An interview with Daniel Snell

Managers and leaders are in a state of perma-crisis and the pace of change is relentless. In this two-part podcast series with Daniel Snell, co-founder of management consultancy, Arrival, we look at some of the issues affecting managers and leaders today, including why DE&I initiatives are in decline, whether AI expectations are matching the hype, and why the disconnect between senior leaders and managers is growing.

Managers and leaders are in a state of permanent crisis. Whether it's related to geopolitics, changing socio-economic pressures, share prices or volatile supply chains, the pace of change has been relentless. With his ability to bridge strategy, people and organisational change, Dan Snell, co-founder of management consultancy Arrival, has helped leaders from nearly every country to create lasting change, sustainable performance and growth upflips, often in some of the most difficult economic circumstances.

In the first of two interviews, we look at some of the issues affecting managers and leaders today, including why DE&I initiatives are in decline, whether AI expectations are matching the hype and why the disconnect between senior leaders and managers is growing. Dan, welcome.

Let's start with DE&I. Are we at a turning point for organisational culture and what do you think organisations need to do in order to bring about cultural change?

Dan Snell: There's a lot in that question, isn't there? And DE&I comes with a lot of heat and politics, depending on the country and the context. And obviously DE&I means different things to different people in different countries.

But if we were to take a step back, I think there are wider forces at play, large-scale tectonic movements in the market that are driving the slackening off of DE&I as a priority for executive teams. And if I could set that out, then maybe that will help the listener understand why I think DE&I as a primary focus, at least within the UK context and possibly America, and to some degree Europe depending, is increasingly not a priority. And that's because if we go back in time to 2008, when we had the market crash, as a result of the crash and the subsequent quantitative easing, money came into the market at almost free or free rates.

And as a byproduct of that, organisations were no longer necessarily required to always deliver productivity and growth because you could effectively M&A or float any underperformance down the track. And additionally, in terms of culture, organisations first lost their focus and then in time lost their capability to always establish, sustain, uplifts in productivity, performance and growth. And in that slackening of a need to perform, organisational culture, in that void, over-indexed or started to focus on things like meaning, purpose and feelings.

And the job market became increasingly tight. And so businesses looked to connect and engage with their people around those topics, rather than demanding productivity, performance and growth. And some of this is obviously governmental policy as well.

But in terms of organisational culture, that's where DEI entered into the organisational culture as a primary focus, super accelerated during lockdown, with the murder of George Floyd. And then organisations again, in the UK context, wanted to appear to be inclusive and diverse, particularly large scale organisations, where meeting customers that looked different, or needed to recruit a lot of people who looked different, was a driving factor for that DEI interest. And so now the market conditions have changed, money is no longer free or cheap.

And we have set in now for long term market change, constant disruption, challenges in the market, the pressure now to re-establish productivity, performance and growth is significant. And AI is both a driver of that general acceleration, along with the fact that there's less free money, or it's harder to access money. And therefore, the pressures around cultures entirely building themselves around purpose, meaning and feelings has come to an end, of which DEI is a critical, but subset of.

I hope that gives you and your listeners a sense of what I think is driving the, I wouldn't say the end of DEI, but the evolution and the non-priority focus at an executive level for DEI.

Yes, it certainly does. I'm intrigued, if you could tell us, what is it about inclusivity and diversity that you are going to mention later?

Dan Snell: Well, first of all, you know, I've worked with leaders in pretty much every region and country on the planet. And so it was very specifically driven by certain interests and certain requirements, depending on the country, the organisation, the market, the culture, etc. And so if you're going to apply something that's universally true as a principle, it has to be universally true and applicable.

But as soon as you get onto a global platform, where each country or region has different definitions of diversity, or different definitions of social mobility or class, or religion, then it means different things in different places. And therefore, how do you ensure that any agenda that you're going to place as an organisational priority is sustainable? How does it drive productivity, performance and growth?

And it wasn't consistently applied everywhere in the same way. It meant different things in some, you know, if I was being a bit cynical, some places, it was just performative. Some places for some leaders, it had profound and deep meaning.

But even where it had deep meaning, it had deep meaning in different ways, always through a different kind of cultural context. So I never could find an exact similar definition for diversity, equity or inclusion. It just meant different things to different people.

And often it was just dominated by the loudest voice internally. And increasingly, I think, certainly within a US UK context, quite weaponised and driven by self interest. It didn't feel that it was truly inclusive, it started to feel like it was exclusive and serving particular groups of particular interest.

So people struggle to understand what inclusion exactly was for and how they could evidence it as a driver of productivity, performance and growth. Conceptually, I think everybody understood the power of well managed diverse teams, because you could unlock greater insights, new communities, new markets, new thinking, because you have different inputs into those teams and projects and organisations based on people with different cultural life experiences. But that's not really what happened.

Mainly, it was driven by some sense of targets. So you move to diversity based on what people look like. But DE&I was never really a representation question, it was a culture question.

How do you really unlock the real value of different people trying to resolve a challenge or unlock an opportunity in a different way. And a of the ways that they were understood were counter to performance. So there was a kind of wider set of ideologies that crept in, that were more about how people felt, or how they experienced work or job security or voice, sometimes at the highest level, than it was around the potential value that individuals or teams could bring, that were aligned with the strategic ambitions for growth of the organisation.

And so, for a couple of years, CEOs really lent in, to some degree, not sure they entirely lent in with resource, but they lent in with their time and their interest. I worked with a number of them. And they were excited by the huge, in a UK context, the huge market potential of talent that were in our inner city communities are from low income communities, often many of whom were immigrants, and would also happen to be ethnically diverse.

But how that actually played out, that's almost impossible to answer, because it played out so differently in each organisation, because they were driven by different needs and agendas. But I'm not sure if the diversity dividend, which is a phrase I coined a number of years ago, was actually ever fully unlocked. So you could argue that things have improved.

And that, generally speaking, exceptional talent from low income communities has been able to get on easier. Which isn't to say that there isn't biases and, and privileges in the system still, of course there are. And things have improved, I think, just generally.

But I think some of the ambitions and desires of people who are passionately connected to this agenda have not been achieved. And if I were to look on social media, for those people who are voices of DEI, and passionate about it, either because they themselves are diverse and have lived experience to share or have consultancy services to sell, I don't see an evolution of what they're trying to communicate, or what they're trying to sell, that is sustainable. I see them coming back with the same sort of messages, and same sort of agitations, which is finger pointing, and is saying how wrong some leaders are, or organisations or whatever, for not understanding the challenges or pain or suffering or exclusions that they're having.

But in truth, most executive teams that I work with, at least, or that I'm connected with, I think understood the opportunity and the challenges fairly early on. And because the message hasn't changed or evolved, their value at that executive level is also diminished. So there is a two factors that are kind of driving that slackening off.

I met a lot of executive teams that were told they were part of the problem, and that they needed to ensure a sort of cultural reality that guaranteed endless opportunities, or something like that. Well, that's, that's not how high performance organisations work, you have to bring and demonstrate and clearly connect what you contribute to an organisation, with the strategic ambitions of the organisation. And if you can't do that, then why should you be guaranteed a place at the organisation, never mind a salary, never mind a guaranteed promotion or increased salary next year.

And so we find ourselves with a kind of a great deal of frustration and upset on one side, as those kind of principled ambitions that were spoken about, or even promised by organisations not really delivering. Because, you know, businesses have to evolve and have to move on. And the pressures to deliver now are very, very real.

And DEI has had its time in the sun as it's currently understood. Now, that may be very upsetting for some people listening to me, because they say, well, this isn't a business point, this is about social equality, or fairness, or whatever. And I think a lot of people wanted to mandate those things into kind of legal policy.

The issue with that is, all talent strikes me as it exists on a bell curve. Don't forget another part of what I've done, I run a management consultancy, but I also run a social impact organisation. And we've supported over 6000 young people, vast majority are ethnically and socially diverse, from low income, community schools, the oldest of which are in their 30s, and run departments and work for many, many very significant UK businesses and brands.

And so I'm acutely aware of this whole process and this journey. And as an agenda, as a priority for executive teams, unless it evolves, it has, you know, as a priority, it's run out of steam now, and businesses have moved on.

AI is being touted as the magic bullet for greater productivity. Is this all hype? Where do you see the benefits of AI?

Dan Snell: Well, it's probably a mixed picture, isn't it? I think for those people with agency and capability to drive the AI agenda, it's probably one of the greatest moments or epochs that's ever been created for those people who are excluded from that or don't know how to. It must be deeply worrying.

As I look internally to large organisations, what I've seen, and I'm sure you've seen the data as well, tech recruits have fallen off a cliff. So businesses are not recruiting tech people. If you have AI coding capabilities, you can charge whatever you like.

So effectively, tech has been commoditised now. And so people who can code to a certain level are becoming irrelevant, because AI coding can do all of that basic stuff, you don't need lots of coders anymore, because AI will pick all of that up. I think a lot of CEOs are hoping that it will make their organisations more efficient.

But I see that AI is a tool, not a solution, a panoply for efficiencies. But I think that's how it may be applied. And that's worrying.

But I think that's because the large consultancies, the McKinsey of this world, Boston Consulting Group, others, the big four, got a monopoly hold on executive teams. And because it's easier to deliver on a strategy, and it's more glamorous and shiny, and there's greater profit margins in that piece of work. I think the market presented that strategy was everything.

And over the same sort of timeframe, maybe a bit before, is that that came at the cost of management, execution, and delivery, which are absolutely critical to business transformations and performance. And I think a lot of executive teams, it gave away organisational culture to their HR functions, and didn't understand how critical it was to their success, and for the ability to assure well managed, well run organisations that could evolve and pivot and change and go to market quickly. And so I worry that AI is actually going to be used or hoped to be used as a way of avoiding that hard work, which is, you know, really well run organisations with strong talent, good architecture, organisational architecture, strong management capabilities, empowered workforces who are clearly aligned to the strategic ambitions, and know that their work activity and contributions are driving performance and not in conflict with it, or a distraction to it.

And in my experience, lots of large scale organisations are really distracted and all over the place. And so if we take tech purchases as a kind of example of that, there are a range of reasons why businesses bought so much tech. Don't ever forget the internal heads of tech want the latest, newest, shiny things, it drives their resume.

And so they're always going to turn around and require or want to buy the latest. I think a lot of internal tech teams were kind of gutted out, then external providers would fill the gap. That has a lot of risk in it.

And so they may well have been told that AI is the answer to all their problems. And it isn't. It could be the creator of a lot of downstream problems.

But, you know, clearly, it's evolving exponentially in terms of what it can deliver and how it can work. And that's both exciting and terrifying. But remember it from a kind of layman's terms, if businesses are letting go of the tech people, and a lot of layman's would already see the kind of people who could code as somehow aliens in their kind of ability, and that they're getting let go because they don't have the capabilities to really drive AI coding, then the disconnect must be massive.

And just think for a moment, if you were a mid manager or a manager in an organisation, and you're no longer being invited to the exciting conversations, the exciting projects and the exciting meetings, you no longer have the ear of the executive, you no longer have the resource, because that's all going to those who can drive the future of the organisation, which is being aligned to AI. That must be very worrying. And if the headlines are like 20% are going to go over the next five years, for those people who weren't driving AI internally, with all the headlines of how many people might lose their jobs, and the fact that they're disconnected from how to move forward with AI, because it's perceived by many people as deeply complex.

And I was just saying that if lots of tech people are being let go, and being commoditised, how does the average layman feel about the future of the world of work and their part to play in it? They will sort of feel like an appendage to the business, like the turn of last century, the arrival of the combustion engine must have seemed terrifying. And I think we may be at a kind of epoch moment, as computers and AI and technology go supersonic.

What is the role of somebody in the organisation that isn't really a part of that?

This is a really good point. In fact, from a cultural perspective, where does the responsibility lie with the leadership, with the HR? And indeed, does a plan need to be put in place culturally to communicate to people within that organisation, that they are still valued, they are still worthwhile, there is a good reason for their role, given all this uncertainty about AI and where it's heading?

Dan Snell: I don't know. I don't know if it's in their interest to say that. It may be more in their interest to say everything's going to be fine.

And because it's evolving at such a rate, and don't forget, a lot of these executive teams probably don't themselves know how AI works or could work or could evolve to. But they're excited, and they're curious, and they're interested, and they want to build those capabilities and build the teams that could do that. But it could be the genie in the bottle that gets unleashed.

I think they're looking for performance and efficiencies, probably, at the same time trying to avoid the really difficult conversations. And in some countries, it's not easy to let lots of people go, it's heavily unionised. So I guess they could say all of that, but whether that's true or not, I don't know.

I don't think they know. Because things evolving so fast, right?

Things evolving so fast, yes. And do you have any tips for organisations looking to implement AI?

Dan Snell: You know, centrally, a bit like anything that you do in an organisation, whether it's culture, strategy, training, whatever, it has to be aligned to your growth strategy. And I think a lot of AI is sort of have at it tinkering in the conversations that I'm having, rather than really squarely aligned to their strategy. And that AI could be a massive distraction, depending on the questions and the prompts and how you're using it.

So an example of that is I was speaking to a really smart young man, and he worked at a big international. And they had a kind of, in this particular department, 40 managers, senior managers, who'd more or less asked their AI tool for a set of general questions that weren't really sharp enough. And then more or less, all 40 managers came back with the same presentation and answers that the internet had scraped for them.

And in that moment, the business was then seriously thinking about removing all of that layer of management because they bring no value other than what the internet can say. And so it's not about AI, it's about how you use it. It's a tool.

And if you can't add additional value other than what the first cut of any AI tool will bring, then you don't bring any value. But that's true of the organisation in its totality. If you can't clearly articulate how you're driving, what you're doing is driving the strategic ambitions of the executive strategy, then you're probably surplus to requirements anyways.

And that's not that's not the executive or the organisation's job to resolve. It's yours as an employee. You know, are you bringing value? Are you not? You can't. You're not guaranteed a job.

Nobody is. And so, as I said, the reason why all of this is changing is there wasn't real pressure on organisations to deliver growth, but that's come to an end and we're entering a very different epoch. And so individuals who want a job next year and who want to pay rise next year, have to figure out how to bring value to the organisation, whether it's using AI or something else.

That's for them to figure. I think that's the responsibility of an executive team.

Yes, to your point, AI being a tool, I was on a global roundtable discussion a few weeks ago on the topic of AI and some research had been done, which showed that even in organisations where training and development had been done to help equip people with what they need to know in order to manage these tools well, that employees felt that they had not had enough training and also that those people who had had training were, in fact, the ones that were more likely to be concerned about the future of their jobs.

Dan Snell: Yeah, well, maybe that might be true. But again, you've got to come at this one or two ways. You're either saying to your people, let's turn the clock back 120 years, you're saying to your farriers, your cobblers, your saddle makers, your cartwrights, you've got to figure out how to make cars.

The end of horse is over. Horsepower has come to an end. We're now into the combustion engine.

Is it the responsibility of organisations to ensure that everybody is brilliant at AI? Or is it the responsibility of the individual to ensure that they can bring value and justify their salary? If we were to go to a kind of extreme version of how this might play out, let's say there are 20, 25% of all jobs go, starting at the kind of basic administrative functions.

Well, then people have got to figure out what value they're going to bring to the organisation, whether it's AI or something else. I don't think executives can drive this because I'm not sure they necessarily understand where AI is going or how to apply it. I think they can understand it in principle, or they can understand the kind of larger view, or the opportunities in principle.

But I'd be very surprised other than getting presented to or having some time to tinker around with things themselves, they're going to be too bogged down in running the business and working on strategies and to spend too much time on AI. So what would they teach people anyways? They need to have that bird's eye view in the organisation, not get bogged down with, you know, how a particular latest software innovation could be applied within their context or their company or their market.

So, you know, it's just one of those epoch defining moments. Do you have the smarts to adapt? And if you don't, then, you know, I think ultimately, you can't look further than the mirror.

Yes, Daniel, thank you so much for this really fascinating deep dive today.