Saturday, December 19, 2015

Why We Hate Change

Over the 100,000 plus years we and our brains have been evolving. During that time, our minds have grown past our primitive lizard brains and as such have brought us intelligence; which in turn has allowed humans to accomplish some fantastic things. Even with all that time and evolution, we and our brains are still guided by these four most important motivators: avoiding threats, minimizing energy, seeking certainty (reducing risk) and obtaining rewards (increasing pleasure).

It is easy to see why these four conditions motivate us not to change, because change usually involved reducing certainty while simultaneously increasing risk and expending energy, often without any guarantee of obtaining a reward. Essentially, due to in a large part to our primordial past, when we find ourselves confronted with change, either on a personal level or say at your company, all the fears from our lizard brain are triggered.

So, how can we get past those fears and anxieties that our genetic makeup makes it so hard to accept change on a personal and group level? Well, lucky for us, intelligence again offers seven (7) ways to make change more readily acceptable and addressable to our ‘fear factors.’

1.) The first is to normalize resistance to change. We have to explain to ourselves and others in our group, that although our brains are naturally wired to resist change, we can take steps to help our brains make changes more easily. We are NOT slaves to our genetics, instead we, each of us, have the power to fight that resistance if we chose to.

2.) Next, believe it or not our brains are motivated and take action when perceived rewards are greater than perceived threats. Not only do we have to see that the risk-to-reward-ratio is tipped on the reward side, but when we are trying to get others to see so too, we need to Invite everyone affected to explore the benefits of the proposed change, and make sure their perceived fears are mitigated and their possible rewards are maximized.

3.) While change always has a certain amount of uncertainty associated with it, as best is possible, you need to meet yours and others brains’ need for certainly throughout the change process. The best way to do this is to break change down into manageable, small-step milestones, time-lines and action items that can be checked off as they are accomplished. These “small victories” can appreciably reduce the risk associated with any change and add certainty as you measure the progress of change.

4.) Attitude is everything and emotions are contagious. You must first believe in and be enthusiastic about your own change if you ever expect to be able to change the hearts and minds of others. When you lead change, do it with as much passion, excitement and enthusiasm as you can muster.

5.) While some of us are more reward-focused, there are others who actually will only be motivated in knowing that not changing is actually riskier than the change itself. To change these minds, including your own, you will need to clearly explain the risks of NOT changing to those who are more threat-oriented or who appreciate threat avoidance as a priority.

6.) No matter how much we fear a thing, or want to avoid risk and pain, or desire rewards and accolades, our brains are conditioned and wired to celebrate and be rewarded with accomplishment. These rewards have to be both on a psychological and physical level. To institute and secure a long-lasting change, it is imperative to recognize progress and wins as the change is underway and completed, not only on an individual level, but also as a team.

7.) Finally, this might sound a little be pat, but the actual experience of the change is its own reward. These rewards come as we grow through a challenge, bond as a team, discover our unknown strengths and abilities, and begin to see our world in a different light. Yes, change is hard, if it were easy, everyone would do it without trepidation. Sadly, it is those lonely few of us who have the ability to seemingly easily and effortlessly implement change. But even with them, it took practice to make accepting change readily.

Sunday, December 6, 2015

So, What About Europe?

Often we wonder how countries get into bad financial difficulties, and sometimes we need an allegory to explain it.  Hopefully the one below can explain how some of the European countries have gotten into their financial mess?

Helga is the proprietor of a bar.  She realizes that virtually all of her customers are unemployed alcoholics and, as such, can no longer afford to patronize her bar.  To solve this problem she comes up with a new marketing plan that allows her customers to drink now, but pay later.

Helga keeps track of the drinks consumed on a ledger (thereby granting the customers' loans).

Word gets around about Helga's "drink now, pay later" marketing strategy and, as a result, increasing numbers of customers flood into Helga's bar. Soon she has the largest sales volume for any bar in town.

By providing her customers freedom from immediate payment demands Helga gets no resistance when, at regular intervals, she substantially increases her prices for wine and beer - the most consumed beverages.

Consequently, Helga's gross sales volumes and paper profits increase massively.  A young and dynamic vice-president at the local bank recognises that these customer debts constitute valuable future assets and increases Helga's borrowing limit.  He sees no reason for any undue concern, since he has the debts of the unemployed alcoholics as collateral.

He is rewarded with a six figure bonus.

At the bank's corporate headquarters, expert traders figure a way to make huge commissions, and transform these customer loans into DRINKBONDS. These "securities"  are then bundled and traded on international securities markets.

Naive investors don't really understand that the securities being sold to them as "AA Secured Bonds" are really debts of unemployed alcoholics. Nevertheless, the bond prices continuously climb and the securities soon become the hottest-selling items for some of the nation's leading brokerage houses.

The traders all receive a six figure bonus.

One day, even though the bond prices are still climbing, a risk manager at the original local bank decides that the time has come to demand payment on the debts incurred by the drinkers at Helga's bar. He so informs Helga. Helga then demands payment from her alcoholic patrons but, being unemployed alcoholics, they cannot pay back their drinking debts. Since Helga cannot fulfil her loan obligations she is forced into bankruptcy. The bar closes and Helga's 11 employees lose their jobs.

Overnight, DRINKBOND prices drop by 90%. The collapsed bond asset value destroys the bank's liquidity and prevents it from issuing new loans, thus freezing credit and economic activity in the community.

The suppliers of Helga's bar had granted her generous payment extensions and had invested their firms' pension funds in the BOND securities.  They find they are now faced with having to write off her bad debt and with losing over 90% of the presumed value of the bonds.   Her wine supplier also claims bankruptcy, closing the doors on a family business that had endured for three generations; her beer supplier is taken over by a competitor, who immediately closes the local plant and lays off 150 workers.

Fortunately though, the bank, the brokerage houses and their respective executives are saved and bailed out by a multibillion dollar no-strings attached cash infusion from the government.

They all receive a six figure bonus.

The funds required for this bailout are obtained by new taxes levied on employed, middle-class, non-drinkers who've never been in Helga's bar.

Now do you understand?

Tuesday, December 1, 2015

Five Rules to Being Happy

All of us want to be happy, but few of us actually feel that way most of the time. Of course, we all experience bouts of happiness, but in general, only about 20% of the people are happy most of the time. So, what keeps us from being happy, or more precisely, but experiencing a continuous state of happiness?

There seems to be five mistakes that are common on the road to happiness. Believe it or not, the first one is to try to figure out if we are happy or not! When we try to pursue happiness as a goal, we often want to experience more joy and contentment…than we had before. So, to find out if we are making any progress we start to compare our past state of happiness to our present condition. This creates its own ennui of dissatisfaction. As soon as we start to compare, we move from the experiencing mode into the evaluation mode.

To be truly happy (and there are decades of research on this), you have to be totally absorbed in what you are doing. Think of being engrossed in a good book, solving a tough problem, being in the flow of a sport, or catching up with a great long lost friend. You are in “the zone.” You are so involved in the moment that you lose track of time and pretty much everything in the outside world. Research has shown that when people are in this state, the do not say they are happy because they are too busy concentrating on what they are doing to notice. But in actuality, they are happy. When asked about what they think about these experiences, people usually describe these moments as some of the most enjoyable experiences in their lives.

By looking or searching everywhere for happiness, we often get disrupted in our ability to enjoy what we love doing. We do not get into our flow or find our zone of enjoyment.. We in a sense become less whole. This can often be seen with people being busy, but not being happy. Busy looking for a new job, or friend, or moving to a new state or country and in the process, assessing each new thing but never truly being fully engaged in what you are doing now. Yes, the newness and activity can make you happy for a little while, but it often turns into a vicious cycle that often leads to depression. This depression leads you to begin evaluating your daily projects as less enjoyable and start ruminating about why they are no longer fun.

The second error on this pursuit of happiness is overestimating that impact that any single life circumstance has on our state of bliss. Not only do we overestimate its impact, but the duration of a positive life event. We think having a great job, or moving to an exciting city, or having the perfect relationship, will ‘make’ us happier. How many times have you seen lottery winners lose all their winnings in a short period of time and often say they were happier before? Yes, each new event will give you a bump in excitement or joy, but in a few months, the reality of the daily grind will set in and that shot of adrenaline begins to wear off.

The third error on our quest to being happy is thinking it comes from doing it alone. That happiness is just about yourself as an individual state. While there is some truth about deciding to be or not be happy, looking for happiness alone is a mistake. Focusing on just our own happiness actually makes us less happy. This is not to say that improving your skills, such as with self love, is not good, it is, but happiness is something that needs to be shared in order to be increased, intensified and extended. Just like love. There is a wealth of evidence that shows that the more people try to be happy by themselves, the more lonely they feel, and in some cases this myopic effort leads to depression. Essentially, the more you try to focus on being happy, the less happy you become. Happiness, unlike a skill, cannot be something you establish on your own alone, but something you share.

The fourth mistake is looking for intense happiness instead of just the simple pleasures. Many believe that to be happy that you need strong, overwhelming positive emotions like joy, elation, enthusiasm, passion and excitement. Sadly, research shows that this is not the best path to being truly happy, and that happiness is driven by the frequency, not the intensity of positive emotions. When we aim just for those intense positive emotions, we often miss the small joys that make us truly happy. Joys like a beautiful sunset, or a walk in the woods, the kiss on the nose of a dog, or a good joke at work.

In evaluating how intense an emotion is concerning our happiness, we start to compare it to a higher standard, which make it easier for us to be disappointed. Studies have shown that when people were explicitly searching for happiness, they experience less joy in watching a figure skater win a gold medal or going to a great concert. They were actually disappointed that the event was not more enjoyable or jubilation. In most of the case, people even stated that they would not have felt any better if they had won the gold medal or been the musician playing on stage. And on the down side, studies indicate that an intense positive experience leads us to frame ordinary experience as less positive. So, once you win that gold medal or won a lottery, it is hard to take pleasure in finding a great parking spot or getting all the green lights when you are late.

The last and biggest mistake we make in being happy is thinking that happiness is just around the corner, or it will come tomorrow, or sometime in the future. We do not value being happy right now, right here. Happiness is about being present in the present.

If you worrying about the future or remembering the past; this mental calisthenics will only distract you from being happy. One of the main tenets of happiness is to focus on the present, the here and now, and in developing your joy in the moment. Happiness comes from being completely centered on the here and now. When you live in the present, you are living where life is happening. As I say, “Fear is caused by the uncertainty of the future. Sorrow is caused by the remembrance of the past. Try to keep your thoughts in the present, for the future we will never know and the past we may never understand.” You cannot be truly happy long term if you are constantly thinking about the past or future all the time.