying intermediate term, the work from home and the work from from anywhere massively increases the effective labor supply, maybe even beyond a country's borders. So beyond what Airbnb has put in place, to be honest, Airbnb also allows employees to work anywhere in the world for a three month period. And the only reason why it's not longer is because it's very difficult to do the taxation from an administrative point of view. Otherwise, it'd be like, yeah, work from anywhere you like. So, you know, in the near term, very tight labor supply, leading to massive wage growth. intermediate term, it sounds like it's a big increase in supply, which would be negative for labor versus companies and good for corporate profits. How do you see this panning out in the short term, and in the intermediate term?


Ian MacFarlane 19:32

I think that the short term memory some of the data is reflection on what's happening. And remember, the labor market is a lagging business cycle indicator. And we're already seeing for example, we're moving from away from a suppliers market either people who are in the labor force to a buyers market in the technology sector and that technology sector was a lead indicator among the sectors and in turn that labor is lagging indicator will expect to happen over the coming months is for those trends which we've seen in the technology sector to become manifest in other sectors as well, in other words, that the balance of power switch switches back to the employer versus the employee. But that is the cyclical dimension of this business face. What's actually happened here is, we had inappropriately easy policy, at a very late stage of the business cycle, we had a supply shock, and the combination of the two created that perfect storm, which led to that inflation surge, if you have been brave enough to change your job, you have kept ahead of inflation, if you've remained employed with it within with your existing employer, the majority of people have had a real wage decrease. And practically, in terms of that shock, which has occurred, there's been adverse terms of trade in the developed world, and that adverse terms of trade should be reflected in us becoming poorer, I people who are participating in the labor force.


And you can respond to that in one of two ways you can respond to that in the way the Japanese did in the 1970s, by easing monetary policy, to lead to actually offset that terms of trade shock, or you could act the way the Germans did, which was tightening monetary policy, to lean into that terms of trade shock. And what is happening right now is central banks are following the German model from the 1970s. And leaning into that to actually constrain the impact and make it more difficult for labor to actually barter to the extent that they retain their, their real living standards. I think that's been exacerbated by the fact that the breakdown of unionization and globalization is long term trends we're talking about Iran are also making it very difficult for people. So bottom line here, I think short term, maybe labor is actually disadvantage from a secular perspective, long term. I think it benefits and benefits everybody. And I think that kind of the sole entrepreneur, operating behind the company model is the way to go. And that both parties will have the chance to sort of break and reconnect, but individuals will be more working multiple. So kind of what I'm hearing a lot about, well, can you have a side hustle? I think the side hustle becomes the normality. And that creates a new reality in the workplace.


Joseph Abramson 22:47

What about the third, you know, technology? You know, we're just kind of in the early innings of, of AI. I mean, right now, it's not even true AI, it's machine learning. But eventually there will be true self learning machines. So, you know, how do you think that plays out? Long term, in terms of the workplace in terms of the power of labor? And, you know, especially in terms of the lower 50% of the labor force, and and the the less skilled workers? So how do you see that playing out the technology trend?


Ian MacFarlane 23:35

Well, the implications have already been apparent now for a couple of decades, and perhaps even longer. If you look at the consumer price index in the United States and have a look at the education component, for example, it's substantially outstripped everything. So there's been a premium placed on knowledge and knowledge, knowledge acquisition. And therefore, that is why the bottom half of the 50% of the United States, for example, haven't had really an improvement, their living standards going back a couple of decades.


To some extent, it was breaks in the the early, mid late 1990s, by the subprime mortgage, and then the Clinton administration who basically sort of said, Okay, we're gonna need people to have access to their own homes that their parents didn't have. But, but by and large, their living standards have deteriorated. And that tension is not going to go away in a hurry. And what that's going to mean is that we're going to have to democratize access to education, we are going to have to understand that education is a right if you're going to survive in the world in which we live, and the costs of earning an education or the fancy school. Sure, people who have minimal means since they'll get in if they get a college scholarship, maybe they're the one top one or 2%. But what happens to the comparison between the 90th percentile of people from working class backgrounds and the 90th center people from middle to upper middle class backgrounds, clearly the latter majorly disadvantaged. And that tension won't actually be able to survive unless we find ways of dealing with it. The second aspect of this is the shelf life of knowledge, which is coming shorter and shorter and shorter the whole time. So almost what you do in your degree is out of date five years later. So how do you compensate for that in terms of offering continued educational opportunities to people.


And I think the third element of this is the education about who we are as individuals, that self awareness. Because amidst all this uncertainty, you have to have a good self awareness to be able to survive. It's almost synonymous with resilience, and that resilience of continually having things changing. What's the definition of tactics? Right? A lot of people will say, that strategy today is what the tactics were 10 years ago, basically try something, it doesn't work, you change your strategy. And we're not actually built as human beings to cope with that. Hence, the kind of things that we're talking about in terms of the mental health crisis, which are going on. And the data there is quite shocking. And it says, one in four of us will suffer some sort of mental health problem every year. And if you look at the amount of money which is actually spent, within healthcare systems, towards, and particularly public systems, for healthcare, it's nowhere nearly enough. So that's the other aspect which are going to have to look at, and brain science and understanding the interaction between genetics and understanding the interaction between genetics and psychology, all of these things are going to come to the forefront and become even more apparent, I hope we live to the day when they sort of say, somebody is proud to sort of say, Oh, I'm seeing a therapist, because that will show their vulnerability will show that they're living in the real world, and will show that they want to adapt to the new realities, which are going on


Joseph Abramson 27:16

at least one in four of us


Ian MacFarlane 27:19

at least 1/4 every year. Yeah, every year. And right now, the access to that medical care is just not there. For a lot of people, for example, in the province of Quebec, $100 million was given to the health system to increase improve access to mental health care. Nobody seems to know where that money's gone, gone. And it seems like a worldwide you want access to some sort of mental health care, on average, you can be waiting one to two years to get that. And that's not acceptable. And there's an economic consequences that in terms of productivity,


Joseph Abramson 27:59

yeah, I mean, just, you know, coming coming back, home, you know, in terms of some of the things that you you'd mentioned earlier, you know, I think we'd be remiss if we didn't, you know, speak to some of the trends in the pandemic, and some of those could very well, you know, reverse in the future, and some of them accelerate. So, you know, at least the stuff that will have investment implications where people live, how they work, real estate, that sort of thing. What do you see as the trends that will continue that five years from now, they'll they'll be a higher percentage of the population than that.


Ian MacFarlane 28:47

What we saw through the pandemic was that the purchase of goods obviously, trumped service the service sector, as we move move towards a hybrid working model, where we don't have to isolate, I think that desire for good purchases will fall away, and that the services sector so if I was to bet where the next inflationary bursts will be, it will be in one of the services sector rather than the good sector. It's very difficult for imagine that technology, for example, will be able to give you a haircut, you never know. But it's unlikely anytime soon. Healthcare in particular is interesting because healthcare beyond remote contact with family doctors that was not able to operate efficiently through the pandemic. So what could happen in that sector to bring that into the the reality that we're going remote? I think the other things to bear in mind are our leisure time. Not only are we going to be working remotely, but in no problem ability, we're going to be working for four days a week, right. So the leisure time, the leisure industries are likely to benefit even more than they have been going forward.


Joseph Abramson 30:11

If we look at, and I guess from your argument, it would be from several millennia, but definitely, pre pandemic, you know, work was so important not just for us to get meaning out of life, but also just all of the social institutions that really form the fabric of society. It's where most people, you know, met their wife, or the friends that they retain, you know, into their, into their 40s. And just, like, so many important things, as you're making that transition from childhood, to to adulthood. And so, so what happens to those institutions and to society? You know, if if these trends towards work from home and, and less, you know, ties to corporate culture, what happens if, if they continue, which I guess is the expectation?


Ian MacFarlane 31:20

Well, I have one, one word, echoing through your question that was discipline, work, if you're not disciplined, you go into work after work seven hours, you have to play, you have to behave in a certain way. And if you're doing that from home, some of that discipline breaks down. Right. But I think it comes back to what we talked about earlier on, and that makes it leadership much more calm, difficult. I mean, how do you motivate people in that type of environment, it's already difficult enough. We hear about kind of young people don't really want to work. They don't understand the difficulties, you know, which our generation had to go through. But what about the difficulties, they're facing the difficulties of all the uncertainty, which is about the fact that it's very difficult to get a job when you and I went to the workforce, probably we put the suit and tie on, we did about five interviews, we walked away with three job offers. Today, people may have to give a delivered 1000, CVS to get a couple of interviews. So we shouldn't forget that how much more difficult life has become particularly working live from from their aspect. But if your contract with your employer gets shorter and shorter term, for example, what does that do to your ability to actually take on a mortgage? Or to buy that car? How do you psychologically react to that uncertainty which has been brought to the fore? How do you keep up with all the new trends and technology which is going on? As we get older, our verbal ability improves, but our mathematical ability, for example, our mental arithmetic begins to decline. So does that mean we'll be on the rubbish tip at 30, or 35, rather than 50, or 55? These are all questions which have not yet been answered. And we don't know what's going to happen.


My bet is that we are going to go to a higher savings ratio going forward, given all this uncertainty, given the shorter term nature of people's contraction with contractual obligations, and fiduciary duties for come with companies. And we are, therefore going to be in an environment, which is going to accentuate what we saw before, which is a lack of consumption going on. So the consumption was reliant on consumption in the developed world. And we've all kind of really sort of frustrated about the lack of consumption in the developing world. I think maybe we go into a lack of consumption type of model in the developed world. Now ultimately, that is social suicide, right? Because people used to talk about the paradox of thrift, you're scared of using your job. So you cut back on your spending, which justifies your fears, because that would just aggregate demand, and that creates unemployment. And the same thing is happening in terms of companies managing the bottom line on the top line, and in terms of them reducing demand, potentially there. But more to the point, the societal trends point, I think, a more of a disinflationary environment than an inflationary environment. And what we've seen is we've seen a jump in inflation in essentially disinflationary environment. So the question is, what does the labor market look like in a disinflationary environment?


Joseph Abramson 34:50

I mean, you'd assume that labor must be weak, it has to be weak because labor is 62%. And of corporate expenses, so definitionally, it has to be, it's too big. Well, that definitely, you know, gives our viewers a lot, a lot to chew on. Maybe if we make some of the investment implications of, you know, a little bit more more specific, you know, our clients have a big chunk of their assets in real estate, particularly multi residential, because it's, it's relatively safe and as tax advantaged income for rent growth is going through the moon. So it's actually been an excellent inflation hedge and has been historically, as well. So that's multi res. But, you know, where do you see these trends in the workplace, affecting, you know, the the office, market office real estate?


Ian MacFarlane 36:01

Well, I think the office market real estate really sort of follows what's been happening in terms of a retail real estate market, where the retail real estate market has been hit by the fact that people are buying more and more stuff online, that people are working remotely, there's going to be a demand for smaller units, there's going to be a demand for kind of hot-desking. And then in the short term, obviously, the the health issues of hot-desking have prevented that from happening more. But as that fear drops away, I think you'll see more hot-desking and smaller, if the demand in terms of number of transactions doesn't fall away, the market in terms of the space requirements, I think will definitely fall away. And that obviously, and that obviously has implications.


The, the multi kind of residential market is also an interesting one. I remember you and I having this conversations over a decade ago about the ridiculousness of apartment prices in Montreal, and having been lectured by some of our ex colleagues about how this was stupid and, and 10 years later, that will be one of the best investments you could have made in Montreal. But if you're gonna get this ongoing trend towards people who are working working remotely, I think in some of the smaller cities, that still that doesn't impact that, firstly, the kind of rental market for offices, but there's some of the largest cities where it's difficult to communicate in, that definitely was going to have an impact. And if gas, energy prices remain at the elevated levels, they are now that they're going to be going to have a further adverse effect.


Joseph Abramson 38:00

I mean, my view for for quite some time, is that office is broken, basically. Well, since since April 2020. And the thing is, that office is extremely leveraged with debt, because before the pandemic, everyone said, Oh, these are 10 year leases, it's it's extremely safe, so I can load up on debt. And the only way the equity holder can make any money is by massively over leveraging. So there's a ton of debt. And the debt has to be paid no matter what.


But you're gonna have structural weakness, and revenue, structural weakness and rent structural weakness, and net operating income the same as you had in retail for the past, you know, 15 years, it's a very slow burning fuse, right? Because, again, your 10 year leases, it's going to take another eight years to fully, fully flesh this out. But by your four, you'll probably see most of it come out because people will will sublease and there's going to be a massive wave of defaults. There's no no doubt about it. And that is, is in front of us. In terms of multi residential, our managers are really focused on small to medium size, fast growing markets in the south of the US, where everybody is, is moving to, you know, and really like no exposure in a place like like New York, where you have these extremely high cap rates and intermediate term. I'm not sure that you'll get the migration growth or the sort of income growth that you'll get in these in these other markets. And, you know, maybe, you know, one last thing On, on the impact of COVID, there's, you know, maybe one or 2% of the population, at least in the US has long term COVID. And so they're effectively out of the labor force for at least some time. And then over and above that you have some people that are fearful, you know, because they're older, or maybe they're immuno deficient. And so, how do you see that impacting, you know, the labor market overall? Is that one of the reasons why we're seeing this fast wage growth? Is that just going to ameliorate in the future? What are your thoughts there


Ian MacFarlane 40:47

was sickly adjusted the labor force participation rates have been falling into this. So the big jump in labor force participation rate for the 1990s, for example, was driven by increased female participation in the labor force. If anything, what's happened is that starting to unwind now, as people realize the importance of taking care of their families, the question going forward is if the hybrid model becomes more acceptable? Is female participation in the labor force again, going to arise? Or will people think that multitasking from home is just more stressful than multitasking from a remote office? When you've got a family? I think that's a billion dollar question. I agree with you in terms of if we, the other thing, which may be argued in of increased labor force participation is if you are in your 60s, for example, you don't have to have a long commute to the office every day, but you can do your job at home. Does that tempt you to stay longer in the labor force? Working from home, enjoying the best of both worlds? So I think the jury is still very much out on that. But if that was the have to guess I would sort of, say, labor force participation, if everything's gonna rise around the kind of fall under this new under this new framework?


Joseph Abramson 42:06

Yeah. It's certainly certainly make sense to me. You know, because there's a chunk of the labor force that, you know, the the not very skilled laborers that have not been working, because they've been getting money from the government. And at some point, which from the data is that point should be around now. Their their choice is either to, to work or to massively cut back on on their their spending things that things that really hurt. So I think, in that environment, then yeah, you'll you'll go back into into the labor force. So just to kind of to wrap things up, you know, it's just fascinating, multi dimension multi-dimensional conversation, I think I could probably go on for another day or two. But what would you say, are the three main takeaways from our chat today,


Ian MacFarlane 43:14

the importance of an anchor, the importance of a sense of purpose, a sense of values, and being as an individual being able to check in regularly with those values, and ensure that the four domains of your life work, family strengths, social, personal development, and leisure, are meeting those values.


So I'd say that's definitely the first step. The second one is that we've moved to a situation where there are multiple stakeholders, and you need to acknowledge those multiple stakeholders, and understand how the system operates. And being able to survive within a VUCA world volatile, uncertain, complex and ambiguous world is going to be key to survival going forward. And thirdly, that don't just use the model of the pandemic, to determine your investment behavior. It was good, friendly, I value friendly in the equity, market context, and service hostile, I think going forward, where you can associate and you can still get services, the new model is still going to be service friendly, and good hostile. And this is a decent disinflation environment rather than the inflationary environment. And therefore, I think the rise in commodity prices is a false storm. And that going forward that that still got a lot to be on wide. I think lastly, but not leastly. And I think the thing which overrides everything else is the importance of leadership, leadership beard at a global geopolitical level. Leadership at a domestic country level, leadership at an at an enterprise level. And it's no longer going to be sufficient for you as a leader every time as efficient demand. What do you do, you look at the bottom line, rather than the top line, you cut costs, and you meet your earnings for that quarter. And then, after 10 quarters, you completely lost your way to where you originally wanted to go, it's going to be more about focus on the top line, it's going to be more about the focus on leadership, it's going to be more than the focus about how you intrinsically motivate people in a rapidly changing environment, and you meet their diverse needs. And above all else, I think what's most generous, they're young, they don't know what it is to have gone through tough times. Maybe they know something we don't know, maybe their wants and their needs are different. And we have to keep an open mind that at the end of the day entrepreneurship and about good leadership. And running a business is about having a strong sense of empathy, and that empathy about what people need. I think what people need now is a certain sense of security with all this uncertainty. What people need now, is a sense that they can live a life, which doesn't destroy the environment, a life which doesn't detract from other people's enjoyment, and lead them in poverty. And I think people who walk in and look at that mission statement on the wall, and don't even understand the difference between a mission statement and a purpose statement are misguided that we should be less cynical about that and pay more attention to that. Maybe SGA in the short term has gone a bit too far. But I don't think it's not going to be the trends of the future.


Joseph Abramson 46:41

Amazing. And thank you much so much in our viewers will will really appreciate your insights and hopefully we can chat again soon.


Ian MacFarlane 46:54

My pleasure. Have a good one.



SUMMARY KEYWORDS

work, pandemic, trends, labor force, leadership, hot-desking, work from home, technology, uncertainty short term, adapting

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