September 20th, 2015
03:19 PM ET

Financial Times' Gillian Tett to Fareed Zakaria: "Facebook...[has] tried to be the anti-Sony..."

Please credit any usage to “CNN’s FAREED ZAKARIA GPS”

The following transcript is of an interview by Fareed Zakaria with Dr. Gillian Tett, The Financial Times’ U.S. managing editor and author of The Silo Effect: The Peril of Expertise and the Promise of Breaking Down Barriers (2015). She explained how organizations can institutionalize “thinking outside of the box”. She also described how hyper specialization and miscommunication creates issues in companies.

MANDATORY CREDIT for reference and usage: “CNN’s FAREED ZAKARIA GPS”


VIDEO HIGHLIGHT

The Financial Times' U.S. managing editor, Gillian Tett, on Sony's digital downfall

TEXT HIGHLIGHTS

Tett, author of The Silo Effect explains how Facebook's innovative organizational structure is designed to create connections and reduce silos within the company: “…one of the first things you can do is to try and fight back and recognize that having some slack matters. …take a company like Facebook, who are incredibly interesting, because they've tried to be the anti-Sony. They have deliberately implemented systems where you move employees around the building; you swap people around teams; you bring them together from time to time to try to collaborate on different projects; you have architecture that forces people to collide the whole time. But the other thing that Facebook does, which is perhaps most important, is that they think. They recognize that human beings need organization. You need to have dedicated teams and departments. But you also need to recognize that as soon as you create a box or a boundary that can potentially be dangerous unless you stop, step back from time to time, and actually think about the social structure that you've created for that company and the world you live in.”

Tett describes how hyper specialization and miscommunication blocks vital internal communications within companies: “…here's the issue. We think today we live in a hyper connected world, where we have our cell phones, our airplanes, our supply chains, our markets that link us all together. But the reality is that when you look at how we live and think, we are actually as fragmented, if not more fragmented, than ever before. And sometimes that specialization is good. You need to have experts. You need to have departments that do things. You need to have professions. The problem is, though, that when you have hyper specialization and when you have those different professions and departments that don't talk to each other and connect, then you start to get big problems. You get people who can't see opportunities and they can't see risks either.”

FULL INTERVIEW TRANSCRIPT

THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.

FAREED ZAKARIA, CNN GPS HOST: Gillian Tett is one of the most respected economic commentators in the world. She is now the U.S. managing editor for The Financial Times. She's one of the experts who predicted or warned about the financial crisis of 2008. When asked how she did it, she has credited her background and training in anthropology. That's right. Tett is actually a trained social anthropologist, with a PhD from Cambridge. She did fieldwork in Tibet and Pakistan and wrote her dissertation on a small goat-herding village in Tajikistan, where she lived among the locals. So she now looks with an anthropologist's eye at Wall Street, the city of London, and other financial and economic centers, with their very peculiar insular cultures and strange practices. And when she looks at these bankers and businessmen, she sees people focused on their own specialized, narrow businesses, never noticing what their practices and products do to the economy as a whole. And that was one of the underlying causes of the financial crisis. She calls this problem the “silo effect,” and she's written a book explaining how it's not just in finance, but in business in general, that people get trapped inside their groups and subcultures, instead of thinking outside the box, or outside the silo, actually.

Gillian Tett, pleasure to have you on.

GILLIAN TETT, AUTHOR, THE SILO EFFECT: Great to be here.

ZAKARIA: So you really take on one of these general - central ideas that we all think of as very good, which is efficiency, specialization, you know, doing what you do to the nth degree. Why is that a problem?

TETT: Well, here's the issue. We think today we live in a hyper connected world, where we have our cell phones, our airplanes, our supply chains, our markets that link us all together. But the reality is that when you look at how we live and think, we are actually as fragmented, if not more fragmented, than ever before. And sometimes that specialization is good. You need to have experts. You need to have departments that do things. You need to have professions. The problem is, though, that when you have hyper specialization and when you have those different professions and departments that don't talk to each other and connect, then you start to get big problems. You get people who can't see opportunities and they can't see risks either.

ZAKARIA: Sony – you - one of your great examples is Sony, which was so dominant in the world of consumer electronics and kind of went by the wayside. What happened?

TETT: Well, my book tells various stories of companies who are filled with bright individuals who do some really dumb things. And tragically, Sony is one example of that, because if you think back to what happened at the turn of the century, you had a generation of music listeners who were obsessed with the Walkman. And by all logical reasoning, Sony should have dominated the era of digital Walkmen, because it had not just computing, it had electronics, it had a great brand and it had its music label inside Sony. You want to know why it didn't happen? It's because around the turn of the century, Sony tried to get into the whole idea of a digital Walkman, a portable electronic Walkman, an Internet Walkman, and it launched not one, but two competing products, because it had different departments that couldn't talk to each other or collaborate. And that created a situation where they cannibalized each other and essentially Steve Jobs jumped in with the Apple and the iPod, and these days, we're all carrying iPods, not digital Walkmen.

ZAKARIA: Now, every business is always telling its employees - or its senior employees, certainly - we want you to think outside the box, right? So how do you do that? How do you do it? How do you institutionalize it?

TETT: Well, here's a tragedy. Every company says we want you to think outside the box and yet almost every company these days is actually acting in a way that deepens those boxes and makes them more rigid, because the incentive is for them to be hyper efficient, to streamline everything, to cut out people who sort of just roam around the building and to cut out opportunities for employees to stop and think and roam mentally or just collide with each other. So one of the first things you can do is to try and fight back and recognize that having some slack matters. I mean, take a company like Facebook, who are incredibly interesting, because they've tried to be the anti-Sony. They have deliberately implemented systems where you move employees around the building; you swap people around teams; you bring them together from time to time to try to collaborate on different projects; you have architecture that forces people to collide the whole time. But the other thing that Facebook does, which is perhaps most important, is that they think. They recognize that human beings need organization. You need to have dedicated teams and departments. But you also need to recognize that as soon as you create a box or a boundary that can potentially be dangerous unless you stop, step back from time to time, and actually think about the social structure that you've created for that company and the world you live in.

ZAKARIA: Is this all really somewhat similar to the - those goat herders in Tajikistan?

TETT: Well, I actually think there's a lot of benefit in having a background in cultural anthropology when you try and make sense of, you know, how modern companies or modern institutions exist, because we love to fool ourselves and think we are these incredibly wise, 21st century individuals who live in cyberspace and actually aren't captured by our social and cultural rules anymore. The reality is, we all are. We are just as shaped by our social rules that we inherit without thinking about them as the Tajiks or any other society that anthropologists study. And if you want to get a sense of this, stop and ask yourself, if you're on Twitter, look at who you follow, and ask yourself, how many of those are people who are actually outside my own social tribe or have views different from me? And what would happen if I was to suddenly change half the people I follow on Twitter and put instead people from a completely different social tribe? How would that change my perception on the world or life or understanding of the world? Because in a sense, that's all that anthropology does. We try and think ourselves into another world, another mind set. We try and understand the alien out there so that we can then look back at ourselves better and see ourselves in more context and see the cultural rules and boxes that tend to control us unless we actually challenge them.

ZAKARIA: Completely fascinating. Gillian Tett, a terrific book.

TETT: Thank you.

ZAKARIA: Wish you all the best.

TETT: Thank you.

###END INTERVIEW###


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