Nagesh Belludi

Moral Self-Licensing: Do Good Deeds Make People Act Bad?

August 25, 2017 By Nagesh Belludi Leave a Comment

When People Do Something ‘Good’ They Feel Licensed to Do Something ‘Bad’ Later

Being—and being seen—as moral, ethical, and principled is an important part of people’s self-concept.

Social psychologists have studied the tendency of people using their prior moral actions to license future morally questionable actions. According to these studies, prior to making morally important decisions, people may survey their previous moral actions. If they recollect engaging in virtuous moral behavior in the past, they may subsequently become less bothered about engaging in morally questionable behavior.

Prior Actions Can Affect Individuals’ Future Behavior

Past good deeds can license people to engage in behaviors that are immoral, unethical, if not problematic—behaviors that they would otherwise avoid for fear of feeling or appearing immoral. The deep-seated human tendency that makes people feel entitled to do something less moral because they’ve done something moral previously is called “moral self-licensing.”

Psychologists reason that people’s previous actions may cause them to feel more self-possessed in their own moral self-worth. As a result, this claim licenses their choice of a more self-indulgent moral choice.

Conversely, when people appear immoral or devious to others, they subsequently take up positive actions to restore their moral image. Psychologists identify this as “compensation or cleansing.”

When ‘Good’ Behavior Supposedly Counteracts Doing Something ‘Bad’

Moral self-licensing has been demonstrated in several realms of human judgment. However, in my opinion, much of the cause-and-effect narratives seem ambiguous. For instance,

In a set of pioneering studies, participants who established their racial non-prejudiced attitudes by endorsing President Obama or through selecting a black person for a consulting firm job were subsequently more likely to make pro-white decisions.
In one test, after subjects were given a chance to condemn sexist statements, they were found to be subsequently more likely to support hiring a man in a male-dominated profession.
One study on consumer behavior suggested that shoppers who brought their own bags felt licensed to buy more junk food.

Contribution Ethic and “Prospective Moral Licensing”

A phenomenon related to moral self-licensing is “contribution ethic” or the “moral credential effect.” When people feel they’ve done their fair share for some noble cause, they decide they need do no more. In one study, after people participated in a pro-social deeds (e.g., doing something good for the cause of the environment,) they felt licensed to behave more selfishly later (e.g., donating less to an environmental program). Another study showed that people who drive hybrid cars tend to get more tickets and cause more accidents than do drivers of conventional cars.

Some studies have suggested that just thinking about past moral behavior or writing about oneself as a moral person can decrease the likelihood of subsequently performing altruistic acts—such as decreasing contributions to charitable causes or being less engaging in cooperative behavior towards friends and colleagues.

Finally, simply planning to do good later can allow people to be bad now. Some studies suggest that when people merely plan to engage in a moral behavior in the future, they feel licensed to respond in a morally questionable way in the present. Psychologists identify this as “prospective moral licensing.”

Idea for Impact: Past Moral Deeds Could Make People Do Morally Wrong Things

Part of becoming wise to the ways of the world and getting along with people is understanding the many peculiarities of human behavior. Learning why people feel licensed to engage in potentially immoral behavior given their demonstrated moral behavior allows for a better understanding of the world in which we live.

How to Manage Smart, Powerful Leaders // Book Summary of Jeswald Salacuse’s ‘Leading Leaders’

August 22, 2017 By Nagesh Belludi Leave a Comment

The Most Valuable People are Often the Most Difficult to Manage

As you climb the career ladder, you will find yourself working increasingly with many other powerful leaders—both inside and outside your organization—who hold the key to your success. Often, you may share responsibility and control with a variety of leaders over whom you may lack authority and influence. Compared to others you’ve worked with in the past, many of these leaders will be more talented, ambitious, competitive, accomplished, assertive, controlling, and ego-centric.

According to by Jeswald W. Salacuse’s Leading Leaders (2005), driving change when you lack influence over other leaders requires you to tread carefully. You must employ all the diplomatic and tactical skills at your command. “Your ability to lead other leaders arises not just from your position, resources or charisma, but from your will and skill.”

The Only Way to Lead Leaders is to Do What is in Their Interests

Salacuse’s central idea in Leading Leaders: How to Manage Smart, Talented, Rich, and Powerful People is that your success depends exclusively on your personal ability to negotiate shared and conflicting objectives, and subordinate your interests to theirs. “Move your followers to take action by characterizing a problem or challenge in such a way that it is in their interests to do something about it.”

To do this, you must determine the interests of those you wish to lead and then make it loud and clear to them that you are indeed serving their interests. This requires meticulous listening, reframing of your objectives in terms of their interests, and respecting their authority and autonomy.

Salacuse breaks the challenge down into “seven daily tasks,” each of which takes a chapter in Leading Leaders.

How to Direct and Negotiate the Vision: To negotiate a compelling vision for your organization that other leaders will buy into, decide on your direction for them and then have a strategic conversation on that subject. Lead an open discussion that allows for their enthusiastic participation. Do not impose your new vision from the top. Through a series of premeditated questions, pilot them to your conclusions. Such collaboration ensures that the leaders will own and support the decisions you select for them. Learn to identify those internally influential people relevant to your objectives and appeal to them. “Beware of becoming so intoxicated by your own vision that you fail to see clearly the reservations that members of your organization may have about pursuing that vision enthusiastically.”
How to Integrate and Make Stars a Team: Your job as the leader is to make sure that all the members of your organization understand that they have common values, shared history, and collective interests. Focus on communication. Demonstrate both by word and by deed that you put the interests of the organization above your own. Understand the nature of the cultural differences that may divide your organization’s leaders and then seek to find ways to bridge any gaps. “Deal directly with other leaders who are spoilers by converting them or isolating them.”
How to Mediate and Settle Leadership Conflicts: The more autonomous the other leaders are, the greater the odds of conflict over turf, power, style, and goals. A leader must intervene and mediate when other leaders come to disagreement. When conflicts arise, read between the lines. Observe the adversaries’ interactions, and find ways to improve communication. Look beyond the conflicting parties’ stated positions; probe for deeper interests. Work as a bridge, and find areas of agreement that can resolve the conflict. Consider how you could apply the six mediation power tools (incentives, coercion, expertise, legitimacy, reference, and coalition) most effectively to resolve conflicts. “A mediator, unlike an arbitrator or judge, has no power to impose a solution.”
How to Educate People Who Think They are Already Educated: Approach your teaching role tactfully. Leaders tend to be proud and sensitive—they may begrudge being treated as unqualified, unskilled, or inexperienced. Before you instruct them, make sure you understand their frame of reference. To the maximum extent possible, do your educating one-on-one, rather than in groups. Actively involve and invite their contributions. The command and control method of instructing them will be ineffective. Instead, use the Socratic Method—ask questions that encourage people to discover the truth for themselves. “In leading leaders, the most effective instrument is not an order but the right question.”
How to Motivate and Persuade Other Leaders: Learn as much as you can about other leaders—their backgrounds, interests, and their goals. Design the specific, personalized incentives that will accord with their interests—only individualized incentives persuade people to act in desired ways. Agree on future goals for the short term, medium term, and long term, and show how those goals relate to those of your organization. Be open and transparent with information so everyone knows where they are and where they are going. “Motivate your followers by envisioning a future that will benefit them and communicating that future to them in a convincing way.”
How to Represent Your Organization to the Outside World: As a leader, you are always on the stage. Everything you do will be subject to scrutiny. Your every action and statement, whether in public or in private, can affect your organization’s relationships with the outside world—customers, competitors, regulators, media, investors, and the public in general. Actively manage their perceptions and expectations. If those interests are dysfunctional or unworkable, seek to change or transform them through one-on-one diplomacy. “One of the most important functions that leadership representation serves is the acquisition of needed resources.”
How to Create Trust to Get the Most out of Your Leadership: People will trust you not because of your appeal, charm, or foresight, but because they’ve decided that aligning with your leadership will move their interests forward. Understand the people you lead and know their interests. Manage their expectations and deliver what you’ve promised. Reinforce your communications during problems and crises. Be consistent and predictable in your actions. “Openness is not just an easy smile or a charming manner; it refers to the process by which you make decisions that have implications for your followers’ interests.”

Tact and Diplomacy Matter More When Leading Other Powerful Leaders

Recommendation: Read Jeswald W. Salacuse’s Leading Leaders. This excellent book’s insights make a great template for the basics of executive leadership. You can especially learn how to gain persuasive skills in situations where you may not have much influence.

Beyond the academic pedantry (the author is a professor of law, diplomacy, and negotiation,) the abundant examples from political leadership are far more multifaceted than the narratives in Leading Leaders tend to imply, but they serve as good cases in point.

Leading Leaders offers a matchless resource in documenting what constitutes effective emotional leadership, which is, in spite of everything, all about persuasive power and influence to get things done through people. The key learning point is, “In developing your leadership strategies and tactics, you need to take account of the interests of the persons you would lead. Leading leaders is above all interest-based leadership. Leaders will follow you not because of your position or charisma but because they consider it in their interest. Your job as a leader is to convince them that their interests lie with you.”

Inspirational Quotations #698

August 20, 2017 By Nagesh Belludi 1 Comment

New ideas are one of the most overrated concepts of our time. Most of the important ideas that we live with aren’t new at all.
—Andy Rooney (American Writer)

Winning isn’t everything, but wanting to win is.
—Vince Lombardi (American Sportsperson)

The fool knows after he’s suffered.
—Hesiod (Greek Poet)

All you have shall some day be given; therefore give now, that the season of giving may be yours and not your inheritors.
—Khalil Gibran (Lebanese-born American Philosopher)

Wisdom too often never comes, and so one ought not to reject it merely because it comes late.
—Felix Frankfurter (American Judge)

Often you just have to rely on your intuition.
—Bill Gates (American Businessperson)

No one person can possibly combine all the elements supposed to make up what everyone means by friendship.
—Francis Marion Crawford (Italian-born American Novelist)

Conscience serves us especially to judge of the actions of others.
—Jean Antoine Petit-Senn (Swiss Poet)

Humans seek happiness as an end in itself, not as a means to something else.
—Aristotle (Ancient Greek Philosopher)

Occasionally, a man must rise above principles.
—Warren Buffett (American Investor)

A man who waits to believe in action before acting is anything you like, but he’s not a man of action. It is as if a tennis player before returning a ball stopped to think about his views of the physical and mental advantages of tennis. You must act as you breathe.
—Georges Clemenceau (French Head of State)

Children should be led into the right paths, not by severity, but by persuasion.
—Terence (Ancient Roman Playwright)

The essence of life is finding something you really love and then making the daily experience worthwhile.
—Denis Waitley (American Motivational Speaker)

Anger is the Hardest of the Negative Emotions to Subdue

August 18, 2017 By Nagesh Belludi Leave a Comment

The Lekha Sutta, an aphorism of the historical Buddha that has been preserved orally by his followers, identifies three distinct ways that anger manifests in individuals:

Firstly, the Buddha refers to the individual who is like an inscription on a rock. His anger stays with him for a long time; it does not war away by wind or water.
Secondly, the Buddha relates an individual who is habitually angered, but whose anger does not stay with him for a elongated time, to an inscription in soil that rubs away by wind or water.
Finally, the Buddha identifies an individual who is like water. When he is spoken to or treated rudely, he stays impervious, pleasant, and courteous—in the vein of an inscription in water that disappears right away.

Here’s a translation of the Lekha Sutta from the Pali by the eminent American Buddhist monk and prolific author Thanissaro Bhikkhu:

Monks, there are these three types of individuals to be found existing in the world. Which three? An individual like an inscription in rock, an individual like an inscription in soil, and an individual like an inscription in water.

And how is an individual like an inscription in rock? There is the case where a certain individual is often angered, and his anger stays with him a long time. Just as an inscription in rock is not quickly effaced by wind or water and lasts a long time, in the same way a certain individual is often angered, and his anger stays with him a long time. This is called an individual like an inscription in rock.

And how is an individual like an inscription in soil? There is the case where a certain individual is often angered, but his anger doesn’t stay with him a long time. Just as an inscription in soil is quickly effaced by wind or water and doesn’t last a long time, in the same way a certain individual is often angered, but his anger doesn’t stay with him a long time. This is called an individual like an inscription in soil.

And how is an individual like an inscription in water? There is the case where a certain individual—when spoken to roughly, spoken to harshly, spoken to in an unpleasing way—is nevertheless congenial, companionable, & courteous. Just as an inscription in water immediately disappears and doesn’t last a long time, in the same way a certain individual—when spoken to roughly, spoken to harshly, spoken to in an unpleasing way—is nevertheless congenial, companionable, & courteous. This is called an individual like an inscription in water.

These are the three types of individuals to be found existing in the world.

Idea for Impact: Learn to Corral Your Anger and Manage Your Emotions

Like everything else in the world, anger surfaces and passes away, restoring your previous sense of calm and stillness. Not identifying the nature of anger and allowing it to take over your state of being can lead to disastrous outcomes. Verse 222 of the Dhammapada (tr. Thanissaro Bhikkhu) states,

When anger arises,
whoever keeps firm control
as if with a racing chariot:
him
I call a master charioteer.
Anyone else,
a rein-holder—
that’s all.

Anger destroys careers. It destroys relationships. As long as you lack the capacity to withstand negative emotions such as anger, you will be at a marked disadvantage in life.

Group Polarization: Like-Mindedness is Dangerous, Especially with Social Media

August 15, 2017 By Nagesh Belludi Leave a Comment

Group Polarization Strengthens of the Opinions of Each Person in the Group

When people who share opinions and beliefs get together in groups, they tend to be even more persuaded in their beliefs—they become extreme in their views. In other words, a group of likeminded people will reinforce one another’s viewpoints. This phenomenon is called group polarization.

Social psychologists reason that people use the choices and persuasions of others as heuristics to steer their lives in this complex world. As the English philosopher and mathematician Alfred North Whitehead once said, “Civilization advances by extending the number of operations we can perform without thinking about them.”

Social Media and Group Polarization

As people converge to likeminded people in virtual neighborhoods, they tend to operate in intellectual bubbles. Given that social media allows participants to curate their sources of information, it is easier than ever before for people to cruise through their day-to-day lives without meeting anyone who disagrees with them. Studies have shown that hanging around a group of likeminded folks makes people more scornful of differing viewpoints, than they are as individuals.

Group polarization explains partly the proliferation of fake news on social media—people accept dubious claims that support their own viewpoint while disregarding facts that conflict with their views. In the confusing times we live in, people get lost in the unstructured, unattributed noise of headlines and repeat the loudest declarations as facts without checking their soundness.

In 1996, MIT scholars Marshall Van Alstyne and Erik Brynjolfsson forewarned of an impending dark side to the newly interconnected world:

Individuals empowered to screen out material that does not conform to their existing preferences may form virtual cliques, insulate themselves from opposing points of view, and reinforce their biases. Internet users can seek out interactions with like-minded individuals who have similar values, and thus become less likely to trust important decisions to people whose values differ from their own.

The Persuasive Ability of Social Proof in Consumer Behavior

In the bestselling Influence: The Psychology of Persuasion, psychologist Robert Cialdini observes that advertisers tend to describe their products as “fastest-growing,” “#1 in the market,” or “best-selling.” Advertisers believe that consumers need to hear not only that a product is good, but also that others think so.

As per group polarization, when people are considering what to do or buy, they often look to what others are doing or have done, and take their cue from others. When a product, service, or an idea strikes out as particularly admired or prevailing, consumers intuitively take social proof that this is the right—and acceptable—choice.

Idea for Impact: Hanging Around with Like-Minded People is a Dangerous Intellectual Trap

The French entomologist Jean-Henri Fabre once wrote, “Seek those who find your road agreeable, your personality and mind stimulating, your philosophy acceptable, and your experiences helpful. Let those who do not, seek their own kind.”

Look for people who respect your worldview—even if drastically different from theirs—but can present alternative perspectives.

Regular exposure to differing views serves to sharpen your thinking and reasoning abilities—and may perhaps even reexamine your positions. As I’ve said before, wisdom comes from facing counter-arguments. The only test of a well-constructed opinion is that it can defend itself.

Inspirational Quotations #697

August 13, 2017 By Nagesh Belludi Leave a Comment

What has once happened, will invariably happen again, when the same circumstances which combined to produce it, shall again combine in the same way.
—Abraham Lincoln (American Head of State)

There is no man in any rank who is always at liberty to act as he would incline. In some quarter or other he is limited by circumstances.
—Hugh Blair (Scottish Clergyman)

The measure of our rationality determines the degree of vividness with which we appreciate the needs of other life, the extent to which we become conscious of the real character of our own motives and impulses, the ability to harmonize conflicting impulses in our own life and in society, and the capacity to choose adequate means for approved ends.
—Reinhold Niebuhr (American Protestant Theologian)

You can never change something by fighting the existing reality. To change something, build a new model that makes the existing model obsolete.
—Buckminster Fuller (American Inventor, Philosopher)

Life is brief–a flash of lightning, a snap of eternity’s fingers.
—Dan Millman (American Children’s Books Writer)

It matters not what a person is born, but who they choose to be.
—J. K. Rowling (British Children’s Books Writer)

So much of writing is not writing the sentences themselves but organizing the sentences and paragraphs in a way that makes sense.
—Ben Casnocha (American Entrepreneur, Investor)

The most tyrannical of governments are those which make crimes of opinions, for everyone has an inalienable right to his thoughts.
—Baruch Spinoza (Dutch Philosopher)

Anger itself does more harm than the condition which aroused anger.
—David O. McKay (American Mormon Religious Leader)

Better to stumble with the toe than with the tongue.
—African Proverb

When nothing is sure, everything is possible.
—Margaret Drabble (English Novelist)

Correcting oneself is correcting the whole world. The sun is simply bright. It does not correct anyone. Because it shines, the whole world is full of light. Transforming yourself is a means of giving light to the whole world.
—Ramana Maharshi (Indian Hindu Mystic)

This is Yoga for the Brain: Multidisciplinary Learning

August 11, 2017 By Nagesh Belludi 1 Comment

You need a broad-based understanding to succeed in today’s increasingly complex world.

Modern scientific and technological advances are increasingly born at the frontiers of more than one science disciplines.

It’s impossible to know everything. However, if you work to understand the basics of the biggest, most important paradigms in the fields of science, humanities, and social sciences, you can progressively expand your decision-making process.

A multidisciplinary methodology entails drawing suitably from multiple disciplines to examine problems outside of their normal boundaries and reach solutions based on an understanding of complex situations.

Multidisciplinarity Leads to Better Internalization of Knowledge

Multidisciplinarity allows you can transform a perspective in one discipline to expand your thought-frameworks in other disciplines. The renowned venture capitalist Paul Graham, author of the bestselling Hackers & Painters: Big Ideas from the Computer Age, said this best when he once wrote,

Studying things from unrelated subjects (multidisciplinary learning) is a lot like yoga for brain. You don’t actually get anywhere when you do yoga. You stand in one place and bend yourself in various shapes. But it makes you more flexible, so when you go out and do walk around, you can walk better.

“Cross-Training for the Mind” à la Charlie Munger

The great investor Charlie Munger, Vice-Chairman of Berkshire Hathaway, is a big proponent of multidisciplinary thinking. This distinguished beacon of rationality and wisdom coined the term “latticework of mental models” to enable the “cross-training for the mind.” Rather than silo your mind just in the narrow areas you tend to concentrate on at college and work, Munger advocates developing a broad, functional set of interdisciplinary knowledge about the world, which can serve you in all parts of life. According to the anthology Poor Charlie’s Almanack, Munger said at a 1998 talk at the Harvard Law School,

If A is a narrow professional, B consists of the big, extra-useful concepts from other disciplines, then, clearly, the professional possessing A plus B will usually be better off than the poor possessor of A alone. How could it be otherwise? And thus, the only rational excuse for not acquiring B is that it is not practical to do so, given the man’s need to A and the other urgent demands in his life. I will later try to demonstrate that this excuse for unidisciplinarity, at least for our most gifted people, is usually unsound.

Many of the world’s leading companies in science and technology are employing multidisciplinary people for managerial positions. These people understand a range of science principles and methods and can synthesize the works of domain-specific experts to invent creative solutions to problems.

Idea for Impact: Pursue Multidisciplinary Thinking

People who think very broadly and comprehend many different models from many different disciplines make better decisions.

Pursue multidisciplinary thinking. Open your mind to new ideas and new experiences. Make new friends, travel afar, read more, and discover new stories.

Interact with people who work in different disciplines and dabble with the arts and the media. Let the new sights, sounds, smells, languages, tastes, sensations, stories, and perspectives spark your creativity.

Everything in Life Has an Opportunity Cost

August 8, 2017 By Nagesh Belludi 1 Comment

“Opportunity cost is a huge filter in life. If you’ve got two suitors who are really eager to have you and one is way the hell better than the other, you do not have to spend much time with the other. And that’s the way we filter out buying opportunities.”
—Charlie Munger, Investor

Doing One Thing Makes You Sacrifice the Opportunity to Do Something Else of Value

In economics, opportunity cost is the cost of not choosing the next best alternative for your money, time, or some other resource.

One of the foundational principles in economics is affirmed by the popular American aphorism, “There ain’t no such thing as a free lunch.” Resources are scarce. When resources (time, money, mindshare, autonomy, and all that) are scarce, selecting one opportunity necessitates forgoing other opportunities.

Life is all about values and priorities. You face trade-offs. Life requires of you to make choices among mutually exclusive alternatives. Every time you select something, you forfeit other alternatives and the concomitant benefits. The cost of something is what you will give up to get it. This is opportunity cost.

You Can Do Anything but Not Everything … What Will You Sacrifice When You Choose One Option Over the Others?

When mulling over multiple choices, the quality of any option cannot be assessed in isolation from its alternatives. The price you pay (or the sacrifice you make, or the benefits you give up) for doing what you’ve chosen to do instead of doing something else is the opportunity cost.

In sum, an opportunity cost is the cost of passing up the opportunities that a different option would have afforded.

Many costs are calculated in terms of money. However, just because you don’t have to spend money to do something does not imply that the options you face are without their costs. For example, you don’t have to spend money to go for a hike or watch a sunset, but there is an opportunity cost there too. You could have used that time to do something else you value—visiting a friend or reading a book, perhaps.

If you decide to invest two years and some $100,000 getting an MBA at a brand-name business school, there’s an opportunity cost; it costs you lost wages and all the things you could have pursued during that time and with that money. But you anticipate that getting your MBA will pay off by way of a better job in a better company with a better salary.
If you spend your weeklong vacation taking your parents to a beach destination in Florida, there’s the opportunity cost of not going to Paris with your spouse.
If you decide to wake up twenty minutes earlier in the mornings to leave home sooner to work and beat the horrendous traffic, there’s the opportunity cost of twenty minutes of extra snoozing.
When the refrigerator at home breaks down and needs replacement, you will have to give up buying that latest big-screen TV you’ve been coveting.
There’s an opportunity cost to even reading this article at this moment. You could have been watching TV, taking a nap, calling up a friend, or moving on to another article in the time you’re devoting to reading this article.

In a nutshell, even decisions that appear to be no-brainers carry the hidden costs of the options you will decline. Thinking about opportunity costs may not change the decision you make, but it will give you a more rational assessment of the full implications of your decision.

Opportunity Costs Apply to All Your Choices—Big and Small

Opportunity cost is a concept of great magnitude. It is one of those apparently simple concepts in social sciences that are difficult to master and tough to put into consistent practice. Tim Harford, the British author of The Undercover Economist offers a particularly instructive example of appreciating opportunity costs in his Financial Times column:

Consider the following puzzle, a variant of which was set by Paul J Ferraro and Laura O Taylor to economists at a major academic conference back in 2005. Imagine that you have a free ticket (which you cannot resell) to see Radiohead performing. But, by a staggering coincidence, you could also go to see Lady Gaga—there are tickets on sale for £40. You’d be willing to pay £50 to see Lady Gaga on any given night, and her concert is the best alternative to seeing Radiohead. Assume there are no other costs of seeing either gig. What is the opportunity cost of seeing Radiohead? (a) £0, (b) £10, (c) £40 or (d) £50.

…

Answer: Going to see Lady Gaga would cost £40 but you’re willing to pay £50 any time to see her; therefore the net benefit of seeing Gaga is £10. If you use your free Radiohead ticket instead, you’re giving up that benefit, so the opportunity cost of seeing Radiohead is £10.

Charlie Munger’s Wisdom on Opportunity Cost

On the subject of making choices in life based on opportunity costs, Munger stated at a 2010 lecture at Harvard-Westlake preparatory school, “The right way to make decisions in practical life is based on your opportunity cost. When you get married, you have to choose the best spouse you can find that will have you. The rest of life is the same damn way.”
Explaining how Warren Buffett and Berkshire Hathaway use opportunity costs to make investment decisions, Munger detailed stated at the aforementioned Harvard-Westlake lecture, “Berkshire Hathaway is constantly kicking off ideas in about two seconds flat. We know we’ve got opportunity X, which is better than the new opportunity. Why do we want to waste two seconds thinking about the new opportunity? Many of you come from places that don’t do that. You’ve got to have one horse, one rabbit, one something or rather, and that rabbit is going to be thinking about something which would be ruled out immediately by an opportunity cost available generally to the place—but, it’s a different department. You have to be diversified and so on and so on. It’s easy to drift into this idea that opportunities don’t matter, you’ve got so many different ways of doing things that are better. It isn’t better.”
Putting the concept of opportunity cost into operation requires benchmarking any prospective decision to other available alternatives. At the 2006 Berkshire Hathaway annual meeting, Munger advised, “In the real world, you have to find something that you can understand that’s the best you have available. And once you’ve found the best thing, then you measure everything against that because it’s your opportunity cost. That’s the way small sums of money should be invested. And the trick, of course, is getting enough expertise that your opportunity cost—meaning your default option, which is still pretty good—is very high…. Most people aren’t going to find thousands of things that are equally good; they’re going to find a few things where one or two of them are way better than anything else they know. And the right way to think about investing is to act thinking about your best opportunity cost.”

Learn to Evaluate Life Choices Via the Lens of Opportunity Costs—The Stakes Become Clearer

You live in a world of scarcity and must therefore make choices. You cannot avoid regret since there are opportunity costs for every choice you will make.

Everything in life is about opportunity costs. Every time you say “yes” to a choice, you are also saying “no” to everything else you may have accomplished with your time, money, and resources.

Opportunity cost is a commanding tool that you should be wise to apply to all decision-making. If you integrate this concept into your thought process, you will not only make judicious choices, but also better understand the world in which you live.

Idea for Impact: Whether you’re choosing graduate school, mulling over switching careers, starting a business, investing your money, buying a car, or frittering away your evening watching TV, considering the value of forgone alternatives will help you make better choices. Make the lens of opportunity costs the underpinning of your decision-making processes.

Inspirational Quotations #696

August 6, 2017 By Nagesh Belludi Leave a Comment

Irrigators guide the water. Fletchers shape the arrow shaft. Carpenters shape the wood. The wise control themselves.
—The Dhammapada (Buddhist Anthology of Verses)

Let no man ever look for what is pleasant, or what is unpleasant. Not to see what is pleasant is pain, and it is pain to see what is unpleasant.
—The Dhammapada (Buddhist Anthology of Verses)

It is much easier to ride a horse in the direction it’s going.
—Abraham Lincoln (American Head of State)

An insult is either sustained or destroyed, not by the disposition of those who insult, but by the disposition of those who bear it.
—John Chrysostom (Greek Christian Saint)

People universally tend to think that happiness is a stroke of luck, something that will descend upon you like fine weather if you’re fortunate enough. But that’s not how happiness works. Happiness is the consequence of personal effort. You fight for it, strive for it, insist upon it, and sometimes travel the around the world looking for it. … Once you have achieved a state of happiness, you must never become lax about maintaining it, you must make a mighty effort to keep swimming upward into that happiness forever, to stay afloat on top of it.
—Elizabeth Gilbert (American Novelist)

We must dare to think ‘unthinkable’ thoughts. We must learn to explore all the options and possibilities that confront us in a complex and rapidly changing world. We must learn to welcome and not to fear the voices of dissent. We must dare to think about ‘unthinkable things’ because when things become unthinkable, thinking stops and action becomes mindless.
—J. William Fulbright (American Political leader)

The things we fear most in organizations—fluctuations, disturbances, imbalances—are the primary sources of creativity.
—Margaret J. Wheatley (American Management Consultant)

Book Summary of Leigh Branham’s ‘The 7 Hidden Reasons Employees Leave’

August 4, 2017 By Nagesh Belludi Leave a Comment

Employee engagement and retention of top talent is a holy grail of people management—and nearly as hard to pin down.

Employees expect managers to be fair, pay fairly, listen, value opinions, relate, develop, challenge, demonstrate care, advance, and so on. But many employees don’t know when and how to voice their concerns, or negotiate for what they want.

All managers know that engaged employees are happier and more productive. Yet, managers and HR managers cannot simply make employee engagement “happen.”

In The 7 Hidden Reasons Employees Leave, employee-retention expert Leigh Branham discusses how companies can tackle employee disengagement and retain their best and brightest people.

Using a copious amount of facts and figures from interviews and surveys, Branham explores seven reasons for employee disengagement. For each reason, Branham lists signs that managers need to keep their eyes open for, and shows how employers and employees could communicate and understand their mutual needs and desires.

“Some Quit and Leave … Others Quit and Stay”

According to Branham, employee disengagement—and eventual resignation—is not an event; rather, it is a plodding process of bitterness, discontent, and eventual withdrawal that can take weeks, months, or even years until the definite choice to resign happens. He lists the ten most common stimuli that trigger employee disengagement:

Poor management
Lack of career growth and advancement opportunity
Poor communications
Issues with pay and remuneration
Lack of recognition
Poor senior leadership
Lack of training
Excessive workload
Lack of tools and resources
Lack of teamwork

Branham claims to have synthesized some 20,700 employee-exit surveys and has identified four fundamental human needs (compare to Maslow’s hierarchy of needs) that must be met by employers:

Employees need to feel proficient. They want to be matched to a job that aligns with their talents and their desire for a challenge.
Employees need to feel a sense of worth. They want to feel confident that their commitment and their efforts translate into meaningful contributions to their company’s mission. They desire to be recognized and rewarded appropriately.
Employees need to be trusted. They expect their employers to pay attention, and be honest and open in their communications.
Employees need to have hope. They want to be treated fairly, and given opportunities to grow their skills and advance their careers.

Why Employees Start Feeling Disconnected from Their Work

The core of The 7 Hidden Reasons Employees Leave is a “how to” guide to address each of the seven reasons to enable a company to pursue the path to become an “employer of choice.”

Reason #1: The Job or Workplace Was Not as Expected. Many new hires join their companies with a wide range of misconceptions and unrealistic expectations. Some stay and adapt, others disengage and stay, and some others disengage and ultimately leave. Branham advocates creating realistic job descriptions, and open communications between managers and employees on achieving their mutual goals and expectations.

Reason #2: The Mismatch between Job and Person. Companies with strong reputations for selecting the right talent and keeping employees well matched with their jobs have a strong commitment to the continuous upgrading of talent. Managers can assign tasks so that employees can be more engaged through the use of their “motivated abilities.” Managers must keep an eye open opportunities to augment employees’ jobs by delegating tasks they might not have considered before.

Reason #3: Too Little Coaching and Feedback. Branham affirms that most managers do coaching and feedback merely as annual or biannual HR-required discussions that bind ambiguous targets to performance-ranking and pay scale. Managers must lead frequent, informal, on-the-job feedback conversations with employees. Branham identifies four principal themes that managers must address to make their performance management practice seem less controlling and more of a partnership:

“Where are we going as a company?”
“How are we going to get there?”
“How does the manager expect the employee to contribute?”
“How is the employee doing? What is going well? What are the key suggestions for improvement?”

Reason #4: Too Few Growth and Advancement Opportunities. Branham observes that most talented employees cannot pinpoint and articulate, and often underuse their greatest strengths. He encourages companies to provide self-assessment tools and career management training for all employees, enabling them to be the best they possibly can be. Most “employers of choice” have a strong mentoring culture. They communicate that employees must take the initiative in their own career development.

Reason #5: Feeling Devalued and Unrecognized. To Branham, many companies do not have a formal and informal culture of recognition because their managers are themselves too busy with their nominal responsibilities to pay adequate attention to employees’ performance. Or, they can’t discern between average and superior performance. He lists recommendations for competitive base- and variable-pay linked to achieving business goals. He reminds managers that employees are hungry to be listened to, and want their ideas sought and implemented.

Reason #6: Stress from Overwork and Work-life Imbalance. Branham observes that the relationships employees form with other employees is a glue that binds people to their workplaces. He encourages fostering social connectedness by assigning cross-functional team projects and organizing group outings.

Reason #7: Loss of Trust and Confidence in Senior Leaders. When senior leaders don’t back up pronouncements such as “people are our most important asset” with their actions, even mid-level managers begin to question the decisions and the actions of senior leaders. The result is a manifest lack of enthusiasm in the workplace, and in the rising complaints and questions about policies and practices. Leaders must set the tone for workplace culture and must back up their words with actions to discourage employee cynicism and disengagement.

Becoming an Engaged Leader is the Embodiment of What Leadership Means

Recommendation: Fast read Leigh Branham’s The 7 Hidden Reasons Employees Leave. This book makes a great reading for managers and leaders who will need to scratch beneath the surface to recognize unhappy employees before it’s too late, and then engage their employees better and retain their top talent.

While many of the book’s themes may appear familiar, The 7 Hidden Reasons discuses many ideas and “engagement practices” in great specificity to help managers and leaders keep their antennae up for signs of bitterness and discontent, and correct before they lose their best and brightest people. This practical tome can also help employees discuss and resolve their needs and desires.

Developing a deep understanding of what causes employees to lose motivation, disengage, and leave cannot be ignored or overlooked. Managers and leaders who can resolve the divergence that employees feel between their personal values and the best interests of their businesses will gain immeasurably by having a highly engaged and productive workforce.

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