I have to Risk

I’m an optimistic person. There is a certain level of self-assuredness to me. Perhaps at times it borders on annoying and perhaps at other times it’s exactly what is needed. But where does it come from? Risks.

This blog often hits on entrepreneurship. For me it’s an “of course” part of my life and I encourage everyone to make it a part of theirs. Why? Because it is so challenging.

Another area that I don’t mention very often, but is pretty risky as well, is art. Creating something from nothing just for the sake of it. I remember when I was younger I would try my hand at different expressions, whether it was a poem, a sculpture, or a song. I didn’t quite have a knack for others to experience my creation the way I did. It didn’t hurt my feelings, but the positive feedback loop wasn’t there. What I learned from it is to let others know when I enjoy their artistic endeavors. They took the risk of sharing with me; they chanced vulnerability for my opinion.

I started contemplating this because  William Gurstelle wrote a short piece on Wired.com called Take Smart Risks. The gist of it is there is a correlation between taking risks and happiness. He suggests taking risks that are in the sweet spot for reward. Here are a few excerpts:

Among our primitive ancestors, those who ventured farthest from their caves in search of better food or who overcame their fear of fire accrued significant advantages over their meeker kin. That’s why a lot of us like the idea of living on the edge: It’s in our DNA to take risks.

A 2005 German study concluded that people who take above-average risks have a higher-than-average index of life satisfaction. Researchers at the University of British Columbia found that among business managers in the US and Canada, those who take greater risks are the most successful. More risk, more reward—not to mention livelier cocktail-party conversation.

The most successful adventurers take the high road of risk-taking without falling off the mountain. They channel neither Evel Knievel nor Caspar Milquetoast, neither lion tamer nor monk. That’s the golden artof living dangerously.

And here is a comment I thought was great:

That study of risk takers vs. non risk takers is probably biased. The random sample of people interviewed most likely didn’t include people that were dead or in prison as a result of the risks they took.

And it is very true, but sometimes risks are compounding and other times they are isolated. It’s important to distinguish when something that appears to be isolated is really starting to compound.

I’m going to Las Vegas in a few weeks and I will place a number of wagers. I will probably lose more than I win. It doesn’t really matter. What I want is the thrill of looking over the options and saying, I believe this will be the future. I will watch to see if it happens and when it does I’ll be excited. When it doesn’t, I’ll just risk again.

Motivation, Dan Pink, and TED

I’m a fan of Dan Pink. He simplifies complex topics and communicates them in very relateable terms. TED is the perfect avenue for someone like Dan. Below is his speech. There are a few concepts I don’t completely buy, but I’ll wait for the book.

http://video.ted.com/assets/player/swf/EmbedPlayer.swf

I Hate People – A Review

Books aren’t usually known for their packaging, but every once in awhile I run across one that grabs my attention. I Hate People: Kick Loose from the Overbearing and Underhanded Jerks at Work and Get What You Want Out of Your Job is such a book. I was enamored with its aggressive title and excellent illustrations.

I started reading this book early in the summer and was interrupted several occasions. Because of this, my opinion has changed several times. Thankfully, the notes I take throughout my readings help me remember my thoughts.

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I really like the presentation of the book, especially the icons. The book starts off very well with a straightforward and blunt reality – people hate people. I thought the names of the different types you see in an office was pretty funny and mostly true (sheeple), but then it started to wonder. Toward the end of the book is a whole portion talking about spaces and caves.It got long and most of it could have probably been cut. Overall, I felt the book was probably 100 pages of material that was stretched to 261. It simply couldn’t hang onto the raw charm it had in the first 50 pages.

Jonathan Littman has written several other books and the writing style is inviting. I’m not familiar with the other books, but they look interesting, particularly the IDEO ones.

I suggest reading this book as a get-away or beach book. If you don’t finish it, then that is ok, but you’ll be entertained.

Specific call outs:

  • The Chapters start out with quotes and there are a few I liked, particularly “Hell is – other people.” by Jean-Paul Sartre
  • Early in the book is a  write up about Microsoft. The narrator is describing their prioritization method by saying that they basically overload the workers and what gets done must be a priority. The rational is that the person who needed it either changed it, revised it, or forgot.
  • This excerpt shows the books humor:

“In a real smile, the eyebrows and the skin between the upper eyelid and eyebrow come down very slightly. The muscle involved is the orbicularisoculi pars lateralis.” Translation: If the eyebrows and eyelids don’t move, watch out: it’s a phony smile!…
Whatever you do, make sure you don’t attempt to outsmile Smiley Face. It’s a trap. Not only will it prove impossible but you may seriously injury muscles in your face and neck.

  • There are people in organizations who love meetings and have learned to follow. In I Hate People, they are called Sheeple.

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  • I liked the stats throughout too. One said that 40 years ago the 10th ranked valued characteristic in the office was Teamwork. Today its first. I guess all the sheeple want to run in herds.
  • There are some great points about mirror neurons. There’s a point emphasizing the need to isolate yourself from others, otherwise your brain could start mimicking your coworkers. And you won’t get things done.
  • This is an excerpt people can probably identify with:

Fear of failure is a big reason why many companies drown their workers
in get-togethers. In some companies, people are not rewarded for taking risks. “They’re rewarded for not making mistakes,” says Lisa Carnel, a veteran of BP and P&G. “So it’s easier to not make fast progress. They want to discuss it, discuss it, discuss it. If you meet, you set up another meeting to then investigate the learnings. Then you set up another meeting.”

  • The authors talk about taking a quick 10. Its simply 10 minutes of focus on whatever your work is. Its useful to say things like “I’ll get to it right after my quick 10.” Those asking for your time will be taken aback by the slang and will probably adopt it themselves – a quick 10.
  • Here is another excerpt I wish I thought of:

We begin each day naively hoping that among the hundreds of mundane irritating, and misspelled pieces of etrash –  we’re not even talking about spam – will be the message. A promising new contract, good news from a client, confirmation of payment.

  • In a segment about Oracle’s purchase of Peoplesoft, the book states that 5000 Saturdays were disrupted by overnight packages that either claimed the recipient was the lucky winner of a new job or the luckless receiver of a severance package.
  • I read in another report recently that continual movement helps to shed weight better than power workouts. The idea is that leisure activities like golf where movement is less strenuous, but longer and more constant is better than a trip to the gym. Well, the authors of the book cite some statistics of a study that confirms that notion. One stat I was really impressed with was how for those trying to lose weight using the active day method their cholesterol levels dropped 37%.  

Working Thoughts: Odds and Ends

Here are some items I wanted to circle back around on, but I don’t have enough for a full entry:

I find it sad that even though the US has some of the largest unemployment numbers ever, Congress is failing to act. It’s sad because politics is getting in the way of making America better from a business perspective. I can’t get over the Republicans mainly. This is supposed to be the party of business, but they seem to be only protecting current business and not expanding markets for new business. For instance, renewable energy is a frontier that will produce both knowledge workers as well as the more routine jobs. And really, jobs are being created in this space. They’re just being created in Europe and China. They see this a possible lever to dislodge the US as the main economic super power. And in the absence of another internet, I agree. Tom Friedman wrote an Op-Ed piece about the reality and potential of this market.

The SEC is probably going to ban flash trading. I wrote a bit about this called The Value Twist. The reason for the post is I feel the US has gotten too involved in creating thin value. Flash trading is thin value. Its where traders make money because of the millisec advantage in knowing the price of a stock. Smart companies like Goldman Sachs wrote great computer code which then executes buys and sells based on this window of knowledge. I applaud their ingenuity, but there is something inherently wrong the concept itself. The idea behind buying and selling stock is about the value of a company. But flash trading is more about the price and the company the stock represents is practically meaningless.

Tim Kreider wrote some of the best writing I’ve read this year. And its also very identifiable to me. The piece is called The Referendum and its about the different choices people make throughout their lives. Particularly in the 30s and 40s part. Kreider talks about always thinking about your decisions against those your friends have made. At times you feel superior as if you’ve won whereas other times you wish you could trade lives. And as Kreider implies, there is no right answer. We all just consider a different life. Check out this excerpt and give it a read:

Recently an editor asked me for an essay about arrested adolescence, joking: “Of course, I thought of you.”

It is worth mentioning that this editor is an old college friend;we’ve driven across the country, been pantsless in several nonsexual contexts, and accidentally hospitalized each other in good fun. He is now a respectable homeowner and family man; I am not. So I couldn’t’help but wonder: is there something condescending about this assignment? Does he consider me some sort of amusing and fecklessmanchild instead of a respected cartoonist whose work is beloved by hundreds and has made me a thousandaire, who’s been in a committed relationship for 15 years with the same cat?

My weird touchiness on this issue — taking offense at someone offering to pay me money for my work — is symptomatic of a more widespread syndrome I call “The Referendum.”

The Referendum is a phenomenon typical of (but not limited to) midlife,whereby people, increasingly aware of the finiteness of their time in the world, the limitations placed on them by their choices so far, and the narrowing options remaining to them, start judging their peers’differing choices with reactions ranging from envy to contempt. The Referendum can subtly poison formerly close and uncomplicated relationships, creating tensions between the married and the single,the childless and parents, careerists and the stay-at-home. It’exacerbated by the far greater diversity of options available to us now than a few decades ago, when everyone had to follow the same drill.We’re all anxiously sizing up how everyone else’s decisions have worked out to reassure ourselves that our own are vindicated — that we are, in some sense, winning.

I have never even idly thought for a single passing second that it might make my life nicer to have a small, rude, incontinent person follow me around screaming and making me buy them stuff for the rest of my life. [Note to friends with children: I am referring to other people’s children, not to yours.] But there are also moments when some part of me wonders whether I am not only missing the biological boat but something I cannot even begin to imagine — an entire dimension of human experience undetectable to my senses, like a flatlander scoffing at the theoretical concept of sky.

But I can only imagine the paralytic terror that must seize my friends with families as they lie awake calculating mortgage payments and college funds and realize that they are locked into their present lives for farther into the future than the mind’s eye can see. Judging from the unanimity with which parents preface any gripe about children with the disclaimer, “Although I would never wish I hadn’t’t had them and I can’t imagine life without them,” I can’t help but wonder whether they don’t have to repress precisely these thoughts on a daily basis.

A Market for Human Resource Solutions

Recently I did a write up about Netflix and their Human Resources strategy. The post is uncreatively titled Netflix does Personnel Strategy.They basically only want high performers and will give them freedom to perform. Those that don’t perform are asked to leave. It’s nothing personal, people and situations change. What I also like is that the employees know this strategy from the point of hiring. No surprises.

The issue I see is how do you rate your top performers? The desire is to make it objective, but no job is completely bias free. Subjective components are necessary, they just can’t be overwhelming to the process. That is why I see a huge market for companies that specialize in offering some sort of method for optimizing personnel performance evaluations.

The other day I was checking the financial area of one of the websites I like and they ran a story about a small cap that was set to bust out.Its called Successfactors. They offer a package of these evaluation tools. They do it through a technology business model called Software as a Service or SaaS. How it works is a company only pays for the amount they use. Usually there is some sort of tiered level of access,but it doesn’t have to be. If one month I use 100 widgets then I pay for the 100 and the next month I use 500, I pay for that number and then the next month I only use 75 then I only pay for that. I don’t need to pay for 500 and have the excess sit in inventory waiting on the spike of use. The other advantage is since its software, it can be updated pretty regularly, so keeping current with latest version is a plus. If I purchase a static license I usually have to pay an additional fee for the most current upgrades. Microsoft Windows is the best example of the normal method. The SaaS model was made famous by a company called salesforce.com, but companies like Amazon have elevated it to another level of mainstream.

Not many would argue that a company’s biggest differentiator is its employees. Having good people is the basis for many books like In Search of Excellence by Thomas J. Peters and Good to Great by Jim Collins. I believe there are huge business markets in the HR space.Until companies come along and grow at tremendous rates, these markets are considered niche. But as companies like Paychex and Successfactors prove, being able to manage your human resources pays – well.

Preparing for a year like 2015

I read many blogs throughout the week and The Harvard Business Review or hbr.com has several that I personally like. They tend to be a length that is easily consumable and yet have enough of an insight to make you think. Well, the other day Umair Haque authored an entry that I wish I wrote. It’s titled Four Rules for Constructive Competition and is set in 2015.

Mr. Haque highlights a very real possibility, if the US federal government can’t get out of its own way, particularly as it pertains to finance and health care, then foreign enterprises will start to offer the people better deals. Here is an excerpt, but I recommend reading the entire post (it won’t take long):

John Maynard Keynes once famously said:“For at least another hundred years we must pretend to ourselves and toevery one that fair is foul and foul is fair; for foul is useful andfair is not. Avarice and usury and precaution must be our gods for alittle longer still.”

Lord Keynes, your century’s up. 20th century competition hinged onthe idea that unbridled greed, naked self-interest, and coercion werethe essential drivers of growth. But last year’s market collapsedemonstrated the fundamental incompatibility of those ideas with aninterdependent world.

For the next hundred years, we must say to ourselves: “fair is fair,and foul is foul. Avarice and usury are yesterday’s fallen idols, andpeace, equity, and meaning are our new gods. How much can we change the world radically for the better?”

….

Higher-order innovation, not unnovation.In the 21st century, even a mandate from the US government isn’t goingto be enough to protect the profit margins of health care monopolists.

….

Ethics, not extraction. Think lobbying’s awful — but smart? Think again. Lobbying’s not just ethically questionable; it’s also strategically self-destructive… Why has lobbying backfired on all these moribund industries? Becauseasking to be insulated from competition saps incentives for innovation— and sharpens incentives for disruption…

The Vanishing of Okun’s Law and the Usefulness of the Education System

Last week the Jobs Report came out and although it had elements of
promise in it, it was pretty bad. Since its been a week there are
revelations coming out. One such idea is that the US has moved away
from Okun’s Law.

Back in the 1960s Arthur Melvin Okun
noticed a correlation between the business cycle (growth and recession)
and the number of jobs created or lost. The two marched fairly closely
in step with each other. However, the recession in 1990-1991 time frame
was considered a jobless recovery.

As a writing in Time.com called Jobless in America: Is Double-Digit Unemployment Here to Stay?
by Joshua Cooper Ramo talks about, this move away from Okun’s Law could
be a real shift in the way the US works. The article talks about how
the Obama administration needs to focus on job retraining since people
need to learn new skills, especially skills that are more than just
button pushing.

For the most part I agree, but since I’ve been
blogging about similar concepts for over two years I have some further
depth on the subject. The first is that there is a need for the middle class to be educated beyond what other nations are doing. For instance,
early in the 1900s the US dedicated vast sums of resources to create a
public education system. This ensured almost all individuals had the
chance to be educated. At the time, that was remarkable. It created a
large grouping of people that had skills that from a volume
perspective, no one else in the world could match. This resulted in a
middle class in the US with a buying power unlike any other.

But
the public education system in the US is largely the same as it was 100
years ago. That to me is just strange. We live in a hyper competitive
nation and yet our education system is almost the same as its ever
been. This is where the rot in the US is. Kids today are taught to pass
tests. No Child Left Behind is a policy that motivates everyone to that
one goal. The problem is that in the real world there are no tests. no
multiple choice questions, or True and False. Kids need to learn how to
solve diverse problems. The focus for schools should be less on tests
and more on accomplishments. Students should be pushed to build car engines or write software programs or pen a musical. The learning will
come in two dimensions: the straight forward what makes an engine work
and the more subtle realization that you need others to help you in one
way or another. So you learn persuasion, negotiation, trade, patience,
self confidence, and resourcefulness. These attributes of education
somewhere along the way were forgotten. And places like China, Russia,
and India have their students learning math and science beyond what the
US teaches. We can differentiate on creativity, ambition, leadership,
and problem solving.

The article also mentions that there is a
possibility that 8% – 11% unemployment might be the new norm. I agree
in a classical sense, but also think that what it means to be employed
could change. Freelance work or self employment is a very real
alternative to what people are used to today. Mini entrepreneurship
could take hold where collective networks assemble and separate fairly
frequently depending on what projects are underway. This requires a
flexible skillset and a willingness to accept ambiguous pay schedules.
There are people who already thoroughly enjoy this freedom. But many
others might have to come to accept it as a possible future.

As I’ve stated before, the future is four areas: Energy, Health Care, Information, and People. Each of these will generate so many employment opportunities, I’m now thinking that leadership for them will come from outside the US.