Integrity and Continuous Improvement

My life is rather causal, that is: I make decisions and get to live with the consequences.  Some are awesome; others are awful.  I decided to establish a framework for making better decisions.  I wanted to rapidly make decisions I could live with.  This framework – which I call Integrity - guides my decisions so I’m not in internal conflict or second-guessing myself.  It allows me to have true freedom.  Maybe things change later, but it allows me to stand up and say “I made the best decision I could with the information I had.”

I make decisions through some criteria such as:

1. Ends don’t justify the means

2. No such thing as a small lie

3. Keep my moral compass

4. Would I do this in the light?

5. My father once told me “Money comes and goes, but no one can take your word from you.”

6. I return constantly to “If I can be trusted in little, I can be trusted in much.” I say it as a challenge to stay upright now so that I can grow into seeing more of the world.

My second value is Continuous Improvement. It’s a two-sided coin. On one side, we have the ideal – it’s what I want to happen. On the other side it recognizes that I’ll make mistakes, and, as long as I’m honestly evaluating my progress and doing a little better every day, then that’s ok. It’s not a free pass. It doesn’t lower the bar. It simply says: the bar is here, did you make it? No. Why not? Let’s change that and try again.

Continuous Improvement is all around us. In high school, I wanted to be part of the “Gold Club.” It was a set of weight-lifting goals that only the top 3% of students could meet. We had to clean, squat, and bench. Squat was easy as I biked to school every day. Clean was pretty easy as it carried over from squat. Bench was my nemesis. I had no training and could only bench my weight: 175 pounds. I needed to bench 225. The bar was 225. Not “Justin’s feeling sad, let’s make it 220.” No – 225. Not “Justin’s trying hard, let’s make it 220.” No - 225. I worked every day. I knew where the bar was: 225. And every day I’d work and get a little bit closer: 180, 185, 190. Every so often I’d try and “bust out” to 225. On the days that I failed, I didn’t quit. I just tried again. As long as I was “moving the football one yard closer every day” I knew that I’d get there. 

I had Integrity with myself to know that I’d follow-thru with the goal. I didn’t have to do it all at once. I couldn’t. I tried over and over to do it all at once and failed. Try, fail, move the football; try, fail, move the football…over and over. One day I got there. I can’t say I ever lifted a pound past 225. Never made it to 226. Don’t know if I can lift 225 to save my life today. But on that day, I got there.

Continuous Improvement to me is the bar, mixed with grace to fail. Another high school story. I needed to get a 700 on my Chemistry 2 SAT to get into Caltech. I had no idea where I was at, so I took it: 530. Hmm, not quite 700. I signed up for AP Chemistry and took it again: 630. Hmm, not quite 700. I did some prep classes and took it again: 670. Still not enough. But I had to apply since I was out of time, I couldn’t try again anymore. 

In both stories - the point is that I redefined failure as quitting. Everything else was progress. I didn’t get discouraged. I was just taking a poll of where I was that day. Was I at my goal? If so, then stop. If not, then keep on.

Continuous Improvement gives me a sense of peace knowing that I may not have accomplished all I want to, and I will miss the bar a few times, but if I can keep pressing toward the goal, then eventually I’ll get there. At minimum I'll enjoy the journey!

So there you have it – Integrity and Continuous Improvement give me Freedom and a Sense of Peace. What are your values and what do they give you?

Artist's Corner: My cousin and I took today's picture at a Luau at Paradise Cove in Hawaii. I chose it hoping to invoke a) the freedom of the seas with b) peacefulness of tropical paradise and c) it might be a tad much, but the two tiki torches are paired together, just like today's two topics are a pair for me.

Strengths and Values

I like stopping life once a quarter and getting away to think.  I call it my Quad-2 Time.  Quad 2, according to Covey, are the important but non-urgent things.  I use it to evaluate my life: how has it been and where is it going?  Did I meet my 90-day goals?  Wave a magic wand and how does it look? Next quarter?  50 years from now?  All good things – and just for fun: a great excuse to go somewhere exotic!

This particular trip was to South-East Asia, specifically Hong Kong and Shanghai.  I was in the process of forming my identity as an adult.  I’d long ago discovered my personality as an ENTJ.  StrengthsFinder gave me words for my strengths such as Context, Strategic, Achiever, Self-Assurance, and Responsibility.

These were great, but I wanted more.  I find Strengths, like Technology, to be agnostic.  I can use Technology for Good or for Evil.  I think the same about Strengths.  It's what I do with my Strengths that I find most interesting.

One day my friend quipped “What you build with your strengths, you can destroy with your character.”  Hmm … what is my character?  What are my values?  It dawned on me that I needed to know both my Strengths and my Values.  I wanted to articulate them to others, but more than this, I wanted to recognize them in others.  Unfortunately there’s no easy web-test for this.  To complete my vision quest, I’d have to look inside.

I knew I could rattle off a list of values I held dearly, but were there core values underneath?  I watched myself make decisions.  I realized there were certain phrases I’d remind myself of as I was making the decision.  For instance, when I was irked I’d remind myself: “you can measure a man by what makes him angry.”  Then I’d try to calm down.  I figured if these were already in my head, I may as well carry a piece of paper and jot it down when one emerged.  I also listed major experiences I’d had in life and challeged myself asking: “what are 10 lessons I learned from each?"  By the time I got to Hong Kong, I had over 300 such “proverbs.”

I wandered around Hong Kong, sat by the pool, and reviewed my list.  I boiled it down to two values: Integrity and Continuous Improvement.

I’ll discuss what these mean to me later, but I’m curious – what are your strengths and values?

Gestalt

Gestalt! That’s what they yell at you in angry-sounding German when you violate protocol.

I had just joined EO – the Entrepreneurs' Organization aka Business Club. We were being trained on how EO does small groups called Forum. Take your typical business owner – they’re used to running the show. Put a group of them together, and you have instant chaos. Everyone telling everyone else what to do.

Except that doesn’t happen because Forum follows Gestalt. In Forum, a person actually volunteers to yell “Gestalt” at everyone. The premise is you speak from your experience – period. There’s a great Wall Street Journal article on EO and Forum called Entrepreneurial 'Therapy': Deals, Divorce, Downsizing.

Each meeting, the group provides feedback to several presenters on a problem. The feedback must be of the form “I had this experience; these were the steps I took to deal with the problem” For instance, if I present on “I’d like to purchase a domain name, but I lack the cash; what are some alternatives to a direct purchase?” Good Gestalt allows “I’m a car broker. When our customers can’t purchase the car, we finance it for them”

Oh, beautiful. That’s your experience. I can’t argue with your experience. I may disagree with it. I may find it stupid, useless, and contradictory, but I cannot argue with it. That’s like arguing with the statement “I went to high school in Fargo, North Dakota” Who is anyone to argue with that? You’re arguing with facts in my life. It’s unarguable. So that's how it’s beautiful there. I can now choose to learn from that person’s experience and decide whether to negotiate a lease.

It’s also a fantastic method to communicate without being liable. Let’s say I’m presenting on how to save legal fees and someone says “I never take my lawyer to court.” I may decide that’s a great idea and not take my lawyer to court; if I lose the case, I can hardly go back and blame my friend. My friend didn’t tell me “don’t take your lawyer.” No. My friend said “I never take my lawyer.” I decided that applied to me. It was my decision.

Gestalt is akin to I messages, but more intense. With I messages I can get away with “I think you should”, but now I’m in the Gestalt Gray Zone. It’s tough following Gestalt. Sometimes I come up with something really helpful, but I just made it up; I never experienced it first-hand. I may try to couch it with “In my opinion…“ or “If I were you…” but I’m back in the Gestalt Gray Zone. Sometimes it even becomes “You should…” welcome to the Gestalt Really-Gray Zone. No “I woulds” and no “You shoulds”

I found it so powerful that I apply it to my personal life as well. It allows me to communicate stories from my life to friends and family without impugning on their sense of self.

The short of this is: if you see me use a lot of first person, I’m not narcissistic, I’m just following Gestalt. How about you? What communication protocols have you found most effective and why?

Good Lazy vs Bad Lazy

Today’s picture is from a Japanese Garden I visited. It was beautiful, relaxing, and I was quite lazy. I was lazy in a good way. I wondered, is there a bad lazy? I think so.

For instance, I try to regularly evaluate the patterns in my life. I ask myself - how is this working for me? If it’s working well for me, then cheers and I keep doing it. If not, then it’s quite exciting because I get an opportunity to improve my lot in life. I always like the results of breaking a pattern, but I don’t always like the work. There is this unfortunate cost in acting to make the change, and sometimes the cost is rather daunting. This doesn’t sound like a game winner, so I decided to change the rules.

I was looking at how hard it would be to make the change. I decided I’d shift my focus to the end, and look at all I’d miss out on if I did NOT make the change. Once I had the end in mind, starting seemed easier.

I face the decision moment of life with two choices:
Choice A) persist in the current pattern – which I already identified is worse
Choice B) change the pattern – to something which I already identified is better

If I’m just picking things that make my life better – that seems pretty lazy to me. Lazy in a good way.

How about you? How have you been good lazy?

Theory X vs Y

Today we solved a problem. Normally not much to write about, except today we solved it for the second time. That's red flags for me. What to do?

Fortunately I just finished Peter Drucker's book on People and Performance. He's written a zillion books on management and is oft cited, so going in I had high expectations.

Drucker constantly compares the history of the world as measured by the standard of living. Being a big fan on case studies, I ate it up. In the book, he discusses Theory X and Theory Y:

Theory X assumes that people are lazy, dislike and shun work, have to be driven, and need both carrot and stick. It assumes that most people are incapable of taking responsibility for themselves and have to be looked after. Theory Y assumes that people have a psychological need to work and that they desire achievement and responsibility and will find them under the right conditions.

Depending on one's assumptions, different action is required. If I assume Theory X to be valid, then a good coarse beating is in order. If Theory Y, then I recognize the problem is not with the person with whom I am angry. Eg. If only everyone knew everything in my head...well they don’t...and probably my head is filled with bunk anyway. Point is - if Y is valid - what to do?

Let us examine the root cause. The problem was not lack of documentation. After we solved it the first time, we wrote it down in the instructions. Clearly more writing or yelling at people to read the manual won't help.

The problem is that it's a complicated procedure with a hundred steps. If you mess up any of them, game over start again. We’re reading instructions off a web page. That’s dead documentation. The root cause is lack of living documentation. There's only so many things a human can do without messing up, and it's for sure less than a hundred. The ideal solution is self-documenting code - that is: automate it.

So now we ask: How likely is it to occur again? Very. What's the cost of failure? A few hours. What's the cost of our solution? A few hours. Hmm...seems like we're gonna fix this. The question now is when, and that's another topic.

So theory X vs Y - to which do you ascribe?

Transportationally Challenged

Thus far I have been in accidents on foot, rollerblades, scooter, bike, car and basically every single form of transportation that I’ve operated – so it’s with some trepidation that I announce I just completed my first flight toward my private pilot’s license. I’m hoping that I’ve grown up some and can take rules at face value without discarding them as mere suggestions. It’s a challenge to myself: can I take this seriously enough to do it? At the first inkling of trouble, I’ve got to be out because you don’t get many second chances up in the air.

For the curious, I’m flying a Cessna 172. I flew for about 45 minutes today. I took off, flew to Liberty Lake and back to Spokane, and then brought it in near the runway until my instructor took over and landed it. My understanding is it goes about 100 to 125 mph. They have some bigger, faster planes – even a few that land on the water. That’d be a cool commute, huh? It’s really quite beautiful and freeing up in the air. It’s a completely different perspective.

My goal is to see some more of the area. I’d also like to visit the capital of every state. This would be a great way to take off on the weekend, go somewhere exotic like – Little Rock, Arkansas – and then back to Spokane. Of course I’d visit them in the order they joined the Union – just for some added joy. Obviously I’m not there today. I’m going to mull it over, see if it pencils out, and if so - it’ll take a few months to get my license, so wish me luck!

Corporate Finance

Hello everyone. Great news - I’m alive and doing well in Spokane, Washington. It’s been quite a hectic last two months with the move from Los Angeles and reading this thousand page monstrosity.

My secret campaign to fool the business people into thinking I’m one of them continues. Raised an engineer, I understand a little about engineering and even less about finance. I know I need to make sure our projects are attached to revenue, but that’s about it. I want to talk to business people in their language, so I read this.

It has been a great read through:

1. Valuation and Capital Budgeting

2. Risk

3. Capital Structure and Dividend Policy

4. Long-Term Financing

5. Options, Futures, and Corporate Finance

6. Short-Term Finance

7. M&A, Financial Distress, and International Corporate Finance

Let’s just say now I know what a shareholder is. I also have a much better understanding of options available to me in the world of finance. I’m rather pleased to be following finance conversations in real-time now versus taking mental notes and catching up later.

The site is: http://www.mhhe.com/rwj with ISBN 978-0-07-310590-1