Seth Godin’s Linchpin Review- Part 2

I’ve spent most of my free moments over the weekend reading and contemplating
Seth Godin’s new book, Linchpin. I’m about half way through, and it’s becoming clear that one of Seth’s main themes is that the real way to get ahead is to make an emotional investment in your work.

I have always agreed with this principle. Over the years, I’ve had discussions with people managing workers in all walks of life, and the bottom line has been that som people seem easily motivated by extrinsic things, like a promise of a bonus, or money, but there’s another subset of people for whom the external motivators are just not what motivates them to come into work every day- their motivation is more about doing something worth while and making a difference. You can try to add additional motivators onto a task, for example, paying someone a bit more for doing a bit more work, but for some people, the compliment or acknowledgement of a job well done is worth more than the paycheck. It doesn’t mean they’ll work for free, but the value of the work itself is a cornerstone of why they do it in the first place.

What struck me is this hits to the core of how we’ve constructed capitalism. We hear people say things like “I pay them to do a job, not to care or to second guess my decisions- I’m paying you to do what I say”- but it seems to me to take the value people could potentially add to your business is a pretty dangerous position to take long term.

Here’s where it gets interesting to me. I’ve been listening to a bunch of NPR interviews recently, featuring an author , Anne Heller, talking about her book, Ayn Rand and the World She Made. Ayn Rand wrote several famous books, again on the best seller list as conservative bibles, basically spawning a philosophical movement called Objectivism. Her opinions were basically that any government interventions were undue interference. It’s even noted that Alan Greenspan knew and was quite fond of Ayn Rand and her positions.

My dad was a big fan on Ayn Rand, and as an engineer and MIT graduate, was devoted to science and logic almost as a religion unto itself. Whenever I would get emotionally worked up over something, he would say that “crying never made anything better” and left me with the impression that how I felt about something was never really as important as what I thought about it. Thinking and feeling were very separate things. Objectivism, facts and logic – intellectualism- should rule the day. The economics and conservative movement of our Country post World War II could be said to derive from some of Ayn Rand’s power and freedom of the individual over the government interference almost at any cost. Ayn Rand also tolerated very little dissent and demanded loyalty from her followers, saying that if anyone disagreed with her, they weren’t thinking properly- somewhat totalitarian in her own way.

What’s interesting is that it struck me that Seth’s book is the anti-Ayn Rand.

*warning- geeky Star Trek Metaphors ahead *

Where companies and corporations take on a Vulcan-like analysis of cold hard facts and logic, decisions made by data alone, Linchpin puts forth an argument that people respond to other people. People want you to be invested in what you do- to care, to do more than the minimum, to stop phoning it in or taking up space. It’s almost a Romulan view, to extend the Star Trek metaphor.

As I understand the Vulcan/Romulan history, the Vulcans and Romulans have a common history, but split off into two people- one branch devoted to logic and Ayn Rand-like objectivism, while the other group remained passionate and are often characterized as cunning and opportunistic.

While I think the terms “cunning and opportunistic” sound negative, I think Seth would agree that his book encourages everyone to leverage the opportunity to stand out from the pack by doing what has become rare- being caring and passionate about everything you do. This may be a time where we have to put objectivism aside and realize that as much as the logical thing to do seems clear, the illogical or “Predictably Irrational” thing may be the better and more adaptive choice when dealing with people. Even the Star Trek movies acknowledge openly that humans are emotional, irrational and often unpredictable creatures, and this is what makes us special and remarkable as a species.

Let’s take a typical customer service problem.  Customer X calls up and needs a problem handled with their account. The operator knows they are being evaluated and paid based on how they handle the call, but also how long they stay on the phone.  There’s more of an incentive to placate the person, pass it up the chain, or basically get off the phone as quickly as possible rather than thoughtfully deal with the customer’s problem the first time.  After all, if you are on the phone too long, or are too nice to the customers, you don’t meet quota- the way you are doing your job looks like you are costing them more money, on phone time alone, than the money you might save them by handling the problem correctly the first time.

When I worked in one of these call centers during college, I regularly spent whatever time was necessary to solve the problem completely.  I felt better, and I knew I was leaving after a short period of time, so I felt more free to ignore the call time metric.  They weren’t going to raise my summer hourly wage, so really, what did I care?  I could do the job right the first time without any negative consequences, so I willingly broke the rules.  A friend of mine does this at her current job, and while she gets recognized from time to time as having the best calls overheard by headquarters, she also gets equally chastised over her per call time- talking about sending your people mixed messages.

Even when I was tutoring students, a faculty member told me I couldn’t give my students treats because it was against the rules.  However, my kids would turn themselves inside out for me for forty minutes for a tootsie roll at the end of a session, so I said simply- “They’ll have to fire me, then.”  It was never a big deal after that, and she often remarked what a great group I had and how hard they worked for me and how lucky I was.  I knew that it was because we had established a trust and rapport, sweetened with sugar, of course, but everyone benefitted from this deal.

I’ve always been willing to bend the rules when necessary, and particularly when the end result was doing a better and more effective job.  If I ever get fired for that, it’s a risk I’m willing to take, because I know at the heart of it, I’m doing the right thing over the expedient thing, and I’d rather not work for an organization that doesn’t value that principle.

So when Seth talks about Linchpins having this attitude, I certainly don’t need any convincing.  But I also realize it’s going to take a lot to convince the people who think the system looks great on paper that it needs to be different for the real world,where people and feelings and gut reactions play a huge part in decisions and choices on all levels.  The age of Ayn Rand and Objectivism is starting to give way to a world in which feelings and connections are more important than ever before.  The humans are in charge, sitting somewhere on the spectrum between the Vulcans and Romulans, hopefully making a place where everyone will be able to function, even if it makes them all a bit uncomfortable from time to time.

Tags: ayn rand, dan ariely, linchpin, objectivism, predictably irrational, romulans, seth godin, vulcans

Top Ten Mania- My Top Ten Books

There’s always a year end meme that goes something like “Top Ten (insert noun here) of the Year”, so I thought I would do one of my own in a bunch of sequential posts (ten perhaps??).  Here’s number one:

Top Ten Books I Read This Year - There’s nothing special to the order, since all of the books here are great, and it’s hard to say one was way better than the other:

Number 1:The Knack- How Street-Smart Entrepreneurs Learn to Handle Whatever Comes Up by Norm Broadsky. The book contains some of the best basic business advice that everyone can use, even if the only business you manage is your personal finances.

Number 2: Buyology: Truth and Lies About Why We Buy by Martin Lindstrom. This is a great book about neuromarketing, and why our brains sometimes reveal things that our reports on our preferences don’t.  The best book out of the three or four I read this year on neuromarketing.

Number 3- Buying In by Rob Walker- This is a simply fantastic book that looks at why some products seem to have a buzz about them, what makes them special, and how it captures the imagination.  Why did Timberland boots become suddenly popular?  What about Ecko?  Rob Walker’s book is amazing.

Number 4- Predictably Irrational by Dan Ariely-  If you hadn’t already figured out that I am a brain and social science geek, this one will convince you to be sure.  Dan Ariely is a behavioral economist, and you will often see his work quoted in other books- but the source is just as compelling- don’t miss this one.

Number 5- The Pirate’s Dilemma- by Matt Mason- Not only do I love Matt because he agreed to come and talk about his amazing book at Podcamp NYC, The Pirate’s Dilemma is a great book, about how youth culture is reinventing capatalism, and he has great insights- like the music business having to come to terms with the fact it may be selling music, not just little plastic discs that transfer music from one place to another.  One of the best books of the year, hands down easy pick.

Number 6-  The Rules of the Red Rubber Ball, and The Red Rubber Ball for Business by Kevin Carroll- A great book about how when your work becomes your play, your life changes all around for the better.

Number 7: Outliers by Malcolm Gladwell- Gladwell has another interesting book, based on the premise of what it takes to be an expert and be successful depends on a confluence of factors, including when you were born, what kind of family you had, and what opportunities you had while growing up. While some of it seems a little ex post facto in its analysis rather than showing you what you can do to help yourself or your kids become successful, it was still a fascinating read.

Number 8 Made to Stick by Chip & Dan Heath- I read this one last year, but it is so powerful, I’m putting it on the list again this year. If you want to know how to make your communications, whether in writing, presentations, or even email better and more effective- do not miss this book.

Number 9: Your Child’s Strengths by Jenifer Fox- Jenifer’s book lays out ways to help children find their strengths and find ways to be successful playing on them- Every parent and teacher should read this one and keep it handy on their shelf.

Number 10: The Truth About You by Marcus Buckingham: One of the first book/kits that I have found worth while- in fact, the DVD/video that accompanies the book is one of the best produced, yet maintaining authenticity and on- to-one feel that I have ever seen. If you or anyone you know is trying to find their place in the world, this is a book and video well worth their time.

What are your favorite books of the year?  What should be on my reading list for the start of 2009?

Tags: books, buckingham, buying in, buyology, Jenifer fox, kevin carroll, made to stick, malcolm gladwell, matt mason, norm brodsky, outliers, Pirate's dilemma, predictably irrational, rob walker, the knack, top ten, top ten books

Online Business Relationships

“Business Relationships” used to sound like an oxymoron- there was business, and then there were relationships, friendships, you had outside of the business or work world.  Companies classically (and probably still do in many places) discourage workplace romantic relationships, as possibly undermining productivity and morale.  Let’s face it- when you get all “mushy and emotional” in business, your steely eyed judgment and practical decision-making can get clouded.  This leads to the whole premise of Dan Ariely’s book,  Predictably Irrational- the fact that we don;t always make the right decision, but frequently the wrong one, based on our emotional appartus swaying our judgement away from the facts.

But now, business relationships have become the currency of the day.  We want to get back to the time where we dealt with people, not just machines.  We want to know people, have a face and a feeling about a business or brand.  The cold, hard, calculated monolith of business is being infiltrated by the social scientists, who are convincing us that it’s okay to have both business and emotions in the same place and still succeed.

The problem with this over the old Ayn Rand/Mr. Spock way of operating business is that injured feelings heal much more slowly than injured bank accounts.

As a lawyer, I’ve see this all the time.  People get themselves into difficult circumstances because they’ve done things for emotional reasons without weighing all the practical ones as well.  Here are a few examples:

- Divorce is all about rash decisions, either from marrying someone who doesn’t really suit you or share your dreams for the future, or because you decided to go off and deal with your on priorities without a careful balance of what the impact might be on your spouse.

-Trusts & Estates- there’s an old saying- where there’s a will, there’s a relative.  It basically means that people get crazy when someone dies and people have to settle up their affairs.  More and bitter fights have divided families over a deceased loved one’s money and accumulated objects than divorce, I would be willing to bet.

-Family Business- here’s another loaded topic.  Dad has a business, he thinks he is preparing for his son to take over.  Son has no interest whatsoever, and wants to make his own way in the world.  Dad sells business, and son is bitter that his safety net/back-up plan is no longer there for him.  Or Dad gives business to one child and not the other…. you can imagine the discord from here.

And this doesn’t even get into the problems and hurt feelings that ensue when friends go into business together.

Whenever I approach a business relationship with friends, I always want to have the business particulars drawn out in writing.  This tends to seem really formal and silly at the time, but without “ground rules”, people quickly get in over their head.  Even when you have ground rules, the relationships aren’t always perfect, and it’s hard to keep the business and personal from creating toxicity if things go bad.

I was recently involved in a business relationships with good friends whom I trusted completely.  I trusted that because we were friends, they would obviously deal with me in an upfront manner.  I trusted that they would do everything they agreed to do pursuant to our contract.  I also thought they would value the relationship highly, since we were friends as well as colleagues.  I executed everything on my end to the letter, but the same hasn’t always been true on their side of the arrangement.  And what’s worse, the communication has been dreadful.  Despite many attempts to chat with them about it, they haven’t responded promptly, if at all.

The crux of the matter is this:  Because the trust implicit in our personal relationship bled over into the business relationship, I expected them to act more like friends and less like a corporate monolith.  Our business relationship took on corporate monolith -like failure to communicate overtones, which has damaged the trust I had in them both as business partners and as friends.  After all, if you don’t have any information to go on, you start to make stuff up and fill in the blanks yourself.  You might start out with excuses, but excuses quickly wear thin and all that is left is a feeling that they don’t care and you feel you are being treated with contempt, whether that was the intent from their side or not.

Taking a broader scope, this kind of story happens all the time online.  We think we have established a trust and friendship with people we do business with.  The conversation we can have on twitter, social networks, and even by email creates a sense of closeness and expectation that isn’t entirely reality based.  Because these are not people in your immediate daily social circle, there’s no sense of enduring personal obligation like there is with your neighbors or your child’s teacher.  We move ahead in business, thinking we have this incredible bond and relationship, based on how we feel, but in the end, business is business.  When someone disappoints us in an online relationship, the trust evaporates even more quickly than when your neighbor forgets to pick up your mail as promised.  You still have to live with that neighbor- the guy online is more distant, so your ability to rationalize and contextualize your relationship is significantly reduced.

This leads to trust being a very volitile currency on the web.  It can work extremely well, but it needs significant care and feeding to remain healthy.  It’s fragile, and can easily be damaged and lost.  And with the infinite choices available, people will easily find someone else to do business with.  But because the voices of dissent and distrust can always be heard, blog posts, comments and the like about bad relationships will haunt you through the power of Google and the Internet Way Back machine for years.

This means if you are going to play in social networks and social media, the one thing you can never take for granted is how you are building your trust and your relationships, and the ability to maintain those relationships is another currency you need to manage as wisely as the one in your bank account.

What do you think?  Is this true?  How do you build your trust relationship online?

Tags: business, currency, Dan Airely, dan ariely, new media, predictably irrational, trust

In the Golden Age of Commerce…. Social and Financial Contracts

Over the weekend, I heard two politicians make comments that stuck with me.  Mike Castle, congressman from Delaware, reported that in recent talks with ING Bank, they are doing very well.  The mortgages that they have financed are doing fine, and there’s no problem with the default rate skyrocketing.  Then again, they service their own loans.  Yesterday, Mike Bloomberg said the City of New York also has a limited mortgage program, and their default rate is also extremely low.

This started to sound like a yearning for the time where the local banker made a personal decision on your credit worthiness, and whether he could trust you when deciding to make a loan.  Factors other than a naked credit score metric went into the decision.  The social context was everything.

Now, compare these banks who are surviving the financial melt-down on Wall Street with Muhammad Yunus, a Bangladeshi banker, developed the idea of microlending  with the Grameen Bank and won a Nobel Prize in Economics because of it.   You start to see that the closer the lender and borrower are, the stronger their relationship, the more likely it is that the loan will be repaid.  Not everyone may have stellar credit, but even loan sharks know that people will repay a loan when properly motivated.  Loan sharks may use force and threats, but often maintaining a reputation and  the ability to continue doing business in a community is enough to make sure loans get repaid.  This works for small loans, partially because a small boost up is often all a person needs to find their way towards success.  Marry that factor with the fact that the loans should be readily repayable- they are not large enough to be risky individually- and you have an easy money out, money in, recycle to another in need system that has helped many people become more self-sufficient.

Look at sites like Kiva.org and even ChipIn, and you can see that money, social causes and concerns can lead to positive outcomes for everyone concerned.

Dr.  Dan Ariely from MIT in his book, Predictably Irrational,  talks about how messy things can get when you mix business contracts and social contracts.  Sometimes, you just want businesss to be business and personal to be personal.  You don’t offer to pay your Mom for Christmas dinner after the meal, because that would be rude. When I buy something at the drug store, I don’t expect the cashier to be forever grateful.  But yet…. When you do mix some level of personal social contract with the business contract, you can get some remarkable results.  Often messy, but clearly what makes these relationships different from the day to day.

Take my favorite local coffee shop.  I love this place because it is like the old sitcom “Cheers”, where everyone knows your name.  My favorite barrista, Shane, even draws little Latte Art pictures in the foam for customers, making this a special experience, beyond the day to day.  But now Shane is leaving, and moving on to another coffee shop and bar in town, a bit more of a drive away.  Will my relationshp with the coffee house stay the same even though the person who makes my day special isn’t there?  I don’t know yet.  I still love the coffee, but this person- the face of the business to me- was part of what made this a destination more frequently than not.  My business relationship- exchanging money for coffee- was enhanced by the social contract and customer service provided by this particular barrista.  That made it special and outstanding.  Maybe I can “bond” with another barrista, but it will probably take time.

Likewise, we have a private banker at a local bank.  If I ever have any issues, I can sit down and talk to them about money issues, investment issues, and they make sure we have our needs taken care of.  I feel like a valued customer- the added service and personal relationship makes this more than a fiscal relationship.  Additionally, when we were buying our house, our real estate agent became a close friend- (Thank You Mary!) the personal relationship we have extended the business relationship, and made the transaction all that more satisfying.

The point I am trying to make here is this-  when financial and business transactions are devoid of all sense of personal attachment and social contract, they are easier are more liable to break and go astray.  When business relationships and future business depends on maintaining a social contract as well, both parties are more likely to be morally obligated to perform all the duties under the contract.  The secret sauce is the social contract that binds the financial contract.

Much of what has gone astray in the financial sector has been the systematic break down of the social contract.  People feel little moral compunction about screwing a big nameless, faceless company, but they feel differently about disappointing their neighbors.  This may seem like a quaint idea, but I think the closer the lender and lendee are, the more personal the relationship, the greater the likelihood the transaction will be successful.  The more distant the relationship, the less likely the relationship will be successful.

So the next time you are in McDonald’s, ask yourself- do I feel a sense of place here?  Or is this a widget, and the people in it as well?  Are you more or less likely to correct someone if they give you the wrong change or an extra order of fries?  And would you do the same at your local diner/restaurant/coffee shop, where you know the owner?  Why or why not?  Is it really the principal of the thing, or does it matter more on the social relationship/contract you feel with friends and neighbors?

What do you think?  Is this right, or am I totally off base here?  Becaue I think the way to solve much of the financial problems these days may be about making things more, not less, personal.  And while this is much harder to run efficiently by the widget standard of commerce, it is certainly the way to keep all of us whole, fiscally and emotionally, no matter how inefficient.

Tags: chipin, dan ariely, kiva, lending, michael bloomberg, mike castle, predictably irrational, social contract