By all accounts there were some very smart people involved in the Hayne Financial Services Royal Commission. Now that it’s over and the final report has been in the public domain for some time, I can take a more reflective look at the Commission’s work and some of the fallout. It strikes me Royal Commission’s are strange beasts. They are overwhelmingly led by lawyers and are conducted in a manner that has a very legalistic and adversarial framework. Most often they are looking into matters that reflect systemic organizational or cultural issues that are failures of management and leadership. It would follow, I would have thought, therefore that while a solid legal foundation might be needed by the commissioner/s, the most essential skill set is management and leadership (and here I’m speaking of leadership of a company). This is seldom the case and proved true of the Royal Commission chaired by Justice Hayne.

So that had me thinking – what were the qualifications of the main belligerents? What made them uniquely qualified to sit in judgement of others? Let’s start at the top with Justice Kenneth Hayne. He’s an ex-University of Melbourne double major Arts and Law and did a Bachelor of Civil Law at Oxford. Topping that off he is a Rhodes Scholar. Then there was the stellar performance by his counsel assisting, the inimitable Rowena Orr QC. She’s endowed with a Bachelor of Economics and Hons Law Degree and a MPhil in Criminology.

Then let’s take a quick peek at some of the ‘defendants’. First off Dr Ken Henry, then Chair of NAB, with an economics degree from UNSW and a PhD in economics from University of Canterbury. He was Treasury Secretary for 10 years most importantly steering Australia through the GFC. Another is David Gonski, Chair of ANZ, who began life as a lawyer at Freehills becoming the youngest ever partner at the age of 25. He is equipped with a Bachelor of Commerce and a Bachelor of Law (winning the University Medal no less) both from UNSW.

What’s striking for me in this is that both sides – the Commission and those being grilled – both appear to have a yawning gap in the very skill area in which they are defending their position, or proffering their criticism. How can this be? I’d never knowingly fly in an aircraft where the person at the controls was not a qualified and experienced pilot.  I’d be willing to guess it has to do with hubris. To become a lawyer you need a great academic result in school that will set you above the less gifted, academically speaking, in what still is (despite increased use of A-i) a highly sought after and hotly competitive area of study. Very few lawyers seem to go on to study management through an MBA or other lifelong learning. Believe me economics and commerce are not a straight proxy for management. They are, off the bat, ill-equipped to speak on matters of management and leadership without bootstrapping some academic qualifications in the field of management.

The fact that the banks and other financial institutions got into trouble, I would argue, is because of lack of management expertise in the first place. Creating highly perverse outcomes from incentive schemes aimed at playing on greed and individualistic reward, was always likely to end badly. The schizophrenia between the advertising of the banks and their actual  behavior must have had many of their non-bonus earning staff shaking their heads in disbelief. The skill of management is about creating growth AND compliance and getting everyone ACTUALLY delivering against agreed values, not just nodding towards them at successive Board meetings. Skills as a Director, which really should be re-phrased as ‘experience’ as a Director, are no proxy for management, nor is it any indication as to how a company might be run.

I noted during the Royal Commission that the professional organization that represents managers and leaders, the peak body as it were, made the case for all senior execs in the finance sector to become Chartered Managers. This is the latest offering from the Institute of Managers and Leaders ANZ and to my mind should be a prerequisite for anyone looking to lead a company as part of the executive. How many take up the offer remains to be seen. You wouldn’t have your Chief Financial Officer without a professional accountancy qualification CA or CPA etc. so why would we expect companies to be run by someone without professional management qualifications?

So, what were the implications for us as consumers from this lack of managerial skills, experience and qualifications? Well, as already noted, consumers have been ‘dudded’ for some time by financial institutions. But at the Commission itself this lack of depth in management means the recommendations are unlikely to create a coherent plan for a re-structure that can create order out of the apparent paradox of serving the customer and the shareholder. Hayne hasn’t sorted this out. There was also a lost opportunity in addressing a long-existing flaw where the executive and Board lines get blurred. I have been of the belief for a long time that you can be on a Board, or in the executive, but you cannot simultaneously do both. If I was Hayne I would have banished the Managing Director position once and for all. How can the management be held to account if the chief officer of management, the CEO, also sits as one among equals on the Board of Directors in the role of Managing Director?

Hayne did collect some ‘scalps’ though, so you might think that the consumer at least had some sense of justice. But let’s look at who went. Ken Henry, saviour of the country from the GFC had a mere 3 years as Chair of NAB and much less time as Chair than his counterpart, Gonski, at ANZ. Henry’s gone and Gonski remains in place. This is as a direct result of Hayne and critical comments in his report based on the tone of the ‘cross examination’ during the Commission’s hearings. Had Hayne had more management expertise to draw upon, I suspect he might have understood the emotional intelligence (EI) issues at play and realized that his assessment of Henry was coloured partly by his performance style.

You could be forgiven for thinking that Hayne might have even had the fleeting thought of ‘how dare he’ a mere economist speaking like that to a lawyer! We will never know. What we do know is that those who are familiar with Henry say that when involved in such circumstances he gets very defensive. This, it can be argued, was also a fault of Henry’s own lack of EI. Henry, though, was only responsible for his performance, while Hayne was sitting in judgement where the bar is set higher (excusing the pun). I hypothesize that a Chartered Manager sitting in Hayne’s Chair would have had a better handle on EI and things might have worked differently for Henry and not at the detriment to the findings either. Gonski, a wily performer with more time in the corporate world, made a small target and came through the Commission pretty much unscathed. Was NAB that much worse than the ANZ…I’m not so convinced?

So I’m advocating for the corporate world to embrace the Institute of Managers and Leaders Chartered Management qualification. I’m suggesting that there be no dual roles as executive and Director for the same person on the same Board. I’m calling for a genuine focus on the customer and concern for the well-being of the workforce. All these things genuine managers do as part of their day jobs. I’m also calling for a more reasoned approach next time the Government decides to call a Royal Commission. By all means have a commissioner with some knowledge of the law so things can go well procedurally, but let’s have some people with genuine credentialed management qualifications and experience. After all if management is the core of the issue, managers need to sort the issues out. If both your pilots fall prey to food poisoning on your next flight, you are unlikely to hear a call out over the PA system asking for someone with experience in Torts!

I was explaining to a youngster over the Christmas period, the old process of accessing entertainment, specifically films to watch, which required a visit to Blockbuster. It generally involved disappointment if you left the run too late to find that the new releases had all been rented by someone else. I was going to go further and talk about getting your camera film developed, but the incredulous look on their face gave me a hint that that might have been a bridge too far already!

Of course, nowadays the inconvenience of having to get your timing right to get to the ‘video store’ and possibly missing out on your desired movie of choice, is a thing of the past. Thank god you might say and to a degree I’m with you. But I still find now, with streaming and poor bandwidth, that if I don’t get my timing right I’ve left it too late for the movie to buffer enough to either watch the film in the first place, or watch it with a degree of fidelity that makes it an enjoyable experience. This is particularly true of Netflix, Stan and TV on demand.

This got me thinking about streaming and its impact on our lives, not only now but into the future. My first reflection is the impact streaming is having on our willingness to wait. This has pretty much been trashed by the always available on demand nature of streaming. In years gone by, the anticipation of the next episode of a TV show that would be on the same night, at the same time a week later, was half the fun. That’s why VCRs were invented – in case you had a function to go to and would otherwise miss your show. In days gone by the conversation next day at work or school etc. had everyone on the same page. Nowadays the conversation goes more like. “Have you been watching [insert programme] on Netflix?” If the answer is ‘no’ it’s generally followed with “well you should it’s great”. If the answer is ‘yes’ it’s followed by “what episode are you up to?” And there ends the conversation when you realise you are both out of sync. No-one wants a spoiler. Not really the in-depth conversation piece of a few years prior when you both were on the same page, as it were, episodically speaking.

The second by-product of this unwillingness to wait is its spill over into other areas of our life. We start demanding things now and our patience for the delivery of content whether it’s music, films or stuff from Amazon has been eroded to the point that customer fulfillment has become the supply chain issue of our generation. It also means though that there is precious little time planning. No big deal you might think but it has significant issues in the business world where last minute demands aren’t as easily fulfilled as a downloaded TV show. Take ordering concrete for a large pour on a block of apartments. You can’t just ring up and get that delivered within an hour or so. Planning they say “prevents piss poor performance” but this concept is fast achieving second cousin status in our work lives and especially our non-work lives. As any successful business person will tell you, planning, goal setting and evaluation are the three core underpinnings of business. The ability to do this, especially planning ahead is associated with the development of the third and most recent part of our brain the neocortex. To take this out of the equation of our lives will seriously impact our neurological health, not to mention our business.

My next concern and trend in streaming is curated content. I noticed this first in the early days of Amazon when doing an on-line CD (a disc upon which digital music was compiled) purchase. It went something like ‘other buyers who bought this also bought…’ Without realizing it I was getting my first taste of the echo-chamber. Nowadays Apple Music or Spotify can curate your musical content and with iTunes you can buy the songs you want to hear from a myriad of albums (originally a large piece of vinyl upon which a band recorded their latest content) without buying the whole thing. Great for your wallet not so good for expanding your horizons.

Netflix similarly – although I think with less precision – is sending similar content to me on the basis if I liked that, I’ll like this… The problem here is with neural pathways. New experiences that challenge and arouse create these new pathways expanding our brain and sometimes generate the neuro plasticity that has featured in recent years in neuroscience research. If we get fed the same content, without exposing ourselves to new ideas, our brains will actually shrink. We used to have a phrase for this – we become ‘narrow minded’. Funnily enough this is a reasonably accurate description of the physiological impact on our brain of not expanding our horizons and trying out new experiences or stimuli.

There’s a less significant but nonetheless important loss also from this and that is the delight in the unexpected. If you bought the song ‘Hotel California’ by the Eagles you will have missed the gem that is ‘The Last Resort’. If you bought ‘Werewolves of London’ by Warren Zevon that features on his album Excitable Boy, you would have missed the classic track ‘Lawyers, Guns and Money.’ If you watched say Daredevil by Marvel on Netflix, you will have been encouraged in the direction of Luke Cage, Iron Fist et al.

Chances are you would not be pushed in the direction of the excellent The Bureau (French) or Das Boot (German) television shows because curating doesn’t spread its net like that, plus it’s on the SBS on demand service not Netflix. Expanding your entertainment viewing boundaries is another way to expand your horizons and therefore develop new neural pathways. What we ingest for entertainment is like the food pyramid whereby ‘a little bit of everything’ and ‘everything in moderation’ holds true!

My third and final concern links to this last point. As bandwidth increases so does the size of the signal through your streaming service. I’ve been watching 4k lately (Westworld) and it’s hard to see how that fidelity can improve. I’ve been watching it on 4k blu ray in case you think this contradicts my earlier point. So what might add to the size of the signal hitting your TV or mobile viewing device? I think the next big step to come, and streaming technology makes it possible for the first time, is highly personalized mass customization (HPMC). My streaming service knows me precisely. For example if I bail early to get a good night’s sleep (a further casualty of our streaming fixation – but that’s a subject of a future blog) I pick up precisely where I left off next time I connect. Couple this with information online harvesters have on me and it’s highly likely that this will feature in content in the future.

We won’t tolerate advertisements in a Netflix show but would we tolerate advertisements within a Netflix show? With high processing power and bandwidth to spare it’s possible, I believe in the not too distant future, that when watching my show of choice (and they know what I’m watching and therefore can predict my future watching patterns), to have a direct appeal or reminder to me encapsulated in the show itself. Product placement will become old hat and viewer specific placements will take their place. Is having a Dell computer placed in a highly visible position in a cop show going to target me more effectively than a Dell monitor in the scene scrolling a message reminding me that my car insurance is up soon an and Budget Direct will offer me a 15% reduction on what my current insurer is offering?  I think not!

If my favourite basketball player in the world is Kevin Durant, how chuffed would I be to read off the front or back of his jersey a personalised message to me loaded onto the green screen patch affixed to that jersey. My neighbor watching the same game at his place would be getting a very different message targeted directly at him on that very same jersey. Highly effective, hugely valuable for the product and advertisers, but immensely annoying and potentially corruptive. If politicians got hold of this, or unscrupulous operators at state or corporate levels then the very fabric of our democracy and sanity might be at risk.

So next time a younger person is extolling the virtue of streaming and sympathizing with you about all those forlorn trips to Blockbuster, just beware that everything comes at a price. Streaming may turn out to be both detrimental to our health, as well as the democratic process. We might find the price we pay for convenience is too high. The intrusion into our lives of streaming services might well be akin to some dystopian 1984 vision and we need to take heed. But the younger generation won’t know this it was written well before they were born and with no Blockbuster it’s real hard to get your hands on the movie!