Rockonomics – Andrew Sentance on business, innovation, the economy and Rock’n’Roll

Andrew Sentance at a recent ‘gig’. Rumour has it that he arrived just before Rolf Harris sang “Two Little Boys” and was cut off in his prime by Lenny Henry

Andrew Sentance is Senior Economic Adviser to Price Waterhouse Coopers and combines a demanding career with a love of classic rock music.  I was curious to find out how he has synthesised these apparent opposites.

Tell me something about your background as an economist?

I started studying economics in 1974 at school in the sixth form.  I went on to accumulate three degrees in economics from Cambridge University and the LSE, and then joined the CBI’s Economics Dept in 1986.  That was a key stepping stone for my career.  I went on to become the CBI Director of Economic Affairs and was appointed to an important group advising the Chancellor of the Exchequer – which was known as the “seven wise men” – in 1992.  I also developed a high media profile while I was at the CBI, something which has been a key feature of my career since then.  After the CBI, I spent four years at London Business School and then nearly nine years at British Airways, as their Chief Economist.

In 2006, I was appointed to the Bank of England Monetary Policy Committee and I served on the Committee until 2011.  I guess that is the position for which I am best known, partly because I was very vocal in making the argument for higher interest rates in late 2010 and early 2011.  Even though the majority on the Committee did not support me, many other people agreed with me and supported my arguments.

I know you wrote a paper about Led Zeppelin and the economy – please explain in brief?

Mervyn King – the Governor of the Bank of England – is a big sports fan and puts a lot of sporting analogies in his speeches.  He once explained monetary policy by referring to Maradona’s second goal against England in the 1986 World Cup semi-final.

I am useless at sport but I really enjoy rock music.  So when I joined the Monetary Policy Committee of the Bank of England, I felt there was an opportunity to make some connections between rock music and economics.

In the summer of 2010, I started to argue for higher interest rates and I was looking for a good title for the first speech in which I would explain my position.  The speech was in Reading, which has good rock music connections because of the Reading Festival.

I came up with the title – How long should “The song remain the same”.  The basis of my argument was that very low interest rates had been put in place to deal with a crisis in 2008/9, but the economy had started to recover and inflation had been much higher than expected.  So interest rate policy should not remain the same when the economy was changing. You can read the speech on the Bank of England website at How long should “The song remain the same”.

I went on to give another speech inspired by rock music in February 2011 – inspired by the Genesis album “Selling England by the pound”.  Editor’s note – For our blogs on Led Zeppelin – see Whole Lotta Love.

A lot of rock songs have been written about money – can you comment in the inherent wisdom (or lack of it) in these songs?

I think a lot of the “money” songs are quite superficial in terms of their lyrics.  Pink Floyd are one of my favourite bands, and “Money” is one of the stand-out tracks on their album “Dark Side of the Moon”.  The irregular time signature – 7/4 – which then resolves into a straight 4/4, along with the sax and guitar solos, make it an excellent piece of music.  But the lyrics are pretty banal – just a rant against various aspects of the supposed lifestyle of rich people.  Ironically, the members of Pink Floyd went on to embrace a number of aspects of that lifestyle!

Interviewer’s note:  I must agree.  As Prince noted “Money don’t buy you happiness, but it sho’ ‘nuff pays for the search”

There are some good songs, both lyrically and musically, which reflect on broader economic themes.  Two of my favourites are “The Pretender” by Jackson Browne and “American Tune” by Paul Simon. Both reflect on the state of economic unease in the US in the 1970s in different ways.  “American Tune” comments on the loss of political direction:

We come on the ship they call the Mayflower; We come on the ship that sailed the moon; We come in the age’s most uncertain hour; and sing an American tune

Jackson Browne’s lament is more personal and reflects on how we are all drawn into a very materialistic lifestyle through necessity and habit:

I’m going to be a happy idiot and struggle for the legal tender, where the ads take aim and lay their claim to the heart and soul of the spender

Can you comment on what we can (or should) do to encourage a climate where innovation is at the heart of the economy?

Innovation is a very broad concept, and it is not just confined to hard technology. Economic studies show that the introduction of tea, coffee and sugar into the British economy was one of the most valuable innovations – from a consumer perspective – in our economic history.  See A spoonful of sugar.

So if we want to encourage innovation – we should not just look to certain high-tech sectors of the economy, but to how new ideas, products and processes might affect the way we live. It is all about how creativity and creative processes feed through into economic activity.

In my view, the flowering of creativity in the 1960s and 1970s laid the foundation for the technological advances of the 1980s, 1990s and 2000s in information and communications technology. The ICT revolution of the last couple of decades has been based on ideas of sharing information, music and visual impact. These were ideas which developed in the 60s and 70s and the “geeks” who have carried forward this revolution grew up in that era..

If I can identify a driver for creativity and innovation in the future, it is probably more closely linked to the challenges we face in managing our environmental problems and the scarcity of energy and natural resources. We have never before been in the situation we now face where nearly 7 billion people all aspire to higher standards of living, and a claim on the limited natural resources on the planet.

We are already seeing these stresses reflected in market prices, as global demand outstrips supply. We are in an era of high and volatile energy and commodity prices. Even in the depths of the euro crisis, the oil price is $100/barrel, compared with $10-20/barrel in the late period from the mid-1980s to the early 2000s. Looking further ahead, the current pattern of use of energy and natural resources risks creating a severe problem in terms of global climate change.

Technology and innovation can help solve these problems of resource scarcity and climate change but it will take time. In my view, the next big wave of innovation will be in these energy and resource-hungry industries – helping us to develop new energy sources and be more efficient in the way we use energy and other natural resources.

What do you do currently?

I work for PwC – PricewaterhouseCoopers, as their senior economic adviser.  After serving for nearly five years at the Bank of England, I was keen to return to the private sector.  PwC has a wide range of clients who are keen to understand the impact of economic trends on their business.  At present, one of my key themes is understanding the “new normal” –  the world that has been shaped by the financial crisis and the emergence of the large Asian economies, especially China and India.  My message is that we should expect disappointing growth and volatility in the major western economies to persist through the mid-2010s.  The era of steady growth and low inflation which prevailed before the financial crisis will not return quickly, if at all.

You play in a part-time rock band. How do you square that with your professional career?

If you have a high profile professional career, I think it is very helpful to have other interests to maintain a sense of perspective on life.  I’ve kept up musical interests throughout my career. Until the mid-2000s, I mainly played as an acoustic guitarist/singer or church organist.  But I now play the bass and sing in a rock band called Revelation, which performs at village fetes and fayres in the area where we live in south Essex.  We cover rock classics, mainly from the 1960s and 1970s.  I also get together occasionally with a group of university friends for jam sessions.

Most people enjoy music.  And many people in my generation appreciate the classic rock of the 1970s.  So music is often a good ice-breaker for conversations at business lunches, dinners and meetings.  I’ve found many rock music enthusiasts in my business contacts and at the highest levels in the Bank of England and at the Treasury.

Who are your rock heroes?

I love a wide range of music from the late 1960s and 1970s.  So I am a big fan of the very accomplished musicians who established themselves in that era.  Jimi Hendrix has to be the king when it comes to guitarists, though I am also a big fan of Dave Gilmour, Steve Howe, Ritchie Blackmore and Tony Iommi.  On keyboards there is only one supremo – Rick Wakeman.  I like bass players who play a strong role in the band, rather than thudding along in the background – like Paul McCartney, Jack Bruce and Chris Squire.  When it comes to vocals, I like a more mellow sound – David Crosby, Paul Simon, Jackson Browne and the Finn brothers (Crowded House).  Editor’s note, let’s have a further indulgence in the form of Mr Blackmore:

If I had to single out one musician, however, it would be none of the above.  I would choose Stephen Stills. He has a very distinctive guitar and singing style, and wrote some really great songs – “For What it’s Worth”, “Suite: Judy Blue Eyes”, “Love the One You’re With”, and “As I Come of Age” stand out.  His solo albums from the mid-70s are also greatly under-rated. Crosby and Nash were great, but Stills gave them an edge.

How has rock music inspired you, and made an impact on your career?

I can’t imagine a world without music, and most of the music I listen to is rock music or some variant of it.  Great rock music is the combination of individual virtuoso performances and the ability to work together as a band.  This is one of the key lessons I take away from the rock world for my career.  The combination of individual ability and team effort is at the heart of success not just in the world of music, but also in business and politics.  For the dominant and mercurial lead guitarist, read the overbearing CEO or Prime Minister who does not acknowledge and recognise the views of his/her colleagues.  All are ultimately doomed – notwithstanding their ability.

To succeed in rock music, you need to be good, but you also need to be surrounded by other good musicians and be able to work constructively and creatively with them for the good of the band.  When this works well, great music results.  That is the approach I find works well in the business context too.

Andrew Sentance has his own website: www.sentance.com and a personal blog:. He also contributes to the PwC economics blog: and is very active in sharing his views with the print and broadcast media.   He can be found on Twitter at @asentance

Related blogs – see my posts on meetings with Evan Davis of Dragon’s Den / BBC Radio 4 and Vince Cable, Secretary of State for Business, Innovation and Skills.

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3M : Meatloaf, Macroeconomics and (Iron) Maiden – Rock’n’Roll Business hits the FT and The BBC

This week, I’ve prepared a round up of press articles on business, management, economics and music.   Starting with Bruce Dickinson from Iron Maiden, who has just opened an enterprise business in Wales, to service aircraft and provide jobs for 800 people in tough times.  The Financial Times covered the story:

Can I play with madness? Iron Maiden enter the fray to help fix the economy

Dickinson sounds a Mc Kinsey consultant who attended a ‘mass customisation masterclass’ and a ‘lean 5S programme’ when he says of the new aviation centre “We will tailor our services completely to the needs of our customers and we won’t employ more people than we need”.  To be fair, he makes his point much more clearly than a management consultant who swallowed an MBA for breakfast! 🙂  That said, I don’t see Dickinson’s business acumen embedded in the lyrics of Iron Maiden’s songs, such as “The number of the beast” or “Two minutes to midnight”, even after I played them backwards …  Why did I not learn more about entrepreneurship, business continuity and economic development when I attended Iron Maiden’s comeback tour at Twickenham with my testosterone-filled 13 year old son?  We must be told …

Moving on to Andrew Sentance, Senior Economics Adviser to Price Waterhouse Coopers.  I will be featuring a full interview with Andrew shortly, but could not resist a trailer in the form of this witty piece on Meatloaf and the economy from The Evening Standard.  Andrew stands head and shoulders above the consultancy profession with his approach, which is thoughtful but also incisive.  A rare breed.

“3M” : Meatloaf, Macro-economics and Management

Without realising it, Andrew had followed an earlier piece I wrote for The Financial Times, and another I wrote which got picked up by BBC Radio 4’s flagship “Today” programme.  Here’s the article and the Radio clip:

I’m delighted to say that the FT letter prompted a US University Academic to get in touch with me.  It turned out that he had spent three years sharing a college room with Jim Steinman.  I have performed a couple of times with Meatloaf’s female singing partner – she sang on “I’d do anything for love (but I won’t do that)”.

For more posts on the economy, see Vince Cable, Can rappers fix the economy? and Evan Davis, who I bumped into the other week whilst jogging round London.  Perhaps Evan is entering the Olympics?

To finish, let’s hear that classic Iron Maiden song again to see if there is any subliminal advice about the 3A’s of regeneration:  Aerospace, Aeroflot or Aerosmith contained within, 666, the number of the beast:

Postscript – The FT published a letter I sent in re this on Tuesday 8 May:

Can I play with madness (and the economy) ?

For more like this, read the book “The Music of Business”, acclaimed by Harvey Goldsmith:

 

Hopes and Fears 2012

Firstly, may I thank all of you that have been reading the Rock’n’Roll Business Blog through 2011.  We have had a whopping 14 000 views since it started in earnest in June last year.

In terms of 2012, if we are to turn the UK plc round, its going to take every bit of adaptation, learning and innovation.  You may care to reflect on some of the more popular posts of 2011 – Lady Gaga and adaptive strategy, Deep Purple, improvisation and innovation, The Beatles on creativity, Prince on excellence, Britney Spears on becoming a learning society, Hendrix v Clapton on innovation and Personal mastery in business and music – lessons from Jeff Beck, Les Paul and Bill Nelson.

So, what does 2012 hold in store for us?   Well, here’s some views taken in the course of my travels recently, with the themes linked to pop and rock songs of course! 🙂

There is power in a union?

2011 was marked by a resurgence of industrial relations unrest in the UK.  However, the recent public sector strikes was marked not by braziers, banners and protest songs, but by the best shopping day in 2011, as retail sales soared.  I saw people leaving local government picket lines to go to Costa Coffee at 10 am.  Is shopping for Ugg boots and flat screen TV’s the hallmark of the new rebellion?

Can we look forward to more industrial unrest?   From talking with people in local government, it seems that there is still plenty of scope for downsizing and it also appears that quite a few people are basically happy with their pension, so it appears that the current industrial unrest may not develop.  When I talk to my self-employed friends, there appears to be little sympathy with the strikes – as one remarked “Pension, what pension?”  One thing is for sure, in an age of unrest we can expect more performances by proto punk protest singer Billy Bragg:

What’s new pussycat?

During 2011 I met Evan Davis of BBC Radio 4’s Today Programme and Vince Cable, Secretary of State for Business Innovation and Skills.  During our conversations we touched on the vexed question of what we should do to rebuild Britain.  There are no easy answers here and a debate has since been raging on Linkedin over this issue.  There seems to be broad agreement that the UK plc desperately needs more innovation, especially the type that can be exported and that which builds out of our strengths in ways that are hard to copy or appropriate.  At the same time the service sector needs to shrink, whether this is through a smaller public service component to the economy or in service industries that merely consume wealth at a local level – for example tanning rooms and burger bars.  The change is going to be hard to swallow for some.  Doing more of the same will not do, we need to do things differently.  Musically, it’s more a case of ‘What’s new pussycat’ rather than ‘Do the standing still’.

We’ve got a meeting with the Department of Business Innovation and Skills to explore some of the ramifications of the UK’s innovation needs coming up.   More on innovation coming up in future posts.

What are your hopes and fears for 2012?  Post a comment on this blog.

Breadline Britain: Vince Cable, Economics and Rock’n’Roll

I had the good fortune to meet The Rt. Hon. Vince Cable, Secretary of State for Business, Innovation and Skills the other week, where we discussed economics (but no sex or Rock’n’Roll 🙂 )  The recent public sector strikes and the general mood of the nation reminded me of Jimmy Sommerville’s 1980’s classic “Breadline Britain”, hence the title of this blog:

During the meeting I discussed the thoughts of Evan Davis on the economy with Mr Cable.  I had met Evan a few weeks before, where he pointed out that the UK needs to create some new engines of growth in areas that other countries would (a) find hard to copy and (b) would give the UK export potential.  Vince broadly agreed with my suggestion that we don’t need a ‘nation of more tanning rooms and burger bars’, which largely consume wealth and have no export potential.  Of course, a shrinkage in the low value service sector and / or the public sector is deeply unpopular, but it does rather seem an inevitable consequence of some sound economic analysis.  We’ll see what happens now that we live in a rock’n’roll economy …

Cable but no Wireless - Vince Cable Rocks the Institute of Directors

We also discussed the slimming down of red tape in business.  I was delighted to present Vince with a copy of ‘Punk Rock People Management’, which I described as “perhaps the shortest white paper on simplifying business ever written”.  Being known for his unusually straightforward views, Vince was amused by the idea of being able to read a chapter in less time that it would take to pogo to a Sex Pistols song on Strictly Come Dancing.

So, it was a great meeting in the wonderful setting of Leeds Castle.  What an absolute coup for the Institute of Directors, who hosted the event.  All kudos to them for doing this.

What to finish this post with?  Well since a friend mixed Vince Cable up with Vince Clarke of Erasure, I guess we should go with one of their fine Essex based economical synth pop pieces – perhaps a call to some politicians who have lost Mr  Cable’s connection with ordinary people – “A Little Respect”:

To get your FREE copy of Punk Rock People Management or book a masterclass – either give Vince Cable a call or get in touch via the Punk Rock People Management webpage

Networking in the Dragons Den

I’d previously commented on the role of planned luck in making business networking work, following my recent visit to Greece.  Yet another few pieces of planned spontaneity came together the other day.

I’d been asked to make a film for the Open University Business School as an advocate of their MBA programme.   To make the most of their time and film crew, I devised a “3 for 1 offer”, by bringing along some great fellow MBA colleagues: Phil Hawthorn and Kim Tasso, a strategy/business development consultant and writer on management/marketing in the professions.  Here’s the film The Open University made, shot outside Dingwalls, the famous London Rock venue:

p.s. Video made by Louise Hill-Hottinger of Chalk Square Media– superb work with no fuss.

This led to an invite to the inaugural professorial lecture by Evan Davis, Presenter of BBC Radio 4’s Today, The Bottom Line and BBC One’s Dragons Den.  I had been keen to give Evan copies of ‘Sex, Leadership and Rock’n’Roll’ and ‘Punk Rock People Management’ and had wondered how to do that in an evening where there were more than 200 people present and there would be no time for detailed conversation.

The answer arrived quite by chance.  I got off the train at Milton Keynes to find Mr Davis on the platform, looking for the stairs.  “Are you going to the Open University Evan?” I asked.  His 1st impression was that he was being approached by a busker (I had a Sex Pistols T-Shirt and a guitar about my person, so it was not an unreasonable assumption! 🙂 Once he realised I was an MBA tutor and not a stalker, he invited me to share a taxi to the University, giving me a unique opportunity to help him prepare for the audience he faced that evening and also to share the books.  He kindly agreed to have a read in between everything else he does and I was delighted to have met him on a 1:1 basis rather than in the hustle and bustle of a busy event.  To hear Evan Davis’ inaugural lecture click on the links – LECTURE and Q&A.  Here’s a picture of us at the lecture later on.

Rock’n’Roll Economics – at the Professorial Lecture

Check out Punk Rock People Management.   The book recently overtook Dave Ulrich, Gary Hamel and the usual HR Gurus, having hit No 1 on Amazon in management and HR books.

Speaking of Dragons Den – I leave you with this mashup by the BBC on Steve Jobs:

Oops I did it again – Britney Spears and learning companies

I commented on the concept of a learning company in my posts on Lady Gaga and David Bowie recently.  The idea of a learning company is a company which learns faster than its competitors and speed of new product / service delivery is vital in today’s business world.  Many academics, such as Peter Senge, Chris Argyris and Peter Senge have commented on this idea, which Britney Spears unwittingly stumbled upon in her classic hit “Oops, I did it again”.  Let’s see Ms Spears in action:

In the context of business, “oops I did it again” refers to the tendency of businesses to repeat themselves, sometimes in the face of compelling evidence telling them to change course.  Organisational learning can mean several things:

Single loop learning – Where we keep existing values and introduce new behaviours – this is often dubbed ‘continuous improvement’, where we look for better ways to do existing things.

Double loop learning – A fundamental reassessment of the way we operate – often more radical and therefore even more difficult.

Companies find it intensely difficult to institute learning at an organisation wide level, be it single or double loop learning.  Marks and Spencer nearly went out of business through having such a strong culture that it did not learn from its customers.  Manifestations of this included a refusal to accept credit card payments for many years and their disastrous initial expansion into Europe.  On the other hand, Toyota have based much of their growth in recent years on behaving as an organisation that learns, alongside other approaches such as lean thinking.  This has given them an incredible edge compared with their competitors.  I have just come back from giving a keynote on this very topic at the 7th International HR Leadership Conference in Athens on this topic, which is central to a turnaround in the way in which businesses operate in the new world order.  I also met Evan Davis from the BBC programme Dragons’ Den last week, where we discussed the need for some new thinking if we are to create a sustainable turnaround in the economy and I shall post separately on this topic soon.

Lessons from Britney:  Don’t repeat yourself.  Learn and adapt.

I have scoured Britney Spears back catalogue for other songs that have a business leadership lesson in them and, frankly, I have failed.  “My perogative”, “Everytime”, “Toxic” – not one transferable business lesson, unless someone can spot something I have missed.  So, I have no particular reason for including the video of “Baby one more time”, except for its own value!

p.s. My new book ‘Punk Rock People Management – A no-nonsense guide to hiring, inspiring and firing staff’ is available FREE via the Punk Rock People Management webpage.   A print and e-book version are also available at PUNK PM.  Britney Spears gets a mention as an honorary punk rocker in the book, even though she is not one.

HR without all the boll...cks - Photo courtesy of Lindsay Wakelin Photography

Finally, let’s hear a Louis Armstrong mashup of Britney’s masterpiece: