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Rory Sutherland on 'boring' free market capitalism and house buying in London | Boardroom Uncovered
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Apr 2, 2025
Capitalism is "unbelievably tedious" and needs to be rebranded in order for people to fight for its survival by the end of Donald Trump's second US administration, marketing veteran Rory Sutherland has said. Speaking on the latest episode of City AM's Boardroom Uncovered podcast, Sutherland said that free market capitalism has been made "so boring that I'm not sure people really feel the urge to defend it anymore". He added that another name for capitalism is needed – one which recognises that "markets do not mean financial markets, but fundamentally wealth is created through innovation, marketing, behavioural change". The Ogilvy chairman also touched on the impact of having the 'bank of mum and dad' and how difficult buying a house in London has become. Read more of the story here 👇 https://www.cityam.com/capitalism-is-unbelievably-tedious-needs-a-rebrand/ Learn more about Blackbaud, the sponsor for this episode, here 👇 https://www.blackbaud.co.uk/ Get more of City AM 👇 🌐 http://www.cityam.com X(formerly Twitter): http://twitter.com/CityAM Facebook: http://www.facebook.com/cityam Instagram: http://www.instagram.com/city_am LinkedIn: www.linkedin.com/company/cityam
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if you were doing pretty well you could buy a four-bedroom house in claen with maybe 18 month salary the next thing I
0:06
knew is I was suddenly being mobbed by school kids you know and it was it wasn't my intention nor was it my
0:12
expectation I feel really really sorry for small businesses because I mean as far as the Press are concerned they
0:19
might as well not exist when I first came to London 1988 if you were doing pretty well you could buy a four-bedroom
0:26
house in claen with maybe 18mth salary you'd be doing pretty well was still possible okay now that's basically
0:33
totally impossible so you will literally have this absurdity where who your parents were when and where they bought
0:39
a house may have vastly more bearing on your quality of life than how hard you
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work or how valuable you are or how good you are at a job hello and welcome to another edition of boardroom uncovered
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from City with me John Robinson my guest of this episode is Rory Sutherland the
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vice chairman of advertising marketing and public relations agency ogul
1:01
after decades at the top of his industry Southerland has emerged as one of the most unlikely social media sensations of
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today with clipse of him speaking generating millions of views across Tik Tok Instagram and YouTube so what does
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he think of his new found Fame and what does it tell us about his industry in 2025 without any further delay let's
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dive in Rory souland thank you very much for coming on board in cover ah it's a pleasure I've got to start with of
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course you've been in the industry for decades and you're very well known within that field but I suppose it's
1:32
fair to say that the public at large might not have heard of you until a few years ago when clips of view speaking at
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events appeared across social media over that time you know you explaining how marketing influences people's decisions
1:45
or setting out what how you think a particular service could be improved has
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I think in general uh business is much more psychological than people like to give it credit for and that's because a
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lot of people in business finance in particular like to pretend it's all deterministic yes and they like to
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pretend it's kind of linear yeah and that it's an efficiency optimization game and if we're being honest about
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this if we look at business Through The Eyes of a kind of naturalist you realize that it's deeply chaotic it's much
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closer to meteorology than it is to kind of Newtonian physics and I think it's
2:21
just fair to continue making this point because there's obviously a downside to it that things are much more random than
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we like to admit but there's also a potential upside which we don't look for nearly enough which is sometimes in
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business something very very small often something very small and counterintuitive can make a huge
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difference that actually the bad news about complexity is that things aren't proportionate the good news about
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complexity is things aren't proportionate that actually small Butterfly Effects can transform a
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business yes well the clips of you have gone across social media you're a Tik Tok and in Instagram something I never anticipated
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it wasn't my intention of course well tell me about that Fame that you're now dealing with it it was a bit like the
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Lord Byron comment that I woke up and found myself famous in that somebody um
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rather wonderful young guy during lockdown he was an aspiring film student
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and was looking for a project and just started taking I think he started with just random clips from podcasts and TED
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talks and so forth and Tik Tock ising them and then for some reason he got fixated with my comment and started
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producing an extraordinary volume of Rory Southerland Tik toks which were rather nicely in case animated in some
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cases they obviously had subtitles in because you need that for Tik Tok cuz the kids are watching it at school and
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they got to have the sound turned down okay and effectively the next thing I knew is I was suddenly being mobbed by
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school kids you know and it was it wasn't my intention nor was it my expectation I knew what I said was of
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interest to a certain audience but I never really expected it to have such a
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wide appeal um it's disproportionately people involved in business
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entrepreneurs Etc or just you know young people who are curious who uh
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effectively constitute the audience but it actually goes very very wide and by the way I'm really really
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pleased about that because I think we need to diversify the kind of people who work in marketing I think it's been a
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little bit homogeneous and so effectively all beard unintentionally
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kind of preaching the marketing gospel a little bit and continually reminding business that marketing and Innovation
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are really where the value is created yeah I think we I think we've had this it's partly you people who are at fault
4:42
which is your adance no no the adance to the shareholder value movement and the financialization of business as though
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business can be reduced to a kind of courtly reporting figure which I think misses what's most interesting about it
4:56
and I think we have had a distortion in the business world World particularly in the UK uh where the focus on what you
5:03
might call operational efficiency which by the way in the short term generally Works fairly well you
5:10
know drag in some Consultants on a gain share agreement get rid of a few people but a bit like Russian Roulette it's a
5:16
game you can play once or twice but you're not really advised to play it repeatedly okay and I think we have this
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problem which is there are a lot of businesses out there which have become so fixated on uh this sort of efficiency
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model which I think comes from the the shareholder value movement I think the shareholder value movement then
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disproportionately gives power to the finance function and then you end up with a kind of corporate sclerosis which
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I think happens and so reminding people that actually business should be opportunistic is you know is a necessary
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job I think you found this Fame obviously in in the last few years or so and you said before we started recording
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you can't even go into Greg's now be recognized what impact does that had on
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you personally is that quite difficult to deal with no um um look let's be clear it's the right
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level of Fame we were talking about this I think on another podcast which is you don't want the level of Fame where you need an Entourage or security or where
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your tour bus is overturned by screaming Japanese school girls I don't want that I wouldn't have liked this level of Fame
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earlier in life either really why is that well I made this comment before which is when you hear people who are
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very famous very young kind of boning the State of Affair you always go yeah come on you know I
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mean you know who's complaining you know you're super rich and super famous you know as a Teenage star who wouldn't want
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that and then you realize that not having had any proportion of your life spent in reasonable anonymity probably
6:46
is in defense of those people it probably is a bit of a pain okay I have had sort of 57 years of relative
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obscurity and so at the age of 59 you know I'm not that bothered it's quite
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gratifying it's quite fun but it's it's at a level of what I call one per airport one per railway station you'll
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be approached for a selfie if you move through any sort of large public Concourse okay but it's not at a level
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where effectively as I said I you know I need to walk around with a vast Entourage or anything like that that not
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yet no that would be a pain to be honest and in any kind of communication discipline um there is actually a role
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for what I call deliberate perversity you know think what everybody else is expecting and do the the
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opposite um you know that lovely scene an airplane you know should we turn on the runway lights no that's exactly what
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they'll be expecting us to do there's an element to that I think I always make this Mantra which is in in maths or in
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high school physics okay the opposite of a good idea is wrong but in marketing in business the
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opposite of a good idea can be another good idea and sometimes actually sometimes
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the way to solve a problem is to take what The Logical solution is and
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willfully be perverse yeah so I met somebody who was in charge of encouraging walking for the UK
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government and they they were campaigning to uh open up more foot paths you know maintain public rights of
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way and my argument was no no if you want more people to walk in the UK you don't need more foot paths you need more
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benches because the people who find it slightly difficult to walk who are the people who you want to Target and
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encourag to walk most they're not constrained by a shortage of horizontal surfaces they're constrained by the fact
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that if you're 500 yards from your house and you suddenly get a bout of sciatica there's nowhere to sit you and my my
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observation is you go to a Seaside where there always too many benches okay they're usually memorial benches which
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are crowding each other out you will see a lot of people of completely diverse ranges of age and fitness all walking
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quite ambitious distances because they know there's a place to sit down down and so quite often The Logical
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solution which makes sense and which never gets you fired never gets you into any trouble is perfectly logical and
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consistent but it's actually wrong just because you're rational doesn't mean you're right I think that's you know
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there's this thing I was be a bit careful I always call it James obrianism uh from the LBC presenter where you
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construct a rational argument which sequentially in and of itself makes sense and therefore having done so you
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claim that you are therefore obviously and self-evidently right about the question and everybody else must be an
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idiot and it strikes me as a fundamental misapplication of rationality I want to
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ask you um if you've seen any marketing campaigns recently that you've been particularly impressed by a few of our
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own I mean we we obviously but I don't like to plug our own work I was very very pleased to do some work in um uh
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the mayor of London's campaign the mate campaign cign which we in the Behavioral Science practice made a contribution to
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which is both a pro-social and worthwhile thing but it was based on a very interesting scientific Insight which is most people wanted to call out
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sexist or unattractive Behavior but they lacked the vocabulary and so what this was doing is it was giving people
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effectively a social mechanism by which they could intervene without appearing
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sanctimonious or without destroying a friendship and so I'm I'm very did by
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the way in the whole you could call this the sapper Warf hypothesis where if you create a name for something you
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implicitly create a norm for something I'll give you an example okay have you noticed recently loaded fries
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are appearing everywhere okay and there's nothing new about the fact that and it's not really surprising that we
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love chips with stuff on top right but until somebody came up with an
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established and recognizable name for loaded fries you couldn't really sell them yeah you know you couldn't you
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couldn't have a you saying chips with stuff on top but now suddenly there's loaded fries now if you're really really
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on The Cutting Edge of creativity Brian Eno would argue that once there's a name for a movement you know he's lost
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interest in it it's now become mainstream because someone's named it but I would argue that in marketing when
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you provide a name for something you create a norm for something and you then make it much easier for people to adopt
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that behavior we we're we're sort of we're chimps okay we're a social species
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a large part of our behavior is driven by copying uh unconsciously in many cases and so consequently one of the
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questions we're always asking albeit unconsciously is you know do other
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people do this what would other people think of me doing this you know I mean I always find it absolutely fascinating to
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look at when people make purchase decisions how much of the decision is driven by unconscious unspoken forces
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which never really come out in Market Research because when you ask people who explain their behavior they reverse engineer a kind of rationalization of
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why they did it I I bought the Aston Martin because of it's spectacular luggage carrying capacity
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you see what I mean and it's low low price of course of course yeah and actually it's very very interesting to
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find out how much of what we do is driven by instincts which are felt but
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not thought um and by the way if you want to solve problems you need to understand the feeling part of the brain
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every bit as well as the talking bit of the
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brain I've got some quick fire questions let's go first job what was it I drove a
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forklift truck at the Rina Factory so that was a holiday job in I think the
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mid 1980s and I have to admit that um
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driving a forklift truck was blast okay um I don't believe anybody who doesn't
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occasionally think how great it would be to be a long-distance Lorry driver or to drive a Mac Truck you know there's 10%
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of me every day I wake up and go actually it'd be pretty great to just climb into a cab and drive somewhere but
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driving a forklift truck was fantastic and you were carrying um black currents all over the place obviously they came
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in you unloaded you probably don't want to know the details of this but you effectively unloaded these huge great
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pallets covered with black currents from all over the UK quite a lot of them from Scotland actually and then they went
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into a kind of M eration process vitamin C was added um and then eventually you ended up with a high concentrate riina
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okay well challenged in the concept of quickfire question so sorry sorry let's do it again U what was your first job I
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was a forklift truck driver at the Ripa Factory there we go we can end it right there who inspires you I'm very
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interested in people who have the capacity to rethink a business category uh so Greg
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Greg Jackson at octopus energy in in business terms uh you know Hannah Gibson and people at a cardo I'm really really
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interested in those businesses and I think it's tragic that in Britain we don't make more Heroes of our really
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innovative business successes in the US things like monzo you know Wise um
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aicardo they be kind of seen as national champions for some weird reason we don't do that if you had to appoint a
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celebrity to your boards who would it be and why well before I appointed a celebrity i' actually try appointing a
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marketer first because most boards don't have a marketing person on them which
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means that the consumer or customer interest is unrepresented at board level now okay I
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understand all thiss about the shareholder value movement but how can you seriously have a decision-making entity which does not factor in the
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needs wants desires of the very people who pay for your business to exist but I would have a comedian you would have a
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comedian who would it be uh Jimmy Carr I know quite well um but it could be I mean Simon
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actually no that's no good you'd have to have two if you want to have dissenting people on a board you can't have one
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because they just feel lonely and shut up you'd have to have two people who would forever what you might call throw
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in bombs their job would be to make Mischief with the rest of the board meeting what's the best thing about your
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job uh no two days are the same and just occasionally you can create a million
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pounds worth of value in five minutes as you do if you want not doing this what
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would you do I trained as a teacher and I nearly became a teacher okay and the
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reason I didn't was I just had a panic attack where I thought well if I go school University and then get a
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teaching job I could end up with my whole life spent in educational institutions and so I panicked and
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jumped chipped for advertising other things um oh I think K-pop choreography
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probably that's that I always feel I've missed my missed my real kind of vocation yeah and finally if you were
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prime minister for the day what would you do uh I'm a georgist so I would tax property and wealth far more and income
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far less I think we've created a nonsensical economy where we have a very
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very active mechanism for redistributing wealth from people who earn more to
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people who earn less despite the fact that actually income inequality isn't the big problem it's wealth inequality
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okay and we don't have any mechanism for uh particularly intergenerational wealth
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redistribution and given what the prop what's happened with the property market and the fact that we've had a stupid
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asset price inflation this is going to lead to massive fractiousness socially
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I'd also by the way argue that there's a little bit of me when Trump and JD van
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go we have to fight harder for Western values I grew up in the era when you had
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a communist threat from the Soviet Union and there was a kind of universal belief
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that capitalism was you know free market capitalism was worth fighting
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for somehow we ourselves have managed to make free market capitalism so
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boring that I'm not sure people really feel the urge to defend it anymore you know no one ever goes you know what do
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we want we'd like McKenzie to come in and slim our Workforce and perform operational efficiency improvements when
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do we want it now okay no one's ever going to go out on the streets in
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support of what you might call early 21st century capitalism it's just unbelievably tedious so it's capitalism
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need of rebrands yeah it shouldn't be called capitalism at all it should be called consumer tested Market Innovation
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that's trips off the tone no no no no no what I'm saying is that we need we need a better word for it which recognizes
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that markets do not mean financial markets that fundamentally wealth is created value is created uh through
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Innovation marketing behavioral change value is created on the Shelf it isn't created in the factory and until we
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actually refocus business so that it actually redirect some of its attention
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towards both employees and customers away from this kind of very narrow Financial preoccupation capitalism will
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continue to be neither very exciting in terms of the value it creates nor very
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interesting to work in or or indeed operate within and we're sitting currently in the heart of the city I
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know I know yeah and I I think they have I think the financialization of everything I me the financial times
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wrote this piece very good piece called how did customer service get so bad and
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this worries me because I think customer service in a lot of online businesses is sufficient to ER Road trust in the whole
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category that's not to say that all the actors are bad I have amazing experiences with some remote businesses
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but consumers are often once bit and twice shy you only need three or four bad experiences you stop engaging and
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the whole Golden Goose of kind of uh you know online Commerce is actually
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threatened by the appalling difficulty you often find in getting in touch with any human being anywhere and I felt like
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saying well if the financial times actually acknowledged in like 20% of their column Ines that there was
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something interesting about a business other than its quarterly financial reporting maybe we wouldn't be in this
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[ __ ] storm to begin with so that the the media exent to which British business coverage is financial coverage yeah I
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mean I feel really really sorry for small businesses because I mean as far as the press a concern they might as
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well not exist okay you get a bit of stuff about multinationals a little bit of stuff about Banking and and financial
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figures but I mean the real economy of people actually going out and doing useful things I it depends on who you
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read there if you if you're talking about the Nationals and that might well be the case with the broad cheeks for example but you go into the regions you
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wa to the smaller B2B the trades you will find stories about smaller companies but but it's not it's not
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actually permeating into the political mindset or The Wider public mindset what what needs to change then one of the
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things i' love to see is why do we have no local TV in the UK so Birmingham
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Alabama has a population of about 200,000 and it has I think four local TV
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stations okay Birmingham England has 2.1 million people and I don't think has a
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single there's no there's no Birmingham TV station no the BBC are based there that's yeah but I mean what with Pebble
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Mill is it is well they're sort of um they're doing up the old um tea Factory
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I think it's a it's a start okay but I mean it is extraordinary that the that there's something very odd about I mean
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the UK is too centralized politically okay I think Devolution would be very healthy I think more and more decisions
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need to be taken closer to the point where the consequences are experienced if you like um but I also think our news
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coverage is weird as well London Centric uh it's very very London Centric but also it's um
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it's there's effectively a missing middle I think that's the way to describe
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21:55
real lasting change Rory we're seeing a lot of Brands and businesses uh switch
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their advertising campaigns to really bring in the social impact in the community element and I'm sure a
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business like ogal V is leading that change but how do you as a business
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replicate that on the inside I think you have to do that with caution in that
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large companies effectively can be I think reasonably accused of greenwashing occasionally and I occasionally call
22:25
that you know planting flower beds on the Death Star you know ignore what we do as a business look we've got this
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cute little 1% of our business that does something fairly worthwhile properly run
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a business should be asking itself the question uh what do we contribute to the communities we serve um as part of the
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day job it shouldn't be a separate stand loone thing and I also think that in many cases your environment just in
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marketing terms your kind of uh social credentials should be worn lightly they
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should be used as a support Point not the central point but fundamentally you know a good
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business should not have a separate kind of budget line item or separate
23:06
department for this because businesses that contribute to wider Society tend to
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do better and survive better than those that are narrowly self-interested and so
23:18
there isn't an absolutely hard line between what you do as a business which is selfish that isn't
23:24
necessarily um bad uh in terms of its externality is and likewise it's not
23:30
necessarily true that businesses do things that are ostensibly well intentioned necessarily help so we've
23:35
got to be a little bit careful about this and I think the business of taking this thing and effectively carving it
23:40
off and making it a separate part almost like a tax on a business is actually
23:46
misunderstanding what businesses can do perfectly profitable businesses can serve a community and so in advertising
23:53
the best thing we can do is to help worthwhile causes or campaigns with
24:00
their Communications or their marketing because that's what we do anyway and therefore there have been a
24:05
few campaigns the the mayor of London's campaign uh you may know as mate for example there's another campaign
24:11
encouraging young people to vote which is called you already vote so vote which makes the point that people are active
24:18
participants in you know whether it's love island or or online reality TV but
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when it comes to a ballot box that determines the next five years of their life they stay home
24:29
um and so one of the most important things we can do is you know we obviously serve commercial clients many
24:34
of those commercial clients I think perfectly valuable to society as they are but there are certain
24:42
problems one might be social problems another one by the way might be category problems I mean I'm looking at the
24:48
moment um as part of a commission on electrification on how we make the case
24:55
for the electrification of things like cars heating okay um and that's not an
25:02
individual brand problem the budgets an agency tends to get tends tend to be individual brand communication problems
25:08
this isn't a problem that's confined to one brand or another brand you know um there are 27 car brands which would
25:15
probably like people to adopt electric cars there's a whole ecosystem of people who'd like people to adopt heat pumps
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it's not a problem we're going to be able to solve one brand at a time brutally put and so the opportunity
25:28
to work either pro bono or simply with wider organizations in support of a
25:35
cause rather than an individual business or brand is a very very useful and necessary use of advertising and
25:41
marketing talent and if K starma and Rachel Reeves
25:48
rung you up and said Rory you know we need some help with some rebranding some marketing for the government we're having a a difficult time what would
25:54
your advice be to them um take the difficult decisions early which maybe they've they have done but uh
26:02
fundamentally there is a problem in politics which is sort of everybody knows what to do they just don't know how to get reelected after they've done
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it um and undoubtedly the entire tenor of um
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uh government policy has been ridiculously weighted towards the old
26:23
the interest of the old compared to The Young and the The Only Reason by the way
26:29
young people aren't more angry about this is they've grown up with it so they think it's normal now if you're my age
26:36
you're 59 and you could remember where you know with a couple of years you could get a deposit to buy a house
26:41
actually you could buy a four-bedroom house in claen when I first came to
26:46
London 1988 if you were doing pretty well you could buy a four-bedroom house in claen with maybe 18mth salary you'd
26:54
be doing pretty well if you're doing that it was still possible okay now now that's basically totally impossible
27:01
you've either got the bank of mom and dad or you've got some sort of inheritance but what's going to happen is you're going to have
27:07
absurd uh inequality not not just intergenerational but intragenerational
27:14
so you might have a thing where a very very successful person who's running a very successful business or earning a very good
27:19
salary is considerably poorer than most of the people reporting to him because
27:26
the c or her because the senior person's parents lived in barnesley and the
27:31
junior people's parents lived in seron okay so you will literally have this absurdity where who your parents were
27:38
when and where they bought a house may have vastly more bearing on your quality
27:43
of life than how hard you work or how valuable you are or how good you are at a job that's that's not a you know I
27:50
mean this this system only works because there's some sort of just desert that you know effort stroke Talent is
27:58
disproportionately rewarded the American dream but weirdly you inherit your parents house or or indeed you make a
28:05
fortune on your own house tax rate zero okay you go out to work tax rate 40% how
28:12
does this make sense so it needs to change in your your opinion it's it's incredibly difficult to do but there
28:19
needs to be some sort of fundamental uh rethink of uh who pays for what looking
28:25
back over your career here do you consider yourself personally a success
28:31
are you satisfied with what you've achieved so far not completely um I I mean if I did
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I'd probably quit but I mean you have to have this sort of niggling uh slight
28:45
self-doubt slight impostor syndrome slight discomfort to keep on doing things but I think it's worthwhile I'll
28:52
put this way I mean I think uh I think that particularly through podcasting and other channels like this um there are
29:00
important things to be achieved there are important arguments to be had and actually there's kind of useful mischief
29:06
to be made because I I do think the public discourse is is dominated by what
29:14
you might call you know very serious logical people but who are slightly deficient in imagination or courage uh
29:20
if we're being blunt about it you know I think there's a sort of weird kind of
29:25
bureaucratic comfort zone over to window call it what you want which is too narrow I think there there's far too
29:32
little experimentation and there's far too little consideration of um uh
29:37
oblique or psychological Solutions economics and law are vastly too
29:43
dominant in the decision-making sphere okay they have a kind of influence and
29:48
uh uh credibility that they simply don't deserve um I asked you earli about the
29:53
best marketing campaigns that you've you've seen recently tell me about the worst well I had a a great one by the way which I one I really
30:00
love um is a campaign for it was an Italian restaurant in the 1960s who
30:07
could never get anybody to sit downstairs because they had a downstairs basement and they had an upstairs restaurant now most people would kind of
30:14
go I'm terribly sorry we have to see you downstairs instead when people rang up to book they'd say I'm terribly sorry
30:20
we're actually fully booked in the capry lounge downstairs so you'll have to sit on the ground floor and it was only a
30:26
matter of weeks or months before people started ringing up and saying I want to sit in your capri Lounge um am I too
30:32
late okay fundamentally the chance of finding a kind of Arbitrage opportunity
30:40
in Psychology is much much better than the chance of finding one in economics
30:45
or physics so the the opportunities to solve problems through using really cunning psychology are just much much
30:52
bigger than they are if we're obsessed with kind of objective reality okay okay
30:57
now the bad marketing campaigns actually some of them are accidental okay um one of them is
31:06
um uh whoever called Nuclear Power Nuclear Power probably set back the adoption of nuclear power you know you
31:13
just get these very very unfortunate namings very very unfortunate accidents
31:18
where something gets considered as you know as as akin to something else and
31:24
you know there are enormous I think there are enormous things where
31:31
um psychological factors I'm just there's one I can think of I'm just trying to remember it uh where simply by
31:38
misnaming something well um I'll tell you a funny
31:43
thing actually octopus energy nearly had a disaster because the only reason they called octopus is their first investor
31:49
was a company called octopus Capital who demanded they were named octopus energy their original plan was be called
31:56
something like green p power Tech and I always joke to them whenever I meet them as a marketer that if they'd been called
32:02
green power Tech they'd now have 27 customers if they hadn't got a pink octopus and called themselves octopus
32:08
energy okay now it is unbelievably disquieting for most people in business
32:14
to realize that you know literally the success or failure of your business can
32:19
be dependent on whether you choose a cute logo or you have a boring name I I kind of agree that it's wor
32:28
that those small things have that effect I just think I don't think you can avoid it genuinely I think it's just the case
32:34
so cases where things have just been uh you fundamentally
32:50
misframing and actually you know I think there are cases like that I think Google Glass was
32:56
an interesting case of what was fundamentally a very good idea and it never went anywhere because they never
33:02
worked out how to sell it and we ought to probably spend a bit more time looking back at history for ideas which
33:09
were fundamentally sound but something about the marketing or the positioning just went badly wrong
33:15
brilliant well that's a perfect way to end the episode thank you very much for coming on any time absolutely fine no
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