347-878-3837

Blog

Here are articles on Blog

Good businesspeople oppose free markets

, ,

A friend on Facebook posted an article about New Jersey outlawing Tesla’s direct-to-consumer car sales. My friend was decrying how Gov. Christie is being anti-free-market. And I agree 100%.

From what I’ve been able to see, it’s pretty clear that the big conservative political donors hate free markets. What they love is whatever give them, personally, the ability to get more wealth. By “free market” they mean “don’t do anything that interferes with my personal ability to make money.” For example, the Koch brothers compete by using their money to alter laws so they win. They don’t compete by being better businessmen.

When it comes to competition, they hate it and undermine it at every opportunity, unless they’re the winner.

When it comes to level playing fields (supposedly the bedrock of markets), they hate it.

When it comes to producing the best product at the lowest cost, they hate it.

When it comes to contributing to the infrastructure they use freely that was funded by the public, they hate it.

Business People Should Loathe Competition

It’s a real education to go to business school and ask: how much of this education is devoted to finding ways to gain a market advantage without actually having to do a better job? The answer: most of it. It’s called “business strategy.” We teach our students how to be anti-competitive and anti-free-market, all in the name of free markets.

This works, however. It works because with the right playing field, pitting anti-free-market forces against each other results in more efficient companies through market selection of companies that are fundamentally better than other companies. This produces better ultimate outcomes for the consumers and society who created the markets to begin with.

But never miss the critical point: free markets work because the players are all trying to gain market advantage by doing a better job than each other. The players themselves are not striving to have a fair market, they’re striving to win and eliminate the competition (and thus the market).

It’s the job of government to make sure the playing field is level enough to keep enough market participants that the market continues to function. Players all want monopoly, government wants thriving market participation.

Mr. Christie’s error is that he’s acting as a businessman. That’s not his job. His job is to take care of all his constituents overall, not just the business ones.

Don’t accidentally say f**k you to your customers!

, ,

T-mobile is using the tune of the song F**k You by Cee Lo Green in their latest radio ads. They apparently missed the part of psychology where people recall the words to songs. They sing about how you should switch to T-mobile, which doesn’t require a contract.

Their intent is for you to break up with your current carrier. But communication doesn’t work that way. When we communicate, our audience hears … whatever our audience hears. Anyone who’s ever said to their shmoopie, “would you please pick up your socks?” knows that an innocent question can be heard as an attack on someone’s entire identity1.

Here’s how communication really works: I get my audience to think “f**k you” by listening to a song whose tune makes those lyrics come to mind. Then the lyrics say “T-Mobile” over and over. When my audience hears is “f**k you, T-Mobile.” Over and over. I seriously doubt that was their intent.

When you’re designing ads, public speeches, or even just carrying on a conversation, pay attention to the words you use. Choose words carefully, so they have the greatest chance of unambiguously conveying just the message you want to come across. And if you’re talking to your shmoopie, the only safe words are “yes, dear.” Use them often.

  1. For those of you not yet in relationships, the question “would you please pick up your socks?” is heard as “You are an ignorant slob who doesn’t deserve to live.” A much better way to say the same thing is to say, “Shmoopie? I’m cleaning the apartment. Where would you like me to put your socks?” ↩

Compromise is the Doorway to Opportunity

My coaching client Cyd wanted to change jobs. Cyd’s work was OK, but not really inspiring. The pay was OK, but not really inspiring. The people? Ok, but not really inspiring. The big benefit of the job, however, is that it was a ten-minute drive from home. Cyd has children and feels very strongly about being close to home.

Cyd crafted a resume, created a LinkedIn profile, and started looking for jobs in nearby neighborhoods. Soon, discreet job inquiries also began flowing in through friends and past colleagues. One especially attractive one offered a 20% higher salary and flex time to work from home. It was also 30 minutes away.

But for Cyd, the tradeoff was worth it. Right before signing on the dotted line, I cried “Stop!” Stop? Why? Because Cyd had compromised, and compromise opens up new opportunities.

Compromise Highlights Flexibility

When starting the job hunt, “10 minutes or closer” seemed like an absolute limit. But when the offers started coming in, Cyd discovered that mountains of cash and work-from-home flex time made the 10-minute drive less important.

This often happens when making decisions. We seek out options that fit what we think we want. Then we get an option that we find acceptable, even though it violates one or more of our guidelines. In that moment, the compromise we’re willing to make opens up new possibilities. Rather than just accept the compromise, scan the landscape using the new criteria. Look for other options that might have initially been overlooked.

Cyd now knows that a higher salary and the ability to work from home can make commute time less important. It’s time for another trip to the job boards and listings, this time to search for opportunities more than 10 minutes away. The caveat is that those jobs must pay a lot more, or have much more flexible work arrangements. Cyd settled on a job 20 minutes away, with 2 days a week of working from home, and a 10%-higher base salary.

Let Compromise Widen Your World

When you’re making a decision, train yourself to pause before you finalize your decision. Review the compromises you’ve made along the way. Then pretend you’d made those compromises from the very beginning, and find out if that changes your approach.

If you end up willing to pay a particular vendor a 30% premium for on-time deliver, stop. Ask yourself which other vendors you could hire for 30% more than you originally expected to spend. You might discover there are vendors who have higher base costs, but a lower premium for on-time deliver, resulting in lower overall costs.

Compromise may be necessary to get a deal done, but it should never be the final step. Compromise tells you where you’re flexible in your criteria, and you can then use that flexibility to uncover new options you would never otherwise consider.

Efficiency Might Be Bad

, , , , ,

I’m a huge fan of system dynamics and the understanding of complex systems that has come from the field that Jay Forrester invented.

This is a superb article by the late Donella Meadows about the leverage points in complex systems, in ascending order of effectiveness.

Alas, most of the things we do to try to change our social and economic systems use only the least effective levers.

Tonight I’m especially struck by #9, delays in systems. Delays of information and material movement can throw a system into or out of sync in ways that utterly change the system’s characteristics.

For many years, we’ve been operating as a society under the implicit assumption that speed = efficiency. The faster things are, the fewer delays, the better off we are.

But this isn’t necessarily true. Increasing the efficiency of communication decreases the time between communication we have to understand and respond. We end up in reactive mode, rather than thoughtful mode. That’s one of the pernicious effects of email. Many people take action on email as it comes in, rather than taking action only on what’s important. That can make the difference between overload and achievement.

Removing communication delays also seems to reduce our tendency to prepare. When you can make changes to your presentation all the way until the night before it’s due, then you will. In prior years, when you had no choice but to finish early enough to send your slides to be duplicated, you actually had time you could then use to rehearse and concentrate on delivery, rather than on making last-minute changes.

Read the article. Let me know your thoughts, if you still have enough attention span to make it through, after all the years we’ve spent training ourselves to operate in a purely reactive—but oh, so efficient–mode.

http://www.thesolutionsjournal.com/node/419

Do we control our own outcomes?

A friend thought it was funny that I’m an executive and life coach who believe we have limited ability to affect our own outcomes. It would be more accurate to say I believe we have limited ability to predict the effects of our actions on our outcomes. What we do makes a difference, but we can rarely tell what it will be in advance.

Our gut is lousy at understanding a complex world. Otherwise, we would have had technology 90,000 years ago. Instead, we needed to develop science and data and measurement to know how small parts of the world really work. Most of what we believe about life (probably 99.9999999999%) has never been really tested.

Yes, our actions affect the world, sometimes in ways that benefit us. And nevertheless, the power of the surrounding system structure far dominates outcomes. I attended a conference about the analysis of social networks. The conclusions are striking: your position a social graph predicts your outcomes far more than your personal contribution. But you can’t know where you are in a social graph without close tracking and analysis, so we’ve only known this rigorously in the last few years. And even now, it’s probably better that we not know it.

Your Attitude Matters

Our beliefs do affect our internal experience of life and success. So find success principles that you want to believe. Just keep in mind that believing for the sake of feeling good is very different from believing to get results. “The Secret” has been shown in several studies to actually lower your chances of getting what you want. (Read books by Richard Wiseman for details.) But it’s an enormously comforting belief system, and many people keep it.

While I don’t necessarily believe hard work produces consistent results, I do believe that apathy and lack of action produces poor results. If someone believes their individual actions make little difference (which may be true), they might stop working under the logic that it doesn’t matter anyway. That lack of movement will guarantee failure. But if they believe they can have an effect, they’ll stay moving, and might encounter luck along the way.

(I know someone who has had a particular belief system about what leads to success. He is 80 years old now, with 50+ years of direct personal experience that his belief system has never produced the results he believes, but he’s still buying those lottery tickets because “this time, it’ll pay off.” If he’d ever recognized the reality of his situation, the lottery system would be bankrupt.)

So How do You Succeed?

My theory is that if you want success (financial, achievement, significance to others, legacy), the steps most likely to get you there are:

  1. Do something you enjoy. You’ll be engaged, creative, and optimistic—all traits shown to be correlated with spotting opportunity.
  2. Develop a habit of spotting opportunity. Even if you don’t jump on it, notice the possibilities each situation provides for you to further your success in whatever areas you desire.
  3. Capture the upside. Pursuing a good idea won’t get you success unless you’re the one who benefits from the idea. Make sure the opportunities you spot give you the chance to benefit if the opportunity comes to pass.
  4. Limit your downside. You want to follow Nassim Nicholas Taleb’s advice from his book Antifragility: limit your downside, expose yourself to unlimited upside, and be prepared to capture the upside.
  5. Build strong relationships. Build cross-disciplinary, strong relationships. Luck often arrives in the form of people, opportunity, and/or the ability to mobilize a group quickly. Having strong, trusted relationships in place increases your ability to move when opportunity presents itself.

Success Principles are Often Bull&%$# !

,

I ran across an article purporting to give principles necessary for success. I don’t buy it. Popular culture is full of “how to be successful” advice that’s pure bunk. It’s mostly made up by salespeople, based on disproven sports mythology. “Work harder” is great advice if you’re trying to win an Olympic medal, but not if you’re trying to earn a lot of money.

I know many phenomenally successful people who violate the vast majority of these rules. I know many people who follow all these rules and have for decades, and aren’t much more successful than they were when they started.

But these rules make us feel good. We want to feel in control. So this list comforts us. When we succeed, it gives us a list of reasons why we deserve success. When we fail, it gives us an explanation. Better to believe “Bill Gates is successful and I’m not because he got up earlier” than it is to believe “I’m not successful because I just was born into the wrong circumstances and nothing I could do would have made a difference.”

What Really Makes (Financial) Success

Conspicuously missing from the list is what Andrew Carnegie called the most powerful business force in the world: compound interest.

To abstract that a bit, in my own experience, rent-seeking activities are vastly superior to hard work in getting ahead. It’s bizarre that we reward this so highly, since it’s the hard work that creates the value for which rent is being extracted. Indeed, Adam Smith considered rent-seeking to be the morally lowest form of economic activity.

And yet, most of my retirement savings comes from owning stock and letting it compound. The money I’ve made from actually doing work is only a small share of my IRA. It’s the investing income over time (the rent-seeking activities) that have been the most important.

Warren Buffett, the 3rd richest man in the world, made money solely through owning assets, not through doing work.

Bill Gates, the richest man, actually made his money through rent-seeking. We just never tell that side of the story. The reason Steve Jobs—who arguably put three entire industries on the map—didn’t die with a net worth of 10x Bill Gates is because Gates kept his stock and Jobs sold his. It was the rent-seeking decision to keep stock that made Bill rich, not the hard work he and his 20,000 employees did to make that stock valuable.

Living an Extraordinary Life

, ,

Want an intriguing program to listen to this weekend?

I do what I do is because I’m deeply committed to helping people live their full potential, especially when they have world-changing dreams. My background in business, entrepreneurship, and cognitive psychology gives me a unique set of skills for helping people whose personal and organizational lives are deeply entertwined.

One of my favorite clients started our work together saying, “my life is quite good. I have a well-paying job that I enjoy, colleauges who support me, and a great circle of friends.”

“Then why are you here?” I asked him. 

He responded, “Because, I don’t want a good life. I want an extraordinary life.”

I was floored. That led to shiftng my emphasis from clients’ businesses to addressing their businesses and their lives.

Many years later, in 2012, I gave a TEDx presentation called Living an Extraordinary Life, documenting a 3-year experiment in living outside my bounds. Technical glitches made the video unusable, but I presented an expanded version of the same presentation with slides for the Harvard Business School Association webinar series a few months ago.

Living an Extraordinary Life

I’ve made the audio, the slides, and a synchronized version of the two available and want to offer it to my community. I’d love your thoughts and reactions.

Note that the MP3 file is tagged as an audiobook and can thus be listened to at 1.5x or 2x on an iPhone/iPod.

Do The Experiment With Me

I’ll be starting my Experiment again, and am offering it as a year-long coaching program to build a supportive community for others who want to join me. If you would like an invitation to the program, here’s how it works:

  1. Listen to the program and make sure it resonates with you.
  2. Contact me via the form on the web page to arrange a discussion.
  3. We’ll meet to explore your needs, what you have to offer, and find out whether you’re right for the program.
  4. If so, I’ll send along an invitation once the program and details have been finalized.

Enjoy!

Your Framing Changes the World

, ,

The way we frame things mentally determines how powerfully we’ll be able to handle them.

I auditioned for Spamalot at a local theater last night. After checking in, they informed me that I was in the very last audition slot. That gave me the “opportunity” to listen to my competition as they sang their audition songs. One by one. While I waited with growing trepidation on the cold, unforgiving wooden bench outside. Trying very hard to smile. (It was an acting audition, after all.)

Each person came out complaining apologetically. “When I performed that aria at Madison Square Garden, I hit the high C with so much more resonance.” Or, “gosh, I forgot all the words, so I just improvised new, rhyming lyrics riffing off of a 13th century Olde English translation of the Song of Solomon.” By the time it was my turn, I was a nervous wreck.

But then, some part of my brain found The Answer. As I stepped through the curtains into the auditorium, the thought came to me: “Forget auditioning. Perform. You have two awesome minutes on stage. Give the audience your absolute best!”

One Thought Changes Everything

Suddenly my attitude changed completely. When it’s time to step on stage, there’s no time for practice or judgment. It’s commitment time. By framing this as a performance, rather than an audition, my nerves vanished. I was suddenly alert and happy (I love performing, after all).

I walked confidently to the pianist, gave him my sheet music, and proceeded to sing my song confidently, dramatically, and with full attention on the small audience that just happened to be the directoral staff for the show.

Nothing about the situation changed except my thinking. An “audition” was scary. A “performance” was exhilarating. The right thinking led to a mental and physical state that let me give my all. Last time, I “auditioned,” was a nervous wreck, and didn’t get the part. This time, I “performed,” gave it my all, and had a great time. My all still may not be good enough to get the part, but at least I had fun performing, which I love.

I tried this again during the dance audition. We got to dance twice. The first time, I was a total wreck. You’ve heard of two left feet? I have seven left feet. And they’re all superglued together. It isn’t pretty. But right before the second dance, I thought to myself, “this is performance, not audition! You may suck, but give the audience the best you have to give.” With that change of attitude, I remembered the entire routine and made it through with all the grace and artistry I could bring to the combination.

We Can Choose Our Frames

How you think about situations before you deal with them will affect the options you find, the actions you’ll take, and how resourceful your mental state will be when you start to deal with them.

Next time you find yourself nervous, sad, angry, apprehensive, or anxious, try a new framing.

If you’re going in to a “critical negotiation,” try a “new, mutually profitable relationship” instead. You’ll stop concentrating on the risk and instead you’ll start finding ways you can both benefit from the relationship.

If you’re on a “failing project,” start thinking about “a chance to rescue something good.” You just may find a way to use what you’ve learned and built in a new way that makes the project successful.

If you’re dealing with an “obnoxious, unreasonable person,” try connecting with “a good-hearted person who has really poor social skills.” Seriously. You’ll find your attitude changes.

Try explicitly reframing stressful situations. Are you fooling yourself? Maybe. But maybe you’ll fool yourself right into finding better, more resourceful ways to handle your challenges.

In Praise of the Corporation

I’m in awe. Normally, I’m not a huge fan of big corporations. I think they often (but not always) dehumanize the people who work there. They can ruin communities in the name of efficient and cost-cutting, and they distribute wealth in truly bizarre ways. But… But… They’re amazing! Not just a little amazing; they’re frickin’ mind-blowing amazing!

Today I was getting lunch at Subway and the regional manager was there helping them tune up their processes so they can deliver the same quality as measured by customer feedback as several thousand other franchises. Not only do they do it today but they will do it every day going forward, rain or shine.

Have you ever thought about that? How incredible it is? There’s never before been a civilization that could do that on such a scale once, much less thousands of times. And we take it for granted that any large company will be able to scale like that.

And the things we do… Building the ancient pyramids is considered a Wonder of the Ancient World. We build buildings that are a thousand times more complex and sophisticated, on a regular basis. We rarely even ask “is a half-mile high building feasible?” Of course it is. We’ll find a way to do it; the limitation we focus on is funding. We know we can master the technological challenges. We know we can get the supplies made to spec. We know that we can coordinate the hundreds or thousands of people it will take to pull it together. And that’s unprecedented in human history.

The modern corporation has taught us to create systems larger than any one person could ever create. It has taught us to create flows of materials and information that span the globe, enabling us to coordinate people and projects on a level that can change the whole planet. And most astonishing, these organizations keep working even though the people who comprise them come and go. Popular business mythology aside, our ability to create and share process has made our achievements largely independent of any single person. The skills and abilities reside in the structure of the systems as much as (or more than) the individuals.

Tomorrow I’m sure I’ll be back to battling the not-so-nice parts of business. But today, I celebrate the corporation, an invention that has raised the human race to levels of accomplishment we have never before dreamt of. Savour it. Appreciate it. Enjoy it. Because it has enabled you to live in the most extraordinary time ever in human history.