BizThoughts

Can money buy you happiness? The short answer: YES.

Justin Wolfers, a frequent guest blogger on Freakonomics and an Assistant Professor of Business and Public Policy at The Wharton School of the University of Pennsylvania, recently wrote a series of posts on The Economics of Happiness:

UPDATED 5/1/2008: I've added parts 5 and 6 to the list.

1. Reassessing the Easterlin Paradox
2. Are Rich Countries Happier than Poor Countries?
3. Historical Evidence
4. Are Rich People Happier than Poor People?
5. Will Raising the Incomes of All Raise the Happiness of All?
6. Delving Into Subjective Well-Being

In these posts, he provides statistical evidence that:

• Rich people are happier than poor people.
• Richer countries are happier than poorer countries.
• As countries get richer, they tend to get happier.

In this CNBC video with Wolfers and Betsey Stevenson (also an Assistant Professor of Business and Public Policy at Wharton), Wolfers explains that the survey questions included, "Did you smile a lot yesterday?" and "Did you laugh a lot, yesterday?" - which can offer more absolute measures of happiness than simply asking, "How happy are you?"

As it turns out, richer people smile and laugh more often than poorer people.

This all comes in stark contrast to the Easterlin Paradox, which postulates that relative income - the amount you make compared with others around you - is more important than absolute income. In the CNBC video, Stevenson states that relative income is still important, but it may not be as important as the Easterlin Paradox suggests.

In the NY Times article, "Maybe Money Does Buy Happiness After All", Richard Easterlin (a Professor of Economics at University of Southern California) agrees that people in richer countries are more satisfied, but isn't sure that their wealth is causing their satisfaction—their survey answers may be reflecting cultural differences and offering skewed data.

Still, the data Wolfers and Stevenson have amassed is pretty compelling. They combed through reams and reams of post-war surveys and research to come up with their conclusions. Take this chart from the 2006 General Social Survey, for instance. The survey asked: "Taken all together, how would you say things are these days?"

Looks like money is sure buying happiness for the rich here.

Why are you still there? You know you want to quit, yet you're still hanging around. Is it for the money? The free snacks? Or perhaps you're a glutton for punishment.

Within the technology & Internet industries, it's become normal to jump around a bit. So when do you know it's time to jump? If most of this list applies to you… then jump!

1. Most of your coworkers don't wash their hands after using the bathroom (especially after a number 2)
2. The company cafeteria is skimping so much that you suddenly notice all the cats in the neighborhood are gone
3. Your company is doing so poorly that you're embarrassed to tell people where you work
4. You fantasize about a meteor striking your company headquarters, just so they'd have to shut down and give you a few days off
5. There's a personal stash of alcohol/pot/cocaine in your desk for those extra-hard days
6. You bring novels or magazines with you into the bathroom and read read read
7. You're so bored that you spend most of your day playing games on Facebook or watching free South Park episodes
8. You only attend the meetings with free food; every other meeting, you skip with the excuse, "I'm too busy"
9. You've gotten really, really good at foosball
10. You start posting Dilbert cartoons all over your cube

It's time to quit! You know it!

My brain hurts. There's too much to keep track of on the Internet. Blogs, ezines, newsletters, forums, news sites, mailing lists, social networks. It's a wonder my head doesn't explode on a daily basis. What's a busy web geek to do?

Here are ten ways I can think of to deal with information overload:

1. Read only the top stories highlighted on Techmeme.
2. Put all the blogs and news sites you want to read on Google Reader and ignore everything else.
3. Rely on your geekiest friend and get all the top news from him or her.
4. Read a news aggregation service like Yahoo! News or Google News.
5. Read only News.com and miss out on all the hype on new companies that may change the world.
6. Read only TechCrunch and hear about hyped-up companies that may not exist a few years from now.
7. Read only The Onion and attain a higher understanding of life and the world.
8. Read only this blog and attain utter nirvana and pure bliss (tee hee).
9. Move to Alaska and learn how to ice-fish.
10. Shut off your computer and go for a run outside, you lazy bastard.

How do you deal with information overload?

It's known as the Curse of Knowledge. Once you know something really well, it's hard to imagine not knowing it. That's why many experts have a hard time explaining their field to someone outside their field.

This curse also effects the ability to be creative and innovative. It's quite a paradox. The more you know about the box, the less you're able to think outside of it. Sucks, huh?

I was just going through some old clipped news articles, when I came across this one from Janet Rae-Dupree of the New York Times: "Innovative Minds Don't Think Alike" (from which I stole for this blog post title). And it got me thinking about innovation again.

In the book "Made to Stick" by Chip & Dan Heath, they wrote about some research Stanford PhD candidate Elizabeth Newton did for her dissertation in 1990. In it, she asked participants to tap the rhythm of well-known songs like "Happy Birthday to You," then asked them to predict how often a listener could identify the song. They predicted around 50%. But in reality, listeners only identified the songs 2.5% of the time. The tappers were incredulous. "How could you be so stupid?" some said.

In a similar study on email communication, researchers from New York University, University of Chicago, and University of Illinois at Urbana-Champaign found that readers of emails don't pick up on subtle nuances (like sarcasm) as much as the writers believe they will. They even consider it a kind of an egotistical behavior. Sounds like common sense when you hear it stated this way, right? But I'm sure you've had a few cases where a friend or colleague misunderstood your sarcastic remarks as an attack of some kind. That's sure happened to me.

Even Fred Wilson, Nick Denton, and Clay Shirky touched on this issue when they debated the optimal age to be an entrepreneur. Shirky weighed in with the conclusion that inexperienced minds are better able to make connections and think creatively that more knowledgeable minds.

These are examples of the curse of knowledge. It doesn't just effect experts; it effects us all. When we form mental maps of the things we know, then assume that other people have a similar mental map, it can lead to misunderstandings and confusion. (Oops, did I just assume you knew the term mental map? My bad.)

Fortunately, there's a way around this.

In the book "The Innovation Killer", author Cynthia Barton Rabe suggests bringing in someone new. A fresh eye and a fresh perspective. One anecdote she shares is about Eveready and their flashlight business, which was foundering in the mid-1980s. One of Rabe's colleagues came to the team with no flashlight experience, but plenty of consumer packaging and marketing experience. So she decided to revamp the flashlight product line (with the inclusion of bright colors, like pink, baby blue, and light green) and revise its distribution strategy (by selling them through grocery store chains). Until then, flashlights were dull colored, sold in hardware stores, and aimed solely at men. This new move, which would have never occurred to the old team, brought huge success and new customers, especially women.

Another way is to train your mind to think creatively. Fortunately, there are a number of brainstorming techniques you can use to push your mind toward innovative thinking. First, it involves realizing that you need to think creatively and opening your mind to all new ideas, no matter how "stupid" they may seem. If your mind is truly open, then no new idea is stupid, you know. Then it involves redefining the problem, looking at topics outside of the subject matter (lateral thinking), and changing your perspective.

I hope this helps the next time you're struck with the Curse of Knowledge. Good luck!

I don't envy the decision he has to make. Jerry Yang, I mean.

I've been closely following the news of Microsoft's (MSFT) bid for Yahoo! (YHOO), since I'm an ex-Yahoo! and still have a lot of friends & colleagues there. While endlessly discussing and analyzing this news, I began to wonder what must be going through Jerry's mind.

Let's take a step into Jerry's shoes. Back in college, all the geeks were in a tizzy over Mosaic and this thing called the World Wide Web. So, along with your buddy David Filo, you create a master index of sorts called "Jerry's Guide to the World Wide Web". Suddenly, the Web opens its academic doors to allow in commerce and corporations and capitalism, oh my. You decide to incorporate—and the next thing you know, you're surfing on a peak of $475/share and are one of the world's richest people. Your momma sure proud of you now!

Then the wave crashes. Your surfboard topples over. You struggle to stay afloat while younger surfers enter the fray, doing much better than you are. So you bring in an experienced lifeguard. Never mind that he's never surfed before; you figure that since he knows how to swim, he'll be able get you back onto the surfboard.

Okay, enough with the analogies. Back into Jerry's shoes. Present day. The company you built and raised from scratch is hurting a bit. You're still making tons of cash, but the media and the stock market are hammering you hard. And worse—some of your top talent is leaving because of that.

Then a major competitor comes knocking at your door again (they've done this before). Except this time, they make their bid public, hoping to win the support of your shareholders. Reports from the media (like MarketWatch and Forbes) warn that such an acquisition would not be easy on either company. Your employees, advertisers, and partners are all concerned and shouting, "What's going to happen to me?"

So you grab your favorite bottle of scotch, sit by the shore, and wonder:

• "If I sell my company to Microsoft, will they lay off half of my friends & colleagues and put my company through painful months of transitions, while combining our collective talents, expertise, and financial resources to put us back on top of the market again?"
• "Or, if I don't sell my company, will my shareholders revolt as my stock price drops amidst my already planned lay offs and talent drain, while remaining tenacious and using our remaining resources & leadership to put us back on top of the market again?"

Not an enviable position to be in. There are pros and cons to every side of this story. Every constituent has his/her own concerns. Whatever decision he makes, he's going to hurt somebody.

Personally, I think Jerry wants to say "No" to Microsoft. I think he still has hope for Yahoo!. He's seen it through the dot-bomb and I think he's willing to see it through this economic downturn as well. He's a true Yahoo!, with purple blood and a bang (!) in his heart.

But he's a smart enough guy to know he's got to think this through and do what's best for his company, his shareholders, and his customers. I think he'll ultimately be realistic about his decision, whatever it will be.

I don't envy him. And Jerry, I hope you're drinking some good scotch there.

There are many schools of thought on employee motivation. Here is the philosophy I've used while managing Internet software developers. The underlying principle is simple and has served me well.

Employee's Goals

This graph represents your employee's own personal goals. These are individual motivations which can be ideas like, "to get a promotion," "to be a manager," or even "to save enough to buy a house." They don't necessarily have to do with their day-to-day work either; they should be the deeply personal motivations which drive that person.

Company's Goals

This graph represents your company's goals. These can be company-wide or specific to your particular team. The key here is that an employee's personal goals will rarely map directly with a company's goals (you're probably thinking, "no duh").

The Convergence of Goals

At some point, there will be an overlapping of an employee's personal goals and the company's or team's goals. If you can accurately identify both sets of goals, those that converge in the middle will be the strongest motivators for your employee within your business.

If your employee is working on a task that is outside his/her personal goals, but within the company's/team's goals, your employee will most probably still do it, but may not be strongly motivated, depending on how far it is from his/her personal goals. Conversely, if the task is outside the company's goals, but within his/her personal goals, your employee will be strongly motivated, but the task won't be of any use to your company.

It is also important to note that not every task can be mapped directly to an employee's personal goals. Every job has its share of grunt work. But as long as a reasonable number of an employee's tasks fall within the convergence of goals, then you'll have a well-motivated employee.

An Example

Mary and Joseph are developers for Acme Software. David is their manager. Acme Software creates desktop and web widgets.

In his talks with Mary, David learns that her personal goals are to become a manager and one day own her own company. She's already a brilliant developer who's stronger in building web widgets than desktop widgets, but has lofty ambitions that span outside of Acme Software. Mary hasn't yet held any managerial positions, but exhibits some leadership capabilities.

With Joseph, David learns that his personal goals are to purchase a bigger house for his growing family, get a promotion, and earn a name for himself in the open source community, where he already regularly contributes. He's a strong desktop developer, but wants to grow his skills in web software. Joseph has no interest in management and the politics that come with it.

Joseph's team is tasked with building a stock ticker widget for the desktop and the web. He needs a team lead, a senior developer for the desktop version, a senior developer for the web version, and junior developers for each.

Knowing what David knows, he gives Mary the assignment of being the team lead and Joseph the assignment of senior developer for the desktop version. This matches both of their personal goals and their team's & company's goals, with a few compromises. The rest of his team fills the other positions.

For Mary, this is a stretch role. David will have to mentor her closely as he tests her leadership and managerial aptitude. Her strong technical skills help her earn the respect of her team, though she will need help earning the respect of the product, sales, design, and QA teams. This experience will be very valuable for her, especially if she's to own her own business one day. David explains this and Mary enthusiastically takes the assignment.

For Joseph, this is a stepping stone towards a promotion and internal recognition. As the senior developer in an area with which he is competent, desktop development, he will define the technical architecture while working closely with the senior developer for the web version. These discussions will familiarize him with web development and prepare him for a future role coding a web widget. David explains this and Joseph enthusiastically takes the assignment.

By understanding the convergence of his employees' personal goals and the goals of his company & team, David has been able to staff a highly motivated team. Not all real life cases will be this easy, of course, but these underlying principles can be a useful guide for any manager.

Does your business operate internationally? Do you have teams and vendors in other countries? Does your work take you all around the globe?

If so, then hopefully you've heard of the GLOBE Study already. If not, here's a quick primer.

The GLOBE (Global Leadership and Organizational Behavior Effectiveness) Study is basically an analysis of the cultural, societal, organizational, and leadership differences between 62 different societies around the world. Conducted by the Wharton Business School of the University of Pennsylvania, its team of 170 researchers are aiming:

To determine the extent to which the practices and values of business leadership are universal (i.e., are similar globally), and the extent to which they are specific to just a few societies.

The completed study is released as a thick 848 page hardcover book called Culture, Leadership, and Organizations: The GLOBE Study of 62 Societies and sells for $130. It's a hefty book at a hefty price, but it's generally regarded as one of those "must-have" books for corporate executives in international businesses. (Thank goodness for expense accounts, huh?)

If you're familiar with the personality tests such as Myers-Briggs and Keirsey, this study is similar—except on acid. The GLOBE Study breaks down the 62 societies into:

• 9 Cultural Dimensions: performance orientation, uncertainty avoidance, humane orientation, institutional collectivism, in-group collectivism, assertiveness, gender egalitarianism, future orientation, and power distance.
• 6 Culturally-endorsed Leadership Theory Dimensions: charismatic/value based, team oriented, self-protective, participative, humane oriented, and autonomous.
• 21 Primary Leadership Dimensions: administratively competent, autocratic, autonomous, charismatic/visionary, charismatic/inspirational, charismatic/self-sacrificial, conflict inducer, decisive, diplomatic, face saver, humane orientation, integrity, malevolent, modesty, non-participative, performance oriented, procedural, self-centered, status consciousness, team collaborative, and team integrator.

A great free guide on how to read and understand the GLOBE Study is provided by Grovewell LLC. Their founder, Cornelius Grove, even provides this list of nine highlights:

1. Thirty-five personal attributes of leaders are viewed in some societies as contributing to good leadership, and in other societies as inhibiting good leadership. Among the 35 are "cunning," "provocateur," and "sensitive."
2. Charismatic leadership is often said by businesspeople to be highly effective. The GLOBE research confirms that, worldwide, "Charismatic/Value-Based" leadership is indeed effective; it also specifies the attributes of such leadership.
3. The United States emerges as the only culture in which participative leadership has a positive influence on employee performance.
4. Most managers around the world wish that their companies and supervisors would focus more heavily on high performance than actually is the case.
5. "Team Oriented" leadership is seen by business people in all cultures as moderately or highly desirable and as contributing to good leadership.
6. Managers in the Middle East were less likely than managers anywhere else to view leadership that is "Charismatic/Value-Based," "Team Oriented," and "Participative" as substantially contributing to good leadership. On average, they viewed these three characteristics as having only a mildly positive effect.
7. Concern for gender egalitarianism is positively associated with good leadership in the great majority of societies; this finding is notable because fully three-quarters of the 17,300 respondents worldwide were male.
8. "In-Group Collectivism" is the degree to which people express pride, loyalty, and cohesiveness in their organizations. Contrary to the individualistic ethic of the U.S., American managers value (desire) In-Group Collectivism to the same extent as managers in Russia, Spain, Zambia, Turkey, and Thailand.
9. Overall, the GLOBE findings suggest that leaders are seen as the embodiment of an ideal state of affairs, and thus as the society's instruments for change.

Trying to sell your ideas within a corporation isn't always easy. You have to contend with politics, egos, bureaucracy, and other assorted barriers.

With that in mind, I put together the following information a couple of years ago for my team. Some of it is influenced by Seth Godin's book Free Prize Inside, which lists lots of great idea promotion techniques.

Introduction

• This is not about how to come up with great ideas
• This is about how to promote your ideas
• Your job is to come up with great, viable, & successful ideas

Ideas Are Easy

• There are a million great ideas out there
• There are a million bad ideas out there too
• Lots of websites give you free ideas almost every day
• People at your company may be bursting with ideas already (maybe)
• Your company's problem isn't generating ideas, it's choosing which ones to implement
• Your problem isn't how to sell your idea, it's getting your idea through the clutter of other ideas

Be an Idea Champion

Understand People & Politics

• Understand the other person's point of view of life, frame of mind
  • Consider the person's background, culture, social standing, economic status, religion, family, ethnicity, etc.
  • Consider personality typing tools (Jung, Myers-Briggs, Keirsey)
  • Be aware of non-verbal communication & cues
• Understand the other person's goals & motivations
  • Be aware of what the pesson wants from life, from you, or from this particular deal. What matters to this person? Money, fame, reputation, a promotion, etc?
• Find out who the true influencers are; these aren't always the top executives (though usually they are); sometimes, it can also be a project manager or a low-level product manager, or even an administrative assistant
  • E.g. The executives of a major company wanted innovation. Unfortunately, below them were some senior managers who were afraid of upsetting the status quo and hurting their stock options because they were already making a fortune on them. They wouldn't let any new ideas through if they hurt the status quo. These senior managers were the true influencers, not the top executives. A way to approach them is to understand their motivations and show that, by not embracing this idea, the status quo would be broken because competitors would do it better.

Convince Others That Your Idea is Great

• Not just good, but great
• Do some research and gather statistics to back-up the potential success of your idea
• Show them your vision, describe the future where your idea is a reality
• Tell them the emotional impact of your idea, get them energized about it
• The goal is not to prove beyond a doubt that your idea will work; that may be impossible to prove. The goal is to go through the necessary steps for your colleagues to believe that your idea will work
• Understand what motivates people (which ties into politics)
  • Some want a cool challenge
  • Some like the geek factor of new technology
  • Some like being the first-to-market
  • Some want to push the stock price up
  • Some like making their own jobs more secure
  • Some want to make the world a better place
  • Some want public recognition

Convince Others That You Can Make This Happen

• Build your reputation as a leader, an Idea Champion
• Start small (plan a small event, like a team lunch)
• Increase your responsibilities (take on increasingly more difficult tasks)
• Take ownership of difficult, complex problems (own them from identification to resolution)
• Be proactive about problem-solving (if you notice a problem happening frequently that no one else has identified yet, step up to find a solution)
• Consider volunteering to champion someone else's idea (to help prove yourself and gain a political ally)
• Consider learning about project management, marketing, engineering lifecycles, etc; (give yourself the right skills to see your idea through)

Good luck, champ!