Archive for the ‘Emotion in a Downturn’ Category
The psychology of confidence is just as important in the boardroom as the bedroom. As Wikipedia suggests, “Confidence can be a self-fulfilling prophecy as those without it fail or don’t try because they lack it and those with it may succeed because they have it rather than because of an innate ability.”
Harvard Business School Professor Rosabeth Moss Kanter wrote a book “Confidence” which could be distilled down to the following: Losing streaks are often created and then perpetuated when people lose confidence in their leaders and systems, while winning streaks are fueled by confident people who are secure in their own abilities and the ability of their leaders. Winning streaks are characterized by continuity and continued investment, while losing streaks are marked by disruption and a lack of investment that typically give way to a self-fulfilling prophecy of failure. Long-term winners often face the same problems as long-term losers, but they just respond differently. They know how to recover quickly and not let failure mess with their head.
We’ve all seen classic human behavior when our confidence is shaken. It could be the coach who throws out the game plan and tries the “Hail Mary” leading to further embarrassment of the team or the business group that starts blaming each other for petty issues. Or, at the high school dance, it could be the shy guy who feels smaller and smaller after two girls turn down his offer for a dance. And, of course, in the bedroom when performance anxiety strikes, one can feel like there are three Olympic judges propped on chairs above the bed ready to reveal their scores.
If “Disappointment equals Expectations minus Reality”, at some point after a few too many disappointments, we start expecting less. This is often the path to personal depression and it could be the same for an economy, which shares that same word – depression – to describe a similar valley. We end up with a “sulking economy.” And, that’s where we are today. For a leader, it’s not an easy thing to rebuild the expectations of one’s people after constant disappointment. The tried and true method of doing this is what I call the “momentum of victory,” creating a feasible goal in the short-term and achieving it. Once that’s accomplished, it means finding another small, concrete win on the horizon. Winning and losing are 90% mental.
Lyndon Johnson was the first White House occupant to have The Conference Board looking over his Presidential shoulder and rating “consumer confidence” as a monthly measurement of our collective psychological well-being. This strong man from Texas saw confidence plummet late in his time in office. True again four decades later when his fellow Texan George W. Bush saw nearly an 80 point drop in confidence, the worst since LBJ. Our most effective confidence-producers have been Reagan (41 point rise) and Clinton (40 point rise). Barack Obama is a man who inhabits his head. Yet, like any athlete – especially a basketball player – hopefully, he knows that over-thinking rarely enhances performance. It’s time for our shrink-in-chief to step it up and find his natural rhythm as a leader. When in doubt, find the goal that we can all believe in and achieve (maybe, today it’s re-establishing our credit rating of AAA) and start creating a micro-map of small victories that can re-establish our confidence as Americans who have a common goal.
Abraham Maslow and Viktor Frankl both suggested that the person who loses their job is best-suited to find another means of keeping themselves active while in the process of seeking new employment, whether this be volunteering for a cause they believe in or working for free in an industry about which they’re curious. Quite often, the opposite occurs. The shock of getting laid off leads to a negative spiral of other collateral damage and this newly unemployed person becomes sedentary while their esteem plummets.
John Scott emailed me out of the blue not long ago and asked if I would be his mentor as he wanted to tell me his story of loss and redemption (a particularly good tale around Easter time). John came to my office and gave me the honor of allowing me to read his story below which touched me deeply. Because I thought it might be meaningful to those you know and care about, John is permitting me to share it with you. Hope you enjoy it. Maybe you can be Mr. Syracuse in someone’s life.
A Year and a Day
On February 22, 2010, I lost my job.
My 34-year career was evaporated in a mere 18 seconds. His words were so few, devoid of even a shred of sympathy or compassion, that they are impossible to forget.
“We’re making a change. It is what it is.”
It was so stunningly to-the-point that even the HR director was a bit taken aback. At least in Up In The Air, George Clooney told the departed a quick story.
“Anybody who ever built an empire or changed the world sat where you are now. And it’s because they sat there that they were able to do it. There’s a packet in front of you. I want you to take some time and review it. All the answers you’re looking for are inside those pages. The sooner you trust the process, the sooner the next step of your life will unveil itself.”
On February 23, 2011, I was offered a new job, and this week, I accepted that offer.
Over the past 366 days I had to make a decision; try to remain in the industry I had devoted literally my entire life to, or take the road less traveled. I thought about my former employer and the industry as a whole. It was a bleak economic time, and many decent people were finding themselves unemployed. The future for this industry is uncertain at best, as it continues a contraction that is precedent-setting. The decision was made: Reinvent.
This is not a heroic tale of a man gallantly facing the world, taking it on full steam ahead, and achieving victory. It was nothing like that at all. Over the preceding 366 days:
I lost a job.
I lost my healthcare.
I lost my home to the real estate bust.
I was denied unemployment by the Republic of California because of a glitch on one piece of paper. I never received a penny.
I applied for 411 jobs online. Not one response.
My former employer withheld my severance for weeks, for no reason other than “they forgot”.
One afternoon, I was sitting in the Opera Plaza Cinema in San Francisco with Emily, watching A Single Man. A regrettable choice of film, as this powerful, amazing and completely depressing movie was not the spirit-lifter I probably should have watched. There was no one else but us in the theater. We kept our phones on. About halfway through the film, mine rang. It was a hiring manager for a winery. We set up a time to talk later. I knew I wasn’t going to get the position. I had no experience in the wine industry, and a zillion winery marketing people were unemployed. It was over before it started.
The movie ended, the credits rolled, and I leaned into Emily and unleashed a waterfall of agony. She held me and rocked me like a baby, this inconsolable, broken, lost man.
There was one day I had 6 cents in my checking account.
An insurance company denied my application because I had a hernia in 1974. I wish I was kidding.
I had the most vivid nightmare I could possibly imagine. I dreamed I had died in a plane crash.
It seemed that everything that could go wrong, did.
Here’s what else happened over this year and a day: I reinvented myself, top to bottom. I reinvented my career, I tackled personal issues. I shed people in my life that were not good for me. I patched up by shattered heart, and spackled my facade to not just look , but to be… more authentic. I questioned everything.
I decided to do it all at once.
I traveled, spent time with family and friends, kept on the move, doing my work. I wrote about it all.
There is a man who is a key player in this tale. I’ll call him Mr. Syracuse.
One day, sitting with him and another good friend at a bar, I moaned about my lot in life, telling him about the 411 jobs, zero callbacks. He said, “Be in my office Monday morning.”
Mr. Syracuse allowed me to do some work for him for a while, in a business that I had never worked in before. Something happened after that experience – good things started happening. This simple act of kindness this man had extended to me made some of the inertia disappear. After I left his company, I got a consulting job. I did some freelance work. I was doing things to learn that ultimately, that I should not do them. I experimented, ad-libbed, and performed extemporaneous jobs and tasks. Some were not glamorous or thrilling, but they were necessary to keep afloat and build the empire I thought I could. Mr.Syracuse had started the ball rolling, and I will never forget it.
I told him the other night, “You know, I blame you for all the good things that are happening!”
He said, “I might have started it. You finished it.”
In these past 366 days I started a company. I secured a monthly retainer for 2011 with a media group to vlog for them. My voice is now heard on one of the top radio stations in America.
And this week, I signed the contract to a full-time position with a local university. I get to learn, read, play with websites, write syllabi, interface with instructors on course outlines. I get to learn and get paid for it.
I took a hike up Mt. Diablo this morning to watch the sun rise. A cinematic moment, yes- I like to mark moments with something memorable. I watched the sun rise, and I sipped a coffee, and looked down on my beloved Bay Area- this hotbed of the creative class, this place so beautiful and yet so tough; you have to want to be here, “they” don’t make it easy.
You have to be relentless. You have to play the odds. 411 no’s, each moving you closer to the YES. You have to stay the course you’ve charted, with all of the potholes and roadblocks and you have to understand that it’s going to be a freaking mess.
You have to clean up your messes. Because it is difficult, that’s the reason you should do it. Because it scares you, that’s why you need to try.
On this day, nothing is as it was. Everything has changed.
I’ll be moving soon, to a new home. I’ll have room to breathe, a place to call mine again. I have a new career path, education. I have fun little projects and little jobs to keep me completely, totally, busy.
This day, I got my life back, but it’s a whole new version of it. It took a year and a day, and it was pure hell, but I made it to The Other Side.
This is the end of this particular story, but it’s really just the beginning. I made it to the starting line, with a little help from people who I will always be grateful to.
You can do this in your life. Believe that you can. Ask people to help you, for you cannot go it alone. Question everything. Look ahead, not in your rear view mirror. Trust your gut.
Reinvent yourself. I’m cheering you on.
GETTING MORE MOJO FROM MASLOW: In Order to Survive the Struggles of the Economic Recession, We Need to Reframe Difficult Business Experiences as Opportunities to Find Meaning in Our WorkWednesday, November 24th, 2010
Viktor Frankl, the Austrian psychologist who was imprisoned in a Nazi death camp and wrote the influential tome Man’s Search for Meaning once lamented, “People have enough to live by, but nothing to live for; they have the means, but no meaning.” This is a predicament of modern man. Once we’ve addressed our basic needs in life, what do we strive for?
Modern man is a worker bee. To us, business means busy-ness. We work 25 percent more hours per week than we did a generation ago, not counting the time we spend e-mailing colleagues from home or while we’re on vacation. As we toil away to keep up with the cost of living, we often fail to recognize the high spiritual price we pay for being more focused on means than meaning. But why? Research shows that this approach can be counter-productive. Gurnek Bains, lead author of Meaning, Inc: The Blueprint for Business Success in the 21st Century, says that meaning directly drives employee commitment and engagement. Industry-leading companies like Google, Genentech, and Southwest Airlines—which regularly appear on lists of great places to work—have learned that the key to raising performance levels is to create a sense of real meaning for employees. “This has a tangible and demonstrable impact on business results. Now that other forms of competitive advantage have become commodities, creating a sense of meaning for people will be what makes the difference for most companies in the future.” It is critical, then, to transform the economic challenges of the recession into opportunities for us to understand and infuse meaning into our work.
When I started my company, Joie de Vivre Hospitality, nearly a quarter century ago, I decided that the name of the business should also be its mission statement. Joie de Vivre has since grown into America’s second-largest boutique hotelier, based on our commitment to “Creating Opportunities to Celebrate the Joy of Life.” We distilled our credo into a two-word mantra, “Create Joy” which is stamped into the blue rubber bracelets that all new employees receive during orientation and that many veteran staffers routinely wear.
But one learns the difference between a glorified mission statement and a belief system that guides behavior when a company faces a “once-in-a-lifetime” economic downturn— and, really, we’ve faced two of these in the San Francisco Bay Area in the past decade. In late 2001, I was struggling. I had 1,000 employees, and I didn’t know how I was going to make payroll. The combination of the dot-com crash, 9/11, and a worsening economy had put Joie de Vivre at risk. One afternoon, I walked into a local bookstore in search of a business book that would help ease my financial pains—or at least give me a clue about how to survive. I quickly realized that what I really needed was some serious personal guidance. So I moved from the Business section to the Self-Help section of the bookstore (conveniently located next to each other), where I reacquainted myself with Abraham Maslow’s Hierarchy of Needs theory, one of the most famous psychological concepts to explain human motivation.
I suppose that a guy who names his company “Joie de Vivre” should naturally gravitate toward self-actualization. Maslow is known as an early leader in the human potential movement; he believed that psychology was too obsessed with our worst behaviors when a lot can be learned from our best practices. He first popularized the axiom, “If the only tool you have is a hammer, everything starts to look like a nail,” aptly describing his peers’ over-emphasis on neurosis in the mid-20th century. Re-reading Maslow helped me to see one of the most neglected facts in business: the fact that we’re all human. And, no matter what our role—CEO, line-level employee, customer, investor— in a particular business is, we each have a hierarchy of needs that determines what’s important to us. Late in his life, Maslow started applying his hierarchy of needs to organizations and businesses. Unfortunately, he died in 1970 at the age of 62 before he could closely examine how his theory might shift from the individual to the collective.
During that downturn nearly a decade ago, I started “channeling Abe” to see how I could apply his theory to my company. I figured the worst that could happen is we’d go bankrupt, so why not learn something along the way? I distilled the Hierarchy of Needs Pyramid from five to three levels, or key themes, which make up what I call the Transformation Pyramid: survive (safety and physiological); succeed (esteem and love/belonging); and transform (self-actualization). These themes aren’t just relevant in business; they’re fundamental in life. I looked at how to apply them to the three most important stakeholders in Joie de Vivre: employees, customers, and investors. For the purpose of this blog, I’ll focus on employees.
Maslow concluded that individuals’ deepest motivations sit at the top of the pyramid—and take on an inspirational quality. For example, in his research on people’s relationship with their work, he asked dozens of nurses, “Why did you go into nursing?” “What are the greatest moments of reward?” and “Tell me a moment so wonderful it made you weep or gave you cold shivers of ecstasy.” The nurses answered by describing peak experiences that were virtually life-altering. Nurses who were most able to express a peak experience seemed most “called” by their work.
In A Simpler Way, Margaret Wheatley and Myron Kellner-Rogers wrote, “People do not respond for long to small and self-centered purposes or to self-aggrandizing work. Too many organizations ask us to engage in hollow work, to be enthusiastic about small-minded visions, to commit ourselves to selfish purposes, to engage our energy in competitive drives. Those who offer us this petty work hope we won’t notice how lifeless it is … when we respond with disgust, when we withdraw our energy from such endeavors, it is a sign of our commitment to life and to each other.” Maslow helped me understand that my Employee Pyramid was defined by money (survive), recognition (succeed), and meaning (transform).
We all have basic needs that need to be met, and our work compensation package is the means to that end. But Gallup has shown in multiple surveys that money is not the primary reason that people leave a company (in fact, it usually comes in fourth place). People join a company, and they leave their boss. Recognition, which addresses people’s success needs and usually taps into one’s sense of social belonging or esteem needs, is what creates loyalty in the workplace. But money and recognition are external motivators for doing any job. Those who are engaged in something they’re passionate about—such as the nurses Maslow interviewed—have transcended the bartering relationship that defines most relationships between employer and employee. They have tapped into an internal motivation that fuels them. They are inspired by what they do. They have moved from just focusing on the tasks they do each day to imagining the impact of their work. As they become more aware of that intangible we call meaning, employees move to the transformational peak of the pyramid.
Most companies get a little lost in the ether at the top of the pyramid, because it’s easier for bosses to “manage what they can measure,” and it’s simpler to do a benchmark compensation survey than to try to gauge meaning. Someday we may have a “Corporate Meaning Index” just like we have a Dow Jones stock index, so that we can quickly scan who is playing at the top of the pyramid and who isn’t. In studying my own company and dozens of other meaning-driven businesses, I’ve come to realize that workplace meaning can be dissected into meaning at work and meaning in work. Meaning at work relates to how an employee feels about the company, their work environment, and the company’s mission. Meaning in work relates to how an employee feels about their specific job.
I believe that meaning at work is far more important than meaning in work. When employees believe in the work of the company, the whole Hierarchy of Needs is satisfied. Those employees clearly have their basic needs met because they have confidence in the financial stability of the company, which means they have job security. Believing in the company’s mission also typically creates deeper alliances among employees because the sense of being part of a connected crew and the pride that comes from group success satisfy our social or esteem needs. Finally, their self-actualization needs can be met by feeling that we are part of an organization making a difference in the world, plus there’s a halo effect that may render the work they do day-to-day even more meaningful.
One of the most profound decisions I made during the depth of that last downturn was to start managing the business based on meaning and to start measuring meaning in various ways, from asking questions on biannual work-climate surveys to querying line workers in monthly staff meetings, “What’s the best experience you’ve had in the past month here at work?” The question I really like to ask our employees goes something like this, “Most of us think of our job in terms of ‘What am I getting?’ What if you asked yourself daily, ‘What am I becoming as a result of this job?’” Helping our employees reframe their work, changing their tasks to make their jobs more meaningful, and creating a democratic culture in which employees help define our business strategy has helped Joie de Vivre’s turnover rate drop to one-third the industry average. We were recently crowned the “second best place to work” in the San Francisco Bay Area, a remarkable feat for a service company that’s full of people cleaning toilets in a region full of high-tech companies famous for plush corporate campuses.
I learned quite a bit about meaning in business during the last downturn, but this downturn has been full of lessons, too. During the dot-com bust, my desire to learn tended to be organizational, but the worldwide Great Recession has led to more personal lessons. I’ve found myself on an emotional roller coaster the past couple of years. I’ve had five friends or colleagues commit suicide, primarily due to stresses at work, and I’ve seen countless companies in the travel and design industries dissolve under the pressure of this relentless economy. My greatest epiphany resulted in a series of what I call “Emotional Equations” (also the title of my next book, due out in 2011) that help remind me how the world works. The most profound equation that I’ve used for myself and for the managers in my company has been despair = suffering–meaning. I learned this from reading Frankl’s Man’s Search for Meaning.
As teenagers, we learned algebra and found there were constants and variables in an equation. That’s true in life, too. The constant in a concentration camp, or in a recession, is suffering. There will always be suffering. Yet, the variable in life is meaning: How do we find a sense of meaning, even in the most difficult times? This is a question that I’ve asked my employees and myself, because if you can find meaning in the rubble, you will lessen your despair. That’s how this equation works: more meaning equals less despair. Yet, most of us in a difficult time put our attention on the suffering. Life and business are all about where you place your attention. If Frankl can live through a death camp by rediscovering the importance of meaning in our lives, we can live through a painful recession by reframing difficult economic experiences.
[Originally posted August 24, 2010 on the Huffington Post]
One of the great mysteries in life is why some of us prefer to be swamp-dwellers. Not literally. I’m not dissing those living in the low country of the Gulf States or, frankly, anyone stuck in less than pristine living conditions. No, what I’m talking about is why some of us choose to be prisoners of our own minds. My grandmother used to tell me, “Some days, you need an escort to take you through that dangerous neighborhood that is your mind.”
Ask a thoughtful swamp-dweller why they perennially veer toward the negative and they may tell you that low expectations translate into less disappointment in their lives. In fact, philosopher William James once wrote that self-esteem could be distilled down to an equation: success in life divided by expectations. Recent studies have shown that Asian-American students coming from families with high academic expectations of them tend to have lower self-esteem even when they score very well on their exams, so maybe there’s some truth to this. But, low expectations can also translate into less success when one’s spirit and motivation is poisoned by a lack of hope, meaning, or possibility in one’s life.
In the context of business, we’re all aware that some corporate cultures create a momentum of victory while others create a constant feeling of failure. Given that my company often takes over the management of hotels that are in a downward spiral, I know the signs of a troubled culture: passive aggressive communication, lots of finger pointing, and universally low expectations. Yet, there are many companies that have risen from their swamp whether it’s Continental Airlines with a newcomer CEO Gordon Bethune in the 90′s or Apple with returning CEO Steve Jobs at around that same time. In both cases, these execs first had to help all in the organization believe in themselves again and identify a few initial victories that they could point to in order to start building that momentum of victory.
My son has just been released from prison after a Federal Judge found that his constitutional rights had been violated (due to mistaken jury instructions). While he was initially ecstatic about being out after being wrongly accused for four and a half years, he started to gravitate back to familiar territory: Will the County District Attorney choose to appeal the Judge’s ruling? Of course, this has enormous implications for his life, but it’s also something he has little influence over and, for the time being, there’s so much life to catch up on and to celebrate that obsessing on the D.A.’s actions can become a no-win game. One of the responsibilities of friends and family is to escort each other through the dark alleys of our minds when there are sunny, open spaces just around the corner.
I’ve been fortunate enough to spend the past few days in Montana with Mihaly Csikszentmihalyi (and his wife Isabella), the author of Flow and many other books on how to live an optimal life. One of the basic premises of Flow is that life is at its best when we’re expertly navigating between challenge and skill. Think of a graph with two axes: with challenge on the vertical axis and skill on the horizontal axis. Flow occurs as we move diagonally away from the intersection of these two axes toward the upper right hand corner. But, most of us spend our lives toggling between boredom (low challenge, high skill) and anxiety (high challenge, low skill) living a life that feels too full of inertia or exertion.
Mihaly says someone in Flow
…concentrates their attention on a limited stimulus field, forgets personal problems, loses their sense of time and of themselves, feels competent and in control, and has a sense of harmony with their surroundings…they cease to worry about whether the activity will be productive or whether it will be rewarded…they have entered a state of flow.
This is true of individuals inside and outside of work as well as companies that pursue an organizational predilection toward Flow.
Manifesting a good life by just thinking positive thoughts is not enough. There’s no doubt that healthy psycho-hygiene creates a greater likelihood of living a life in flow with the world. But, I prefer to think of this as more like planting yourself “downwind from the flower shop.” Your willingness to build your skills and to accept challenges — emotionally, professionally, intellectually, athletically, spiritually — is your means of placing your destiny at a fortuitous intersection where good things come wafting your way. To understand how to find that flow in your life, read Mihaly’s book of the same name or Finding Flow or Good Business (to understand the context for work) or The Evolving Self (how Flow can make a difference to society).
Happiness surveys typically are a little suspect partly because the definition of happiness is so loose. This is especially the case for surveys that blindly rely on simple self-assessments of the respondents. But, happiness surveys during the holiday season are probably even more tainted given the unique love/hate relationship people have with this time of year. Yet, when three different polls are revealed in December that consistently say that Americans have made great strides in their happiness you have to take notice.
A mid-December poll of 1,000 Americans by AP-Gfk showed that 78% of Americans are either very or somewhat happy – some seriously spiked egg nog must have made its way to that bunch. Another survey of 1.3 million Americans was just revealed by Brit and American researchers and found higher levels of happiness than anyone expected. They also found these results tracked their independent evaluation of the portions of the country that had the greatest intrinsic quality of life based upon a variety of measures. Oddly, Louisiana was #1 in both happiness and the researchers’ perspective on quality of life. Given that this state is normally in the bottom ten of most surveys for just about everything, they must have asked the question around Mardi Gras time when the environmental “joie de vivre” is quite high in the Pelican State or maybe the locals are just happy their NFL Saints are winning. Finally, the Gallup-Healthway Daily Life Evaluation Index of random Americans is now 50% higher than it was a year ago and is at a historically high level. Are we lying to the researchers or are we just high on life?
One of my favorite musicals of all time is RENT. There’s a goosebump-creating song with the enchanting lyrics of “525,600 minutes…how do you measure a year?” This play was a modern take on the classic La Boheme and suggested that Americans could find happiness by being a little more bohemian. Is that what 2009 signifies? Our stab at a little piece of bohemia in the heartland? Are we measuring our own happiness in new ways now that we have a “new normal?” If disappointment equals expectations minus reality, does ratcheting down our expectations create the opposite of disappointment?
I came face-to-face with potential answers to these questions in San Francisco’s bustling Union Square shopping district last week. I ran into a friend from college who was with his wife and two kids. They had just embarrassed themselves on ice skates in the open air of the Square. The four of them giggled like they were on laughing gas and my buddy told me he’d “never been happier.” So, being a bit of a happiness researcher myself, I asked him what’s going on in his life. He told me that both he and his wife had been laid off in Silicon Valley a year earlier. They fretted the first three months and then they downsized everything in their lives from their home to their cars to their vacations to how they spent money on food. In fact, they’d chosen this year to only give “Christmas experiences” to each other. No material gifts. No standing in line at department stores. No traffic at the mall. Each of the four members of the family were responsible for giving three experiences to each of the three other members, with ice skating in the city being an example of one of them. Somehow I imagined Henry David Thoreau sitting on my friend’s shoulder whispering his famous quote from Walden Pond: “That man is the richest whose pleasures are the cheapest.”
And, instead of desperately seeking jobs, he and his wife chose to volunteer for a couple of non-profits they’d always admired but never had been able to engage with. Before he shoved off for their next family experience in the city, my friend lobbed a philosophical softball my way: “success is having what you want, while happiness is wanting what you have.” Dude, where did you learn that? I don’t remember that class at Stanford! Interestingly, four of the five states at the bottom of that happiness poll I mentioned earlier were the success-motivated, aspiration treadmills of California, Connecticut, New Jersey, and New York. Is this some communist plot to lull us into capitalistic complacency? I noticed in that same poll that Hawaii came in second behind Louisiana. Between the Bourbon Street booze and the Maui wowie, I guess I can understand why those two states are so happy, but what does this mean for the future of our country?
What if Forbes magazine were to follow up their cover article featuring the 400 Richest People in the country with a cover story of the 400 Happiest People in the country? Maybe it’s time to redefine the idea of wealth. I suspect that while 2009 has been an emotional rollercoaster for so most of us, it’s also been a year for wanting what we have rather than being obsessed with what we want. It seems as if gratification gave way to gratitude. And, maybe our painful sense of entitlement is evaporating as a result. There’s no doubt that the Great Depression three quarters of a century ago was a great equalizer and humbler. It brought people together and it shifted expectations. And, from the ashes of that burned-out economy, perseverance and ingenuity led to three decades of unparalleled progress in the 1940’s through 60’s. So, I guess it’s time for us to put our feet up, relax a little, and know that good times are ahead. More importantly, just as I learned from RENT, the good times are now and we have 525,600 moments per year to experience them.
[Originally posted August 24, 2009 on The Huffington Post]
Is there a silver lining in all of the pain and suffering associated with corporate America’s downsizing diet? I had some time to consider this during a bucolic weekend on a Sonoma ranch. I spent the last few days drinking exclusively organic grape juice and a variety of medicinal teas while not allowing a solid morsel to pass by my lips for more than 72 hours. For nearly a decade, I’ve been celebrating this ritual with a few close friends as a means of spiritual and physical cleansing. We’ve found that a unique bond seems to grow from experiencing this together. Fasting has long been a practice in all kinds of religious communities, but the benefits of fasting are vigorously argued within the medical and health community. My purpose in writing this blog isn’t to endorse this practice, but more to ruminate whether some lemonade can be made out of the lemons we’re all being served with this treacherous economy.
Starving yourself would seem to be the domain of Hollywood starlets and maniacal monks, but CEOs and business leaders have been doing the corporate equivalent of this for over a year now. Unfortunately, most companies have taken an unconscious approach to this purging after a few years of Vegas-style bingeing. What if the act of willfully cutting your corporate expenses was made in a more conscious fashion such that it could result in long-term positive results for your organization?
Let me outline four positives beyond the obvious corporate waistline reduction which can come from a “corporate fast” (I promise you I don’t do this juice fast to lose weight and companies don’t have to just look at their better bottom-line as the only good outcome of their fasting):
(1) As mentioned above, one ironic outcome can be a bonding of those people who remain in the organization. In my book PEAK: How Great Companies Get Their Mojo from Maslow, I wrote about my company’s experience of navigating the dot-com crash and the fact that our corporate culture and sense of resolve actually improved during this stress test. In “Good to Great,” Jim Collins wrote that there’s a lasting comradeship that occurs when a collection of employees band together to weather an economic storm. In his role model companies, he found that the fond memories senior executives had often revolved around how they had made it through a difficult time and that “the people we interviewed from good-to-great companies clearly loved what they did, largely because they loved who they did it with.”
(2) Glucose is the body’s primary fuel source and, yet, during a fast, the system instead taps into glycogen in the liver as a means of providing sufficient resources to run your body. This innovative biological process – which can also burn protein and fat…and muscle if you’re not careful – forces you to be efficient in how you burn energy and prods your system out of its status quo. Yes, this is another way of saying you’re liver detoxing, but one great benefit that comes out of this is that you feel fresher, lighter, and more alert. Organizational execution and process innovation would be well-served if they could take on these qualities in a downturn.
(3) The physical effects on a juice fast are fascinating. The first day is always the toughest as you’re breaking a habit, but by the second day, your hunger subsides, your thinking becomes more clear (both the whites and hazel color in my eyes become more crisp), and you really do start appreciating the essence, as opposed to the extraneous, in life. There’s a laser-like sharpness and focus in one’s awareness. Complicated corporate strategy could use this kind of natural editing, especially in a downturn when prioritization is so important.
(4) Fasts are defined as occurring when you haven’t ingested and digested food in 8-12 hours. That’s why our first meal of the day is called “break fast.” My first meal after a three day fast tastes as good as anything I’ve ever been served at a Michelin-rated restaurant. Scarcity breeds appreciation. In the last few years, we were more focused on gratification than gratitude, whether it was in how we spent our money as consumers or in how we operated as businesses. A downturn can help you see some of the less obvious assets of your company which might have been hidden during the go-go growth years. There is something elemental to be learned in a corporate fast that, hopefully, can be sustained as the economy picks up again.
In sum, this downturn can feel punishing or enlightening. You can choose what you want to take from this experience. Just remember that DESPAIR = SUFFERING – MEANING. The level of corporate despair that your organization is likely to feel will be inversely proportional to the amount of wisdom, learning, and meaning that you will discover from this crash diet you’ve found yourself on.
[Originally posted June 22, 2009 on the Huffington Post]
I stumbled into my 25th Stanford Business School reunion over the weekend somewhat chagrined by the fact that my pockets are relatively empty a quarter of a century after I graduated from this august institution. I expected to feel small relative to the corporate titans who were my former classmates as while many of these alums have experienced the “once in a lifetime” historic downturn that we’re all living through, few could match my misfortune of experiencing it twice in the same decade (as my Bay Area hotel company was pummeled in the dot-com bust, 9/11 era also). But, I was surprised to discover that misery truly does love company as this collection of venture capitalists, investment bankers, high-tech execs, management consultants, non-profit leaders, and entrepreneurs had one thing in common. Every one of them had a net worth at this reunion that was lower than it was at the 20th reunion five years earlier and many of these folks had come back out of early retirement due to financial necessity.
One of my favorite panel discussions was a “View from the Bottom” (in each of the past reunions, this panel had been called “View from the Top”) where we learned that this past decade has been more severe than even the 1930’s. Professor Jack McDonald told us that in the 1930’s (after the big drop in stock prices in late 1929), the stock market showed basically flat growth (although lots of up and down swings) along with an average of 2% annual deflation, so there was 2% real growth in the stock market during that time. Given the wreckage we associate with the Depression, this was a bit of a shock to me. Yet, in the past ten years from January 1999 to January 2009, we’ve experienced a 3% average annual drop in the stock market and have had 3% annual inflation along the way which registers a 6% negative net growth for the decade. So, when we say “at least it’s not as bad as the Depression,” there’s certainly truth to that when it comes to unemployment and soup kitchen lines, but for those whose nest egg has shrunk 6% annually in real terms as compared to 2% growth in the 30’s, it’s understandable why you’re feeling a little blue.
And, this is for the monied class. Think about what the average middle class family has faced in the past 30 years in order to try and assure that their income was keeping up with their expenditures. Many families became two income households in order to pay the bills. Then, they started working longer hours, or, at least commuting longer distances because they could only afford a home further out in the sticks. Then, they mortgaged their home up to the hilt (or maxed out their credit cards) in order to keep the bill collectors at bay. Financial engineering isn’t just a Wall Street phenomenon as the CFO of any middle class family will tell you that their balance sheet has been sorely out of balance for years, especially when you factor in the scarcity of time in our lives. Henry David Thoreau once wrote, “The cost of something is measured by how much life you have to give for it.” Based on this premise, our modern lives are very, very expensive!
So, I left my Stanford reunion feeling a surprising dose of gratitude. I didn’t feel “lesser than” like I thought I would and I felt “at one with” so many of my humbled classmates. One of my classmates who has worked with the same investment banking firm for decades pulled me aside at one of the luncheons. He said he needed to have a private moment with me, so we ducked behind a potted palm and he whispered in the kind of tones one uses when talking about infidelity or a curiosity with Viagra. He said, “I made a bundle and lost half of it. For a few months, I felt like half a man. Then, I read your book PEAK and realized that you have a different ‘scorecard’ for success. I love that the name of your company is also your mission statement and your strategic goal for what you produce: joy. Now, I realize how far off my path I am. I realize I’ve been climbing the wrong ‘peak.’”
The world is chaotic and unfair. And, certainly, it isn’t controllable. One thing you can control is your definition of your scorecard. Just as my grandpa Potka told me years ago when, as a young teenager, I threw a tantrum on the golf course because I was hitting divots further than golf balls, “When you’re having a bad golfing day, stop counting your strokes and start counting squirrels, or how many different cloud formations you see in the sky, or how many times you’ve made your grandpa smile with one of your silly jokes.” What scorecard are you using to define success in your life?
[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 22nd 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.
[originally posted Jan. 14, 2009 on The Huffington Post]
What does it take to help you realize what you’re worth? And, who determines what you’re worth? Two simple questions, but they’re so complex to answer.
Tragically, I’m not sure a Stanford MBA classmate of mine from 25 years ago, Erik, sat down and asked these questions. Erik ran a successful hedge fund and was caught in the downdraft of this treacherous economy. Around Thanksgiving, suffering from deep depression, he tried to commit suicide. After a brief hospital stay, he was allowed to rejoin his family only to take his own life a day later. This is my third friend to choose this path in the last year, including my close friend and insurance agent, Chip, who served as a mirror for me in many ways. Going to Chip’s funeral, knowing our similarities, and hearing his name repeated over and over again was haunting.
As the New York Times recently reported, three prominent European businessmen took their lives in the past few weeks. A London financier threw himself in front of a train. A French aristocrat stabbed himself to death. And, the body of a German industrialist was found near the railroad tracks near his home. All three were distraught with how their net worth had been shattered. During the Great Depression, the suicide rate in the U.S. grew by 21%. There’s no evidence that we’re on the verge of this kind of mass existential crisis again, but there’s no doubt this downturn has wreaked economic and psychological havoc with wild abandon. Hopefully, the two questions above can help add some sanity to the feverish financial nightmares that are racing through our minds too much of the time.
The world of busy-ness can delude us into thinking that our net worth is represented by our balance sheet and that our life is summed up by the narrow path of our career. If there’s one essential lesson that comes from tragedy, it’s that we have a capacity for survival and adaptation that might shock us. Most successful businesspeople are exceptionally adept at putting blinders on as a coping mechanism, but tragedy is the great equalizer. Austrian psychiatrist Viktor Frankl wrote of his experience about life in a prison in his book “Man’s Search for Meaning.” Frankl found that those who didn’t have hope or couldn’t see some kind of future meaning coming from their current dreaded existence were more likely to die quickly in the wretched conditions of the prison. What I took from Frankl’s landmark book was the idea that DESPAIR = SUFFERING – MEANING. There was a constant for all those in the prison and that was suffering, but those who were able to see the meaning or lesson in their experience were able to decrease their sense of despair. Sometimes, our true worth – not financially necessarily – but in how we impact others and the world becomes most apparent in the most troublesome of times. So, rather than ask the silent question of ourselves, “what am I getting from this job or work?” consider shifting that to “what am I becoming as a result of this experience?”
As for who determines what you’re worth, it isn’t necessarily your banker or CPA. It’s you. There may be many contributing influences including your family and friends as well as your enemies and business competitors. But, at the end of the day, you’re the one to determine how to define success in your world. It’s easy to get caught up in someone else’s metrics as I often do with my investors, but the reality is that you have the freedom to define how you want to calculate your net worth. Ironically, I started my company 22 years ago at a time when I had quickly got disillusioned with my first taste of the business world after getting my MBA. I decided to call my company Joie de Vivre (meaning joy of life in French) because it was the mission statement for not just what I wanted to provide our employees and customers, but it was also what I was looking for myself. My definition of success was how much joy I was bringing into my life. This intangible metric is unconventional, but it’s been a powerful reminder of what’s important to me as my company has grown to a quarter billion dollar annual revenue enterprise.
So, on my worst days recently (and I’ve had my share of them), I just remind myself that I can determine my net worth. It’s greater than the number of zeroes on my balance sheet. And, this concentration camp of a recession is meant to teach me some healthy lessons and meaning that I can use the rest of my life. I used to hate that cliché “what doesn’t kill you makes you stronger,” but I have a profound new sense of the wisdom behind that commonly used expression.
I don’t know about you, but there are certain Sundays when I can curl up like a cat with my Sunday NY Times, shot of adrenalin from Meet the Press, and then the zombie afternoon watching NFL Football….I need to install a flat-screen in my bathroom so I can do this in my favorite place: the deep-water bathtub.
This Sunday’s Business section was meant for the Hall of Fame. There was more valuable wisdom in the articles that graced those 14 pages than I learned during my two years at Stanford Business School. First, I have to direct you to an article by a neuroeconomist (who knew such a profession existed?) that point blank proves something that my book, PEAK, hypothesizes: that fear is a de-motivator in the workplace. At times like these when fear pervades, the number one sensible response for a leader is to lead people away from this contagious, pervasive emotion. Dr. Berns says it best, “Fear prompts retreat. It is the antipode of progress. Just when we need new ideas most, everyone is seized up in fear, trying to prevent losing what we have left.” http://www.nytimes.com/2008/12/07/jobs/07pre.html?_r=1&scp=1&sq=neuroeconomist&st=cse
Then, there’s a thoughtful cover story on Best Buy, one of the lone survivors in the retail electronics world (with Circuit City, Sharper Image, Comp USA, and Tweeter all failing in the past year), which has succeeded due to savvy management, but also because of an enormous investment in their people. I don’t know about you, but I’ve found Best Buy employees to be the best trained, the happiest, and the most helpful floor reps out there, and, that’s after having shopped the competition to make a major home entertainment system purchase this past month (doing my part to keep the economy going when national electronics sales dropped 22% in November). To learn more about why Best Buy is succeeding, check out the article. http://www.nytimes.com/2008/12/07/business/07best.html?scp=2&sq=best%20buy&st=cse
On the other hand, the feature cover article in the NY Times Biz section focused on Apollo, a private equity firm that is truly struggling and is a poster child for the greedy investor that skims the profits of their portfolio companies only to find that these companies have been bled dry when the economy turns sour. Warren Buffett is a great model for the long-term, legacy investor that I admire, but Leon Black of Apollo is a good cautionary tale of how an investor can capsize a business. http://www.nytimes.com/2008/12/07/business/07leon.html?scp=2&sq=apollo&st=cse
On page 3, there’s a great article called “Teamwork, the True Mother of Invention” which talks about how successful companies bake the innovation process into their culture and it’s a very collaborative process. Based upon that premise, you might think that these companies are all about brainstorming, but this Silicon Valley thought leader suggests that brainstorming is passe and that there are many other ways to create an innovation culture. http://www.nytimes.com/2008/12/07/business/07unbox.html?scp=55&sq=dec.%207,%202008&st=cse
There were a few other articles that caught my eye, but these four were my favorites. I’ve said for a long time that the greatest bargain that exists for consumers is a well-written newspaper and the NY Times proved that to me once again this weekend as this $5 purchase is much more affordable than a $50,000 MBA.