Last week I read an article in the Guardian weekly about a successful experiment at a home for people with mental problems. They had brought in other people with mental problems, those at different recovery stages, to help with caring. I couldn’t help but laugh. After all these years, the lunatics really had taken over the asylum.
Then I read more and thought more deeply. Of course, I concluded, this made so much sense. The root causes of people with disturbed minds are often psychological, things starting out with lack of self-esteem or other requirements for empathy. Despite all their training, it is very hard for care professionals to fully relate to such patients and to get through to them. Other people emerging from similar issues might have more ability to see into the heads of the sick, and explain coping strategies that might help, things that may have worked for them, things that could give hope. Hope may be all that is missing, hope given by someone credible yet not superior, someone who cannot be a threat or any sort of humiliation.
Isn’t that lovely? I wish them every success with the experiment, and hope that more spring from it. Of course care professionals do not lose their role, but it modifies. They have to work in the background, finding the right peer partners, gently suggesting approaches to those partners, being ready with follow up treatment such as a change in medication, and overseeing to ensure no harm comes from the process.
But the care professionals may not be comfortable with this. These different skills may not come easily to them. They may even feel a bit threatened by their subtle change in power and role.
I believe this is a microcosm of a very common opportunity. Sorry to keep bleating on about it, but in my part of Shell we tried something similar (though I’m not sure Shell leaders would be all that pleased about being compared with mental patients). In the Applied Leadership programme, we replaced training courses about leadership with discussion groups of leaders. Under the eye of a moderator, participants shared their issues and their solutions, building confidence and a menu of tried and trusted strategies. For many it worked well. For some it opened their brains for the first time to improving their leadership, something ego and fear and prevented before. Hearing that peers had similar problems was the catalyst to being able to share their own problems. Barriers were broken down, not for everyone, but for a larger group than would have secured value from classical training.
In essence, I believe this to be identical to the mental patient story. And it started me wondering what other examples might be out there, and what other fields might be improved with this approach.
Training teachers has changed a lot in the last fifty years. Classroom type sessions have been partly replaced by experienced based training, spending time in front of real live kids and finding ways to cope then to connect then to thrive. I remember when I was at school, there were some teachers who were no doubt very clever and technically well-trained, but who had no ability whatsoever to connect with their pupils. Some did not master control, others couldn’t find the right atmosphere or language, others simply could not see the problems from the point of view of the kids. I know this has improved, but I suspect that it go further. I am gratified to see that teachers are offered two or three days per term for training, but I wonder how much of that time is spent receiving technical training. My guess is that more often a dimple discussion with other teachers at the school would yield more dividends, if properly moderated. And the simplest and most cost effective way for any teacher to improve might be to invite a peer into his or her classroom a few times to observe, and to give the same favour back later. Does this happen? I have my doubts. What stops it? Well, ego and fear are two things – who would not initially be a little bit frightened letting a colleague into their empire? And I also suspect professional trainers by block this, subconsciously or not. The trade unions might not help much either.
Generally, any field where human communication is an important part of the skillset could benefit from a peer-based approach. One good bi-product of the much-maligned health service reforms might be the increased possibility for GP’s to give peer coaching to each other, though the same blockers are likely to persist as in teaching.
Another example is conducting and choir directing. True, technical skills are important, but, once again, my guess is that the best way to develop above a certain level is to observe and be observed by peers and to start an improvement dialogue as a result. Ego is especially big in this field, so don’t be surprised that in my experience few actually do this.
Gaining the benefits of peer coaching is one of the things enabled by the internet. Blogs and open query sites are perfect for peer coaching. People can share what works for them, or post issues holding them back, without much stigma. Virtual connections are fast, plentiful and relatively unchallenging. Many of us have got into the habit of surfing the web when we have a new problem to solve. We could probably do it more than we could, and apply the approach to things we think we have already mastered as well.
Two more example areas might be parenting or caring for the elderly. In both these cases, these are less often professions than skills people need to acquire as they go without training. A bit like line management really. I love to observe other parents and try to be open to their criticism of my own approach – within a couple is the easiest place to start of course. And I would love more clues for how to care for my ailing mother. So, I should start with the internet on that one.
I notice my daughter is a lot better and many of these life skills than I am. Building relationships is another one, my generation had no clue how to do that at all yet many kids these days avoid the pitfalls with grace. I expect peer coaching has a lot to do with it. Facebook and MSN may be derided by some of my generation, but my belief is that they are enabling a positive revolution in many empathy-based skills. Which only bodes well for a bright future. Perhaps in the future there will be many fewer people needing help mentally – and the treatment for those that still do will be more effective do to peer coaching.
Friday, March 23, 2012
Thursday, March 15, 2012
My Seven Wonders
I grow to love Intelligent Life, the Economist magazine published every two months. It is rather like the review section of a Sunday newspaper, but with the sharp attitude and writing style from the parent publication. Some features, like the wine review, just leave me cold, since they describe a world outside of my comprehension (how can a wine bottle of 400 dollars be good value?). It is also hard to make credible listing which are global and relevant: if six exhibitions are listed, then the chance that I might happen be in one of the cities might be 10%.
One regular feature is called Seven Wonders, in which some polyglot is asked to describe a special view, city, hotel, building, beach, journey and work of art. Often, I have not even heard of most of the nominations, and that can grate, inspiring not awe but a sort of jealousy. But each time I have read the feature I have been tempted to try it for my myself. So, this week I did. I have no expectation that it will inspire awe, and hope it will not inspire jealousy either. My hope is to inspire you to try the exercise for yourself, as I found it fun and pleasantly nostalgic.
For a view, there are many candidates in Scandinavia, and some cityscape views as well, for example the Staten Island ferry view in New York, but my choice is the Swiss alps from a plane. Business travel has many negatives, and frequent flying is certainly one of them, but I still love looking out of the window on a clear day, reflecting on the miracle of flight. I also love maps and fancy myself as a good navigator, so the puzzle of identifying locations beneath me is endlessly fascinating. Flying over any city I know is thus a joy, but, for its sheer splendour, mountain ranges are special. It is almost worth the cost and hassle of a day trip from Amsterdam to Milan and back for the beauty that are the alpine views from the window. One of the blessings of our generations.
I love cities, and love being what I now learn is called a flaneur, a sort of random wanderer in a city. Walking and public transport are my favourite ways to be a flaneur. Choosing any city over any other is difficult. London, Paris, New York, Barcelona, Lisboa, where to start? I suppose somewhere compact, where it is easy to walk, somewhere with a distinctive history and present, and where buildings and especially people have stylish diversity. So I go for Sevilla. It is stiflingly hot in summer, but otherwise the city is a jewel, its people proud, demonstrative, stylish and often out of doors. Boston or Cambridge might qualify as well.
I found hotel the hardest category, I think mainly because hotels for me mainly evoke the most sterile part of sterile business trips, judged only by the absence of the negative. As long as the room temperature is OK, the bed soft and without bugs, the hot water hot, the breakfast edible and the check-out efficient, I’m happy to move on. True, I’ve been to some beautiful locations (Holmenkollen in Oslo and the Danube front hotels of Budapest), historical places (the castle hotels near Stockholm or the Hunting Tower near Perth in Scotland), and quaint establishments, and I’ve had wonderful experiences in hotels as well, but something about the category does not work for me. So my choice is a sort of anti-choice. Formule One is a great business model, and revolutionised its category, so my choice is any Formule One. You can plan your journey, you know exactly what you will get, and your wallet will hardly be troubled. I’m old enough now to value a private toilet, but if Formule One hadn’t started the trend, imitators with private toilets would not have arrived.
For buildings, I am no expert in architecture, but I do love wandering into Churches. For me the delight of Rome is just to randomly walk, stopping at every Church I pass. But how to choose between them all, single one out? Then I also love many modern buildings, those that combine functionalism and simplicity with grace and uniqueness. I am not one to denigrate the town hall in The Hague. My choice is a museum, the Vasa in Stockholm. The building is the boat, reconstructed from a salvage operation fifty years ago, the same boat the sank half an hour into its maiden voyage four hundred years earlier. The boat itself is magnificent, and its museum combines that splendour with history, science and intrigue.
A beach for me is for walking. So it needs solitude, dramatic colours and dramatic sea, the chance to paddle and sand that is flat and hard enough to walk on, an alternative cliff top route for the return journey, and a vista facing either way. It also helps if the climate is seasonal but mainly sunny. So I choose Falesia beach in the Algarve, between val de Lobo and Albufeira. Just like Sevilla, avoid July and August, this time because of people as well as temperature. Otherwise the orange cliffs and exciting sea offer all the aids to reflection that one could ever want. Portstewart in Northern Ireland has all the same positive characteristics – but unfortunately it is usually raining.
Journey is a lovely category. One day I would love to walk to Santiago de Compostelo, but I haven’t had that pleasure yet. The South Downs way from Eastbourne is a wonderful journey and surprisingly accessible, dotted with good pubs. I could also choose something abstract like Holy Week. But I choose a rail journey, as I love travelling by rail almost as much as walking. The route from Oslo to Bergen is stately. At the top of the mountains it is possible to detour onto a funicular and boat trip on a peaceful fjord. But the best feature of the journey is its ability to offer three seasons in a single day, for example in September. Near Oslo you find Autumn colours and flavours, but it the mountains it is already bleak winter. Then in the maritime air towards Bergen you can capture the last of summer. Spring is a bit harder generally in Scandinavia, as it is always late and fleeting. Bergen is a wonderful destination if you are lucky enough to choose one of the sixty or so days in the year when it does not rain. A tourist tip for Norway is to go inland. The Hurtigruten up the coast is famous and has its charms, but the views cannot compare.
Last comes a work of art, and my appreciation is greatest for music. I could go for a Victoria or Monteverdi anthem, last year I sang a piece from the same era by Vivanco which was unforgettable in its drama, but in the end I choose Bach. This prolific composer could not write bad music, nor could he write music that stands still. Some Bach can be so somnolent as to be monotonous, but not the Magnificat. Twelve short movements, each with its own distinctive character, perfectly formed. Amazingly, Bach wrote much of his music for his local Church choir, and was constantly harangued to keep his music short. His remit for the Magnificat was not to go over thirty minutes, and this may explain why the very last movement rather runs out of steam. But in show business the maxim is always to leave the audience wanting more, and that certainly applies here.
So, that was fun, and I commend the exercise. One overall reflection is that most of my memory concerns less the object and more the human experience I associate with it. Don’t you find that when you look at your old photos the only ones you linger over are the ones of people? Well, I found the same with this. I suppose that is good, or we might all choose the same places.
The other reflection is how blessed I am compared with my parents, to live in an age where the world has become so much smaller and more accessible. Yet still almost all my choices are from the developed world and even from Europe. I guess my 22-year-old daughter would already be able to offer a more eclectic selection, and just think of the range of experience she might have when she reaches fifty one, or when her own kids reach fifty one.
One regular feature is called Seven Wonders, in which some polyglot is asked to describe a special view, city, hotel, building, beach, journey and work of art. Often, I have not even heard of most of the nominations, and that can grate, inspiring not awe but a sort of jealousy. But each time I have read the feature I have been tempted to try it for my myself. So, this week I did. I have no expectation that it will inspire awe, and hope it will not inspire jealousy either. My hope is to inspire you to try the exercise for yourself, as I found it fun and pleasantly nostalgic.
For a view, there are many candidates in Scandinavia, and some cityscape views as well, for example the Staten Island ferry view in New York, but my choice is the Swiss alps from a plane. Business travel has many negatives, and frequent flying is certainly one of them, but I still love looking out of the window on a clear day, reflecting on the miracle of flight. I also love maps and fancy myself as a good navigator, so the puzzle of identifying locations beneath me is endlessly fascinating. Flying over any city I know is thus a joy, but, for its sheer splendour, mountain ranges are special. It is almost worth the cost and hassle of a day trip from Amsterdam to Milan and back for the beauty that are the alpine views from the window. One of the blessings of our generations.
I love cities, and love being what I now learn is called a flaneur, a sort of random wanderer in a city. Walking and public transport are my favourite ways to be a flaneur. Choosing any city over any other is difficult. London, Paris, New York, Barcelona, Lisboa, where to start? I suppose somewhere compact, where it is easy to walk, somewhere with a distinctive history and present, and where buildings and especially people have stylish diversity. So I go for Sevilla. It is stiflingly hot in summer, but otherwise the city is a jewel, its people proud, demonstrative, stylish and often out of doors. Boston or Cambridge might qualify as well.
I found hotel the hardest category, I think mainly because hotels for me mainly evoke the most sterile part of sterile business trips, judged only by the absence of the negative. As long as the room temperature is OK, the bed soft and without bugs, the hot water hot, the breakfast edible and the check-out efficient, I’m happy to move on. True, I’ve been to some beautiful locations (Holmenkollen in Oslo and the Danube front hotels of Budapest), historical places (the castle hotels near Stockholm or the Hunting Tower near Perth in Scotland), and quaint establishments, and I’ve had wonderful experiences in hotels as well, but something about the category does not work for me. So my choice is a sort of anti-choice. Formule One is a great business model, and revolutionised its category, so my choice is any Formule One. You can plan your journey, you know exactly what you will get, and your wallet will hardly be troubled. I’m old enough now to value a private toilet, but if Formule One hadn’t started the trend, imitators with private toilets would not have arrived.
For buildings, I am no expert in architecture, but I do love wandering into Churches. For me the delight of Rome is just to randomly walk, stopping at every Church I pass. But how to choose between them all, single one out? Then I also love many modern buildings, those that combine functionalism and simplicity with grace and uniqueness. I am not one to denigrate the town hall in The Hague. My choice is a museum, the Vasa in Stockholm. The building is the boat, reconstructed from a salvage operation fifty years ago, the same boat the sank half an hour into its maiden voyage four hundred years earlier. The boat itself is magnificent, and its museum combines that splendour with history, science and intrigue.
A beach for me is for walking. So it needs solitude, dramatic colours and dramatic sea, the chance to paddle and sand that is flat and hard enough to walk on, an alternative cliff top route for the return journey, and a vista facing either way. It also helps if the climate is seasonal but mainly sunny. So I choose Falesia beach in the Algarve, between val de Lobo and Albufeira. Just like Sevilla, avoid July and August, this time because of people as well as temperature. Otherwise the orange cliffs and exciting sea offer all the aids to reflection that one could ever want. Portstewart in Northern Ireland has all the same positive characteristics – but unfortunately it is usually raining.
Journey is a lovely category. One day I would love to walk to Santiago de Compostelo, but I haven’t had that pleasure yet. The South Downs way from Eastbourne is a wonderful journey and surprisingly accessible, dotted with good pubs. I could also choose something abstract like Holy Week. But I choose a rail journey, as I love travelling by rail almost as much as walking. The route from Oslo to Bergen is stately. At the top of the mountains it is possible to detour onto a funicular and boat trip on a peaceful fjord. But the best feature of the journey is its ability to offer three seasons in a single day, for example in September. Near Oslo you find Autumn colours and flavours, but it the mountains it is already bleak winter. Then in the maritime air towards Bergen you can capture the last of summer. Spring is a bit harder generally in Scandinavia, as it is always late and fleeting. Bergen is a wonderful destination if you are lucky enough to choose one of the sixty or so days in the year when it does not rain. A tourist tip for Norway is to go inland. The Hurtigruten up the coast is famous and has its charms, but the views cannot compare.
Last comes a work of art, and my appreciation is greatest for music. I could go for a Victoria or Monteverdi anthem, last year I sang a piece from the same era by Vivanco which was unforgettable in its drama, but in the end I choose Bach. This prolific composer could not write bad music, nor could he write music that stands still. Some Bach can be so somnolent as to be monotonous, but not the Magnificat. Twelve short movements, each with its own distinctive character, perfectly formed. Amazingly, Bach wrote much of his music for his local Church choir, and was constantly harangued to keep his music short. His remit for the Magnificat was not to go over thirty minutes, and this may explain why the very last movement rather runs out of steam. But in show business the maxim is always to leave the audience wanting more, and that certainly applies here.
So, that was fun, and I commend the exercise. One overall reflection is that most of my memory concerns less the object and more the human experience I associate with it. Don’t you find that when you look at your old photos the only ones you linger over are the ones of people? Well, I found the same with this. I suppose that is good, or we might all choose the same places.
The other reflection is how blessed I am compared with my parents, to live in an age where the world has become so much smaller and more accessible. Yet still almost all my choices are from the developed world and even from Europe. I guess my 22-year-old daughter would already be able to offer a more eclectic selection, and just think of the range of experience she might have when she reaches fifty one, or when her own kids reach fifty one.
Sunday, March 11, 2012
Take me to Jakarta?
A couple of weeks ago Ipsos published a happiness survey of 28 countries. Indonesia were run-away winners with 51% saying they were very happy, more than double the score for any European nation.
I love these surveys. I was encouraged when David Cameron started a campaign to understand and drive policy towards “gross national happiness” a couple of years ago and am disappointed that it seems to have led nowhere. Probably it has run into the problems of defining and measuring happiness, and also political blocks: who really wants to stake their re-election prospects on something so fickle as a poll?
The Ipsos survey interviewed people from the same 28 countries in 2007, so it is also possible to see trends. There are splits not just by nation, but also by age, gender, marital and work status. I looked at the raw data on the website, but haven’t yet found great surprises or insights from these other categories.
As the surveyors point out, a healthy dose of salt is necessary in drawing too many conclusions, even if we assume that the interviewers managed to find a large enough representative sample from each country. First, there is the language and culture dimension. The basic question can be translated into different languages, but the exact nuance is bound to differ. Anyone with one native language living in a second country knows that subtle changes in text radically change interpretation. Even if the intent of the question is more or less the same, the responses will still reflect culture. Perhaps in Indonesia, if a stranger comes up to you in the street and asking you how happy you are, it would be a monumental insult to them, to your family or to your God to respond anything but positively. For this reason, perhaps the trends over time give better indications than the national scores.
But this leads to another problem. I’m pretty sure that my response to the question would vary day by day, even hour by hour. True, we have an inner sense of contentment or otherwise that remains pretty solid for months or years. But my mood today is buffeted by so many ethereal factors as well. If the sun is shining, I always feel better. If I have slept well. If my football team has won its most recent match. If a friend paid me a compliment, or if I managed to make a friend happier myself. If I am free from a slight headache or backache or whatever ache. If the morning news or something I just read uplifted rather than depressed me. If my most recent family interactions have been happy ones.
Especially since I may respond quickly and without much thought to a random pollster catching me off guard, I have a feeling that my answer s might swing rather more wildly than they should. And while some of these effects are personal and might be expected to balance out in a large enough poll, others might effect a lot of people in the same direction, the weather, news and sport as examples.
Can a poll really mean anything in the midst of all that noise? My suggested answer would be: only if conducted quite frequently. One measurement in 2007 and another in 2011/12 seems to me to be rather like dismissing climate change because it was cool last week.
Still, let us for a minute cast all these quibbles aside and look at the poll results. Most countries at the top of the league in 2007 stayed there in 2012. Behind Indonesia were India, and then Mexico and Brazil, though Brazil dropped back in 2012. Turkey jumped from the bottom half of the table to fifth place. Then all the developed non-Europeans/non-Asians are in a cluster – US, Canada, Australia. South Africa, Argentina and Saudi Arabia are in the top half too. Then we have all the miserable Europeans. The Brits and Swedish are a bit ahead of most continentals, Italy and Spain (especially in 2012) a bit behind, and Hungary and Russia right at the bottom. China does no better than average, and Japan and South Korea do worse. For a table, look (among other places) at the February 25th Economist.
So, what does this all tell us, caveats notwithstanding? Money plainly doesn’t buy you happiness, at least as a nation. The best performers perhaps have simpler lifestyles, and a strong faith-based spirituality. I am sure that Elizabeth Gilbert, author of the excellent “Eat, Pray, Love” would not be surprised to find Indonesia and India at the top, and might attribute it in part to simplicity and spirituality.
While absolute economic development is not an indicator, some sense of progress perhaps is. Life for the leaders probably feels more blessed than a generation before. Turkey is plainly going forwards, and its results improved more than any other nation. Even Australia and the US might benefit from a sense of national youth. In Europe, by contrast, we are often led to believe that our best days are behind us. Perhaps distant former glories afflict the Chinese and Japanese as well?
What about dignity and justice? I argued before that these were stronger drivers of wellbeing than freedom or wealth. This theory is supported by Russia’s lowly position. In the case of Saudi Arabia, there may be multiple forces at work. There is also a case to say that material goodies only start to make us unhappy when we lack them but our neighbours don’t. That is one reason that, unless we are as enlightened as Liz Gilbert, we probably wouldn’t all make ourselves happier by moving to Indonesia.
All in all, the survey is fascinating and makes me beg for more. Surveys are so cheap to administer nowadays – why can’t this one cover 100 countries, with ten times as many people asked ten times as often? We might start to learn more about what truly makes people happy, and be able to do something about it, individually and collectively.
I think it would work. In the part of Shell I worked in, we started a regular staff survey, and used it to track things which were otherwise hard to measure. Questions like: “Does your division value for money for clients?”, or “Is X an innovative company?” are excellent for surveys, since trends in employee perceptions are probably the most reliable (and earliest) indicators of important business drivers. I was always fascinated by the results, and astonished at how consistently they anticipated real change. The work of Reichheld and Bain using customer and employee surveys to measure net promoter score uses a similar method, and I find it one of the most powerful tools available to companies.
Looking at why companies don’t do these things more often offers a clue why governments don’t either. At the time we used these internal surveys, my division was blessed with an enlightened leader. Even so, he was quite sensitive about the questions used, and not always objective in applying the results. His management team hated the surveys, seeing them as a threat. His bosses listened politely and allowed us to use survey scores to influence our self- assessment, but showed no appetite to copy us.
This was all about politics. How many leaders really want to display the truth? How many want to put their bonus in the hands of something so fickle as a survey?
It is the same with politicians, which is why I am cynical whether anything good will come from Cameron in the end. But, in the end, technology will defeat them. Online surveys already proliferate, and will become more pervasive, just like social media. It is not just Putin and Assad who in the long term will truly have to look their people in their eye.
I hope by that stage the Indonesians will still be as happy. But that is the great paradox of development. They probably won’t be, because that same technology might have taught them to value what they lack as well as what they have.
I love these surveys. I was encouraged when David Cameron started a campaign to understand and drive policy towards “gross national happiness” a couple of years ago and am disappointed that it seems to have led nowhere. Probably it has run into the problems of defining and measuring happiness, and also political blocks: who really wants to stake their re-election prospects on something so fickle as a poll?
The Ipsos survey interviewed people from the same 28 countries in 2007, so it is also possible to see trends. There are splits not just by nation, but also by age, gender, marital and work status. I looked at the raw data on the website, but haven’t yet found great surprises or insights from these other categories.
As the surveyors point out, a healthy dose of salt is necessary in drawing too many conclusions, even if we assume that the interviewers managed to find a large enough representative sample from each country. First, there is the language and culture dimension. The basic question can be translated into different languages, but the exact nuance is bound to differ. Anyone with one native language living in a second country knows that subtle changes in text radically change interpretation. Even if the intent of the question is more or less the same, the responses will still reflect culture. Perhaps in Indonesia, if a stranger comes up to you in the street and asking you how happy you are, it would be a monumental insult to them, to your family or to your God to respond anything but positively. For this reason, perhaps the trends over time give better indications than the national scores.
But this leads to another problem. I’m pretty sure that my response to the question would vary day by day, even hour by hour. True, we have an inner sense of contentment or otherwise that remains pretty solid for months or years. But my mood today is buffeted by so many ethereal factors as well. If the sun is shining, I always feel better. If I have slept well. If my football team has won its most recent match. If a friend paid me a compliment, or if I managed to make a friend happier myself. If I am free from a slight headache or backache or whatever ache. If the morning news or something I just read uplifted rather than depressed me. If my most recent family interactions have been happy ones.
Especially since I may respond quickly and without much thought to a random pollster catching me off guard, I have a feeling that my answer s might swing rather more wildly than they should. And while some of these effects are personal and might be expected to balance out in a large enough poll, others might effect a lot of people in the same direction, the weather, news and sport as examples.
Can a poll really mean anything in the midst of all that noise? My suggested answer would be: only if conducted quite frequently. One measurement in 2007 and another in 2011/12 seems to me to be rather like dismissing climate change because it was cool last week.
Still, let us for a minute cast all these quibbles aside and look at the poll results. Most countries at the top of the league in 2007 stayed there in 2012. Behind Indonesia were India, and then Mexico and Brazil, though Brazil dropped back in 2012. Turkey jumped from the bottom half of the table to fifth place. Then all the developed non-Europeans/non-Asians are in a cluster – US, Canada, Australia. South Africa, Argentina and Saudi Arabia are in the top half too. Then we have all the miserable Europeans. The Brits and Swedish are a bit ahead of most continentals, Italy and Spain (especially in 2012) a bit behind, and Hungary and Russia right at the bottom. China does no better than average, and Japan and South Korea do worse. For a table, look (among other places) at the February 25th Economist.
So, what does this all tell us, caveats notwithstanding? Money plainly doesn’t buy you happiness, at least as a nation. The best performers perhaps have simpler lifestyles, and a strong faith-based spirituality. I am sure that Elizabeth Gilbert, author of the excellent “Eat, Pray, Love” would not be surprised to find Indonesia and India at the top, and might attribute it in part to simplicity and spirituality.
While absolute economic development is not an indicator, some sense of progress perhaps is. Life for the leaders probably feels more blessed than a generation before. Turkey is plainly going forwards, and its results improved more than any other nation. Even Australia and the US might benefit from a sense of national youth. In Europe, by contrast, we are often led to believe that our best days are behind us. Perhaps distant former glories afflict the Chinese and Japanese as well?
What about dignity and justice? I argued before that these were stronger drivers of wellbeing than freedom or wealth. This theory is supported by Russia’s lowly position. In the case of Saudi Arabia, there may be multiple forces at work. There is also a case to say that material goodies only start to make us unhappy when we lack them but our neighbours don’t. That is one reason that, unless we are as enlightened as Liz Gilbert, we probably wouldn’t all make ourselves happier by moving to Indonesia.
All in all, the survey is fascinating and makes me beg for more. Surveys are so cheap to administer nowadays – why can’t this one cover 100 countries, with ten times as many people asked ten times as often? We might start to learn more about what truly makes people happy, and be able to do something about it, individually and collectively.
I think it would work. In the part of Shell I worked in, we started a regular staff survey, and used it to track things which were otherwise hard to measure. Questions like: “Does your division value for money for clients?”, or “Is X an innovative company?” are excellent for surveys, since trends in employee perceptions are probably the most reliable (and earliest) indicators of important business drivers. I was always fascinated by the results, and astonished at how consistently they anticipated real change. The work of Reichheld and Bain using customer and employee surveys to measure net promoter score uses a similar method, and I find it one of the most powerful tools available to companies.
Looking at why companies don’t do these things more often offers a clue why governments don’t either. At the time we used these internal surveys, my division was blessed with an enlightened leader. Even so, he was quite sensitive about the questions used, and not always objective in applying the results. His management team hated the surveys, seeing them as a threat. His bosses listened politely and allowed us to use survey scores to influence our self- assessment, but showed no appetite to copy us.
This was all about politics. How many leaders really want to display the truth? How many want to put their bonus in the hands of something so fickle as a survey?
It is the same with politicians, which is why I am cynical whether anything good will come from Cameron in the end. But, in the end, technology will defeat them. Online surveys already proliferate, and will become more pervasive, just like social media. It is not just Putin and Assad who in the long term will truly have to look their people in their eye.
I hope by that stage the Indonesians will still be as happy. But that is the great paradox of development. They probably won’t be, because that same technology might have taught them to value what they lack as well as what they have.
Thursday, February 16, 2012
Look back and Learn
It is a good practice to live our lives as much as possible in the present. Idle dreaming of the future or bitter regretting of the past take us nowhere, it is the present we have the power to influence.
While living in the present is a good general rule, there are useful things that the future and the past can do for us. The future offers us hopes that can become plans or intentions. And the past offers us the chance to learn, and sometimes to celebrate.
Learning from the past is a laudable objective of many companies, yet it does seem hard to achieve. In Shell we had an enormous computer repository of all sorts of data, called Livelink, where people dutifully recorded their activities. The problem was that, in general, no-one ever accessed this data ever again. No wonder smart cynics used to call it Deadlink.
I often wondered why this was. My main conclusion was that we humans are often too arrogant or too stressed to take the trouble to ask questions of the past. Somehow, it seems like cheating, or it takes away the fun of problem solving. True, but there had to be more to it than that.
I was handed a fortuitous clue this month when a friend sent me a link to an old promotional clip for Shell Centre, made soon after the building opened in the 1960’s. Thanks George, it gave me a laugh as well as setting me thinking. You can watch it for yourself on http://www.youtube.com/watch?v=8zUQD1p9bXY&feature=related&&
There are some predictable take-aways from the film. Anyone in the 1960’s showing off about the state of technology then, be it telephones, switchboards, typing pools or mail rooms would not be too surprised to learn that things have moved on apace since.
There were some physical areas where it struck me how little progress there had been since the 1960’s. All the public areas of the building, the lifts, the canteen and the offices all looked much the same forty years after the film was made. True, nowadays no one would bother to show off about the speed of a lift. But it seems we have made little progress in how buildings work for us.
And in some areas we have got worse. Security has become more pervasive and intrusive than ever. Sometimes in recent years it took me 15 minutes to gain access to Shell Centre, unthinkable in the 1960’s. Yes, there are new threats. But I fear that security is just slapped on without much thought for the typical person. Just look at the journey from the front door of an airport onto a plane – it is not designed with us in mind.
However, in the video the most telling things were social ones. We learn most about the things that were never highlighted in the commentary. Someone had taken the trouble to include a token black man in the post room, which just looked anomalous now, showing by accident how much progress has been made in race relations. Wow, even the football pitch is joining the twentieth century nowadays, if not quite yet the twenty first.
But that was not the most obvious apartheid. Class reared its head all through the video. Shell did well not to include shots of the executive dining room, but it was still in existence, for forty years after the film was made. Progress there has come at last, but it took a long time.
And then there is gratuitous sexism, the most noticeable aspect of the video. Wendy is in a typing pool of girls. Her concerns are portrayed as how she can change for an evening out or secure some recreation rather than anything to do with her work. Admin staff are all “girls”, physical blue collar work is done by rough looking guys, and managers are invariably men, looking serious. That was the reality then. And you can see how the portrayal in films like this would have prolonged that reality. Feminism needed to be aggressive to shake things up enough to drive change.
In many countries we have since made great strides in tackling feminism, homophobia, racism and class stereotypes. Nonetheless we can be sure that it is not just John Terry (allegedly) and Luis Suarez who are lazily prolonging unacceptable current realities today. If a video were made of our daily lives now, and shown forty years from now, our behaviour would be exposed just like those from the 1960’s was, in ways we don’t even notice today.
Which brings me to my main point. The past has many lessons. But most of those lessons are not obvious from the vantage point of the past. The makers of the video were setting down something they thought would be interesting in the future, but the things that are interesting are not the things they envisaged.
That may be part of the reason why Deadlink fails. We record what we think people can learn. But by the time anyone is ready to learn, the context has changed and the relevant lessons are not those we envisaged.
This argues for a more random way of recording and accessing the past. Rather than just storing documents, we should somehow try to store experiences, without trying to judge the lessons.
Even five years ago, this was an impossible technical challenge. But with youtube and google, now we have the power to store so much more, and also access archives based on keywords. My guess is that this will revolutionise our ability to learn in a very short time, and competitive advantage will be available to those who can jump the queue.
Specific, targeted learning from looking back is much simpler. I don’t understand why companies do not insist more on post investment reviews. It also makes sense after any project to pull the team together to see what there is to learn. Few do it, and those that do always benefit. Perhaps it is not done because people let the emotional side take over. Someone trying to get a bonus or credit or shift blame can get these reviews a bad name very easily.
Another reason to look back occasionally is to celebrate progress. In my singing lessons, every so often I try to re-learn a song I studied some years before. This is always so good for morale, as the high notes and passages that used to cost me sleep invariably seem so much easier now. I have got better, and it is only this sort of thing that offers proof. Similarly, when we go to dancing class, I love to observe the end of the previous class. Often it is a group of a standard that we were a year ago, and don’t they seem slow! At the time, those steps were hard for us to, and it is good to see that and celebrate the progress we have made.
In singing and dancing these simple benchmarks are available, but in most aspects of our lives it is harder. Am I a better parent nowadays? I have no idea, and it would be hard to conceive of evidence to prove it one way or the other. Unless I had lots and lots of video clips, I suppose. Clips which the facebook generation may well have when it is their turn.
Living in the present is a good idea, but the past has its uses. The same technology that could revolutionise corporate learning is available to us as individuals. We should all take lots of photos and make lots of videos, and not just of things we think are interesting now. We can look at them later, and learn things, things we could not even contemplate now. Learning and celebrating are both good ideas.
While living in the present is a good general rule, there are useful things that the future and the past can do for us. The future offers us hopes that can become plans or intentions. And the past offers us the chance to learn, and sometimes to celebrate.
Learning from the past is a laudable objective of many companies, yet it does seem hard to achieve. In Shell we had an enormous computer repository of all sorts of data, called Livelink, where people dutifully recorded their activities. The problem was that, in general, no-one ever accessed this data ever again. No wonder smart cynics used to call it Deadlink.
I often wondered why this was. My main conclusion was that we humans are often too arrogant or too stressed to take the trouble to ask questions of the past. Somehow, it seems like cheating, or it takes away the fun of problem solving. True, but there had to be more to it than that.
I was handed a fortuitous clue this month when a friend sent me a link to an old promotional clip for Shell Centre, made soon after the building opened in the 1960’s. Thanks George, it gave me a laugh as well as setting me thinking. You can watch it for yourself on http://www.youtube.com/watch?v=8zUQD1p9bXY&feature=related&&
There are some predictable take-aways from the film. Anyone in the 1960’s showing off about the state of technology then, be it telephones, switchboards, typing pools or mail rooms would not be too surprised to learn that things have moved on apace since.
There were some physical areas where it struck me how little progress there had been since the 1960’s. All the public areas of the building, the lifts, the canteen and the offices all looked much the same forty years after the film was made. True, nowadays no one would bother to show off about the speed of a lift. But it seems we have made little progress in how buildings work for us.
And in some areas we have got worse. Security has become more pervasive and intrusive than ever. Sometimes in recent years it took me 15 minutes to gain access to Shell Centre, unthinkable in the 1960’s. Yes, there are new threats. But I fear that security is just slapped on without much thought for the typical person. Just look at the journey from the front door of an airport onto a plane – it is not designed with us in mind.
However, in the video the most telling things were social ones. We learn most about the things that were never highlighted in the commentary. Someone had taken the trouble to include a token black man in the post room, which just looked anomalous now, showing by accident how much progress has been made in race relations. Wow, even the football pitch is joining the twentieth century nowadays, if not quite yet the twenty first.
But that was not the most obvious apartheid. Class reared its head all through the video. Shell did well not to include shots of the executive dining room, but it was still in existence, for forty years after the film was made. Progress there has come at last, but it took a long time.
And then there is gratuitous sexism, the most noticeable aspect of the video. Wendy is in a typing pool of girls. Her concerns are portrayed as how she can change for an evening out or secure some recreation rather than anything to do with her work. Admin staff are all “girls”, physical blue collar work is done by rough looking guys, and managers are invariably men, looking serious. That was the reality then. And you can see how the portrayal in films like this would have prolonged that reality. Feminism needed to be aggressive to shake things up enough to drive change.
In many countries we have since made great strides in tackling feminism, homophobia, racism and class stereotypes. Nonetheless we can be sure that it is not just John Terry (allegedly) and Luis Suarez who are lazily prolonging unacceptable current realities today. If a video were made of our daily lives now, and shown forty years from now, our behaviour would be exposed just like those from the 1960’s was, in ways we don’t even notice today.
Which brings me to my main point. The past has many lessons. But most of those lessons are not obvious from the vantage point of the past. The makers of the video were setting down something they thought would be interesting in the future, but the things that are interesting are not the things they envisaged.
That may be part of the reason why Deadlink fails. We record what we think people can learn. But by the time anyone is ready to learn, the context has changed and the relevant lessons are not those we envisaged.
This argues for a more random way of recording and accessing the past. Rather than just storing documents, we should somehow try to store experiences, without trying to judge the lessons.
Even five years ago, this was an impossible technical challenge. But with youtube and google, now we have the power to store so much more, and also access archives based on keywords. My guess is that this will revolutionise our ability to learn in a very short time, and competitive advantage will be available to those who can jump the queue.
Specific, targeted learning from looking back is much simpler. I don’t understand why companies do not insist more on post investment reviews. It also makes sense after any project to pull the team together to see what there is to learn. Few do it, and those that do always benefit. Perhaps it is not done because people let the emotional side take over. Someone trying to get a bonus or credit or shift blame can get these reviews a bad name very easily.
Another reason to look back occasionally is to celebrate progress. In my singing lessons, every so often I try to re-learn a song I studied some years before. This is always so good for morale, as the high notes and passages that used to cost me sleep invariably seem so much easier now. I have got better, and it is only this sort of thing that offers proof. Similarly, when we go to dancing class, I love to observe the end of the previous class. Often it is a group of a standard that we were a year ago, and don’t they seem slow! At the time, those steps were hard for us to, and it is good to see that and celebrate the progress we have made.
In singing and dancing these simple benchmarks are available, but in most aspects of our lives it is harder. Am I a better parent nowadays? I have no idea, and it would be hard to conceive of evidence to prove it one way or the other. Unless I had lots and lots of video clips, I suppose. Clips which the facebook generation may well have when it is their turn.
Living in the present is a good idea, but the past has its uses. The same technology that could revolutionise corporate learning is available to us as individuals. We should all take lots of photos and make lots of videos, and not just of things we think are interesting now. We can look at them later, and learn things, things we could not even contemplate now. Learning and celebrating are both good ideas.
Friday, February 3, 2012
The Optimism Bias
Are you a glass half full or glass half empty person?
I read a couple of articles this week which both suggested that human beings have a bias towards optimism. Supposedly it is something that distinguishes us from other animals. Furthermore, capitalists claim it is a positive factor in business, since it makes us good at the creative destruction required for progress.
This got me thinking. Are we really optimistic? More than other animals? Our cat is certainly optimistic, always exploring, curious, living in hope. I don’t think I’m more optimistic than the cat. Still, that is what the research has discovered, and I’ve certainly evolved to be brainier than the cat, for better or worse, and perhaps my optimism is one reason why.
I certainly accept that a degree of optimism is healthy for us. The same research claimed that without our bias to optimism, we would all be depressed most of the time. I have certainly seen the converse of that. One of the things depressed people lose is their optimism. There is a certain inevitability of failure when failure is expected, and that is how depressed people tend to think.
Yet optimism plainly has its downside as well. If we all threw ourselves off tall buildings, in hoping that we would be OK, our life expectancy would suffer. Yet in many things we are a bit reckless. We go skiing, despite evidence from statistics and from our own eyes – how often do you see people carted off in ambulances, and what makes you think that will not be you next time? We place massive trust in fellow human beings every time we get into a car, yet it doesn’t stop us speeding.
Gambling is also pretty reckless, yet it seems to be a human urge that is hard to control. And I’m not even sure about the claim of the capitalists. I have seen crazy, reckless behaviour again and again in business. Almost every acquisition I have been involved in has become a sort of animal hunt that eventually tosses reason out of the window. And what about all those dot com business models that started with the wonderful naïve assumption, that if just one per cent of possible users became users, we would all be rich?
What about with relationships? Almost one in two marriages in Western societies now ends in divorce. Globally, a far large share than 50% ends in misery for one or both parties. Yet somehow we all think our own marriages are different, that those statistics don’t apply to us.
Then there is health. Much though the tabloids love to play on our fears by reporting daily about the dangers of some foodstuff or other, our behaviour usually suggests we believe we are invincible. How many people die each die without making a will? How many people (especially us men, myself included) don’t bother with health checks and would rather ignore symptoms than face up to them?
And our last great optimism is our faith. Even people with no religious belief like to think there might be something waiting for us after our death. Looking at the evidence, that seems heroically optimistic really. There seems to be even less evidence for another common belief, that somehow some God has chosen us individually from the crowd to look after.
Some of these examples of optimism are healthy, some less so. It is not so clear cut whether the net effect of all of them is good or bad, both for us as individuals or for our species overall.
There are other factors in play as well as optimism. Curiosity is generally good, if it doesn’t become envy or obsession with others. A sense of adventure, with limits around high buildings and the like, must be good too. Even faith has its advantages. Whether there is an afterlife or not, a belief system helps us to stay humble and recognise and accept our ignorance and relative powerlessness. It is also good to try to keep a balanced view of the bigger picture – there are cycles in life, and things will sometimes get better, sometimes worse.
On the reverse side, superstition or irrational exuberance probably have more downsides than up. You don’t meet too many well-balanced gamblers, and the partners of gamblers suffer even more.
What is clearly true is that a sunny nature is a blessing. Whether my own glass is half full or half empty, it is always more fun to be with people from the half full persuasion.
In business, I am not so sure. Optimism is all very well in the marketing department, but cold, hard numbers have their place too.
Are there difference between nations and cultures? Scandinavians are known to have a prevalence for depression and suicide. It seems to be accepted that this is related to light deprivation in the winters. Portuguese are also said to be a bit sombre, while some Latin nations are sunnier, and Americans are also known for their optimism.
One of my favourite bits of market research is about American optimism, and it goes a long way to explain US politics. When Europeans and Americans are asked what class or income bracket they belong to today, both groups answer quite realistically in accordance with the facts. But asked what class or income bracket they will belong to ten years into the future, Europeans tend to assume little change, while most Americans see themselves moving up a rung or two.
Now that is optimism. It explains why taxation of the wealthy wins fewer votes stateside. Does it explain US economic success? I’m not so sure.
Another group of relentlessly optimistic people are those who succeed in sales jobs. I read that the human characteristic most correlated with success in sales is the ability to be rejected on Monday yet still turn up smiling on Tuesday. If you are thinking of career in sales, or looking to recruit sales people, bear this fact in mind.
Again, there might be more than optimism in play. Fear of rejection may be lower in sales people. They may have the same degree of optimism about whether a sale will come off, but may have a different response to failure or anticipated failure, being ready to brush it off and move on.
I’m always careful about gender generalisation, but this last quality may be a male one. If so, it is a good thing, as us guys seem to have more things going against us than for us (listening, empathy, persistence, etc.), so we need some advantages. It might start with the dating game. Even nowadays, it is usually the job of the male to initiate the various phases of the relationship. That places us right in line for rejection. Yet we bounce back again the next day.
What is that? Optimism? Arrogance? Hardness? Whatever it is, the species needs it to prolong itself. And in the end, any optimism bias probably comes down to simple Darwinism. Which is one reason why I’m a bit sceptical about the claim that we have more optimism than other animals, cats or otherwise. They have to evolve too.
So perhaps we ought to wish for a cocktail of attributes. A sunny nature, and the luck to find others with a sunny nature. Some curiosity, sense of adventure, humility, recognition of ignorance. A dose of bounce-back-ability. But not too much recklessness or superstition.
I read a couple of articles this week which both suggested that human beings have a bias towards optimism. Supposedly it is something that distinguishes us from other animals. Furthermore, capitalists claim it is a positive factor in business, since it makes us good at the creative destruction required for progress.
This got me thinking. Are we really optimistic? More than other animals? Our cat is certainly optimistic, always exploring, curious, living in hope. I don’t think I’m more optimistic than the cat. Still, that is what the research has discovered, and I’ve certainly evolved to be brainier than the cat, for better or worse, and perhaps my optimism is one reason why.
I certainly accept that a degree of optimism is healthy for us. The same research claimed that without our bias to optimism, we would all be depressed most of the time. I have certainly seen the converse of that. One of the things depressed people lose is their optimism. There is a certain inevitability of failure when failure is expected, and that is how depressed people tend to think.
Yet optimism plainly has its downside as well. If we all threw ourselves off tall buildings, in hoping that we would be OK, our life expectancy would suffer. Yet in many things we are a bit reckless. We go skiing, despite evidence from statistics and from our own eyes – how often do you see people carted off in ambulances, and what makes you think that will not be you next time? We place massive trust in fellow human beings every time we get into a car, yet it doesn’t stop us speeding.
Gambling is also pretty reckless, yet it seems to be a human urge that is hard to control. And I’m not even sure about the claim of the capitalists. I have seen crazy, reckless behaviour again and again in business. Almost every acquisition I have been involved in has become a sort of animal hunt that eventually tosses reason out of the window. And what about all those dot com business models that started with the wonderful naïve assumption, that if just one per cent of possible users became users, we would all be rich?
What about with relationships? Almost one in two marriages in Western societies now ends in divorce. Globally, a far large share than 50% ends in misery for one or both parties. Yet somehow we all think our own marriages are different, that those statistics don’t apply to us.
Then there is health. Much though the tabloids love to play on our fears by reporting daily about the dangers of some foodstuff or other, our behaviour usually suggests we believe we are invincible. How many people die each die without making a will? How many people (especially us men, myself included) don’t bother with health checks and would rather ignore symptoms than face up to them?
And our last great optimism is our faith. Even people with no religious belief like to think there might be something waiting for us after our death. Looking at the evidence, that seems heroically optimistic really. There seems to be even less evidence for another common belief, that somehow some God has chosen us individually from the crowd to look after.
Some of these examples of optimism are healthy, some less so. It is not so clear cut whether the net effect of all of them is good or bad, both for us as individuals or for our species overall.
There are other factors in play as well as optimism. Curiosity is generally good, if it doesn’t become envy or obsession with others. A sense of adventure, with limits around high buildings and the like, must be good too. Even faith has its advantages. Whether there is an afterlife or not, a belief system helps us to stay humble and recognise and accept our ignorance and relative powerlessness. It is also good to try to keep a balanced view of the bigger picture – there are cycles in life, and things will sometimes get better, sometimes worse.
On the reverse side, superstition or irrational exuberance probably have more downsides than up. You don’t meet too many well-balanced gamblers, and the partners of gamblers suffer even more.
What is clearly true is that a sunny nature is a blessing. Whether my own glass is half full or half empty, it is always more fun to be with people from the half full persuasion.
In business, I am not so sure. Optimism is all very well in the marketing department, but cold, hard numbers have their place too.
Are there difference between nations and cultures? Scandinavians are known to have a prevalence for depression and suicide. It seems to be accepted that this is related to light deprivation in the winters. Portuguese are also said to be a bit sombre, while some Latin nations are sunnier, and Americans are also known for their optimism.
One of my favourite bits of market research is about American optimism, and it goes a long way to explain US politics. When Europeans and Americans are asked what class or income bracket they belong to today, both groups answer quite realistically in accordance with the facts. But asked what class or income bracket they will belong to ten years into the future, Europeans tend to assume little change, while most Americans see themselves moving up a rung or two.
Now that is optimism. It explains why taxation of the wealthy wins fewer votes stateside. Does it explain US economic success? I’m not so sure.
Another group of relentlessly optimistic people are those who succeed in sales jobs. I read that the human characteristic most correlated with success in sales is the ability to be rejected on Monday yet still turn up smiling on Tuesday. If you are thinking of career in sales, or looking to recruit sales people, bear this fact in mind.
Again, there might be more than optimism in play. Fear of rejection may be lower in sales people. They may have the same degree of optimism about whether a sale will come off, but may have a different response to failure or anticipated failure, being ready to brush it off and move on.
I’m always careful about gender generalisation, but this last quality may be a male one. If so, it is a good thing, as us guys seem to have more things going against us than for us (listening, empathy, persistence, etc.), so we need some advantages. It might start with the dating game. Even nowadays, it is usually the job of the male to initiate the various phases of the relationship. That places us right in line for rejection. Yet we bounce back again the next day.
What is that? Optimism? Arrogance? Hardness? Whatever it is, the species needs it to prolong itself. And in the end, any optimism bias probably comes down to simple Darwinism. Which is one reason why I’m a bit sceptical about the claim that we have more optimism than other animals, cats or otherwise. They have to evolve too.
So perhaps we ought to wish for a cocktail of attributes. A sunny nature, and the luck to find others with a sunny nature. Some curiosity, sense of adventure, humility, recognition of ignorance. A dose of bounce-back-ability. But not too much recklessness or superstition.
Thursday, January 26, 2012
Remembering Maggie-nomics
Mrs Thatcher has been in the news lately, because of the Meryl Streep movie. I’m looking forward to seeing it. She is polarising opinion once again, just like the 1980’s.
As did most twenty somethings at the time, I used to loathe Maggie. The way she seemed to be completely indifferent to condemning people to unemployment I found repellent then, and still does now.
Yet now I am older, I can see things are rarely so simple, and there were things to admire about Maggie. As a woman leader, she did a lot for female emancipation. And here are three other ways I admire her.
First, she challenged the establishment. Just like now, there was a consensus at the time, with the civil service running the show and little difference between the political parties. She refused to accept that, and challenged the orthodoxy of the day. Many of her solutions were poor, but she had the guts to rattle things about. We do not have enough courageous politicians, which is why people become apathetic about politics and sometimes look to extremes. Ed Miliband could take note. So could almost all leaders of the EU.
Second, she made clear decisions. I remember the week of the Falklands crisis in 1982, it was the week of my job interviews at Shell and other things in my personal life, and it all played out against this dramatic backdrop of the nation going to war. Maggie may have mismanaged the lead up to the crisis, but once Argentina invaded, there were only two choices. These were to accept the new situation, or fight without compromise. Maggie chose to fight, and did not flinch in the weeks that followed. Most politicians and advisors would have tried to triangulate, to compromise, keep options open, fudge things between the two choices. They would have failed. There are times when a firm choice is the only way. I’m not saying I defend the UK occupation of the islands, which seems to me like a historical anomaly. But I admire that choice.
Similarly, she showed the same decisiveness when taking on the miners. Again, most politicians would have wavered. She saw it through for better or worse.
My last admiration is of something she said when she first came to power, and which was widely scorned. She compared the UK economy to a grocery shop, saying that over time expenditure had to match income. Simple, homely economics, and at the time everyone thought she was naïve, including me. But perhaps instead she was brilliant.
We are in the middle of a global economic crisis. There are many excuses, explanations, accusations and solutions banded about, but possibly at its heart it comes down to Maggie’s grocery and to debt.
Debt can be marvellous, actually one of the most important engines to progress. It is a sort of multiplier, something which can speed things up, a sort of double or quits option which gives benefits when plans are good. Nearly all of us use debt, most notably when we take out a mortgage. We are taking a reasonable gamble with our future, believing that the asset value and our future earnings will enable us to achieve a triple benefit – to enjoy progress quicker in the form of a nicer place to live, to be able to eventually clear the debt, and potentially also to secure profit from the appreciating asset. Companies do the same thing all the time. It is the engine of a sound economy.
But the key word is reasonable. As an individual or a household, we have to assess the odds on our gamble. Will our income really rise? Will we able to afford the interest even in bad times? In short, do we have a credible plan to repay our debt, a plan which takes account likely negative contingencies?
If an individual or family overstretches, it ends up in the hell of negative equity and shot credit ratings, from whence there seems no escape, only loan sharks feeding off your carcass. If a firm overstretches, the shareholders eventually notice and lose confidence and bankruptcy beckons.
We can blame the banks. I love blaming banks. They are so greedy and stupid. It is shameless to lure less numerate people into the hell of debt, yet that seems to be their business model. I blogged before about the American bank that refused most Shell customers a credit card because their credit risk was not high enough. Evil. But still as individuals and families we get greedy and foolish too, and have to take our share of fault. For companies there is even less excuse.
But what about countries? The same basic logic applies. Use debt, but only for a value creating reason and with a credible plan to pay it back.
A credible plan comes in many forms. Maybe there is a demographic dividend coming to the nation, with a higher share of working age people expected. Maybe there are smart reforms, in education, or infrastructure, or employment law in the pipeline. Maybe there are natural resources to exploit. Or a competitiveness agenda.
Now look at the USA and Europe. No credible plan is in place. In fact, most trends make things worse. Yet the French have not run a balanced budget for seventeen years. The Italians let debt mount while competitiveness is only worsened by Zimbabwe and Haiti. The Americans have political gridlock. Nearly all these nations, except Germany, run a trade deficit year after year after year. No one really invests in education or infrastructure, only increasingly in pensions. It was pensions that killed Detroit and other corporate giants – it will slowly strangle our rich countries too.
The crisis should have been no surprise. We can, and should, blame the banks, but not only the banks. The whole system has got too far out of balance, with no credible plan to rebalance it.
Indeed, current plans make it worse. Austerity might balance the budget within a country for a while, but it will only make competitiveness weaker. Within the euro, devaluation is off the table.
What can be done? Well, we could reverse logic and look at countries running a habitual surplus. Trade, unlike personal debt, is a zero sum game. The post-war consensus (with largely fixed exchange rates, note) only started breaking down when Japan and then the Arab starts started building up structural surpluses, condemning the rest to structural deficits. Now the same thing is happening with China. At least the Chinese are ploughing their surpluses back in, though the West are fighting it, and even with that move the music has to stop sometime. It may seem a paradox, but structural surpluses in the end condemn us to instability.
Revaluation can help, and the Chinese would do well to let that happen. If this were individuals or companies, taxation policy would provide an equaliser – maybe surplus countries should pay some sort of levy to the IMF? Currently, countries are not even subject to any competition law – OPEC would never be permitted if the players were companies not states. In the end, this is one more argument against countries – if we were able to take a global approach, transfers and taxes could balance things out.
But, today, the only thing on the table is austerity. That will not work. By a strange irony, austerity was Maggie’s remedy too. She understood about the peril of debt with no plan, from her grocery analogy. She escaped, but that was less to do with austerity and more to do with the windfall of North Sea oil. Even so, some Maggie style challenging of the flawed establishment would be valuable today around the corridors of the G20.
As did most twenty somethings at the time, I used to loathe Maggie. The way she seemed to be completely indifferent to condemning people to unemployment I found repellent then, and still does now.
Yet now I am older, I can see things are rarely so simple, and there were things to admire about Maggie. As a woman leader, she did a lot for female emancipation. And here are three other ways I admire her.
First, she challenged the establishment. Just like now, there was a consensus at the time, with the civil service running the show and little difference between the political parties. She refused to accept that, and challenged the orthodoxy of the day. Many of her solutions were poor, but she had the guts to rattle things about. We do not have enough courageous politicians, which is why people become apathetic about politics and sometimes look to extremes. Ed Miliband could take note. So could almost all leaders of the EU.
Second, she made clear decisions. I remember the week of the Falklands crisis in 1982, it was the week of my job interviews at Shell and other things in my personal life, and it all played out against this dramatic backdrop of the nation going to war. Maggie may have mismanaged the lead up to the crisis, but once Argentina invaded, there were only two choices. These were to accept the new situation, or fight without compromise. Maggie chose to fight, and did not flinch in the weeks that followed. Most politicians and advisors would have tried to triangulate, to compromise, keep options open, fudge things between the two choices. They would have failed. There are times when a firm choice is the only way. I’m not saying I defend the UK occupation of the islands, which seems to me like a historical anomaly. But I admire that choice.
Similarly, she showed the same decisiveness when taking on the miners. Again, most politicians would have wavered. She saw it through for better or worse.
My last admiration is of something she said when she first came to power, and which was widely scorned. She compared the UK economy to a grocery shop, saying that over time expenditure had to match income. Simple, homely economics, and at the time everyone thought she was naïve, including me. But perhaps instead she was brilliant.
We are in the middle of a global economic crisis. There are many excuses, explanations, accusations and solutions banded about, but possibly at its heart it comes down to Maggie’s grocery and to debt.
Debt can be marvellous, actually one of the most important engines to progress. It is a sort of multiplier, something which can speed things up, a sort of double or quits option which gives benefits when plans are good. Nearly all of us use debt, most notably when we take out a mortgage. We are taking a reasonable gamble with our future, believing that the asset value and our future earnings will enable us to achieve a triple benefit – to enjoy progress quicker in the form of a nicer place to live, to be able to eventually clear the debt, and potentially also to secure profit from the appreciating asset. Companies do the same thing all the time. It is the engine of a sound economy.
But the key word is reasonable. As an individual or a household, we have to assess the odds on our gamble. Will our income really rise? Will we able to afford the interest even in bad times? In short, do we have a credible plan to repay our debt, a plan which takes account likely negative contingencies?
If an individual or family overstretches, it ends up in the hell of negative equity and shot credit ratings, from whence there seems no escape, only loan sharks feeding off your carcass. If a firm overstretches, the shareholders eventually notice and lose confidence and bankruptcy beckons.
We can blame the banks. I love blaming banks. They are so greedy and stupid. It is shameless to lure less numerate people into the hell of debt, yet that seems to be their business model. I blogged before about the American bank that refused most Shell customers a credit card because their credit risk was not high enough. Evil. But still as individuals and families we get greedy and foolish too, and have to take our share of fault. For companies there is even less excuse.
But what about countries? The same basic logic applies. Use debt, but only for a value creating reason and with a credible plan to pay it back.
A credible plan comes in many forms. Maybe there is a demographic dividend coming to the nation, with a higher share of working age people expected. Maybe there are smart reforms, in education, or infrastructure, or employment law in the pipeline. Maybe there are natural resources to exploit. Or a competitiveness agenda.
Now look at the USA and Europe. No credible plan is in place. In fact, most trends make things worse. Yet the French have not run a balanced budget for seventeen years. The Italians let debt mount while competitiveness is only worsened by Zimbabwe and Haiti. The Americans have political gridlock. Nearly all these nations, except Germany, run a trade deficit year after year after year. No one really invests in education or infrastructure, only increasingly in pensions. It was pensions that killed Detroit and other corporate giants – it will slowly strangle our rich countries too.
The crisis should have been no surprise. We can, and should, blame the banks, but not only the banks. The whole system has got too far out of balance, with no credible plan to rebalance it.
Indeed, current plans make it worse. Austerity might balance the budget within a country for a while, but it will only make competitiveness weaker. Within the euro, devaluation is off the table.
What can be done? Well, we could reverse logic and look at countries running a habitual surplus. Trade, unlike personal debt, is a zero sum game. The post-war consensus (with largely fixed exchange rates, note) only started breaking down when Japan and then the Arab starts started building up structural surpluses, condemning the rest to structural deficits. Now the same thing is happening with China. At least the Chinese are ploughing their surpluses back in, though the West are fighting it, and even with that move the music has to stop sometime. It may seem a paradox, but structural surpluses in the end condemn us to instability.
Revaluation can help, and the Chinese would do well to let that happen. If this were individuals or companies, taxation policy would provide an equaliser – maybe surplus countries should pay some sort of levy to the IMF? Currently, countries are not even subject to any competition law – OPEC would never be permitted if the players were companies not states. In the end, this is one more argument against countries – if we were able to take a global approach, transfers and taxes could balance things out.
But, today, the only thing on the table is austerity. That will not work. By a strange irony, austerity was Maggie’s remedy too. She understood about the peril of debt with no plan, from her grocery analogy. She escaped, but that was less to do with austerity and more to do with the windfall of North Sea oil. Even so, some Maggie style challenging of the flawed establishment would be valuable today around the corridors of the G20.
Thursday, January 12, 2012
The Tides of Life
Even though I am celebrating ignorance, I can still try to learn things. I was always amazed how in Scandinavia people built their homes right to the water’s edge. There is plenty of severe weather there, especially facing the Norwegian sea, so how could this be safe? And why was there so little tide?
Wikipedia helped a bit. I was a good read, but overall the conclusion is somehow that the tide varies because it does. I can understand how enclosed bodies of water like the Mediterranean or the Baltic have less tides than the oceans. But the other factors are a bit of a mystery, with the moon playing a role as well as something with the lovely name of bathymetry, which had me making mental models of splashing bath water.
Tides are just one of nature’s beautiful cycles. This is a twelve and a half hour cycle. There are of course daily cycles and monthly cycles. Annual cycles give us the wonder of seasons. It is often tempting for those of us who suffer winters to dream of perpetual summer, but the most common complaint of those who have moved is to miss seasons. I love the screensaver showing the daylight around the world, it is somehow peaceful and reminiscent of higher powers.
I can see why. Witnessing light in the sky after five last Sunday was compounded by a hint of a sunrise at eight on Tuesday, both signalling the slow return of daylight to our Northern clime, and giving a similar lift to my mood. Change signals renewal, and renewal is opportunity.
Most religions and beliefs make use of cycles. Most religions suggest a day for praying once per week and have an annual calendar. Whether superstition or not, the enduring practices are most likely the ones that work, that help people live their lives over many generations, so we should not discard them lightly. Feng Shui and the Aztecs are full of beliefs about long cycles. One day we might understand more about their value.
So, much of natural life follows the beautiful sine curve we witness in light each day and each year. Yet we tend to ignore the abundant messages for our business and personal lives. True, most things are complex and influenced by multiple sine curves of different height and length. But the old maxims that was goes up must come down, or what goes around comes around, are more true than we realise.
There was a lovely new item this week. Someone had found a connection between skyscrapers being built and economic crashes. For me it is a nice example of people’s folly over cycles. When are skyscrapers commissioned? When people believe good times will go on forever, when they make economic justifications on assumptions of extrapolating volume and margin trends. In the cycle, they are commissioned on the way up, opened at the top, and often seen as folly soon after as the cycle goes into reverse.
Not everything follows cycles, but it is smart in most cases to assume it, especially when something has an established history of cycles, such as national economies. Nigel Lawson and Gordon Brown both came to regret claims of abolishing economic cycles.
Look at the classic growth picture of a company, and you see a truncated cycle. Growth, slow then rapid then slow then negative. In theory a firm could go all the way to the bottom again before turning back to grow. In practice it gets taken over or goes bankrupt, so we rarely see the full sine curve in all its beauty. Cycles affect nearly everything – even Tesco today signalled it might be at the top of its long upward cycle.
The basic reason why cycles affect most things in economics is that there are usually countervailing forces. At the top, prices are too high and competition erodes margins. At the bottom there is spare capacity and opportunity for the smart. That is the root cause of many natural cycles too.
What is so lamentable is how bad most firms and governments are at spotting cycles. True, many sine curves overlap, and usually there are true trends (or cycles with longer frequencies) playing out alongside cyclical things. But we somehow miss the likelihood of cycles, despite ample evidence. And the result is empty skyscrapers.
An example helps to show why. At Shell I often had to analyse the plans of different countries, and recommend who should get extra capital and who should be cut back. I tried to fight it, but invariably the tendency was to shower riches on the successful and starve the failing. Usually that just meant silly skyscrapers and lazy management for those at the top of a cycle, and lost opportunities at the bottom. Most acquisitions were by overvalued firms of similar overvalued competitors, and divestments were of undervalued assets ready for a cyclical upturn. Smart investors, usually smaller, have taken advantage of this for years.
We did not always get it wrong. Once I was on a small project team trying to buy up tiny oil companies. We developed a little policy, which was to avoid companies with fountains in the yard, or similar monuments to vanity. You wouldn’t think this was much of a strategy, but it worked. And the reason is that the monuments tended to signal someone overreaching at the top of a cycle.
As a manager, there are simple things to do to help. First, try to differentiate between a trend and a cycle. Not easy, but history offers clues, as do analysis of real fundamentals such as Porters Five Forces and demographics. If in doubt, assume a cycle rather than a trend. Then, if you are on the cyclical upswing, tone down your investment assumptions, remember to harvest profits, and look hard at costs. In the downswing, do what you have to do to survive, make sure you have learned lessons and not making things worse, but look for cheap opportunities and signs of a cycle turn.
These same messages apply to all of us in our personal lives. How often do you have a day, or a month, or a year when everything seems to go right? Or wrong? Good news seems to come in waves, and so does bad. Maybe it is just random, but I believe there are natural cycles at work here too, even though you won’t get me signing up to astrology.
So what to do if things are going right? The same things. Don’t assume it will go on forever. Harvest, in the form of celebration and saving. And watch your behaviour – I am always at my nastiest and most intolerant when times are good.
And if things keep going wrong? Survive – stop what has to be stopped. Stop actions that make things worse – for example a bad diet or behaviour. But keep trying with the smart things, believing that the corner will be turned eventually. You’ll be surprised, it will. Keep planting, and some of those seeds will start bearing fruit. Maybe soon.
Of course, if you think things are going badly and nearly always have, you might have an expectation problem. Counting blessings is always a good thing.
So then, the beautiful cycles in nature may have other messages to help us. And the wisdom of elders and experience, whether in a religion or what seems just a superstition, might carry more value than we give it credit for.
Wikipedia helped a bit. I was a good read, but overall the conclusion is somehow that the tide varies because it does. I can understand how enclosed bodies of water like the Mediterranean or the Baltic have less tides than the oceans. But the other factors are a bit of a mystery, with the moon playing a role as well as something with the lovely name of bathymetry, which had me making mental models of splashing bath water.
Tides are just one of nature’s beautiful cycles. This is a twelve and a half hour cycle. There are of course daily cycles and monthly cycles. Annual cycles give us the wonder of seasons. It is often tempting for those of us who suffer winters to dream of perpetual summer, but the most common complaint of those who have moved is to miss seasons. I love the screensaver showing the daylight around the world, it is somehow peaceful and reminiscent of higher powers.
I can see why. Witnessing light in the sky after five last Sunday was compounded by a hint of a sunrise at eight on Tuesday, both signalling the slow return of daylight to our Northern clime, and giving a similar lift to my mood. Change signals renewal, and renewal is opportunity.
Most religions and beliefs make use of cycles. Most religions suggest a day for praying once per week and have an annual calendar. Whether superstition or not, the enduring practices are most likely the ones that work, that help people live their lives over many generations, so we should not discard them lightly. Feng Shui and the Aztecs are full of beliefs about long cycles. One day we might understand more about their value.
So, much of natural life follows the beautiful sine curve we witness in light each day and each year. Yet we tend to ignore the abundant messages for our business and personal lives. True, most things are complex and influenced by multiple sine curves of different height and length. But the old maxims that was goes up must come down, or what goes around comes around, are more true than we realise.
There was a lovely new item this week. Someone had found a connection between skyscrapers being built and economic crashes. For me it is a nice example of people’s folly over cycles. When are skyscrapers commissioned? When people believe good times will go on forever, when they make economic justifications on assumptions of extrapolating volume and margin trends. In the cycle, they are commissioned on the way up, opened at the top, and often seen as folly soon after as the cycle goes into reverse.
Not everything follows cycles, but it is smart in most cases to assume it, especially when something has an established history of cycles, such as national economies. Nigel Lawson and Gordon Brown both came to regret claims of abolishing economic cycles.
Look at the classic growth picture of a company, and you see a truncated cycle. Growth, slow then rapid then slow then negative. In theory a firm could go all the way to the bottom again before turning back to grow. In practice it gets taken over or goes bankrupt, so we rarely see the full sine curve in all its beauty. Cycles affect nearly everything – even Tesco today signalled it might be at the top of its long upward cycle.
The basic reason why cycles affect most things in economics is that there are usually countervailing forces. At the top, prices are too high and competition erodes margins. At the bottom there is spare capacity and opportunity for the smart. That is the root cause of many natural cycles too.
What is so lamentable is how bad most firms and governments are at spotting cycles. True, many sine curves overlap, and usually there are true trends (or cycles with longer frequencies) playing out alongside cyclical things. But we somehow miss the likelihood of cycles, despite ample evidence. And the result is empty skyscrapers.
An example helps to show why. At Shell I often had to analyse the plans of different countries, and recommend who should get extra capital and who should be cut back. I tried to fight it, but invariably the tendency was to shower riches on the successful and starve the failing. Usually that just meant silly skyscrapers and lazy management for those at the top of a cycle, and lost opportunities at the bottom. Most acquisitions were by overvalued firms of similar overvalued competitors, and divestments were of undervalued assets ready for a cyclical upturn. Smart investors, usually smaller, have taken advantage of this for years.
We did not always get it wrong. Once I was on a small project team trying to buy up tiny oil companies. We developed a little policy, which was to avoid companies with fountains in the yard, or similar monuments to vanity. You wouldn’t think this was much of a strategy, but it worked. And the reason is that the monuments tended to signal someone overreaching at the top of a cycle.
As a manager, there are simple things to do to help. First, try to differentiate between a trend and a cycle. Not easy, but history offers clues, as do analysis of real fundamentals such as Porters Five Forces and demographics. If in doubt, assume a cycle rather than a trend. Then, if you are on the cyclical upswing, tone down your investment assumptions, remember to harvest profits, and look hard at costs. In the downswing, do what you have to do to survive, make sure you have learned lessons and not making things worse, but look for cheap opportunities and signs of a cycle turn.
These same messages apply to all of us in our personal lives. How often do you have a day, or a month, or a year when everything seems to go right? Or wrong? Good news seems to come in waves, and so does bad. Maybe it is just random, but I believe there are natural cycles at work here too, even though you won’t get me signing up to astrology.
So what to do if things are going right? The same things. Don’t assume it will go on forever. Harvest, in the form of celebration and saving. And watch your behaviour – I am always at my nastiest and most intolerant when times are good.
And if things keep going wrong? Survive – stop what has to be stopped. Stop actions that make things worse – for example a bad diet or behaviour. But keep trying with the smart things, believing that the corner will be turned eventually. You’ll be surprised, it will. Keep planting, and some of those seeds will start bearing fruit. Maybe soon.
Of course, if you think things are going badly and nearly always have, you might have an expectation problem. Counting blessings is always a good thing.
So then, the beautiful cycles in nature may have other messages to help us. And the wisdom of elders and experience, whether in a religion or what seems just a superstition, might carry more value than we give it credit for.
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