The crazy in the news

I switched my routine this morning and just did a quick skim of the news – my diet these days consists of a roughly 10 minute read of The Economist Espresso, Quartz’ daily newsletter and the Skimm. There’s a bit of overlap across these 3 but I’ve still found value in each of them.

So, it is natural that the news is on top of my mind as I write this.

One of the funny things about reading the news is that I am regularly shocked by the amount of ongoing crap taking place. Yes, I understand that negative stuff brings about more readership but I do always wonder about the “real” ratio of positive to negative news in the world.

A quick example of the kind of stuff that shocked me this morning –

  • Shell and ENI in Nigeria have had about 550 oil spills in Nigeria in the last few years. (550? How do you even get away with a number as crazy as that?)
  • American Presidential hopeful Ben Carson lied about receiving a scholarship. (How could anyone make such a dumb mistake in this day and age?)
  • Former McKinsey partner Anil Kumar, who actively participated in the insider trading scandal that got former McKinsey chairman Rajat Gupta and hedge fund owner Raj Rajarathnam in jail, constructed the elaborate scheme by creating offshore accounts in his maid’s name. The maid, Manju Gupta, now lives in poverty in Kolkata, India and hasn’t heard from her former employers in years. And, Anil Kumar walked away from all of this with a $25,000 fine. (This is so crazy that I’m not even sure what question to ask)

As humans, we tend to obsess about being perfect and getting everything right. It does, however, seem to me that we’d go a long way if we just did the basic stuff right – be honest (definitely don’t lie or cheat) and do your best to do good work. I’m not saying any of this stuff is easy – Anil Kumar, Ben Carson, et al, are smart folk. If anything, sharing my struggles with getting the basics right for more than 7 years now has definitely made me appreciative of how difficult it really is.

Nevertheless, this is likely a simpler undertaking than – go make a positive dent in the universe. It sure takes the pressure off. :-)

And, maybe, just maybe, it is the folks who go crazy about trying to make a positive dent who forget that there’s more to life than transitory wealth, fame and power.

Maybe happiness is this

I was reminded of the book ‘The Geography of Bliss’ on Twitter yesterday. So, I downloaded the book on my Audible and listened to the epilogue again.

And, here are a few quotes from the book that I absolutely loved.

We are shaped by our environment. In some ways, we are our environment. The word utopia has 2 meanings – good place and nowhere. That’s the way it should be – the happiest places are the ones that are just this side of paradise. The perfect person would be insufferable to live with. Likewise, we wouldn’t want to live in a perfect place either. A lifetime of happiness – no man could bear it. It would be hell on earth. Happiness requires livable conditions but not paradise. We find happiness in a variety of places.

We thrive on messiness. The Good Life cannot be mere indulgence – it must contain a measure of grit and truth.

Our happiness is completely and utterly intertwined with other people: family and friends and neighbors and the woman you hardly notice who cleans your office. Familiarity should breed contentment and not just content. Happiness is not a noun or verb. It’s a conjunction. Connective tissue.

Money matters, but less than we think and not in the way that we think. Family is important. … Beaches are optional. Trust is not. Neither is gratitude.

Have I found happiness? . . . I do experience happy moments. I’m learning, as W.H. Auden counseled, to “dance while you can.” He didn’t say “dance well.” And, for that I’m grateful.

And that brings me to my favorite quote whose beginning inspired the title of today’s post.

Maybe happiness is this…not wanting to be elsewhere, doing something else, being someone else.

So true.

Wishing you a great week. Thanks, Eric, for a wonderful book.

Good enough – The 200 words project

Psychologist Barry Schwartz has a simple piece of advice – “If you ever aren’t sure if you attended the very best party or bought the very best computer, just settle for ‘good enough’.”

People who do this are called “satisficers,” and they’re consistently happier, he’s found, than are “maximizers,” people who feel that they must choose the very best possible option. Maximizers earn more, Schwartz has found, but they’re also less satisfied with their jobs. In fact, they’re more likely to be clinically depressed in general.

The reason this happens, as Schwartz explained in a paper with his Swarthmore colleague Andrew Ward, is that as life circumstances improve, comparisons become commonplace and expectations rise => people may live better, but they won’t feel better about how they live.

So, pick a few things in life that you want to maximize. For everything else, go for good enough. Good enough, as Schwartz says, is almost always good enough.

It can be hard, in our culture, to force yourself to settle for “good enough.” But when it comes to happiness and satisfaction, “good enough” isn’t just good—it’s perfect. – Olga Khazan


Source and thanks to: Olga Khazan in the Atlantic

Stretch

I think the speed of our learning curve begins and ends depending on our answer to the question – “how do you react to being in the stretch zone?”

Most folk attempt to minimize that feeling of stretch and remind themselves that discomfort exists to be minimized.

Others accept the discomfort as a part of life and choose to dance with it.

Of course, we all want to minimize unnecessary stretch and we definitely don’t want to consistently feel stretched because others don’t do their job or because our managers consistently make unrealistic promises to our clients. We also don’t want to find ourselves stretched every minute of our lives. But, that said, if we feel relatively in control of our lives and schedules, our ability to deal with stretch can be developed – just like building a muscle.

And, I would argue that there are few muscles that are more important to build – after all, life begins at the end of our comfort zone.

Clinical execution

A future self idea that inspires me is one where I’d associate myself with clinical execution.

Work gets done when you combine intensity, focus and time. I think time is not so much the issue – I am definitely prepared to put in the time and have been for many years. I have less of an issue with focus these days. A big part of that has been accepting my ADD/natural attention deficit nature and learning to be kind to myself when I find my attention drifting. It has also meant designing a life and a “getting-things-done” system that works well with this ADD.

The toughest nut to crack has been intensity. Intensity, as I define it, is choosing where to focus on. And, I think we can further divide this into making a decision and then executing on it. Over the years, through constant reinforcement and increased awareness about my priorities, I have found myself become better at making decisions that are aligned to my priorities.

However, it is in the execution where I face that demon – procrastination. For instance, I had a 2 hour window yesterday when I knew exactly what I needed to and, yet, managed to find ways to procrastinate. During periods when there is little time to waste, I find such wasted hours frustrating.

So, this is a reminder to myself to begin to focus on banishing procrastination. So, here’s to figuring out an approach to that.

And, maybe, just maybe, I will then be worthy enough to bestow the “clinical execution” adjective on myself. :-)

Complete No and Partial No

I’ve found myself saying no a fair number of times this week. For someone who attempts to be available and of help, saying “no” is always a bit of a wrench. I avoided it for years until I realized that I was both compromising on quality by saying yes too much and not taking care of myself. I’ve definitely found myself getting better at it with practice.

One technique that has helped me say no is to not think of it as a partial no and not a complete no. A complete no aims to end the conversation immediately while a partial no keeps it going by offering up an alternative. An alternative I typically end up offering is to continue the conversation via email versus scheduling a separate chat.

A simple example – over the past year, there have been regular requests from folks who found me via one of my “MBA Learning” blog posts asking for 30 minutes for a conversation about business school applications. While I’m unable to do a call justice, I generally send a list of FAQs I’ve compiled and also respond to any follow up questions they might have. It isn’t perfect but it hopefully, at least, covers most of the basic questions they might have.

The principle here is that every non-essential no is an implicit yes to something essential that’s high up our priority list. Focus less on the no and more on what you are saying “yes” to. And, where possible, make it a partial no and offer up a few alternatives.

Why Amazon’s first physical bookstore was both inevitable and smart – MBA Learnings

Amazon opened its first bookstore in Seattle yesterday. This led to a many interesting questions in the media – has Amazon taken a step backward by jumping back into traditional retail? Didn’t Amazon start an online store to improve on the traditional bookstore model?

To understand this, let’s begin by taking a walk down memory lane and look at Jeff Bezos’ initial rationale for starting an online bookstore.

Bezos understood a fundamental benefit of having an online store – an “unlimited” access to inventory while also eliminating the fixed cost of owning a physical location. Why did this matter? For a category such as books, there are millions of published works. However, even the largest of bookstores can possibly only stock tens of thousands of books. So, within bookstores, you now need to forecast/guess demand for books. And, that, inevitably means high inventory costs because estimates are rarely right – especially for niche category books.

So, it is now easy to understand why Bezos narrowed in on the following 5 categories as possible areas for Amazon to focus on for its initial product – compact discs, computer hardware, computer software, videos, and books. All of these categories have a “long tail” of niche products that make selling them via traditional retail very challenging and expensive.

The principle we’re getting at is that the characteristics of a product drive the ideal supply chain/distribution strategy. Let’s imagine 2 kinds of products –
Low demand uncertainty, low value products. Examples of such products are daily groceries or toilet paper. These have consistent demand and low value. So, it makes sense to make these available near customers as the cost of shipping these products from a centralized warehouse is probably going to exceed the cost of these products. Besides, we’re not going to lose money on wasted stock since it is fairly straight forward to predict their near-constant demand.
High demand uncertainty, high value products. A great example of these are diamonds. It is very expensive to carry diamond inventory. So, shipping them from a centralized warehouse makes a lot of sense since the shipping costs are small relative to the value of the diamond.

Supply Chain Strategy

This, in turn, leads to the next natural step in the logic –
It is very expensive for online retailers like Amazon to ship low uncertainty, low value products like diapers and toilet paper. So, they should only do so if customers are willing to pay a premium for the convenience. While basic items like diapers and toilet paper are cheaper at Costco, one could make the argument that Amazon is still subsidizing shipping costs far too much as the prices are still comparable. And, Amazon’s financials in the past few years have reflected higher shipping costs.
Similarly, it is very expensive for physical stores to carry expensive inventory. This is why Tiffany sells most of its diamonds online and sells cheaper products via its retail stores. Still, keeping even some of its diamonds in physical locations is expensive and that means Tiffany should only do so for customers willing to pay a premium for that. And, they do. Tiffany’s margins are much larger than Blue Nile. This isn’t a luxury for Tiffany – it is a necessity.

We’ve only discussed the two extremes in this graph. What about everything in the middle? The reality for most large retailers is that they carry products that are scattered all over the graph. This, in turn, leads us to the final natural conclusion – it is in the interest of larger retailers to develop hybrid/”omni-channel” distribution strategies. This is why retail models such as “click-and-collect” have become popular in Europe.

So, essentially, it is in the interest of Amazon to have physical locations to complement its online offerings. There are 3 massive advantages to doing so –
1. It can leverage its incredible scale to truly be the retailer with the lowest prices – across its physical and online stores. Amazon store diapers will be the cheapest in the market. If you want to buy them online, however, you should be prepared to pay a premium for the convenience.
2. It can use its physical locations as warehouses for “Prime Now” and “Fresh” offerings.
3. Amazon has the data and analytics capabilities to be smarter about its inventory in physical retail locations than any of its competitors. This means it can have a real cost advantage – a big advantage in a traditionally low margin business.

As is the case with many things in life, the answer in picking the right distribution strategy lies in replacing “or” with “and.”

And, at the rate at which Amazon has added businesses to its portfolio in the past decade, one could make the argument that few understand that idea better than Amazon and Jeff Bezos.


HT: Prof Chopra’s work on Omni-Channel retailing @ Kellogg

Consistent greatness

Once in a while, when you see sparks of greatness, it is only natural to stand up and applaud.

However, if that greatness becomes a daily occurrence, it is only a while before you start taking it for granted. These acts of greatness can be in any sphere – a teammate who scores wonderful goals every time you go out to play, a spouse who takes care of you incredibly well every day, a parent who showers you with unconditional love and affection every time you spend time with them, a friend who is always around when you need her, an employer who takes great care of you at work, or a teammate who never shows up to a meeting unprepared.

This is why managing expectations is not just a good life skill, it is also a key ingredient to happiness. Because, the moment our expectations go up, we lose sight of consistent greatness. We become like the bangle seller in front of the Taj Mahal who doesn’t appreciate the genius in front of him.

And that is truly one of life’s greatest tragedies… because, I would argue that it isn’t really greatness if it isn’t consistent.

And, if we aren’t able to see and appreciate greatness, what the hell are we doing here anyway?

Perpetuity

If we want to do build things that matter, we have to build as if you’ll be around forever.

Given how strongly we’re wired to optimize for the short term and seek instant gratification, it is impossible to make good long term choices unless we have an implicit assumption that we’ll be working on our projects in perpetuity.

The difficulty is that there is something inherently scary about the idea of committing to something forever.

But, if there’s anything we should learn from folks who do build things that matter, it is their willingness to do things that few others would.

Channeling Jeff Bezos, however, we also know that it is a sign of wisdom to know when to change your mind and stop.

Perhaps, therein lies the secret to building things that matter – when you do something – even if it is something small and even if it something for a short period of time, do it as if you’d be doing it forever.

In essence, leave everything you do a little better than you found it. That’s how we get into the habit of building things that last.

First Principles Reasoning – The 200 words project

Until Tesla began developing battery packs, battery packs were very expensive at $600 per Kilowatt hour (kWh). In tackling this problem, Elon Musk illustrates the difference between reasoning by analogy vs. reasoning by first principles. The normal way to think about battery packs would be to reason by analogy and say – we buy battery packs at this price because that’s what other people are doing.
With a first principles approach, however, you would ask – what do we know for sure is true? Then, reason up from there. So, Musk and team asked – what are batteries made of? (Cobalt, Nickel, Steel can, etc.) and then asked – what is the value of these constituents in the London metal exchange? It turns out that these constituents cost just $80/kWH.

By using a similar first principles approach, Musk realized that rockets were obscenely expensive because they used parts and technology that had been designed in the 1960s. The constituents of a rocket could be bought in a commodity market today for 2% of the typical price. Cue: SpaceX.

It’s computationally easier to reason by analogy and if you tried to reason from first principles all the time, you wouldn’t be able to get through your day. But, when you’re trying to do something new and complicated, that is the way to do it because analogies are not necessarily perfect and they’re relying on things that have already occurred, so, if you’re trying to make something new then it’s not a great way to go. – Elon Musk


Source and thanks to: Wired.com‘s interview with Elon, HT: Vik’s blog