Improving effectiveness

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I recently finished reading Stephen Covey’s 7 Habits of Highly Effective People. I’m guessing, like many people I’ve previously only glanced through or skim-read this book primarily looking for the “quick fix” to my seemingly ever increasing workload. Subsequently I’ve heard many people referring to how insightful and useful this book was for them so this time I chose to read cover to cover to find out why. The answer, for me at least, came when I realised that the true value wasn’t actually in the habits per se but rather in the message that like an organisation one’s life needs to be guided by internal values and external principles towards an engaging self- vision and or mission. Intuitively this makes sense.

He defines values as the “internal laws that we feel strongest about and commit to upholding, they guide our behaviour”. I interpret this to mean things like truth, honesty, discipline, courage and honour. For me, values are core beliefs about how one should live such that if one’s thoughts, feelings and behaviours have upheld them one can stand tall, hold their head high and never feel any guilt. This is not to say that adhering to one’s values is easy, often people interacting will do so with different values.

Principles, on the other hand are “natural external laws that ultimately control the consequences of our actions” and provided examples are justice, fairness, responsibility, integrity, respect, cooperation, communication and renewal. To me these are closer to values than his definition of principles although I do think his definition has merit and use. I see principles and the cause-and-effect rules-of-thumb that we each experience every day. Examples might be karma – what you do to others will eventually be returned to you several-fold.

Values and principles therefore provide the rules for making decisions that, if necessary, one can look back and no matter the outcome believe the right choice was made, although this may not necessarily be the best choice. Comparing right and best is like comparing quality and quantity. A choice made according to one’s values is a high quality choice where as a choice that brings about the greatest progress towards an outcome is a high quantity choice. For example, to increase one’s wealth one could save more (high quality) or steal (high quantity).

By themselves values and principles don’t provide direction, this is why one needs to also take timeout to define a personal vision and mission. These are more than just long term goals, they provide the guidelines for defining one’s goals. A vision is basically an imagine that one is willing to dedicate their life to trying to bring about, generally it is a concept that if realised is just as engaging to maintain. A mission statement consists of open ended goals and actions that define how the vision will be achieved. For example, if one has the vision to be the expert at something then their mission might be to pursue lifelong learning opportunities in that domain of knowledge.

Defining one’s values, vision and mission is not easy, it takes time and space to reach deep inside to find what is truly important however the feeling of energy and excitement that comes from doing so along with being able to measure progress towards outcomes desired above all else makes the process worthwhile.

The habits themselves can be summarised as: keep any and all promises you make to yourself and or others; take a collective and cooperative approach to problem solving seeking the best outcome for all; and, regularly reflect on thoughts, feelings and behaviours and make necessary adjustments immediately.

  1. Be proactive – take responsibility for your life, both where it is and where it is going.
  2. Begin with the end in mind – if you don’t know where you are going any road will lead you there
  3. Put first things first – increase priority of goals and tasks with long term benefits e.g. health
  4. Think win/win – seek the solution that creates the best outcome for all
  5. Seek first to understand, then to be understood – ethos before pathos before logos.
  6. Synergy – the whole is greater than the sum of the parts
  7. Sharpen the saw – invest in yourself physically, emotionally, mentally and spiritually

Economic confusion

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Feeling confused by the financial and economic events of the last few years? Not sure about how the US crashed in 2008 or why Europe is responding the way it is?

The short answer to both is – culture. Published in 1993, so certainly not attempting to capitalise on emotional (over-) reaction, Michel Albert’s book Capitalism vs Capitalism highlights both the cultural differences and structural causes of events recently experienced. Both the US crisis of 2008 and the EU crisis of 2011 involve the reaching of cultural tipping points and the attempts to rectify and rebalance. Any attempt to change is fraught with danger and challenges, more so as more people and sub-cultures are involved. That said, we experience, cause and desire change every day but the difference is we feel and or think we need these changes. Clearly, not everyone is going to feel and or think the same changes are required at the same time. A simple framework for considering changes is Social Cognitive Theory which takes the view that cognitions (thoughts & feelings), behaviours (actions) and environment (context) converge on a equilibrium then reinforce it. Herein lies the challenge, any attempt to change one factor will cause both resistance from the others until an equilibrium is re-established.

There were many factors contributing to the US credit crunch and blaming the “greedy” bankers is certainly easier than accepting than attempts to increase equality could also contribute. The US has the widest spread of income inequality in the developed world and a culture, cloaked in an interpretation of capitalism, that values money above living standards. The changes to social (housing) policy prevented the mortgage process from properly accounting from increased default risk. Corporate America then, concerned for impacts to profits and other cultural success criteria, sought to alleviate or mitigate the under-priced risk by creating bundles of mortgages with varying levels of risk and selling them to others. This effectively obscured the true risk making it very difficult to determine an appropriate price for the bundle so the long term default rate of 6% was used. So what happened? The true default rate was above 20% and the whole system unravelled. The US response to the crunch was merely to address the short-term issues in the hope economic growth would quickly make the whole thing a distant memory. The result was that an equilibrium was re-established relatively quickly and the original social goal of increased equality is now further away.

The EU crisis is also cultural and has also been coming for while. In this case the cause is the cultural diversity that exists in the EU. The ‘PIIGS’ as they are affectionately known have economies that, for the recent history, lived to the level of debt their income could support. Unfortunately, when external demand for their products and services declined their income could no-longer support the standard of living to which they’d become accustomed. In contrast to the US, the EU has been attempting to create lasting cultural change by insisting that EU economies reduce their reliance on economic growth and external demand. Understandably this is a painful process for many economies but insisting on and supporting incremental change has the greatest chance of lasting success. Interestingly, the global bond markets are having a mixed influence on this process in that the short-term desires are demonstrating the importance of reducing debt levels to increase economic independence whilst simultaneously requiring the incremental process to speed up and thus the pain of the change to be more intense. Therefore, the EU is attempting internal cultural change whilst simultaneously resisting counter-productive external cultural influences.

It will be interesting to see the state of the EU and the US in 5 years time.

Welcome to 2012

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There always seems to be something special about a new year, whether it be a calendar year or a birth year. My guess is that it comes from the feeling, almost an implicit permission that you can close out the mistakes of the previous year and start over. It therefore comes as no surprise that new year’s resolutions are quite common as they provide both a vision and a mission for the year ahead. These provide a context for reflecting on prior decisions as well as for evaluating the options of new ones. Unfortunately, for one reason or another very few people actually manage to achieve their resolutions. Some never truly engage in the goal in the first place whilst others make resolutions that exceed their willpower. However, possibly the most demoralising outcome is to achieve the resolution only to experience all of the effort unravel, often faster than it was achieved. So what are those who achieve and maintain their resolutions doing differently?

Do you perceive a goal as a journey, destination or merely a new direction?

A goal is simply an outcome that one wishes to bring about. General rhetoric about goals will say that they need to be SMART. Now I’ve seen this acronym expanded with many different words but the general idea is the same- Specific, Measurable, Achievable, Realistic and Timely. This approach to goals is very rational and is aligned to the mantra “what gets measured gets done”. However as pointed out by Dan Ariely in his books Predictably Irrational and The Upside of Irrationality humans are not rational. This irrationality comes primarily from emotion, therefore goals also need to engage on an emotional level and to an extent that will maintain the desire and drive to achieving it through any highs and lows.

There is a theory in psychology called Social-Cognitive Theory (SCT) which basically states that our cognitions (thoughts and emotions), behaviours (actions) and environment (context) achieve a self-sustaining equilibrium. SMART and emotionally engaging goals address the thoughts and emotions, but unless actions are taken and the context is changed as well then reversion will occur. Taking action towards a goal is an obvious and often understated step as until action is taken the goal is merely a wish or dream. It is therefore in the third area where greatest difficulty occurs for if the choices available continually challenge the thoughts and emotions or merely don’t present reasonable options for taking action then progress cannot be made.

Pragmatically, whilst valuable and worth understanding, all this analysis and theory makes achieving goals more complex and daunting than it needs to be. There are some who advise that to achieve your goals you should consider yourself to have already achieved them. Unfortunately this explanation falls short of the true key that to achieve your goals you need to consider yourself to be maintaining them. If thoughts, emotions and actions would be unable to maintain the goal then they’ll be unable to achieve it, and vice versa. This approach rewards consistent effort with consistent progress whilst also supporting any progress already achieved.