559: Professor of Finance at London Business School, Alex Edmans, on Why ESG and DEI Data May Contain Lies

Michael explains that people often struggle because "adding and adding must be more effective," yet humans are "more confident when just one advantage is presented." He shares that Five Guys succeeded because they "only do burgers and fries" and that "if you say you are best at one thing most of all, they're more likely to believe that." He emphasizes that "buyers…have a top force-ranked prioritization of the most important thing," and focusing on the thing you are "best in the world at" is "more believable and more memorable." On pricing, he notes that "thinking is to humans like swimming is to cats. They can do it. They just prefer not to," and the brain "uses twenty percent of the calories in your body." He explains that humans rely on shortcuts and that price is "a relativity game." He describes how Red Bull "broke the comparison" by avoiding the soda can format and launched at "two dollars and fifty cents" instead of one dollar. He explains left-digit bias: "Forty-nine ninety-nine is going to be a much more attractive price than fifty dollars," and that ending in a seven "feels much more specific." He describes how indulgent framing changed behavior: "sweet sizzling plant-based beans and crispy shallots" increased selection "twenty-five percent more," while "light and low carb" suppressed it. He states that appealing to the emotional side "will always feel more indulgent and will always be more appealing," and that consulting services should focus on "what does the buyer really want" and how to communicate emotionally, not only rationally. On scarcity, he shows that breaking enjoyment boosts desire. Pumpkin Spice Latte sells because "they decided to make it for a limited time only," and the shorter deadline in a voucher study produced a "four and a half times increase." He warns that in professional services "you have to be careful that it's still believable." Time scarcity rarely works; instead, "we only have three seats left in this class" or "we only have room for two more clients to onboard this quarter." Michael explains that nostalgia reduces price sensitivity, noting people were willing to pay "three times more" when feeling nostalgic. He says social connectedness lowers price concerns: "there will be less pricing sensitivity when there's higher social connectedness." He points out that many consultants think this is about likability, but "that's not actually what the science says is happening." He introduces the publicity principle — "if someone revealed what you were doing, would you be ashamed or embarrassed by it?" — and the grandma principle: "if you had to tell your grandmother the way you landed that big account," would you feel proud? On humor, he explains that humor creates "higher attention," "higher positive emotions," and "higher purchase intent," but jokes must reinforce the brand or they become "the vampire effect." He shares the pratfall effect: a small blunder "makes you even more likable," showing that "a little bit of a blunder can make you a little bit more likable." He highlights powerful examples such as "good things come to those who wait," "we're number two so we have to try harder," and "the taste you hate twice a day." He explains that concrete ideas outperform abstract ones. People remembered "rusty engine" and "white horse" far more than "impossible amount" or "subtle fault." He says consultants should avoid abstract language and "draw a picture in people's minds" so ideas are "much more easily remembered." Michael emphasizes that "every word matters." He shares how Patagonian tooth fish became Chilean sea bass and saw a "thirty fold increase," and how one verb changed perceived car-crash speed from "forty point five miles per hour" to "thirty one point eight." He notes buyers are "light users of our industry" and that consultants may be "choosing words that leave a totally different impression." He explains the illusion of effort: showing effort raises perceived quality. Participants rated a poem higher when told it took "eighteen hours" instead of four. He warns consultants that AI can lower perceived effort unless they "show your effort that went into using AI." Get MichaelAaron's book, Hacking the Human Mind, here: https://shorturl.at/zV3HW Claim your free gift: Free gift #1 McKinsey & BCG winning resume www.FIRMSconsulting.com/resumePDF Free gift #2 Breakthrough Decisions Guide with 25 AI Prompts www.FIRMSconsulting.com/decisions Free gift #3 Five Reasons Why People Ignore Somebody www.FIRMSconsulting.com/owntheroom Free gift #4 Access episode 1 from Build a Consulting Firm, Level 1 www.FIRMSconsulting.com/build Free gift #5 The Overall Approach used in well-managed strategy studies www.FIRMSconsulting.com/OverallApproach Free gift #6 Get a copy of Nine Leaders in Action, a book we co-authored with some of our clients: www.FIRMSconsulting.com/gift

7 Tammi 53min

When most executives discuss AI, they focus on automation. Dr. Ben Zweig, NYU Stern professor and CEO of Revelio Labs, explains why the real disruption isn't machines replacing people, it's our failure to rethink how work is structured. "Labor markets are not as sophisticated as capital markets," Ben explains. "We allocate capital efficiently, but not labor. That's a huge weakness in how our economy operates." In this conversation, we explore: Why every company must learn job architecture, seeing jobs not as titles, but as bundles of tasks that must constantly evolve. The three factors that determine whether AI causes unemployment: How quickly firms adopt new tech How individuals adapt their skills How flexibly jobs can transform Why middle managers now sit at the center of organizational adaptation. "The top can't really affect this meaningfully, it happens through line managers." Zweig challenges the old idea of "delegation." Instead, he calls for reconfiguration, a manager's ability to reshape work as technology shifts. "Don't tell people how to do things. Tell them what needs to be done, and they'll surprise you with their ingenuity." - General Patton, quoted by Ben Zweig We also discuss the human skills that will rise in value: empathy, coordination, and the uniquely human ability to orchestrate complex systems. "AI can execute tasks, but it doesn't yet coordinate them," he says. "That orchestration, what we call management, is still deeply human." For young professionals, his advice is both practical and hopeful: "Manage a project from start to finish. Build something end-to-end. That's how you train orchestration." Ben also shares how Revelio Labs uses large language models to build a scientific understanding of labor markets, and why "AI is only called AI until you understand it, then it's just math." Get Ben's book here: https://shorturl.at/qSspC Job Architecture: Building a Language for Workforce Intelligence. Claim your free gift: Free gift #1 McKinsey & BCG winning resume www.FIRMSconsulting.com/resumePDF Free gift #2 Breakthrough Decisions Guide with 25 AI Prompts www.FIRMSconsulting.com/decisions Free gift #3 Five Reasons Why People Ignore Somebody www.FIRMSconsulting.com/owntheroom Free gift #4 Access episode 1 from Build a Consulting Firm, Level 1 www.FIRMSconsulting.com/build Free gift #5 The Overall Approach used in well-managed strategy studies www.FIRMSconsulting.com/OverallApproach Free gift #6 Get a copy of Nine Leaders in Action, a book we co-authored with some of our clients: www.FIRMSconsulting.com/gift

5 Tammi 52min

In this conversation, Mark explains that "we often build our lives on things we are certain about that simply are not true." He describes how "we don't actually see the world… we see screens of how we think the world is." He explains that these screens create "a double paradox" shaping what we think is safe, what we think is risky, and how we choose to act. Mark describes the difference between someone who sees a large employer as stability versus an entrepreneur who sees it as danger, saying "which screen is right? Well, it depends on which screen is going to give you more power in life." He talks about choosing the entrepreneurial screen because "I detested the idea of being a piece of a cog in a major machine." He explains how a "victim type screen" once took over his thinking when he was diagnosed with osteonecrosis: "I was catastrophizing… I went into a very negative spiral." He recalls seeing children receiving chemotherapy and realizing "Mark, you are really self-absorbed… You don't get to live a life without pain and challenge." That shift, "Why me?" to "Why not me?", transformed everything for him. Mark also talks about the mindset required to reinvent yourself: "No matter what I succeeded in in the past entitles me to win in the future." He shares that he must "redo it every three years or reimagine it and transform it," because "if I'm not transforming my business, other people are going to be working to transform my business out of it." He discusses fear and avoidance: "You can be afraid of having the conversation… but what you cannot do is ignore it." He explains how ignoring problems is the beginning of decline. Mark then explores how his business model evolved when he realized that people with millions of dollars were still "miserable, always afraid… always complaining" while others with far less were happy. This led him to see that money alone is not the source of well-being. He dismantles the three ideas he was taught early in his career: "stock picking," "market timing," and "track record investing", calling them "completely bankrupt." He explains that "the market is very efficient, very random," and that "stock picking, market timing and track record investing didn't work." Mark describes how identity and mission changed for him over time, how screens shape action, and how transformation requires confronting fear, discarding false certainty, and letting go of entitlement. He closes by saying he hopes never to retire because "stopping is one of the worst things you can do for your future." He explains that purpose, planning, and creating are what allow people to thrive. Get Mark's book here: https://rb.gy/h4brr0 Experiencing The American Dream: How to Invest Your Time, Energy, and Money to Create an Extraordinary Life Claim your free gift: Free gift #1 McKinsey & BCG winning resume www.FIRMSconsulting.com/resumePDF Free gift #2 Breakthrough Decisions Guide with 25 AI Prompts www.FIRMSconsulting.com/decisions Free gift #3 Five Reasons Why People Ignore Somebody www.FIRMSconsulting.com/owntheroom Free gift #4 Access episode 1 from Build a Consulting Firm, Level 1 www.FIRMSconsulting.com/build Free gift #5 The Overall Approach used in well-managed strategy studies www.FIRMSconsulting.com/OverallApproach Free gift #6 Get a copy of Nine Leaders in Action, a book we co-authored with some of our clients: www.FIRMSconsulting.com/gift

31 Joulu 202552min

Adam McGraw is a Fortune 100 VP turned entrepreneur and co-founder of CREW, a leadership community. "We try and really curate it for folks that are in the VP and above through CEOs as well, founders, etc., so that they have this kind of safe white space atmosphere to really consistently plug in and build community." "Not just transact network-wise in things that are typically narrow and niche… we really love the idea of a melting pot for leaders." "This is kind of the new normal: constant change, constant uncertainty, constant transition." "Being in crew keeps me grounded and conscious and aware." "I want folks by the end of the day to feel like even though I dedicated and carved out time in my busy life and work week, I came out of here actually feeling juiced up and energized because I had some fun and obviously I learned some stuff and I got to be myself."   Claim your free gift: Free gift #1 McKinsey & BCG winning resume www.FIRMSconsulting.com/resumePDF Free gift #2 Breakthrough Decisions Guide with 25 AI Prompts www.FIRMSconsulting.com/decisions Free gift #3 Five Reasons Why People Ignore Somebody www.FIRMSconsulting.com/owntheroom Free gift #4 Access episode 1 from Build a Consulting Firm, Level 1 www.FIRMSconsulting.com/build Free gift #5 The Overall Approach used in well-managed strategy studies www.FIRMSconsulting.com/OverallApproach Free gift #6 Get a copy of Nine Leaders in Action, a book we co-authored with some of our clients: www.FIRMSconsulting.com/gift

29 Joulu 202555min

Technology is reshaping the world at a pace few people, inside or outside the industry, expected. But every so often, you meet someone who has not only witnessed the major waves of technological change, but helped build them. In this conversation, Marcus Fontoura, Technical Fellow and Corporate Vice President at Microsoft, CTO for Azure Core, walks us through the story of AI, what leaders are getting wrong, and how to develop the one thing that will matter more than any model or algorithm: human agency. Marcus has lived through every major inflection point: early search, the rise of cloud computing, and now large-scale AI systems. One of the first things he challenges is the popular narrative that we are heading toward an AI apocalypse, or an AI utopia. Both extremes, he explains, miss the point: "My approach was more like, let me just explain what the technology is and what it does… it's basically a prediction system." Marcus offers a clear explanation of modern AI. He compares today's large models to a system that has: "Read nonstop for fifty thousand years… with near perfect memory." But this doesn't make AI a mastermind. It makes it a stochastic parrot, extraordinarily capable, but not self-directed. He also emphasizes that while AI will automate the mechanical layers of work, it will amplify, not replace, the leaders who know how to think: "If your job is typing in a spreadsheet… then I would feel scared. But if you have the knowledge and experience to really add value, I wouldn't feel scared." His point is: the danger isn't AI. The danger is becoming someone who only performs tasks AI can do. We also cover the uncomfortable but increasingly visible trend: people relying on AI so heavily that they lose their independent critical-thinking muscles. Marcus acknowledges the risk: "That is a little bit concerning… we will see good uses of technology and uses we don't want to happen." He stresses that organizations must raise the bar for juniors, not lower it, and that AI helps experts more than novices: "More experienced folks already know what to expect… junior employees may not know what is correct or incorrect." This is one of the most important insights in the entire episode: AI accelerates expertise; it does not create it. On hallucinations, Marcus is exceptionally candid: "The more we use it, the more you have techniques to avoid it… but we have to double-check those things." On leaders fearing displacement: "Use AI in a way that amplifies your skills… automate the mechanical tasks and focus on what only humans can do." And on what truly matters in this moment of technological upheaval: "Technology shouldn't influence us. We should influence what we want to see in our society." And he gave a useful explanation of the names of ChatGPT models: "When you say that bigger AI models, when you move from ChatGPT three to four, four to five, basically these models have more parameters. So this means that you read a lot more, but also you memorize a lot more." This conversation is a reminder that the most important focus should not be AI, it's the leader using AI with judgment, clarity, and agency.   Get Marcus's book, Human Agency in a Digital World, here: https://shorturl.at/v0lo8   Claim your free gift: Free gift #1 McKinsey & BCG winning resume www.FIRMSconsulting.com/resumePDF Free gift #2 Breakthrough Decisions Guide with 25 AI Prompts www.FIRMSconsulting.com/decisions Free gift #3 Five Reasons Why People Ignore Somebody www.FIRMSconsulting.com/owntheroom Free gift #4 Access episode 1 from Build a Consulting Firm, Level 1 www.FIRMSconsulting.com/build Free gift #5 The Overall Approach used in well-managed strategy studies www.FIRMSconsulting.com/OverallApproach Free gift #6 Get a copy of Nine Leaders in Action, a book we co-authored with some of our clients: www.FIRMSconsulting.com/gift

25 Joulu 202554min

In this episode, Dr. Julia Garcia explains why hope is a habit and why it is critical for us to remove what blocks hope. She describes what happens inside teams when leaders lose hope, including "the culture that creates, the burnout that leads to, the discouragement and defeat." Julia shows how unprocessed emotions drain leaders even when they appear high-functioning. "If we emotionally feel disconnected, we're going to start looking elsewhere or we're going to end up in a place of hopelessness where maybe we completely shut down in our career and now we're just a robot." One of the most memorable insights is the use of the word "maybe" to interrupt destructive thought cycles. She explains: "Maybe your next idea is the one that's going to change the game for you." "Maybe that failure wasn't a failure. It was a setup." "Maybe you have everything you need right now." Julia also demonstrates how holding unspoken emotions limits our capacity. "We can function by holding all these things in emotionally… but we actually aren't discovering what we're truly capable of because we're not fully available." Julia shares her own experiences with failure and rebuilding: "None of this was a waste. I can repurpose this." and "Maybe I can learn from this. Maybe I can come back stronger." We also discuss AI. Julia warns: "AI is increasing productivity, but it is decreasing the personal humanity." and "We need people in our problem solving. We need people in our products." She closes with the central message of her book: "Hope is a habit… it is the single greatest predictor of success and health." Get Dr. Julia's book, The 5 Habits of Hope, here: https://shorturl.at/rjpNF Claim your free gift: Free gift #1 McKinsey & BCG winning resume www.FIRMSconsulting.com/resumePDF Free gift #2 Breakthrough Decisions Guide with 25 AI Prompts www.FIRMSconsulting.com/decisions Free gift #3 Five Reasons Why People Ignore Somebody www.FIRMSconsulting.com/owntheroom Free gift #4 Access episode 1 from Build a Consulting Firm, Level 1 www.FIRMSconsulting.com/build Free gift #5 The Overall Approach used in well-managed strategy studies www.FIRMSconsulting.com/OverallApproach Free gift #6 Get a copy of Nine Leaders in Action, a book we co-authored with some of our clients: www.FIRMSconsulting.com/gift

22 Joulu 202553min

In this conversation, Anthony Vinci explains that "AI is going to be able to do more and more of what people do." He describes a future where "AI is going to get better and better at doing what people do," and highlights that leaders must understand "how do you figure out what AI is good at and then implement it to do that" and "how do you manage your workforce so that they are able to partner with that AI." He warns that leaders often "overestimate what AI can do and underestimate it at the same time," and stresses the importance of "getting that balance right." As he shared, "sometimes they can sense that, oh, AI can do anything," while others say "it will never do that," and both assumptions can mislead decision making. He offers direct guidance for staying relevant: "The number one thing I would recommend is literally to just go use AI for thirty minutes a day." He urges leaders to "push the envelope" and "see where the holes are, what it won't do." Vinci describes how workflow—not just technology—defines whether AI succeeds. Implementation requires understanding "the process and the workflow," recognizing that AI adoption "is going to be small parts," and building "those pieces over time." He explains the subtle dangers of influence, noting that AI can "change your mind" without you realizing it. The threat is not dramatic deepfakes but "what if it just changes one word?" or "an adjective and makes something seem slightly different." To stay resilient, he urges people to "think like a spy," recognize that "there might be a bad actor on the other side," and build habits of "triangulating information." He emphasizes cognitive agility: "We still need to learn to do it so that you can think about mathematics and understand mathematics," and he connects this to thinking and writing in an AI-driven world. Even with powerful tools, "you're still going to have to keep yourself sharp." Vinci closes by discussing perspective, explaining how "living abroad" showed him how much people assume about how the world works. He encourages listeners to embrace the belief that "maybe this assumption that you have in life is wrong," because "the difference between being okay or good at something you do and being great is this ability to take a step back and question whatever you see in the world." Get Anthony's book, The Fourth Intelligence Revolution, here: https://shorturl.at/rjpNF Claim your free gift: Free gift #1 McKinsey & BCG winning resume www.FIRMSconsulting.com/resumePDF Free gift #2 Breakthrough Decisions Guide with 25 AI Prompts www.FIRMSconsulting.com/decisions Free gift #3 Five Reasons Why People Ignore Somebody www.FIRMSconsulting.com/owntheroom Free gift #4 Access episode 1 from Build a Consulting Firm, Level 1 www.FIRMSconsulting.com/build Free gift #5 The Overall Approach used in well-managed strategy studies www.FIRMSconsulting.com/OverallApproach Free gift #6 Get a copy of Nine Leaders in Action, a book we co-authored with some of our clients: www.FIRMSconsulting.com/gift

17 Joulu 202553min

When was the last time you played, really played? For Cas Holman, founder and chief designer of Heroes Will Rise and star of Netflix's Abstract: The Art of Design, play isn't childish. It's the foundation of human creativity, resilience, and connection. She worked with LEGO, Disney Imagineering, and the LEGO Foundation and on a mission to help adults rediscover what children know instinctively: that play is how we learn, adapt, and feel alive. "Play isn't what happens after work," Cas explains. "It's how we manage uncertainty. It's how we cope, experiment, and find our way through the unknown." In this conversation, Cas reframes play not as a distraction from productivity but as the engine of it. She explains why play is essential for innovation, executive presence, and emotional agility, and how suppressing it has drained creativity from our professional lives. "Playful thinking lets us reframe success," she says. "It makes us flexible enough to keep moving when things don't go according to plan." We discuss: Why free play (activities that are intrinsically motivated, freely chosen, and personally directed) is the most powerful form of creative renewal. How reframing success turns frustration into discovery: "You came to play basketball, the ball's flat, the court's full, so what? Invent a new game." Why curiosity and uncertainty are not threats to be managed, but conditions for growth. How "breaking" systems or routines can reveal how they actually work. And how adults can learn to release judgment, the internal critic that says "I should know the answer" instead of "let's find out." Cas's insights are strikingly relevant to the age of AI. As technology automates more of what we do, she reminds us that what matters most is how we create, not how efficiently we delegate creation. "We're outsourcing the wrong things," she says. "Creativity wasn't the problem that needed fixing. It's what makes us feel alive." Get Cas' book, Playful, here: https://shorturl.at/jxR4O Claim your free gift: Free gift #1 McKinsey & BCG winning resume www.FIRMSconsulting.com/resumePDF Free gift #2 Breakthrough Decisions Guide with 25 AI Prompts www.FIRMSconsulting.com/decisions Free gift #3 Five Reasons Why People Ignore Somebody www.FIRMSconsulting.com/owntheroom Free gift #4 Access episode 1 from Build a Consulting Firm, Level 1 www.FIRMSconsulting.com/build Free gift #5 The Overall Approach used in well-managed strategy studies www.FIRMSconsulting.com/OverallApproach Free gift #6 Get a copy of Nine Leaders in Action, a book we co-authored with some of our clients: www.FIRMSconsulting.com/gift

15 Joulu 202555min