WHAT DO WE VALUE?

[Originally posted April 29, 2009 on the Huffington Post]

Who defines what you value?  Of course, we would love to think that we alone define our own sense of value.  But, it shouldn’t surprise you to know that – on a global basis – our definition of what’s important is incredibly influenced by statisticians and economists using the equivalent of an abacus to define human progress in the 21^st century.

A country’s Gross Domestic Progress (GDP) has been the world’s holy grail for nearly four decades (which was proceeded by similar measure, Gross National Product).  This universal measuring tool, as a means of determining which countries are “developed” and which are not, is a gross tally of a nation’s production and consumption.  By definition, it assumes every monetary transaction adds to the developed nature or social well-being of a country.  In practice, this rewarding of production and consumption masks many of development’s costs whether those costs be the workaholism and materialism associated with these toils or the prisons that are constructed to incarcerate those who don’t play by the rules.  Just consider that pollution – or environmental degradation – shows a double benefit to GDP, scoring points when we pollute and, once again, when we attempt to clean-up our messes.  This “gross” (love the pun, don’t you?) definition of a country’s value is an artifact from an earlier era that assumes that economic development would naturally lead to human development.

There’s too much evidence today showing that this GDP = Quality of Life perspective is just plain wrong both in the developed and the less-developed world.  U.S. per capita income since World War II has tripled and our homes are twice the size, but there’s no reputable survey that shows that Americans are statistically any happier today than they were during Eisenhower’s era.  In fact, there’s more and more evidence that past a certain modest level of economic survival, humans tend to judge their happiness more on a relative basis (“keeping up with the Jones”) than on some objective, personal criteria.  Capitalism and GDP are the perfect recipes for this zero-sum game of conspicuous consumption.  And, in the developing world, we are able to see within a decade’s time the societal costs associated with a GDP-driven strategy, whether they are growing income inequities or the loss of generations of cultural traditions.

Why is this important?  Well, the indicators we use for societal success determine our policies and even embody our values.  While there’s no doubt that GDP provides an objective, easily-measurable means of defining the relative success of various countries that’s like saying that we could judge a boy’s character by how tall he is. In 1972, Bhutan’s new King Jigme Singye Wangchuck had a moment of clarity that would have inspired MasterCard (even this credit card giant realizes the importance of the intangibles of life: “there are some things money can’t buy…for everything else, there’s MasterCard”).  This King of a tiny country wedged between China and India suggested the blasphemous: why don’t we value the intangible of happiness in our calculations of whether a country is getting it right.  Twenty-seven years before the country would have its first TV installed in a home, King Wangchuck proclaimed that Bhutan would follow a Gross National Happiness Index (GNH) instead of GDP.

Since that time, a diverse collection of countries, from Australia and the Netherlands to Sri Lanka and Haiti, have jumped on the happiness bandwagon.  France’s Nicolas Sarkozy has teamed up with Nobel laureate Joseph Stiglitz to create a Quality of Life Commission to study which indicators have the greatest effect on well-being.  There are now HDI’s (the U.N’s Human Development Index), HPI’s (Happy Planet Index), and GPI’s (Genuine Progress Indicators) that factor in such subjective criteria as the crime rate in a country, the percentage of couples getting divorced, a country’s carbon impact on the world, and the access to education.  Just like the triple bottom line is gaining momentum in the business world (an alternative means of defining a company’s success based upon people and the planet, not just profits), the governing powers that be are recognizing that these times require a new method of thinking about how we define progress.

If this seems a little abstract, let me share a personal example of how using new, more intangible measuring tools helped save my company during the last economic downturn.  When my San Francisco Bay Area hotel company was getting rocked to its core by the combination of the dot-com crash, 9/11, and a variety of other factors beyond our control, I realized that the traditional methods we’d used that defined our success – like year-over-year revenue or profit growth – were no longer relevant as a relative measure of our success since, frankly, everyone was showing huge drops in revenue and net income.  Instead, we started giving greater attention to our employee satisfaction surveys and competitive market share as a means of guiding our business strategy.  Lo and behold, we came to find that the intangibles of having supremely-engaged employees or evangelical customers created the kind of deep loyalty that allowed us to transcend the bad times.  It wasn’t that profits and net income weren’t important, but they were actually the lagging indicators of our success.  Changing our approach from measuring these byproducts to, instead, measuring the inputs (happy employees and customers) helped my company triple in size during a very difficult time.  So, I’ve seen from personal experience that what you measure matters.  And, sometimes, you have to adapt your measuring tools to the intangibles in life that truly define success.

So, tonight I travel to Bhutan and tomorrow I have dinner with some of the royal family (including, hopefully, the new King, who at 29, has an incredible likeness to Elvis) and a collection of the members of their relatively new democratic government.  I will be meeting with members of the Gross National Happiness Commission to understand the nine key areas that they measure and to question whether a subjective means of measurement has risks of devolving into a sort of “Brave New World” paternalism (don’t worry, we know what will make you happy).

Abraham Maslow once said, “If the only tool you have is a hammer, everything starts to look like a nail.”  This has been the case for world leaders who’ve myopically been focused on GDP as the only tool in their toolbox.  There’s a growing misalignment between the kind of human needs Maslow and others have espoused and the professed world economic goals as defined by production and consumption.  Robert Kennedy probably summed it up best four years before the Bhutanese King uttered the concept of the Gross Happiness Index, “Too much and for too long, we seemed to have surrendered personal excellence and community values in the mere accumulation of material things.  Our Gross National Product…counts…cigarette advertising, and ambulances to clear our highways of carnage….Yet the Gross National Product does not allow for the quality of our marriages, the intelligence of our public debate, or the integrity of our public officials.  It measures neither our wit nor our courage, neither our wisdom nor our learning, neither our compassion nor our devotion to our country.  It measures everything, in short, except that which makes life worthwhile.”

Our American forefathers wrote about our unalienable right toward the “pursuit of happiness” long ago.  I am now pursuing the ephemeral concept of happiness in Bhutan and I’ll report back to you in a few days as my next posting will overview what I’ve learned from this trip.

Add comment April 29th, 2009

ARE YOU WORKING IN A FEAR FACTORY?

[Originally posted April 14, 2009 on the Huffington Post]

You can catch much worse than the flu at work.  W. Edwards Deming, the father of the total-quality movement in business, once said that the primary duty of every leader is to remove fear from the workplace.  Smart man.  Today, our workplaces have become “fear factories,” with an emotional contagion far more serious than the cold germ.  Successful companies create a kind of psycho-hygiene that can immunize employees against the fever charts of misery that exist in most workplaces today.

Recently, neuroeconomist Gregory Berns wrote in the New York Times, “We are caught in a spiral in which we are so scared of losing our jobs, or our savings, that fear overtakes our brains. And while fear is a deep-seated and adaptive evolutionary drive for self-preservation, it makes it impossible to concentrate on anything but saving our skin.  Ultimately, no good can come from this type of decision-making. Fear prompts retreat. It is the antipode to progress. Just when we need new ideas most, everyone is seized up in fear, trying to prevent losing what we have left.”

Berns conducted an experiment and found that people would rather expedite a bad experience rather than wait for it.  He writes, “Nearly a third feared waiting so much that, when given the chance, they preferred getting a bigger shock right away to waiting for a smaller shock later. It sounds illogical, but fear — whether of pain or of losing a job — does strange things to decision-making.”  I’ve experienced this kind of “shock me now” illogical thinking recently in my business.  We were in the midst of launching a San Francisco restaurant and a Southern California hotel when two separate owners independently decided to potentially shutter the new restaurant and the new hotel after spending millions of dollars and time to create them due to a severe case of fear-itis.  Fortunately, in both cases, we were able to convince the owners (as my company, Joie de Vivre Hospitality, is the manager of both properties) that it made more sense to launch the venture and not layoff all the managers and staff that had been hired and trained as opposed to mothballing the business for a year until times were better.

The irony is that risk aversion is running rampant just at the time that creativity and innovation are more needed than ever.  Downsizings and the fear associated with them are part of the business landscape, but corporate anorexia – companies that downsize to get too thin – isn’t healthy for an organization or its people.  But, just as the anorexic doesn’t have a realistic perspective on his or her body, the corporate leader who is possessed with thinning the company has no clue what kind of long-term negative impact they’re creating on a cellular level in their organization.  One of the most important questions any leader needs to ask before they downsize is, “What do we want this company culture to look like at the end of this downturn?”

New thinking in both psychology and medicine suggests that wellness isn’t just the absence of disease, but, instead, it’s the prevalence of fulfillment and vitality.  This is just as true in an organization as it is someone’s body.  We need to practice a radical rethinking of the idea of management.  Notice I used the word practice as my friend and fellow entrepreneur Jesse Jacobs recently pointed out to me that doctors, lawyers, religious professionals, and athletes all “practice” their craft, but no one uses that word to describe businesspeople.

First, peak-performing leaders need to practice clarifying for their associates what’s within their grasp to change and what’s beyond their grasp.  Life is full of constants and variables, just like algebra.  Those companies and leaders that create serenity in place of fear know how to practice accepting the things they cannot change, having the courage to change the things they can, and the wisdom to know the difference (credit the Serenity Prayer).  Fear comes from the unknown and the uncontrollable, so it’s essential to redirect the corporate energy from the light at the end of the tunnel to the metaphorical candle you can light in your hand.  And, creating a couple of small wins will help build the momentum such that a positive emotional contagion can grow.

Secondly, companies are meant to be the vehicle for the aspirations of their workers as integrated human beings.  And, great leaders are truly awakeners of potential, not managers of experience.  Many of us are asleep to what we are capable of becoming, yet a brilliant boss and times like these can be the actualizing alarm clock you’ve needed to awaken to all you have to offer to your company and the world.  Fear can be a motivator, but the scent of possibility is so much more powerfully sustainable as an influencer.  When one door closes, another opens, but quite often we look so longingly and regretfully upon the closed door that we do not see the one which has opened for us.  In fact, too many of us become enamored with the open window as our escape.

If you practice these two steps – focus on what you can control and help people see and actualize their potential - you will build confidence and reduce fear.  And, that bundle of human energy that we call your company will weather this storm just fine.  In fact, our emotionally-intelligent President is trying to use this two-step dance to immunize the country from the fear tailspin we’re in collectively.  Fear creates failure.  The strange irony is that on Friday, the U.S. shut down its 22^nd bank of the year and it was called Cape Fear Bank.

On a personal level, I’ve noticed the change in the corporate mood of this country.  When my book, PEAK, came out a year and a half ago, most of the questions I was asked at speeches related to how to create a more vital workplace, but today the questions are more survival-driven.  From fulfillment to fear and from mojo to malaise, I’ve seen a dramatic shift in where we are paying our attention.  But, one thing we can learn from the great spiritual practices of the world is life is all about where you pay your attention.  Practice paying your attention on the higher needs of your employees, customers, and investors, and, miraculously, you’ll find that this is the true differentiator when everyone else is stunted at the bottom of their Hierarchy of Needs pyramid.    

Add comment April 15th, 2009

OUTSOURCING THE GOVERNMENT TO WAL-MART

 [orginally posted April 1, 2009 on the Huffington Post]

Admit it.  We are in uncharted territory.  We’re spending more than a trillion dollars to prop up an economy that was overly-stimulated during the dot-com bubble and then propped-up again by the Fed during the real estate bubble.  When Republicans are talking about nationalizing banks and the Obama administration is taking a more expansive role in virtually every industry, we have to recognize that our next bubble may be the viability of our government.  We can’t afford to have that bubble burst.  In fact, the Chinese, our biggest offshore “pusher” that have helped facilitate our consumption and borrowing addiction, have warned us.   They’ve asked us to tame our government-sanctioned stimulus sensibilities for fear of piling on the future America’s debt burden.  You know when the largest Communist country in the world is educating the U.S. on the risks of too much government intervention and debt that we’ve crossed some sort of line that only Ayn Rand would have imagined a generation or two ago. So, within the context of this new version of the New Deal landscape, let me propose a blasphemous concept.  Given the huge logistical exercise that the Obama administration will be conducting in health care, environmental, infrastructure, and virtually every other policy matter, why not learn from the masters of how to make big things work better: Wal-Mart?  This resilient and entrepreneurial company has pranced across the planet creating annual revenues that surpass most mid-size countries’ annual GDP.  Of course, Wal-Mart and McDonald’s were the only two American companies that experienced growth in their 2008 stock prices in this new survivalist economy, so they may be the right role model for these trying times.