Musings from an Employed “Emerging Adult”

There used to be 4 life stages. Now there are 6… at least according to New York Times columnist, David Brooks. In 2007, during my junior year of college, the article, The Odyssey Years, came out.

The article’s theory on life stages struck me as interesting at the time, but now, five years later, it is starting to fully make sense; I’m now immersed in the workforce and have spent a few years navigating post-college life and watching my peers do the same.

In the article, Brooks asserts that where the human life span used to be comprised of four segments: childhood, adolescence, adulthood, and old age, the average Western human now goes through 6 stages of life: childhood adolescence, odyssey, adulthood, late adulthood, and old age. The third life stage he mentions, Odyssey, is gradually becoming more widely recognized as a standard rite of passage. Also dubbed, “Emerging Adulthood,”, it generally begins with entrance to college (or the age 18) and ends in the early to mid-thirties.

From what I’ve read, and personally observed as a 26-year-old passing through Odyssey, there seems to be 4 major things that define this life stage:

-Delayed marriage and child bearing

-Transience

-Financial Instability

-Deferred commitment to a career or organization

While the effects this new phenomenon is having on society have been acutely observed by many social commentators, what has not be so thoroughly explored are the effects this life stage is having and will have on organizations. One obvious implication is that people my age entering the workforce generally have no intention of committing more than several years to their first post college employers.

And, who can blame them?

Most of my peers can’t conceive of committing to a partner or city residence any time soon, so how could they possibly dig their feet in and limit themselves to climb only one organizational ladder?

So, the challenge then falls to top executives and business owners as to how to view these post-adolescent, pre-adult 20-somethings drifting through their organizations.How do organizations capitalize on young professionals today so that they glean the most value from emerging adults while not ending up behind from lost time and money in the ever revolving door of young people looking for a different adventure or opportunity? And, how do they plan for what their organizations will look like in 10-15 years when their aren’t 30- 40 year old employees with 5 plus years of in house experience under their belt to step into middle management positions?

Despite these obstacles, in some ways, Emerging Adulthood might be happening at a most optimal time, as it is evolving in tandem with a crippled economy full of businesses that cannot offer lucrative salaries and job security. Perhaps, there is a clever way for both parties to get what they want without either having to sacrifice what they are not poised to offer.

The following are some insights into the psyche of Emerging Adults and ideas for how to view and leverage this population.

1. Tap Emerging Adults for contributions that will last beyond their shelf life at your company. Allow young professionals to openly participate in brainstorming sessions and encourage them to share ideas they may have for the company. You won’t lose anything and you may walk away with some viable suggestions. Plus, Millennials, who currently make up the Odyssey population, LOVE feeling like they are being valued for their intellectual capital.

2. Use the Odyssey population at your workplace to share their social media knowledge and skills up the organization. Higher level employees may have missed on boarding with this trend, but most of your 20-something employees will be fluent on Twitter, LinkedIn, Facebook, etc., and will be able to inform others and suggest how it could be used to benefit your company.

3. View your entry level employees as future good will ambassadors and network connections for your company. Often, Emerging Adults feel bad leaving a company that has invested time and money into them. So if they have had a good experience, they will talk highly of your company and be happy to connect you to one or several of the other organizations they will likely cycle through in the future.

In short, the best way to manage this new kind of employee is to value what they know; it’s likely different than what their bosses know and could pay off in many ways down the line. Invest your care and concern in them while they’re with you because likely, they’ll go on to do bigger and bigger things,so  pay if forward!

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Three Things New Leaders Must Remember

It’s nearly spring in the U.S., and the nation’s professional baseball teams are already busy preparing for the season to start. It’s a time of relaxed joy and performance pressure for them – an interesting paradox. I always wonder which new player will ascend to a leadership role on the team.

There’s a similar paradox in business. Promotion from a functional role to a leadership role is viewed as an achievement and a departure to strange unknown world.

Why don’t all new, eager leaders succeed? A quick Google search for “reasons managers fail” returned 54,800,000 links to articles, books, videos, blogs, slide shows, podcasts, and so on.

However, the advice is all over the map, ranging from prescriptive (e.g., “meet with your people regularly”) to esoteric (e.g., “embody your vision”), and it is often contradictory, confusing, or just plain unhelpful. I can imagine the anxiety of a new leader looking for advice only to find blog after blog and article after article listing the five, eight, ten, or even TWENTY reasons managers fail.

Time out! Something seems very wrong viewing the world of leadership in this way. Imagine if we sent our kids to little league baseball practice having told them all the reasons preventing young baseball players from making it in the major leagues. That would be cruel, counterproductive, and a huge waste of energy, right?

Let’s focus on the positive and then a few basics. First, keep in mind why you as a new leader would read this blog – because you’re a new leader! You got the job! Clearly, you’re already quite good at what you do, and others have recognized it.  So, focus on the joyful achievement of this opportunity. Yes, it will be exhausting, and it can also be personally rewarding.

Now, a few basics you must remember before you start searching Google for your plan:

1. Your Voice Is Louder

When I became president of a small business many years ago, I noticed that each time the team got together to celebrate someone’s birthday, there would be NO singing. It was weird, but I thought it was how the culture evolved. After about a year, I asked our office manager if we were going to sing at the next party. “No!” she said. “You said you don’t like it when people sing to you.” She had implemented a no-singing rule for our office celebrations and had been reminding people all along that, “Paul doesn’t like it when we sing.” Wow! I didn’t even remember saying that, and I couldn’t believe she took it so seriously!

When you move from a functional role to a leadership role, you will get more attention. Mostly, that’s good. You want attention so people know to look to you for direction. However, because of the concept of power dynamics, you’re role as leader means what you say has much more impact than you realize. Just remember, your suggestion will sound like a directive, and one off-hand comment can become policy.  Be aware that what you say has significant impact.

2. You’re Bigger than Yourself

Prior to taking the helm of a non-profit organization, I had been harboring some resentment about my salary. However, when I took the top role, I became aware of the financial reality of the organization – and the salaries of everyone in the company. What a wake up call that was! I could no longer justify my poor attitude, and I had to change. I went to the Trustees and asked them to freeze my salary (and give raises to others).  Although I led the organization, I wasn’t the highest paid person – and none of the employees knew about it.

As a manager, you will begin to feel greater responsibility for the emotional and financial well-being of others. This comes from greater social awareness. You will begin to realize that you are no longer “one of the guys/gals.” You are not only working for your own success, but you’re working for the success of the people around you. You have the opportunity and responsibility as a new leader to create an environment where people will thrive.

3. You’re Still You

When I was much younger, a co-worker was promoted to a management role. The Monday after he was promoted, he came to work with a new suit, a new haircut, new glasses, and a new leather briefcase! He walked right past all of us, giving only a nod as he went to his new office.

Don’t be that person. Seriously. Trading in your personality for your imagined leadership persona will come across as inauthentic. It will create a huge rift in your relationships, and it will send a signal that you are leaving them behind. Instead, take up your authority without giving up your identity. Focus on building and maintaining relationships (especially the relationships you’ve already got). You’ll be happier, and you will find yourself with more resources at your disposal to get things done.

If you keep these three things in mind in the spring, you will find yourself leading a great team that’s poised for the playoffs in October!

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The Leadership Paradox: Show Your Strength by Leaning on Your Team

I was working with a senior leader of a technology company last week and he told me about a recent interaction he had with his boss during an executive team meeting. The leader I coach is pretty savvy. He’s thoughtful about how he leads, surrounding himself with people who fill in his knowledge, skills and temperament gaps so that as an entity, his team is robust and as near to complete as he can envision.

Likewise, his team describes him as someone who “wouldn’t ask us to do anything he wouldn’t do or hasn’t done himself. With the exception of something he doesn’t know how to do—then he either asks us to teach him or lets us run with it.” The story he told me about his own boss really got under his skin. Essentially, unlike his own practice of forming a team of complementary abilities, his boss flies solo. He ran a meeting that was intended to be inspirational, but it appears he lacks the knack for the emotional side of leadership.

Rather than soliciting support, input or expertise from those on his team who do have that knack, he simply forged ahead and failed to connect even a little bit with his team—his talk was information-heavy, connection vapid. This left my coachee scratching his head, and feeling let down—even somewhat de-motivated—by his boss.

While it may seem obvious, it never ceases to astound just how many senior leaders (men and women, by the way—this is not gendered at the executive level) don’t ask for help. And this covers the gamut—they don’t ask for input into communications which can result in a big miss with the intended audience. They fail to create conditions where their team feels comfortable enough to give them real feedback, so they live in a false reality or a bubble we refer to as CEO Disease. And finally, these leaders blithely carry on repeating old patterns, never asking for help with their own development.

While at first blush it may seem that asking for help equates to admitting to a weakness, it is overwhelmingly experienced by others as a demonstration of confidence to solicit input, advice and guidance—at any level of seniority. Further, lifelong learners are proven to be the most adaptable and successful leaders over time, changing and growing as the world changes around them.

While not wanting to be exposed may be one reason leaders stop reaching out, there are many other reasons why the social life of a leader becomes one way communication, including chronic stress from tremendous responsibility which, over time, takes a toll and causes the brain to literally become myopic. This myopia is a protective response to overstimulation—but it is a false security, as the input and support from others is paradoxically exactly what the leader needs to counter the effects of the wear and tear—and isolation—of leading.

Advice to leaders: Lean into your people—it’s not only the best leadership behavior to model, it is the best way for you to ensure you won’t go stale, trying to apply old solutions and thinking to new challenges. People bring diversity of thought, use it as the life blood for the future that is guaranteed to be more than any single mind can navigate with elegance and the full range of possibilities.

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Komen Crisis: How to Kill a Movement

When I stood in the radiologist office and heard the news of my breast cancer, I wasn’t concerned about anyone else’s potential right to life. I was concerned about my own, actual, life. If I didn’t have health insurance at the time I wouldn’t have had that screening. I was young and without risk factors. Without early detection, I would be dead today—that is not hyperbole, it’s a fact.

Susan G. Komen for the Cure® has spent years and millions of dollars building a unified and powerful social movement, a “Komen Community,” fighting against breast cancer. The Komen Foundation itself is a powerful force for positive change. Literally, millions of women and men walk, run, raise and give money in a pink branded, “Race for the Cure.”

They do this because they want to find a cure for breast cancer, because they have a personal relationship with the disease, and because they want to be part of that pink-clad cadre of people actively doing “the right thing.” It is a movement built on the values of compassion—“we care,” inclusivity—“everyone can help and receive” and commonality—“breast cancer doesn’t discriminate.”

When you attend a rally, race or banquet, you see faces of every color and memorials of women who have the disease, or who died, being honored by their family and friends. It is an emotional afternoon, evening or three-day walk with these women never far from the minds of the participants. I don’t know about in the executive suite or boardroom, but on the streets, Komen stands for the 99%, not the 1%. Here in lies the betrayal and, hence, the outrage about recent decisions made by the CEO and her team.

Alignment to the Mission? No.

Komen’s promise is to provide access to preventive breast care to women who need it the most, and to work tirelessly to “end breast cancer forever.”  On January 31, 2012, Komen announced its decision to change its funding guidelines for allocation of funds generated by the community. As a result, no further funding would be given to:

1) Planned Parenthood programs to provide subsidized access to mammograms for poor women;

2) Institutions that do research on stem cells.

All hell broke loose with the news and the organization found itself on its proverbial back high heel. Denying poor women access to clinical breast exams and mammograms at Planned Parenthood was widely interpreted as a strategic move pushed by politically conservative people—most notably recently-hired Senior Vice President for Public Policy, Karen Handel– a defeated Republican candidate for Governor in Georgia who set her sights on punishing an old enemy in the anti-abortion movement. A second, related decision was also announced, albeit more quietly, to not fund stem cell research. The impact of this new policy is to cut off a promising stream of exploratory research that may actually find the cure we are all racing for.

Planned Parenthood and stem cell research are red flag issues for the political right, anyone with a television knows this.

When a leader of an organization makes decisions directly out of step with the organization’s espoused values, that they loudly and consistently promote, you have trouble—big trouble in this case. The irony here is that the pink-clad Komen Krusaders who are mad, are mad because they have been listening to and inspired by Komen: the shared values and the pink community. Other organizations would kill for this kind of engagement and attention. But what did Komen do? They made the two big mistakes so many other leaders of successful companies and organizations have done through the years: the Komen for the Cure leadership took their supporters for granted and are now having trouble admitting they did anything wrong.

Lack of Attunement Breeds Crisis of Confidence

Komen’s supporters are now thrown into disarray by a leadership team that got it wrong—and then wrong again.

  • How can an organization that is all about inclusivity—it is a fund-raising organization after all—decide to exclude a major vehicle for preventive screening services for poor women?
  • How can Komen raise literally millions and millions of dollars for research and then make politically-based decisions about stem cell research, effectively not-funding one of the most promising areas of innovative research?

The Krusaders can understand the need to make discernments based on quality of research or likelihood of finding meaningful contribution to finding a cure, but to say “stem cell” into today’s environment is to wave a red flag at a bull in a bullfight. It’s politics. For a CEO to pretend otherwise is not a reassuring expression of social awareness and to do so with a former gubernatorial candidate, who ran on a platform of getting rid of Planned Parenthood on your staff, and in charge of the decision, stretches the disingenuousness of your surprise at our reaction even farther. Who do you think the Krusaders are? We can read, we do have opinions, and you ask us for our time and money. Remember, the Komen Krusaders volunteer for you, they don’t pull a paycheck from you.

CEO Disease Is Now CEO Dis-ease

Komen is a story of a great organization that, despite having been built on the enthusiasm and concern of literally huhdreds of million dedicated volunteers, allowed a handful of highly compensated executives to make policy that, while defensible and logical in the boardroom, is utterly indefensible and counterproductive in the eyes of millions of others. The CEO Nancy G. Brinker may be suffering from CEO disease—a term Teleos has coined for instances when a CEO thinks she is attuned to the organization but is, in reality, badly out of sync and unaware of that fact.

Often such a CEO surrounds herself with like-minded people who agree with her and shield her from the bigger picture, which includes diverse perspectives. You may jump to a cynical conclusion that she doesn’t care what others think, but from her videos it seems she does, and in our experience CEOs usually do—to a point. So this is likely not a situation of heartless lack of concern, at least by her. She allowed herself to get isolated and insulated—never a good move for a leader.

So, where was everyone else at the top of the organization? Where was her team of executives, and where was the Board of Directors? It is clear not only from the actual decision, but from the next days after the crisis emerged, that they are missing in action. Crisis communications experts can and will debrief how the organization handled the next days.  It has already started.

A Movement Is More than an Organization

This crisis erupted as a result of serious disagreement about “what is the right thing to do” by powerful, emotionally engaged groups (employees, volunteers, the Board, the Executives, grant recipients, etc.) Conflict by definition is emotional. To try and mollify or obfuscate the emotions and complexity of the situation, is a mistake. Movements are powerful because of the shared emotions and beliefs of the people within them. Leadership is judged by the degree of perceived alignment between espoused values and action.

Traditional organizations can often rely on their hierarchy, structure and processes to manage through difficult times (frequently losing the hearts and minds of their employees along the way).

Whether organization or movement, or as with Komen, organization and movement, trouble occurs when the leader or leadership team is out of sync with the values, emotional reality, dreams and pains of the people who do the work—under-attend to the emotional reality of these different, powerful, constituencies at your own risk.

You don’t want to end up with an organization and no movement—that is the situation with many of our struggling, large organizations that are having trouble engaging their employees. Top down simplistic responses to upset—“get back to work, “we will get through this,” “you matter,” “it was a policy decision,” don’t work in today’s world of internet-driven communication, decentralized and disaggregated organizations, and instant news.

Leadership miscues and missteps erode faith in an organization. No faith? Dispirited action. Leadership behavior and decisions do matter, and in today’s world, are increasingly apparent. This begs the need for proactive empathy and transparency, and raises the bar for the need for communication and personal emotional intelligence on the part of leaders.

If you are awake, aware and attuned to your own values first, and then to what is happening with all the groups around you and not just listening to one or two constituencies, you will be able to make decisions you can passionately and authentically explain.

We are hearing more and more often that the rank and file workers, or in this case passionate volunteer, are suspicious of the motives of executive leaders, and feel disengaged at work. Komen is playing with its essential life-fire—its volunteer army—it can’t afford to lose their commitment and loyalty. The fact that they are huge, socially oriented mission-driven organization/movement makes the potential risk here even more stark, but the message is true for all organizations.

People want to believe in the goodness of their leaders, in the alignment of a leader’s values and the work of the organization, and they want their feelings to count—or they will walk away.

From Apolitical to Now Political

To act surprised that people might construe these recent announcements as having a political element, is to insult the very women who are the heart and soul of the organization. Komen leadership’s stated surprise at the response is particularly dissonant in this situation because Komen is an organization built on emotion, relationship, and caring. Nancy G. Brinker, the founder and CEO of the foundation, assures us in her straight talk video that this decision was not in response to political pressure. She herself then appears to have hurt feelings that anyone could question Komen. This makes me wonder if she is out of touch.

Her appeal to logic—that these decisions were not political, but rather a result of a standard leadership review of policy—misses the emotional point entirely and feels disingenuous. Any decision that cuts off access to care for poor women will be experienced as heartless by a volunteer army built on the basis of compassion. Anticipating and understanding the emotional impact of a decision on your followers is essential.

So What’s Next?

First, if I were coaching Nancy G. Brinker, I would suggest she consider a forthright explanation of what happened with this decision. Tell the whole story about how and why she chose to let her team make this policy change. Empathize with the Krusaders—find out why they got upset. Don’t blame them for a lingering emotional reaction. Admit that a mistake was made. Assure them that you believe that politics and breast cancer should NEVER mix, and that you will be more careful of this line in the future.

Second, take your team on a retreat and have an open debate about this issue. Work hard to make sure everyone tells you everything they think. Do an after-action review like the military does and figure out what mistakes were made along the way. Then have your team fan out and hold dialogue sessions with the affiliates. Have them listen and learn. Avoid defensiveness. Only then will the organization truly move on. Then, and only then, you may recapture the hearts and minds of your Krusaders. In the meantime, my network and I will send our money to the other local breast cancer organizations. I will be watching to see what you do.

See more blogs by Teleos founder, Fran Johnston.

News Flash: Good Guy Wins!

Beyond the Pink: Wake Up Calls and What I Learned from Cancer

 

 

 

 

 

 

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NBC Story on Teleos’ Medical School Partner: Doctors with Emotional Intelligence Make House Calls

 

Teleos has had the great privilege of supporting the emergence of a new medical education model for up-and-coming physicians. This new program, SELECT, is a collaboration between University of South Frorida College of Medicine and Lehigh Valley Health Network, in PA to create physician leaders and change agents into the world of US healthcare.

Teleos has brought our leadership, curriculum design and emotional intelligence expertise to the core of the program, beginning with Behavioral Event Interviews that assess emotional intelligence in applicants, to the key EI experiential immersion sessions for each cohort, and the building lock on development of EI skills, such as empathy, social awareness, collaboration, coaching. Read more…

Excerpted from NBC:

“House calls are an antiquated practice for doctors, but for medical students at the University of South Florida they are a critical part of the curriculum.

“I get to hear things I would not be able to crunch in to a 5-10 minute visit in a doctor’s office,” says first year medical student Chris Pothering.

Pothering is in the “Select” Program at the University of South Florida.

Not only did he have to pass the MCAT to get in, he had to pass an emotional intelligence test commonly taken by CEO candidates.

“We want to make sure that these students exhibit not only the qualities that will make them outstanding physicians, outstanding clinicians, but also leaders,” explains Dr. Alicia Monroe, Vice Dean of Educational Affairs at USF’s College of Medicine.

The heart of the program is making sure doctors have a heart.

There’s a strong emphasis on teaching the students to see things from a patient’s perspective, to get to know them and learn how their job, family and social life affect the decisions they make about their health.

That’s why Pothering is taking the time to get to know patient Emma Donahue in her home environment.”

Watch the NBC video

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Keeping Your Commitments to Yourself

Angela Scalpello is the Senior Vice President of Human Resources at PR Newswire in New York City.

A number of years ago, a professor for whom I was doing research said to me, “You are the most responsible and dependable person I know.” At the time I didn’t realize that wasn’t how most people were because it had been drilled into me as a child – you keep your word, you do what you say you will. Now, many years later, I like to think that my friends and family and colleagues would agree with my professor’s evaluation of me.

However, truthfully the one person to whom I don’t keep my commitments is myself. I allow the needs and wants of others to overshadow, if not thwart, my self-care.

So as 2012 began, I set the goal of exercising every day for 30 days straight. I called it my exercise “streak.”

Today is Day #33. For me this has been more about keeping my commitment to myself than it has been about exercising. It’s been about making my intention clear and then not backing down because of the needs of others. It hasn’t been about excluding concern about, or responsibility to, others. However, it has been about proving to myself that I can be there for me in the same way I’m there for others.

For many women this is one of the hardest things to do. But hard doesn’t mean impossible.

The challenge remains although my next “streak” is about exercising my mind. My commitment is to read at least one substantive article a week for the next four weeks about a subject or in a field that is TOTALLY outside my usual realm of interests. Again, it will be about the “streak” itself but, it will also be about honoring a promise to myself.

See what commitments you can make, and keep, to yourself. I’d love to hear about them and cheer you on.


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Teleos Client Spotlight: Creative Commons on a Shared Culture

We have had the incredible pleasure of working closely with the Board of Directors and leadership at Creative Commons, an organization with the following mission:

Our vision is nothing less than realizing the full potential of the Internet — universal access to research and education, full participation in culture — to drive a new era of development, growth, and productivity.

Teleos is committed to the mission and vision of Creative Commons and we would like to invite you to get connected and share your best ideas through Creative Commons licensing options. For a brief overview of Creative Commons, check out their new video.

From Creative Commons website:

“Our 2008 fundraising campaign, Creative Commons has released “A Shared Culture,” a short video by renowned filmmaker Jesse Dylan. Known for helming a variety of films, music videos, and the Emmy Award-winning “Yes We Can” Barack Obama campaign video collaboration with rapper will.i.am, Dylan created “A Shared Culture” to help spread the word about the Creative Commons mission.

In the video, some of the leading thinkers behind Creative Commons describe how the organization is helping “save the world from failed sharing” through free tools that enable creators to easily make their work available to the public for legal sharing and remix. Dylan puts the Creative Commons system into action by punctuating the interview footage with dozens of photos that have been offered to the public for use under CC licenses. Similarly, he used two CC-licensed instrumental pieces by Nine Inch Nails as the video’s soundtrack music. These tracks, “17 Ghosts II” and “21 Ghosts III,” come from the Nine Inch Nails album Ghosts I-IV, which was released earlier this year under a Creative Commons BY-NC-SA license.”

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Come See Annie McKee Speak at the 2012 HRPS May Event in NYC

 

 

 

 

 

Click below for full brochure with details of this exciting conference.

HRPS_GC2012_Program

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Positivity: If this 3 year old can do it, what about you?

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Happiness Matters. Got Some?

You know things are changing when the cover topic for Harvard Business Review is Happiness at Work. What? Those of us working in leadership with a focus on emotional intelligence, resonance and neuropsychology research have long seen conclusive links. Performance, loyalty to an organization, discretionary effort—it’s all linked to a person’s happiness—both at work and in life. That’s right: Happiness matters, in a very big way.

Teleos is grounded on the firm belief that professional development requires personal growth. Why? Because to become different at work, we must become different. Period. If I want to be less conflict averse at work, I need to become less conflict averse as a person. Research shows that we are who we are. At home. At work. Core behaviors, core skills, core defaults or tendencies are true for us across contexts.

But it begs the question: So what about people who really do act differently at work than home?

Say the person who rules the roost at home, but seems to be deferential to a boss. We all know them: quiet in meetings, agrees with the CEO, doesn’t seem to lose his/her temper at work. But at home, it looks different. That same person talks over a spouse, sets rules and expects them to be followed—no questions asked or watch out! Doesn’t that disprove this core assumption: as at home, as at work?

Actually, no. Sure, we may see someone who is more deferential to a boss than to a spouse, but that’s about power, not capability. The deeper issues calling out for development appear in both places: not letting power determine levels of openness, kindness, listening or participation. And addressing that requires personal development. If done, it will allow for a more authentic, more effective worker who can respond to a boss with respect, and still not defer. And a  person who can listen, or respond, to a spouse or kids with respect, and not expect deference.

And this circles back around to happiness. We are a social species. We are built to be in groups, not solo like polar bears, eagles or jaguars. We are emotional creatures, we are wired to receive data from our environment on an emotional frequency that helps inform and protect us. Therefore, we tend to live and work in groups, and we tend to respond to emotions. Happiness is connected to both of these realities about our species—we are at our best when we are in satisfying emotional relationships with other people. We are at our best when we are happy. At work, and at home.

So, I share with you an excerpt from HBR, this month. If this speaks to you, I invite you to read a piece Annie McKee and I wrote a few months back: Good-Bye Adam Smith; How Empathy and Awareness Just Might Save the Planet.

+++++++++

Money isn’t everything. But for measuring national success, it has long been pretty much the only thing (other than, of course, sports). The specific metric that has prevailed since World War II is the dollar value of a country’s economic output, expressed first as gross national product, later as gross domestic product. This is an improvement over ranking by military victories—the most time-honored gauge. And the era of GNP and GDP has been characterized by a huge global rise in living standards and in wealth.

At the moment, though, GDP is embattled. Economists and national leaders are increasingly talking about measuring a country’s status with other metrics and even with a squishy-seeming concept like “happiness.” A 2009 study on alternatives to GDP, commissioned the year before by French president Nicolas Sarkozy and led by the economists Amartya Sen, Joseph Stiglitz, and Jean-Paul Fitoussi, has become a global wonk sensation. In October 2011 the Organisation for Economic Co-operation and Development (OECD)—a club of the world’s wealthy nations—followed with a “How’s Life?” report on “well-being” in its member countries. Each year since 2007 the private Legatum Institute has published a global Prosperity Index, a sophisticated mix of economic and other indicators. Individual nations are getting into the game, with Prime Minister David Cameron of the UK making the biggest waves by unveiling plans to measure national well-being. There are decades-old challenges to GDP as well, such as the United Nations’ Human Development Index and the Kingdom of Bhutan’s insistence that it is out to maximize not GNP or GDP but GNH—“gross national happiness.”

As everyone in business knows, you manage what you measure. So although the replacing-GDP discussion may seem a little airy, its growing credibility in important circles could give it a real impact on economic policy. And it parallels efforts in some boardrooms to use new metrics to measure overall success. So it’s worth exploring where the movement is coming from and where it might be headed. (For more on how the expansion of performance metrics leads to new management priorities, see “Runaway Capitalism,” by Christopher Meyer and Julia Kirby, HBR January–February 2012.)

 

The story usually begins with Jeremy Bentham, an Englishman who in 1781 outlined a philosophy of utility that assessed the merits of an action according to how much happiness it produced. This was during the Enlightenment, when thinkers sought to replace religion-based rules with rational, scientific guides to decision making and life. Bentham suggested creating a sort of happiness calculus for any action by balancing 12 pains (the pains of the senses, the pains of awkwardness, and so on) and 14 pleasures (the pleasures of amity, the pleasures of wealth).

Although the basic idea of utility took off, Bentham’s approach to it did not. Calculating pleasure and pain in a way that could be compared from person to person was too difficult and messy. Economists, the most enthusiastic adopters of the concept, came to focus instead on the tangible expression of people’s needs and desires: what they were willing to spend money on.

This work reached an apotheosis in the 1930s, with Paul Samuelson’s attempt to explain welfare economics in purely mathematical terms. At about the same time, the economists Simon Kuznets, in the U.S., and Richard Stone, in the UK, were developing the systems of national accounting from which GNP and GDP are derived. They were not really concerned with utility; the main goal was to make it easier for policy makers to manage a national economy through financial crises and wars. But the combination of a straightforward metric, the belief among economists that spending patterns revealed all, and the rise in economists’ clout and prestige was a powerful one. In the 1940s GNP was adopted by the newly formed International Monetary Fund and World Bank as the key indicator of economic growth, and over the years it took on deeper connotations of success and well-being.

For its original purpose—measuring short-term economic fluctuations—GDP is not likely to be supplanted anytime soon. It may even be gaining ground: A major discussion is under way concerning whether the U.S. Federal Reserve and other central banks should in times of crisis focus not on inflation but on GDP growth.

When one moves beyond short-term ups and downs, though, things get more complicated. “Our gross national product…counts air pollution and cigarette advertising and ambulances to clear our highways of carnage,” Robert F. Kennedy said on the presidential campaign trail in 1968. “It counts special locks for our doors and the jails for the people who break them. It counts the destruction of the redwood and the loss of our natural wonder in chaotic sprawl.…Yet the gross national product does not allow for the health of our children, the quality of their education, or the joy of their play.” Read full piece.

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Want more?  Read Good-Bye Adam Smith, by Annie McKee and Suzanne Rotondo

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