Tuesday, August 9, 2011

"The Bottom Line on Happiness: Using Business Models to Understand and Plan for your Future Happiness

I recently read a really great article about Happiness in the Reader's Digest. By the end of the article, I was convinced the author must be LDS, so I looked it up and was glad to discover that he is LDS.

I hope you'll enjoy reading it as much as I did. Remember that being an "intentional" parent means planning ahead for stuff such as successful family dinner each night, or helping your children become musicians, or making sure your family cultivates habits of charity and compassion for others. These things don't just "happen" most of the time, but momentum counts for A LOT, so start while they're young and keep at it! It takes 20 years or more to build great kids.

"The Bottom Line on Happiness"

By Clayton M Christensen

My class at Harvard Business School helps students understand what good management theory is and how it is built. In each session, we look at one company through the lenses of different theories, using them to explain how the company got into its situation and to examine what action will yield the needed results. On the last day of class, I asked my class to turn those theoretical lenses on themselves to find answers to those three questions: First, How can I be sure I’ll be happy in my career? Second, How can I be sure my relationships with my spouse and my family will become an enduring source of happiness? Third, How can I be sure I’ll stay out of jail? Though the last question sounds lighthearted, it’s not. Two of the 32 people in my Rhodes scholar class spent time in prison. Jeff Skillin of Enron fame was my classmate at Harvard Business School.

I graduated HBS in 1979, and over the years, I’ve seen more and more of my classmates come to reunions unhappy, divorced, and alienated from their children. I can guarantee you that not a single one of them graduated with the deliberate strategy of getting divorced and raising children who would become estranged from them. And yet a shocking number unwittingly implemented that strategy. The reason? They didn’t keep the purpose of their lives front and center.

Having a clear purpose has been essential to me. But it was something I had to thing long and hard about before I understood it. When I was a Rhode Scholar, I was in a very demand academic program, trying to cram an extra year’s worth of work into my time at Oxford. I decided to spend an hour every night reading, thinking and praying about why God put me on this earth. It was a very challenging commitment because every hour I spent doing that, I wasn’t studying applied econometrics. I was conflicted about whether I could really afford to take time away from my studies, but I stuck with it and ultimately figured out the purpose of my life.

My purpose grew out of my religious faith, but faith isn’t the only thing that gives people direction. For example, one of my former students decided that his purpose was bring honestly and economic prosperity to his country and to raise children who were as capably committed to his cause, and to each other, as he was. His purpose is focused on family and others, as is mine.

Here are some management tools that can be used to help you lead a purposeful life.

1. Use Your Resources Wisely - Your decisions about allocating your personal time, energy, and talent shape your life’s strategy. I have a bunch of “businesses” that compete for these resources: I’m trying to have a rewarding relationship with my wife, raise great kids, contribute to my community, succeed in my career, and contribute to my church. And I have exactly the same problem that a corporation does. I have a limited amount of time, energy and talent. How much do I devote to each of these pursuits?

Allocation choices can make your life turn out to very different from what you intended. Sometimes that’s good: opportunities that you have never planned for emerge. But if you don’t invest your resources wisely, the outcome can be bad. As I think about my former classmates who inadvertently invested in lives of hollow unhappiness, I can’t help believing that their troubles related right back to a short-term perspective.

When people with a high need for achievement have an extra half hour of time or an extra ounce of energy, they’ll unconsciously allocate it to activities that yield the most tangible accomplishments. Our careers provide the most concrete evidence that we’re moving forward. You ship a product, finish a design, complete a presentation, close a sale teach a class, publish a paper, get paid, get promoted. In contrast, investing time and energy in your relationships with your spouse and children typically doesn’t offer the same immediate sense of achievement. Kids misbehave every day. It’s really not until 20 years down the road that you can say, “I raised a good son or a good daughter.” You can neglect your relationship with your spouse and on a daily basis it doesn’t seem as if thing are deteriorating. People who are driven to excel have this unconscious propensity to under invest in their families and overinvest in their careers, even though intimate and loving family relationships are the most powerful and enduring source of happiness.

If you study the root causes of business disasters, over and over you’ll find this predisposition toward endeavors that offer immediate gratification. If you look at personal lives through that lens, you’ll see that same stunning and sobering pattern: people allocating fewer and fewer resources to the things they would have once said mattered most.

2. Create A Family Culture - It’s one thing to see into the foggy future with a acuity and chart the course corrections a company must make. But it’s quite another to persuade employees to line up and work cooperatively to take the company in that new direction.

When there is little agreement, you have to use “power tools” – coercion, threats, punishments and so on, to secure cooperation. But if employee’s ways of working together succeed over and over, consensus begins to form. Ultimately, people don’t even think about whether their way yields success. They embrace priorities and follow procedures by instinct and assumption rather than by explicit decision, which means that they’ve created a culture. Culture, in compelling but unspoken ways, dictates the proven, acceptable methods by which member s of a group address recurrent problems. And culture defines the priority given to different types of problems. It can be a powerful management tool.

I use this model to address the question, How can I be my family becomes an enduring source of happiness? My students quickly see that the simplest way parents can elicit cooperation from children is to wield power tools. But there comes a point during the teen years when power tools no longer work. At that point, parents start wishing they had begun working with their children at a very young age to build a culture in which children instinctively behave respectfully toward one another, obey their parents, and choose the right thing to do. Families have cultures, just a companies do. Those culture can be built consciously or evolve inadvertently.

If you want your kids to have strong self-esteem and the confidence that they can solve hard problems, those qualities won’t magically materialize in high school. You have to design them into family’s culture and you have think about this very early on. Like employees, children build self-esteem by doing things that are hard and learning what works.

3. Avoid “Just this Once” - We’re taught in finance and economics that in choosing investments, we should ignore sunk and fixed cost and instead base decisions on the marginal costs – that is, the price of each individual new step or purchase. But I teach that this practice biases companies toward using what they’ve already put in place – what helped them succeed in the past – instead of guiding them to create the capabilities they’ll need in the future. If we knew the future would be exactly the same as the past, this would be fine. But if the future’s different, and it almost always is, then it’s the wrong thing to do.

The marginal cost doctrine addresses the third question I discuss with my students: how to live a life of integrity. Often when we need to choose between right and wrong, a voice in our head says, “Look, I know that as a general rule, most people shouldn’t do this. But in this particular extenuating circumstance, just this once, it’s okay.” The marginal coast of doing something wrong “just this once” always seems to alluringly low. It suckers you in, and you don’t look at where that path is ultimately headed and at the full coast that the choice entails. Justification for infidelity and dishonesty in all their manifestations lies in the marginal cost economics of “just this once.”

I’d like to share a story about how I came to understand the potential damage of “just this once” in my own life. I played on the Oxford University varsity basketball team. We worked our tails off and finished the season undefeated. The guys on the team were the best friends I’ve ever had in my life. We got to the British equivalent of the NCAA tournament and made it to the final four. It turned out that the championship game was scheduled for a Sunday. I had made a personal commitment to God at age 16 that I would never play ball on Sunday. So I went to the coach and explained my problem. He was incredulous. My teammates were, too, because I was the starting center. Every one of the guys on the team came to and said, “You’ve got to pay. Can’t you break the rule just this one time?” I’m a deeply religious man, so I went way and prayed about what I should do. I got a very clear feeling that I shouldn’t break my commitment, so I didn’t play in the championship game.

In many ways, that was a small decision, involving one of several thousand Sundays in my life. In theory, I could have crossed over the line just that one time and then never done it again. But looking back, I can see that resisting the temptation of “just this one” was one of the most important decisions I have ever made. My life has been an unending stream of extenuating circumstances. Had I crossed the line that one time, I would have done it over and over in the years that followed.

The lesson I learn is that it’s easier to hold to your principles 100 percent of the time than it is to hold to them 98 percent of the time. If you give in to “just this once.” Based on a marginal cost analysis, as some of my former classmates did, you’ll regret where you end up. You’ve got to define for yourself what you stand for and draw the line in a safe place.

4. Remember to be Humble – It’s crucial to take a sense of humility in to the world. If you attitude is that only smarter people have to teach you, your learning opportunities will be very limited. But if you have a humble eagerness to learn something from everybody, your learning opportunities will be unlimited. Generally you can be humble only if you feel really good about yourself and want to help those around you feel really good about themselves too. When we see people acting in an abusive, arrogant, or demeaning manner toward others, their behavior almost always is a symptom of their lack of self-esteem. They need to put someone else down to feel good about themselves.

5. Choose the Right Yardstick – Don’t worry about the level of individual prominence you have achieved; worry about the individuals you have helped become better people. This is my final recommendation: Think about the metric by which your life will be judged, and make a resolution to live every day so that in the end, your life will be judged a success.

"Choose you this day whom you will serve..but as for me and my house, we will serve the LORD."
Joshua 24:15