2024 Ripple Rewind (Part 2)

Dan Loney: Welcome to a special edition of The Ripple Effect Rewind. We’ve hand-picked some of the most impactful, thought-provoking moments from our episodes over the past year and compiled them into this Year in Review episode. Let’s dive into these memorable moments and relive the insights and inspirations together.

Michael Parke on Post-pandemic Time Management

Loney: The dynamics of time management are rooted in our history as a country, as a culture. How do you think it has developed with the pandemic and all that we’ve experienced over the last few years?

Michael Parke: I think that instead of time management, I often like to broaden it out to self-management. When you have structure — which we had a lot of in terms of going to work. You have your commute. You get to work. You have an office, a routine. The pandemic changed that for so many people, where you have to find a new structure at home — the different office. You have different distractions. You have some less distractions, because you have don’t colleagues. But you might have kids. You might have a lot of other devices at your house that you may not have access to at work. It was relearning how to find routines and structure and manage your time at a home office, especially if you weren’t used to that. Especially if you didn’t work at home before the pandemic. I think it radically shifted how people figured out how to be disciplined, how to do their work, and how to allocate their time in a different space, in a different way.

Loney: What are the expectations as we move forward here? The pandemic is behind us. We still have remote work as a component. But more companies are starting to call workers back into the office full time.

Parke: I think that’s one of the key questions out there. I can’t say I have a strong prediction or an answer. I think what you see is different companies trying different things. One of the professors at Stanford who’s studied a lot of the remote work, Nick Bloom, his advice in the past year or so to companies has been to experiment. Start off with the hybrid. Maybe three in the office, two at home. See how it goes. Measure it. Study it, right? Because we are trying to figure it out in terms of companies, organizations, industries, of what may work and what may not.

Now, other companies and leaders have taken a much firmer stance. Like, we’re going to be in the office, or not. You’ve even seen sort of a little bit of resistance or pushback on that as well. I think right now, we’re trying to figure it out. And I don’t have a strong prediction of what’s going to win out. If I had to take a guess, I think what we’re going to see is much more flexibility. Meaning that we’re going to give workers more flexibility of where they work and how they work than they have in the past. Overall, that is a good thing for workers and their productivity and their engagement, as well as for companies. But we’ll see.

Nancy Rothbard on Professional Sponsors for Women

Loney: What was that process like for you? Was there a recognition that you had along the way, of the capabilities or the elements that you may be able to bring to some of those other individuals, in terms of being a sponsor and the benefit that you could provide?

Nancy Rothbard: The lightbulb for me was when I realized that my job depended on me being able to develop future leaders, people who could fill the roles that were going to be really critical for the organization’s success. That lightbulb went off, and I realized, “Wow, this is actually a big part of my job.” I started being much more active and proactive about scouting the landscape, about thinking and getting to know people, so that I knew what they were capable of. But also getting to know what kinds of things and places where they could thrive. Because you have all sorts of people out there who are going to be able to thrive more in one situation than another. The better I am at spotting that and matching those people to jobs, the better I’m going to be in my role as a sponsor.

Loney: For the the employee who is looking to find that person to be the sponsor, especially if it is a woman, is there any additional benefit of that sponsor being a woman?

Rothbard: I think that the answer is sort of yes and no. On the one hand, it can be really beneficial as a woman to have a woman as a sponsor. On the other hand, it’s much more important to have a sponsor. At different levels in my career, some of my sponsors were women and some of them are men. The key piece was having the right person sponsor me. I think that’s still the most important piece. And we have to recognize that as you go up the hierarchy in organizations, there are not as many women in some of those roles. So, I think having a sponsor is more important than insisting to yourself that that person be a woman.

Loney: I read that women tend to be over-mentored and under-sponsored. Explain why that is.

Rothbard: The relative comparison between being over-mentored and under-sponsored is such that there are fewer people in these roles who recognize women as having the leadership potential that is going to be of value in the organization. That’s where the under-sponsorship can come from. Because one of the things we know from a lot of research is that there’s a concept called homophily — we are drawn to people who are similar to us. It’s easier for us to relate to people who are similar to us. Because there are fewer women in these executive roles, that sort of trickles down in a way that people actually have to be more conscious about sponsoring people who are not similar to them.

Michael Roberts on the Future of Financial Literacy

Michael Roberts: I think the trajectory of financial literacy has been positive over time, but positive at a somewhat glacial pace. It’s not improving quickly enough. I think government policy and actions that we’ve seen over the last four or five years is a positive step forward, but raises perhaps more questions than concerns that it calms. Who’s going to teach it? How’s it going to be taught? What’s going to be taught? There are a lot of challenges.

Susan Wachter on the Housing Market

Dan Loney: Will we see another bump up of housing prices before we see things slow down? We saw such a rush in 2021 and 2022, where prices went up. And things seemed to level off a little bit. It feels like maybe we’re getting ready for another bump up.

Susan Wachter: It all depends on the overall economy. We see in the most recent numbers, the overall economy is slowing. Also, it depends on affordability. We now are at affordability constraints for many households. They can’t afford the housing, so they can’t demand the housing. I think that the consensus for this coming year is that housing prices will increase, but perhaps at about the inflation rate, assuming that GNP is declining in growth rate, as we’ve seen in the most recent quarter. If we don’t see that deceleration in the GNP growth rate, it will absolutely heat up the housing market, despite the high mortgage rates. Because with employment, there is a need to move to new housing. Maybe it’s in the Midwest. We still have peak millennials. They’re still looking to come out of their family’s home. We have 50% of young adults living at home, and they and their parents are looking for them to go out independently, which will increase the demand, put more pressure. We have a supply shortage. We have pent up demand.

Loney: From a policy perspective, do you have to start to look at some of these issues?

Wachter: I think there is a new look at the importance of policy, particularly at state levels. States across the country are experimenting with ways to ease up the supply of developable land.

Loney: They have to work directly with the builders and the local communities to open some of these doors, right?

Wachter: That’s the way forward.

Loney: How do we bring the housing market back into alignment?

Wachter: First, this really is mortgage rates. Mortgage rates aren’t going to come down until inflation and the overall interest rate comes down. Because otherwise, rental is more affordable. But rental isn’t that affordable, either. In fact, we see it in the percentage of young adults, millennials, who are renting versus owning. If you look at the individual as opposed to the overall, we see one-third of young adults are not living in owner-occupied. Either living with their parents or renting, which is significantly lower than previous generations.

Stefano Puntoni on Decision-driven Analytics

Loney: It feels like we have more data than ever. And in many cases, I would assume the decision-makers are probably inundated with this data and maybe don’t know how to parse through it and make the right call.

Stefano Puntoni: Yeah. It’s like a strange irony in that for a long time, companies were complaining they didn’t have data to make decisions. Now they’re still complaining about data, but now the complaint oftentimes is that they have too much data, meaning that there’s so many things that one could look at, it’s easy to get lost. Of course, we still have many situations where we don’t have good data. And companies still are struggling to figure ways in which they can achieve evidence-based decision-making in those situations. I think we need to keep looking for great data there. But in many situations, we do have lots and lots of data. The problem is that sometimes those data are not the data you need, or maybe those data are not being thought of the right way in terms of supporting the decisions that are important to make.

Loney: Is there an importance to reinstalling the human component of this process?

Puntoni: Yeah. The human judgment is crucial. What I argue always is that as computers and algorithms become smarter and smarter, and the data becomes better and better, we should think harder, not less. In a way, the key message of the book is to say that the secret to making good decisions with data is that before you even start looking at the data, you need to do a lot of thinking. It takes a lot of thinking without data to make good decisions with data.

Loney: How does AI impact the decision process and either make it better or worse, depending on all this data that we have now in the mix?

Puntoni: AI is the biggest thing happening today, and I’m very excited about all the work that the Wharton School is doing in the area of AI. In fact, our Dean Erika James, just yesterday, announced a major new initiative called the Wharton Initiative for AI and Analytics. We’re really pushing hard on what we know and what we can do to support business decision-making.

But AI here has both a risk and an enormous upside potential. As we use more and more complex algorithms and technology, that gap between decision-making and the analyst is only risking to grow even larger. Because now, the decision-makers have even a looser grasp of what these techniques can do and what they are about. And the people who are technical become so technical, they now lack a link to the business and maybe the main expertise that can help them be good partners for the leaders who are making decisions. That’s the risk part.

But the upside potential is enormous. I think we are going to benefit in million different ways from AI to improve our decision-making by automating decisions in a much smarter way, by providing tools that can help support human experts’ decisions. And making sure that the scarce expertise of our human professionals is used for the cases where that expertise can really move the needle. And leave the rest to AI.

Cait Lamberton on Customer Dignity

Loney: I was going to ask you whether or not there’s a permanence to this concept, or there’s a fluidity to it. It almost seems like maybe there’s a little bit of both that companies have to have in this mix.

Cait Lamberton: Yeah, it’s funny. If you look at a lot of company websites, especially in health care, pharmaceuticals, you’re going to see the word dignity. It’s going to come up. They’ve built it into their stated purpose, so they’ve taken it on as something that they permanently want to pursue. But then the next step, which is systematically building it into everything — the patient, the physician, the caregiver experiences — that is the connection that’s only partially made.

Another thing that’s fluid is that it may have to change across cultures. We’ve done some work where we’ve looked at, for example, what dignity means for people who are in Nigeria, as opposed to people are India, as opposed to people who are in the United States. In India, in the U.S., it’s fairly similar. It has a lot to do with being seen and heard and having agency. You see those things come up over and over again. Our Nigerian respondents, though, talked a lot more about being treated fairly as part of a group, because their group identity was extremely important.

We also found that consumers in the U.S. were, of the three groups, least sensitive to the affirmation of dignity. If you affirm their dignity, in some cases, they actually think, “If you if you respect me, I’m going to ask for even more from you.” Which could be an opportunity for firms to grow. But our consumers from other regions sometimes said, “If you respect me, I might give you some grace if I don’t get everything I want.” There’s a substitute and a complement relationship that may be fluid across different kinds of markets.

Loney: There’s probably multiple reactions that you will get from the consumer. If you don’t deliver, there are going to be some consumers that are going to be mad. They’ll go away.

Lamberton: There can definitely be heterogeneity. What I’ll say is, on average, I don’t think you make anything worse. Especially if you incorporate agency. Early on in the process, say to consumers, “Listen. We can allow you a lot of choice and a lot of control, or we can help you out more along the way. Which would you prefer?” Somebody can say, “I don’t want to think about everything. I don’t want all the choice.” And you just simply send them down one pathway or another. Now, we may get to a point where AI will actually be able to tell who are the people who value agency at every step, and who are the people who are happier to have a more supportive experience. But right now, it’s also not a hard thing to do to ask. And people tend to self-report this kind of thing.

Loney: I guess most companies are already starting to think about so many things about AI, including this component as well.

Lamberton: There’s a big movement that is focused on data dignity. And these folks are pointing out that representation, which is one of these three pieces of dignity, also means not being seen when you don’t want to be seen. Which would mean, I don’t want to be included in that data set that’s used to predict everyone’s preferences. Or certainly, we would want our data to be used in ways that we feel good about. Otherwise, what’s basically happening is our voice is being co-opted by a firm, and people do not like that experience.

There’ll be regulations that will slowly work their way through the courts. But we do need to be sensitive to the way that consumers are seen and heard, and the extent to which they begin to feel that their control is is being eroded by the way that artificial intelligence is used to connect with them. When we connect with a person, I think we’re all very aware that at the end of the day, we get to walk away. But if everywhere we go in the environment, there’s some AI reaching out to us, we lose agency. We’re going to have to learn how to use that in a way that doesn’t make humans feel as though they’re devalued relative to technology.

Christian Terwiesch on AI in Education

Loney: How much do you think ChatGPT has impacted your profession right now?

Christian Terwiesch: I think we’re just seeing the implications for the academic profession. I use it for idea generation, oftentimes. I wrote a paper that shows how ChatGPT outperforms human beings at coming up with ideas for new products or services. That is something that somebody who teaches innovation cares a lot about. I use it for writing. When I’m stuck with something, I say, “ChatGPT, continue that page for me.”

I think the key thing that you have to realize about ChatGPT is, it still makes mistakes. But there are situations where mistakes are not consequential. If I’m asking you for 10 ideas and five of them are bad, I still get five good ideas. If I ask you to do heart surgery for me, and five of those heart surgeries go wrong, that would be a disaster. You want to use it in relatively low-stakes environments where you have a human in the loop, so that you make sure that the quality is ultimately where you want it to be. Because ultimately, it’s your name on the paper.

Loney: If you have that understanding that things like ChatGPT can be an assistant, but you still have to do the double check, then it can be a benefit moving forward.

Terwiesch: Absolutely, right? I think if all we ended up is a world where we were three years or four years ago, we would have wasted a huge opportunity.

Loney: Where do you think we’re going to go in education with things like AI and ChatGPT in the process?

Terwiesch: I think it’s going to increase access, first of all. That goes back to our MOOC discussion. There are many people in the world who don’t have access to an education like here at Wharton, and we can basically share and open the gates to those people. I think that’s a good thing. That is all about making things more efficient. For the people who are at Wharton, I hope we can do a better job educating them. We can create some really awesome learning experiences. I know Ethan Mollick and the folks building simulations are already actively working on that. We can create real increases in the quality of education, just like the person at the barbershop is providing better looks to the clients.

Joao Gomes on the National Debt

Joao Gomes: We will have a serious economic crisis in our hands. In that scenario, we might have to tighten our belt by the equivalent of $2 trillion. Just think about the spending cuts that entails, and the damage that would do to the economy. And nothing else, if that was just it. I think it’s very scary, and I’m an optimist by nature. I continue to hope that we’ll find our way out of this. But if, if that scenario unfolds, it is a very scary scenario.

Loney: Then programs like Medicare, Social Security, all of these would have to take a significant haircut in order to keep them up and running.

Gomes: Exactly. A real possibility. Another possibility is a very sharp increase in taxes to cover a deficit of one or $2 trillion, It’s taxes on everyone. It would have a substantial tax increase on every single person. It can’t just be concentrated on the top 1% or 2%. There’s just not enough revenue there. We don’t want to go through this. And to be fair, that’s the reason no candidate right now has a huge incentive to to do much about it, unfortunately. Just kick the can down the road and hope the next person will take care of it.

Loney: You spoke before Congress about how the debt could have the potential to be more stubborn. As an example, our aging population could actually help us prevent growth in the country.

Gomes: Oh, it does currently. The best scenario we can hope for to get out of this is — and I think it should be an obsession for us — how can we grow our tax base? Let’s just accept that we have an aging population, we want to take care of them, and cutting benefits there is going to be difficult. The only way out of this is to have a bigger tax base to increase the revenues for the government. The best scenario there is to increase the size of the pie. Things like more people, more people in the workforce, people working longer, more productivity, more entrepreneurship. Those things should be basic priorities for us. That’s the one hope that we have. And it would have to still be a significant amount of growth.

Absent that, the demographic pressures make our problems incredible. Very, very challenging. The Social Security Trust Fund runs out in 2033. That’s the latest that I would envision this conversation taking place. At that point, it’s not a conversation for bankers, for hedge funds, for fund managers. It’s a conversation for 50 million people that are going to think about, what happens to my check? We can have that conversation earlier, but I think no more than 10 years from now.

Loney: One of the other things you also have to factor in, when you think about the level of debt, is the interest in buying off the debt by other countries around the globe, and some of the relationships that we have or don’t have.

Gomes: Exactly. That’s a really good point. Talking about America becoming self-sufficient also means becomes self-sufficient in terms of, we can fund our debt ourselves. Or increasingly more. That is challenging. Right now, 40% of the U.S. debt gets ultimately placed in the balance sheets of different agencies, different countries. Becoming self-sufficient forces U.S. consumers, U.S. businesses, to buy more of that debt. The U.S, banks to do it.

If I force you to buy paper, because that’s what I’m doing, you cannot use the money to turn around and eat. Buy a house. Go shopping. Take care of your kids. It could be really challenging. In an environment in which we want to become a little bit more closed, a little more self-reliant, it will be a lot more challenging to fund this government without imposing significant penalties on our standard living.

Katy Milkman on When to Ask for Donations

Loney: Were you able to determine what is that sweet spot for a hospital, for an organization, to make that donation ask of a person who’d been in that facility?

Milkman: Yes. You talk about a sweet spot, and that’s because we talked about this tension between the two competing theories. You don’t want to act too fast and seem grabby, right? Like, “Oh, this wasn’t done out of the goodness of the organization’s mission. It was just a ploy to get you to give us money as fast as possible. It’s almost like a payment.” And then the sort of, “We want to capitalize on that feeling of gratitude.”

We thought there might be an upside-down, U-shaped relationship. Like it might be better to wait a little while, but not too long. What we actually found is that you can’t act fast enough, essentially. In our data, we never saw anyone getting a mailing asking for a donation faster than 23 days after their encounter. But faster was simply better. We saw that there was a pretty linear decline in giving. Every extra 30 days after an encounter you wait to contact a patient leads to a 30% decline in the likelihood that they will make a donation in response to that ask. It’s a really precipitous decline, and it continues over the whole course of the time that we were able to follow patients.

Loney: Is that kind of the format that hospitals should take with all patients? I think some people will react differently to being contacted whatever the time is. Some people, no matter the time, will feel like, “Oh my god, it’s another ask from the hospital.” Or they’re like, “They did such a great job of taking care of me. Yes, let me write a check to them.”

Milkman: That’s right. Not everyone is going to be affected. But it is remarkable that you’d see this 30% decay with every 30-day decline. That’s a pretty huge effect. It suggests that a lot of people are impacted by the time frame in which the ask is made.