How To Respond To Job Offers

This is a story about when I almost blew it.

I had moved to be closer to my girlfriend (now wife!) and was looking for work. I had graduated from college a couple years earlier and during the interim had attended Military Intelligence Officer School (as part of my Army Reserve commitment following college) and had spent a a year and a half in a giftware importing business in the Chicago area.

As I looked for work, I was closing in on two opportunities: one was a sales position for a successful business telecommunications firm where I would be given a territory, a quota and would sell long-distance telecommunications services (voice and data) to large businesses in my territory, the other a “management trainee” position in a local bank, where I would spend several weeks in various bank departments before settling on one particular area.

The obvious choice these many years later was to take the sales role in the telecommunications firm. It was a better fit for my work style (on the move throughout the day instead of going to the same office every day, more room for improvisation, etc) and – again this is more clear in retrospect – it was a tiny but important part of the big technology revolution that was sweeping through society.

But the bank thing had a certain respectability about it, and many of my friends were in the banking space and doing well (I didn’t stop to consider the fact that they had majored in finance and I had majored in International Business for good reasons).  Anyhow, and THANK GOD, the telecommunications company called me first to offer me a job.

This was where my mistake happened. When I got the call offering me the job, I wasn’t sure this job was the right one for me (not really considering that I was unemployed and without significant work experience).  The guy who called me was a senior guy in both age and experience, and I could tell he was thrilled to be offering me the job. I was the guy they chose.

And I played it very cool.

What Are You Incenting?

When I was first introduced to economics, I found that I enjoyed the history of economic thought – the great writers such as Adam Smith, John Stuart Mill, Keynes, Galbraith, etc.  But then my econ classes turned more toward math and graphs. I eventually lost my original enthusiasm for the field but gained some appreciation for why it can be referred to as “the dismal science”.

Economics has once again become interesting to me as a number of excellent books have been published that approach economics from the standpoint of psychology and incentives. The study of incentives has always been key to economic thought – that isn’t anything new. However, it feels to me that there has been a lot of fresh writing in this area – examples include everything from Malcolm Gladwell to Daniel Kahneman to the Freakonomics books, Dan Ariely’s writings, and others. Truly, whatever behavior you subsidize or incent you will get more of.

Since I’m confounded by the morass of the American healthcare system and what passes for “debate” on this issue in Washington, I have a tendency to pick up books that help me understand different points of view on the problem. Books that fit this category include Catastrophic Care by David Goldhill and America’s Bitter Pill by Steven Brill (for the essay that launched Brill’s book, go here).

I just finished An American Sickness by Dr Elisabeth Rosenthal, a new and powerful book that I highly recommend. Keep in mind that I’m not recommending it because it’s always fun to read. Since Dr. Rosenthal relates a number of stories about people being caught in a web of overcharges and diminishing competition, it reads more like a horror novel than some of the Stephen King books I’ve read. I almost had to sleep with the light on.

Since this is a blog about leadership, innovation and personal effectiveness, I’ll leave the healthcare debate aside. However, this one section caught my attention:

“Cataracts can be detected during an eye exam long before they become a real bother to patients, so there is much discretion about when to perform surgery. Studies have shown that the rates of cataract surgery are highly dependent on how much doctors are paid to do the procedure. In one study in St. Louis, the number of cataract surgeries performed dropped 45 percent six months after a group of doctors went on salary and were no longer paid per surgery.”

I don’t know about you, but I find that to be a bit alarming. It’s a pretty good indicator that doctors who are incented to do cataract surgeries will do borderline cases to pump up their income.  And this got me to thinking about incentives in general.

The Warrior Ethos for Business Leaders

A year or two ago I heard a radio program about a group of distraught British parents whose children had joined ISIS. The parents themselves had emigrated from the Middle East to the UK and had built successful lives over the ensuing years – successful enough to send their children to medical school in London.  Everything seemed to be going great until the students left school and went to Iraq and Syria to join ISIS as doctors.

The parents were grief stricken. Why would their bright children, who were on the cusp of successful careers in the developed world, drop it all to join terrorists in a inhospitable land?

The parents were eventually pointed to an American psychologist who works with governments and national security agencies to understand the psychology of young people who join terrorist organizations.

He explained to the parents that all humans seek meaning in their lives and can feel the deep need to pursue an objective greater than themselves to find that meaning. Hardship faced in pursuit of the objective can add to it’s allure, it’s meaningfulness.  He said that just as these young people were looking to devote their lives to something big and important, what they saw being offered by modern society were shorter working hours and greater physical comfort.

This interview came back to me as I was reading a short book from Steve Pressfield called The Warrior Ethos. The book is a collection of vignettes and reflections that Pressfield uses to describe common traits among warrior cultures, ranging from the Spartan warriors of Thermopylae to the US Marine Corps.

The book references one of the great “help wanted” ads in history. But before we get to that, let us consider that employee recruitment today is primarily centered around appeals to candidates’ naked self interests. “How can we attract your temporary services in exchange for pay?” a company might ask.

Can You Go Around a Leaf?

Among the greatest innovations over the past few decades – greater perhaps than Pumpkin Spice Latte – are the rise of animated movies that provide lessons for children and adults alike. The movie Toy Story sticks out in my mind as the movie that changed it all. Pixar (now part of Walt Disney) created movies that were fun for kids but also provided great gags that sailed over the heads of the little ones but got a laugh from Mom and Dad.

One of those movies is A Bug’s Life, which gives Aesop’s fable The Ant and the Grasshopper the full Pixar treatment. I have always loved A Bug’s Life because it intersperses profound lessons about hard work and innovation with some hilarious scenes.

The ants in the movie are diligent in their efforts to collect enough food for the grasshoppers, who are bullies demanding ever-greater production from the ant colony (pause here to consider themes of slavery and mafia “protection” rackets). The ants work hard, as ants do, but aren’t particularly innovative – that is, until a self-styled innovator and rugged individualist ant named Flick decides to look at the grasshopper/ant divide through a different lens.

Although Flick isn’t featured in this scene, it represents a hilarious metaphor for those of us who panic when our normal routines are interrupted by the unexpected obstacle. Enjoy….

Desert Storm, Or: How I Learned to Stop Worrying and Love the Lentil

As I write this I am eating a bowl of lentil soup, which reminds me of a story. Let me set the stage….

It’s winter of 1991, and I’m in Kuwait City. As you recall, this is when coalition forces entered Kuwait City as part of a multinational effort to evict Saddam Hussein’s forces from the city – aka “Desert Storm”. Although few US forces actually entered into the city itself, there were some unique US troops running around the city during/after the short ground war. I was in Civil Affairs – the part of the Army that is a liaison between local civilians and governments. Our much cooler colleagues from Special Forces served as liaisons between our military and the local military elements on the ground.

I was part of “Task Force Freedom“, a small task force set up to work through the complex – and impossible to anticipate – challenges that arose during the operation. As the ground war quickly came to an end, our mission turned to getting Kuwait City on the road to recovery.

Our immediate concerns related to basics like security, sanitation and food distribution. The previous months of Iraqi occupation of Kuwait City had been hard on some city residents, so in the early days, along with our other missions, we were in the city making sure large trucks filled with food were distributed to neighborhoods as requested by the Kuwaiti government.

You Have an Execution Problem

I’m in a Mastermind group. You might think that a Mastermind group is comprised of villains who are hatching fiendish plans of world domination, or even superheroes planning to thwart them, but you would be wrong. In fact, it’s much cooler than that.

No capes!

No capes!

Mastermind groups have been around for a long time, and are small groups of peers who come together to hold each other accountable toward their respective objectives and help members solve problems.

Recently, our group has been discussing and (imperfectly) practicing the concepts found in the book The 12 Week Year – a concept where annual objectives are tossed out the window in favor of 12 week objectives. I’ll be writing more about this concept in a later blog post.

There’s more to the 12 week year than compressed time horizons. I won’t cover it all here, but obviously recommend you check it out. However let’s focus on just one aspect from the book, and what I like and don’t like about this powerful quote:

The Power of Applied Hope

If you read my About Me page, you will see that it ends with this:  “Finally, I am an optimist.  It’s an exciting time to be alive”.

I thought that now would be the perfect time to revisit optimism – not just as a way of viewing external events and avoiding despair, but as a way to impact events.  Let’s start with three well-known characters:  Bill Gates, Melinda Gates, and Warren Buffet.

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Last week, the Gates Foundation released their annual letter. Since Warren Buffet gave the bulk of his wealth – $30B or so – to the Gates Foundation in 2006, Bill and Melinda addressed this year’s letter directly to Warren. I recommend you read through the letter in its entirety.

In one part of the letter they touch upon why they remain optimistic about many of the major health challenges facing the world.  This optimism runs contrary to rampant pessimism. For instance the statistic below:

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Bill puts it well here:

“One of my favorite books is Steven Pinker’s  The Better Angels of Our Nature. It shows how violence has dropped dramatically over time. That’s startling news to people, because they tend to think things are not improving as much as they are. Actually, in significant ways, the world is a better place to live than it has ever been. Global poverty is going down, childhood deaths are dropping, literacy is rising, the status of women and minorities around the world is improving.”

Optimism (and pessimism) perpetuates itself. While the political world has become practiced in leveraging fear, that approach doesn’t work as well in the private sector, where leaders create outcomes based upon the shared belief and passion of their teams.

Which leads me to a related point: the importance of active optimism, or “applied hope”.  Before I get into the provenance of this phrase, let me drop one last (telling) quote from the Gates letter, this line specifically from Melinda:

The Dangers of the Golden Story

In the past, I have written about the importance of storytelling. Companies often tell the same stories over and over to signal what is important to the company and why it exists. But I want to provide one bit of caution around something I call the “Golden Story”.

golden-egg

I have worked for a number of high-growth software companies – most of them private companies that were working against the odds every day, trying to secure more customers and new financing. One of the things we would be desperate for was some external validation that our product/market fit was on point. “Product/Market Fit” means that there was a 1) demonstrably large market with a particular problem, 2) that market was providing indicators that it was willing to spend money to address that problem, and 3) participants in the market had selected our product and used it to successfully address the problem.

Since a lot is riding on a young company proving product/market fit, we treated any story that validated our product like gold – and inevitably, we would hear such a story.  Perhaps a customer had a great outcome when they used our software exactly as designed, or maybe a major customer had licensed our technology at a high price. It’s natural to love stories like these and to re-tell them.

But in retrospect, sometimes these stories can be false signals, and false signals can lead to bad events. Here are some indicators that the Golden Story you’re telling is a false signal in disguise:

  1. The recurrence of the story is limited.  You keep telling the same story over and over. It is rarely supplanted by new versions.
  2. The sample size is minuscule. It’s one company out of a thousand. It’s one user out of a million. You make it seem bigger.
  3. You’re overly elated. It quiets your doubts, but if you’re honest, you’re pretty surprised.

A Powerful Word to Inspire Action

I recently wrote two posts – one on the psychology dynamic duo of Tversky and Kahneman, as chronicled in Michael Lewis’s book The Undoing Project, the other on the power of being “disagreeable” in the sense of not needing social approval to embark on a worthwhile effort.   Today, I’d like to combine them with an interesting example.

In his book, Lewis talks about the eminent economist Richard Thaler and how he was energized when he first discovered Tversky and Kahneman’s research. To understand the context of the story below, you must understand that although Thaler may now be described as an “eminent economist” (and is enough of a big shot to appear with pop star Selena Gomez in the movie “The Big Short” – and let’s be honest, we don’t often see economists hanging out with international pop stars), but at the time of the story below he was not remotely “eminent”.

Richard Thaler's appearance, with Selena Gomez, in the movie "The Big Short"

Richard Thaler’s appearance, with Selena Gomez, in the movie “The Big Short”

In fact, he was clinging to a very precarious faculty position (a position that he had to beg for), had limited career prospects and a young family.  So he wasn’t a guy with a safety net should he take a risk.

He was doing research for a thesis on how much money people would need to be paid to accept a certain amount of risk in their profession. As he engaged in a number of experiments, he noticed that people’s responses to various risk questions were contradictory. He eventually discovered Tversky and Kahneman’s insights about the human mind and it’s tendency to play tricks on us, and he wondered about how psychological insights like these could impact the field of economics – particularly given how much certainty economists tended to exhibit regarding their research conclusions.

From Lewis’s book:

“He (Thaler) told his thesis advisor about his findings.  ‘Stop wasting your time with questionnaires and start doing real economics’ said his advisor.

Instead, Thaler began to keep a list.  On the list were a lot of irrational things people do that economists claim that they don’t do, because economists presume that people are rational.”

If I were to ask you to pick out the most important word in the story above, what would you say it is?

You, Your Biases, and The Undoing Project

Consider this description.

“Linda is 31 years old, single, outspoken and very bright.  She majored in philosophy.  As a student, she was deeply concerned with issues of discrimination and social justice, and also participated in anti-nuclear demonstrations.”

Which of the below descriptions do you think is more likely?
1. Linda is a bank teller
2. Linda is a bank teller and is active in the feminist movement

If you selected number 2 – that Linda is a bank teller and is active in the feminist movement – then you would be like the vast majority of people, regardless of their education level. You would also be wrong.

If you look at the options without thinking too much about the description that preceded it, you would quickly see that the idea that option 2 could be more probable than option 1 is totally illogical.  Expressed as a Venn Diagram, “Linda as a Bank Teller” is a big, huge circle, and “Linda as a Bank Teller and an active feminist” could only be a small circle within it.  It’s impossible for number 2 to be more probable than option 1.

This common mistake is one of many cognitive quirks we humans have that cause us to make errors in judgement.  This particular one is an example of the Representative Heuristic, where we overcompensate for some random fact that causes us to make a mental shortcut to a destination that seems likely, but is wrong. Like many groundbreaking cognitive bias insights, this one was the work of the psychology world’s dynamic duo: Amos Tversky and Daniel Kahneman, whose years of collaboration are the subject of the latest book by Michael Lewis, The Undoing Project.

michael-lewis-the-undoing-project-2

I probably have read a number of articles that referenced Kahneman and Tversky’s research over the years without really registering their names. However, when Kahneman wrote a book that made much of their academic research accessible for the general interest reader (me!) a few years ago, I took notice. Here’s a video that highlights some of the main themes in Kahneman’s book.