July 09, 2009

Entropy and Atrophy

Use it or lose it. Develop, grow, flourish, improve or wither away. Do or die. Harmony versus disharmony, it’s your choice.

Entropy and atrophy – when said it has some aural similarity to the Paul McCartney/Stevie Wonder song title “Ebony and Ivory”. That song used the keys on a piano to describe integration and racial harmony. McCartney was inspired hearing Spike Milligan say "black notes, white notes, and you need to play the two to make harmony folks!” (Martin, George (editor): Making Music). With entropy and atrophy, the “inspiration” is uncertainity and disuse, and you need to play the two to make disharmony folks!

Entropy is a thermodynamics term that describes a measure of the amount of energy in a physical system that is not available to do (useful) work; it is the degree of disorder or uncertainty in a system, and is often used loosely to refer to the breakdown of any system. Atrophy, on the other hand, is a pathology term that means degeneration, decline, or decrease, to waste away; wither or deteriorate. Can you see where I am going with this?

Think about your world right now.  Usually we define the boundaries of this world by what is making us happy, or what is bugging us, right about now.  No matter how you frame the concept of your “world”–whether it’s in context of your immediate environs of home and work, includes your community or country, or is a totally global definition–there is uncertainty, disorder and lots of energy that doesn’t seem to be focused in ways that are helpful and hopeful. That usually means as individuals we become uncertain and unfocused. Activities and ideas that we normally think of as important are set aside; instead of doing, we start reminiscing about the good old days. Or if our anxiety level is really high, we go into full blown avoidance mode, we regress and cocoon. We atrophy; our skills, our confidence, our identities wither. Worried about the economy?  Lost your job?  Been out of work for quite a while and your savings are running low? Chances are your self-esteem has suffered, and your self-image – your worth – has experienced entropy and atrophy.

Managing uncertainty is how we avoid personal atrophy. Managing uncertainty is how we stave off societal entropy. I didn’t say remedy or fix, I said manage and that means doing something; focusing energy to do something, trying for forward motion to do something. It does require some letting go of past processes. What it doesn’t require however is letting go of your basic values. This is key. Values are your foundation, processes are the variables. Unfortunately, we often see either a letting go of each or a desperate clinging to both. If you need a different outcome, then you need to change your variables. If you want to live with the new outcome, you better be sure the variables you choose are values-based – your values, not someone else’s.

Uncertain? Then step back and take stock. First take stock of the external situation. What is causing your sense of uncertainty? Is it definite? Perhaps you’ve been told your position will be eliminated and you will be laid off in six weeks. Or is it more nebulous?  For example, there have been layoffs and reorganization and senior management is in a cost cutting mode, therefore, you’re probably the next to go. Realistically though, maybe you are and maybe you aren’t losing your job. There is a subtle but large difference.

Understanding the external situation first allows you to then take stock of your internal situation. Whether or not your sense of uncertainty is justified and doom truly is imminent, uncertainty is your signal to take control of what you can. Rehearsing “what you would do if”… is amazingly powerful. Of course we avoid even hinting at the unthinkable or the scary and are ill-prepared when something does happen to us. Yet, most of us practice what we’d do in non-threatening situations. Golfers “rehearse” their putting, their drives, how to get out of sand traps. Cooks “rehearse” the dishes they want to serve at their next dinner party. Successful people are those who are good at Plan B.  So how about doing some rehearsing around things that can really impact your life. Make some mental movies in which you star and play out how you succeed.  In other words, figure out the possible scenarios that might result and then figure out what you can do to manage those scenarios. 

Chances are the scenarios you come up with won’t play out quite the same in real time. It doesn’t matter. What matters is that you won’t go into a panic, you won’t cling to old patterns that won’t help you, and you will step back and take stock. Why?  Because you have determined options, you have set up contingency plans, you have confidence.  Your energy is available to work with the situation and try different variables to reach an outcome that works for you. You rehearsed and, if you need to, you can ad lib!

Entropy and atrophy or harmony and growth it’s your choice.

Just as the constant increase of entropy is the basic law of the universe, so it is the basic law of life to be ever more highly structured and to struggle against entropy.” – Vaclav Havel

June 24, 2009

Go Ahead Punk, Make My Day (or The Importance of Facing Down Adversity)

When young, we are taught the difference between right and wrong. It either is or isn’t, black or white. It is so simple to do the right thing. As we get older, when push comes to shove, sometimes we do things we aren’t quite comfortable doing. A little more complicated, but really in the long run, nobody got hurt, right? Today, there is no facing down adversity at work. We must do whatever we are asked; even when we believe it’s wrong. Is that right? Well to tell you the truth, given all the economic hype, I’ve kinda lost track myself...

Do you feel lucky? In the heat of the moment you need to check your internal barometer. Put aside feelings of anger, frustration, and fear; control your emotions. Hear what is being said to you and listen to yourself. If you can identify what is at stake in a showdown, you can respond appropriately.

Are you being threatened or not? Sometimes a manager is blowing off steam, thinking aloud, or just repeating what she or he heard elsewhere - without context. Understand if it's important. Is it life or death; your job or someone else's? Understand what is really on the line and don't be afraid to ask for clarification.

Did I fire six shots or only five? Have an unshakeable grasp on the facts. Even when faced with superiority (job titles are not a free pass for avoiding the truth) you can reduce any situation to a facts based discussion. Knowledge truly is power.

Always know your options. "A man's got to know his limitations" as Dirty Harry said. Is quitting your job really an option for you? Is your company culture tolerant of whistle blowers? Do you have political capital to spend? A confrontation is not the time to determine your limitations.

In challenging times, when it is easy to follow the path of least resistance, we must remember that even in crises "do the right thing" still applies. If you follow the points above, chances are you will read the situation accurately and respond appropriately. Hopefully, you’ll find yourself in the position to do the right thing. Go ahead punk, make my day.

June 06, 2009

Still Life in Mobile Homes

Are you sitting near a wireless network reading this on your mobile device? Good. Then let’s begin…

The classic interruption: two people are in conversation, then one of them surreptitiously lifts up a mobile device and starts to click on the buttons.  As one conversation is interrupted, another begins.  So little time… so many conversations. We are always on, always in touch, always within reach. Or are we?

The Unbearable Lightness of Being (Available)

The obligation to be always available used to weigh heavily on the shoulders of a few.  Doctors and medical staff ready for emergencies, technical support staff running mainframe computers, police and troops ready to serve and protect at the ring of a phone.  These people made personal sacrifices as part of their work.  It was not a mere lifestyle choice, but a serious obligation. These days the on-call list is filled with accountants, financial analysts, project managers, teenagers, mothers, and even grandparents. All of them, connected to the network, available for communication via cell, email, Facebook and other electronic portals.  The reason and means for availability has now become feather light, which is why we can all shoulder the obligation to be available. In fact, it has ceased to be an obligation for practically all of us.  It is now an expectation. For many, always being available is a need bordering on obsession.

A Life In A Moment, Revisited
Back to the classic interruption for a second, if we can both focus long enough.  Not so long ago, that behavior would have been considered downright rude.  If you were engaged in a conversation your counterpart deserved your full attention, and they deserved yours.  And yet today, what is happening to you now, in this very moment, is not as important as what could be happening to you in your mobile life… if only you were looking at your mobile device!  Anything that comes to you via mobile device is instantly more important than what you were just doing, and so you connect. 

Once connected to your network, the reality of your life is replayed in a more interesting light.  You tweet on Twitter, or post to your Facebook wall or just send a plain old email if you’re part of the “older” generation.  Another ego battling for audio-visual attention in cyberspace, and yet there is an audience of roughly a gazillion viewers who are quite willing to be nothing more than passive receptacles for whatever goes by, like the tiny coral on a huge reef, filtering, filtering. This reef has been built on people’s insecurities and fed with personal details of their lives that can be replayed over and over again. For some people, the number of Friends (Coral Reefers? Sorry, Jimmy Buffet.) that are “connected” to them equates to self-esteem. Is there a directly proportional relationship between one’s degree of insecurity and time spent revealing one’s life through an online identity?

Identity Crisis in a Culture of Availability
We’ve always had many identities – Dad, employee, boss, friend…whatever – and always struggled with integrating them. Consciously, we made choices about which identity was most prominent at any given time, usually based on where we were and who were with physically. Home, I am mostly Dad. Work, I am mostly employee.  Generally, this occurred in real time and face to face. Our identity choices were somewhat limited by time and space; hard to be rock star when you had a day job and family.

Now, our identities are not so limited in this networked community.  At home, you can be “Dad” to your children, be on the phone to an employee as “the boss”, and connect to your friends on Facebook as “RockGod” all in the space of five minutes and sometimes simultaneously. Where am I, no longer informs who I am. Who am I, really, is more difficult to figure out than ever.

In the movie “Alien”, the tagline was “in space, no-one can hear you scream”.  Pretty scary, right?  In cyberspace, some-one [else] decides if you are screaming (or not).  Not quite as compelling as “Alien”, but this is real and therefore scarier. There is a complete lack of emotional connection in a cyber environment. For instance, have you ever received an email or text in which you couldn’t tell if the sender was being serious, sarcastic, or angry? Unless the message was shouted in all capital letters or had those cute little emoticons, it was totally stripped of emotion. We need emotional feedback to help us make sense of who we are and who we want to be.

This leads me to wonder: are we estranging our real relationships in favor of virtual hook-ups?  If you find that being “RockGod” is more fun than being “Dad” then that is a real consideration. Many people have adopted multiple personalities.  But this is clearly by choice.  The culture of availability can only grow through common bonds, through our choices to connect with others and share stories, and play out parts we have chosen for ourselves in a global theater. All the world is a stage, and we are all connected.  As each of us, and our kids, spend more and more time on the Reef, are we ignoring the opportunities to connect with each other in real-life?  Is there still life in mobile homes?

May 14, 2009

Models!

"Here's something to think about: How come you never see a headline like 'Psychic Wins Lottery'?" – Jay Leno

What if you knew exactly how everything was going to happen?  How would you feel? Probably bored out of your mind. We need certainties (food, water, shelter) but we also need surprise - uncertainty. To deal with life’s uncertainties, we have established the long tradition of prediction and have put a lot of faith (and money) in it.

Predictions are not about divining the truth. Far from it, predictions or forecasts are about tying a change in current conditions to a possible outcome in the future. In other words, if done well a prediction is an educated guess and may come close to what actually happens. There are no sure things in the world of predicting. Clearly, your mileage may vary with the forecaster and his/her forecast. We follow other people’s predictions, notably the weather (and until recently, that housing prices would continue to rise), and very rarely do we stop to think about exactly what they are doing. There is no value-added superstition behind forecasting, no mumbo-jumbo.  But chances are, there is a mathematical model behind the scenes.  Even so, there is no certainty involved, only possibility.  And mathematics.  And an imperfect understanding of reality. And that is where things can start to go awry.

The economic models of the last ten years have predicted untold wealth in the real estate and mortgage markets – so much so that we all came to believe it, and therefore it became our reality.  But the models had one flaw. Okay, more than one, but this one is a doozy.  These economic models never included the possibility of housing prices decreasing. Now that seems a pretty obvious factor to take into consideration, doesn’t it? Intuitively and practically we usually think that things that go up have to come down at some point or at least level off. So how did this get missed? To answer that question, let’s paint a picture and revisit a flood.

Imagine a friend asks you to paint their portrait.  You would find a canvas and paints, situate your subject in a suitable pose and begin.  Okay, if you have no artistic talent imagine it’s modern art and you can fake it.  At the end of your work, you have a portrait.  Great!  Now, imagine that the person asked you to make the portrait speak.  “Yeah, I want it to say something witty every time anyone walks past it”, they say. This isn’t the same thing as that plastic fish hanging on the wall singing “Take me to the river”, after all.  How can a flat, two-dimensional representation hope to bear close resemblance to real-life? But this is precisely the conundrum that forecasters find themselves in when they want to make a prediction: they need to model the real world, using something that isn’t the real world (paper, computer etc).  And the real world changes, unpredictably.  No, really – it does.

Twelve years ago, forecasters at the North Central River Forecast Center in Chanhassen thought the Red River would just top the 50-foot mark in Grand Forks. The weather service has remarked that its 49-foot crest prediction was never meant to be perfect, nor was it something that residents could completely rely on.  But most did. The forecast was off by 3.8 feet, a small error relative to the size of the crest but one that that forced most of the 60,000 people in Grand Forks and neighboring East Grand Forks, Minn., out of their homes.  The total cost of damages ran to about $3.5 billion.  Viewed in that way, it was a not-so-small prediction error.

If you calculate the total volume of water in a landscape and plot it against the depth of that water collecting together is flows down a river, you typically get a nice smooth arc that looks like about half a rainbow. And that's how the Red River seemed to work for most of recorded history.

But it turns out that as the volume of water peaks in very flat rivers, like the Red, odd things start to happen. Unexpected things. The flooding gets higher, even though the total amount of water is decreasing. If you're plotting it on a graph, the curve actually loops up at the end, like a whip snap, before it goes down; an elegant and poignant detail that was not part of the general flood model. The weather service now figures this effect, known as "looping", accounted for about two feet of the 1997 flooding in Grand Forks – more than half of their miscalculation.  Looping is caused by a complex phenomenon of friction and velocity that are not easily modeled but is easily verifiable through Geological Survey measurements.  However, modeling real life in real time has proven to be very difficult.  But that’s where it counts.

The National Weather Service has changed its forecasting methods since the 1997 flood disaster - not only for Grand Forks but also for disasters such as Hurricane Katrina. "Our science, modeling and communication are better," said Dan Luna, hydrologist in charge at the National Weather Service office in Chanhassen, Minn. "We learned a lot in 1997."
Some of what they learned involves telling the public what forecasters really don't know.
Forecasters now stress the uncertainties of their predictions, with a range of worst-case possibilities. A prediction now represents multiple possible future outcomes. The national Weather Service calls it "hedging."  That seems to be a better term for what remains an educated guess about possibilities.  The models have improved, but they are not perfect – the mathematics cannot yet mirror real-life. Not even for the Red River, where the National Weather Service has some hard-won experience.

Interesting stuff, but what are the conclusions? Over-reliance on forecasting models can cost money and lives. We are still learning the dynamics of how our world works. Sometimes, we are so excited about predicted possibilities we don’t take into account the most obvious of factors. Over-reliance on models is part of the mortgage crisis.  There is more than appears to the eye at work in the economy; in general people aren’t able to actually make the chain between cause and effect. If mathematics can’t guide your every decision, what can go beyond models?

Our inability to draw a perfectly straight line between cause, truth and effect leave us with a variety of possibilities in between.  Aside from knowing and acknowledging the limitations of the models that can predict where that straight line may fall, we can also try to account for the many options in between.  This is strategy.  Rather than blindly trusting in models, we look at the range of possibilities, the consequences of each and try to plan around those outcomes.  In the case of the Red River, it means building the walls of sandbags higher than the possible “loop” of the river’s crest.  In the case of the mortgage crisis, it means looking at the possibility of house price declines building in some element of risk to buyers that performance is not guaranteed. And in the case of Jay Leno’ psychic, it means not giving up your day job just yet.

"Giving up the illusion that you can predict the future is a very liberating moment.  All you can do is give yourself the capacity to respond.  The creation of that capacity is the purpose of strategy." -- Lord John Brown, British Petroleum. 

April 29, 2009

Twitter: Tastes Like Chicken?

Twitter-logo  ALAN: I’m still not sure what all the hype and fuss are about.  Twitter, it seems to me, is just the latest in a series of web 2.0 fads (2.0 itself, a fad) that is now mainstream and about to be so not cool.  Hey, if Oprah is “tweeting” (dear God, can’t they come up with better verbs? “Friend” is not a verb, and “Tweet” is not something any grown adult should admit to doing even if alcohol is involved) then how cool can Twitter really be?  No offence to Oprah, of course, she does great work and has a wonderful book club.  Anyone promoting adults buying and reading books is alright by me. But her presence, along with other stars, on Twitter is a tell-tale sign that the end is nigh. I hope so.

KAREN: Hmm… perhaps it’s just confirmation that humans like to be part of something. As much as we all want to be seen as individuals, stand out from the crowd, we still want to be in on the latest thing. Why else would we crave that particular car, purse, house, or garment?

ALAN: And what is the point of Twitter anyway?  The site says:

“Twitter is a service for friends, family, and co–workers to communicate and stay connected through the exchange of quick, frequent answers to one simple question: What are you doing?” 

So, I guess there really is no point to Twitter as I don’t care what my friends, family and co-workers are doing right now – only when I’m meeting them, or we need to talk. In which case I pick up the phone.  One of the Twitterati (I feel a migraine coming on) says that “Twitter is the telegraph of the web 2.0”.  I think we replaced the old telegraph system with the phone (version 1.0) didn’t we?  Why do I need Twitter?  Fortunately, the website has anticipated my failure to grasp the heart of the matter:

“Why? Because even basic updates are meaningful to family members, friends, or colleagues—especially when they’re timely.

    * Eating soup? Research shows that moms want to know.
    * Running late to a meeting? Your co–workers might find that useful.
    * Partying? Your friends may want to join you.”

Oh, so that’s it.  If I’m going to be late to a meeting because I’m busily eating soup at a party I need to let my Mom (and her research team) know.  I’ll call her, thank you.

KAREN: Spoken like a true introvert. In this rather extroverted and voyeuristic world of ours, sometimes it’s hard to get a word in edge-wise. Twitter certainly fills that void on a moment to moment basis. Seriously, we blog to share our thoughts; I will grant you that blogging not only allows us to share, it allows us to formulate and refine those thoughts before sharing.

ALAN: “Writing is refined thinking”, as someone once said. But I guess what’s bothering me the most about Twitter was beautifully captured in a tweet from a twerp at Newsweek magazine: “Suddenly, it seems as though all the world's a-twitter.”  Why? Why are all you people spending exorbitant amounts of time letting each other know that you’re eating soup, or your cat just rolled over? 

KAREN: Perhaps, in this connected, yet disconnected, world Twitter makes people feel a part of something bigger than them. They are linked to others in a very mundane way. It’s the cyberspace equivalent of strolling down Main Street greeting you neighbors with “Hello, how are you?” “Lovely weather we are having.” “Wasn’t that some storm we had last night?”

ALAN: The world has bigger problems, and if we dedicated some of the time and energy that we spend in meaningless exchanges on Twitter, Facebook and MySpace, then maybe we would make some positive change in the world.  Need to feel connected to friends, family and coworkers?  Go work together on a Habitat For Humanity project.  Or how about setting up a sideline business with friends and colleagues as a way to have fun, bring in a little money (even if it just covers your beer costs) and network face-to-face.  You can build better relationships, and maybe change your finances for the better.  These real-world experiences are far more rewarding than typing some twaddle into Twitter and waiting for a response.

KAREN: No argument. But sometimes it’s the fads that move us to the next level. Ashton Kutcher is making Twitterites aware of malaria and Hugh Jackman has offered to donate $100,000 to charity, "I will donate 100K to one individual's favorite non profit organization. Of course, you must convince me why by using 140 characters or less." It takes all kinds of ways and means (and people) to make a difference.

ALAN: Twitterites, or Twitterarians?  How about we just call them Twits for short? Here’s the website’s closing argument: “Twitter puts you in control and becomes a modern antidote to information overload.” You know, I really like the old-fashioned antidote to information overload – switch off and do something in the real world.

KAREN: I am with you on this. But then, you and I are non-tweeters, tending to view the world through a different lens. Here’s to fads and trends that make us talk and think and act differently. There’s nothing more real world than that!

April 22, 2009

Twyla Tharp: Creativity Over Fear

Fear is the enemy of creativity. When we're fearful, we freeze up -- like a nine-year-old who won't draw pictures or sing a song, for fear that everybody will laugh. Creativity has a lot to do with a willingness to take risks. Paradoxically, creativity stems from our earliest desire to play. What is so risky about play? Think about how children play. They run around the playground without thinking about where they're going, playing games in their imagination. They trip, they fall down, and then they get up again and run some more. They have a wonderful belief: everything will be all right. They feel capable; they let go; they play. So what is it that we fear about creativity?

Any creative endeavor involves exposing your ideas, your thoughts, your nature to the judgment and criticism of others. The world is often unkind to the new, the original, and its easier not to make the leap and put your idea out there. You can't have it both ways: you can't be creative, and conform too. Recognize that what makes you different also makes you creative, and vice versa. You have to be willing to try, and trust that you have something worthwhile to offer.


“Creativity requires quite a lot of faith -- not just in yourself but also in the knowledge that you have the right to proceed, even when you may not know exactly what you're doing… You also need to have faith that life is composed not of alien or segregated elements but of related components. Creativity comes from having an inquisitive mind, from being easily bored, from wanting to challenge the status quo. It comes from people who look for alternatives.”

To look at Twyla Tharp’s long list of achievements, you wouldn’t  think that she had any difficulties with the creative process.  Since graduating from college in 1963, Twyla Tharp has choreographed more than one hundred thirty-five dances, five Hollywood movies, directed and choreographed three Broadway shows, written two books and received one Tony Award, two Emmy Awards, nineteen honorary doctorates, the Vietnam Veterans of America President's Award, the 2004 National Medal of the Arts and many grants including the John D. and Catherine T. MacArthur Fellowship.  However, as every great artist knows, each creation brings you back to that point of origin: the blank piece of paper, the empty canvas or as Twyla calls it, the empty white room.

“To some people this empty room symbolizes something profound, mysterious, and terrifying: the task of starting with nothing and working your way toward creating something whole and beautiful and satisfying… some people find this moment – the moment before creativity begins – so painful that they simply cannot deal with it.  They get up and walk away from the computer, the canvas, the keyboard… they procrastinate.  In its most extreme form, this terror totally paralyzes people…  I’ve worked in almost every space and environment you can imagine… I’ve worked long enough and produced with sufficient consistency that by now I find not only challenge and trepidation but peace as well as promise in the empty white room.  It has become my home.”

“I’m a dancer and choreographer.  Over the last 35 years, I’ve created 130 dances and ballets. Some of them are good, some less good (that’s an understatement – some were public humiliations)… No-one starts a creative endeavor without a certain amount of fear; the key is to learn how to keep free-floating fears from paralyzing you before you’ve begun… I combat my fears with a staring-down ritual like a boxer looking his opponent right in the eye before a bout”.

April 13, 2009

What’s Meaningful Got to Do with It?

“Do what you love and the money will follow. Find your passion. Follow your bliss. What is life without meaningful work?” In this particular day and this particular age, are you kidding me? The answer is life sucks without a paycheck, right? What the heck does any of this have to do with paying the mortgage and feeding the kids?

 

We all now know, having learned a painful lesson, that the world of finance is pretty convoluted - so much so that the “experts” didn’t get it either. The nightly news is full of tight credit and credit default swap explanations; daily we hear about another greedy SOB fleecing his or her clients of their savings. Wall Street, big business, un-savvy homeowners, unsavory lenders, rampant retail therapy and greed all had their roles in this mess. But could a more basic cause of our current economic situation stem from ignoring meaningful work - a separation of our basic values and the workplace?

 

Malcolm Gladwell in Outliers defines meaningful work as having three things – autonomy, complexity and a connection between effort and reward. A disconnection between effort and reward can lead to many things, even economic ills. Taking (reward) without putting in much (if any) effort leads to risky behavior. Clearly, it is much easier to take risks when you are generally removed from the consequences of your actions.

 

Does anyone enjoy a spoiled child who has a huge sense of entitlement and treats people and things as dispensable? If a child gets whatever they ask for, they don’t have the same regard for the care and use of things. What happens to that child when he grows up? If something gets broken, it will be replaced, right? If I don’t see who gets hurt; then it really doesn’t affect me, right? In the wider world though not everything is replaceable, and sometimes those that do get hurt affect all of us–high unemployment hurts the whole community, including those still employed.

 

Are we a nation of spoiled children? Have we disengaged ourselves from our effort and our reward? Or have we just lost sight of why we need to connect effort and reward? Read any parenting book or watch Nanny 911; in order to have happy, well-grounded children that grow up to be happy, productive adults, they need to understand the consequences of their actions and behave accordingly. In the world of work, the more connected we are to the consequences of our work, the happier and more grounded we are, the greater our appreciation and pride in what we do and who we are. Consequently, one would like to think; the less likely we are to screw anyone else.

 

Habitat for Humanity requires that eligible participants put sweat equity not only into their home, but help another family build theirs.  In this way, participants actively invest heart and soul into work that connects to their values.  It feels good, and is meaningful as it adds to their community, as well as themselves. Habitat homeowners know exactly how their effort is connected to their reward. They take pride in maintaining the home and the community they helped build.

 

 We all need something to believe in, something for which we can have whole-hearted enthusiasm. We need to feel that our life has meaning, that we are needed in this world.” -- Hannah Senesh.

On an individual basis, if we are connected to our effort and reward, if work is meaningful, do we avoid overextending financially? As institutions, made up of individuals, if we are connected to our effort and reward, do we avoid risky behaviors that affect us all in the long run? Is this what we need to do turn ourselves around and in the process turn around our economy?

 

Not all of us are willing or able to only seek work that is 100% meaningful to us. Some of us are in situations that any work that allows us to earn money is meaningful, in and of itself. Basic needs must be met first-food, shelter, safety. Within whatever work we do, we can try to understand how our work actions connect us to others. We can also do other activities that connect our effort to non-monetary rewards that are meaningful to us, from the simplest of spending time with friends and family, to actively volunteering within the community, to pursuing our dreams.

 

For those who are able, another way of making work more meaningful is to do less of it. A number of companies (notably Best Buy) have plans for flexible working to make it easier for employees to work part time. Separating oneself from a career that isn’t as fulfilling for part of the week to pursue something else (even if it is to do a different job) provides a respite and helps maintain objectivity about the other. The point is, the more of us there are who find meaning in our work, who can connect our efforts with our rewards, the more of us there will be who refuse to subscribe to risky get rich schemes that in the end only benefit a very few.

April 08, 2009

Fox or Hedgehog?

Are you a fox or hedgehog? This is not a trick question. Okay, it is.

Philip Tetlock, a professor of organizational behavior at the Hass Business School at UC-Berkeley, is an expert on experts. In an article in Money Magazine (The Expert on Experts, by Eric Schurenberg, March, 2009) he discussed why so many experts missed the economic crash. Great article. One of the points he made was the most important factor in who was a better forecaster: it was how they thought, not their education or experience. He quoted Isaiah Berlin (philosopher) who borrowed this line from a Greek poet, “The fox knows many things, but the hedgehog knows one big thing”.  Tetlock went on to say, “The better forecasters were like Berlin’s foxes: self-critical, eclectic thinkers who were willing to update their beliefs when faced with contrary evidence, were doubtful of grand schemes and were rather modest about their predictive ability. The less successful forecasters were like hedgehogs: they tended to have one big, beautiful idea that they loved to stretch, sometimes to the breaking point.”

Remembering Alan Greenspan, Large Spiny Hedgehog

On March 17, 2008, Alan Greenspan wrote an article for the Financial Times' Economists’ Forum entitled We will never have a perfect model of risk in which he argued: “We will never be able to anticipate all discontinuities in financial markets.” He concluded: “It is important, indeed crucial, that any reforms in, and adjustments to, the structure of markets and regulation not inhibit our most reliable and effective safeguards against cumulative economic failure: market flexibility and open competition.” Referring to his free-market ideology during Congressional testimony on October 23, 2008, Greenspan said: “I have found a flaw. I don’t know how significant or permanent it is. But I have been very distressed by that fact.” Rep. Henry Waxman (D-CA) then pressed him to clarify his words. “In other words, you found that your view of the world, your ideology, was not right, it was not working,” Waxman said. “Absolutely, precisely,” Greenspan replied. “You know, that’s precisely the reason I was shocked, because I have been going for 40 years or more with very considerable evidence that it was working exceptionally well.” A fox, he ain’t.

Prediction, It’s In Our Nature
Taken figuratively, the words of the Greek poem can describe one of the deepest differences that divide successful forecasters and unsuccessful forecasters, and, it may be, human beings in general.

Back to the question – are you a fox or hedgehog? Not an economic forecaster, you say? Not a forecaster of any kind. Oh, really? Think again. We are all forecasters who on a daily basis make predictions and act on those predictions. Perhaps you forecasted that if you went to college you’d make more money than if you started working right out of high school. Perhaps you are predicting that those few extra pounds you seem to put on each year won’t have any affect on your health in the long run. Every time you make a choice you are forecasting an outcome. Every time anyone makes a choice, they are forecasting an outcome. Think about that. Think about the impact that has.

So the question of whether you are a fox or a hedgehog becomes one of whether your choices in life follow a distinct pattern, filtered by a conscious/unconscious singular view of your world, or whether you adjust your estimates and base your decisions on distinct situational feedback – do you alter your decisions based on new information? If you don’t, can you?

We’d all like to think, that once one has consciously made a connection, one can choose to maintain or change one’s behavior. Can you think of friends or acquaintances that continually run with the same idea, even though time after time that idea has proven untenable for them? Do you believe that they have some form of amnesia that erases all knowledge of “it not working the last twelve times and won’t work this time either if you keep going about it the same way?”  Perhaps it is just their nature.

Life On a Small Planet
Fox v. hedgehog is personal. Let’s face it everything is personal. Unfortunately, someone else’s personal choices have now spilled over into your personal life. If you have lost your job or your retirement, then someone else’s choices – their predictions - are now affecting you.  Perhaps yours are affecting them? We are all in this together, with our fox and hedgehog natures. Businesses and governments are run by people, after all. Given the global upheavals and crises we are faced with today, perhaps the question is: are you a myopic hedgehog out for a stroll in wild fox country? Or, are you a fox surrounded by hedgehogs and what are you going to do about?

April 05, 2009

Cue The Ice Age, Mr. Buffett

In days past, great lumbering giants ruled the Earth.  Starting out small, they swallowed even smaller prey and evolved into larger, more complex forms, their metabolism becoming ever more dependent on a ready supply chain. A sudden change in the environment caused such stress and chaos they could not adapt rapidly enough. The fundamentals of their way of life changed, and they simply could not go on.  One by one, they disappeared.

Cue the Ice Age, Mr. Buffett.  Yes, we are talking about corporations, those behemoths of the business world that have dominated for so long, and whose very existence is now threatened in the face of global pressures. Big, previously successful companies that have dominated the markets for years aren't organized around the concept of change. To them, change is not inevitable; being too big to fail... What? Us, worry?  Economic bubbles? What goes up must come down? No, what is will always be. Such is the institutional memory of many a corporation born during good times, and completely unprepared for the bad times.

Business leaders have always been willing to make incremental changes that please shareholders, customers and employees – usually in that order. At the very least, every captain of industry needs to have the support of two out of the three constituencies to maintain dominance. The problem for established companies is that a rift started in the world of business; business models which were not sustainable in the long-term. Ironically, like many of these giant corporations, it too started small and grew.  A small rift, easily ignored, is now a very large chasm; a chasm that requires enormous change to find a way to the other side.

The chasm continues to widen as the tectonic plates of the economy pull apart, separating the winners from the losers. Neither is it possible to predict how things will be on the other side, nor is there any guarantee that all will make it across. For many, time and money are running out. Faced with the inevitable, they have to make a choice. They can't please all three constituencies. Shareholders want the returns and dividends they used to see – or even more! Customers want better, cheaper products. Employees want stable jobs for fair wages. In some situations, there is a fourth constituent: the Government.  The new administration campaigned on a tsunami of change, and they have little time for the care and feeding of ailing dinosaurs. They must quickly find a way across.

Looking at the drastic changes needed to survive, most companies, regardless of size, just say maybe. They wait, they hunker down. They trim costs at the bottom, making easy but far from evolutionary changes. They choose not to understand the choices they made that led to this point. Hindsight maybe twenty-twenty, but it helps you find the hand-holds to get to the other side. The same companies that favored excess, exuberance and hubris are abruptly choosing moderation as they backpedal from the edge of the abyss. But there is no going back - only over? – as the footings crumble and erode. An era is ending, another is beginning. Either companies adapt and evolve, or our children will read about these dinosaurs in the history books.  They won’t be working for them. Is this a bad thing?  Not necessarily.  As with the last Ice Age, life goes on.  In fact it thrives, becoming more diverse, and hopefully, sustainable than before.

February 26, 2009

Walls of Separation

David Armano has a great post on branding on his Logic + Emotion blog today.  Go check it out.

"Many companies, brands and organizations are inadvertently building walls between themselves and their customers. It's unintentional, happened over time—but ultimately in this age of empowerment, customers feel more connected to each other than they do to your business or brand."

I loved his take on ROI:

"ROI Infatuation
In this economy, ROI is king and it's understandable. I can't stress that enough. But infatuation with it also kills risk taking which means that you could be in a perpetual cycle of risk aversion to the point of losing the spark that started your business in the first place."

That vicious cycle of ROI, of using only proven "tried and true" solutions, and avoiding risk means that you lose sight of innovation and opportunities.  And pretty soon you are working for another "Me Too" company, hawking a commodity, and looking at the wrong side of the profitability curve as you struggle to keep up with cheaper global competitors.