There is Nothing Worse in Life than Being Ordinary

I watched, again, an interesting piece of cinematic work, “American Beauty.” Kevin Spacey plays a man telling the tale of him and his family near the end of his life. A tapestry of events weaves itself together to a conclusion which brings about revelations in the lives of everyone involved. During the arc which Mena Suvari’s character makes from point A to point B, she says that “there is nothing worse in life than being ordinary.” I got to thinking about this.

There is a bumper sticker out there that reads that “well-behaved women often make history;” the intent of which is such that the people—in this case, those of the female variety—who stand out are the ones that people remember, that are written about in the history books. It means that you want to, whether you are a man or a woman, should want to make history and leave your mark upon the earth in a way that sets yourself apart from others. As it is oft-said, if you take the road everyone else takes, you end up where everyone else does—instead, if you take the road less traveled you will supposedly do much better.

Let us look at this through the eyes of an economist: The “total cost of ownership” perspective. For everything there is a cost to be paid. The questions resulting from this notion bring a person to ponder what the cost to be paid is, what are the set of results to be had, and so on and so forth. Think of it this way: What is the cost of expending some capital—be that physically, mentally, emotionally, or financially—in the current time and let the fruits of this investment compound over the years…or pay the cost of not even trying and regretting that decision down the road. A wise judge once mentioned, as I paraphrase it: “The cost of utilizing discipline on a daily basis far outweighs the cost of not doing so.”

While ordinary is fine with some people, this blog is not of the ordinary. Throughout history several a notable figure have confronted a place in their life in which they needed to choose to be ordinary or to strive towards greatness. You have the choice to do so, and you will never know quite what it is like until you are there.

In closing a thought by one of the most famous writers of all time, William Shakespeare; his perspective: “Be not afraid of greatness: some are born great, some achieve greatness, and some have greatness thrust upon them.”

Life Economics

Home economics is a dying discipline. When I went through school the classroom existed, but not the corresponding class. Much like civics it is being relegated to a niche of society in such a manner that it is being forgotten…at a price.

For years I have lived by the philosophy that I manage my life like I manage a business. On the surface it may seem cold, perhaps even callous—but that isn’t necessarily the case at all. In fact, improved efficiency and effectiveness makes for a better life. A few examples:

1. The Budget. Face it—you stand to get rich if you suddenly run into a large sum of money, but the chances of that happening aren’t such that you should count on it. Instead, the world of finance stresses the time value of money and leveraging your current assets. Your income is the best wealth-building tool which you have and by reducing your debt obligations you effectively increase the power of your income to produce wealth. You do this most efficiently by producing a budget and watching and managing every dollar that flows through your household. By taking this approach you can “make every dollar scream.” What to do after you get to the point where your debt is paid off and you have extra money lying around? Invest!

2. Buy Like a Business. Once upon a time we’re all financially struggling people—whether that be as a poor college student or in a period of personal financial contraction—but we’re not in that position forever. It is rarely a static condition, however, and we progress onto better financial times. At this point in time we can move from buying-to-survive towards purchasing-to-thrive. We learn to buy in bulk—and start to think like an accountant. Price items on a per-unit basis, for instance. When I worked in a grocery store, once upon a time, I noticed that the tags that accompanied stock on the shelves would always have a “price per ounce” or related entry on the tag. By making some observations a person notices where the “sweet spot” is for purchase of a particular item: To buy the smaller box of cereal or the larger, “value-sized?” The larger the package—think bulk— usually the better value per unit. Take this concept one step further and develop a product mix of products that are economical and meet your personal utility or that of your family. For instance—I purchased the specific Rubbermaid containers meant for cereal and have no problems with purchasing the “bag cereals” which are often very close to the recipe of the corresponding name brand “box cereals.” On the other hand, I am very picky about the hot dogs which I purchase.

Another step in which to take this notion relies upon you realizing that sometimes you pay more in up-front costs to save money across the lifespan of a particular item; a concept which accountants like to refer to as “total cost of ownership.” A good example is the typical inkjet printer: Cheap and comes with some ink; it may or may not come with a USB cable, and certainly comes with a notorious “power brick.” Sure, you may spend $30 on the machine, but you will likely end up purchasing a lot of ink cartridges—just black and color, if you’re lucky—over the course of your time with the printer. On top of this these ink cartridges are fickle in such a way that the printheads can easily become non-working if they aren’t treated right or used correctly. Although they can have great resolution—past 1200x1200 dots per inch—they do so by spitting small ink blobs onto the paper; this makes for a very dirty process. By contrast—if you can do without resolutions higher than 1200x1200 dpi then a laser (or LED) printer is for you. They are much cleaner, have longer lives, and are generally more efficient. Of course, there are makes and models that are better or worse than others, but a little research or stop by your local printer service shop will give you a leg up.

One project which I’m planning is to replace my cans-of-soda drinking ways with a fountain soda machine. Although the initial costs are high (several hundred dollars for the initial setup), the cost of consumables—the soda syrup itself—can be less than half the cost of a serving of its canned alternative.

While this is merely the tip of the iceberg, it is a starting point for to get you to thinking about how you, too, could make your life better!

They Ought to Call Me Hercules

Over a cold slice of coconut cream pie and warm conversation recently a good friend of mine paraphrased an old adage that, probably, most of us have heard: “That which does not kill us makes us stronger.” Originally a Nietzsche quote it has been adapted to fit a plethora of situations from the warrior to the clerk that works in the local convenience store 40 hours each week: It has become a modern-day ethos of the person just trying to make it through, longing for something better as a sum result of their experiences.

The more strengthening experiences which they have to make it through, the better that it will make them: Someday these situations will make them Hercules-like.

So it stands to reason: Why do bad things happen to good people, vice versa, and other permutations of either in between. The short answer: Free will.

The longer answer: Start with a leaf that falls from far atop a high tree. Physics can tell us the individual forces affecting it—wind resistance, gravity, acceleration due to gravity, various factors of aerodynamics, and wind velocity and direction. It cannot, however, tell us where the leaf is going to land. Just as the physicist which can describe what is happening to the leaf has only a finite perspective of the universe ahead of him or her, each of us lack anything more than the finite perspective we allow ourselves.

A good way to reach this understanding is to first understand what the physicist does about the falling leaf: Understand the specific ways we are interacting with the world around us and how the world is interacting with us on a daily basis. Learn the general principles which guide you forward and figure out how you can make each better.

When we worked together at one of the major wireless companies in resolutions the same friend that I mention above taught me that problems a person has with the outside world usually originate from inside that person. In other words, if you are having problems with your spouse it is best if you look inside yourself before placing blame with them.

Even though animals have what resembles free will, the human sense of free will, combined with our problem solving skills and how the greater mix of those traits which make us human all falls into line making us, as humans, special. As humans we can choose. We are not programmed for any specific behavior, lest that which we have or allowed ourselves with which to be programmed. We are driven on a daily basis because we find specific utility in them. This utility manifests itself as pain, pleasure, morality, or one of many other things. Because we have the choice in deciding the value which our behaviors have, it is meaningful. On the other hand, if we were simply programmed to do something, lacking the choice to do it, the meaning that it would otherwise have is lost. You have the choice to do good things; you have the choice to do evil things—whichever path you choose then has all the more significance to you…and, through you, it has increased significance to the world around you.

As every child learns, however, each choice has consequences—either positive or negative. Let’s go back to the leaf for a moment: Even though it doesn’t have free will, it has a path from the top of the tree to the ground below it, through the space between the two. Every location through which it passes, each moment which it passes through that location, there are consequences. Since leaves are responsible for photosynthesis on the tree, the loss of a leaf in the community of leaves removes from the productivity of the tree for survival; the path of the leaf towards the ground might otherwise impede others in its path; where it lands on the ground might do the same, worse, or better. Just as physics teaches us the relationship between us and the energy which flows around us, it also teaches us the concept of the “world line” such that each particle—or, each person—has a path that it makes through the world. These paths interact with the paths of those in our immediate vicinity and as a component of the greater whole.

People tend to have only a finite perspective of the world around them, but without higher education or life experience tend to lack a strategic perspective; not only inasmuch as how their actions comprise the consequences of the greater whole, but also how they have or may become consequential casualties of the greater whole instead.

The reconciliation between our immediate lives and the grand quality of the greater community of humankind may seem mind-boggling, but you just need to remember that, from an economic perspective, you only need to participate to the capacity which you are able: Good deeds done on a daily basis will not only have spillover effects on the world around you, what are otherwise known as the “ripple effect,” and help to add value to the greater community.

In closing I’d like to end with a story that comes from a great movie from the mid-1990s: Phenomenon. In the movie the character played by John Travolta tells a story of a grove of trees in Colorado which were originally thought to be just a bunch of trees; in reality they were found to share a common root system which helped the grove thrive. As the modern-day human civilization we share a common root system, tempered by our freedom of choice: As parts of the entire grove of individuals, our actions have consequence to the greater community, just as the greater community affects us as individuals. If we want to make things right with the greater whole we start from within and make ourselves a more valuable part of the whole.

Perspective of the Giants: Warren Buffett

The name of the blog is Underground Value; and they have a great quote from second-richest-man Warren Buffett as part of an interview with him.

The difference between potential and output comes from human qualities. You can make a list of the qualities you admire and those you despise. To turn the tables, think if this is the way I react to the qualities on the list, which is the way the world will react to me. You can learn to turn on those qualities you want and turn off those qualities you wish to avoid. The chains of habit are too light to be felt until they are too heavy to be broken. You can’t change at 60; the time to look at that list is now.

The Power of the Down Market

Adam Smith, often dubbed the father of economics, is best known for his magnum opus, The Wealth of Nations. What is lesser-known about his writings, though, is what he wrote about prior to Wealth; The Theory of Moral Sentiments. Between these two works it can be argued that Smith was trying to describe the morality of humankind by superimposing economic theories onto it. Since 1776 social science has come a long way in understanding much of the behaviors of individuals: And we have finally come to the point in human history where we can recognize that markets, such as the stock market, and human behavior have many parallels—and form a symbiotic relationship with one another.

Take, for instance, the current behavior of the stock markets. Right now, as I look at the Dow Jones Industrial Average, I see that it is down 315 points; Standard & Poor’s 500 Index is down 37 points itself. When many people look at the numbers which we have been seeing in the stock markets lately they fear a word that is often brought up in the evening news, “recession.” Words like “inflation,” “stagflation,” and such are used. Perhaps some people would either categorize the behavior of the markets as overly complex, perhaps even irrational.

Just as people require corrections, controls in their behavior, to move forward and progress, the stock market requires the same. Just as risk is necessary to be in any system in which there is reward, so must there be correction. These corrections are a reflection of human nature inasmuch as people exhibit both rational and irrational components in behaviors. In his column in Forbes magazine, Paul Johnson writes an excellent column depicting the mechanics behind what is happening in the stock market right now and an impetus that helped to cause it. Pointedly:

“All the same, markets are determined by moral strengths and weaknesses, and it is useful to identify what those are at each major episode. The state of the present market is the consequence of undue patience combined with excessive greed.”

He continues to weave the intricate tapestry of morality, impatience, greed, and how they all tie into one another and become progress. The theme of rational components to seemingly irrational things, and how the up and down sides of each turn into our tomorrow, better than our today.

Mr. Johnson has some very brilliant insights.

No matter what we do, we exist as components of a much larger system: As people, we form communities; as workers at firm or a shop we put together a product, provide a service, or otherwise add value to something. Because we are part of something, and everything changes, we will eventually need to cope with change. Chinese philosopher Lao Tzu once wrote about life that it “is a series of natural and spontaneous changes. Don’t resist them - that only creates sorrow. Let reality be reality. Let things flow naturally forward in whatever way they like.”

Management theory dictates that we survey those things around us and formulate plans to manage them and control systems to put situations back where they need to be should they fall outside of the tolerances which we set for them—this is something business students are usually taught in their first semester of school. However, anyone who has had management experience understands that no good plan survives combat intact and that no amount of control systems will hedge against change happening. There is nothing that can stop the ebb and flow of life of causing the unexpected to happen.

We learn to accept change. Better yet, we learn to balance the ebbs and move with the flows of what life throws at us. In a market that is “up” we live the good life and become richer in as many ways possible; in “down” markets we learn also how to accept it and learn ways to become richer. Necessity is the impetus for innovation, and difficult times offer us the opportunity to shine. In other words, accepting change is good, but learning how to use it to propel you forward is best.

Nothing Risked…

I recently had a brief conversation about risk with a client and friend of mine that leads the Information Technology Department for a nearby Ritz Carlton. One of the sum results of that conversation was that there are two kinds of risk: The stupid kind and the smart kind. There are countless individuals in the world who behave in such a way that they don’t factor risk much into their actions and behaviors. There are, however, those who calculate risks into their activities and understand the dynamics of this powerful thing.

Drive somewhere in the town or city in which you live. I will bet that the larger the municipality in which you live, the worse the drivers are: It appears that they use minimal, if any judgment. Maybe they have a cell phone to their ears; maybe they are exhibiting poor driving skills; maybe it is a combination of factors. At any rate, professional drivers are often taught the art of “defensive driving” which dictates that you, as a driver out on the roadways, must drive with the anticipation that someone is going to use poor judgment and that you must be able to drive in such a way as to be proactive or react accordingly to these drivers whom have increasing amounts of risk factors piling up on them.

I’ve once heard it said, or read it on a bumper sticker, that life is difficult; more so if you’re stupid. Stupidity has often been equated to ignorance. Think of the driver while you are out and about that is ignorant of the traffic laws, or (worse yet) ignorant of those around him or her. Those who aren’t aware of risk often overlook the power that it has in their lives and the world around them. Perhaps I could even go as far as saying that they are more apt to be “victimized” than the alternative.

I’ve often equated risk management and the world of insurance as one that assigns numerical values to behaviors and calls these information sets “risk factors.” For example, take a driver who fails to use their blinker all the time. This driver has a higher probability of getting into a collision with another driver by not notifying those around them as to their intentions on the roadways. If they also fail to use their mirrors properly, the earlier risk factor adds to this new risk factor. Additional factors only add to the mess. While one can easily apply this to any part of life, not just driving, there are ways to minimize your exposure to such risk factors.

For a few years I lived in the Rapid City, SD area. Just as the schools were heavy into “character counts” campaigns with their students, a local television station ran a series of advertisements much to the same effect geared towards adult audiences. One of these public service messages included a judge discussing the merits of discipline. Essentially the message was that even just a daily investment in self-discipline works wonders for hedging against. If you are self-disciplined enough that you can take a walk or do another sort of moderate exercise you decrease risk factors that would otherwise influence you becoming obese, becoming depressed, getting diabetes, or otherwise becoming physically or mentally unhealthy. Think of the things that you could do less of or do more of on a daily basis that would make your life better, increase your value, or otherwise might make you or those around you better.

With that being said, there is absolutely no way to mitigate all risk involved with something. Just as the stock market has something called systemic risk that is inherent to a particular industry or to the entire market. Whenever there is the potential for gain or reward, there is always risk. In fact, since there is always risk involved any time there is reward or gain possible, it has been argued that gain and reward are possible because there is risk involved.

This is why the best risk is that which is of the calculated variety: This is why the stock markets will always correct itself, will always (eventually) increase in value, and why most of us will realize gains to ourselves or our lifestyles over a long enough timeline and given enough effort. If we are able to learn how to calculate risk in our lives we can then move our lives from being at the unsophisticated level of the haphazard risk-taker into being the sophisticated, calculated risk-taker and, along with it, move our lives along a more successful avenue.

Knee Deep in the Hoopla

Everyone, to some degree, cares what other people think about them. Sure, there are those out there that have the “I am who I am, and all others be damned!” mentality, but even they must come to the stark realization one day that their success relies, to some degree, on the decisions of others. Sooner or later, everyone worries about their reputation.

So, what is it about this phenomenon of reputation?

Think about The effect which you have onto the world around you. Not just to your immediate family, close friends, and co-workers, but onto the circles of individuals belonging to more outlying portions of your friends and family. How about your acquaintances, lesser acquaintances, and people whom you don’t even really know, but with whom you still occasionally come into contact? The point is that we often have more impact on our own world, more than we realize. How often, however, do we take a moment to think about how we impact the lives around us, or if that impact is particularly positive or negative?

Think about the sum total of each of these groups, then think about the positive or negative impact which you have on them. Think about the degree of this impact: Just a bit good, just a bit bad, a whole lot good or a whole lot bad; or somewhere in between? In a psychological-economic sense and parlance of “Seven Habits of Highly Effective People” it is essentially the net imports and net exports of the emotional capital, both deposits and withdrawals, with other people.

Yes, people remember the impacts which you have on them. Some may let you know; some may not say a thing…but remember nonetheless. People tend to criticize when a need of theirs is not being met, but others will just let the ill will fester inside of them.

For the uninitiated, the concept of emotional deposits and withdrawals: Each time you interact with someone you will affect their emotions—if you do so positively, you make an “emotional deposit.” If you do so negatively, you make a withdrawal. Of course, you want to maximize the deposits which are made with each person in your life and minimize the chance that you will withdraw too much with a person. If you have enough emotional deposits with a person, you can certainly run a line of credit, so to speak. However…run a negative balance for too long and it becomes possible that you’re go into emotional default with a person and they’ll eventually write you off.

In an economic sense—a grander one—you must be aware of the aggregate of impacts which you have on other people. The net of the deposits and withdrawals which you make is ultimately the reputation which you have. In this sense, it is wise to be actively aware, monitor, and manage the impacts which you have with other people as to increase the value of your reputation and make you more famous than infamous.

Quote: They Can't Get Away Now!

“All right, they're on our left, they're on our right, they're in front of us, they're behind us... they can't get away this time.”
—Lieutenant General Lewis "Chesty" Burwell Puller, U.S. Marine Corps

Help Wanted

It’s well-known that we live in the Information Age. Once upon a time it was the power of industry—great pieces of equipment operated by countless laborers working countless hours. As economies of scale developed, so did the assembly line and the furtherance of the manufacturing-based economy. As the industry-based landscape matured, the economy advanced to the point where specialization became increasingly important. As the twentieth century closed we had harnessed the power of the Internet. Combined with all other elements of the day our manufacturing-based society in the United States and other locales converted into an information-based economy.

Industry-based economics seemed to be a stepping stone to where we, in the west, are now; just as other places in the world go through this phase of their development we are shifting away from such and into a paradigm based around information, services, and facilitation. This information-based economy is revolutionizing old models and paradigms and changing the way that the various agents in each component of the economy interact with one another.

For the consumer part of this is that the Internet has had a tendency to democratize everything. eBay, with its online auctions, and Wal-Mart, with its harnessing of technology to make its business processes more efficient have collectively acted as the “invisible hand” of economics and made marketplaces more efficient: There is arguably not much profit to be made from these two businesses short of selling in volume. Wal-Mart posted a net profit margin of 3.6 percent in 2005, down to 3.2 percent in 2007. eBay has epitomized the low- or zero-profit margin on the Internet: In an online sense I firmly believe that eBay is as efficient as a market gets.

Each of us goes through our days selling our time to other people: For most of us that means selling our time for a wage or a salary, and maybe some benefits. Whether that means flipping burgers at the local fast food restaurant or bagging groceries for minimum wage or being a vice president with a bank, you are effectively selling your time to your employer for a price which you and the market will handle. In essence, you are a product which you must develop, market, and sell to employers seeking you and your product. This is simply a new way at looking at an old paradigm, though. I’ll breach that topic at another time. For now, however…

Imagine an extension of the above premise with the basis that you are a product such that you, instead of selling your services to your employer, could sell the services you provide to your employer directly to the customers which you already serve. Cut out the “middle man,” and eliminate inefficiencies at that level. Instead of being tied down to the policies, protocols, bureaucracies, and whatever else you don’t like about the time which you’re selling to your employer, you would be your own boss. You would be in control of your own destiny in the marketplace. You wouldn’t have to worry about performance reviews or a supervisor validating you: The marketplace which you serve would instead be the entity which validates your abilities and efforts.

There are a few, however, which can’t fit into this model. This does not mean, however, that you can’t work within this new paradigm, however.

Each person has not only the “hard” job skills and the “soft” ones they sell to their employer: They also have skills which they apply to hobbies or other “extracurricular” activities that occupy the time which they are not working for their employer.

This is where the famous adage “do what you love and find a way to get paid for it” enters. This is the ideal route. Find a way to do that which you love and make an occupation from it. Obfuscate the traditional definition of “work” so that it seems like play to you, particularly if you are that type of person who differentiates between “work” and “play.”

A lot of these hobbies-turn-jobs can be done as a sole proprietorship: Being in business for yourself, using yourself as the sole business entity. Although it is less difficult to deal with than its more sophisticated brethren, it is also just that: Less sophisticated. Not offering any liability protection is the greatest disadvantage of this form of business organization.

The next higher form of business organization is the partnership. There are multiple types of partnerships, but the key factor in choosing a partnership is that it offers a level of protection against liability inasmuch as it spreads liability amongst a group of partners. General partnerships, limited liability partnerships, and limited liability companies are the fundamental organizational forms which they take. For more, read up on them!

Next up are the corporations. The most sophisticated form of business organization; it is also the most powerful. A corporation is considered its own separate legal entity: In other words local, state, and federal governments consider it to be its own person. As such all liability taken on by a corporation is the responsibility of the corporation. Each “co-owner” or shareholder of a corporation is only liable for as much as they invest in the corporation. Put another way if you invest $1000 into a corporation and the corporation completely tanks, you only lose your $1000. The “classic” corporation is the “C-Corporation:” This organization type is typically unlimited to the amount of shareholders it can take on but can be taxed as a corporate entity (corporations are taxed as such in U.S. states; not at individual rates) and the shareholder is responsible for their financial gains from their investment in the corporation as well. Corporations are wonderful things for making money; as Ambrose Pierce humorously defined a corporation: “Corporation, [noun]. An ingenious device for obtaining individual profit without individual responsibility."

The other corporate entity is the “S-Corporation.” While some consider it a “glorified partnership,” the government still considers it a type of corporation. The name is derived from the portion of the Internal Revenue Service’s tax code that allows for the existence of this entity, “Subchapter S Corporations.” Essentially, the Subchapter S style of corporation allows for tax liability to be “passed through” the corporate veil such that each shareholder is responsible for paying them: While a regular C Corporation is double taxed (corporate plus individual), the S Corporation doesn’t pay corporate taxes, instead the individual shareholders are responsible for paying taxes on their individual investments in the enterprise. Subchapter S Corporations are typically corporations that are originally formed as C Corporations in their respective states, then paperwork is filed with the IRS in order to gain recognition as an S Corporation. An example of an S Corporation? My own.

Why such the long blog post? Because, at this time of year it seems that everyone is thinking about what moves to make in the year ahead: The obligatory New Year’s Resolution. Why not, in the upcoming year, figure out how you can break the “tyranny of the 9 to 5,” get away from the “dungeon of the cubicle” and figure out how you can become one of the successful string of businesses that drive innovation and contribute to society? Maybe it is for you, and maybe it is not for you. I strongly urge you to consider, however, this option.

While these steps take a skill set that is general and diverse in nature, one of my string of topics in the forthcoming year will be to develop the skill set required for a business owner, small business operator, or even CEO of one of the large multi-nationals. However, if you’d like to request a topic, please feel free to email me a question, your suggestion for a topic, or your feedback at this address!

Engineering Through It

Engineering is a fine discipline.

Albert Einstein was once quoted as saying that “scientists investigate that which already is; engineers create that which has never been.” Most of my life I have fashioned myself a scientist, however I have served in many a role in which solutions needed to be engineered. Indeed, any practitioner or student of any field surely applies to it skills which are inherent to the engineer; as Leonardo da Vinci said: “He who loves practice without theory is like the sailor who boards ship without a rudder and compass and never knows where he may cast.” Engineering is the practical portion of any sort of theoretical study.

Rewind to my earliest days in the military. I served as a combat engineer when its military occupational designation was still 12B, “twelve-bravo.” The Army taught us in horizontal and vertical construction, mobility and counter-mobility, bridge building and destruction and—in order to facilitate the former—demolitions. All of these were trade skills: As obedient privates in “this man’s Army” we were drilled with the motions, methods, and repetitions which would work their way as sets of skills which would be applied to a team, a squad, a platoon, or a company in the execution of a task that fit into a mission which dictated which drills we would use to get the mission completed. Yeah, this was the monotonous portion of what was otherwise a glamorous career choice for a grunt.

What I would go on to learn, though, was that this particular style of engineering in combat forces many a practitioner to think on his or her feet. Any good combat or technical engineer that had served for long enough in the career field, enlisted or officer, could tell you that there are at least three ways of doing things: The right way, the long way, and the field expedient way. For engineers in the army there is a constant barrage of problems to be matched with a solution. My two years serving as a combat engineer and four years after that supporting engineer units taught me that theory may say one thing, but it is nothing short of human ingenuity that often succeeds in breaching the otherwise arbitrary limits of when said theory meets the contact of the battlefield.

While a battlefield can be a harsh place, so can our daily lives. The realities which we call our own have good guys, bad guys, fires to extinguish, and battles with which to contend. While there are countless books out there that can help us with the theory of dealing with it, the bottom line is looking within ourselves and to our environment to find the tools—mental and otherwise—to aid us in adapting to our world. We must take the theory which we know from our pasts and apply them with an eye towards “how can I better adapt in this moment to make the most of my situation?”

On the flip side of this coin, American psychiatrist M. Scott Peck points out: “The truth is that our finest moments are most likely to occur when we are feeling deeply uncomfortable, unhappy, or unfulfilled. For it is only in such moments, propelled by our discomfort, that we are likely to step out of our ruts and start searching for different ways or truer answers.”

That which ensues are thoughts about comfort zones and expanding them in such a fashion that you’ll be ready for the big moments to happen: Engineer your life for what you want it to be.

Opportunity

I am a firm believer in the notion that we each know, at each point in time, that which we need to know. Yes, this is a point of view in which destiny is a key factor, something more than a random consideration.

I have stayed fairly busy as of late: Secretary and Treasurer on a couple nonprofit boards as well as taking on key managerial roles with each, running and operating in an executive capacity on a nonprofit which is my brainchild, a for-profit company, and other volunteer work in the discipline of IT consulting. This is not to mention my regular “9 to 5” job, as I refer to it. Also of note is that next month I begin college again towards a degree in Finance.

I have had at least a couple people worry about me stretching myself too thin in the last week. One had mentioned that the comment was made to them that perhaps I “am setting myself up for failure.” I have thought long and hard about this, trying to perceive it from an unbiased and logical, rational perspective.

I subsequently came across a quote in a movie:

"When a person prays for patience, do you think that God makes them patient, or gives them the opportunity to be patient? If he prays for courage, does He give him courage or the opportunity to be courageous?"

I applied this singular thought to my own situation. What I decided upon was that right now, right at this time, I am being challenged and simultaneously offered the opportunity to prove myself and to succeed in that which I have been working towards for years.

“Sometimes it seems so long, yeah, but his passion is so strong; and something makes him carry on… He'll do what he has to do, to be part of the game. Yeah, he knows what he'll have to go through, till the world knows his name.”

Part of what I’ve learned, so far, along this journey; something that’s just been reaffirmed for me, is that you get back that which you give: The more you give to other people, granted that they don’t “screw you over,” the more that you will receive in return. If you give to the absolute, you will receive in kind. If you are apt to take in the absolute, then you can expect the same of others.

Like a Good Bartender

For years I have held that, from a purist’s perspective, there are two types of functional individuals: Subject matter experts and professional managers. One should aspire to become one or the other or both in whichever industry they are in.

A subject matter expert, commonly referred to simply as SME, is one that is just that: An expert in the subject matter of their discipline. If this means that you are flipping burgers, be the best burger flipper than you can be. Subject matter expertise insists that you become technically proficient in a particular discipline or subset thereof. As a young soldier I found my expertise in the subject matter of soldiering, engineering, administration, personnel, information technology, and others. One by one, I knocked out the learning that was necessary to become practically proficient in each piece of subject matter as to create a promotion pathway for me. By the time I left the military I was working as a key individual in a personnel and administration section of an engineer headquarters.

The notion of subject matter expertise didn’t hit me as much, however, than it did when I worked with Cingular, now the new AT&T. As a receivables management agent, I took inbound calls from wireless phone customers using a handful or two of different systems. I was told that in order to progress, I needed to memorize policies and procedures for receivables management.

So, that’s exactly what I did. In between calls I spent my time going through the company’s knowledgebase and memorizing policies and learning procedures. As I progressed in these studies over a few weeks I started to learn how the system worked, how the system thought, so to speak. I became, at the time, the quickest-promoted person in history of the call center in which I worked. To this day I hold second place—a good friend of mine beat me by a matter of weeks; he entered the call center in which I worked from another division of the company which was even more empowered and difficult. We both rose to positions of prominence in the same call center because we took paths that others were not willing or able to travel, went the extra mile, and stood out amongst our peers.

We became subject matter experts in our field.

The professional manager, by contrast, is less focused on specific technical details and more focused on being a generalist. However, this isn’t exactly what it seems. In an earlier blog post I point out the fallacy of the “conventional wisdom” of the “jack of all trades, master of none.” It is my personal sentiment that this phrase was constructed by those more apt to be SMEs rather than the generalist that is more suited to being a professional manager.

If a subject matter expert is much like the Army’s warrant officer program—a special subset of the officer corps that was established and exists to operate and maintain the specialized technical systems of the modern military, the professional manager is a manager that adheres to a code similar to that of the Bushiddo—the warrior code that the samurai used in feudal Japan, not unlike portions of the code of chivalry used by the samurai’s European counterparts.

A professional manager uses the sub-disciplines of business and organizational theories and practicum and applies them to any situation: Accounting-Finance-Economics, Management, Information Systems and Information Technology, Sales-Advertising-Marketing, Human Resources, Law, Organizational Psychology, so on and so forth.

Like I said, the professional manager can apply managerial skills to any circumstance. In this regard they are akin to “Special Forces” of the managerial world: For the situations in which they find themselves will often only find it smelling like roses after they have entered themselves into the equation.

That is not to be said that subject matter experts aren’t like Special Forces. In fact, what each SME and Professional Manager should aspire to is to become both: Subject matter experts should learn the “soft skills” of management and associated disciplines to give them a broader perspective when it comes to the performance of their duties and professional managers should heighten and hone their component subject matters as well as others.

What does this mean for the rest of us? Basically just to start down one path or the other and find the other path along the way!

If It’s Going to Be…

Imagine any one of the battles during, say, the Revolutionary War. Gentleman’s wars, at the time, consisted of two uniformed military elements marching towards one another and firing inaccurate rifles, cannons, and other instruments of destruction. When I saw my first movies depicting this form of warfare I was stunned, thinking that popular military theory for engagement at that time in history was grossly inefficient.

This mode went on through the 18^TH and 19^TH centuries—the War of 1812, the Civil War and such. It wasn’t until later in the 19^TH century that a new element started to find itself into the vernacular of warfare: Initiative. “In personal behaviour, initiative is the ability and tendency to initiate: to start an action, including coming up with a proposal and giving or helping without first being requested to do so.”

I’ve always equated the development of initiative with the period that John J. Pershing served actively in the United States Army. Born John Joseph Pershing on 13 September 1860, “Black Jack,” as he would come to be known, graduated from West Point in 1886, serving in the Spanish-American War, the Philippines Insurrection, and the Mexican Expedition through his service during World War I.

It was during the period of Pershing’s influence in the U.S. military and abroad that the concept of initiative would develop. Instead of lining up in columns and rows and marching towards another military unit lined up in the same fashion, initiative dictates that you do just what it suggests—move to the enemy, to contact. Oddly enough, the underlying concepts for the military doctrine of initiative can be seen in doctrines long before its coming of age in the 20^TH century. Sun Tzu is known to teach that the commander calculates, in part, battlefield conditions prior to entering armed foray. General Clausewitz popularized the notion of battlefield geometry amongst his contemporaries. General Nathanial Bedford Forest, from the (American) Civil War era put it simply: Be there “the firstest with the mostest.”

Initiative is a force multiplier—a single person’s dedication amplifies the efforts of many in a single group of people organized for the same purpose. It also sets the stage for higher levels of economics to take effect and add to the synergy of the team.

Continuing with the analogy, initiative built into a formidable concept after The Great War and morphed into something that helped General George S. Patton command his troops through Europe in World War II and gain more ground than any other army in history. He did this, in part, because of the indoctrination of initiative into formal military education and the manifestation of initiative into the main battle tank—an awesome feat of military weaponry if ever one existed. Initiative would go on and help form the basis for the Airland Battle doctrine that reigned during the Cold War…but that is a discussion for another time.

Remember this: Take the initiative…because if it is going to be, it is up to you to make it happen.

No Man is an Island

Imagine the first fax machine: A machine of which we know the capabilities today. What about the first one, though? What is the usefulness of this machine that can send a facsimile to other fax machines…when there are no other fax machines?

The point of a single fax machine is moot.

Now…add another fax machine. What is the usefulness of your fax machine now? Common sense indicates that it would double. This isn’t exactly true: The effect of these two fax machines is directly proportional to the number of fax machines—instead of being an arithmetic proportion, it is a geometric proportion. In other words the net result of the utility of these two fax machines is not 1+1, but rather 2^2, or 2 squared. The increase is so great because each user can either send or receive a document instead of the fax machine offering just a single purpose in relation to each other fax machine in the world.

In fact, there is a mathematical formula depicting this relationship: n * (n − 1) / 2 whereas n is the number of fax machines in the network.

Network. Networking. Networks. Thirty years ago this word meant much less than it does today. The man behind the power of this simple word, Robert Metcalfe, was half the man behind the technology called Ethernet. Ethernet, in short, is the largely the technology behind our home and business networks and the entire connectivity of the “wired” portion of the Internet (in contrast to the “wireless” portion). In selling his wares, Metcalfe grasped to his background as a trained engineer and businessman to inform his customer of the simple economies of scale involving his new networking peripheral. While their work may be able to take their businesses to a certain point, in order to grow past this point of critical mass, they would need something revolutionary—a force multiplier—to realize any newfound value.

This brings us to a more generalized definition of the network effect. From Wikipedia: “A network effect is a characteristic that causes a good or service to have a value to a potential customer which depends on the number of other customers who own the good or are users of the service. In other words, the number of prior adopters is a term in the value available to the next adopter. One consequence of a network effect is that the purchase of a good by one individual indirectly benefits others who own the good — for example by purchasing a telephone a person makes other telephones more useful. This type of side-effect in a transaction is known as an externality in economics, and externalities arising from network effects are known as network externalities. The resulting bandwagon effect is an example of a positive feedback loop.”

How does this apply as wisdom? Think about applying such economics to your daily life. As I’ve said before, we can each consider ourselves a good wishing to perform services with other people (some more than others, sure) and from whom we look to offer our services—exchanges in the free market economy of life. Just as the 17^TH century poet John Donne wrote “no man is an island, entire of itself,” as individuals we have little value to anyone but ourselves, if that is to be of any real value at all. When we are able to offer our services to another, then our value as an individual increases because we are able to both offer of ourselves and receive what things of value the other person in this exchange can offer. The more people that we have in our lives, to whom we are able to offer something of value, the more we are able to use the networking effect—those things which we can accomplish, thusly, can grow as a square of the people in our lives with whom there can be reciprocating value.

At a glance, it might seem like a complex concept, but think of it in this way: It is often said that a fraction of total jobs available in a given market are advertised through traditional sources—newspaper, Internet, radio, job service, etc; whereas most jobs are assumed through “connections” that a person might have. This is a direct result of the networking effect.

Ever get a tip from a friend? Can you say that you’re a better person because of the people in your life? How about what you are able to offer to other people?

This falls in line with a quip of wisdom I’ve held for several years. Take two ice cubes: One in the shape of a cube, the other with the same amount of mass in the shape of a thin sheet. Which will melt first? Why? Certainly the ice sheet will melt before the cube because it has more surface area exposed to the environment. If we make the assumption was the preferred result of this process, wouldn’t your preferred result of your life be the success that you’d like from it? Increasing your “surface area” to the world, that is to increase the potential for interactions which you have, can thus increase your potential for reaching critical mass and, with help of the networking effect, geometrically grow into and past your hopes and dreams.

“We’d rather miss a good one than hire a bad one.”

It's tough to find good help these days. That is why these companies are changing their tactics for finding good workers in a national economy with less-than-natural unemployment.

Do you play well with others?

College?

While I'm a very big proponent of a higher education, it should be kept in mind that a higher education, namely college, isn't necessary for success. What is in you, rather, is the key to success.

15 Successful Entrepreneurs Who Didn't Need College

Today’s Gamer, Tomorrow’s Strategic Leader

An interesting article caught my eye through one of my news aggregators over at myadsl.co.za. From the article:

“Video games have become problem-solving exercises wrapped in the veneer of an exotic adventure.”

Certainly a first line that intrigues and piques one’s curiosity, let alone the affect the headline has on someone. Reading on:

“Video games have become problem-solving exercises wrapped in the veneer of an exotic adventure. In today's fast and rapidly-changing business environment, the strategic skills they teach are more important than ever.”

The article goes on to debate, through the perspective of the two authors of the book Got Game: How the Gamer Generation is Reshaping Business Forever. The authors state that instead of being like television where people are the bystander, gaming offers a suspension of disbelief and includes the gamer into the world of the game—they become a willing participant.

As such, the gamer must think strategically in interacting with their environment, propelled to win.

These skills, the article states, are indispensible to the business world. These traits are even more accentuated in multi-player online environments—the MMOGs like World of Warcraft—such that small team leaders need to leverage the abilities of their teammates in the execution of success.

This culminates in an important point:

“Games teach by trial and error. Consequently, gamers learn that failure is a necessary and unequivocal part of the path to success. This is a message that is often lost in the real world, because repetitions are few and far between and therefore the stakes are too high during each attempt. In games, repetition is high and immediate feedback is provided to the gamer. While failure in the real world is disheartening, in games it serves as an encouragement to try harder. This attitude towards failure eventually permeates life outside of the game. The result is that the gaming generation is willing to take more risks and be more entrepreneurial than previous generations.”

The kicker?

“80 percent of managers in the US under the age of 35 had significant video game experience and that gamers had a more positive outlook on life than non-gamers. Gamers tended to prefer multitasking to individual assignments, to stave off boredom.”

Food for Thought

What separates the winners from the losers?

"I'll try means I'll fail."

Shovel the Snow, Form the Habit

Tonight we’ll be taking a look at some wisdom from elsewhere: How forming a walking path through snow is much like self-engineering a set of favorable habits.

“The process of forming habits [is] as walking home through fresh snow. The first person to go through the snow has to forge a path through the snow, and it’s difficult … but others will follow in that path and it gets easier and easier.

Forming a habit is a matter of forging that initial path until it’s harder not to take the path. Who wants to forge a new path through the snow?

But let’s take that concept a little further: what if you engineered it so that even the initial person forging through the snow would rather take that path than another, because it would be harder not to take the path.

Engineer your habit change so that it’s harder not to form the habit.”

Read the full article here.

The ebook, though not free, can be found here.

It Doesn’t (Necessarily) Take an MBA

Many people in recent decades have been incessantly taught that college is the right way to go: Get a good job, retire, so on and so forth. While in this conventional wisdom lie some very valid points—education is completely worthwhile, there are diminishing returns in some scenarios. The classic picture of an Ivy League education being responsible for making one’s way up the corporate ladder and into the corner office isn’t necessarily the one that is based in reality.

In fact, the Wall Street Journal reports:

“Most CEOs of the biggest corporations didn't attend Ivy League or other highly selective colleges. They went to state universities, big and small, or to less-known private colleges.”

In fact, I know for a fact (as the article reports), went to Pittsburg State University in the small community of Pittsburg, KS: A place where I resided for a small time. An accounting major there, H. Lee Scott ascended to the top spot in the world’s top corporation: Certainly no small feat.

In fact, the “Oracle of Omaha,” the third-richest man in the world Warren Buffett, is quoted as saying “I don't care where someone went to school, and that never caused me to hire anyone or buy a business.”

Following the line of logic that this allows, let’s take a look at Gabriel Hammod, a Johns Hopkins student who had his mind set on law school. During the course of his undergraduate years there, however, he traded stocks, placing $1000 on Caterpillar. Finding he had a knack for it, Gabriel decided to join Goldman Sachs as a stock analyst. Instead of going to business school for an MBA, like many of his colleagues, he chose to raise $5 million and start his own hedge fund, Alerian Capital Management. Three years into it, his company now manages $300 million from New York and Dallas. Gabriel, on the other hand, at the age of 28, enjoys a seven-figure salary.

What was his logic?

“Like other young people on the fast track, Mr. Hammond has run the numbers and figures that an M.B.A. is a waste of money and time — time that could be spent making money. “There’s no way that I would consider it,” he says.”

The finance world is rife with these sorts of stories.

“At funds that manage $1 billion to $3 billion, people with just a few years of finance experience will make $337,000 this year, Mr. Zoia says, and those with five to nine years of experience will average $830,000, up 6 percent from last year. These estimates include analysts and researchers but not portfolio traders, who can make much more because they sometimes share in profits.”

The moral of this story is clear: While extrinsic qualifications such as college degrees and other pieces of paper are good, intrinsic qualifications such as leadership skill, are the make-or-break critical factor in success.