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SMB Impossible, Part II

In last month’s post, we got into a meditation on business turnaround principles, as demonstrated by the philosopher Robert Irvine (the host of Restaurant: Impossible). Restaurant: Impossible is my guilty pleasure, my Keeping Up With The Kardashians. And I thought it might be beneficial to try and divine real-world business lessons from a staged, pseudo-realistic makeover show. This is roughly like learning about culture and teamwork from Survivor.

Here is a brief review of the three turnaround principles from last month’s article:

1) Who You Are Is Meaningless; What The Market Wants is Everything

This means that you should get over yourself and your original concept, and make what the market will buy from you at high margins.

2) Knock On The F*#@ing Doors

This means that you should stop pretending that you instinctively know your customer’s mind, and show some hustle with phone calls, surveys, meet-and-greets, and other opportunities that force you to come out from behind your desk to engage the customer.

3) Simplify! Cut Down The Menu and Make Everything Delicious

This means that if you are working your ass of but not profitable, you’re most likely stretched too thin, with too many unprofitable and probably low quality offerings.

And now, let’s pick the conversation back up, and learn what else the great Robert Irvine has to tell us. For the remainder of this article, I consulted heavily with Gary Sutton’s insanely practical turnaround handbook, The Six-Month Fix.

 

4) You Are Ignorant, So Fix Your Ignorance

At the beginning of a standard episode of Restaurant: Impossible, Irvine typically asks the restaurant owner how they started the restaurant. The story usually goes something like this: “Well, I spent 15 years in the manufacturing / software / live bait / other completely unrelated industry, and wasn’t fulfilled. So I took my child’s college fund and all other life’s savings, and went into a business I knew nothing about with a person whose relationship with me I would never want to damage. We are no longer on speaking terms, and I am $25k/$50/$100k/$3M in debt.

The follow-up is always, “What knowledge or experience about the restaurant industry did you have when you started?” Invariably, the answer is, “None.”

Then, “Do you know what your average daily/weekly/monthly food cost is?” –“No.”

–“Do you know what your current food inventory is, and how fresh it is?” –“No.”

There are some businesses that people romanticize. They say, someday I’ll quit the rat race and own a restaurant/bed-and-breakfast/art gallery/eBusiness/really-popular-blog. As if with any of these endeavors, simply hanging the “Open” sign rings the cash register. Restaurants and hospitality businesses are difficult on a good day. The costs are high, the staff typically young and inexperienced, the patrons ungrateful, the economy flaccid, the kitchen chaotic, yada yada yada. Even people who’ve spent years in this industry have a tough time because certain elements like tastes change quickly.

Accept that you are ignorant. Even if you’ve been in your industry for your entire career, accept the philosophical stance that at any point in time, “I know nothing.” Then, get on top of the basics. What are my costs (fixed vs variable)? What’s my breakeven point? What are my product margins? That’s it. Start with your costs and your profitability. Knowing that makes everything easier.

 

5) Forget The Grand Plan, and Stop the Negative Cash Flow

The Six-Month Fix, by Gary Sutton

Once you fix your ignorance, you can proceed to fix your loses. Those managers who are aware of their costs and still losing money are usually under one of the many common illusions in business. These are illusions like, “We’re shooting to acquire this one massive contract, and once it comes in things will get better.” Another is, “We’re just holding together until our game-changer product comes out later this year/next year/in five years.” I’m cribbing heavily from Sutton here.

The illusion in the restaurant business is usually, “We are the only authentically Italian/Lithuanian/Madagascarian/Martian restaurant in at least three miles, so if we can just wait until the economy picks up…” Just as an FYI, the economy is a great scapegoat. I’ve made this mistake too, blaming the economy for the lackluster effects of poor execution. The list of companies that created their greatest profits in the middle of, nay because of, an economic downturn is large and humbling.

This is not the time for holding tight to illusions, egos, misguided concepts or unrealistic assessments of the future. This is the time for adaptation.

There is one caveat: I am not saying that we mortgage our future by killing off investment in future products, or anything like that. Cash is king, but it is not God. We all have to be actively figuring out how our offerings are going to be better tomorrow. That’s what a business is. But we will be judicious about it.

So rank all your current products or services by profit margin, and kill the bottom half of the list. Or see if prices can be raised on low-margin products without affecting sales too dearly. Rethink costly expenses like travel. Find out where your employees hours are being wasted (too many meetings, anyone?). Be open to all options that will save you from having to lay off employees.

 

6) Figure Out Your Core

As Tim Ferriss would council, focus on the 20% of your offerings responsible for 80% of your revenue, and make them outstanding.

In the last section, we discussed one side of the Coin of Delusion: hanging onto an outdated identity or long-shot possibility as a justification for not taking action. Like, “The economy will bounce next quarter.”

The flip side of that delusional coin is the notion of being everything to everyone. The restaurant that promotes itself as a bistro AND pizza joint. And they sell sushi. And coffee drinks. And they’re a music venue…

Diversifying your product (profitably) is fine if it doesn’t interfere with your core business identity. Sutton tells the story of a manager at Home Depot who, as a test, let a vendor sell pantyhose at a kiosk that was near the cash register. The test ended up being wildly profitable, and could be more so if it was expanded. The manager took this idea to his superiors, expecting to be instantly promoted and given a medal for original thought.

The idea was axed, and the manager was asked to remove that profitable kiosk. But why?? Because it’s Home Depot. What home improvement problem is solved by pantyhose, other than the potential attractiveness of the occupants? Their executive management said, correctly, “Fuzzy direction kills more businesses than competition or dying markets.”

There are some very general businesses, but most successful ones find success by distinguishing their product and their customer better than their competition does. This is like a pub that says, “We have many things on the menu but we are famous for how good our hamburgers are, and we tailor our business to the after-work crowd from our working-class neighborhood.”

In any business, you have to be able to do something better than all the other guys, and that something has to heavily influence the purchase decision in your favor. What do you do better than anyone else?

 

7) By the Time You Become Aware of Employee or Culture Problems, It’s Too Late

Of all the elements of Restaurant: Impossible, the one that adds the real umph is the human drama. The owner has their whole livelihood on the line, usually mortgaged many times over. They are typically desperate to turn around their failing business through long hours and pressure on the staff. In every case where Irvine finds business dysfunction, he also finds dysfunction on a managerial, which is to say a basic human, level.

This typically plays out as a Come to Jesus meeting between the manager and the staff. You can tell that it’s the first honest conversation that’s they’ve all had in a while. The manager is resentful that the staff acts lazily and unprofessionally, leaving him/her to clean up the mess and put in all the extra hours. The staff tries to articulate as best they can that they’ve never been properly trained, that there are no established procedures for anything, and that their personal boundaries are violated by the manager’s step-in-an-do-it-myself attitude. Crying is usually involved.

Trust is a tricky subject. Managers can screw up trust very unintentionally. I’ve known very well-meaning managers who put a lot of time and effort into developing a specific company culture, who then inadvertently screw up that trust by stepping in an controlling a process that they’re supposed to have delegated. They can’t help themselves.

Fight opaqueness and politics. Healthy culture does not begin with Foosball tables in the office (although there’s a lot to be said for that). Healthy culture starts with transparent conversations and honest assessments about collective strengths and weaknesses. The moment you feel you need to “puff up” or in any way massage or sugarcoat a communication “to the troops” (I hate that pejorative term), your culture is already dying.

Actually I’m wrong about that. Healthy culture starts with the manager being able to hear criticism of his/her performance voiced by his employees, value it, absorb it dispassionately, and fix it. Some would argue that should be a two-way street, but I disagree. The manager is setting themselves up as a leader. They set the example of how to take the criticism of a transparent conversation and use it to make improvements. “The troops” will do likewise if they have the good example to follow.

The Psychology of Social Media In a Crisis

One of the large parts of professional Social Media management is the role of a crisis. When something urgent and negative happens, people feel emotionally compelled to share information without necessarily evaluating the truth of that information. This is particularly so when someone is 1) physically or effectively close to the disaster, 2) tending to think about themselves rather than thinking of others, and 3) experiencing negative emotions from reading the information. It may seem obvious, but it’s still important that it’s been studied and proven, that our tendency to share information during a crisis is based on self-centered emotional release rather than the benefit of others.

Earlier this year, my colleague at Social Media Beast wrote an article for businesses dealing with Social Media crises. These are truly perilous situations if handled incorrectly. Whatever legitimate negative publicity kicked the mess off is bad enough without the additional Social Media wildfire of rumor, speculation and trolling.

Though it’s hard for many to see it this way, these times of emotional frenzy can also be opportunities to test and strengthen your brand and place you top-of-mind if handled authentically and deftly.

 

Here are some key points from my colleague Katie’s article:

1) Have a plan. Obvious, but yet everyone gets caught flat-footed and plan-less.

2) Already have a structure in place that allows for consistent monitoring and rapid response.

3) Move quickly, but without defensiveness or any other attitude that would inflame the situation. Remember that, as we said above, triggering readers’ emotions will only cause more tweeting-sans-thinking.

4) Become a go-to resource for the kind of information and service that defuses tension.

5) Keep learning. Revise your plan so the next one is handled smoother.

 

After spending over 10 years in marketing, I’ve been personally involved in a number of situations where an angry customer became a product evangelist when the responsiveness and customer service were truly worthy.

Social Media Psychology: SM Is Worse For You Than You Thought

March 31, 2015 1 comment

For all the time we devote to social media, you would think that it would register some meaningful improvement to our lives. You would expect that social media would do something psychologically beneficial for us: elevate our mood, increase our energy, or help us get more out of the day.

But the more research that comes in, the more social media looks to be a wasteland of clickbait and sadness.

Social Media and Psychology: How to Kill Productivity and Happiness

According to a recent study in Computers in Human Behavior, personal social media use not only correlates inversely with productivity (we already knew this in our hearts), but correlates inversely with happiness as well. The correlation is true regardless of how good a multitasker you are, and regardless of how well you can focus your attention on a subject.

The study notes that to date, we have all kinds of research on how distraction can impede someone’s performance at a task. And though it seems obvious that personal social media use would be classified as a distraction, there is not a lot of present research on whether or not social media specifically impedes performance.

However, the psychology of social media is not just about efficiency. Maybe we are willing to give up some efficiency for something that makes us happy. We must, after all, be getting something out of all the time we spend on social media; if it’s not something tangible like efficiency, then it’s something intangible like happiness.

Except that’s wrong.

Social Media and Happiness: Less (of the Former) Is More (of the Latter)

The researchers also took happiness scale evaluations during their social media usage experiment. Social media lowers happiness, and it does so in two ways.

First, it lowers happiness directly. This largely has to do with self-comparison to one’s peers. As the report hypothesizes:

Many news stories published by popular media outlets are concerned with negative impacts on happiness from social media. One story in particular, entitled ‘‘Facebook: The Encyclopedia of Beauty?’’ discusses the rampant unhappiness that can be found in college-aged females living on campus. The story gives accounts of self-esteem issues and other negative effects from over-usage of social media.

Secondly, social media increases a sub-category of stressors that researchers our now labeling “technostress.” Technostress is defined by psychologists as “‘any negative impact on attitudes, thoughts, behaviors, or body physiology that is caused either directly or indirectly by technology.”

This is not something that’s only experienced by people who are uncomfortable with computers and devices. The article cites a University of Edinburgh study, which found that “the more Facebook friends a user has, the more likely you are to feel stressed out by the social media.” And there is already a very good foundation of research supporting the notion that increases in stress diminish happiness. So, if social media ads stress and stress diminishes happiness, then you can get the rest.

The study revealed that personal social media use lowered productivity by way of causing distraction. This finding is in line with what’s call Distraction-Conflict Theory, which says basically that distractions cause some of the information necessary for the primary task to fall out of short-term memory. This is no surprise to anyone who’s ever used social media.

What was a surprise was that the effect was just a dramatic among poor multitaskers as it was among people who rated themselves great multitaskers. As the report puts it, “This result lends support to the common rhetoric that people are not as good at multitasking as they think they are.”

In Summary

So, in three points, here’s what all this means for us:

1. Social media makes you less productive despite how good a multitasker you think you are.

2. Social media makes you unhappy in the long run, both directly and by adding stress.

3. We’re probably still going to spend all our time on Facebook and Twitter anyway…

That last point is not from the report, but we both know it’s true.

 

 

Everything You’ve Been Taught About Public Speaking is a Myth

November 30, 2014 6 comments

Let me clarify the title a bit: everything you’ve been taught about public speaking can only get you to a certain level of proficiency. Then, like in every other area of mastery, you have to re-think everything you’ve learned because it’s time to make finer distinctions. As Marshall Goldsmith says, What Got You Here Won’t Get You There.

Nine out of every ten sources of advice for public speaking are designed for one purpose: to get beginners over their fears. They say things like “know your audience,” “know your venue,” and “know your material.” The thing is, there are many professionals out there for whom this advice is an insult to their intelligence. They speak regularly, and want to become masterful. But what examples and advice do they have to work from?

This is a list of 10 truisms about public speaking that, once you gain some proficiency, will not serve you anymore. Don’t be the speaker or performer who is still using the same bag of tricks that got them through high school and college. Break out of old thoughts!

Myth #1: The Main Focus of Learning to Be a Speaker is to Get Over Nervousness

Most books and advice sites on public speaking imply that once you get over your fears, you’re pretty much good to go. To this end, they advise basic strategies like knowing your material, knowing your audience, practicing, and gaining experience.

Two issues here. First, there is no getting-over-the-nervousness. There is only executing-well-while-being-nervous. You think nervousness ever goes away for skydivers? Why would they want it to? The nervousness is the whole point. Without nervousness, skydiving is just five minutes of a rather nice view. Likewise, people become speaking and performance masters because of the rush. They embrace it and look forward to it.

Second issue: once you can speak to an audience despite being nervous, you’re not at the end of your journey. You’re at the beginning. The main focus of learning to be a speaker is to help your audience change their lives for the better. This is true no matter the topic. You want them to see something differently and behave differently after you’re done. It’s not about your nervousness, it’s about mastering the art of helping and serving others en masse.

Myth #2: I’m Ready to Go Once I’ve Run it a Few Times and Feel Comfortable

I can count on the fingers of one hand the number of people I’ve met in my life who could deliver a masterful speech after only having run it a couple of times. And they were all well-trained performers from an early age.

What’s more, most people don’t rehearse their speeches or presentations out loud. They sit in a chair and flip through their PowerPoint deck a couple of times, and then bore their audience to death by reading off the slides. Again, “feeling comfortable” is not the standard. It’s only a slight reassurance that you won’t publicly soil yourself. I know speaking trainers who advocate an hour of rehearsal for every minute of speaking time. Whatever you’re doing no only isn’t enough…it probably isn’t in the ballpark.

Myth #3: Top Speakers Are All High Energy Performers

I want you to, right now, Google “Public Speaking Champion” and then look at some of the YouTube videos. Go ahead, I’ll wait.

Most of them are cringe-worthy. Some are full of high-energy schtick. Others are more subdued, but full of very contrived pacing and performance-art moments. They seem like they should be powerful and captivating, but something feels inauthentic, like a Rolex from a sidewalk vendor.

That which is touted as “great speaking” today is stuff that is hacked together from a tool kit taught at the high-school and college levels. It is choreographed and paced within an inch of its life. All authenticity is squeezed out.

Really great speaking is that which the speakers manage to find renewed emotional connection to thoughts they’ve already had, as if they were experiencing them for the first time. The rest is decoration.

Myth #4: Nervousness Goes Away With Helpful Mental Tricks and Visualizations

See Myth #1. Nervousness does not go away. You know what compounds the problem? Taking your mind off your message and your audience in order to do something stupid like visualize them in their underwear. I have no idea why this old chestnut is still around.

Now, can meditation, guided visualization and/or a consistent warm-up routine help you before you speak? Absolutely. Most stage actors in fact tend to be rigorous bordering on superstitious about how they prepare for a performance. But do not expect this to make everything magically easy.

Myth #5: It’s Important to Preplan and Choreograph Your Gestures

I’ve coached high-school and college level performers to choreograph gestures before, but it was because the stylized nature of that competitive environment demands it. When speaking coaches focus on gestures, it’s usually because they’re dealing with a beginner who’s hands are frozen by nervousness.

Once you get to the intermediate level, your hands will start talking for you. Sometimes out of nervousness or learned bad habits, a speaker will use their hands too much or to little, and a good speaking coach will catch that and tell you that you can tone it up or tone it down. But choreographed gesturing always comes off inauthentically. You know why? It’s not authentic.

Myth #6: Whatever You Do, Be Sure to Memorize / Not Memorize Your Speech

I’ve heard people say both of these. Most people say “don’t memorize,” because they’re working with beginners who can’t pull off a memorized speech. On the other hand, it takes a performer with pretty significant chops to memorize a speech completely and then deliver it with that first-time authenticity. Most pros I’ve seen can’t even do that.

When I deliver a speech, I’ve run it so many times that I know my word choice pretty well, like maybe 90%. The remaining 10% is just sentence formation flexibility. I don’t want to throw myself because I meant to say, “one and two” but I end up saying “one and also two”. The really short speeches (2-3 minutes) I’ll memorize unless I’m introducing someone. I’ll read introductions right off the card because the biggest sin is forgetting to mention something. Most people do the opposite: they have no idea what words they’re going to use and end up jabbering on five times as long as they should.

There is no one rule about memorization that covers every circumstance, but don’t use that as an excuse for lack of preparation. Know what you’re going to say, whatever that means to you.

Myth #7: Whatever You Do, Be Sure To / Please Don’t Try to Add Humor

I’ve heard this one both ways as well. Most advice blogs say to add some humor, especially at the beginning. Most coaches of beginners say not to try to be funny because you’ll never pull it off.

There is no right answer to this. Yes, speeches work better with some humor to connect to, especially in the beginning. Most speakers, when they hear this, go about it by writing a speech or presentation with no humor and then try to shoehorn jokes into the writing after the fact. Masterful speakers aren’t necessarily joke-writers, but they are so comfortable in their own voice that they can let their natural sense of humor come through in their writing.

If you take the risk and it bombs, it’s not the end of the world if you keep your energy going and move right on. I’ve done this. I usually bomb when I misjudge my audience. If the crowd is really all-business or you’re getting them at a time when they’re tense and not warmed up, it’s an uphill battle to make the humor work. If it’s a close call, I would advise you to work humor into the speech even at the risk of bombing, because you want to gain the experience.

Myth #8: Don’t Acknowledge Your Mistakes

I can see why this myth exists. When you’re a beginner and you’re all caught up in your nerves, mistakes can really throw you off your game. You haven’t yet gained experience on how to handle them.

First of all, what is a mistake? Some students that I’ve coached would get bent out of shape about accidentally leaving out two sentences somewhere, when their delivery and room chemistry was truly energizing. Other students would pat themselves on the back for making it through with no technical mistakes, when their delivery was flat and unconnected.

I know it’s hard to see mistakes as gifts, because up in front of people they can feel mortifying. That’s fine. We all make them. Pros make them. The panache is in the handling, which comes with the experience of having screwed up. If you trip over the mic cord and try to not acknowledge it, that will read as goofy. It happened. The pro keeps her composure and says, “Well, that happened.”

Don’t worry about mistakes. Don’t even worry about acknowledging them, if they’re obvious. Just keep your composure.

Myth #9: The Speech’s Length Should Be Under 20 min / 30 min / 40 min / However Long It Needs to Be.

There are a lot of differing opinions on how long you should go. Some coaches say to keep it under 30 minutes because of the average listener’s attention span. Peggy Noonan says to keep it under 20 minutes because Ronald Reagan never went over 20 minutes. I kid you not.

My point in this section is that the actual minute count is not the big deal (within reason). The big deal is that your speech, however long it is, is about twice as long as it needs to be.

We’ve become accustomed to writing for the filling of time, and it’s gotten us used to bloated speaking. It’s no wonder that people start pulling out their smartphones while we’re talking. Did you write a pitch presentation for a piece of creative business that goes for 30 minutes? It probably should be 15. Did you write a 20 minute graduation speech? It would probably be a better speech at 10 minutes. And your six minute Best Man speech will be much more effective at three minutes.

Don’t write to fill time. However much material you believe is appropriate, do enough refining to take out at least half. This is hard, time consuming work and absolutely necessary to mastery.

Myth #10: Start With Small Audiences and Work Up to Big Ones

I’m a big believer in gaining progressive experience. But remember that speaking for a small group of people whom you know and whose faces you can see might be more freaky that speaking in front of an auditorium full of strangers.

Progressive experience doesn’t necessarily mean increasing the audience size. It means increasing the stakes. You start in an environment where you feel safe. Maybe one-on-one with a coach. And then you bring in more relatively safe people. You should progress in a way where you feel scared, but not prohibitively so.

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Do you find this subject interesting? If so, then please leave a comment. I’m trying to determine if there’s enough interest in public speaking mastery to expand further on it. I’ll make that determination based on the comments that you leave here, and the questions you have. Happy Speaking!

The Stoics and the Epicureans

October 31, 2014 Leave a comment

The Stoics for the motivation and achievement, but the Epicureans for the style…

Seneca the Younger

I recently got onto Hellenist moral philosophy after reading The Obstacle Is The Way, one of the books recommended by Tim Ferriss. The book is a motivating entree into Stoic thought, and Ferriss himself is a devotee of Seneca, a famous Stoic philosopher.

Several hundred years before Christ, two post-Socratic schools of thought emerged as to the nature of the universe and how we should behave within it to live the optimum life. Many of the teachings these schools reverberate today.

The Epicureans are my sentimental favorite, and they were astonishingly ahead of their time in deducing how the universe actually works. They were adopters of Democritus‘ idea that objects are made of atoms, and that those atoms move through space. They did not know about how light works, but deduced that something traveled from the object to the eye. They came very close to articulating the conservation of mass theory, millennia before Einstein proved that matter and energy were interchangeable.

Epicureans did believe in the gods, but did not believe that they intervened in the actions of the earth. Therefore, they believed that they had nothing to fear from the gods, and therefore nothing to fear from death. Life was simply to be lived, and therefore they concluded that the optimum life was lived as pleasurably as possible. Happiness was the thing to be pursued, as Jefferson (himself an epicurean) pronounces in the Declaration of Independence.

This leads many people to equate epicureanism with hedonism. And, to be fair, if you know anyone today that you’d call “Epicurean”, they usually know where the best food and drink can be found. But epicureans meant “pleasure” mostly to mean freedom from anxiety. Under their moral code, for example, you would not want to steal from your neighbor – not because it’s intrinsically wrong but because it would result in anxiety from the theft and secrecy, and the potential consequences put your happiness at risk. Better to live simply, treat others well, and cultivate friendships. Don’t worry…be happy.

I love the Epicureans for an outlook on life so far from my own. If I were capable of doing away with my needless anxiety and absorbing myself in food, drink, thought and friendship, I’d be right there. I know people like this, and they’re the right people to chill with. As a matter of fact, Epicurean notions are still present today in modern psychotherapy, where a psychiatrist will try to allow a patient to let go of his or her idea of what the world “should” be, and accept it as it is.

The one place where epicurean thought is largely mute is having to do with concepts like achievement, motivation, and personal development. The ancient Greek epicureans did not seek to achieve greatly, instead they secluded themselves in a commune. Politics and industry brought about anxieties that were detrimental to the pleasures of a simply-lived life. For achievement and growth, you have to talk to the Stoics.

Emperor Marcus Aurelius (Visual Approximation)

Rather than a concept of the universe that was atomic and mostly random, the Stoics believed that the universe was created by the gods with a distinct universal order, and everything had a distinct purpose. The purpose (and the only purpose) of a horse, for example, was husbandry.

Remember Silence of the Lambs? When Lecter told Clarice to “read Marcus Aurelius” (another Stoic philosopher)? What did he say? He said that the emperor counsels simplicity. Of each thing, ask, what is it’s nature? It’s purpose?

To the Stoics, everything literally had one defined nature and purpose. The nature and purpose of the human, being the only animal that reasons, is to live its life using his natural capacity for reason. This meant living in accordance with nature, natural order, and therefore the reason allows us to understand what the natural order of the world actually is. With me so far?

The optimum way for a Stoic to live is therefore as virtuously as possible. One must try and become a paragon of virtue, because our sense of logic and reason tells us that it best serves the natural order of the universe for us to do so.

You can see that this concept of morality is 180 degrees apart from the epicurean philosophy. One is sensory, visceral, pleasure-seeking, deemphasizes ambition, reclusive, and seeks a mental framework that avoids anxiety by doing away with the concept of “should”. The other is top-down, orderly, reasoning, taming, and harbors ambition to achieve a highly virtuous and logical life. One looks at obstacles and says, “Don’t worry about it.” The other looks at obstacles and says, “Overcoming this obstacle will lead to further development.”

For us simple folk, we probably unwittingly live somewhere in between these two extremes. But you notice that neither one of these great philosophies looks at obstacles and says, “I must whine for sympathy and feel like I’m doomed.” Nor does either school think that the optimum life is lived by creating maximum anxiety in order to compete for wealth, status, and the purchasing of insignificant stuff. Each philosophy is a study in self discipline and mental conditioning, just in opposing directions.

It was useful for me, and it might be useful for you, to look at the anxieties in your own life and ask, “Am I doing this for a purpose that makes sense, or am I just reaching higher?” And if we find that we are constantly making unreasoned, half-asleep choices about achievement and attitude, how might these models serve as something to strive for?

The Five “People-triggers” Discoveries That Most Changed My Life

August 29, 2014 1 comment

Screenshot 2014-08-29 15.31.58I’ve been writing the People-triggers blog since 2010.  After all that time, I’m not sure I’m any closer to understanding why we do what we do, and why we get out of bed in the morning.

Psychology feels like it’s nipping around the edges of this question. Like the moment anyone gets close to an insight, they stop studying, write a book and start trying to teach everyone how to stay motivated and influence others. In the 70’s, we were sure that Transactional Analysis was a scientific approach to relationships. In the 80’s, we were sure that we needed to praise our children regardless of result because self-esteem correlates with success.

Think of what we’re sure about today. Working from home achieves higher productivity. No wait, it kills collaboration. Group brainstorming produces better outcomes than individual reflection. No wait, it shouts down the introverts and encourages rule-by-volume.

In psychology, today’s bestseller is tomorrow’s bullshit.

That all being said, I’ve looked back at the readings and writings I’ve done over the past four plus years and I’ve found five discoveries-five core principles-that I’m willing to bet will stand the test of time. More than that, they changed my life because I was able to 1) become more effective in producing output, and 2) stop wasting energy worrying about certain things. So, here they are: Read more…

Swarm Intelligence and Capitalism

July 31, 2014 1 comment

Recently I revisited an article that I posted once upon a time on Swarm Theory (Decentralized Problem-Solving). This is the notion that a self-governed network of entities operating on simple heuristics (e.g. bees in a hive, ants in a colony) can solve certain problems more effectively than central authority. I received a comment from the CEO of a software company in Finland that harnesses Swarm Theory within specially designed social networks to solve problems.

As I was searching around for more information on Swarm Theory, I came across this quote on a blog: “SWARM OR HIVE INTELLIGENCE: Communism Without The Corruption! […] Individual Capitalism Vs. The Collective! One Thing Is Certain: Capitalism Cannot Be The End Result For Humanity Or We And Very Likely Earth Itself Are Doomed!”

Interesting perspective.

But at the same time, there’s an interesting point to be made: this quote has its logic exactly backwards. Sure, a leaderless structure like an ant colony brings to mind the visual idea of a commune. But Communism as we’ve experienced it (and Socialism for that matter) are associated with central planning, which is the opposite of Swarm Theory. If you want to look at the economic system that bears the closest resemblance to Swarm Theory, you’ll be looking at good old Capitalism.

The Invisible Hand = Early Crowdsourcing

 

Since Adam Smith described the “Invisible Hand” in 1776, arch-capitalists have ascribed a magic, almost religious quality to the economic distributions within a free market. As supply lowers, prices rise. How does the system know? How does wealth accumulate with those who are meeting a strong demand? How is investment capital finding its way to the most promising opportunities? Is it God’s will that it be so?

The “invisible hand” is an instance of Swarm Theory, nothing more. The motivation to provide value in exchange for monetary reward is a simple heuristic and economic participants (workers, owners, investors, etc) are the automatons who follow it. Therefore the strengths and weaknesses of the various Capitalist systems of the world can be understood by how effectively they replicate a basic swarm system.

In his book Business Stripped Bare, Richard Branson coins the term Gaia Capitalism to describe the more environmentally and globally aware form of Capitalism to which he subscribes. This promotes the idea that there are many manifestations of Capitalism that have varying degrees of concern for long-term thinking or preservation of common goods. Should a Capitalist system have rules? Should it be transparent? Should it reward individual actors? Do regulations always make it less efficient? We can understand these questions by understanding how they apply to swarm systems.

So let’s revisit the characteristics of an effective swarm system:

  1. It is self-organized
  2. Its actors follow simple heuristics, though different classes of actors may follow different instruction sets (foragers vs patrollers, etc.)
  3. Actors must act in a diverse fashion (i.e. bees don’t search for a new home be all flying in the same direction)
  4. There is a communication mechanism by which information is shared with all actors
  5. Actions must be self determined, without imitation, cohesion or fad-following

It also must be understood that the collective result will not be perfect, but it will be ever-improving. Just because bees agree on a location for a new hive doesn’t mean that the resulting location is perfect. The quality of the new location depends on the terrain that was explored (i.e. luck), and the system that has evolved to determine consensus. Notice that it does depend on the outsized reconnaissance skills of any one super-star bee.

Notice also that Swarm Theory works to solve the problems of the collective, e.g. how to propagate and defend an ant colony, or how to allocate wealth to the providers of value and quality investment. They do not exist for the purpose of enriching individual actors at the expense of others. To be sure, there are often status hierarchies within swarm systems, and individual actors are motivated to act by their own survival, but the nature and essence of the system is to propagate the entire community.

Answering Hard Questions on Capitalism

 

Now, assuming the analogy between a swarm system and a Capitalist one, and also that our goal is to make the most productive system that we can, lets draw some conclusions.

Should Capitalist systems have anti-trust laws, and how vehemently should those laws be enforced? Well, are swarms more effective when actors are acting diversely or in concert? Diversely. Acting in concert through collusion or anti-competitive measures weakens the system by limiting the diversity of opportunity. The dynamic becomes indistinguishable from central planning.

In healthy Capitalist systems, should all trades take place on transparent exchanges (i.e. removing the dark pools of investment banks). Well, are swarms more effective or less effective with transparent communication? They’re more effective. In fact, they depend on the systemic aggregation of collective information so all actors can make informed decisions. Keeping information secret for private advantage weakens the system by disallowing all the actors from making effective decisions.

Do central regulations always make a Capitalist system less efficient? This one is harder to demonstrate with analogy, and it also depends on the time frame that one is talking about. I interpret “regulations” as rules and safeguards. As part of its heuristic logic, a forager ant will not leave the colony to forage for food unless it come into contact with at least four patroller ants within the space of ten seconds. This lets the ant know that it’s safe to forage. It might be more efficient for the colony in the short term if the forager ant would search for food immediately, without this safety procedure. In the short term, the chances of running into food might be higher then the chances of running into an anteater. But the colony will pay a heavier cost (population count) every time this gamble doesn’t work out.

Yet, this procedure evolved organically. It was not enforced from a central authority. It’s hard to find analogies to central rule enforcement within natural swarm systems. These systems, by definition, have no central authorities. Instead, this might be a question for digital automatons in labs.

Still, we can see from this demonstration that the strongest, most effective Capitalist systems are not necessarily the ones that provide the greatest enrichment to individual members. They will more likely be the ones to harvest most effectively the wisdom of the swarm.