Subscribe to Making Rain by Email

Archive for December, 2012

Today’s thought is about the value of negativity.  It’s about the upside of “no.”

Ours is a culture that glories in messages of positivity, particularly at this time of year.  The birth of Christ.  Resurrection. Hope. The miracle of Hanukkah.  We are a popular culture of affirmations and the power of positive thinking.  We are  country of determined and doctrinaire, almost feral, optimism.

Yet I must admit my ruminations about my company’s future at the end of each year begin with first focusing on what can go wrong.  And it has served me well for seventeen years.

Of course, entrepreneurship is a passionately positive vocation.  It’s populated by dreamers and radical individualists who believe in creating the new and the out-of-the-box.  They have the specific courage and faith to create something out of nothing.  Yet for me, while I revel in all these quintessential entrepreneurial qualities, I find practical negativity a useful space in which to begin my planning for each new year.

In other words, for me, negativity not negative.  It is a practical good.

Oliver Burkeman wrote a useful article in support of this business intuition in the Wall Street Journal recently. (Dec. 8, 2012, Section C, Page 3)  He bases his article on the work of New York psychotherapist Dr. Albert Ellis (1913-2007), who he describes as a pioneer of the “negative path.”  Ellis espoused a key incite of the Stoic philosophers of Greece and Rome:  that sometimes the best way to face the uncertain future is to focus not on the best-case scenario but on the worst.

Burkeman points to many recent studies suggesting that “peppy affirmations” designed to lift the user’s mood through positive thinking, repetition, and visualizing future success, frequently achieve just the opposite.

He castigates American corporations for their widely accepted “cult of positivity.”—that is, the corporate credo of demanding big, audacious goals for an organization.  So called “stretch goals” frequently employed by corporate managers often result in desultory practical and emotional results.  (Among other things Burkeman notes that rigid goals and doctrinaire positivity encourages employees to cut ethical corners.)

I wrote ten dour entrepreneurial predictions about the next four years in a blog a few weeks ago.  And I got some rather fierce comments.  One my most esteemed entrepreneurial friends wrote , “Geez, Tim…did you stub your toe right before you wrote that?  I’ve never seen you so negative.”  Several other comments were in a similar vein. (Ten Predictions, Obama, and Entrepreneurship)

I’ve thought a lot about that blog and its supposed negativity since November 13.  Most successful entrepreneurs I know are constitutionally sunny folks.  Positivity and hope help buttress the businessman’s act of faith that animates his enterprise.  I frequently find myself looking first at the dark side potential of any action.  What’s the worst case scenario and what is my greatest downside?

Nevertheless, I assure you I am not a saturnine curmudgeon pouring rain on the 2013 business parade.  I certainly don’t intend to be a Grinch casting calamitous Christmas aspersions like thunderbolts.  There is money and value to be created in all environments and times.  And I believe the first step in that journey to profit and value is to embrace reality in all it’s positive and negative glory.  The beginning of prosperity is cold eyed acknowledgement of the good and bad.  Then figure a way to create money and happiness out of it.

Consider the biggest negative of them all:  Death itself.  Keeping in mind the ultimate finitude of all companies and all persons is healthful ballast to businesswomen and men as a palliative to hubris.

As Steve Jobs said, “Remembering that you are going to die is the best way I know to avoid the trap of thinking you have something to lose.”  Thanks—again—Steve.

Comments 8 Comments »

Nassim Taleb, the author of best sellers Fooled by Randomness and The Black Swan has a new book out called Antifragile:  Things That Gain From Disorder  (Random House, 1212)  Read it.  It is the best popular apologia for practical entrepreneurship I’ve read in quite a while. 

Taleb is what I would describe as an anti-intellectual intellectual.  He’s a curmudgeonly thinker and skeptic who believes in common sense and learning through experience.  Kinda like most entrepreneurs.

Taleb states in his earlier book, The Bed of Procustes, the central problem which he rails against in Antifragile.  He says, “We humans, facing limits of knowledge, and things we do not observe, the unseen and the unknown, resolve the tension by squeezing life and the world into crisp commoditized ideas.”  (Wikipedia)  He posits that man, in his longing for certainty, artificially invents grand economic theories that simply cannot take into account the randomness and unpredictability of reality.  He rails against the arrogant hubris of the currently dominant statism championed in the economic theories of John Maynard Keynes and Keynes’ current acolytes Ben Bernanke, Paul Krugman, Joseph Stiglitz, et. al.  He believes realistic trial and error beats academic knowledge every time.

For Taleb the greatest business sin is to be a “fragilista.”  He defines a fragilista as a person who weakens the institution he works in because he thinks he knows what’s going on.  These folks believe they can conquer randomness; that they can control and prevent game-changing “Black Swan” events.  They create more and more rigid structures and rules that support their confident sense of control and mastery.  Taleb’s epiphany is that this is a foolish chimera that actually undermines what they claim to be buttressing.  He believes top-down planning guarantees inflexibility, inefficient complication, and delays.  It predictably results in the downfall of companies and governments, whenever they turn their destiny over to central planners.

(Though he doesn’t address this specifically, I find his writing very congruent with my own cynicism about teaching entrepreneurship in business schools.  There is no way to formally teach creativity, passion, originality, and ability to deal with the unknown–randomness–from whence cometh great entrepreneurship.)  Can Entrepreneurship Be Taught?

Taleb fundamentally stands the quality of uncertainty on its head, declaring that the unpredictable is both desirable and healthy.  The “antifragile” company is an alive, existential company that benefits from the adversities, uncertainties, and stressors that challenge it, not from trying to structurally preclude them.

By implication, Taleb is a capitalist Darwinian, not unlike Ayn Rand.  He clearly believes in the idea of “creative destruction” advanced by the Austrian economist Joseph Schumpeter, which is that all things are improved when shocked–that wolves are fundamentally good for the elk herd because they winnow out the weakest members, creating a stronger genetic and practical future for the species.  Or, in entrepreneurial terms, restaurants are eternally failing, resulting in constantly improving cuisine.  If failing restaurants were somehow protected (or bailed out) from the random judgements of the market place, the result would be the end of innovation and bland food.  The parallel implications of government bailouts on the macro-economic scale are obvious.

I could easily go on about Antifragile, but enough said.  The book is great fun to read.  If I have a quibble it is that Taleb seems to ground his thinking is the most obscure of intellectual and philosophical sources.  (I have an M.A. in philosophy, but I have frankly never heard of such ancient worthies as Aenesidemus of Knossis, Antiochus of Laodicea, Menodus of Nicomedia, Herodotus of Tarsus, or Sextus Empiricus.)

In practical terms I’d sum up Taleb’s message as simply this:  Shit happens.  Go with it.  It’s a blessing.  Small is beautiful and efficient.  Praise the Lord!

As Catholic mystic Thomas Merton says, “We live on the brink of disaster because we do not know how to let life alone.  We do not respect the living and fruitful contradictions and paradoxes of which true life is full.”   I think Taleb would agree. Thank you, Thomas.

Comments 8 Comments »

I was belatedly thumbing through my Money Magazine (Oct. 2012) last week, vaguely reading a series of not particularly illuminating articles about money, investing, retirement,etc., when I came across a short interview with Clayton Christensen, HBS professor and management guru (pp.97-100), that made me cry hallelujah.

Christensen is most famous for developing the idea of disruptive innovation, delineated in his book The Innovator’s Dilemma.  However, he has just put out a very personal book that applies his business theories to the finding of integrity and happiness in life.  It’s titled How Will You Measure Your Life?in which he specifically addresses what makes a business life worth living.

He says, “You want to be in a job where you’re motivated.  There’s a theory that was articulated by the late psychologist Frederick Herzberg.  He makes a strong point that there’s a big difference between motivation and incentives.  An incentive is, ‘I will pay you to want what I want.’  Motivation means that you’ve got an engine inside of you that drives you to keep working in order to feel successful and to help the organization be successful.”

Christensen speaks to the increasingly important field of “happinomics,” which posits that beyond a certain minimum salary, people don’t work for money.  They work for satisfaction, happiness, a free life, and other non-quantifiables.  Avatars of this new school of business psychology include Mihaly Csikszentmihalyi (Claremont Graduate University), Edward Deci (University of Rochester), and Andrew Oswald (University of Warwick-UK), as well as populizer Daniel Pink.

For example, Dr. Oswald states:

“The relevance of economic performance is that it may be a means to an end.  That end is not consumption of beef burgers, or the accumulation of of television sets, not the vanquishing of some high level of interest rates, but rather the enrichment of mankind’s feeling of well-being.  Economic things matter only in so far as they make people happier.”  (Happiness and Economic Performance-Economic Journal-1997)

Entrepreneurship is as much an act of vocational faith as it is one of calculation.  Christensen says most entrepreneurs are looking for personal growth and meaning almost as much as they are looking for financial success.  He is very positive about current entrepreneurial opportunities, saying,  “The great thing about society today is that we are awash in money and opportunity.  With good ideas, a lot more people can succeed than historically we might have thought….If you can’t grow [in your present circumstances], there are all kinds of ways to create new companies and new environments where you can….Most of us end up being successful in a career we never imagined.”

Finally, Christensen recounts turning his current life around by applying his business insights about meaning and happiness to his own recent experience, which, for him, has taken the form of service.

“I’ll give you an analogy from my own life.  Four years ago I had a heart attack.  Then I was discovered to have advanced cancer that put me into chemotherapy. About two years ago I had a stroke.  I had to learn how to speak again one word at a time.  The more I focused on the problems in my life, the more miserable I  was.  And then somehow I realized focusing on myself and my problems wasn’t making me happier.  I started to say,  ‘Every day of my life I need to find somebody else who I could help to become a better person and a happier person.’  Once I started to reorient my life, the happiness returned.”

On the other hand, as Ingrid Bergman put it, “Happiness is as simple as good health and a bad memory,”  Thank you, Ingrid.

Comments 10 Comments »

Corporate Rain International on Facebook