Karl Pettersen  
The root of corporate culture is the assembly line, right? And every person is is taken to do one specific job. You tighten them, you tighten the screws on the widget. That's it. You don't say anything else. You don't get a say, like, is this widget good? Is it crap, etc. And so it's a culture that, almost by design at day one, devalues, you know, the entire experience of a human being.

Jeff Ma  
Hello and welcome to Love as a Business Strategy, a podcast that brings humanity to the workplace. We're here to talk about business we want to tackle topics that most business leaders shy away from, and we believe that humanity and love should be at the center of every successful business. I am your host, Jeff Ma and as always, I'm here to have conversations and hear stories with real people, real businesses in real life. So my guest today is Karl Pettersen. And Karl is the founder and CEO of Pettersen Analytics, which aims to fully articulate what he calls the Rosetta Stone between the languages of sustainability, corporate finance and technology, so we can all make progress in embracing new and greener technologies. Karl spent over 25 years on Wall Street and in Europe as a researcher and advisor, working with some of the world's largest companies on how to express their risk profiles in a way that's resonant with different audiences. In addition to holding a degree in economics from Yale Karl, is also an award winning composer, having scored two films and released eight albums, even executive produced a feature film in Mexico last year, a fable about how abuse exists and is transmitted between people. Fun fact, he's also a former competitive ballroom dancer and a master in six degree black belt in Shaolin Kung Fu. And that is exciting. I wish I had more time to dive just into that piece of it. But welcome to the show. Karl, how are you ?

Karl Pettersen  
Good, good. Thank you for having me. Jeff,

Jeff Ma  
well, I have to avoid my curiosity around the the the ballroom dancing and the KungFu , because I have to. I have only so much time to pick your brain about so many, so many other things. But before we begin, if you don't mind, I'd love to know Karl, what is your passion and where did you find it? 

Karl Pettersen  
Oh, good question. Let me try to find the the words that that work and that really resonate. I I think the best way to describe it is my passion would be to find genuine openness, genuine connectedness, right within myself and then within other people as well. Because I think you know when, when you think of what it is that we as humans really yearn for. You know, we all know the list, right? We want to feel safe, we want to feel loved, but I think that requires us creating a space where we can be genuinely vulnerable, where those who love us love us completely for who we are and treated with dignity, and then in return that we can love fully from everything that we are towards everything that other people are too. And I think that's where trust really happens. That's where anything that's genuinely good business also happens. It goes down to these fundamentals and the prerequisite, in a sense, to getting there, is finding that real sense of openness, that very lucid view of who we are and what it connects to, and and cultivating that every single day. So I hope that makes some kind of sense, yeah,

Jeff Ma  
for sure. And I love that. I'm curious. You come from the world of finance, and here we are talking about on a podcast about love and business, can you help connect the dots a little bit, maybe like, and you know, you run your own firm now, and maybe just a high level run through, but like, how did you find yourself doing what you do now? What changed along the way?

Karl Petterson  
Yeah, it's strange, because I think as is the case with many people, although perhaps not, not a huge proportion of them would admit it, I stumbled into finance by accident, right? In large part because I needed to be financially independent. I had a lot of bills to pay, a lot of debt to take care of, and that seemed it was intellectually stimulating as well. And there's a certain buzz, there's a certain. Enlightenment that goes with it, and that's one of the reasons too. I ended up studying economics. What was fascinating through all this is that when you really go deep into these fields, you realize that a lot of it still doesn't really work, right? We like to put a veneer of sophistication on things and pretend that it's run by algorithms and that everything is that we like to pretend it's kind of like the laws of physics. We know what they are, and we can measure, you know, all these, all these effects and things like that. But a lot of it still doesn't really work, because so much comes down to basic human behavior, and essentially the fact that emotion drives behavior, not rational thinking, when you really think about it, when you look at markets and Wall Street, so much of it is just pure emotion, so that I found fascinating, and the niche that I found for myself as an advisor to a lot of companies was to really touch that emotional content that drove their behavior, and in some sense, trying to reverse engineer the language of finance around it. And so that ultimately led me to the work I'm doing now as well. So it was, it was always there beneath the surface.

Jeff Ma  
Yeah, I know when people think finance, I think emotions probably last on the list of things that they consider, but I think I obviously agree that human behavior and emotion drive so much more. And we've, we've created this corporate, I guess, environment in order to try to control and contain that, right? What? So, what? I guess, kind of jumping to, you know, this idea of a revolution, because I want to make sure we get to this. I love the title this, of this episode, love is a love is a revolution strategy. What do we mean by that? So, what do we mean? What do you have in mind when you say a revolution in this context?

Karl Petterson  
I think there's a few possible entry points into the conversation. Perhaps the most readily available is if we think a little bit of what it is the whole sustainability conversation aspired to right. So much of it is a bid to really renegotiate our social contract right. And when you think of the new green technologies that are coming in, when you think of the global conversation or in decarbonization, it's a bid to modernize our industrial fiber, to rethink energy markets, and, by extension, also to reshape a lot of geopolitical currents there in the world. Now, one of the difficulties we've had is that you can take all these aspirations but translating them into objectives is is very, very difficult. And the reason being, these are all completely different lexicons that don't talk to each other. You know, finance is a very reductive lexicon as as we all know. But similarly, things like even the lexicon of sustainability is very, very reductive, in the sense that it slippery slope where you can quickly start excluding things and vilifying things, and you look along the line, and the challenge in this kind of renegotiation that we've attempted to enter into is that it requires us to marry these different lexicons, which means it requires us to really examine our blind spots and be very aware of the vulnerabilities that we bring to The table, and quite frankly, to speak directly to these vulnerabilities and about these vulnerabilities, and there's this very difficult step to take say, for, you know, Vice professional, to say, yeah, all these ratios and, you know, all these spreadsheets that I deal with, what You're asking me to do. I have actually no idea how to measure it. I'm not sure what it means, and it'll probably challenge a lot of the assumptions that I have right now. But then let me try to figure out a way to do it. So it's revolutionary, in that sense, that so much of the conversations we have in so much of the corporate culture we have is about being reductive as much as possible. It's about having as narrow an aperture as possible, but this level of genuine progress that we're aiming for and the clearly, you know, a vast proportion of the population. Is hungry for right calls for really widening the aperture and embracing these things that we've in, that reductive mindset that we set aside, that we don't look at because they're uncomfortable, because they make us feel awkward, and therefore finding that mindset where there's genuine acceptance and dignity given to these scary bits of us, right, that becomes not only a little bit of a revolutionary mindset, but it allows us to make progress and to connect The dots and to connect the numbers and connect the business opportunities and business constructs in ways that simply we haven't done before ever.

Jeff Ma  
Yeah. I mean, when I think of revolution, I think of a large amount of change and discomfort and disruption that's required to achieve a new state right, to come out in a new way, in a new form. Can you maybe, hypothetically at least, can you paint what that, that end state looks like at the end of of a revolution that's centered around this, this, you know, culture change this because corporate shift. What? What is that that revolution intended to bring about, what does that what does that world look like?

Karl Pettersen  
I think there's, there, there's there's two things that we can rectify and we can avoid. One is, again, I hate keeping, I hate to keep using the word, but the sense that a lot of the things are reductive where, you know, if we look at the business world, so much has been so intensely financialized, right? Companies live and die by one or two ratios, essentially. And these are ratios that are made up, and they're arbitrary, and a lot of the accounting constructs that go behind them are arbitrary. What it does is that it facilitates a type of behavior where you engage in type of behavior, but you call it something else, always. So for example, if you take the mantra of shareholder returns are everything, they're the only thing that matters, right? That means you quickly get into a mindset where you can extract as much cash, as much value from your business, from your employees as possible, give everything to your shareholders and say, Look, I've acted in the best behavior possible. I have created value. In fact, what you've done is you've extracted value, but you can call it value creation. So the minute you have that kind of reductive mindset, it's it enables this kind of smoke and mirrors, right? This kind of theater. The the second behavior, I think, that we can start avoiding is there's almost a kind of a vengeful tendency when people want to go beyond a certain narrative, right, and widen that aperture and create a new kind of narrative there. You know, it's very fashionable these days to be in a kind of us versus them position, to be in a, you know, victim and oppressor discourse, which has its merits right, and which has its its genuine, justifiable sources, but it becomes, all too often tempting to just try to flip the table, right? I've been a victim, you know, let me, let me now take power, and it gives me license to act badly. You give yourself permission to act badly. So the reason I bring all this up is once you start having that real information, that real lexicon, that that enables to have everybody, everybody in all these different stakeholders, essentially speaking the same language, looking at the same constructs, and approaching them from their individual viewpoints, but reaching the same conclusions. In the end, you end up with results that are that are more complete, that are more robust, that are that more genuinely meet people's needs. And so if I were to paint that picture of that revolution, it's it's that it's reaching that level of, again, of of much more completeness in the information that we talk about and in the results that are produced, and at its core is is this notion of love and kindness and dignity and acceptance of one's vulnerabilities?

Jeff Ma  
So help me understand I think what I'm hearing is that you center. A lot of this around, I guess, for lack of a better word communication, or the way we communicate, or how this translates from one kind of facet to another, but you also kind of painted in the light of, you know, I guess you know, you talked about that shareholder mindset of just like, of, just like, monies, everything, and so there's almost an element there of, almost, you know, morality or ethics, or even just business practice, like best business practices, things like that. Can you help me center this all around, like, is it about communication? Do you think communication solves all these things? Is it a miscommunication that we suffer from today, or or, or maybe walk me, talk me through, I guess, the connection of those types of two types of spaces, if that makes sense,

Karl Pettersen  
yeah, yes, yes, absolutely. It's probably easiest. If I give you a bit of an example of the kind of thinking that we engage in my firm at the moment. And also, everybody talks about communication all the time, but too often we're we just talk at each other, right? Or we find a in the Venn diagram of our different language. We find the common ground, which is actually still very narrow, and that's all we talk about, and we call it communication, right? Whereas what I what I'm looking at is more fully translating one language into the other, and then seeing what it tells us. And then you'll see that you kind of reach us in conclusions. So if we take the specific example of finance and shareholder returns and whatever it is, if I'm a CFO today, and somebody comes to me and says, You should think about sustainability. You should decarbonize, you know, you should invest in your assets, my first question becomes, well, how much does it cost, and what's my return? Sure, the cost is high and the return you don't know. So my answer is, well, I'm not going to do that right that. I mean, unless you know, I have a strong moral calling, just in terms of my language, I'm not going to do that. But if you take carbon right and the emissions that your company issues, and you realize that carbon is starting to be priced right now in the market, the EU has a border tax that's starting to price carbon, the inflation Reduction Act that has brought a lot of investment into green technologies, implicitly prices carbon. The second you price carbon, then all the emissions that your company issues become economically indistinguishable from a huge financial liability, and it's a financial liability you've committed to pay down to zero. And if you don't, you'll end up paying increasing amounts of carbon tax. And if you try to buy the offsets right, which are a bit of an accounting concert that offsets to net your carbon from, you know, the decarbonization that somebody else has done, then you quickly get into this, these constructs where you have a huge financial liability, but really the actions you're undertaking are to pay enormous amounts of interest on that liability. So you can demonstrate that by not acting you have this huge liability, and you and you could, based on the strategy that you've taken, be paying 100% interest on it, which is financial madness. So once you've really translated the carbon and sustainability conversation into corporate finance, you realize that it's, it's, it's crazy to keep going that way. But also, once you translate into, say, liability and into principle and interest on the liability, you can optimize this. We know how to do this. We've been doing this for, you know, hundreds of years. So the math starts to become very clear. And that gives you all kinds of things. It gives you measures of return. It gives you measures of investment efficiency. It opens up measurable pathways towards how you create value for shareholders. It resets the dialog that you can have with a company in the market, and so at that point, you've achieved kind of real communication between the two lexicons, and they lead us in down the same direction. And what's really interesting too, is that, you know, a lot of companies out there, for example, have put out targets of how much they want to decarbonize, when they want to reach Net Zero, etc. But a lot of them were a little bit finger in the air at the time that they were they were set. It's just what sounded good and in line with what everybody else was doing. When you really do that math, and you allow that translation to happen, and you you really, you really look at what the numbers say with a very sober view and a very holistic view. I. Um, then you'll see that once you do the kind of optimization that's required, it tells you that you should actually decarbonize much faster than anything you've said previously, that that's actually the the optimal path, that that's the efficient frontier between cost and carbon. So it's a bit of a narrow example, but I hope it helps to illustrate a little bit. No that that example was perfect, like that example really made a lot of sense of what like. It's not just communication, but it's almost a translation. Like you said, Absolutely. And I guess my, my kind of

Jeff Ma  
like end point question here, at least for for this conversation, is really around corporate culture in general. When, when you paint this picture of, I guess, the narrow example of getting you know finance to understand that their in their language, why it's important to do something. What is it about corporate culture that makes that difficult when you explain it like that, but you just explain it to me in five minutes. I know I'm not in I'm not in finance. So there's more to talk about, I'm sure. But you know what makes this conversation just not not happen naturally in corporate culture?

Karl Pettersen  
I think there's a lot of deeply ingrained habits in corporate culture, which which it's always easiest to not question, but I've always thought, rightly or wrongly, that the root of corporate culture is the assembly line, right? And every person is is taken to do one specific job. You tighten them, you tighten the screws on the widget. That's it. You don't say anything else. You don't get a say, like, is this widget good? Is it crap? Etc. And so it's a culture that, almost by design, at day one, devalues, you know, the entire experience of a human being, right, and reduces it to something extremely narrow. The issue we're facing is that we're past that now, right? This is not, this is not what. This is not how most businesses are run, for one thing, and secondly, in the competitive workplace that we have, this is not what's needed, right, certainly in this part of the world, so much of how companies compete is about creativity. It's about genuine innovation, but it's also about emotional connection, right? Very often, when you buy a product, yes, you're buying the product, but you're buying what that company, or what the founder inspires in you as well. So I believe we're there's this, there's this attempt right now at kind of bridging that gap between the two, but all the constructs for the corporate world have been about, you know, let's, let's reduce people to one particular task. And the problem is, once that happens, and you as an employee, are given targets to meet, and are being told. You know, this is the this is how you're valued, and this is your sense of value. The work, often is, is a lot of work to do. It's very tiring work to do. It creates a bit of a sense of sensory deprivation, in essence. And once that happens, all you can readily see are the targets that are given to you. And all you can readily perceive as your own value is what this company, what the corporate world has told you is your value. So you get trapped you you get trapped in this, and it requires you know, breaking, breaking out of that and making these broader connections at that point requires you to have a little bit of that revolution mindset. So just to sum this up, I think it's that sense of a very reduced aperture on what the value of a person is, plus that kind of sensory deprivation, and that's it's really part of that. It's a pretty cultish playbook. When you think about it, if I were to build a cult, that's how I would do it.

So, you know, there's bridging that gap into, again, accepting the fact that, even as a corporation, that your view of the assembly line

is maybe inefficient is maybe creating problems of its own, that it's not the be all and end all. It takes leaders that. Have that kind of vision and that sense, that sensibility, and that's probably generational thing. So

Jeff Ma  
well put I, I couldn't agree more our kind of mantra around here is bringing humanity back to the workplace, and that the idea of the Industrial Revolution and creating the modern corporate workforce that we have today with the assembly line of widgets is exactly right. I mean, I think you put it, I love the way you put it. I think it really clearly articulates that and and also really paints a clear picture, for me of what this revolution needs to look like. So I'm pretty I'm pretty stoked to have heard, you know, what you what you shared today. I'm pretty inspired. I really appreciate that perspective, because I think we I think we all feel it. I think we know, like when we talk about we broaden it to something like, oh, culture or satisfaction in our job, and things like this, like feelings that we have. But I think you've really painted it as the as one form of the specific problem, which is that we're really assembly line workers sometimes, but also kind of not allowed to bring all of that to with us and incorporate it into that conversation. So

Karl Pettersen  
thank thank you for kind words. Jeff. I think just to extend that assembly line imagery. If you're a manager in one of these companies, and you yourself have bought into it because you've been centrally deprived, I think what happens is you start to view the workers as widgets, right? So anything that stands out, that's different, becomes problematic, right? And so you, you, try to stamp out that difference, and so you create a culture of intense self censorship with people, and then you just perpetuate the problem. And ultimately, I can't see that's how that's a it's a recipe for getting things done, but I don't think it's a recipe for success, right? These are two different things. And

Jeff Ma  
to add on to your add on, most managers and leaders on that assembly line were pulled out because they were the best widget maker out of all of the widget makers. And so they have no skills in actual leading people. They're just really good at building a widget. And then you tell them to lead people, and all they can really resort back to is how to make widgets. So, yes, so that's it becomes that perpetuating problem with leaders at the very top who have no leadership skills sometimes. And what's the difference? Yeah,

Karl Pettersen  
what's the porter principle that you get promoted up to the point of total incompetence?

Jeff Ma  
I love it. Well, Karl, I really appreciate the time you spent today. I really enjoyed this conversation. What can people do to find out more here? For more from you, I don't know. Watch one of your award, award winning films, or how can they reach you?

Karl Pettersen  
Go on LinkedIn, right. I'm there all the time. I comment on stuff, you know, as the kind of corporate social media thing. Don't hesitate to connect. I have a website, Pederson, online.com, and yes, if you so, that's if you want to touch the kind of corporate side of what I do, if you want to look at more that real kind of deep, emotional landscape. I'm on Apple Music Spotify, title, you name it. A lot of these streaming services, you know, every little helps. It's always great to have a new listener and get in touch if you like it.

Jeff Ma  
That's awesome. Karl, thank you so much. And to our listeners, thank you as always. Hope you're enjoying the content. Let us know what we can change. Do better, what you like, what you don't like, and check out the book. Love is a business strategy if you haven't with that, everybody have a wonderful week. Karl, thank you one more time, and everyone have a wonderful week. We'll see you in two weeks for the next episode. You