It was interesting and almost nostalgic to see the authors using the term ‘trainer’ right up front with no apologies; so often these days ‘training’ can be seen as a rather dated and tainted term yet it is still a practical and effective description of what many of us do.
The other interesting feature that caused me to choose this article and to enjoy reading it, is the contention that the administrative and organisational side of managing a training function is often underrated and requires a varied skill set. The authors emphasise the importance of financial understanding to help the management of budgets and costs, and an appreciation of all business functions to make the training manager aware of the job context of all those being trained.
When covering the skills required for what the authors describe as ‘direct training’, they make some interesting points which are rarely made so emphatically. They argue that knowledge of content is usually the ‘least of the problems’; that good trainers can be convincing and effective even if they do not know that much more than their audience. This is because of the air of confidence and competence they display from start to finish and the unseen preparation that has taken place.
Another interesting statement that rang a bell with me is the suggestion that sometimes the skilled trainer can be so good that it all appears too easy and others therefore undervalue the contribution and believe that they could do it just as well. This is because the most important skills are usually those of design and facilitation, which often conceal the experience and thought that lies behind them.
The article then provides a rather long and ambitious list of skills required by the ‘complete trainer’ which the authors admit looks rather like a cross between ‘Man for all Seasons’ and ‘Superwoman’. There was however one requirement about which I had some reservations and that was for a trainer to have ‘well above average intelligence’. It may be a contentious view but our experience at MTP has been that often the very intelligent candidates are not the ones you want to recruit, because they cannot easily relate to the learning needs of the less gifted. You clearly need a minimum level of intelligence but even more important are empathy and ability to interact with those who struggle to learn.
Though it is implied to some extent, another area that might have been emphasised more is the creation of interactive learning material. There is quite rightly an emphasis on the trainer’s ability to manage the learning situation and cater for different learning styles but, in the case of most topics, there is a need to develop innovative material that engages the audience, particularly where the topic is unfamiliar and potentially unattractive to the participants. Content heavy slides will not work and the trainer, or someone in a supporting role, must be able to create exercises, case studies and work related discussions that bring the topic to life.
Overall this is an article that probably only confirms what most learning professionals already believe but it could be useful for those who are just entering the training world, to confirm that training requires a broader skill set than is often believed and is a challenging but rewarding career option.
To read this article go to:
http://www.trainingjournal.com/tj/2551.html
Tuesday 19 January 2010
‘The Myth of Multi-tasking’ by Helen Kirwan-Taylor, Management Today, November 2009
This article may not be as directly connected with learning as the other reviews but it does cover a topic that is becoming an increasing issue for everyone involved in business - how do you cope with the modern trend for multi-tasking, enhanced by the widespread use of Blackberries and iPhones? This has a specific relevance to those running courses because there is a need for a prepared response to the increasing problem of participants wanting to use their communication devices during course sessions.
In fact the conclusions of the article give some ammunition to those who apply - or try to apply - an absolute ban during courses; the evidence is that the multi-tasker is generally less effective overall than those who have the discipline to focus on one task at a time. This evidence comes from some rigorous research by Stanford University, though it has to be accepted that the selected group was students rather than experienced people.
It seems that the person who is checking messages on his or her Blackberry during a meeting might as well not be there and is probably preparing a reply that has not been fully thought through. The reply may be an hour or two earlier than it otherwise would have been but the research suggests that this does not compensate for the failure to take the time to fully consider the options and the wording.
The evidence of the research is that those who adopt a multi-tasking strategy do not deal with matters in sufficient emotional depth. They ‘give up the capacity to reflect’ and indulge in ‘screen sucking’, an addiction to checking e-mails all the time, avoiding the hard work and ‘spinning wheels’ without getting anywhere. The research indicates that IQ scores of those who are regularly checking e-mails fall by about 10%. And those who constantly allow their train of thought to be interrupted in this way are far less creative than they could be.
The author does make the point that there are exceptions to the rule; for instance multi-tasking can be effective when a task requiring only physical skills is combined with one that requires mental concentration, for instance listening to learning tapes while mowing the lawn, thinking through new ideas while jogging. Interestingly the article argues that the benefits of the latter can be reduced by the tendency for managers to take their mobile phones with them; ‘mobile free jogging’ is apparently one coping strategy to improve effectiveness.
You might argue that this does not really help the trainer who is faced with addicted Blackberry checkers on a course. Clearly the decision as to how you deal with this irritating phenomenon is a personal (or company) issue. But quoting the research in this article at an early stage could be a gentle way of leading in to the behaviours that you wish to encourage.
To read this article go to:
http://www.managementtoday.co.uk/news/948497/the-myth-multi-tasking/
In fact the conclusions of the article give some ammunition to those who apply - or try to apply - an absolute ban during courses; the evidence is that the multi-tasker is generally less effective overall than those who have the discipline to focus on one task at a time. This evidence comes from some rigorous research by Stanford University, though it has to be accepted that the selected group was students rather than experienced people.
It seems that the person who is checking messages on his or her Blackberry during a meeting might as well not be there and is probably preparing a reply that has not been fully thought through. The reply may be an hour or two earlier than it otherwise would have been but the research suggests that this does not compensate for the failure to take the time to fully consider the options and the wording.
The evidence of the research is that those who adopt a multi-tasking strategy do not deal with matters in sufficient emotional depth. They ‘give up the capacity to reflect’ and indulge in ‘screen sucking’, an addiction to checking e-mails all the time, avoiding the hard work and ‘spinning wheels’ without getting anywhere. The research indicates that IQ scores of those who are regularly checking e-mails fall by about 10%. And those who constantly allow their train of thought to be interrupted in this way are far less creative than they could be.
The author does make the point that there are exceptions to the rule; for instance multi-tasking can be effective when a task requiring only physical skills is combined with one that requires mental concentration, for instance listening to learning tapes while mowing the lawn, thinking through new ideas while jogging. Interestingly the article argues that the benefits of the latter can be reduced by the tendency for managers to take their mobile phones with them; ‘mobile free jogging’ is apparently one coping strategy to improve effectiveness.
You might argue that this does not really help the trainer who is faced with addicted Blackberry checkers on a course. Clearly the decision as to how you deal with this irritating phenomenon is a personal (or company) issue. But quoting the research in this article at an early stage could be a gentle way of leading in to the behaviours that you wish to encourage.
To read this article go to:
http://www.managementtoday.co.uk/news/948497/the-myth-multi-tasking/
‘Rethinking Marketing’ by Roland Rust, Christine Moorman and Gaurav Bhalia, Harvard Business Review, January 2010
Considering the number of articles produced by the HBR and the difficulty of creating something that is genuinely new in management thinking, it is perhaps inevitable that some articles come across as less than original. We hope this shows that, at MTP, we are already reflecting the latest thinking in our coverage of management topics and maybe we should see this as a kind of reassurance.
Whatever the interpretation, this is an article that confirms some important points about the way that marketing is changing but it seems to offer little that is new to those who are in touch with modern marketing trends. The main thrust of the article is that because of new uses of technology, businesses can be more sophisticated in their approach to marketing and can tailor their communications and their offerings to the needs of specific customers and segments. Thus there is a need to move away from traditional product centred approaches to marketing, to one that cultivates customers and looks for ‘customer lifetime value’.
There are a number of examples to make the point, both in consumer and business to business (B2B) markets. An example of the latter is IBM who ‘use key account managers and global account directors to focus on meeting customers’ evolving needs rather than selling specific products’. The inevitable reaction from experienced marketers is that this is what any B2B company that has heard of segmentation will have been doing for many years. We also had the same reaction to the suggestion that financial people need to think about customer as well as product profitability, a trend that we have seen developing in a range of top companies during the last 10 years.
More convincing is the example of Tesco whose Loyalty Card is less about rewarding customers and more about collecting data on buying patterns and, through advanced IT capability, targeting their marketing effort to individuals and groups. This is a powerful example of the main thrust of the argument but is rather let down by the statement that Tesco have only recently been using this approach when in fact it has been their practice for about 15 years.
The article then moves on to consider the organisational implications, in particular that these new developments justify the appointment of a ‘Chief Customer Officer’. This is less convincing than the other arguments in the article and there are no examples of this having been done or of the benefits that can accrue. In particular there does not seem to be a discussion of how this would impact sales and marketing directors; our belief is that this would turn out to be either a mere change of title or the start of a new battle for influence and territory.
This article could be a useful update for those who are not involved in current trends in marketing but generally comes across as behind the times and not something you would expect from one of the world’s top business schools.
To read this article go to:
http://hbr.org/2010/01/rethinking-marketing/ar/1
Whatever the interpretation, this is an article that confirms some important points about the way that marketing is changing but it seems to offer little that is new to those who are in touch with modern marketing trends. The main thrust of the article is that because of new uses of technology, businesses can be more sophisticated in their approach to marketing and can tailor their communications and their offerings to the needs of specific customers and segments. Thus there is a need to move away from traditional product centred approaches to marketing, to one that cultivates customers and looks for ‘customer lifetime value’.
There are a number of examples to make the point, both in consumer and business to business (B2B) markets. An example of the latter is IBM who ‘use key account managers and global account directors to focus on meeting customers’ evolving needs rather than selling specific products’. The inevitable reaction from experienced marketers is that this is what any B2B company that has heard of segmentation will have been doing for many years. We also had the same reaction to the suggestion that financial people need to think about customer as well as product profitability, a trend that we have seen developing in a range of top companies during the last 10 years.
More convincing is the example of Tesco whose Loyalty Card is less about rewarding customers and more about collecting data on buying patterns and, through advanced IT capability, targeting their marketing effort to individuals and groups. This is a powerful example of the main thrust of the argument but is rather let down by the statement that Tesco have only recently been using this approach when in fact it has been their practice for about 15 years.
The article then moves on to consider the organisational implications, in particular that these new developments justify the appointment of a ‘Chief Customer Officer’. This is less convincing than the other arguments in the article and there are no examples of this having been done or of the benefits that can accrue. In particular there does not seem to be a discussion of how this would impact sales and marketing directors; our belief is that this would turn out to be either a mere change of title or the start of a new battle for influence and territory.
This article could be a useful update for those who are not involved in current trends in marketing but generally comes across as behind the times and not something you would expect from one of the world’s top business schools.
To read this article go to:
http://hbr.org/2010/01/rethinking-marketing/ar/1
‘How to Eliminate Bias’ by Bijan Tabatabai, Finance and Management, December 2009
The existence of bias in forecasts is a subject very close to our hearts and one that we regularly cover in our course sessions on risk analysis and financial planning. The evidence is very strong that many forecasts in most companies are biased, sometimes one way, sometimes the other. Pessimistic bias - making sales forecasts deliberately low or cost budgets deliberately high - is usually found in the annual plan so that the forecaster can later receive praise for over achievement; optimistic bias - high sales and low costs - is likely to be found in the context of investment appraisals when a project team wants to get their proposal through the system.
The article starts with a helpful definition of an unbiased forecast - one where there is a 50/50 chance of achieving the actual result, where it is just as likely that the actual will be over or under the forecast. There is then the obvious but important observation that bias is caused by human behaviour; maybe a manager who likes to receive praise for over delivery, or a manager who needs to get a project accepted.
The author then produces a list of types of bias which is rather too long and involves categories that overlap too much. The most significant category in our experience is ‘motivational bias’- the impact of incentives in the organisation to either over or under achieve. Also interesting is the category of ‘anchoring bias’ which occurs when a team only listens to selective data that reinforces their plans. What is not mentioned in the article is the important point that these types of bias are often driven by the corporate culture or a particular management style which it is possible - though usually difficult - to change.
There is then coverage of what companies can do to eradicate bias from their forecasts and two approaches are highlighted; either you can adjust manager’s estimates where bias is suspected, or you can change the process to eliminate the behaviour that causes it in the first place. However, having posed these two alternatives, the author does not make this important choice; instead he goes on to talk about the tools he has used within Unilever to identify bias. The quote from Unilever confirms this - ‘the toolkit provides simple but statistically sound rules to spot bias’.
Though I am sure that the toolkit works well, I would have liked to see mention of the important issue that we cover on our courses for Unilever and others - the role of the financial person as business partner. The good financial manager will be aware of the corporate pressures, will know the personalities of his or her management colleagues, will take into account past performance compared to plan and will try to steer each manager towards unbiased forecasting.
The author’s technical toolkit will help but in the end this is a behavioural problem that requires a behavioural solution and the financial person has a big part to play in steering forecasts towards a consistently objective and unbiased level.
To read this article go to:
http://www.icaew.com/index.cfm/route/169551/icaew_ga/en/Faculties/Finance_and_Management/Publications/Finance_and_management/How_to_eliminate_bias_in_forecasts
The article starts with a helpful definition of an unbiased forecast - one where there is a 50/50 chance of achieving the actual result, where it is just as likely that the actual will be over or under the forecast. There is then the obvious but important observation that bias is caused by human behaviour; maybe a manager who likes to receive praise for over delivery, or a manager who needs to get a project accepted.
The author then produces a list of types of bias which is rather too long and involves categories that overlap too much. The most significant category in our experience is ‘motivational bias’- the impact of incentives in the organisation to either over or under achieve. Also interesting is the category of ‘anchoring bias’ which occurs when a team only listens to selective data that reinforces their plans. What is not mentioned in the article is the important point that these types of bias are often driven by the corporate culture or a particular management style which it is possible - though usually difficult - to change.
There is then coverage of what companies can do to eradicate bias from their forecasts and two approaches are highlighted; either you can adjust manager’s estimates where bias is suspected, or you can change the process to eliminate the behaviour that causes it in the first place. However, having posed these two alternatives, the author does not make this important choice; instead he goes on to talk about the tools he has used within Unilever to identify bias. The quote from Unilever confirms this - ‘the toolkit provides simple but statistically sound rules to spot bias’.
Though I am sure that the toolkit works well, I would have liked to see mention of the important issue that we cover on our courses for Unilever and others - the role of the financial person as business partner. The good financial manager will be aware of the corporate pressures, will know the personalities of his or her management colleagues, will take into account past performance compared to plan and will try to steer each manager towards unbiased forecasting.
The author’s technical toolkit will help but in the end this is a behavioural problem that requires a behavioural solution and the financial person has a big part to play in steering forecasts towards a consistently objective and unbiased level.
To read this article go to:
http://www.icaew.com/index.cfm/route/169551/icaew_ga/en/Faculties/Finance_and_Management/Publications/Finance_and_management/How_to_eliminate_bias_in_forecasts
Improving MBAs by Jeanette Purcell, Personnel Today, 12th January
The author is CEO of the Association of MBAs and is thus unlikely to be fully objective but I thought that this article was, considering its short length, both informative and interesting. Its main basis was some research by the Association and Durham Business School which surveyed 100 schools and over 500 alumni from 57 countries. The focus of the research was the ways in which Business Schools are and should be changing - a topic that we have covered several times in recent blogs.
One finding was particularly interesting to me as a financial person - that a major trend is a move away from the domination of shareholder value thinking, towards the concept of multiple stakeholders. Connected with this is a greater emphasis on corporate social responsibility as a key issue to be covered on courses. One hopes that coverage of this trend includes some way of reconciling the many potential trade-offs between the various stakeholders, rather than the platitudes that are often voiced when a typical list of stakeholder headings is shown. Surely the key to reconciliation is convincing the shareholders who own the business that it is their long-term interests to look after the interests of the other stakeholders.
At this point the article becomes frustrating because there follows a long list of topics that business schools should, and in some cases are, focussing upon - risk management, sustainability, entrepreneurship, change management, creativity and innovation. This is the problem with articles in magazines like Personnel Today; they do not provide authors with enough space to go into sufficient depth and end up with something that is much too superficial.
The lack of depth in this list also made me wonder whether some business schools are adopting a similarly superficial approach to make it appear that they are moving with the times, particularly those who run generic courses that have not changed much over the years (no names mentioned!!). The temptation might be just to hire in someone to talk about sustainability and business ethics and to regard the box as having been ticked, rather than rethinking course design in a fundamental way.
The final point of the article is that Business Schools will need to put more emphasis on practical application than on theory, an observation that should not need a research project or a recession to reveal. One interesting aspect of this point was that the alumni of the schools believed this much more strongly than the academic staff and that the latter did not fully accept the criticism. No change there then!!
I would not recommend you to read the article because there is not much more than I have covered above but those who are interested should perhaps approach the Association of MBAs or Durham Business School for more detail of the research.
To read this article go to:
http://www.personneltoday.com/articles/2010/01/07/53630/improving-mbas-after-economic-downturn.html
One finding was particularly interesting to me as a financial person - that a major trend is a move away from the domination of shareholder value thinking, towards the concept of multiple stakeholders. Connected with this is a greater emphasis on corporate social responsibility as a key issue to be covered on courses. One hopes that coverage of this trend includes some way of reconciling the many potential trade-offs between the various stakeholders, rather than the platitudes that are often voiced when a typical list of stakeholder headings is shown. Surely the key to reconciliation is convincing the shareholders who own the business that it is their long-term interests to look after the interests of the other stakeholders.
At this point the article becomes frustrating because there follows a long list of topics that business schools should, and in some cases are, focussing upon - risk management, sustainability, entrepreneurship, change management, creativity and innovation. This is the problem with articles in magazines like Personnel Today; they do not provide authors with enough space to go into sufficient depth and end up with something that is much too superficial.
The lack of depth in this list also made me wonder whether some business schools are adopting a similarly superficial approach to make it appear that they are moving with the times, particularly those who run generic courses that have not changed much over the years (no names mentioned!!). The temptation might be just to hire in someone to talk about sustainability and business ethics and to regard the box as having been ticked, rather than rethinking course design in a fundamental way.
The final point of the article is that Business Schools will need to put more emphasis on practical application than on theory, an observation that should not need a research project or a recession to reveal. One interesting aspect of this point was that the alumni of the schools believed this much more strongly than the academic staff and that the latter did not fully accept the criticism. No change there then!!
I would not recommend you to read the article because there is not much more than I have covered above but those who are interested should perhaps approach the Association of MBAs or Durham Business School for more detail of the research.
To read this article go to:
http://www.personneltoday.com/articles/2010/01/07/53630/improving-mbas-after-economic-downturn.html
Madoff - the man who stole $65 billion by Erin Arvelund, published by Penguin
My choice of this book was partly for personal reasons; I have a morbid fascination with financial scandals and like reading about them. After reading the story my feelings were much the same as when I read about Enron; the more in depth study makes you realise that the superficial reporting in the newspapers hides the reality of personal tragedies caused by such large scale frauds. Maybe many of the investors were well off by many standards and should perhaps have realised that the high returns were too good to be true, but this does not alter the fact that this was a wicked fraud that ruined many lives.
My opinion of the book is that, while it is factually correct and full of detailed research, it is much less interesting than it should have been. This is partly presentational - the style is turgid and there is not a single picture and very few text breaks over nearly 300 pages - and partly because the author was perhaps too involved in the detail of the scandal. She had been saying that Madoff was a crook for nearly 10 years but nobody would listen and she has much evidence to confirm this. If she had been a journalist more recently on the scene looking for a story, it might have been an easier read. It compares poorly with, for instance, ‘The Smartest Guys in the Room’ which described the Enron story and read like a fast paced novel.
The other reason for the lack of excitement is that, apart from its sheer scale, this was not a particularly exciting story. Madoff conned people into giving him money by promising high returns; he spent most of it and then used new money to fund any cash payments that were needed. And he was such a good con man that the inevitable discovery took longer than it normally would have done. He had so many high profile contacts and trusting investors that everyone thought - ‘well if they trust him, he must be OK’.
The author describes in detail the large numbers of hangers on - family and business associates - who made extraordinary amounts of money out of the fraud, yet who seem to have got away scot free. Perhaps the only good thing you can say about Madoff is that he took the rap himself. She also reveals that the amount of money stolen is probably far less than is in the book title, because the amounts claimed include the many years’ fictitious returns that investors wrongly thought they were making.
Two other interesting insights emerge from the book; firstly that Madoff didn’t really need to do it; he was already making enormous profits from his legitimate brokerage business that would have satisfied even his elegant lifestyle. Secondly, that there was no point where he said - ‘I am going to commit a fraud’. As with many fraudsters and gamblers, it started when he found that he was not delivering the returns that he promised and he took in more money to cover the shortfalls.
But there is no way that any reader would feel sorry for this smooth con man; any danger of that is removed by the epilogue, which describes his sentencing hearing and some of the tragedies and traumas that have befallen those who moved from riches to rags overnight.
My opinion of the book is that, while it is factually correct and full of detailed research, it is much less interesting than it should have been. This is partly presentational - the style is turgid and there is not a single picture and very few text breaks over nearly 300 pages - and partly because the author was perhaps too involved in the detail of the scandal. She had been saying that Madoff was a crook for nearly 10 years but nobody would listen and she has much evidence to confirm this. If she had been a journalist more recently on the scene looking for a story, it might have been an easier read. It compares poorly with, for instance, ‘The Smartest Guys in the Room’ which described the Enron story and read like a fast paced novel.
The other reason for the lack of excitement is that, apart from its sheer scale, this was not a particularly exciting story. Madoff conned people into giving him money by promising high returns; he spent most of it and then used new money to fund any cash payments that were needed. And he was such a good con man that the inevitable discovery took longer than it normally would have done. He had so many high profile contacts and trusting investors that everyone thought - ‘well if they trust him, he must be OK’.
The author describes in detail the large numbers of hangers on - family and business associates - who made extraordinary amounts of money out of the fraud, yet who seem to have got away scot free. Perhaps the only good thing you can say about Madoff is that he took the rap himself. She also reveals that the amount of money stolen is probably far less than is in the book title, because the amounts claimed include the many years’ fictitious returns that investors wrongly thought they were making.
Two other interesting insights emerge from the book; firstly that Madoff didn’t really need to do it; he was already making enormous profits from his legitimate brokerage business that would have satisfied even his elegant lifestyle. Secondly, that there was no point where he said - ‘I am going to commit a fraud’. As with many fraudsters and gamblers, it started when he found that he was not delivering the returns that he promised and he took in more money to cover the shortfalls.
But there is no way that any reader would feel sorry for this smooth con man; any danger of that is removed by the epilogue, which describes his sentencing hearing and some of the tragedies and traumas that have befallen those who moved from riches to rags overnight.
The Trouble with Markets by Roger Bootle, published by Nicholas Brealey
This book is not one for holiday reading and it is likely that only the most committed economists will read it cover to cover, as Chris Goodwin - my adviser for this review - has done. Nevertheless, its implications are important for everyone who wishes to understand more about the causes of the recent financial crisis and the ways in which some of the problems can be overcome.
Bootle’s book argues that a major contributory factor to the crisis was the mistaken belief that markets are always right and can be left alone to sort things out. He believes that this is because many so called economic experts place too much emphasis on quantitative and mathematical approaches and not enough on ‘behavioural economics’. He suggests that the reason why academic economists like to emphasise complex, mathematical solutions is because this is where they are most comfortable and where they can feel superior to others.
He goes on to argue that a greater understanding of behavioural factors enables the more far sighted economists to produce much needed challenges to the ‘efficient market hypothesis’. This belief has justified a laissez faire free market approach, allowing financial institutions to follow the disastrous paths that have led to the current financial crisis. In the specific case of the banks the free market assumption did not work because bankers’ pay reflected the profits in the good times but not the losses in the bad times, and this inevitably led to uncontrolled, reckless behaviour. He regards the argument that this high pay is justified by market factors as ‘risible’; they are in the position of receiving excessive reward without equivalent risk to themselves and this should not be allowed to continue.
Unlike many economists, the author then goes on to make specific recommendations, based on the fact that, because blind following of the free market philosophy is dangerous, some intervention by government is necessary. He advocates:
• Requiring banks to hold more capital to cope with the risk of similar future crises
• Public regulation of remuneration structures
• Restrictions on some of the more complex financial instruments
• Separating commercial and investment banking
He recognises that all these solutions create problems of their own and that there is no perfect solution. But greater understanding of behaviour and its implications will reduce the chances of the same thing happening again.
Bootle’s book argues that a major contributory factor to the crisis was the mistaken belief that markets are always right and can be left alone to sort things out. He believes that this is because many so called economic experts place too much emphasis on quantitative and mathematical approaches and not enough on ‘behavioural economics’. He suggests that the reason why academic economists like to emphasise complex, mathematical solutions is because this is where they are most comfortable and where they can feel superior to others.
He goes on to argue that a greater understanding of behavioural factors enables the more far sighted economists to produce much needed challenges to the ‘efficient market hypothesis’. This belief has justified a laissez faire free market approach, allowing financial institutions to follow the disastrous paths that have led to the current financial crisis. In the specific case of the banks the free market assumption did not work because bankers’ pay reflected the profits in the good times but not the losses in the bad times, and this inevitably led to uncontrolled, reckless behaviour. He regards the argument that this high pay is justified by market factors as ‘risible’; they are in the position of receiving excessive reward without equivalent risk to themselves and this should not be allowed to continue.
Unlike many economists, the author then goes on to make specific recommendations, based on the fact that, because blind following of the free market philosophy is dangerous, some intervention by government is necessary. He advocates:
• Requiring banks to hold more capital to cope with the risk of similar future crises
• Public regulation of remuneration structures
• Restrictions on some of the more complex financial instruments
• Separating commercial and investment banking
He recognises that all these solutions create problems of their own and that there is no perfect solution. But greater understanding of behaviour and its implications will reduce the chances of the same thing happening again.