*Transcript from the Video
I like to encourage the young men that I work with to have a plan a life’s plan. I believe that if you have a goal, you’ll get there quicker. And I think most people will agree with me, and we all know that if you write your goal down on paper, you’re exponentially more likely to achieve it than not.
And so I’ve thought about this. Just about everything you buy today has an operating system and it has an operating manual. You buy a washer and dryer, it comes with a manual troubleshooting guide, et cetera. You buy a, new set of speakers that they come with an operating manual. Life doesn’t come with one. And I think that’s really interesting. I think that the operating manual is, Really something that is inherently taught through your family, through your community, through your relationships. And in that operating manual, there are a lot of wrong answers. There is a lot of bad advice.
The intention is often good, but not everyone has it all figured out. I think that’s important to know. Nobody is perfect the advice that we give is done with the best intention. But it’s not always the right answer and it certainly is not always executed upon. But the mentor-mentee relationship is one again, of judgment but yet uplifting advice, encouragement, and sharing of best practices. And so I always encourage the young men that I’m working with to have some type of a plan.
You get in the car and you start driving, you’re gonna end up at a beach most likely, I’m assuming. No flat tires, breakdowns, et cetera. No detours. But which beach are you going to? We have a beach called Corpus Christi. Well, it’s not the finest of sand, and the water’s not clear and blue and magical.
But if you were to travel a little bit further onto, let’s say, Destin, Florida, it’s like a paradise, right? And so if you want to go to the beach figure out how many hours it’s gonna take you to get there. If your vehicle’s ready to go how much gas it’s gonna take, you have to stay overnight and just plan that out.
If you wanna show up at the beach and you wanna show up at the right beach, have the best experience, you have to lay it out and life’s a lot that same way.
And it’s okay to get.In the car and realize you want to take a, detour and go over to, new Orleans on your way, or that you decided the weather didn’t hold out. So you’re gonna end up going to a museum or a concert or maybe in a different location. But just have a plan.
Why does this matter? Especially with our long to-do lists and the constant feeling that we’re each so busy…
The hard-wired brain mistakes “being busy”–the feeling of non-stop effort–with making more progress on priorities. Unfortunately, that “progress” can be mostly an illusion. It”s easy to get lost in this cerebral and sensory swamp of automatic and mostly mindless “doing.”
Let’s interrupt this pattern. Glance at today’s schedule. Commit to completing one specific task or meeting today five minutes earlier than planned–and devote this time to creatively streamlining and the remainder of today and tomorrow so that you can make greater measured progress on your top priorities… Note: Devote the final minute of these five minutes to reviewing and re-committing to your “To Don’t List”–which can matter even more than your To-Do List.
If you track through a busy day of the highest performers in the world. They are making breakthroughs and succeeding at measurably higher levels than everyone else. They make it look easy, and everyone observes and questions how they do it.
A big part of it, is they move through every single day with this awareness and this curiosity about what is possible here. What is possible in this interaction? this choice? this moment? this day? this week? This type of curiosity in neuroscience is so powerful. We call it the need for cognition.
We need more of it every single day. So we can sense deeper to be able to see what other people don’t and see what might be possible uniquely for us to make more of a difference, to have a better life along the way. Yet, too often, we miss it.
So set that reminder to pause ahead of each decision and each interaction, to ask “What is possible and what truly matters?”
I’ve been thinking a lot about the power of incentives and how they shape our behavior and the world around us. I’ve been asking myself, what is the incentive behind (person,system, decision) ect? Just asking this question let’s me think about things a bit more rationally and clearly if I have an understanding of what is shaping the behavior of those around.
Rational decision making is vitally important, yet we are anything but rational. If we look deeply at human pyschology and behavior, we can see that the power of incentives is one of the largest driving forces shaping the world around us and even impacting our own thinking.
“The chains of habit are too light to be felt until they are too heavy to be broken.” – Warren Buffett
Incentives are incredibly powerful and potentially dangerous because of they shape systems or influence our own thinking in ways that not easily detected, difficult to predict, and almost impossible to change once the system is built. It can cause us to rationalize immoral behavior that in a stand along situation would thought to be grossly misguided.
The goal of this piece is to highlight how incentives are at work and by providing some examples. Perhaps by peeling back the layers and exposing incentives at work, we can understand how and why human behavior is how it is.
Corporate and Business Incentives
Incentive: Leaders of publically traded companies are judged by how well their stock performs. Stock performance is based upon the company’s ability to make money, which is reported in quarterly earnings. Seems like a logical incentive structure, encourage CEO’s to have their company do well on a regular basis. Good CEO’s and good company’s will be rewarded
Unintended Consequence: This can create the incentive for CEO’s to focus short term, neglecting long term investment necessary for the future of the business. It can also create intense short term pressure to “meet the numbers” quarterly, which might lead to questionable accounting practices or other immoral behavior… See Enron, GE, or any number of corporate cases where the numbers didn’t quite match reality.
Incentive: Salespeople are paid commission for the sale of products. They are motivated to make money and thus work hard.
Unintended Consequence: Can create the incentive for immoral behavior. Some examples: Wells Fargo employees opening fake accounts to meet their sales numbers. Countless cases of immoral Insurance salesmen on everything selling bad companies with higher commission to taking advantage of the elderly, ect.
Incentive: Politicians need to get re-elected repeatedly in the US or any democracy. This allows citizens to vote out bad politicians.
Unintended Consequence: It makes it difficult for politicians to make meaningful, difficult, long-term decisions because they are always involved in a popularity contest for their job. Would you do anything difficult or unpopular if your livelihood would end in 2, 4, or 6 years? This incentive creates lifelong politicians who do not accomplish much.
Politicians are also responsible for allocating tax dollars, if you had to win a popularity contest might you be tempted to allocate money to the causes that might help you win that popularity contest. Like a 6th grade class president candidate who promises unlimited recess and ice cream for lunch.
Investment and Finance Space
Incentive: Managers of Private Equity, Venture Capital, Mutual Funds are paid fees based on assets under management.
Unintended Consequence: Investment Managers are not incentivized to invest well, they are incentivized to “gather more assets”. More assets=more fees for the manager. This creates very average performance on the whole so customers don’t pull their funds and buy index funds to settle for averages. It can also encourage risky or reckless behavior because you get the money and are being paid to invest, whether you have a good investment idea or not.
Incentive: Reporters need access to high profile people.
Unintended Consequence: Are they going to fair in their assessment? Or do they want to keep getting access to the high-profile people? They might not if they’re overly critical (even if it’s true).
Incentive: Attorneys are usually billed by the hour.
Unintended Consequence: Are they incentivized to conclude legal proceedings as quickly as possible? Or is the temptation to drag out billable hours?
We could exemplify any number of systems that horribly influenced by the power of incentives: Healthcare, Education, social services, …..Bottom line in systems is people show conscious or unconscious bias to those who employ, pay, or feed them. “Who’s bread I eat, his song I sing.”
On an Individual Basis
This also happens to us on the individual level. Incentives can influence our behavior and thoughts without knowing, or worse we rationalize it to ourselves. Examples:
-Instead of seeking truth. Most people spend the majority of their life, looking for information that rationalizes what they already believe to be true.
-The salesmen who sells a low-quality product, might justify it in his mind. Even believing that it’s a great product, when in truth it’s poor. “To the man with a Hammer, everything looks like a nail.”
– We look for reasons to justify the outlandish behavior of the candidate of our aligned political party. “He’s only doing that because the other party is so evil….”
-We talk ourselves into foolish financial, professional, or business decisions because we simply want them to be true. “Nothing is easier than self-deceit. For what each man wishes, that he also believes to be true.”- Demosthenes
-The person who behaves slightly immorally, will justify it to themselves to reach their incentive. “I’m entitled to the money, I embezzled.” “Everyone does this in corporate accounting.” “Everyone cheats on their homework and tests.” “All men behave this way….”
We should all take a step back and analyze what is the incentive behind this person, or system? Not all incentives are bad, but it’s incredibly important that we take the time to analyze them so we can approach decisions as rationally as possible.
When I was with the Imagineers at Disney, we used all kinds of different ways to stimulate creativity. These were incredibly important to the culture of the organization.
I believe all of the problems that we face require an interdisciplinary approach to solving. No one skill or idea tackles the complexity of life. We need to encourage the development of individual unique talents in individuals and even our children. Let them find what they are good at and then bring those skills together across different disciplines.
The hardest part of creativity is overcoming the status quo and saying “What if We? How Could We? How Might We?”
This requires immense courage. The willingness to stick our necks out and potentially look foolish or make mistakes. In a group setting like with the Imagineers, there had to a culture of trust so they could have this courage to take chances.
When collaborating it’s important to emphasize the individual strengths and skills of our team members. Do not get over concerned with their weaknesses.
What is their unique approach to problem solving? What skills do they bring to the table? These are the things that will energize and bring them joy as well making helping the team work more effectively towards their goals.
When I was younger, I didn’t get a lot of formal education. Most of the things I learned were hard-won from just working hard and making mistakes. I’ve made my share of them and one thing I’ve learned is how important it is to seek out the insights of people with more life experience then me. Today I am much more intentional about seeking out people with experience so I can learn from them and perhaps avoid some of the mistakes that I may make on my own.
“Investing in the Loss” is a term that we discovered in Josh Waitzkin’s book, The Art of Learning: An Inner Journey to Optimal Performance. It’s had a profound influence on how we approach life and performance.
Josh is a former Chess Champion who then became a champion and master of Tai Chi Chuan. One of his biggest takeaways was that everyone who wants to perform at a high level needs to invest in the loss to succeed.
Investing in the loss is a mentality. It’s a process of acknowledging that something is going to be painful and difficult. This is where the growth comes. Through the process of humbling yourself and being ok with it.
Most people are not willing to be embarrassed, look foolish, or do anything that might result in failure. This fear is what holds them back from achieving new levels of performance. When we’re afraid, we revert back to old habits and avoid activities that might be difficult or make us uncomfortable. This is why we won’t speak new languages in public, take on new ventures, or step up in high performance situations.
In his book, Josh references how Michael Jordan, made more game winning shots then any NBA player in history, but he also missed more game winning shots in NBA history. Make or miss, Michael Jordan was willing to invest in the loss. He knew it would be painful and he would be exposed if he missed but he was willing embrace that as well.
In order to improve we need to embrace a growth mentality and invest in the loss. Acknowledge that something might painful. It might be embarrassing and you might even fail very publicly. But willing to accept that allows you to reach levels beyond where you might have imagined possible.
The words from “Man In The Arena” exemplifies investing in the loss.
“It is not the critic who counts; not the man who points out how the strong man stumbles, or where the doer of deeds could have done them better. The credit belongs to the man who is actually in the arena, whose face is marred by dust and sweat and blood; who strives valiantly; who errs, who comes short again and again, because there is no effort without error and shortcoming; but who does actually strive to do the deeds; who knows great enthusiasms, the great devotions; who spends himself in a worthy cause; who at the best knows in the end the triumph of high achievement, and who at the worst, if he fails, at least fails while daring greatly, so that his place shall never be with those cold and timid souls who neither know victory nor defeat.”