I’m not a blogger

I’m not. It’s an uncomfortable fact for both of us, that this copy really exists for me, not you. I’m not trying to be a jerk about this; I just want to set your expectations right from the outset.

I used to feel beholden to my blog (not particularly often as you can tell by my blogging frequency), like a diary with a daily quotient that had to be met, but not anymore. I write here when I feel like it and frankly when I have the time. Forgive my selfishness. It’s not that I don’t care about you (gentle reader), it’s that I don’t think catering to you will make this any more interesting. Maybe it’s tough love. I would like to pretend that I am independent and cavalier enough that I just don’t give a flip, but that isn’t true. I want to be liked as much as the next human. But it isn’t very likable to go around trying to be liked. In the end, you just have to do your thing and if it resonates with someone else, that’s awesome. If not, no biggie there either.

Here’s the thing, I think there are a bunch of you writers out there in the same boat.

Don’t get me wrong, I LOVE writing. I write every day (just not here).

I recently articulated something similar to myself. In my professional circles, I have many relationships that I value. But I don’t value any of them enough to forgo making my contribution in the way I believe is best. One of the things that has been good for me in my career that a long time ago, I was out of work for a substantial amount of time. Months and not years, if you are curious. After going through that, I was boldened. Since that time I have never been afraid of being fired. I don’t kowtow to anyone or suffer manipulation in my partnerships or work roles as a result of fear of being fired. This has allowed me to do MUCH better work and make a stronger contribution in all of my roles since.

The new thing that happened is that I realized that I was committed enough to doing what I believed to be right that I was not only happy to risk being fired, but happy to risk relationships that couldn’t withstand me working at my best. As I stated in an interview recently, I don’t get out of bed in the morning unless it is to try to change the world. I’m not saying I hit that goal all the time… or even very often if I think about it. But I’m striving for it every single day.

Commitments have a cost. Commitments mean you cannot accommodate everybody. Some things have to be sacrificed if you want to make commitments. And I’m at peace with those sacrifices. I’m good with it. I’m not going to fret, or stress… I’m just going to keep getting up everyday hoping to change the world.

The Evolution of Education

The face of education is changing. This has been a theme for me over the past few years.

What I think most authors on this subject are missing is that this shift is driven by a powerful confluence of factors, and not merely a comment on the advance of technology or the peculiar study habits of Millennials.

Sure the Internet has enabled the Massive Open Online Course (MOOC) trend, is facilitating a delivery channel for education. But the velocity with which MOOCs are penetrating the market is driven by the broken economics of traditional education.

Students are fed up with a product that no longer serves them. Employers are giving less credence to degrees and degree holders.    A recent Money Magazine article stated that nearly 30% of students with a much less expensive Associate’s Degree are out-earning those with Bachelor’s Degrees. The costs of education are going up (in a peculiar break from standard supply and demand economics, education pricing has soared through the recession which began in 2008). New students are justifiably questioning whether an education is worth the cost. College placement rates are dismal and the actual information conveyed in many university courses is available online and on-demand for free. Young people today often view education as a problem-solution situation. I need to know something, ergo. I look it up online. Why would I waste my time in school?

Consider what the product of an education is. Knowledge or information about a subject. A certificate authorized by a body of accreditation that tells everyone you really know what you are doing. An opportunity to network with other students. An opportunity to get involved in academia, which I define as doing research and working on projects that have not yet proven to be marketable.

Now ask yourself how many of these objectives can just as easily be obtained via CourseraEdX, Udacity, UdemySkillshare, or the Khan Academy with no unbankruptable student loan debt.

In the name of full disclosure, I am not unbiased since I work as an entrepreneur and consultant for a couple of startup companies and as an adjunct professor in the Finance department at the University of Utah.

Education Bubble Part 2

More of this is hitting the news. This video gives more details of the education bubble. To me the big question is this, is the free market being prevented from equalizing the student loan debt situation because student loans are not bankruptable? If bankruptcy is the great “do-over” allowing citizens to recover from untenable financial situations and return to society in a productive role, then are we just crippling students by not allowing them to participate in this mechanism available to the rest of society? Maybe the OWS crowd wouldn’t be so angry if they had the ability to recover from the fateful decision of picking a major with no economic prospects. In any case, I think there is a reasonable argument to be made that if we are willing to forgive debt to countries in Africa, we ought to consider giving at least the bakruptcy option (which is not without consequences) to our own young people.

 

The Education Bubble

I’ve been talking about this for about 3 years. I’m glad somebody finally picked it up. The AP reported on a financial bubble in education last week. There have been a slough of stories percolating about this, such as Generation Jobless: Is An Ivy League Diploma Worth It?, and some spinoffs of ridiculous comments made by unemployed Occupy Wall Street lemmings, like What’s Your Kid Getting From College? 

There are also some debates about what constitutes a REAL economic bubble, as if anyone caught up in it cares about the precise definition of the hyperbolic media parlance. Personally, I’m more interested in the similarities of the big bubbles, Dot.com, real estate, and now education. In all three cases, it appears that a disconnect arose between price and value. Specifically, the price inflated way beyond the intrinsic value of the underlying asset. With the Dot.coms there was a belief that traditional valuation methods based on old-fashioned metrics like assets or earnings were passe and companies could be valued for cyberspace intangibles like website visitors or stickiness. With the real estate bubble home prices were artificially inflated due to massive pull-through demand generated by collateralized mortgage obligations, fueled by investor cash that had fled the market in the Dot.com crash looking for something “safer” that financiers didn’t understand… real estate.

So, how does education—and more particularly student loan debt—look like these previous bubbles? Well for starters, the price and the underlying value are way out of whack. Tuitions have escalated around the country in the midst of the financial crisis, its ensuing recession and remaining aftermath. How is that possible? Do people have more money to spend on education? No. Has the value of education gone up? No. In fact, the opposite is true. New graduates are now competing with candidates that have both degrees and experience, but who now find themselves part of the massive ranks of unemployed Americans vying for available positions.

Any hope that this climate might change soon dwindles in the face of politicians like Harry Reid who showed such a profound misunderstanding of economics that he was recently quoted as saying millionaire job creators are like unicorns, they don’t exist. Seriously, what an out of touch tool.

Despite any political despair, the question remains, why would tuitions rise in the face of declining economic operators? Demand is down, supply is up, and yet the price climbs. This simple analysis betrays the disconnect and the evidence of a bubble.

Disconnects like this also alert us to other symptoms of a problem. If the economics are breaking down, then too is the value this education is providing to society. But in the face of this evidence, the powers that be continue to raise the cost of traditional education and use their influence to prevent new entrants into the market. I am not about to prognosticate about how this bubble will resolve itself. One thing preventing it from popping is the un-bankruptability of student loan debt. However, depending on election results this coming year, someone may get wise to the idea that if we are going to forgive debts we would be just as well to forgive them to our citizens as to developing nations in Africa or Asia. And when we do, education will rapidly return to its fair-valued price. In other words… pop.

 

 

 

The Punctuated Equilibrium of Leadership

Many of us have worked for someone and thought, I could do his job. What’s so great about that person? (These thoughts are probably more prevalent when that person is our boss and is driving us crazy.) I’m not trying to answer every question about how some people work their way into leadership positions. What I am going to do is suggest some thoughts about why a person, who still only has 24 hours in a day, who still has only one FTE of output, and who puts their pant on one leg at a time just like everybody else, might be able to create disproportionate value for a company.

I recently read Linchpin: Are You Indespensable? by Seth Godin. (I also recently gave this book a negative review on my LinkedIn reading list and now I’m quoting it, go figure.) On page 51 (of the hardcover first edition), he made a comment about Richard Branson as follows:

You could do Richard Branson’s job.

Most of the time, anyway.

… You could certainly do most of what he does, perhaps better than he does it. Except for what he does for about five minutes a day. In those five minutes, he creates billions of dollars’ worth of value every few years, and neither you nor I would have a prayer of doing what he does.

Now, if you are interested in what Godin says Branson does in those five minutes, you can read the book. What interested me is this idea that a leader was able to create that kind of leverage. That there really might be a quality time component to leadership, that made the economy of a company work, despite an ostensibly disproportionate amount of control and pay residing in one individual.

I have known CEOs who felt that the key to their leadership was to outwork, outsmart, and outperform everybody in the company in every function. This seems obviously foolish, but in their desire to lead by example, they view their company like a wolf pack where their position at the top is only secure as long as they can unseat any challenger to their superiority. If a leader’s true value is not created by putting in more hours than anybody else—hours are finite after all—but, instead leveraging a few critical moments of judgement, decision-making, insight, or charisma, then the economy of leadership within a company make sense.

I titled this post, The Punctuated Equilibrium of Leadership, because this narrow opportunity to exercise leadership that would be leveraged across other less-critical moments, reminded me of Stephen J. Gould‘s concept of punctuated equilibrium in evolutionary biology (something that opens up an extremely wide field of potential common ground with scientists who are also men of faith). This is the idea that things move along for a time with very little change, and that these times of relative equilibrium are punctuated by times of rapid change.

In support of this idea, I recently read the latest Jim Collins book, Great by Choice: Uncertainty, Chaos, and Luck—Why Some Thrive Despite Them All, which is a follow up to Good to Great and How the Mighty Fall. On page 120, he writes:

Not all time in life is equal. Life serves up some moments that count much more than other moments…. We will all face moments when the quality of our performance matters much more than other moments, moments that we can sieze or squander…. [We can] respond to unequal times with unequal intensity, when it matters most.

Having spent a few years of my career as a CEO, this is hyper-relevant to me as I strive to be equal to the critical moments that I will inevitably arise in the future of my company. But I think it has a broader application than that. It seems to me that whatever the endeavor, if we want to achieve our life’s goals, we need to dedicate ourselves to being prepared to be equal to the critical moments that present themselves. We can abdicate this quality on behalf of our company, if we aren’t the CEO—but we can’t abdicate it in our lives. There isn’t anyone else who is more invested in our success as individuals. In effect, we are all the CEOs of our own lives, and it isn’t a job we can be fired from, resign from, or otherwise give up to others. As Collins says, not all time in life is equal. We have time during the equilibrium to prepare to make the critical choices when they come.

Who are your influences?

“Who’re your influences?”

This was the question Jimmy Rabbitte posed to each prospect interviewing to join the “World’s hardest working band,” The Commitments, in the 1991 film adapted from Roddy Doyle‘s classic novel. The Commitments is a great (albeit profane) cultural snapshot of the pre-Celtic Tiger Ireland I first encountered as a missionary in January of 1992.

One of the reasons I love this line from the movie is that Jimmy is trying to do what everyone who has ever interviewed someone tries to do—ask questions that probe deep and in a few brief moments reveal a person’s character and future behavior, to peer into the soul of the interviewee and see what kind of person he or she is. The task of knowing for certain whether someone is going to be a good fit for the band, or the company, or the job by spending a few minutes (an hour tops) with them is of course impossible. But the question, Who’re your influences? opens the door for someone to reveal a lot about themselves.

So, I began thinking about my influences. Not just artistic influences, but life influences. Maybe it is right to talk about these people in terms of mentors. I made a list, and I have about a dozen major mentors in my life. These are men and women who had a profound effect on me. They taught me, set an example for me or opened my eyes in one way or another. Then, I realized that I have another cadre of minor mentors that also had an influence even though they may have only appeared once or twice in my life.

I’m not going to list the major mentors by name, but they include my parents, various teachers, supervisors, partners, and friends. Some of the “influence” they had was to teach me that work is a blessing; that knowing mythology, Shakespeare and the Bible were the keys to understanding English; how to recognize miracles and to feel the deep spiritual things of life; that you don’t have to compromise your principles in order to achieve success in business; about commitment and sacrifice; and about strength and gentleness.

Add to that the influence of minor mentors and a great deal of what I am and believe is owed to how I responded when presented these influences. I would guess that if you look at yourself, you will see that the same is true. The more I think about the men and women behind that influence, the more grateful I am.

One of my favorite lines from The Lord of the Rings, is the statement by Theoden as he lies dying on the Pellenor fields. He says, “I go now to my fathers, in whose mighty company, I will not now be ashamed.” In generations past, we built up courage in ourselves by telling stories of the honor won by our heroes, the men and women of valor from our more distant past. In modern times the tradition of venerating the good in our history, has unfortunately fallen out of favor and in its place, we seem wont to focus on the here and now. If I look to my own generation for those heroes, I have been fortunate enough to have them and they are my mentors.

Driving past the cemetery the other day, my daughter asked me what it was. I told her. She asked why we don’t go there more often. I told her that the older you get, the more people you have to see in the cemetery, so you tend to go more often. In truth, I believe we go through life and build a welcoming committee for the other side. So, when I exit this world and enter the next, I hope to stand in the company of many of my mentors. If I am able to stand in their mighty company without shame, I will be satisfied.

Freedom via Constraints

In 2008, I read Presentation Zen by Garr Reynolds. Essentially, it is about making slideshow presentations more powerful, more focused, more interesting and more effective. (I think this book should be mandatory for all students and business presenters.) It is also about the value of simplicity. Simplicity is not easy, but it is powerful and I think a worthy goal in almost any endeavor. As Leonardo DaVinci said, “Simplicity is the ultimate sophistication.”

Well this week I picked up the sequel, Presentation Zen Design. The follow-up volume is equal parts effective presentation strategies and a crash course in the basics of design—mostly what we would consider graphic design—at an elemental level that translates into many of life’s pursuits. It was inside this well-crafted package that I found a principle so elegant that I was compelled to spend more time with it. Reynolds often comments on how restraint is key to powerful design, a beautiful yet counter-intuitive idea. But deeper still was the following quote about working within constraints from Steve Hagen,

True freedom doesn’t lie in the maximization of choice, but, ironically, is most easily found in a life where there is little choice.

I find this notion far more counter-intuitive than merely the notion of restraint. In fact, I would expect most readers to read and reject this idea out of hand. However, I think there is a great truth here. In a country based on freedom, where we even have a statue of liberty, and in a world with few restrictions, what external constraints are left?  We aren’t coerced by a king, or a master. We are free to adopt the only true control there is, which is self-control.

Victor Frankl said, “A human being is a deciding being.” and, “Between stimulus and response there is a space. In that space is our power to choose our response. In our response lies our growth and our freedom.” This idea of space relates to what Hagen is talking about. If we look at our lives from the deciding moments, we are essentially looking forward at the unwritten story of our lives. Nothing exists there yet but space. And then we make a decision… From Presentation Zen Design:

If you take an empty slide and put even a single word on it, you have created “space.” Before you put anything on a slide, it is just a frame filled with possibilities. Once you add an element, you activate the space.

When we choose to act in our lives, from those moments of critical decision, we “activate the space.” We are constrained by the consequences of our actions, but within those constraints is where we can achieve the greatest freedom. When we try to act without consequence, we are slaves of our own thinking, because we have rejected the constraints that would have made us free. In fact the energizing creativity that is required to keep harmony with each subsequent decision we make after “activating the space” is exciting and alluring.

In Presentation Zen Design, Reynolds discusses the Japanese ink and wash art called sumi-e. In sumi-e, the ink is always black. A monotone palette from pure black to very light shades of gray is created by the manner in which each brushstroke is made. There are rules in traditional sumi-e. If you do not understand the rules, you can paint all you want, but you are not making sumi-e. You are not free to make sumi-e unless you understand the constraints, the proper method for how it is made. I remember my grandmother telling me that when she was a child and she saw her first opera, she wanted to come home and write one herself. Of course when she sat down to write it, she found that she couldn’t. It was an impossibly hard task from her current level of skill and understanding. I had a similar experience after reading Tolkein, I thought it would be great to create my own language. I spent several hours attempting this, only to discover that I did not yet understand enough about grammar and syntax to produce more than a few code words that related 1:1 to their English counterparts.

If exercises like these demanded that we learn the rules and operate within the constraints, what about the big things in life? What about happiness, relationships, religion, and meaning? Well, it stands to reason that you need to learn to embrace constraints there too. If god’s plan involved giving us our agency, the freedom to choose for ourselves and to act rather than be acted upon, yet at the same time gave us a laundry list of commandments, of constraints, then it stands to reason that if we want to become what we have the potential of becoming, we really don’t have a choice at all.

The irony, as Hagen says, is that to be truly free, we have to choose to act in complete harmony with all of the constraints. If freedom is what we desire, we really don’t have any choice in the matter.

Thin choices among leaders

The Affluenza AntidoteI read something recently that stirred me. It was in a book called The Affluenza Antidote about raising children to be good people in spite of affluence. It said that due to a breakdown of traditional values:

Fewer people are … running for public office.

That resonated with me. I thought back to the 2008 election. Sure these days you would have to be in a coma not to see that Obama is a train wreck as president. Lots of voters are fighting off buyer’s remorse, clinging to hope that his hollow promises and siren song of governmental panacea will come true like some political fairy tale—but not me, cynic, realist, maybe just not audacious enough to still hope. Who knows? Hey, there have always been folks who failed to see the writing on the wall, but I think most people are starting to get it. Things just aren’t getting better. Time will tell. However, my point is not to recite the litany of the presidents failures—others more capable will do a better job of that—I’m trying to decipher a deeper problem. See, even though Obama is a catastrophe, when we remember back to the alternative it was … the utterly lackluster McCain! Ungh. Not yet aware that we were putting a lunatic behind the wheel, in 2008 it sure seemed like we faced a real dearth of choice. No wonder Obama was elected, the alternative was just so tepid and unexciting. Contrast can be good, though. I don’t think the tea party movement and other principle-based political trends would have flourished under McCain. Without the terrifying backdrop of Obama, there just wouldn’t have been the motivation.

Then I think back over past presidents. Bush was really bad. Clinton likewise poor, although then we were only worried about him being someone with poor moral character not a complete madman. All told I think I am forced to admit that, by the time the next presidential election rolls around, no one under twenty will have been alive during the term of a decent president of the United States. Why not? Why haven’t we had better choices? This is a pretty big problem.

Even in my local district, Stephen Sandstrom faces opposition from a truly clueless challenger. Sandstrom is responsible for sponsoring a brilliant bill on immigration reform in Utah. But in so doing has exercised one of the rarest of qualities in modern politics–the courage of ones convictions. Sandstrom might lose his seat over having the integrity to do something about an issue other than his own reelection. I hope not

Iacocca where are the leaders?Lee Iacocca’s book, Where Have All the Leaders Gone? bemoans this same condition. You can read the opening lines and get the gist.

Moral of the story? Mothers and Fathers, don’t just raise your children telling them that they could be president. Raise them to feel an obligation to serve and to have the character and integrity to do it with competence and courage. Maybe in the future, more great men and women will step up and offer America a real choice.

The Root of All Evil..

So recently there was quite a brouhaha about President Obama’s comment that “I think that a certain point you’ve made enough money.” Now, I don’t know if he meant everything that has since been implied by that comment, but I think it is worth some commentary.

Washington is working on what it calls financial reform. Financial service companies in every sector are waking up each day wondering if today is the day that Congress is going to send call them onto the mat and perform an involuntary colonoscopy. In an astounding coincidence, the SEC launched a fraud investigation into Goldman Sachs the week Harry Reid called for a vote. (Interestingly the Inspector General decided to launch a probe into the timing of the SEC’s actions, but very little was made of this in the media.) Also timed coincidentally as Republicans kick up a stink about a proposed provision seen as a pre-funded bailout of $50 billion, Secretary Geithner makes a report that bailouts aren’t as bad as they are made out to be.

I gotta say that the most open-minded observer has to be scratching his head a little at all these shenanigans. It is clear that what is being done is not being done in the open and that there is urgency behind it that is curbing thorough debate. There are also the uber left field inclusions, like the angel investor rules, that are so baffling one has to wonder just what the agenda creating the momentum for this bill really is.

In all of this confusion, I have a few questions.  1. Goldman Sachs is the only Wall Street investment bank left of the big five after the meltdown (Bear Stearns, Morgan Stanley, Merrill Lynch, and Lehman Brothers are all either gone entirely or sold to other institutions for chump change). These guys were the main perpetrators of the CMOs which caused the massive pull-through demand which fueled the sub-prime mortgage crisis and played a significant role in the crash. If they are wiped out as a result, who is Washington still trying to punish on Wall Street? The headliner in Naked Credit Default Swaps, AIG, already got a bailout pass from Washington, so regulating them seems a little schizophrenic.

2. The main body charged with regulating securities since the acts of 1933 and 1934 has been the SEC.  Why haven’t we seen any financial reform legislation directed at modifying the SEC to encompass the more “creative” types of securities? Indeed, why is there a focus on anything outside derivative swaps?

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