How to Fail Your Business

Sure, businesses fail -- but are you failing your business?

Here are six ways you could be failing your business:

Your eye has started to wander. You're bored with your business because, well, things have gotten a little stale. You don't want to necessarily leave your company, but you've started to look for a little variety: You're thinking about forming other companies, or starting a side venture, and you pay less and less attention to your primary business. In the process results, relationships with customers and suppliers, and employee morale all suffer.

You focus on the wrong line. When revenue is down it's natural to focus on cutting costs, especially if, like me, you don't come from a sales background. Instead of focusing on the top line and growing sales, you cut and cut and cut until nothing is left. Sometimes it is impossible to save your way to profitability, and focusing on top-line growth is the only long-term answer.

You use "we" at the wrong times. You know there is no "I" in "team" so you try to say "we" -- but at the wrong times. "We worked straight through the weekend," sounds good -- unless you stayed home while your employees were at work. "We need to cut down on errors," sounds good -- unless you're the only one who made the mistakes. Use "I" whenever you personally make a mistake, and use "we" whenever you do something positive.

You network rather than sell. Networking is like sowing seeds. Selling is like harvesting crops. To survive, your business needs sales, not business cards and handshakes. Spend all your time networking on the golf course, at restaurants, and at social events instead of getting out and selling and revenue suffers. Network some of the time -- sell all the time.

You're in it for glory. Does your business serve as an extension of your ego? Is your business just a status symbol? Is your business on display for the greater glory of you? You should serve your business. Your business should not serve you -- and especially not your ego.

You can't stop searching for that one big idea. Innovations and breakthroughs do sometimes build great companies. Innovations and breakthroughs are hard to develop and even harder to deploy, though. Most companies succeed through hard work, attention to detail, and consistent execution. Ignore ideas and small improvements while you search for that one incredible breakthrough and your company will fail. A big idea is unlikely to transform your business; executing lots of small ideas can build a great business.

I would love to hear your comments and opinions.  You can publicly display them on my Blog: http://businessmanagementcounselingservices.blogspot.com/

Or e-mail me in private: stevehomola@gmail.com

Your opinion is always highly regarded and respected!

How to get fired!

Whether you love or hate your job, you probably don't want to put it in jeopardy because of some behavior you weren't consciously aware was a career hazard. And there are a slew of risky behaviors out there -- you don't have to send your boss an angry email to get on his or her radar in a bad way. Here are some behaviors to watch out for:

1. Abuse your sick days. Yes, you have an allotment of sick days at your disposal, but if you read HR's fine print, you'll see that they're not just some sorts of wildcard vacation days. If you always use every vacation day to which you're entitled every year, or have a habit of calling in sick on Mondays, you are flagging yourself as someone who lacks personal integrity and abuses the system.

2. Throw bombs. You've probably heard that it's fine to ask questions, challenge conventional wisdom and say "no." But that doesn't mean it's okay to be confrontational or rude. You can quickly flag yourself as anti-collaborative or difficult to work with if you throw bombs in emails or in face-to-face meetings. Find constructive ways to ask questions and disagree, or you'll be "the guy" no one wants to work with.

3. Undercut your own team. Know the right time to discuss sensitive issues. If you are concerned with your own team's ability to meet a deadline or worried about a decision your boss made, make sure your partners aren't a part of the email thread where you express your reservations. Otherwise, you become the guy that undercuts and undermines your boss and your team in front of partners, and there's no faster way to the bench than that.

4. Evade transparency. Be honest and up front. It's the rare boss who has patience for people who misrepresent reality. In the modern age of email, messaging and metrics, it's difficult to disguise an off-track project for long.

5. Be anonymous. In principle, you might think it's a good idea to keep your head down and do the work you're assigned. But most organizations actively try to grow their next generation of leaders from today's individual contributors. In fact, many companies have an implicit "up or out" policy that requires an employee to participate collaborates, grow and advance. You need to be seen and heard.

I would love to hear your comments and opinions.  You can publicly display them on my Blog: http://businessmanagementcounselingservices.blogspot.com/

Or e-mail me in private: stevehomola@gmail.com

Your opinion is always highly regarded and respected!

Are you an Entrepreneur or Leader?

Entrepreneurs and business leaders each have their place in the business world. It's the entrepreneur that forges the path and the leader that turns it into a highway. Even more rare, is the entrepreneurial leader that changes our world. Think Steve Jobs (Apple), Yvon Chouinard (Patagonia), Herb Kelleher (Southwest Airlines), Bill Gates (Microsoft), Henry Ford (Ford Motor Co.), Sam Walton (Walmart), and dozens of others. Those entrepreneurs not only changed our lives but changed life, as we know it.

So how do you join the ranks of entrepreneurial leaders? First, let's look at the difference between leaders and entrepreneurs. Answer the following questions and see how you stack up. Remember, there's no right or wrong.

Is it easier for you to make promises or to keep promises?

Entrepreneurs are visionaries. They make lots of promises, and by the skin of their teeth and seat of their pants they keep most of them. Reaching beyond their grasp allows them to stretch further which often leads to break-through innovation. Unfortunately, this comes with a cost: Not all promises are kept. Execution sometimes takes a back seat to innovation. Bright shiny metal objects can lead to the next powerhouse idea but can also cause today's priorities to drop faster than the Time's Square ball on New Year's Eve.

Leaders execute. They keep their promises but they don't do it alone. Here's one of the secrets of both great entrepreneurs and leaders: They rely upon these three people:

1. The operations manager or COO to keep the company’s promises
.

2. The financial person (CFO, bookkeeper, controller, etc) to pay for their promises through receivable collection, pricing, and financing.


3. The administrative (executive assistant) to help them keep their personal promises.

Speaking of counting on other people…

Are you a lone wolf or a top dog?

Many entrepreneurs start their businesses, because quite frankly, they don't play well with others. They get an idea that often bucks the system. The idea becomes a passion, the passion takes form and, voila! There is a business.

The entrepreneur typically measures his or her success based on the impact of their ideas.

However, for that business to continue to grow and stay relevant it takes people - a lot of them. Customers, vendors, employees, associates, even competitors are people and require a human connection to manage them.

The leader measures his or her success based on the quantity and quality of their relationships.

Is creativity in your nature or something you nurture?

In his latest book 11/22/63, Stephen King wrote: "Artistic talent is far more common than the talent to nurture artistic talent. Any parent with a hard hand can crush it, but to nurture it is much more difficult."

Nurturing talent maybe more difficult but it is no less important than entrepreneurial talent. Steve Jobs was a "design maniac" who, even while in the hospital, tried to redesign his oxygen mask and finger monitor according to Walter Isaacson in his biography on the man. Such was his passion and creativity.

So here's your final question: If you inspire, you are a leader. If you are inspired, you are an entrepreneur. Still not sure, ask the people around you.

I would love to hear your comments and opinions.  You can publicly display them on my Blog: http://businessmanagementcounselingservices.blogspot.com/

Or e-mail me in private: stevehomola@gmail.com

Your opinion is always highly regarded and respected!

The Fundamental Roles of a Great Business Manager

Great business owners become great based on their actions. Intentions are meaningless. Words are important. Results are everything.

But probably not the kinds of results you might have in mind. Consistently accomplish these five functions and you, your company -- and most importantly your employees -- all reap the benefits. Fail at these five functions and no matter how hard you work, you and your business will eventually fall short.

1. Develop every employee. If your sole focus is on hitting targets, achieving results, and accomplishing concrete goals your leadership cart is well before the horse. Without great employees, no amount of focus on goals and targets will pay off. Employees can only achieve what they are capable of achieving, so it's your job to help every employee become capable of achieving more.

Plus, even the most self-starting employees can only do so much to improve their skills. As a manager you owe it to your employees to provide the training, mentoring, and opportunities they need and deserve. In the process you listen, guide, and develop loyalty and commitment. Reviewing results and tracking performance is transformed from enforcement into personal progress and improvement -- both for the employee and for business.

Employee development is your primary responsibility as a boss. Spend the bulk of your time developing the skills of employees; goal achievement becomes a natural, long-term result.

2. Take care of problems immediately. Nothing kills team morale quicker than issues that don't get addressed. Interpersonal squabbles, performance issues, inter-departmental feuds all negatively impact employee motivation, enthusiasm, and even individual work ethic.

Small problems never go away. They always fester and grow into bigger problems -- and when you ignore an issue, employees immediately lose respect for you. Without respect you can't lead.

Never hope a problem will magically disappear (or someone else will deal with it.) No matter how small, deal with every issue head-on.

3. Rescue a struggling employee. Every team has an employee who has fallen out of grace: Publicly failed to complete a task, blew up in a meeting, or just makes particularly slow progress. Over time a struggling employee comes to be seen by his peers, and by you, as a weak link.

When that happens it's almost impossible for the struggling employee to turn a corner on his own. The weight of team disapproval is just too heavy for one person to move.

But that weight is not too heavy for you to move.

Before you remove a weak link from the chain, put your full effort into trying to rehabilitate that person instead. Step in and address the situation, but do so in a positive way. Say, "Tom, I know you've been struggling. I also know you're trying. Let's find ways we get you where you need to be." Express confidence, be reassuring, and most of all tell him you'll be there every step of the way.

Don't relax your standards, though. Just step up the mentoring and coaching you provide.

Granted, sometimes it won't work out, so see the effort as its own reward.

4. Serve others -- never yourself. You can get away with this once or twice, but that's it. Never say or do anything that in any way puts you in the spotlight, however briefly. Never congratulate employees and digress for a few moments to discuss what you did. Never say, "This took a lot of work, but I have finally convinced upper management to let us..." If it should go without saying, don't say it.

Your glory should always be reflected, never directed. When employees excel you excel. When your team succeeds you succeed. When an employee rehab project turns into a superstar, remember they should be congratulated, not you.

You were just doing your job the way a great manager should.

Consistently act as if you are less important than your employees and everyone will know how important you really are.

5. Stay humble. As a business owner, you've reached a level many of your employees also hope to someday reach. Some admire what you have accomplished; most respect you for your hard work and achievements. So sometimes an employee will just want to talk or to spend a little time with you.

When that happens you can blow that person off, or you can see the moment for its true importance: A chance to inspire, motivate, reassure, or give someone hope for greater things in their life.

The higher you rise, the greater the impact you can make, and the greater your responsibility to make that impact.

I would love to hear your comments and opinions.  You can publicly display them on my Blog: http://businessmanagementcounselingservices.blogspot.com/

Or e-mail me in private: stevehomola@gmail.com

Your opinion is always highly regarded and respected!

The Business Owner-The Utmost Fear

When the competition is fierce and the economy is down, it's natural for small business owners to focus primarily on short-term results -- and on making short-term decisions. While we'd like to think long term, we nearly always operate from a short-term perspective. When revenues are down, customers are deserting, making payroll seems like an impossible dream or cash is flowing in the wrong direction, a short-term perspective is often all you can afford.

Who has time for long-term considerations when the short term is uncertain?

But what if you knew? What if you knew, without a doubt, that you and your business would survive for the next 20 years? What if, for example, you knew:

-- A problem employee will still be on the payroll one or two (or heaven forbid, 20) years from now. Does it make sense to keep ignoring the problem? Do you really want to deal with that employee for years?

-- A disengaged partner won't leave the business of his own accord, and for the next 20 years, he'll make minimal contributions while taking a major share of profits. If you knew that, would you try to address the problem now or decide just to live with it?

-- A small market with a limited customer base will always be small. Would you relocate, expand or find different sales channels, or would you keep complaining about limited opportunities for the next 20 years?

Short-term crises can cause us to ignore longer-term headaches, roadblocks and challenges. We tend to push aside larger chronic problems as we fight smaller, more immediate issues.

So take a step back from the day-to-day and turn the proposition around. Assume hard work, intelligence and persistence will overcome short-term business issues and challenges. Assume you and your business will still be here. In fact, assume you'll still be right here, right where you are today, facing the same problems and frustrations. Then take steps to address them now.

Above all, make sure you never have to look back and say, "I can't believe it's been 10 years and I'm still dealing with this (stuff)." That should be your greatest fear -- make sure it doesn't become a reality.

How your Business Plan Can Be Destructive

We've all heard the expression, "If you fail to plan, you plan to fail." And few people disagree on the importance of a business plan. But too many business plans risk turning against their authors (and often do) because of one or more of these potentially fatal flaws:

1. Being too attached to a product or idea. The "everyone will want this" phenomenons, where you love an idea so blindly that you don't even consider the possibility that the world might not beat a path to your door.

Gut feelings, experience and a willingness to take risks certainly count, but don't get too stubbornly attached to your ideas. Be brutally honest with yourself, and do as much homework as you can. A mentor of mine once said, "Never make decisions based on an assumption that you're your own customer."

2. Overestimating the market. Almost every formal business plan I've ever seen cites impressively researched industry statistics and uses them to come to hypothetical conclusions. Typically they read something like, "We anticipate “NewCo” can capture 1 percent of this $50 billion industry within two years, resulting in revenues of $5 million."

It seems reasonable -- hey, just 1 percent -- but in many industries getting 1 percent market share is a Herculean feat. For start-ups with limited resources, it might even be impossible -- many run out of money chasing flawed assumptions or unrealistic/non-fundable goals. So for the typical entrepreneur, it's better to build estimates from the bottom up (units, distribution outlets, marketing and other resources, etc.) than to back into numbers based on market share.

3. Not fleshing out execution details. In one of my favorite bits, comic actor Sacha Baron Cohen's alter ego, Ali G., is pitching real, unsuspecting venture capitalists on investing in a hoverboard -- a levitating skateboard inspired by the movie "Back to the Future." He hands a plain wooden skateboard deck to an impatient Venture Capitalist, who quickly points out that it's just a skateboard without wheels -- and doesn't hover. Ali G. replies, "It doesn't yet. That's where you guys come in." This happens in real life all the time. The business plan describes a great concept, but with no real-world execution plan.

Determined people with big ideas and dreams often have faith that the missing pieces will just come together. If you're the late, great Steve Jobs, that may be true. Bust most of us aren't, and most don't have the resources for endless exploration. So if you don't know how to execute your idea (much less if it can be executed at all), or you don't at least know of specific resources to which you can turn, then it's just an idea -- not a plan.

4. Overestimating financial results. Business plans commonly make overly aggressive or unrealistically ambitious assumptions about sales, rate of growth, gross margin, profitability timing, cash flow, market share and other tangible results. To be sure, some startups knock it out of the park, but most work their way up slowly, through zigs and zags that rarely follow the original plan. I can't think of an entrepreneur I know whose startup financial estimates materialized as planned. Mine certainly didn't, and I'm as conservative as they come.

Another wise piece of advice I got years ago was to separate goals from estimates. Goals are what you shoot for; estimates are what you bet on! Keeping them separate in your head -- and in your plan -- can help avoid painful surprises down the road.

5. Underestimating costs. This is usually the biggie. "Assume that everything will cost twice as much and take twice as long" may be cliché, but it's always been wise and healthy advice. Running out of cash is, of course, among the top reasons businesses fail, and underestimating expenses is one of the top reasons they run out of cash.

No matter how much homework you've done and how much you think you've nailed down the numbers, add a generous margin of error. If you're seeking financing, you may only get one shot. And if nothing else, think of it this way: chances are you can only be pleasantly surprised if you overestimate.

There are generally two reasons for doing a business plan: one is for yourself -- to organize your thoughts on paper, make sure you really understand and feel good about what you're doing, and give you a path forward (one that will almost certainly change, but a place to get started).

The other is for outside use, which typically means asking for money. There may be some differences in the content and presentation of the plans to suit each purpose, but no matter what, it should be honest, thorough and as realistic as possible.

It's great and important to be positive, determined and enthusiastic about your business, and I'm not suggesting writing a pessimistic or self-defeating plan. I think anyone who has a good idea; a solid plan and the personal qualities it takes to be an entrepreneur should go for the wild ride.

But it's equally important to balance your passion, drive and conviction with a healthy dose of conservative self-evaluation. Challenge everything about your plan, and then challenge it again. Making unrealistic assumptions and/or kidding yourself -- much less others -- can come back to bite you.

I'd love to hear your own business-plan pitfalls or advice. Please share your thoughts.  If you are in need of that business plan assistance, contact me!

Emotional Well-Being (part 4 of 4)

The Misconception: There is nothing better in the world than getting paid to do what you love.

The Truth: Getting paid for doing what you already enjoy will sometimes cause your love for the task to wane because you attribute your motivation as coming from the reward, not your internal feelings.

In 1980, David Rosenfield, Robert Folger and Harold Adelman at Southern Methodist University revealed a way you can defeat the over justification effect. Seek employers who dole out reward – paychecks, bonuses, promotions, etc. – based not on quotas or task completions but instead based on competence. They ran an experiment in which they told subjects the goal was to find fun and interesting ways to improve vocabulary skills in schools. They placed participants in two categories and two groups per category. In one category, subjects would be paid for being good at their task. In the other category, the subjects would be paid for completing a task. The subjects received 26 dice with letters on their faces instead of dots and a stack of index cards each with 13 random letters. The subjects hit a timer and used their dice to make words from the letters on the cards. Once they had used nine letters or spent a minute-and-a-half trying, they moved on to the next index card and kept repeating until the experiment ended. It was difficult but fun, and as the players kept going they started to improve in their abilities.

In the payment for competence category, Group A was told they were being paid based on how well they did compared to the average score. In Group B, the subjects were told the same thing, but there was no mention of any reward. In the payment for completion category, the scientists told Group C each completed puzzle would increase their payout, and Group D was told they would be paid by the hour.

After the games, the experimenters pretended to tally up the subjects’ scores and showed Groups A and B how well they did. No matter how they actually performed, the scientists told half of Groups A and B they did poorly and half they were amazing at the game. Groups C and D, the ones who were paid for completions, were also split. Half got low pay and half high pay. The subjects then filled out a questionnaire and sat alone in the room with the dice and cards for three minutes. During that alone time the real study began. The scientists wanted to see who would keep playing the game for fun and for how long.

The people in Groups A and B, the ones who were paid for being better than average, they picked up the game and played it for over two minutes, but slightly less than that if they were told they weren’t that good. The people in groups C and D, the ones paid for completions, didn’t play it for fun for as long as did the people in the competency groups, and they tended to play longer the less they were paid.

The results of the study suggested when you get rewarded based on how well you perform a task, as long as those reasons are made perfectly clear, rewards will generate that electric exuberance of intrinsic validation, and the higher the reward, the better the feeling and the more likely you will try harder in the future. On the other hand, if you are getting rewarded just for being a warm body, no matter how well you do your job, no matter what you achieve, the electric feeling is absent. In those conditions greater rewards don’t lead to more output, don’t encourage you to strive for greatness. Overall, the study suggested rewards don’t have motivational power unless they make you feel competent. Money alone doesn’t do that. With money, when you explain to yourself why you worked so hard, all you can come up with is, “to get paid.” You come to believe you are being coerced, paid off, and bought out. In the absence of what the scientists called “competency feedback” there is no story to tell yourself that paints you as a badass. Quotas and overtime and hourly pay don’t offer such indications of competency. Bonuses based on a reaching a specific number of completions or reaching a quantified goal make you feel like a machine.

If you pay people to complete puzzles instead of paying them for being smart, they lose interest in the game. If you pay children to draw, fun becomes work. Payment on top of compliments and other praise and feeling good about personal achievement are powerful motivators, but only if they are unexpected. Only then can you continue to tell the story that keeps you going; only then can you still explain your motivation as coming from within.

Consider the story you tell yourself about why you do what you do for a living. How vulnerable is that tale to these effects?

Maybe your story goes like this: Work is just a means to an end. You go to work; you get paid. You exchange effort for survival tokens and the occasional indulgence from your favorite store. Work is not fun. Work pays bills. Fun happens at places that are not work. Your story is in no danger if that’s how you see things. In an environment like that Skinner’s assumptions hold true, you will only work as hard as is necessary to keep getting paychecks. If offered greater rewards, you’ll work harder for them.

Maybe your story goes like this though: I love what I do. It changes lives. It makes the world a better place. I am slowly becoming a master in my field, and I get to choose how I solve problems. My bosses value my efforts, depend on me, and offer praise. In that scenario, rewards just get in the way of your job. As Kahneman and Deaton’s study about happiness showed, once you earn enough to be happy day-to-day, motivation must come from something else. As Kahneman and Deaton’s research into happiness and money showed, the only material reward worth seeking once you have a bed, running water and access to microwave popcorn, are tributes, symbols to all of your merit, stuff that demonstrates your effectiveness to yourself and others. Ranks, degrees, gold stars, trophies, Nobel Prizes and Academy Awards – these are shorthand indicators of your competence. Those rewards amplify your internal motivations; they build your self-esteem and strengthen your feelings of self-efficacy. They show you’ve leveled up in the real world. Achievement unlocked. They help you construct a personal narrative you enjoy telling.

The over justification effect threatens your fragile narratives, especially if you haven’t figured out what to do with your life. You run the risk of seeing your behavior as motivated by profit instead of interest if you agree to get paid for something you would probably do for free. Conditioning will not only fail, it will pollute you. You run the risk of believing the reward, not your passion, were responsible for your effort, and in the future it will be a challenge to generate enthusiasm. It becomes more and more difficult to look back on your actions and describe them in terms of internal motivations. The thing you love can become drudgery if that which can’t be measured is transmuted into something you can plug into TurboTax.

Help someone who can't return the favor!

Emotional Well-Being (part 3)

The Misconception: There is nothing better in the world than getting paid to do what you love.

The Truth: Getting paid for doing what you already enjoy will sometimes cause your love for the task to wane because you attribute your motivation as coming from the reward, not your internal feelings.

Self-perception theory says you observe your own behavior and then, after the fact, make up a story to explain it. That story is sometimes close to the truth, and sometimes it is just something nice that makes you feel better about being a person. For instance, researchers at Stanford University once divided students into two groups. One received a small cash payment for turning wooden knobs round and round for an hour. The other group received a generous payment for the same task. After the hour, a researcher asked students in each group to tell the next person after them who was about to perform the same boring task that turning knobs was fun and interesting. After that, everyone filled out a survey in which they were asked to say how they truly felt. The people paid a pittance reported the study was a blast. The people paid well reported it was awful. Subjects in both groups lied to the person after them, but the people paid well had a justification, an extrinsic reward to fall back on. The other group had no safety net, no outside justification, so they invented one inside. To keep from feeling icky, they found solace in an internal justification – they thought, “you know, it really was fun when you think about.” That’s called the insufficient justification effect, the yang to over justification’s yin. In telling them the story, the only difference was the size of the reward and whether or not they felt extrinsically or intrinsically motivated. You are driven at the fundamental level in most everything you choose to do by either intrinsic or extrinsic goals.

Intrinsic motivations come from within. As Daniel Pink explained in his excellent book, Drive, those motivations often include mastery, autonomy, and purpose. There are some things you do just because they fulfill you, or they make you feel like you are becoming better at a task, or that you are a master of your destiny, or that you play a role in the grand scheme of things, or that you are helping society in some way. Intrinsic rewards demonstrate to yourself and others the value of being you. They are blurry and difficult to quantify. Charted on a graph, they form long slopes stretching into infinity. You strive to become an amazing cellist, or you volunteer in the campaign of an inspiring politician, or you build the starship Enterprise in Minecraft.

Extrinsic motivations come from without. They are tangible baubles handed over for tangible deeds. They usually exist outside of you before you begin a task. These sorts of motivations include money, prizes and grades, or in the case of punishment, the promise of losing something you like or gaining something you do not. Extrinsic motivations are easy to quantify, and can be demonstrated in bar graphs or tallied on a calculator. You work a double shift for the overtime pay so you can make rent. You put in the hours to become a doctor hoping your father will finally deliver the praise for which you long. You say no to the cheesecake so you can fit into those pants at your next high school reunion. If you can admit to yourself that the reward is the only reason you are doing what you are doing – the sit-ups, the spreadsheet, and the speed limit – it is probably extrinsic.

Whether a reward is intrinsic or extrinsic helps determine the setting of your narrative – the marketplace or the heart. As Dan Ariely writes in his book, Predictably Irrational, you tend to unconsciously evaluate your behavior and that of others in terms of social norms or market norms. Helping a friend move for free doesn’t feel the same as helping a friend move for $50. It feels wonderful to share a romantic dinner with your date after getting to know them and staying up one night making key lime cupcakes and talking about the differences and similarities between Breaking Bad and The Wire, but if after all of that the other person tosses you a $100 bill and says, “Thanks, that was awesome,” you will feel crushed by the terrible weight of market norms. Payments in terms of social norms are intrinsic, and thus your narrative remains impervious to the over justification effect. Those sorts of payments come as praise and respect, a feeling of mastery or camaraderie or love. Payments in terms of market norms are extrinsic, and your story becomes vulnerable to over justification. Marketplace payments come as something measurable, and in turn they make your motivation measurable when before it was nebulous, up for interpretation and easy to rationalize.

The deal the children struck with the experimenters ruined their love of art during playtime, not because they received a reward. After all, Group B got the same reward and kept their desire to draw. No, it wasn’t the prize but the story they told themselves about why they chose what they chose, why they did what they did. During the experiment, Group C thought, “I just drew this picture because I love to draw!” Group B thought, “I just got rewarded for doing something I love to do!” Group A thought, “I just drew this to win an award!” When all three groups were faced with the same activity, Group A was faced with a metacognition, a question, and a burden unknown to the other groups. The scientists in the knob-turning study and the child artists’ study showed Skinner’s view was too narrow. Thinking about thinking changes things. Extrinsic rewards can steal your narrative.

As Lepper, Greene and Nisbett wrote, “engagement in an activity of initial interest under conditions that make salient to the person the instrumentality of engagement in that activity as a means to some ulterior end may lead to decrements in subsequent, intrinsic interest in the activity.” In other words, if you are offered a reward to do something you love and then agree, you will later question whether you continue to do it for love or for the reward.

(To be continued)

Emotional Well-Being (part 2 of 4)

The Misconception: There is nothing better in the world than getting paid to do what you love.

The Truth: Getting paid for doing what you already enjoy will sometimes cause your love for the task to wane because you attribute your motivation as coming from the reward, not your internal feelings.

Throughout the 20th century, as psychology came into its own as a scientific discipline, many psychologists emerged from the halls of academia and ascended to the rank of celebrity after delivering open-palmed scientific slaps to the face of mankind. Sigmund Freud got people talking about the unconscious and the malleable, hidden world of desires and fears. Carl Jung put the ideas of archetypes, introversion, and extroversion into our vocabulary. Abraham Maslow gave us a hierarchy of needs including hugs and sex. Timothy Leary fed Harvard students’ psychedelic mushrooms and advocated that an entire generation should use LSD to “turn on, tune in, and drop out.” There are many more, but in the 1970s, B.F. Skinner was the rock star of psychology.

Skinner and his boxes made the cover of Time magazine in 1971 underneath the ominous proclamation, “We Can’t Afford Freedom.” His research into behaviorism had made its way into the public consciousness, and he was intent on using his celebrity to convince all of humanity there was no such thing as free will. You’ve seen his findings in practice. The Supernanny and The Dog Whisperer reward desired behavior and either punish or ignore undesired behavior – and they get impressive results. Skinner could make birds do figure eights on his command, or train them to pilot guided missiles. He invented climate-controlled baby boxes in which infants never cried. He created teaching machines that still influence user interfaces today. But, he also scared a romantic generation of freedom seekers into thinking freedom might be an illusion.

Skinner said all human thoughts and behaviors were just reactions to stimuli – conditioned responses. To believe as Skinner did is to believe everything you do is part of seeking a reward or avoiding a punishment. Your entire life is just a stack of evolutionarily selected against quirks and desires seasoned with programmed interests and fears. There is no self. There is no one in control. Those things are illusions, side effects of a complex nervous system observing its own actions and cognitions. In light of this, Skinner advocated we build a society through setting goals and then condition people toward those goals through positive reinforcement. Skinner didn’t trust human beings not to be lazy, greedy, and violent. Humans, he said, were inclined to seek and reinforce status through institutions, class warfare, and bloodshed. People can’t be trusted with freedom, he told the world. Psychology could instead design systems to condition people toward positive goals that ensure the best possible quality of life for all.

As you might imagine, the proclamation humans have no soul, or at least no special spark, caused a great deal of mental indigestion. Many psychologists resisted the idea that you are nothing more than chemical reactions on top of physical laws playing themselves out no differently than a rock slide crashing down the side of a mountain or a tree converting sunlight and carbon dioxide into wood. Skinner claimed what goes on inside your head is irrelevant, that the environment, the stuff outside your skull determines behavior, thoughts, emotions, beliefs and so on. It was a bold and terrifying claim to many, so science set about the task of picking it apart.

Among those who wanted to know if the mind was just a pile of reactions to rewards and punishments were psychologists Mark Lepper, Daniel Greene and Richard Nisbett. They wondered if thinking about thinking played a bigger role than the behaviorists suggested. In their book, The Hidden Costs of Reward, they detail one experiment in particular which helped pull psychology out from under what they called Skinner’s “long shadow.”

In 1973, Lepper, Greene and Nisbett met with teachers of a preschool class, the sort that generates a steady output of macaroni art and paper-bag vests. They arranged for the children to have a period of free time in which the tots could choose from a variety of different fun activities. Meanwhile, the psychologists would watch from behind a one-way mirror and take notes. The teachers agreed, and the psychologists watched. To proceed, they needed children with a natural affinity for art. So as the kids played, the scientists searched for the ones who gravitated toward drawing and coloring activities. Once they identified the artists of the group, the scientists watched them during free time and measured their participation and interest in drawing for later comparison.

They then divided the children into three groups. They offered Group A a glittering certificate of awesomeness if the artists drew during the next fun time. They offered Group B nothing, but if the kids in Group B happened to draw they received an unexpected certificate of awesomeness identical to the one received by Group A. The experimenters told Group C nothing ahead of time, and later the scientists didn’t award a prize if those children went for the colored pencils and markers. The scientists then watched to see how the kids performed during a series of playtimes over three days. They awarded the prizes, stopped observations, and waited two weeks. When they returned, the researchers watched as the children faced the same the choice as before the experiment began. Three groups, three experiences, and many fun activities – how do you think their feelings changed?

Well, Group B and Group C didn’t change at all. They went to the art supplies and created monsters and mountains and houses with curly-cue smoke streams crawling out of rectangular chimneys with just as much joy as they had before they met the psychologists. Group A, though, did not. They were different people now. The children in Group A “spent significantly less time” drawing than did the others, and they “showed a significant decrease in interest in the activity” as compared to before the experiment. Why?

The children in Group A were swept up, overpowered, their joy perverted by the over justification effect. The story they told themselves wasn’t the same story the other groups were telling. That’s how the effect works.

(To be continued)

Emotional Well-Being (part 1 of 4)

The Misconception: There is nothing better in the world than getting paid to do what you love.

The Truth: Getting paid for doing what you already enjoy will sometimes cause your love for the task to wane because you attribute your motivation as coming from the reward, not your internal feelings.

Money isn’t everything. Money can’t buy happiness. Don’t live someone else’s dream. Figure out what you love and then figure out how to get paid doing it.

Aphorisms like these often find their way into your social media; they arrive in your electronic mailbox at the ends of dense chains of forwards. They bubble up from the collective sighs of well-paid boredom around the world and get routinely polished for presentation in graduation speeches and church sermons.

Money, fame, and prestige – they dangle just outside your reach it seems, encouraging you to lean farther and farther over the edge, to study longer and longer, to work harder and harder. When someone reminds you that acquiring currency while ignoring all else shouldn’t be your primary goal in life, it feels good. You retweet it. You post it on your wall. You forward it, and then you go back to work.

If only science had something concrete to say about the whole thing, you know? All these living greeting cards dispensing wisdom are great and all, but what about really putting money to the test? Does money buy happiness? In 2010, scientists published the results of a study looking into that very question.

The research by Daniel Kahneman and Angus Deaton, published in the Proceedings of the National Academy of Sciences, analyzed the lives and incomes of nearly half-a-million randomly selected U.S. citizens. They dug through the subjects’ lives searching for indicators of something psychologists call “emotional well being,” a clinical term for how often you feel peaks and valleys like “joy, stress, sadness, anger and affection” and to what degree you feel those things daily. In other words, they measured how happy or sad people were over time compared to how much cash they brought home. They did this by checking if the subjects were consistently able to experience the richness of existence, by whether they tasted the poetic marrow of life.

The researchers discovered money is indeed a major factor in day-to-day happiness. No surprise there. You need to make a certain amount, on average, to be able to afford food, shelter, clothing, entertainment and the occasional Apple product, but what spun top hats around the country was their finding that beyond a certain point your happiness levels off. The happiness money offers doesn’t keep getting more and more potent – it plateaus. The research showed that a lack of money brings unhappiness, but an overabundance does not have the opposite effect.

According to the research, in modern America the average income required to be happy day-to-day, to experience “emotional well being” is about $75,000 a year. According to the researchers, past that point adding more to your income “does nothing for happiness, enjoyment, sadness, or stress.” A person who makes, on average, $250,000 a year has no greater emotional well-being, no extra day-to-day happiness, than a person making $75,000 a year. In Mississippi it is a bit less, in Chicago a bit more, but the point is there is evidence for the existence of a financial happiness ceiling. The super-wealthy may believe they are happier, and you may agree, but you both share a delusion.

If you don’t already have it, money can improve your life and make you happier, but once you have enough to go to Red Lobster on Tuesday night without worrying about paying the water bill that month, you’re good to go. Or, as Henry David Thoreau once said, “A man is rich in proportion to the number of things which he can afford to let alone.” In the modern United States the ability to let most things alone, according to Kahneman and Deaton’s research, costs about $75,000 a year.

If you find that hard to believe, you aren’t alone. A study in 2011 at Cornell asked Americans which they would rather have, more money or more sleep. Most people said more money. In a choice between either $80,000 a year, normal work hours, and about eight hours of sleep a night versus $140,000 a year, routine overtime, and six hours of nightly dreams – the majority of people went with the cash. It’s unfortunate, because although it looks good on paper and feels right in your gut, the research has never agreed. No matter how you turn it, the science says once your basic needs are taken care of, money and other rewards don’t make you happier, and you can appreciate why after examining a psychological jewel called the over justification effect. To understand it, we must travel to 1973 when a group of psychologists poisoned a few children’s love of drawing in the name of science.

(To be continued)