Marveling at a Tree Swing

Last night I pulled up my driveway and noticed my neighbor in the
backyard near the property line. I forgot that a few weeks ago he
mentioned putting in a few swings for his girls to swing on. A tree,
that is technically mine, has several large branches about 50 feet up
that can hold the weight.

And here is where he and I differ. I
didn’t think much about it, but I would throw some rope over the branch
and fasten the swing accordingly. If I didn’t get the spacing right,
then so be it, we’d figure out a work around. But my neighbor has
several ropes out and some lines as well. Except these ropes weren’t
the swinging type, they were the kind you find on a rock climb. My
neighbor devised a pulley system to hoist himself up to the tree branch
using his car as the lever. His wife drove their Toyota Highlander as
his kids alternated watching and doing homework.

This was so
surreal to me. He had a harness on in my back yard. His car was slowly
elevating him to the branch. There was nothing to catch him if he were
to fall. And yet there he was, 50 feet up attaching sets of chain
around the branch at the perfect distance apart. He just kind of
floated there until he commanded his wife to lower him slowly (she went
a little faster than he’d like). Although he couldn’t do it in time for
the sunset, his kids did enjoy their first swings, even if it was in
the dark.

I spend time considering covergent and divergent
thinking. I work with people to find practical solutions in a system
view. I think I’m different because I don’t componentize my efforts –
my time horizons tend to be over six months in delivery. I usually have
very little direct control over any particular part of the players in
the solution I’m striving for. And I’m comfortable in that type of
environment.

My neighbor wanted a tree swing for his girls and learned to fly in less than a month to make it happen.

Wealth Distribution Study and Excerpts

Here are some more thoughts and excerpts I pulled from the Wealth
in America: Who Gets What and How Wealthy Were the Forbes 400 Richest
Billionaires in 2008 Relative to America’s Bottom Half?
paper.

The household at the 90th percentile had 4,157 times as much wealth as the household at the 10th percentile, 129 times as much wealth as a household at the 20th percentile, and 9 times as much wealth as the median household. The wealth distribution in the U.S. was extraordinarily concentrated at the very top in 2004, far more concentrated than the annual income or earnings distribution.

The median household in the
U.S. in 2004 had 4 times as much income as a household at the 10th percentile but it had 465 times as much wealth, a relative difference of 113 times. The top/middle ratio (90/50) was characterized by the smallest relative difference, but even here wealth inequality was 3.3 times higher than income inequality. At the very top of the distribution (top 5%) wealth is also much more concentrated than income in our nation.

Thus, the bottom 50 percent of the U.S. households accounted for only 2.6% of all of the wealth in the country in 2004.

The top quartile’s share of the combined national wealth rose from 84.5% to 87.1% between 1992 and 2004 while the shares of the second and third quartile declined and the bottom quartile’s share remained at 0 in every year…. The rise in the share of wealth captured by the top quartile over the 1992-2004 period was almost entirely attributable to the behavior of households in the top decile of the distribution. Between 1992 and 2004, their estimated share of wealth increased from 67.0% to 69.5%. If we had included the wealth of the 400 richest billionaires in 2008 in that total for the top decile, their share of the national wealth would have risen close to 73%.

Caner and Wolff have estimated that 26% of all of the nation’s households were asset poor in 1999.

Interestingly enough, the current meltdown of normal investments (stocks, bonds, mutual funds) is having a major impact on the wealthy and the extremely rich. I expect the growth to reverse itself over the next 2 years and then rapidly accelerate. There are just so many opportunities for Americans to achieve financial success. A new era is upon us.

Wealth Distribution Charts and Graphs (1991-2008)

About a month ago I had a commenter question my use of certain graphs.
Frankly, he is right, you can’t lean too heavily on one set of stats
because stats can tell whatever story you want them to.

But I
did stumble upon a great research paper created by the Center for Labor
Market Studies at Northeastern University. It is titled Wealth
in America: Who Gets What and How Wealthy Were the Forbes 400 Richest
Billionaires in 2008 Relative to America’s Bottom Half?

I pulled some charts and graphs from it:

This line graph is the result of dividing the Median net worth measure of the US against the Mean from 1995 to 2004. This means that the wealthiest people in the US are getting wealthier at a faster rate than those in the middle. The Mean is 4.81 times greater than the Median in 2004.

This graph shows the average net worth of each decile. The trend line shows how quickly the wealth accumlates at the top.

This graph shows how much the average wealth was increased over the span of 1995 to 2004. The lowest quartile saw no increase in wealth, but the top quartile saw an improvement of 77%.

This graph takes the idea of wealth from a proportional standpoint. So if you baseline it at 100% then this is the make up of the distribution.

This graph show that from 1983 to 2004, everyone did well. But there is a getting rich and then their is accumulating an amazing amount of wealth… and that is what the richest 400 did over that span. They increased their wealth from $250,000,000 to $2,205,000,000.

This pie chart shows that is take 51% of the population just to equal the same amount of wealth the 400 richest Americans have.

More to come on this…

Working Thoughts 04/23/08
Ei – Earth innovation

Social Intelligence: Its all in your head

Mirror neurons, spindle cells, and oscillators – who knew? There are still many secrets locked in your brain and these three revealed themselves recently. Each of them play a part in social intelligence (for an overview of social intelligence, check out this post from yesterday).

Here is a summary of each pulled from the HBR called Social Intelligence and the Biology of Leadership by Daniel Goleman and Richard Boyatzis

Mirror Neurons:

Perhaps the most stunning recent discovery in behavioral neuroscience is the identification of mirror neurons in widely dispersed areas of the brain. Italian neuroscientists found them by accident while monitoring a particular cell in a monkey’s brain that fired only when the monkey raised its arm. One day a lab assistant lifted an ice cream cone to his own mouth and triggered a reaction in the monkey’s cell. It was the first evidence that the brain is peppered with neurons that mimic, or mirror, what another being does. This previously unknown class of brain cells operates as neural Wi-Fi, allowing us to navigate our social world. When we consciously or unconsciously detect someone else’s emotions through their actions, our mirror neurons reproduce those emotions. Collectively, these neurons create an instant sense of shared experience… The effects of activating neural circuitry in followers’ brains can be very powerful… And everybody knows that when people feel better, they perform better. So, if leaders hope to get the best out of their people, they should continue to be demanding but in ways that foster a positive mood in their teams. The old carrot-and-stick approach alone doesn’t make neural sense; traditional incentive systems are simply not enough to get the best performance from followers.

Spindle Cells:

Intuition, too, is in the brain, produced in part by a class of neurons called spindle cells because of their shape. They have a body size about four times that of other brain cells, with an extra-long branch to make attaching to other cells easier and transmitting thoughts and feelings to them quicker. This ultrarapid connection of emotions, beliefs, and judgments creates what behavioral scientists call our social guidance system. Spindle cells trigger neural networks that come into play whenever we have to choose the best response among many—even for a task as routine as prioritizing a to-do list. These cells also help us gauge whether someone is trustworthy and right (or wrong) for a job. Within one-twentieth of a second, our spindle cells fire with information about how we feel about that person; such “thin-slice” judgments can be very accurate, as follow-up metrics reveal. Therefore, leaders should not fear to act on those judgments, provided that they are also attuned to others’ moods.

Oscillators:

Such attunement is literally physical. Followers of an effective leader experience rapport with her—or what we and our colleague Annie McKee call “resonance.” Much of this feeling arises unconsciously, thanks to mirror neurons and spindle-cell circuitry. But another class of neurons is also involved: Oscillators coordinate people physically by regulating how and when their bodies move together. You can see oscillators in action when you watch people about to kiss; their movements look like a dance, one body responding to the other seamlessly. The same dynamic occurs when two cellists play together. Not only do they hit their notes in unison, but thanks to oscillators, the two musicians’ right brain hemispheres are more closely coordinated than are the left and right sides of their individual brains.

Here are a few questions that need to be asked:

How do you improve these areas?
It isn’t quite known, but it is assumed that having an open mind and looking at yourself through other people’s eyes helps.

Can you artificially produce these results?
Strangely, if you try to force it, then other areas of your brain activate and the person you are interacting with can sense a lack of genuine sincerity. You can’t fake it.

Is one sex better at it?
Although women tend to be more attentive to emotion, there isn’t any evidence to suggest they are superior to men in regards to social intelligence.

Here are some characteristics and questions to ask yourself:

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Empathy

•    Do you
understand
what motivates other people, even those from different
backgrounds?

•    Are you
sensitive
to others’ needs?

Attunement

•    Do you
listen attentively
and think about how others feel?

•    Are you
attuned
to others’ moods?

Organizational
Awareness

•    Do you
appreciate
the culture and values of the group or organization?

•    Do you
understand social networks
and know their unspoken norms?

Influence

•    Do you
persuade others
by engaging them in discussion and appealing to their
self-interests?

•    Do you
get support
from key people?

Developing Others

•    Do you
coach
and mentor others with compassion and personally invest time and
energy in mentoring?

•    Do you
provide feedback
that people find helpful for their professional
development?

Inspiration

Do you articulate a
compelling vision,
build group
pride, and foster a positive emotional tone?

•    Do you
lead
by bringing out the best in people?

Teamwork

•    Do you
solicit input
from everyone on the team?

•    Do you
support
all team members and encourage cooperation?

Social Intelligence and Leadership

Have you ever noticed that some people can put others under their spell? They can just start talking and you are laser beamed in. These people tend to be in leadership situations, either explicitly or implicitly.  Well, it turns out our brains have a function for this. Here is an intro video from HBR on the subject of social intelligence:

Working Thoughts 04/20/08
Outsourcing Research

Three Characteristics that can Stifle an Entrepreneur

About a month ago I was surfing over to the Harvard Business Review (HBR) site and ran across one of their bloggers named Anthony (Tony) Tjan. He wrote a clear and direct entry called Great Entrepreneurs’ Secret: Smarts, Guts, and Luck. I posted a summary called Three Requirements for Entrepreneurs. He recently followed up that entry with another that points out some of the negatives about Great Entrepreneurs. But as he states in Why Do Most Entrepreneurs Fail to Scale? it’s all about balance. The three characteristics are: Persistence and Stubborness, Controlling Interest, and Team Loyalty.

Regarding Persistence and Stubborness:

Perseverance is an admirable quality of great entrepreneurs. However,
when perseverance is confused with unhealthy stubbornness the outcome
is not likely to be great. Stubbornness is fantastic when it is right,
but it is a bitch when you are wrong. Or to paraphrase the bible, “Hell
is truth seen too late.”

Regarding Controlling Interest:

This control freak nature and maniacal attention to detail are almost required
during the early phases of company growth. But as a company grows,
entrepreneurs need to demonstrate not only that they can do the task
(i.e. no task is too small or beneath them), but also that they can
appropriately delegate. Fast growing businesses quickly move beyond the
ability of one person to manage without proper delegation, founders can
unknowingly limit the start-up’s growth potential.

Regarding Team Loyalty:

To be clear, loyalty should be recognized and is culturally important,
but it cannot be confused with the performance and future needs of the
organization. As a start-up becomes a full-fledged business, an
entrepreneurial leader has to be prepared to deal with difficult and
inevitable personnel situations where business decisions need to be
made for the interest of the company and not personal or historical
reasons.

Top Minds Moving to Different Fields

I never quite thought about it, but many industries rise and fall based on the type of person they attract to work there. Over the last twenty years two industries attracted the most inventive minds – Technology and Finance. Why? There are probably many reasons, but I’m going to say it was the level of accessibility. Prior to 1990 only math geeks and computer nerds were interested in those industries. However…

President Reagan was charming; he ushered in a new era. An era of wealth obsession. Hollywood caught on and created characters that were gripped by money and were memorable. Drama’s like Wall St showcased Gordon Gecko and sitcoms had personalities like Alex P. Keaton (Family Ties). Cultural subtleties creeped into the minds of the viewers. I liked Alex P. Keaton. He was witty, he got the girl, and he was easy to understand. The 1990s beckoned and the age of the mega bank was born.

The internet did the same thing. The instant riches were glorified by the media. Not too many people understood how to value this thing, so they overpaid for it – just ask Mark Cuban. But the key word here is instant. Once the big paydays became known many top minds moved into the industry.

It is now early 2009 and a recession has hit. The news still covers big pay days, but they’re the illegal kind. The Financial industry has succumbed to the same fate as the Technology industry – back to being boring. The NY Times has noted in a few recent writings that the top minds are no longer committing to the Financial industry. There are two areas that seem to have some cache: Energy and Social Programs. In regards to Energy, I’m mainly referring to clean or renewable energy. The opportunity is big and it is accessible. When I say social programs, I mean working with charities, public service, teaching and so on. If the top minds are really moving into these two areas, then it signals a new set of values – on their own, energy and social programs don’t pay that well.

President Obama is charming; he ushered in a new era.

I guess — I guess a small-town mayor is sort of like a community organizer, except that you have actual responsibilities. – Sarah Palin

Working Thoughts 04/15/08
CPI Inflation Trend and the Cost of Milk