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Would YOU Be Grateful for $5.6 m?
By Shlomo Maital
Do you regularly count your blessings? We are all showered with them, but sometimes, take them for granted, especially the small ones, the ones that turn out to be actually really BIG.
Psychologist Robert Emmons says America is in crisis, but not because of the economy. “We have lost a strong sense of gratitude about the freedoms we enjoy,” he says. Emmons is editor of the Journal of Positive Psychology. Positive Psychology is a branch of psychology developed by Martin Seligman, that tries to show how we can be happier, more content, and..well, more grateful.
Emmons himself is enormously grateful about gratitude. His application for a grant was accepted, and he was given $5.6 m. to research the subject by the John Templeton Foundation. I am certain he would win, hands down, a Golden Fleece award, awarded by the late Senator Proxmire, for weird money-wasting research. (Here are a few projects that won the Golden Fleece: * Office of Education for spending $219,592 in a “curriculum package” to teach college students how to watch television; United States Department of the Army for a 1981 study on how to buy Worcestershire sauce; United States Department of Defense for a $3,000 study to determine if people in the military should carry umbrellas in the rain).
But in fact, if more of us were more grateful, if more of us just said thanks, that simple act would reinforce our own feelings of wellbeing, and the acts of kindness done by others. And the best part: Saying thanks, to the Creator, and to those around us, is free. It doesn’t even cost 5.6 cents.
So good luck Emmons. Let’s hope you reveal enormously insightful new findings about gratitude, especially – why we take for granted massive blessings.
Source: APA Monitor Sept. 2012, p. 13.
Kids are More Creative Than Ever – Some Adults, Less!
By Shlomo Maital
There is empirical evidence that our kids are more creative now than kids were, 25 years ago. (Alas, I have a strong feeling, we adults are LESS creative, especially those of us working in large bureaucratic organizations, which is nearly all of us).
Here is the evidence. Case Western Reserve researchers Sandra Russ and her student Jessica Dillon compared 14 studies of child creativity, done in Russ’s lab between 1985 and 2008. Each study used the same scale to evaluate children’s cognition and emotional expression during five minutes of unstructured play. ** Here is the method:
Affect in Play Scale: (APS): Each child was met with individually and given two neutral-looking puppets and three blocks with which to play however he or she would like. The task is appropriate for children ages 6–10, in grades 1 to 4. The play was videotaped and scored according to criteria in a scoring manual. The APS is relatively unstructured so that there is room for the child to structure the play and present affect themes that are habitual to him or her. The instructions for the task are: I am here to learn about how children play. I have here 2 puppets and would like you to play with them any way you like for 5 minutes. For example, you can have the puppets do something together. I also have some blocksthat you can use. Be sure to have the puppets talk out loud. The video camera will be on so that I can remember what you say and do. I will tell you when to stop. Go ahead. *
According to the APA Monitor: “The researchers found that over the 23-year stretch, children’s comfort and imagination scores improved, their organization and emotional expression numbers stayed the same, and their use of negative imagery decreased. According to Russ, the increase in imagination underscores children’s resilience. “They are finding other ways to develop their imaginative abilities”. Perhaps, she suggests, kids are being deprived of time to play freely, with more of their time being structured, so when they are allowed to let their imaginations run wild, they “take more advantage of it”.
I think there are two main lessons here. First, let our kids have far more unstructured play time, to exercise their imaginations. Second, let us adults ALSO have more unstructured play time, idle time, time to let our imaginations roam free. If kids are creative, and adults aren’t, perhaps we adults should be more like our kids. Simple, no?
* Scoring: The APS measures pretend play ability with five scores: 1. Organization rates the child’s play (1–5) on the quality and complexity of the plot, considering cause and effect and plot integration. 2. Imagination rates the child’s play (1–5) on its fantasy elements, block transformations, and number of novel ideas, characters, or events. 3. Comfort is a rating (1–5) of the child’s comfort, involvement in the play and enjoyment of the play. 4. Frequency of Affect is a tally count of the number of units of verbal and nonverbal emotion expressed during the play. A unit is defined as one expression by an individual puppet that can be scored. For example, every time one puppet said, ‘‘I like you’’ or ‘‘I hate this’’ a unit is coded. The total number of units expressed during the 5-minute period is the frequency of affect score. Frequency of positive affect units and negative affect units are also obtained. 5. Variety of Affect is a tally count of the number of affect categories that are expressed during the play, drawing from 11 categories: Anger= Aggression, Anxiety=Fear, Happiness=Pleasure, Frustration=Dislike=Disappointment, Sadness= Hurt, Oral, Oral Aggression, Anal, Competition, Sexual, and Nurturance=Affection. These categories can be combined into positive affect expressions and negative affect expressions.
**Changes in Children’s Pretend Play Over Two Decades. Sandra W. Russ and Jessica A. Dillon. Case Western Reserve University. CREATIVITY RESEARCH JOURNAL, 23(4), 330–338, 2011
Innovator: Are You Agile?
By Shlomo Maital
Yves Doz & Mikko Kosonen
I recently had the privilege of moderating an event featuring two of the world’s top experts on strategy, Prof. Yves Doz (INSEAD) and Mikko Kosonen (formerly head of strategy at Nokia, now head of Finland’s Sitra innovation fund). Together they authored the recent book Fast Strategy *
* Fast Strategy: How strategic agility will help you stay ahead of the game. Pearson Prentice Hall: 2008.
The book’s key point, in one short sentence: In a world of rapid unpredictable change, organizations must be able to change and adapt their strategies, to turn on a dime. In two words: Strategic agility! The core dilemma is: How do you at the same time build dogged persistence in pursuing a clear strategic goal, while at the same time fostering the ability to dump it when the business environment requires it?
Doz and Kosonen bring wisdom and experience to this tough core issue.
I believe their work applies to individuals, not just to organizations. So here is a kind of checklist for innovators, to see if you too as an individual have the required strategic agility. Note: Agility does NOT mean opportunism, which for entrepreneurs can be disastrous. (“Yes, I can supply THAT too, and THAT..and THAT….”).
- Are you strategically sensitive? Do you spend time reading widely, tracking trends, and trying to identify trends that not everyone is talking about? Have you missed key trends? (Facebook missed the shift of social networking to smartphones, for instance).
- Do you agree with yourself? Organizations need a leadership team that is on the same page. But as an individual – are you internally conflicted, or do you know exactly who you are, and where you want to go? You can learn a lot about yourself while innovating – but it may be very expensive.
- Do you have fluid resources? By that, Doz and Kosonen mean: Strategic agility is worthless unless you have the ability to back your shift in strategy with adequate resources. Do you have liquid reserves? Do you keep such reserves, in the event that a major opportunity arises? If, like Mellanox, you need to do a major project and finish it in only weeks to enable the company to survive – as an individual, do you have the reserves of energy and drive to make this happen?
These are the three key elements of fast strategy: sensitivity, fluidity, consensus.
And now, here are Doz and Kosonen’s 13 “toxicities” – things that keep you from being strategically agile. Score yourself on each. ‘3’ for bad, ‘1’ for good. If you score over 20, you’re in trouble:
– Tunnel vision – you just don’t see things you should.
– Tyranny of core business – you are hopelessly stuck on what you know and what you do and always have known and done.
– Strategic myopia – you fail to look beyond next week.
– Dominance mindset – controlling others is more important to you than the truth.
– Snap judgment and intellectual laziness – you fail to do due diligence on your decisions.
– Imprisoned resources – you sunk your resources so deep it takes forever to dig them up and employ them.
– Business system rigidity – you do business one way, the “right” way, and never change.
– Ties that bind – you are stuck with bad people and are unable to dump them.
– Management mediocrity and competence gaps – there are things you need to learn and know, key things, you don’t know them, maybe you don’t even know you don’t know them.
– Management divergence – you are internally conflicted.
– Heady charm of fame and power – you drink your own Kool-Aid.
– Expert management (making operational decisions instead of strategic) – you focus on day-to-day instead of on vision and long-term direction, for which you have no time.
– Emotional apathy – you’ve lost your passion, your fire, and those around you know it, and so lose theirs too.
Look deep inside, tell the truth, ask if you have what it takes to achieve strategic flexibility, as an innovator and entrepreneur. Once you are aware of shortcomings, they can be fixed. But the first step, as with the 12-step method for curing addiction or alcoholism, is to admit that you are rigid and inflexible. From there, it’s all uphill.
The Amazing Saga of Elon Musk
By Shlomo Maital
This is the amazing story of Elon Musk, who was born in Pretoria, South Africa, 41 years ago. His life story can teach us more about persistent visionary innovation than any textbook. Musk and brother Kimbal left South Africa when Elon was 15; neither wanted to do compulsory army service for the apartheid regime. Since his mother was originally Canadian (born in Saskatchewan, like me), Musk chose Canada, and studied at Queen’s University, in Kingston, Ontario, (my undergrad college), before transferring to Univ. of Pennsylvania. (Elon’s dream was always to reach America, where wild dreams can be made to come true). He studied physics at Penn, then got a scholarship to study at Stanford. He dropped out to launch a Yellow Pages director company, Zip2, sold to Compaq for over $300 m. (Elon’s profit from the deal was $21 m.) Elon saw, just a few years after the World Wide Web was born, how it could replace print city directories.
Elon had big dreams, to tackle “important problems that would most affect the future of humanity”, as he said later — ” the Internet, clean energy, and space”
Internet: He founded a company that was to become PayPal, with the insight that “money is just an entry in a database”. (How many of us are stuck in the rut of money being coins, paper or checks?).
He founded Space X, (Space Exploration), to build commercial rockets. Space X’s Falcon 9 rocket, after initial failures, now has a NASA contract to supply the Space Station, replacing the Space Shuttle. Musk has a dream to create colonies on Mars and the Moon. “I would like to die on Mars”, he has said, “just…not on impact”.
He founded Solar City, which provides photovoltaic cells to generate power, for the roofs of homes and businesses, and is one of the largest power companies in America.
He founded Tesla, the first new car company in decades, to create cool speedy all-electric cars. The Tesla Model S (named after Henry Ford’s Model T) is a family sedan, aimed at a mass market. To make it, Tesla has bought the NUMMI car plant, near San Francisco.
On several occasions, e.g. with Tesla, Musk has put up his own money, down to his last dollar, to keep his companies alive. His $40 m. cash injection kept Tesla alive, after the global recession hit in late 2008, leaving Tesla without money.
What can we learn from this amazing man? First, study physics. The fact that Musk knows physics, as well as computer science and programming, is a big advantage. It enabled him to help guide Space Exploration toward creating a successful rocket, when nations with huge budgets have failed, all this in only 6 years, and to guide Tesla.
Second, go to America. Despite all America’s woes, Silicon Valley (where Musk is based) is still the world’s center for innovation. For example, when Musk decided to develop electric batteries for cars, he found all the expertise he needed not in Detroit, MI, but in Silicon Valley.
Third, one innovative creative daring person can help revitalize an entire industry. GM went bankrupt. Bob Lutz helped revive it, by emulating Musk and competing with Tesla to build the Chevy Volt. He credits Musk with inspiring him and GM. Volt, and some other innovations, have brought GM back from the dead.
De Tocqueville wrote 200 years ago: “Boldness of enterprise is the foremost cause of America’s rapid progress”. Perhaps that is still true.
The World According to Reuters, on Page 21:
Romney’s 47 % vs. Romney’s 0.01 %
By Shlomo Maital
Sometimes, not often, the state of the world is reflected in a single page of a newspaper. Today is such a day. Page 21, Global New York Times, “environment, companies, business”, with “Reuters”.
* “Risk calculation shouldn’t be left to banks”. (This will be the subject of a separate blog). European banks are allowed to do their own risk calculations (i.e. the weighted risk of their balance sheets) by national regulators (instead of EU regulators). Of course, they underestimate the risk. If they estimated risk accurately, they would have to set aside billions more in capital reserves; and if the banks lacked capital, then governments (and taxpayers) would have to foot the bill. So, national regulators avoid forcing their banks to estimate risk correctly. Result: Undercapitalized European banks, that teeter and topple, only way out of our sight.
* Asia’s most expensive cocktail: “The Jewel of Pangaea”. Pangaea Lounge in Singapore has created a hugely expensive cocktail, for 32,000 Singapore dollars (about $26,000 US). The ingredients are served in a stainless steel briefcase accompanied by security guards. They include: Richard Hennessy cognac infused with gold flakes (I’m NOT making this up!), smoke-infused raw sugar cube with Jerry Thomas bitters, and a…one-carat diamond. (Honest!). Want one? Get into the queue.
* American Airlines, restructuring after filing for bankruptcy last November, sent layoff notices to 11,100 workers. They will not be buying “The Jewel of Pangaea”.
* Global billionaires are lining up to buy apartments in One57, a 90-story tower under construction in Midtown Manhattan. Each apartment is a full floor with views in four directions. If you don’t have $50 m., don’t even bother to call. American Airline mechanics might find some work building One57 for the very rich, if they’re lucky, at half the wages they got as mechanics. A new tower, 130 stories tall, will be built soon at 432 Park Ave. To buy a place there, all you need is all the money in southern Italy.
So, there you are. All this on one page. Obscene conspicuous consumption, by the super-ultra-rich, and unemployment by the working middle class.
One day, this whole mess is going to explode. The evidence? The top blew off the frustration of the Arab masses, which no expert predicted. The underlying cause there, and here, is the same.
As We Suspected: Bankers are Gamblers, Not Risk-Avoiders
By Shlomo Maital
Bank? Or Gambler?
If you suspected that the world’s leading banks have excess appetite for risk, and behave like wanton gamblers, even after being bailed out – you were right. A new study by the Bank for International Settlements (BIS), the Swiss-based bank for bankers, corroborates this. It is cited in James Saft’s NYT “inside the markets” column today (Sept. 19).
Many addictive gamblers double down their bets, after sustaining big losses, hoping to recoup what they lost. It rarely works. It generally leads to disaster – to lacking even the taxi fare to get back to their hotel room. Banks now appear to behave in the same disastrous way.
According to the B.I.S. study, “bailed-out banks not only did not cut back on risk in their lending into the syndicated loan market [this is the market for loans that are highly leveraged, i.e. asset purchases nearly all funded by the loan, so that if asset prices fall, borrowers struggle to pay their debts]. … after being ‘defibrillated by their governments, they actually increased the practice, relative to the market and to banks that had not been rescued.” One of the key offenders is J.P. Morgan. This bank chalked up huge profits by borrowing money (pumped in by the Fed) at near-zero rates, then seeking high-risk high-return channels to lend it. Even though one of J.P. Morgan’s ‘roulette wheel’ deals brought billions in losses, the bank itself remains profitable. But the problem is – this is the kind of behavior that caused global financial collapse. Will we get “Act Two”? Banks are supposed to use their low-cost borrowing, and low interest rates funded by the Central Bank, to spur borrowing and create jobs. Instead, it is funding speculation in proprietary activity (trading for ‘nostrum’, or the bank’s own, accounts). The B.I.S. study covers 87 banks from wealthy nations, accounting for half of all global banking assets.
Don’t look to the regulators for help. Another NYT article shows that the regulators are now shying away from prosecuting law-breaking banks, and instead go for plea bargains with minimal fines. When the civil service regulators match their lawyers against high-priced Wall St. legal talent – it’s like Mohammed Ali against Grandma Moses. So the regulators choose not even to enter the ring.
Saft concludes: “risky banking seems to be more a feature than a bug in the financial system.” Translation: Irresponsibly risky big banks are here to stay. Manage your funds and your investments accordingly.
Footnote: Six of Israel’s tycoons, who took the kind of leveraged loans mentioned above, are in trouble and struggle to repay the loans. Israeli banks have already written off big chunks of these loans, and pension funds stand to lose huge sums as a result.
Silicon Valley Is Up, Even When America Is Down
By Shlomo Maital
Silicon Valley is ‘up’, even when America as a whole is down. That is the point of an article by two Associated Press technology writers. * Even though Facebook and Zynga, its sidekick, have destroyed $60 b. in wealth, a sum larger than many countries’ GDP, the Valley continues to hum. “Companies catering to mobile devices, business software and data management products are thriving, while longtime Silicon Valley stalwarts such as Apple Inc. and Google Inc. remain among the most revered brands in the world,” the authors note.
It is still possible to raise venture capital in the Valley. “Silicon Valley startups raised $3.2 billion from venture capitalists during the April-June quarter, far more than in any other part of the U.S as tracked by the National Venture Capital Association. Venture capital flowing into Silicon Valley increased by 4 percent from the same time last year, while it dropped 12 percent nationwide.”
Moreover, rents in San Francisco, the Valley’s hub city, are still strong, as are rents in San Jose. “San Francisco apartments rented for an average of $2,734 in June, up 13 percent from a year ago and well above the average of $2,128 when technology stocks were at their peak before the dot-com bubble burst in 2001, according to the research firm RealFacts. Renting in San Jose — the region’s largest city — is less expensive than San Francisco, but even there the average lease cost $1,811 a month in June, a 10 percent increase from last year.”
If you are a software engineer, you can earn top dollar in the Valley, because there is a shortage. “Software engineers working in the San Francisco area are now paid an average of about $115,000, up from $106,000 in 2008, according to Glassdoor.com, which analyzed compensation figures collected from users. The average salary for software engineers in the Bay Area is about 17 percent higher than the national average for the same occupation, according to Glassdoor. Google now pays its engineers an average of $142,000, up from just under $104,000 in 2008, Glassdoor calculated. During that time, Google’s workforce has swelled by 70 percent to about 34,000 employees, including thousands of engineers working at or near its headquarters in Mountain View, Calif. “
Even Facebook and Zynga are hiring, say the authors.
What is the secret of Silicon Valley’s success. It is, I think, the fact that anyone who has been there for more than a year or two understands the principle of rapid change and cyclicality. In high-tech, downs and ups happen rapidly. If you are not prepared for them, if you are not resilient enough to ride the ups and endure the downs, the Valley sends you packing. Some of the best examples of recent successes, note the two AP authors, “include Silicon Valley-based software companies Palo Alto Networks Inc., ServiceNow Inc. and Splunk Inc. All have seen their value grow by more than half since their IPOs this year, even as IPOs of better-known companies such as Facebook proved to be a disappointment. The difference? Rather than focusing on consumers whose tastes can be finicky and rise and fall with trends, these three court corporations and government agencies as customers. Palo Alto makes firewall technology that protects computer networks, ServiceNow’s software automates technology operations and Splunk’s analyzes massive amounts of data. “You can make a lot of money selling stuff that nobody understands,” jokes Ben Horowitz, who went through the first Internet boom as an executive at Web browser pioneer Netscape Communications during the late 1990s. He’s now a partner at the venture capital firm Andreessen Horowitz. On average, the 60 technology companies that have gone public since the start of 2011 had seen their stock price increase by 11 percent through August, according to Dealogic. That was slightly better than the 9 percent gain posted by the Standard & Poor’s 500.
Silicon Valley’s success is both good news and bad, for America. Good, because it shows America still has a growth engine, somewhere! Bad, because Silicon Valley is unique and in my view, cannot be replicated anywhere else. Other nations have tried and failed. It is a unique blend of money, risk, can-do culture, high-level engineers, Stanford research and start-up history. We can admire it, but not recreate it elsewhere, even in America.
* Silicon Valley isn’t sharing Facebook’s misery, By BARBARA ORTUTAY and MICHAEL LIEDTKE, AP Technology Writers, Sept. 10
How Innovators Can Be Dreamers Without Fantasizing
By Shlomo Maital
Dreamcatcher (2003 movie)
One of the hardest dilemmas for innovators and entrepreneurs, I’ve discovered over the years, is this: How to be a visionary dreamer …without the dreams or fantasies.
What I mean is this: Research by NYU psychologists Michael Sagristano and Yaakov Trope, along with Nira Liberman (J. of Experimental Psychology: General, vol 131, no. 3) reveals what we all know: for events that are close to us in time (next month, next 3 months), we can clearly see the downside, pitfalls, problems, challenges. But for events that are distant, we tend to see the upside (i.e. we imagine launching a successful startup) without seeing concretely all the myriad things that can and do go wrong. Trope’s CLT (construal level theory) says, an activity is less attractive, the closer in time it is, when the concrete details are less pleasant than the abstract goals.
I’ve seen this so many times with startup-ists. They dream, they have a vision, both are vital – but they do not see the concrete details, what has to be done, day to day, and what might go wrong. That is why I insist that my students do two things: Describe concretely the vision, a kind of photograph of the future, to see themselves in five years running a highly successful startup, but also: List all the many things that can go wrong, in the most concrete imagineable terms.
CLT theory explains such behaviors as gambling (we envision winning, but not losing every cent we have), buying a TV, and getting engaged. In general, optimism is a highly positive trait. But somehow we must temper it with a dose of realism, without allowing the realism to kill the dreams and the vision.
Have you noticed that things we dream about, often are somewhat less wonderful when our dreams are fulfilled?
Trope says the ideal decision-maker takes into account both abstract and concrete aspects of distant-future courses of action. The ‘concrete’ part is very difficult. That is why we need a structured method for launching an innovation or a business, that forces us to concretize it, even five years hence. Innovators must dream…dream on, dream on, but at the same time, temper their dreaming with cold hard reality. I call this ‘head in the clouds, feet on the ground’. Combining the two is very very difficult, but it is essential.
Men Drool, Women Rule…Here’s Why
By Shlomo Maital
In the 1993 Disney movie Homeward Bound: The Incredible Journey, Chance the cat says memorably, dogs drool, cats rule!
According to David Brooks’ Op-Ed column in today’s New York Times, “Why men are failing”, we need to alter that quote a bit to “men drool, women rule”. Here are some data – * in elementary and high school, boys get 75% of the D’s and F’s. * in college, only 40% of bachelor’s and Master’s degrees go to men. * in 1954, 96% of men aged 25-54 worked; today it is only 80 %. * male labor force participation reached an all-time low in the U.S. in May. * annual earnings for median prime-age male fell 28% in the past 40 years. * 12 of the 15 fastest-growing professions are dominated by women.
What is going on? Brooks cites a new book by Hanna Rosin, “The End of Men”, that explains the decline of men and ascent of women by “adaptability”. Women, she argues, are like immigrants who move to a new country. They flexibly adapt to new circumstances. Men are like immigrants who move to a new country but keep their minds in the old one. Men are rigid; women are fluid.
Brooks cites a study by the National Federation of Independent Businesses, which found that small businesses owned by women outperformed male-owned small businesses, during the last recession. And finally, the last straw, after a marital breakup, more women than men see their incomes rise by at least 25%.
Women are today like clean slates, Rosin says, abandoning both feminist and prefeminist preconceptions. Men still adhere to masculinity rules, which limits their vision, movement and flexibility.
It’s just as Chance said about dogs and cats. Women rule. We men just haven’t realized it yet.
William Moggridge (1943-2012): Interaction Design Pioneer
By Shlomo Maital
One of the world’s pioneer industrial designers, William Grant (“Bill”) Moggridge, has died. Moggridge, who was British, became famous when his design company ID Two, located in Palo Alto, CA., acquired GRiD Systems as a client, in 1979. GRiD Compass was the world’s first laptop computer, in 1981. It was the first portable computer, that had a display that closed over the keyboard. It cost $8,000. GRiD patented the design and licensed it for many years. GRiD made trips on the NASA space shuttle, starting in 1983. We take this simple design for granted today, but in its time it was a breakthrough. I once owned a Compaq “portable” computer, that weighed 25 pounds and was carried in a suitcase Schwarzenegger would have trouble lifting. It was a wonderful computer, but very clumsy. Moggridge solved that. Moggridge says that when he tested the prototype GRiD in 1981, it was the first time he used a computer. In the digital era, he later said, the computer opened his mind to the idea that design should be more than just beautiful utilitarian objects, but rather should also be about the experience of the user. Today this is elementary; in his day it was revolutionary.
In 1991 Moggridge co-founded IDEO, together with David Kelley and Mike Nuttall. He remained at IDEO until 2010, when he left to become head of the Cooper-Hewitt National Design Museum in New York.
Moggridge pioneered ‘interactions design’. In his book, Designing Interactions, Chapter 10, he summarizes this approach:
Bill Moggridge describes the process of interaction design as it is practiced at IDEO. He believes that if we think first about people and then try, try, and try again to prototype designs, we stand a good chance of creating innovative solutions that people will value and enjoy. He is helped by two of his colleagues in telling a more complete story about understanding people and using prototypes.
It is so simple. When designing your innovation, start with people. Imagine people using it. Do a prototype. Let people try it. Watch them as they use it.