Workplace hacks for managing managers

The economist Hello and welcome to the Intelligence fromr the Economist. I'm Jason Palmer. And I'm Rosie Blor Today on the show, Germany's left wing Delinkke wins over the Young and a selection of our Readers' hacks for managing managers a reminder that perb all the power plays and posturing always has his eye on markets and money I didn't want to see economic catastrophe. If you kept this going, that could have happened. But all I know is every time we talked about the possibility of peace, the stock market shot up like a rocket ship. You know who must have been glad Mr. Trump was preoccupied with Iran Kevin Warsh, freshly minted chair of the Federal Reserve. It was rate setting time yesterday, his first to expect from this lifetime hawk who got all dovish when angling for the job, fromr the next chair who should expect relentless Trumpian pressure to lower rates? As you saw a few moments ago, the committee decided to maintain the target range for the Fed funds rate at three and a half to three and three quarters percent. He held firm Nots the most exciting news. But as so often with Fed shares, there were more tea leaves to be read. In some ways, the least interesting part of the Fed meeting yesterday was what happened to interest rates Ch Chi Hall is our U S. economics edit They stayed flat Everyone expected them to, and Kevin Warsh managed to push that through. what was much more interesting was everything else. his communication style, his plans for federal reform Everything that's said about how he's going to handle the next four years So let's start with what might otherwise have been the big news, the decision on interest rates Kevin Warsh came in with a claim that he was going to be a crusading and straight cut or at least that's what he pushed for during his campaign to get Donald Trump to actually nominate him for the job And we've argued that was always a dubious proposition that was never really quite in line with frankly either his prior reputation or certainly where the American economy was at the moment The whole pressing issue. is that actually since he was nominated in late January, the American economy has shifted pretty decisively So inflations now up a decent bit because of in part the Iran warar, but also in part Inestment AI and so on generally is looking firmer than it was at the start of the year. The lay markets, if anything, look a bit stronger as well as, all that pushes in the direction of higher interest rates And it's become clear that the notion that W was pushing during the campaign, AI be a disinflationory force and push inflation down While maybe plausible in the long term certainly doesn't seem to viting in the short term when we dat centus and so on showing up and really pushing demand into the American economy. So it was always going to be hard to cut interest rates We're also in a stage, frankly, where inflation is above target, but not devastatingly so, may well come down given some of the news from the Iran w side. And so holding on, waiting and seeing was a pretty sensible thing and seems not to been terribly controversial But you said that was in fact not the interesting thing. In particular, you mentioned his communication style. What do you mean by that Central bankers sit on a spectrum. Some of them like to talk and like to explain what they're doing pretty closely to markets and the public. And I think that means they're better understood. They're treated as more legitimate by the public and also markets are more likely to know what they're going to do and therefore be less volatile around central bank meetings There's another schoolool of thoughts, which is much more like Kevin Wars's which is basically that central bank's job is set interest rates and really don't do very much else And that's a lot of the communication that's going on is a distraction That statement just gives you the facts as best we can judge it Warsh even went further. he think might sometimes distort markets if they're too busy looking through the lens of what the Fed's going to do rather than just what the data says about the economy on its own terms And so the result of that has we got quite a different communication style We had a statement that was much shorter and much more terse than usual He was very willing simply to say I'm not going to answer that question. I can't give any forward guidance about what we're going to do next. The good news is we'll be meeting in six weeks rather than try to give a bit of a window into how he was thinking is his moral style of at least the last couple of his predecessors. and you'd thent subit a dot for the famous dotlot where Fed governors lay out where they expect the economy to evolve over the next few years And then you mentioned something of reforms. What does Mr. Warsh want to do with the Fed He appears of great ambitions He's long been someone who's said both that he loves the vet and really cares about the institution, but also that he think it's in pretty urgent need of repair And some of that is genuine longstanding belieief and some of that particularly recently has certainly been hamed up in his campaign to persuade Dald Trump who certainly doesn't love the Fed He's someone who can be trusted to take the reins spepecifically what you push for now was effectively if we're being uncharitable kicking the can down the road, if we're being more charitable trying to really work through how to do this properly. And that was the announcement of five task forces, which are going to go through various bits of the Fed's remit, like the balance sheet, what data it looks at, including how it communicates and report back with a set of recommendations that he could then take forward to see how to reform the Fed. So certainly, this is not He's coming in, all guns blazing, day one, huge changes over the next few months But it does seem like if we have this conversation in a year' time, the Fed could look fairly different But coming back to the rate decision, he did what was expected and what you think is right for the economy right now Yeah, absolutely. The particular decision to not raise or indeed not lower interest rates wasn't terribly controversial. It was effectively what? almost every Fed watcher expected The Iran war is obviously very in the news right now. It's a terribly important geopolitical story. It's an economic story for the U.S. It's moderately important, but not hugely so. high oil prices didid matter, they did raise inflation a little bit, but ultimately didn't really knock about the U.S economy in a way that has been true for of the rest of the world in response to this war. So what were left with instead for the US an economy that's doing pretty well Inflation is a little bit high. Some of that reflects the Iran war Some of that reflects AI exuberance, general hot economy, fiscical stimulus and a whole bunch of other factors And the question going into late this year, where it may well be possible the Fed needs to raise rates a bit, certainly Jging M by a Dot plot that was released yesterday as well number of Fed governors and regional bank presidents think so will really lie on does inflation recede either naturally or as a result of the Iran war, deal pulling oil prices down? or do all those other factors that I mentioned firm inflation up and kind of keep it in a sort of place? where the Fed actually does need to intervene and raise rates later on in the year But raising rates is going to be relatively difficult under Mr. Trump, who always, always, wants lower ones Yes, that's the looming political danger over this Fed And the question a lot of Fed watchers were asking going into this meeting was how political and how much of a lackey, frankly Kevin Washh would appear to be. We recognize that inflation has been running well ahead of the Fed's long stated inflation goal of two percent That's been going on for more than five years He came out very, very strong in asserting the Fed's commitment to its two percent inflation targets which implicitly, of course, means that if inflation is durably looking like it's going to be a problem, he's suggesting the Fed would be very happy to raise rates and deal with that. And he really foregrounded the inflation side of the target, which was interpreted as more of a hawkish tilt. So in that sense good news on the politics side, Warsash wasn't coming out and saying, inflation's not a problem, AI iss going to fix everything. We're going to cut rates, which was a little bit of the tone of some of his campaigning rhetoric from last year when he was trying to sell a present on appointing him The less reassuring part was that the flip side of Wars's pretty non communicative style is it's very easy for him to avoid confronting potentially difficult choices, and therefore it's hard to know exactly how you'd respond in a real crunch point, which may be part of the point. not communicating a lot. So for instance, right now, he can say we D didn't raise interest rates, we didn't lower them, we kept them flat I'm not going to speculate about what I'm going to do in the fut And indeed, almost any substance question, we have a task force for that the report back. And so he's very, very unlikely to say anything that's going to annoy the president. But obviously at some point You also us to make decisions. I think we're going to come up with some new and interesting things. We made some changes today. I expect more changes to come and whether those decisions also keep the president happy. or whether he's willing to sidestep and push against the president's wishes is a good fair really ought to do in the right circumstances That's all rain to be seen Thanks very much for joining us RG Thank you some up sheet of my I now just mas leg M Lck Aa Which roughly translates to Matz Lick's balls M Nutle is the economist Berlin Bureau Chief. Inulting Friich Metz, the German Chancellor is perhaps not exactly what you would expect from a senior opposition politician. probably wouldn't trouble Heidi Reicheneck, who is one of the leading figures for Germany's Dlinker or the Left party J Linka is gaining momentum with some young voters whoo've been mobilizing around Ms Reich's powerful pererhaps off colour, speches. This weekend, at the party's annual Congress in Potsdam, they will be looking for strategies to keep climbing Toma, we've talked a lot about the AFD and the rise of the right, a bit less about the left. Where is this rise in popularity coming from with the leftft In some ways, it's one of the most extraordinary stories in German politics Aout eighteen months ago, we had a SnP election looming in Germany and D Linka, which has been around for the best part of twenty years was literally on the verge of extinction. They were languishing at about three percent in the polls. There'd been a very acrimonious split with a figure called Saha Wadenkneck over foreign policy and cultural issues. The party was bruised, It's lost a lot of its MPs. Voters were either literally dying out because they were too old or they were moving to the far right AFD And what happened was first of all, a very good ground game. They knocked on hundreds of thousands of doors, which is not actually a typical campaign tactic in Germany And then, just a few weeks before the election, came this extraordinary decision by Frig Mertz, for his party, the Conservative Christian Democrats, to vote in Parliament with the AFD on some anti immigration measures And this was exactly what D Lincoln needed. Miss Reichchenek, we heard at the beginning of this gave an electrifying speech in the Bunders tag against this. It went viral on social media and all of a sudden you saw D Linka start, if you look at the charts, it's almost a vertical line from january twenty twenty five to the election a month later They're now sitting at eleven percent in the polls, only a couple of percentage points behind the social Democrats, the main party of the centre left, who sit in government with Mr. Matz' CDU Do you expect them to maintain that momentum? Yeah, that's a good question. I mean, they feel like the wind is in their sails. It's not only that they're doing a lot better than they were, it's that their electorate and their membership has completely changed So in the past, one of the main bases for D Linka was an older electorate in East Germany, former communist East Germany. Now what we have is a party that's become much, much younger both in terms of its electorate and its membership, and also some of its leaders, including Ms Reichchenk, it's become much more Western in terms of its voter base. it's about sort of fifty fifty between Westter and East, which is a radical change from the past. And this has meant that the sort of conversations that the party has and the way it presents itself to the electorate are rather different from what we saw past as the AFD has got stronger and stronger, it's now the most popular party across all of Germany and in easastern Germany by an absolute mile D Linka likes to present itself as the most credible, as they would say, anti fascist force in Germany So what does DLinker actually stand for One of the things that they decided on in the election campaign last year was to have a very, very disciplined campaign focused basically on two issues. One of them was the cost of living and the other one was housing So rents have gone up very quickly in most German cities in recent years. A lot of people have been struggling. You do have very strict rent control laws in Germany compared to some other parts of Europe, but nevertheless, this is something that the party realized that basically everybody could get behind. It wasn't the sort of thing that was going to expose divisions within the party, and it was a very simple message to take to the doorstep What about the issues that divide the party still Yeah, so Delinka as a party of the far left is riven with division as parties of this sort always are. We saw this last year when the party came quite close to kind of ripping itself apart over Israel and Gaza. And to simplify a little bit, some of the party's newer younger members who, like in similar parties elsewhere in Europe are incredibly exercised by this issue And last year at the Party Congress, you actually had a number of senior figures of the partarty quit in protest. They thought that some of the motions that were emerging from some of the younger branches basically were coming quite close to anti Semitism They've put together a motion for this year's Congress that they think is kind of big and capacious enough to please everybody. I spoke to Katherine Gable who's D Linkor MP sits on the party's board. And she says that the party's younger members have been important in redefining the party's focus through their protests. The social protest that we're engaging in this summer, we've already started on the first of June and managed to put six thousand people on the streets in very short notice So I think it's going be like a very Soting hot socialist summer And is that what you're anticipating, Tom, a scorching hot socialist summer? Yes, I mean, I think they're going to be pretty active about bringing people onto the streets. I think looking ahead, Friidic Merz's government is embarking on a program of domestic reforms, which means cuts to welfare programs, cuts to healthcare provision We're probably going to have a very bitter rout on pensions coming in the next few weeks. And this is basically grist to the mill of D Linka. They're going to fight back against the stuff very hard. They've already brought thousands onto the streets for some protests and they promised that there will be lots more in the summer ahead Germany, of course, has a coalition government. So where does Delinka stand in relation to that? What's its role in the current situation One of the tricky things for the party is to what extent basically they want to be a party of political power, either in coalition governments in Germany states or supporting governments. versus a kind of protest movement that spends a lot of time on the streets that has a political wing. It's not going to be possible for the party to avoid this. The reason for that is that the AFD has got so big in these states, it's attracting in some parts more than forty percent of the vote because no other party will work with them To make a coalition, the space for that has been completely squeezed And so you'll have the very, very awkward situations where the CDU, the main Conservative partarty, In order to put together a coalition government, it needs to have votes from D Linker. Both of these parties detest the other. So it's a horrible situation. You have lots of people in Dinka who will say, well I didn't join this party to put conservatives into office. And then you'll have other people in the party say, the only thing that matters is that we stop the AFD from entering government. And if that means that we have to hold our nose and vote for CDU prime ministers in these states then that's what we have to do. But this is a very uncomfortable discussion for the party to have So how does that all shake out in terms of strategy? What happens next They will discuss this in Potsdam at their Congress this weekend They will embark on a summer of protests against all of these domestic reform that they hope will prove as mobilizing as their election campaign last year was. And I think the as it were, good news for Dil Linka is that in the capital, Berlin, the vote is so fragmented that Dilinka actually has a chance of coming first and attempting to put together a left wing city government with the social Democrats and the Green Party This is the thing that they're really excited about. They have been in government in Berlin before, but they've never run the government and now they have a chance of doing that. So basically this is the thing that's really exercising the party right now Tom, thank you very much. Thanks, Rosie. ever been in a situation where you've done what you feel is a great piece of work And then your boss comes along, asking for things to be changed, making things worse You get the feeling that they're only pointing things out so they have something to do Palmer Ration, hosts Boss Class, are wildly successful podcast series about the world of work and management Well, let me tell you a secret. There's a hack that can help you. It's the idea of Award's Duck, the deliberate insertion of a redundant or incomplete feature whose only purpose is to be discovered and removed by the higher ups. That way, your boss feels they've done something useful, but no actual damage has been done to the end product. The phrase Edward's duck comes from a video game, an apocryphal story about a programmer who added a pixelated duck to the character of the queen in a chess related game. A producer reviewed it and asked for one thing only, Get rid of the duck The programm employed and the game was ready to ship. I mentioned Atwwards Duck in a recent piece and to my surprise, many of you emailed in to tell me about equivalents. So here's one from construction. Peter Deman wrote from Canada to say that in construction, this phenomenon is called leaving something for the inspector. So when an inspector comes to look at something, if it's electrical, you leave the cover off a junction box If it's a building, you leave some piece of concrete out of place. somethingomething really simple so that this person will feel important, theyve found it, they've got rid of it, their job is done That's not the only example of a duck based tactic. Mervyin Taylor wrote from Dublin to say that Atwward's duck may not be a duck at all. It could be a potato. The Admiral's potato is something that people in the Navy referred to. And it's the idea that when someone is coming aboard again to inspect a ship The potato is left out It's there only for the admiral to spot it, tell it to be tidied up, and the inspection can then proceed And then a final variation on the idea of outwards duck. and this has the memorably unpleasant name of the hairy arm This came from Arnold Peterson, who emailed from California, to say that in the business of TV commercials, The hairy arm refers to the deliberate insertion of a hand model with a hairy arm. Gives someone at the agency a very obvious thing to ask to be removed. Everything else is left untouched, the commercial goes out just as the producers wished it would I wasn't expecting any more duck based correspondence, but the letters kept on coming Steve Raf wrote to talk about his experience when he was the managing director of a business in Jamaica in the early nineteen nineties. He says that his factory manager there would paint the bottom of the coconut trees which lined the long driveway every time someone Grand was visiting from headquarters. The point of this painting was to impress the higher ups with the neatness of the environment and to distract them from the real issues. Steve called this management by paint which is a great phrase. Bruce Manford wrote in to point out that sometimes the duck survives. He told the story of a friend who was working in house for a Canadian oil exploration company had to advise on an exploration agreement. The contract draft went back and forward, and Bruce's friend suspected that absolutely nobody was reading it. So he inserted a clause into the draft which required that certain heavy equipment had to be transported to the wellhead by horse and carriage No one noticed, and Bruce's friend forgot that he put the claws in, until somet timee later, he got a call from his boss, asking Why did he need to get a horse and buggy There's plainly lots of demand for this kind of content so I'm pleased to announce that we're going to be launching a new video show in the autumn called Inside Ducks. In the meantime, you can email me at Bleby at economist d. com I also wanted to thank listeners to the Intelligence, who responded to our remix of Velvelocity Pivot. a meaningless filler text that we set to music Lots of you have written in with your own wonderful versions of this We think AI may have been involved, but we wanted to play you a few The first one is from Isvan Horbth ationable appet Let's begin. Artificial intntelligence, Tokaxing, tokness Tok and doubleolity Fireide chat drinking from a fire hose burning platform, Genal Pania Agment I actually quite like that. It starts really badly. It's like European rock ballad and then gets better. Yeah. So well done is famam And this one is from Ed Sevilla of Massachusetts. Like the drip, drip, drop of a waterfall shark that oozes through the deck. Like the what when why of a toolkit from a team alignment check. Like the final end of a project plan that spans all stakeholder views The voice inside me keeps insisting use, use use, corporateain They are very enjoyable and very very listenable, almost too enjoyable for something which is supposed to be unbearable to listen to. So yeah, lots of great stuff. Thank you both. Chill's the will of every sweet Ec. I just can't quit using you corporate speaking. That's all for this episode of The Intelligence. We'll see you back here.