Review – Corporate Strategy

Corporate Strategy: Tools for Analysis and Decision-Making

by Phanish Puranam, Bart Vanneste, published 2016

What is corporate strategy and how is it any different from business strategy? That was actually a distinction I hadn’t made in my own mind when I picked this title up. I was generally interested in exploring “strategy” in an economic or business competition sense and this book was one of many I selected for further research. It was a happy accident then to realize there is a difference and this book is all about explaining what it is and why it’s different.

Business strategy aims at creating competitive advantage in a firm-against-firm struggle within a given industry. It flows outward from customer behavior through organizational structure and management practice to policies and processes surrounding marketing, sales, production, distribution and customer service.

Corporate strategy aims at realizing synergies from the joint ownership of different businesses. Synergies can be realized between businesses competing in the same industry but with common ownership (and perhaps diverse geographic territories), the case of a “corporate HQ” utilizing economies of scale in back-end or administrative functions to lower their cost or raise their quality across the individual customer-facing businesses. Synergies can also be realized between businesses operating in distinct industries but where coordination between actors in these industries allows for new products or services to be bundled, consider a bank and an insurance company owned by one corporate parent which can then offer a full range of financial services to customers.

One interesting takeaway from the book is that all public equity investors who do not have 100% of their investments in a single company (ie, they own a portfolio of stocks) are engaged in corporate strategy. However, as the book advises, passive investors are not able to realize synergies which those in control of these businesses can through exerting influence over their management. So, a passive equity investor could have an insight about the unique value of owning a complimentary basket of businesses representing corporate advantage, but they do not have the means to act upon it unless they are able to successfully agitate for M&A activity or have enough resources to get voting control over the companies in which they can sway management to extract the synergies they’ve spotted.

Another concept that was interesting to me was the irony that by bringing businesses under common ownership, a corporation destroys its own best benchmark for valuation (ie, the individual market prices of each business) and thus it is trapped in a perpetual game of trying to evaluate whether it’s coordination of economic activity within the corporation is synergistic and creating value, or wasteful and destroying it.

Warren Buffett as a conglomerator par excellence is an interesting case because, at least nominally, he does not provide managerial oversight to operations of the businesses he owns and has never claimed he has purchased a business for synergistic reasons for corporate strategy. Rather, he purchases businesses ONLY because he considers them to be available on a bargain basis, that is, he thinks they are available for less than their intrinsic value.

The entire point of corporate strategy, according to the book, is to be able to pay market or “fair” prices for assets and businesses, but still realize a profit from owning them, because of the ability to manage or exploit them differently under a joint ownership structure. So, Buffett is NOT a corporate strategist, although he is a really great investor.

And if you can realize synergies AND buy at bargain prices (AND apply leverage safely…) then you are really cooking with gas!

One of the great ironies of the (public) business world is that many managers (they are hardly ever significant shareholders themselves) think they can spot synergies all over the place, which either they or their investment bankers use to rationalize their acquisition activity. But the data demonstrate that few synergies ever appear to be realized– acquiring companies usually overpay, their stock falls on the announcement of an acquisition and the target company’s stock rises. Further, these acquisitions are often followed years later by goodwill writeoffs or divestitures of the previously acquired business or assets.

On average, a corporate parent that divests a business increases shareholder value.

In fact, one of the strategic suggestions of the authors is the always be on the look out for someone who is a better owner of a business or asset than you (ie, willing to pay you more than it’s worth to you to continue owning it) and selling things seems to be one of the most reliable ways for corporate strategists to create corporate advantage. It’s a pity, then, that most corporate strategists are buyers, not sellers!

If some other corporate parent has even stronger synergies with a business than you do, you should consider divesting.

Divesting when you can, and not when you have to is usually preferable.

Imagine that, starting today, the two businesses would be moved into separate ownership and would be operated completely independently, with no communication or exchange of any kind between the two. How would the value of the businesses be effected?

If one thinks one is smart enough to beat the odds, the authors suggest four places to look for synergies from joint ownership and operations for corporate strategists:

  1. Consolidation, creating value by rationalization across similar resources from similar value chain activities by eliminating redundancies, affects mostly costs and invested capital
  2. Combination, creating value by pooling similar resources from similar value chain activities, such as combining purchasing to obtain volume discounts or acquiring a competitor then raising prices for customers, impacts either costs or revenues
  3. Customization, creating value by co-specializing dissimilar resources in order to create greater joint value, results in improved value in production or consumption and involves modification of resources, the transfer of best practices can create unique value
  4. Connection, generates value by simply pooling the output of dissimilar value chain activities, for example customers may value being able to buy a bundle of different products and services together, the product development of one business is being connected to the distribution channel of another

Here are some other major strategy risks that are common:

One common negative synergy is brand dilution, ie, does the brand apply? Another is complexity. Another is market rivalry, this is a significant concern in the advertising industry, where when two firms who serve rivals merge, the chances of keeping both their clients is low.

Governance costs act as taxes that eat into the potential benefits from synergies when they are attempted to be extracted. [ie, the price you pay to operate an acquired business effectively.]

When an autonomous business becomes a division within another, the incentives of the owner and managers are necessarily diluted.

Synergies likely to generate significant transaction costs are less likely to be successfully realized in arms length relationships between independent firms than under common ownership.

I particularly appreciated the discussion about the corporate advantage that can be achieved through thoughtful design of the organization and its management.

One should be able to read the corporate strategy of a company in its organization chart: what kinds of activities does the top management feel are essential to integrate?

While all organizational structures represent a unique combination, there are three “pure form” ways to structure the corporation and its management structure: by activity, by output, by user/customer.

The authors recommend that corporate strategists “Think about the multi-business corporation as a collection of value chain activities” and look for synergies accordingly. But, being economic entities, there are necessary tradeoffs to beware of with each choice:

Grouping similar activities together emphasizes economies of scale at the expense of economies of scope, whereas grouping different activities together does exactly the opposite.

Every grouping arrangement emphasizes certain interactions but excludes others, which show up as opportunity costs and bottlenecks.

Further, if the innovation literature and hundreds of years of business history haven’t beat it into your head yet, things change. That means that the “right” structure (the synergistic one) is likely to change over time. “No structure is permanent.” Corporate strategists should always be considering the possibility that the ideal economic structure for managing the company has changed in reflection of new competitive dynamics, customer tastes and habits or advancements in technology, culture and society. A good rule of thumb might be that the appropriateness of the corporate structure needs to be reconsidered every time a major acquisition or divestiture occurs.

There were two other nuggets of corporate strategy wisdom that stood out to me. One was that most multi-business firms have capital allocation decision-making on auto-pilot. Either every request gets granted, or every request gets denied, or every business gets to keep whatever it generates. The corporate strategist can grab some low-hanging fruit by being thoughtful about capital allocation decisions within the portfolio and providing a critical voice about whether capital should be redistributed amongst divisions or even outside the company (ie, dividend or acquisition activity).

The other was in the author’s description of the typical M&A process (which includes not just execution of the acquisition transaction but also successful completion of the post-merger integration process). The most overlooked, and final, step in the process is Evaluation, which “refers to a post-transaction review of what went right and wrong” and analyzes the economic impact of the transaction on the entire firm. Were synergies realized? In the amounts predicted? Did costs materialize that were surprising? Did any other kind of disruption or distraction that was not anticipated earlier occur during the course of the merger? From my personal experience, it is difficult for management teams to take the time to look into the rear-view mirror like this, and even harder for them to be honest about what they see!!

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Review – Silver Spoon Kids

Silver Spoon Kids: How Successful Parents Raise Responsible Children

by Eileen Gallo, Jon Gallo, published 2002

Growing up, I’ve personally witnessed conflicted family dynamics surrounding money. My parents are “successful” as the term connotes in this book, and their goal for their children (myself and siblings) was to create plans and structure for sharing their success with them while trying to avoid the risk of ruining our motivation, realism and personal attitudes. To summarize it in a pithy way, it is the quest to find a way for family wealth to “Have an impact, without an impact.” Somehow, we were to all benefit from family wealth while living as if it didn’t exist.

I’d say it’s been hit or miss, so far. All of their kids turned out morally in such a way that the average friend, neighbor or community member would think to refer to them as “good people” (if I may be so bold as a member of the sect!) But struggles or lack thereof with personal identity, sense of purpose, motivation, etc. vary from person to person and area to area. And at present, a minority of the children are in any position to know what to do with their parents’ wealth in the event of their demise. We might just chalk this up to genes and the randomness of life, but Silver Spoon Kids offers some child development background and family socialization dynamics that provide evidence these outcomes are anything but purely random.

While the authors (a husband and wife duo in the fields of estate planning and family therapy, definitely toll collectors on the highway of family misery built by poor planning) offer a summary of 4 major family money practices they consider essential for parents to master to inculcate responsibility in the second generation, I’d summarize my biggest takeaway from the book in a single sentence as follows:

When it comes to transmitting family values to children, especially concerning money, there is no substitute for parents investing their own time and attention in the relationship and modeling the values themselves for their children.

Most of the cringeworthy examples of “what not to do with kids and money” cited in the book are a result of some kind of avoidance of this elementary wisdom. Either the parents think they can get away with not being there for their kids, or they think the kids won’t notice when they say one thing and do another. It seems that good parenting on the topic of money is identical to good parenting on any other topic. That stands to good reason because child development is not rooted in “things” but in human evolutionary social biology!

So that’s my one-sentence elevator pitch on what this book is about. But here is the 4 point summary of essential practices the authors share at the end of the book:

  1. Understand the theoretical underpinnings; learn about normal stages and behaviors in child development and let this awareness inform your approach to discussing money with your children
  2. Live your values; to live your values, you must first know them, so take time to articulate what is important to you about money and why and make sure it doesn’t remain a secret to your offspring
  3. Teach your child about money through word and deed; don’t be a hypocrite, don’t be silent and don’t expect your kids to just magically arrive at the same conclusions and habits about money (if you think they’re good!) that you have without actively engaging them in the topic in age-appropriate ways
  4. Raise a giver rather than a getter; help your children understand that money comes and goes and there are important aspects to where it goes beyond just where it comes from; emphasize the ways in which money can make all people better off and give your children opportunities to find meaning in being a resource for others

Is this book of interest even if you don’t expect to be wealthy? Yes, because you can still spoil your kids without affluence. Again, the reason is because child development and human social dynamics are a constant of human nature rooted in evolutionary biology, rather than dependent upon material “things” coloring each person’s individual circumstances. Here’s an instructive quote I underlined in the book that describes what’s going on:

Can your children develop a secure attachment if you are with them for only limited periods of time? Interestingly, this same problem is faced by many low-income families, especially those with a single parent.

Yes, interesting indeed. Most of the symptomatic ills of the lower-classes are connected to the notion of parents who are over-taxed versus their available resources (time, money, health, etc.) But affluent families can create the same symptoms in their children by behaving the same way struggling lower class families behave– spending more time at work than at home, expecting children to raise themselves, neglecting to share values (or healthy values) with their kids and so on.

One helpful exercise in the book for getting a grip on family culture surrounding wealth is the development of a “Money Narrative”. It involves creating a short story about one’s early and personal family experiences surrounding money after reflecting on questions such as:

  • What is your earliest money memory (ie, the first important purchase you made)?
  • What did you learn from your father/mother about money?
  • What are some of your family stories about money (ie, the time grandpa was really cheap, or your aunt made a ridiculous purchase)?
  • What kind of financial education did you receive growing up?
  • What were the big emotional issues around money in your family?

The Wolf and I have been discussing this and we’re going to share our Money Narratives in a separate, follow-up post.

An interesting theme from the book is the way in which money is not special or unique in offering parenting challenges, but is simply another vector for making poor parenting choices in general. For example, the authors talk about the importance for children in experiencing struggle in the process of mastery, both because it is inherent in learning experiences and necessary for an individual to learn that they can not achieve mastery without a period of struggle as an amateur, but also because children who do not struggle do not achieve mastery, they are simply rescued by the adults around them. You can rescue someone by doing their homework for them or you can rescue them by paying off their credit card bill. It isn’t money that is “spoiling”, it is the rescuing.

Another item the authors placed emphasis on was the need for including philanthropy in the family culture surrounding wealth and money. I am a skeptic on the mainstream practice of charity. I was pleased to see the authors discount “charity” specifically in favor of “philanthropy” as a broader term encompassing any activity aimed at making the world a better place for mankind to live in. I also appreciated that they disclaimed simply writing checks or disbursing financial resources to organizations and instead talked about the importance of physically serving, in person and with one’s time and skills, and of making this a family activity. The discussion overall was thought-provoking and has given myself and the Wolf some homework to do in thinking about how we want to more closely integrate philanthropy in the core of our family values.

There’s more of value in this book, even if it is, to me anyway, mostly just Good Parenting Common Sense at this point. I’ll organize my remaining notes in a separate follow-up post for easier perusal by those interested in going deep.

Review – Leader Effectiveness Training

Leader Effectiveness Training

by Dr. Thomas Gordon, published 1977, 2001

Introduction

I find this book to be interesting as a potential “handbook of general management practices” and as such, I made extensive notes throughout the text as I read. There are many sections of the book that I copied in whole into my notes. My plan for this review, unlike other reviews focused on pithiness and synthesizing my impressions into a summary, is to keep more of these notes and direct transcriptions from the book in tact so that I have a good resource in the future.

What is leadership effectiveness?

How to influence people without using power is the key to leader effectiveness.

A revolution has started– a human relations revolution of great significance. People want to be treated with respect and with dignity; people are demanding to have a strong voice in their own working lives; people are less willing to be coerced and exploited; people want the right to achieve self-respect in their work and have work that is meaningful and rewarding; people are rebelling against inhuman working environments in very human ways — by jobhopping, absenteeism, apathetic attitudes, antagonism and malicious mischief.

While workplace regulation and government interference don’t help the capitalist or manager in this regard, the shift in workplace expectations is cultural and -psycho-intellectual-progressive (not political-progressive!) and gone are the days, real or imagined, of early industrialism in this country in which the business had all the power and could dictate, like a “captain” how would would be performed or else. Today, the dignity of the organization’s members is paramount to leadership effectiveness and great managers both a.) leave their associates feeling heard and understood and b.) offer them agreeable reasons to do the company’s work that serve their own self-interests.

Seems simple enough, so why does workplace and managerial conflict persist?

People come naturally to these built-in patterns of negative responses; they learned them when they were children. The leader inherits each group member’s “inner child of the past.”

[…]

Because group members at first perceive most leaders as probable controllers and dominators, that’s the way they will respond to her, even though the leader may have no intention of using power and authority.

It is vogue to ask of people to “leave your personal problems at home.” But this proves naive because it is the same person having problems at home who comes to work– there is no way to cleave one’s personality into two halves, work and personal. Further, people wish to believe that personality dynamics are mysterious or pertain only to events and developments occurring in the present, adult life. However, just as it is the same person at work and at home, it is also the same person who is an adult now but was a child in the past! A manager need not become people’s personal therapists, but they do need to understand that many of the negative, “childish” behaviors they witness in workplace conflict are in fact a result of unmet childhood needs and failed coping strategies developed in childhood adversity and trauma.

Being the leader doesn’t make you one, because leaders don’t automatically get the respect and acceptance of their group members; so in order to earn the leadership of their group and have a positive influence on the group members, leaders must learn some specific skills and methods.

How leaders acquire followers

There is a set of principles rooted in human evolutionary biology and the logic of economic scarcity that informs social organization development and leadership roles therein:

  1. Every individual is engaged in a struggle to survive by meeting needs and relieving tensions
  2. Means are necessary to survival
  3. Most means are acquired through relationships with other people; therefore people and the groups they form become the means of survival
  4. People seek out relationships in which others are seen as the means of survival
  5. People join groups with the goal of satisfying their needs and ensuring their own survival
  6. People follow a leader and permit them to direct their activities whom they believe will help them get what they need and want to survive

Organizational needs are primarily for increased productivity and efficiency, while the group members needs are sometimes those that motivate them to resist pressure for increased production and efficiency.

An effective leader cannot be only a “human relations specialist” nor only a “productivity specialist”, they must be both.

A job must provide opportunity for growth, responsibility, recognition and advancement if it is to be satisfying; it is not enough to simply remove dissatisfying items from a job.

Expecting people to show up for work just to earn a paycheck is not enough. People also want a sense of personal satisfaction and meaning from doing work they consider important and doing it well.

The principle function of a group leader is to facilitate problem-solving; in somewhat different times, it is to maximize productive work time and achieve mutual need satisfaction.

Effective leaders must behave in such a way that they come to be perceived almost as another group member; at the same time they must help all group members feel as free as the leader to make contributions and perform needed functions in the group.

Group members draw away from leaders who make them feel inadequate or lower their self-esteem.

When leaders achieve this “another member” status, they actually increase the contributions they can make to the group, because their ideas will get evaluated like those of other members.

An effective group leader, then, does not need to solve problems, but to see to it that they get solved.

A 6-step process for effective problem solving

  1. Identifying and defining the problem
  2. Generating alternative solutions
  3. Evaluating alternative solutions
  4. Decision-making
  5. Implementing the decision
  6. Following up to evaluate the solution

Observant leaders can use “signaling behavior” to become alert to the existence of a problem:

  • being unusually uncommunicative
  • sulking
  • avoiding you
  • excessive absenteeism
  • being unusually irritable
  • not smiling as much as usual
  • daydreaming
  • tardiness
  • looking downcast or depressed
  • being sarcastic
  • walking slower (or faster)
  • slouching in their chairs

Once alert to a problem, a leader can follow the problem-solving process to resolve it and thus allow the team member to return to their productive functioning within their organizational role.

As a rule, people don’t get down to the real problem until after they have first ventilated a feeling or sent some opening message.

It has not been an evolutionarily-successful social strategy for human beings to be directly confrontational. As a result, most people learn in childhood to show they are hurt or have a problem without specifying what it is upfront. This necessitates the leader engaging in an exploratory process to help the person with the problem feel comfortable revealing what their problem actually is.

The “helpee” usually will not move into the problem-solving process unless the listener sends an invitation– opens the door for the helpee:

  • “Would you like to talk about it?”
  • “Can I be of any help with this problem?”
  • “I’d be interested to hear how you feel.”
  • “Would it help to talk about it?”

Active Listening as a tool for building trust and leader engagement

Active Listening involves establishing equilibrium between the expression of the person needing help and the impression being received by the one trying to help them. Frequent and continuous feedback of the results of the receiver’s decoding is what “Active Listening” is all about. Listeners need only restate, in their own language, their impression of the expression of the sender. It’s a check: is my impression acceptable to the sender?

At least two ingredients are necessary in any relationship of one person fostering growth and psychological health in another– empathy and acceptance. Empathy is the capacity to put oneself in the shoes of the others and understand their “personal world of meaning.” Acceptance is feeling good about what a person is doing.

The 12 Roadblocks to Communication

There are 12 common roadblocks to effective, empathetic communication between leaders and followers and almost every leader makes the mistake of running into one of these roadblocks at some time or other in the course of carrying out their leadership duties.

  1. Ordering, Directing, Commanding
  2. Warning, Admonishing, Threatening
  3. Moralizing, Preaching, Imploring
  4. Advising, Giving Suggestions or Solutions
  5. Persuading with Logic, Lecturing, Arguing
  6. Judging, Criticizing, Disagreeing, Blaming
  7. Praising, Agreeing, Evaluating Positively, Buttering Up
  8. Name-calling, Ridiculing, Shaming
  9. Interpreting, Analyzing, Diagnosing
  10. Reassuring, Sympathizing, Consoling, Supporting
  11. Probing, Questioning, Interrogating
  12. Distracting, Diverting, Kidding

What makes these roadblocks ineffective tools of communication?

Implicit in these 12 categories of listener responses is the desire or intent to change rather than accept the sender, acting as vehicles for communicating unacceptance. A climate of unacceptance is very unconducive to personal growth, development and psychological health.

Listening helps keep the responsibility for problem-solving with the member. The 12 Roadblocks tend to grab responsibility away from the owner of the problem and deposit it in the hands of the leader.

Part of demonstrating acceptance is being willing to hear the WHOLE person, not just the part of the person we enjoy being around or working with. Feelings, even negative feelings, are part of everyone’s total reality and existence and will be a necessary part of an effective leader’s daily experience.

Contrary to the “feelings don’t belong here” belief, there is evidence that expressing feelings actually increases a group’s effectiveness and productivity. Openness in expressing feelings serves very much the same function for a group as pain does for one’s organism.

Leaders should treat feelings as “friendly”, not dangerous. Feelings should be welcomed because they are cues and clues that some problem exists.

Negative feelings can be quite transitory. People purposely select strong negative feelings as codes to communicate “I want to make sure I get your full attention” or “I want you to know how bad you’ve made me feel.”

However, don’t confuse the simple expression of a negative emotion as the start and end point of the problem to be explored. Sometimes people don’t know what the real reason is for their discomfort and need help finding it, and other times they just aren’t comfortable saying what it is.

People’s problems are like onions– they come in layers.

This is not unlike a child’s temper tantrum, and, as parents know full well, the best strategy is to wait for the feelings to dissipate.

Leaders do a lot of teaching– giving instructions, explaining new policies or procedures, doing on-the-job training. Yet very few leaders have received special training to carry out this important function.

Little or no learning is going to occur until you acknowledge the team member’s feelings and help him work through them somehow. Your teaching has to stop until you get evidence that he is again ready to learn. This is the most important principle of effective teaching. Just as you can’t be a leader without followers, you can’t be a teacher without learners.

Getting learners more actively involved and participating in the learning process is the mark of an effective teacher.

It’s also naive to believe that problems can simply be ignored or avoided.

The price unassertive leaders pay is that the problems rarely go away; they suffer in silent marytyrdom or build up feelings of resentment toward the person causing the problem.

The difference between “I-Messages” and “You-Messages”

You-Messages carry a high risk of damaging relationships because:

  • they make people feel guilty
  • they may be felt as blame, put-downs, criticism or rejection
  • they may communicate a lack of respect for the other person
  • they often cause reactive or retaliatory behavior
  • they may be damaging to the recipient’s self-esteem
  • they can produce resistance, rather than openness, to change
  • they may make a person feel hurt and later, resentful
  • they are often felt as punitive

People are seldom aware their behavior is unacceptable to another. Their behavior is usually motivated only by a desire to meet their own needs, not by a deliberate intent to interfere with the needs of others. When you send a You-Message, you communicate “You are bad for doing something to meet your needs.”

I-Messages are less confrontational because they represent a plea for help from one person to the other. Most people are willing to be of service to others when asked for their help.

The Three Components of a Complete I-Message:

  1. a brief, non-blameful description of the behavior you find unacceptable
  2. your honest feelings
  3. the tangible and concrete effect of the behavior on you (the consequences)

BEHAVIOR + FEELINGS + EFFECT

When people resist changing, it is generally useless to keep hammering at them with subsequent I-Messages; what is called for at such times is a quick shift to Active Listening.

The “diagnostic model” is the fashionable management belief that a leader’s job is to figure out what kind of person each of their team members is and then to speak “their language.”

The assumption implicit in the diagnostic model is that it is the leader who assumes responsibility for producing changes in the group members, and the more leaders know about their team, the cleverer they will be in selecting methods for changing them. This is ultimately a method of manipulation.

This is the “language of control” versus the “language of influence” in the confrontive model, where the leader cares more about knowing how people feel than why they feel that way.

With the confrontive model, leaders need only understand their own feelings and how to communicate them in a nonblameful way; then they need to put listening skills to work so they and their group members can work out mutually acceptable solutions. This is simpler than trying to “figure people out” to manipulate them into doing what you want done.

The role of meetings for effective leaders

There are two kinds of meetings, each with a distinct purpose: informational and problem-solving.

Informational meetings are for such purposes as personal growth, continuing education, keeping informed about what other group members are doing (including the leader). Should problems arise, they should be put on the agenda for the next Problem-Solving Meeting. Problem-Solving meetings have 6 types, following the six step process for problem-solving outlined above.

An organization without many problems is one that is not growing, changing, adapting. Expect problems, and embrace them as vehicles to making organizational progress!

Leadership effectiveness requires regularly scheduled meetings for problem-solving and decision-making with your management team. “Show me an ineffective organization or group and I’ll give you a leader who either does not have management meetings at all or who conducts them poorly.”

Guidelines for effective management team meetings:

  1. Frequency of meetings; it is important to meet at the same time, day and place on a regularly scheduled basis, with or without the leader
  2. Duration of meetings; meetings should start and end at rigidly enforced times, and include a break if meeting for longer than two hours; it is better to have multiple meetings than one that is too long
  3. Priority of meetings; ideally the meeting should have priority over other organizational responsibilities and people should be prepared to be fully present during the meeting
  4. Alternates for members; if a member can not attend, he can designate an alternate with authority to act on his behalf
  5. Place of meeting; conference rooms with sufficient privacy, quiet, seating and comfort are preferable to offsite lunches or dinners
  6. Physical arrangements; white boards, chart pads and other note-taking instruments should be present, members should be seated and have tables for writing on and refreshments for relaxing; the meeting leader should not necessarily sit at the head of the table
  7. The recording function; the leader should not be the recorder as they must be free to perform other functions; the recorder can be a designated person or a rotating responsibility; the recorder should capture decisions, plans for dealing with unresolved problems, problems emerging from the discussion to be placed on future agendas, task assignments and follow-up actions; a brief formula is a statement of the problem and who is to do what by when; meeting notes should be distributed to attendees after the meeting
  8. Developing the Agenda; the group should own its own agenda, not the leader; the agenda can be collected and formed before the meeting or at the beginning; discussion should wait until the agenda is complete
  9. Establishing priorities for the agenda; the most critical items should be discussed first
  10. Rules for speaking; effective groups usually function informally; the leader can be most helpful not in setting rules, but in ensuring each attendee has a chance to provide input
  11. Kinds of problems appropriate for the group; typically appropriate problems are those which require data from the group to solve, and whose solutions require the group members to implement or which effect the members of the group
  12. Kinds of problems inappropriate for meetings; never use group time to solve problems affecting only some of the members, that are too unimportant for that level of the group, that require study and preliminary data gathering (without conducting this first), or that are outside the authority of the group
  13. Rules for decision-making; ideally, all members of the group should agree on the solution and the problem should be discussed until all members are able to voluntarily buy in; voting should only be used to help the group understand which direction members are leaning, not to settle upon the solution and make a decision; when time does not permit further discussion, decision-making can be delegated to one, two or three members acting as a subgroup
  14. Confidentiality of Group Meetings; the procedures of the group should be kept in confidence to encourage open sharing, and only the decisions of the group should be shared publicly, not how they were arrived at
  15. Disposition of Agenda Items; every agenda item should be disposed of by reaching a solution, delegating the problem for further study outside the group, delegating the problem to an individual or subgroup for a recommendation, being placed on the agenda of a future meeting, taking the problem off the agenda by the person submitting it, or having the problem redefined in new terms; no problem should be left hanging
  16. Record of the Meeting; notes should be distributed promptly and cover all decisions made by the group, the disposition of all agenda items and all task assignments with due dates including WHO does WHAT by WHEN
  17. Procedures for Continual Evaluation of Group Effectiveness; the group can improve the functioning of its meetings by periodically reflecting upon itself and evaluating its own performance by written or oral evaluation and feedback

Some leaders pride themselves on having a problem-free workplace. They ask and expect people to “forgive and forget” or, worse, to not bring up problems in the first place. They pay a heavy price for this attitude of enforced ignorance.

The absence of conflict may be symptomatic of an organization or group that is not functioning effectively– not growing, changing, adapting, improving or creatively meeting new challenges. The number of conflicts in groups (including families) is not at all indicative of how “healthy” they are. The true index is whether the conflicts get resolved and by what method they get resolved.

I have heard executives proudly describe their groups or organizations: “We’re just a big happy family around here– we get along, no problems.” I am always suspicious of such leaders, as I am suspicious of husbands and wives who say, “We’ve been married for twenty years and we’ve never had a fight.” Usually that means that their conflicts are not allowed to surface and be faced.

Beware also of team members who avoid bringing up conflicts in order to earn rewards and avoid punishment.

In relationships with leaders who rely heavily on reward and punishment, group members selectively send messages that they think will only bring rewards, avoiding messages that might invite punishment.

These leaders, too, believe they are operating without problems or conflict, but are usually unpleasantly surprised to learn something major has simply been hidden from them out of view!

It gets a lot of mocking treatment amongst pundits and the entertainment industry, but it’s nonetheless worth reiterating the The No-Lose Method of Conflict Resolution: we will work together to find a solution to this problem that respects both our needs. For organizations which fear reward and punishment-based leadership, this can be an effective means of building trust that problems can be talked about because they will be solved to everyone’s satisfaction.

An additional concept is the “Principle of Participation” which states that those who are responsible for helping to shape a decision, feel responsible for seeing that it works. Utilizing the PoP, leaders can avoid the temptation to dictate solutions to problems that are brought to their attention and instead get their team members involvement in finding a resolution that they will actively support.

The Periodic Planning Conference Concept

People who believe they ARE the organization will want to contribute to its success, this means people need:

  1. Work that is meaningful and provides need-fulfilling experiences
  2. Their ideas and contributions are valued and needed
  3. Guidance for how to grow and develop so they can enjoy the satisfaction of being more competent over time
  4. A feeling of freedom and self-determination through improving their own performance

The Periodic Planning Conference (PPC) is an instrumental practice in soliciting their ideas, providing guidance and giving them a sense of self-determination in improving their performance such that ultimately work becomes more meaningful and need-fulfilling because the person is creating their own work.

The PPC is an alternative to the annual performance appraisal and is instead a regularly scheduled conference, generally every six months, with each group member. It may be as short as a half hour, averages two hours but may involve several meetings stretched over a period of days.

Items for discussion:

  • Group member’s ideas for improving performance in the next six months
  • Ideas for developing new skills
  • Plans to institute changes in carrying out functions of the job
  • Discuss ways the group leader can help the group member accomplish their goals in the next six months
  • Discuss with group leader ANY problem or concern impacting their job performance, job satisfaction or future with the company

It focuses on FUTURE performance (what can be done) rather than PAST performance (what has been done). It has no scores and focuses on job functions rather than personal characteristics or qualities. It is a two-way conference.

The rationale:

  • It is the leaders’ responsibility to help the individual member improve their performance
  • Provides useful organizational by-products:
    • Identifying qualified candidates for each level of management
    • Providing means for systematic follow-up and development of people
    • Focus on job performance instead of personality traits (de-personalize management)
    • Help people to help themselves grow in the job and the org
  • Builds a relationship between leader and group member where free discussion can exist and problems can become visible and addressed
  • Focuses on the future, engages with positive behaviors to make improvements
  • Group members become more engaged in their work by suggesting solutions to their own problems
  • Provides an opportunity to resolve conflicts when they arise, creating a mutually rewarding relationship

Important assumptions to discuss and keep in mind during a PPC:

  • Companies face competition and must make constant progress to avoid being surpassed by competitors; for the company to grow, people must grow; most people don’t like standing still
  • There is ALWAYS a better way of doing things
  • No one is EVER working at 100% of capacity
  • Change, growth and modification are an inevitable part of effective organizations
  • People are strongly motivated to accomplish goals they set themselves, not goals set for them by others
  • People are happier when given a chance to accomplish more

Steps to prepare for a PPC

  1. Prepare your people
    1. Explain the deficiencies of traditional performance-rating systems
    2. Explain the rationale of the PPC and its assumptions
    3. Listen to the feelings of team members
    4. Influence them to try the new PPC system on an experimental basis
  2. Get mutual agreement on job functions; what is the team member expected to contribute to the organization? What do they do in return for their wage/salary?
    1. What do you do to contribute to the organization?
    2. What do you do that warrants the organization paying you a salary?
    3. Why does your job exist? What is it supposed to contribute?
    4. When you feel you are doing a good job, what are you actually accomplishing for the organization?
    5. Procedure
      1. Explain the definition of a job function as opposed to a job duty
      2. Ask the team member to develop his own list
      3. Developer your own list as the leader
      4. Review them together
  3. Get mutual agreement on how performance is to be measured
    1. Reduces misunderstandings
    2. Points out what data will be needed for the group member to evaluate their own performance

Conducting the PPC

  1. Set the date for the PPC in advance, preferably by 1 week minimum
  2. Ask your team member to prepare goals in preparation for the conference
  3. Provide an opportunity to ask questions about the PPC
  4. Explain that the focus of the PPC is on the future, not the past, and that the team member is expected to “carry the ball” in presenting goals
  5. Explain your own goals for the work group, so the team member understands the larger context

Potential questions to prompt the team member in preparing for the PPC:

  • What do you want to accomplish in the coming year?
  • In which of your job functions do you feel the need for improvement?
  • What are your goals for doing a more effective job?
  • What help will you need from the organization to attain this goal?
  • What is your program this year for improving your performance or the performance of your work group?
  • What benchmark will let you know that you have improved?

Key points to remember about the PPC:

  • It’s the team member’s ball. Get his ideas and feelings out first. Active Listening.
  • Remember to keep the discussion forward-looking, the past is gone.
  • When it’s your turn to talk, be candid, honest and open. Send I-Messages.
  • Secure agreement on the goals to be accomplished. Keep their number to a workable size. Use Method III.
  • As a leader you want to have a clear understanding of how your team member plans to reach each goal– what actions are planned.
  • Share ideas when you think there is an opportunity or need
  • Maintain a climate that is warm, friendly and informal, but task-oriented.
  • Setting goals is a commitment to change, some may resist sticking their necks out
  • Review and put into writing goals agreed upon, with a copy for each participant (and, can share with the group)

Implementing the decisions of a PPC

  1. Provide data needed to evaluate progress
  2. Provide material, financial or personnel resources required to accomplish goals
  3. Make yourself available as a counselor or facilitator of problem-solving (use the Six Step process)

Expected benefits of the PPC

  1. Team members respond to trust by becoming more responsible and less dependent
  2. Higher motivation in your team members
  3. Greater self-fulfillment and satisfaction from team members
  4. You will spend less time supervising and overseeing
  5. Witness continuous improvement in job performance; doing things better will become the norm

Deeper issues for leaders

Just as the adults before us are grown versions of the children they once were, and a person at work is the same person he is at home, leaders must reflect on how their choices and actions will extend and reverberate beyond the narrow confines of the workplace. These personal philosophical inquiries may be of benefit for the leader in contemplating his place in society at large and, more importantly, what kind of impact he wants to have on that society:

  • What kind of person do you want to be? How you behave as a leader will shape you as a person
  • What kind of relationship do you want? How you behave as a leader will determine the kinds of relationships you have with others
  • What kind of organization do you want? Organizations are made of people in relationships, so the kinds of people and the types of relationships they have determine the type of organization they form
  • What kind of society do you want? An open society requires open leaders running open organizations where the members are allowed to exercise their own talents and wills

Review – The Drama Of The Gifted Child

The Drama of the Gifted Child: The Search for the True Self (buy on Amazon.com)

by Alice Miller, published 1979, 1997

Recently I was discussing economic and social philosophy with some friends and the question came up about why certain philosophical ideas aren’t more popular or well-known if they seem to be more logically correct than the alternatives. We entertained a number of reasons why this might be but the one that stuck out to me as particularly weighty is the idea that the truth is deep, long and heavily nuanced and doesn’t make for quick, emotional soundbites. I made the quip, “Why is the economy the way it is? Do you have 5 years to study what you’d need to know to understand it?” followed by, “Why does the political system look as it does today? Do you have an entire lifetime to devote to studying all of human history?”

The other weighty suggestion that was offered is that there are many philosophies that cater to telling people what they want to hear (ie, an easy to accept reality) and only one that emphasizes telling it like it is (ie, a hard truth about reality).

I see echoes of these two notions in the opening of Alice Miller’s “Gifted Child”:

The damage done to us during our childhood cannot be undone, since we cannot change anything in our past. We can, however, change ourselves. We can repair ourselves and gain our lost integrity by choosing to look more closely at the knowledge that is stored inside our bodies and bringing this knowledge closer to our awareness. This path, although certainly not easy, is the only route by which we can at last leave behind the cruel, invisible prison of our childhood. We become free by transforming ourselves from unaware victims of the past into responsible individuals in the present, who are aware of our past and are thus able to live with it.

Most people do exactly the opposite. Without realizing that the past is constantly determining their present actions, they avoid learning anything about their history. They continue to live in their repressed childhood situation, ignoring the fact that it no longer exists. They are continuing to fear and avoid dangers that, although once real, have not been real for a long time. They are driven by unconscious memories and by repressed feelings and needs that determine nearly everything they do or fail to do.

This book asks the reader to consider two troubling ideas. The first is that they are likely to be carrying some emotional baggage from their childhood that originates with the way they were cared for by parents and other important adults in their lives. The second is that they are likely to transmit this baggage to their own children (if they have any) and other important, intimate relationships if they don’t find a way to come to terms with it beforehand.

Like the consideration made about the popularity or penetration of certain economic and social philosophies, these ideas are troubling for most people to accept because it forces them to revise their current understanding of the relationships they have with important people in their lives, it forces them to take responsibility for the course of their lives and their choices and give up the perverse safety and security of seeing life through the eyes of the helpless victim and it forces them to concede that the present is not a unique or isolated moment pregnant with infinite possibilities, but rather one moment at the end of a string of moments stretching back into the earliest reaches of human history in which possibilities exist but are limited by certain choices and events which took place in the uncontrollable past.

There is of course great freedom in choosing to explore these troubling ideas but they come at the cost of a grave responsibility that few, based on my practical experience, seem willing to bear.

To find this freedom, one must seek out “the lost world of feelings.” Human infants are entirely dependent upon their adult caretakers for their survival, unlike most other animals who, while weak and undeveloped, are nonetheless able to move around, seek shelter, find food, etc., on their own almost immediately after birth. For a young human, being ostracized or unloved by ones parents is a death sentence. Therefore, the human psyche is wired at birth to prioritize adapting to the parents’ emotional needs over fully developing its own.

If certain emotional expressions or behaviors prove to be problematic for the relationship with the parents, the human child will work to repress and hide that part of themselves. They will disown it and their personality will become dichotomized into “me”, the feelings and behaviors and characteristics I acknowledge and accept because they have demonstrated value with my parents, and “not me”, the feelings and behaviors and characteristics I deny possessing or experiencing because they have been a source of conflict with my parents, on whom I depend for survival.

This is what Miller means when she talks about searching for the “true self.” The irony, however, is that

the child does not know what he is hiding.

That is, it is not as if the child knows what his true self is and isn’t and is lying to himself and others about who he really is. It is more like, he has shoddy vision and can’t see a focused image of himself in true detail, or else he has a map of himself leading to the buried treasure of his own reality but he doesn’t know how to read the map and therefore doesn’t know where his self is or even what he’ll find when he gets there. Every now and then this person might get a glimpse or a sense of their true self in a particularly emotionally charged moment but really all they’re experiencing is the anxiety indicating the existence of repressed and disowned selfhood, not a look at what is missing.

To heal, these emotions must be encountered and experienced. Further, painful emotions must be resolved by tracking down their genesis in early childhood experiences. Memories and relationships with respected and important adult caretakers must be studied and re-evaluated through the more objective eyes of an independent adult rather than the way they were first constructed by a subjective and immature child. This not only allows the adult of the now to be released from the terrors of the former child but it can enable the adult to have new modes of living and doing:

Rational, constructive action depends not only on the intactness of our intellectual faculties, but also on the extent to which we have access to our true emotions.

[…]

the inescapable conclusion is that for people to be able to organize their lives, they must have access to their emotions.

This is one of the many and for me, the most important, takeaways from this book. It is not enough to rationalize about a choice and a potential plan of action. To actually develop an impetus to act requires an emotional experience. Adults who repress certain parts of their emotional selves due to childhood traumas become incapable of acting in certain areas of their lives. They become procrastinators, perfectionists or otherwise evasive in the area of making a decision, acting on it and then sticking with it.

By finding and integrating one’s lost world of feelings, one has the opportunity to become active and empowered in new areas of one’s life that were otherwise mysterious, frustrating or dormant.

One question that comes up for some people as they consider all of this is, “But why did my parents ever treat me in such and such a way?” Using some of the memories and recollections of a famous cultural writer as an example, Miller says,

like so many gifted children [he] was so difficult for his parents to bear not despite but because of his inner riches. Often a child’s very gifts […] will confront his parents with conflicts that they have long sought to keep at bay by means of rules and regulations. These regulations must then be rescued at the cost of the child’s development.

The parents’ childhoods involved repression as well. For their own survival they learned to disown parts of their emotional experience or certain of their behaviors that caused trouble with their parents. They rationalized this turn of events and created rules for living that would help them avoid these perceived dangers. And then when they had children, these rules and procedures came into question by the existence of the innocent child. And so a new round of repression is started.

The only way the cycle can be broken is for the adult to make the painstaking effort to connect with his child self and understand what happened and how it has impacted him, and then he must choose to live his life differently with that new awareness of his past. This is hard for many to do because

What they do not see, because they cannot see them, are the absurdities enacted by their own mothers when they were still tiny children.

Another powerful idea contained in this book is an explanation of the appeal of irrational ideas to adults with traumatic childhood experiences. The trauma of childhood is itself irrational– there is no “reason” for any child to be abused or neglected by those who brought it into the world, and save those who are simply unlucky in having some external misfortune befall their family (ie, the child is made an orphan when the parents die unexpectedly), there is no excuse or justification the adults could offer a child as to why they are being treated as they are. For survival reasons, the child must make a place in their psyche for irrational ideas to exist because in doing so they “close the loop” on the irrationality and make it seem rational. “Some things just don’t make sense” is a way to make sense of things that don’t make sense.

When this space for irrationality exists, adults can become wedded to irrational ideas and beliefs, such as political ideologies, abusive social relationships or supernatural superstitions. On one hand, they lack the ability to rationally resist these ideas and beliefs because they are willing to accept that not everything has to make rational sense in their lives. On the other hand, they may positively identify with the claims of these ideologies because they appeal to their own experiences or sense of self as a victim who is oppressed by others, that is, they offer a way to feel like they’re getting even. On this point Miller is worth quoting at length:

Oppression and the forcing of submission do not begin in the office, factory or political party; they begin in the very first weeks of the infant’s life.

[…]

Political action can be fed by the unconscious rage of children who have been misused, imprisoned, exploited, cramped and drilled. This rage can be partially discharged in fighting “enemies”, without having to give up the idealization of one’s own parents. The old dependency will then simply be shifted to a new group or leader. If, however, disillusionment and the resultant mourning can be lived through, social and political disengagement do not usually follow, but our actions are freed from the compulsion to repeat. They can then have a clear goal, formed out of conscious decisions.

Once our own reality has been faced and experienced, the inner necessity to keep building up new illusions and denials in order to avoid the experience of that reality disappears. We then realize that all our lives we have feared and struggled to ward off something that really cannot happen any longer; it has already happened, at the very beginning of our lives while we were completely dependent.

The term “fighting yesterday’s battles” comes to mind when thinking about this irrational space.

While Miller’s analysis applies to any child and any adult experiencing emotional pain and depression (whether they’re aware of it or not!), the book is especially focused on the plight of “gifted” children because of the uniquely problematic experience they can have in this area due to their talents and abilities. Not only do “gifted” children tend to experience these emotional troubles more deeply,

many people suffering from severe symptoms are very intelligent

but they also tend to experience these troubles uniquely through feelings of grandiosity and contempt.

Grandiosity is the concept of identifying one’s personal value as a person with one’s special talents and abilities. One’s greatness isn’t just a part of one’s self, it IS the self. But this complicates the emotional life of the gifted child because it is inevitable that not every part of themselves is grand. There exists then another dichotomy, wherein all the parts that are grand (which may be very few and overall represent a quite limited part of the total person or experience of self) are “me”, and all the parts that are normal or weak (which is likely then the majority and the wider experience of self) are “not me”. And if my parents love and care for the grand gifts I have but dislike or don’t know how to deal with the unexceptional aspects of my self, then

we remain at bottom the one who is despised, for we have to despise everything in ourselves that is not wonderful, good, clever… we despise… in short, the child in ourselves and in others.

[…]

“Without these achievements, these gifts, I could never be loved. would never have been loved.”

An emotional experience that often goes hand in hand with grandiosity is contempt.

The function all expressions of contempt have in common is the defense against unwanted feelings. [ie, despising what is not grand about oneself]

[…]

Once we are able to feel and understand the repressed emotions of childhood, we will no longer need contempt as a defense against them.

[…]

Contempt as a rule will cease with the beginning of the mourning for the irreversible that cannot be changed… it is, after all, less painful to think that the others do not understand because they are too stupid.

Gifted people often experience contempt for others as an expression of insecurity about the repressed parts of themselves that are not part of their gifts. Unable to have empathy and kindness towards themselves in these areas, they become impatient and hostile towards those reminders of their own weakness that they see in others.

Sadly,

hating and offending an innocent person, using him as a scapegoat, can only strengthen the walls of our inner prison of confusion, isolation, fear and loneliness: it cannot free us.

And the most innocent person of all, the most unfair scapegoat a person can choose in this drama, is their child self. Whether these ideas are new or familiar, I encourage anyone reading this to consider the implications of the ideas contained in this book not as if they describe a set of generalized human experiences but rather as if they describe something specific and personal to the reader himself. If this book’s message can be taken to heart and internalized, it can be the jumping off point for great personal change that will ultimately resolve itself in what Miller refers to as a “healthy self-feeling”:

I understand a healthy self-feeling to mean the unquestioned certainty that the feelings and needs one experiences are a part of one’s self.

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Review – 1, 2, 3… The Toddler Years

1,2,3…The Toddler Years: A Practical Guide for Parents and Caregivers 3rd Edition (buy from Amazon.com)

by Irene Van der Zande, published 2011

A friend had recommended “The Toddler Years” as a resource for continued learning and practice with regards to piloting RIE from infancy into childhood. And indeed, the book is similar in format, structure, tone and event content to works we’ve read previously and enjoyed such as Your Self-Confident Baby and Dear Parent: Caring for Infants With Respect. Much of the material and insight in the book comes via childcare practitioners at a day facility in Santa Cruz, CA and the book has a preface by Magda Gerber. This is definitely “RIE-approved”.

As I was reading this book and noticing the similarities, I asked myself, “Why do we do what we do [as parents]?” When we first learned about RIE and NVC, it was easy to get overwhelmed with all the new DOs and DONTs in terms of behavior and lose sight of the goal. The goal is not to follow some set of rules, arbitrary or otherwise, or even to be Good Parents as some kind of exercise in living an ideal, but to live our lives in relation to our children a certain way– to treat them with the kind of respect we’d hopefully treat any other adult.

As I was reading the scenario-specific counsel in this book, I realized that “what to do” in any of these situations shouldn’t be mysterious. We can get to the answer quite easily by inverting the situation and asking ourselves what we’d do if an adult acted like a child? How would we treat that adult? With condescension, disgust, frustration, anger or worse, violence? Or would we practice patience, understanding, offer our assistance and respect their needs and choices as much as we could?

That being said, these lessons about commonly occurring parenting dynamics are indeed helpful pre-practice and may result in the thought processes and related behaviors becoming more intuitive and flow-y rather than flustering or rehearsed.

Choice

Just like all of us, toddlers are happier when they have some control over their lives. This also makes it easier for them to accept what they don’t have a choice about.

The first act of a child’s life, being born, is a set of circumstances the child itself had no choice in creating. Nor is the child aware of its lack of choice, in this situation or any others, for some time after birth. Nor even is the child capable of exerting any influence over the course of its life, via choice, even if it was aware of the choices that existed.

But over time the child’s life becomes increasingly defined by choice both in terms of awareness and in terms of action. It is no wonder then that “choice” is an important theme in the development of the life of the toddler and that we as parents and caregivers can render a great service to our children by giving them choices whenever we can and being understanding with them when they react against the situations where they lack choice but might like to have one for whatever reason.

One way to offer choice is via closed questions, that is, “Would you like to have an apple for your snack, or a banana?” versus “Would you like a snack?” The reason to offer closed questions is because it encourages the child to make choices we can live with. It can be easy to get bogged down in the subtle reality of how little toddlers have to choose about their life at times– we know they NEED a diaper change but they don’t WANT one, etc. Using closed questions frames the choice around taking a positive action the caregiver believes is necessary and hopefully avoiding fighting and antagonism over choices that don’t exist.

Similarly,

When there is no choice, we need to be careful not to offer one by mistake.

Saying, “We’re going to Grandma’s, it’s cold outside, do you want to wear your jacket?” might elicit a “No!” and a frozen child, when what we really meant was to offer a closed question such as, “Would you like to put your jacket on yourself or would you like me to help you put it on?”

Feelings

Spend a lot of time giving children names for their feelings.

As adults, we have a certain awareness of our feelings such that we can distinguish one feeling from another, the intensity of the feeling, its source and perhaps most importantly, we can label our feelings in order to communicate about them more clearly. (This is the ideal with adults, anyway… any student of NVC is aware of just how limited even many adults’ capabilities are in this regard!)

With young children it is different. Feelings might seem to come from nowhere and shock or surprise. They might seem uncontrollable. One kind of feeling of a high intensity might seem similar to that same feeling at lower intensity (ie, just “good” or “bad”, pleasant or unpleasant) and there is most of the time no sense of the character of a feeling and the name it carries. Talking about feelings with young children and repeating the names of the feelings we observe them experiencing can help a toddler start to gain mastery and awareness of their feelings.

Children need to understand their feelings. They need to know their uncomfortable feelings are just as important as their pleasant feelings. By accepting these feelings, we teach our toddlers to accept themselves and each other.

The goal of many parents and caregivers seems to be to raise a child who only experiences good feelings. Feelings of pain are warded off, “Oh you’re alright, nothing happened!” as are feelings of shame or fear, “Be a big boy, don’t cry!” Perhaps the motivation is to provide children with that ideal experience, “childhood innocence”, as long as possible and to protect them from reality which is sometimes disappointing, frightening, infuriating or just plain unfair.

But accepting some feelings and rejecting others leads to self-repression and a certain kind of schizophrenia. There is the “me” that has feelings which are acceptable to the adults and caregivers in my life, and there is the “not me” that has feelings which make them uncomfortable, which seems to pop up in my life at the most embarrassing times. Helping children to experience all their emotions as equally valid allows them to build confidence in the unity of their self.

Limits

Limits can be stated in firm but respectful words. We can do this by using what is called an “I” message. That is, instead of saying “You must do this” we can make it clear that we are speaking for ourselves:

“I want you to be gentle.”

“I need you to help me get your clothes on.”

“I don’t like it when you run away.”

We can talk about what the child is doing rather than using blaming or labeling words.

Some people find parenting with respect challenging because they equate it with a kind of “anarchy” and the giving up of their authority even in matters of safety or in enforcing their personal preferences in their own home or life. It can be hard enough to adjust to living with a messy spouse, for instance, now a diabolical two-year-old is supposed to reign over me?

This is a false dichotomy. Respect is a two-way street. And imperative to having respect and giving respect is to be clear about who is respecting what. Using the “I” technique makes it clear that limits have to do with individual needs and don’t involve arbitrariness or authority.

Building Confidence

Children who are confident in their ability to learn through practice are more likely to grow into independent people… making things happen rather than waiting for things to happen to them.

We learn to be action-oriented in our lives or we learn to wait for a rescue that isn’t coming.

There are two models of failure and its significance that humans can internalize according to recent psychological research. One model is failure-as-feedback, in which failure indicates that an action was not performed properly to achieve the desired result with the possibility that it could be performed properly with further practice.

The other model is failure-as-wrongness, in which failure indicates that a person is not appropriate to a task at hand in some existential way and their inability to achieve success in this instance is evidence of their wrongness or lack of completeness as a functioning person.

It is imperative that children have opportunities to practice actions, to experience occasional failure, and to be encouraged to try again in order that they build confidence in themselves and in the model of failure-as-feedback. Without internalizing this principle, they are apt to experience a life of growing self-doubt and confusion on a fundamental personal level.

Presentism

Toddlers live in the here and now. Yesterday is ancient history and tomorrow might as well be next year.

How wonderful that toddlers can remind us that the present is all we ever have! As adults it is so easy to live with regret, or to drift through the present ever-anticipating the future.

Of course, they may serve us these reminders in unpleasant ways with their seeming impatience, or their repetitious requests or insatiable demands for things they’ve already been given before. But it’s important either way, for our own sanity and enjoyment of life, that we remember that they only behave this way because the present urge is the only one they know at this moment in their life.

Sleep

Give warnings before bedtime so the child has a chance to finish playing.

Not only do small children seem to sleep fitfully at times, but they also go to sleep fitfully. And sleep seems to creep up on them and snatch them when they aren’t expecting it. One moment they are playing with their toys and screeching with gaiety, the next they are rubbing their eyes and ears and about to topple over with sudden onset of wooziness.

Adults can help children anticipate the future, and their own need for sleep, by following bed time rituals which include buffer time and light warnings that sleep is coming and it is time to begin winding down.

The “S word” – Sharing

Toddlers do not learn to share by having grown-ups make them do it. Having to give up a toy makes a toddler feel angry, not loving.

Why do adults think sharing is so important? Is it simply mindless repetition of their own childhood experience? Is it a social or cultural imperative tied to recent historical developments? Is it a way to feel equal while ignoring that we are not?

Sharing is not in the vocabulary of small children although, curiously, property rights are! The individual child’s property right, at least. While there are many ways to respect small children by thinking of them and treating them as capable of something they have not yet mastered, sharing seems to be one of those things that does not lend them respect or enjoyment when it is expected of them.

In our home we don’t care for sharing as a principle. So avoiding the “S word” will be relatively easy for us!

Tantrums

If a toddler finds out that having a tantrum is a way around our limits, the child may start throwing tantrums all the time.

Another idea that is interesting about tantrums is that they belong to the child, not to the parent. It is easy for the adult to assume a tantrum is a demonstration of a critical failure in their parenting, rather than a critical failure in the emotional regulation of the child. Of course they often come at the most inopportune times as well, right before trying to leave for an errand, or out in public amongst a bunch of gawkers.

Even during a tantrum, the child is experiencing an emotion they are truly experiencing and it’s worth it for parents and other caregivers to practice patience and understanding in these moments, validating the emotion even if it is disagreeable and talking through it with the child, along with giving them space to express their emotion, to exhaustion if necessary.

Toilet time

The time to start toilet learning is when our toddlers show signs of being ready, like:

  • having dry diapers for longer periods of time
  • letting us know that they’ve pooped or peed in their diapers
  • showing interest in sitting on a toilet or potty chair
  • wanting to wear underpants
  • disliking wearing wet or soiled diapers

The book does not call it toilet “training” for a reason. This is not a rote memory behavior or even a reflex. It requires conscious effort and it has a psychological root. Being ready to use a toilet for elimination is an egotistic decision and like many other similar experiences in life we can help the child by waiting until they’re ready rather than expecting to do something they’re not yet capable of or don’t see any benefit in themselves.

Eating and weaning

Toddlers will eat when they’re hungry, but might not eat much.

Toddlers need to eat more often than we do. Their stomachs are smaller.

Toddlers like to have choices.

Meals are served outside whenever the weather permits.

One thing I thought could’ve been added in this section is the observation that sometimes toddlers will eat quite a bit! In fact, too much and too fast if you keep putting food in front of them. We are learning to offer one piece of food at a time and waiting until our Little Lion requests more (with reaching, grunting and looking for the food). Even then, we try to pace things as his belly is bound to fill up quicker than his brain gets the signal that it’s time to stop.

Successful parenting

It helps to remember that, just as there are no perfect people, there are no perfect parents or children. There are no perfect families either, even if they look that way from the outside. It’s not our job to be perfect, but to do the best we can.

I’ll let that one settle in on its own.

It’s healthy for our children to see us having interests besides our families.

It’s also healthy for our children to see us acknowledging their needs without actually fulfilling them, instantaneously or at all. New parents often forget that it’s okay to use the bathroom, even if it means a crying child. And these kinds of over-permissive decisions can extend beyond those first few months to picking the child up whenever it beckons, interrupting a rhythm or flow in some household chore to immediately respond to the child’s request, etc. The child isn’t always going to get what they want in life and it’s okay to model that now, in toddlerhood. Just realize you may hear a bit more crying and whining as a result of your decision.

Being polite by acknowledging people socially is an adult need, not a child’s.

Teaching children to wave hello and goodbye, to high-five, to smile or “be nice” to strangers who greet them and to say please and thank you may seem cute but it is not necessary and it may even be unsafe (why undermine a child’s instinctive apprehension of strangers?)

Some people who do not understand that children are individuals and not objects can find it frustrating and demeaning to deal with an “aloof” child. Why is it so important to this person to be acknowledged by a tiny toddler who is more interested in drooling over their toys? What does their need for acknowledgement and validation-in-existence truly imply?

Guilt keeps us looking backward and feeling bad about what we should have done instead of looking forward and feeling good about what we’re going to do next.

This idea is tied to the failure-as-feedback model. If we are always learning and growing, as the toddler is, and we want to model this as normal, we would do well to focus on what we’ll do next and not to obsess about the past.

Enjoying your child

Childhood passes quickly. And it never comes back. “They won’t need me as much as they do now.”

A truly bittersweet thought. To acknowledge that the pain, discomfort and disruption of being always needed is ephemeral; but so too is the joy, confidence and excitement of being the center of a young person’s world.

4/5

 

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Review – Essentialism

Essentialism: The Disciplined Pursuit of Less (buy from Amazon.com)

by Greg McKeown, published 2014

This past year I’ve been exploring topics related to the concept of mastery. It is so tempting for me to try to be interested in everything I come across and consequently it’s a real challenge to be selective and commit to being a master of only a few things. Essentialism was recommended to me by a friend and it’s a great concept inside of an okay book.

The key to essentialism, which is a combination of the ideas of prioritization and mastery, is to be conscious of tradeoffs. One has to develop a habit of asking, “What will I NOT do in order to get this done?” Progress in one aspect of life can only be made at the expense of denying progress in all the others.

The author teaches at Stanford and implements the empathy-based design thinking approach in his essentialism advice. In this case, he offers several techniques for building empathy with yourself– to gain clarity about your purpose, to acknowledge physical limitations (primarily sleep) necessary to making sustained progress and to engage in free-spirited play to unlock creative thinking and avoid self-reproach. And like a design thinker, he advocates a kind of Minimum Viable Product approach to making progress on your priorities. Don’t set your sights on one big effort, or assume that you can define the endpoint of your efforts before you get there; start with a rough idea of where you think you want to go and think of the next tangible iterative step you could make to progress. In so doing you’ll develop confidence and motivation to keep moving forward.

One thing I enjoyed most about the book were the numerous pithy quotes at the masthead of each chapter and sprinkled throughout the text. I might copy a few of them into the blog after I finish writing this. On the other hand, the book is also another disappointing amalgamation of pop business and productivity stories, name-dropping and “stuff my friends did that I thought was worth including in my book” that deny this book a chance to enter the pantheon of classics, aside from the fact that it really offers nothing new on this subject other than the marketing of the idea.

The four-part structure of the book, Essence, Explore, Eliminate, Execute, has the clear “focus-flare” cadence of the Design Thinking toolbox’s Empathize, Define, Ideate, Prototype and Test. Essence sounds like Empathize, Explore sounds like Define, Ideate sounds like Eliminate and Prototype/Test sound like Execute to me.

In thinking about the message of focusing on what’s really important, I made a note in the margin on one page which said, “if it feels like I can do anything I want with my life, it’s ironic because I will in fact only do one of those things.” If that’s true, and I think it is, it would be better to figure out what that one thing is sooner rather than later lest I risk wasting a lot of my time on what turns out to be non-essential.

3/5

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Review – The Acquirer’s Multiple

The Acquirer’s Multiple: How the Billionaire Contrarians of Deep Value Beat the Market (buy on Amazon.com)

by Tobias Carlisle, published 2017

I received a free copy of this book from the author.

I spend a lot more time thinking about the best way to introduce people to the world of value investing than I actually get requests for such information, though I do receive occasional requests for advice. The reason is not just because I am a pedantic thinker but because I spent a very long time acquiring my own knowledge on this subject, with many wrong turns and wasted efforts and I have always wondered, “Is there a better way?”

Toby Carlisle’s “The Acquirer’s Multiple” may just be that better way.

But first, let me explain the most up-to-date advice I have been vending, and keep in mind, this advice is not intended as “how to be a good investor/make good investments” because I am not a registered investment adviser nor would I attempt to impersonate one– this is just my opinion of “how best to learn about investing”. I think I can dispense that advice as an opinion without running afoul of the authorities because I am just talking about ways to acquire certain knowledge. At least I hope so!

My suggestion is to read the following titles, in this order:

  1. The Richest Man in Babylon: Now Revised and Updated for the 21st Century (Paperback) – Common
  2. The Millionaire Next Door: The Surprising Secrets of America’s Wealthy
  3. Buffett: The Making of an American Capitalist
  4. The Accounting Game: Basic Accounting Fresh from the Lemonade Stand
  5. The Essays of Warren Buffett: Lessons for Corporate America, Fourth Edition (or more specifically, Buffett’s Shareholder Letters from Berkshire Hathaway, and his private partnerships, available on the Berkshire website)

Perhaps at a later date I will spend some time writing a post explaining in greater detail why I recommend these resources in this order to an aspiring student of (value) investing, but for now I will simply say that the first two explain how to save and how to develop the psychological discipline and personal habits that permit one to save money, and you must have savings if you want to fuel an investment program. The second lesson is in inspiration, to study the life of the greatest master of investing in the modern era to understand both what is possible, and what it takes, to be great at investing. The third lesson is a rudimentary knowledge of accounting, “the language of business” because if you’re going to be investing in businesses you ought to have a clue what is going on.

Only then, young grasshopper, are you ready for your fourth (but not final) lesson, which is to learn the methods and principles of (value) investing itself. And I can think of no greater expositor of these principles than the great master himself once again, Warren Buffett, especially because you can read along as his company develops and see the wondrous workings of these principles in “real time”.

But even this can be an overwhelming introduction for a noobie who doesn’t realize what a deep pool they’re wading into in asking the question. For the action-oriented, then, I offer a 3-Point Plan of Investment Attack which includes:

  1. The Richest Man in Babylon
  2. The Little Book of Common Sense Investing: The Only Way to Guarantee Your Fair Share of Stock Market Returns (Little Books. Big Profits)
  3. The 2013 Berkshire Hathaway Shareholder Letter, “Some Thoughts About Investing”

This short list will teach you how to save money so you have fuel for your investment machine, and then it provides the basic knowledge needed to decide if you want to be a humble Sunday-driver investor and do passive index investing, or if you want to be a more racy investor and pick your own businesses to invest in the way a true value investor would.

Pedantic as I am, where the heck does Toby’s book fit into all of this?! Well, I think now I can whittle my 3-Point Plan down to 2-Points: The Richest Man in Babylon, and The Acquirer’s Multiple. And I might be able to turn my original 5 item foundations into a 3 item list, using Richest Man, Accounting Game and The Acquirer’s Multiple as the set of texts. Here’s why.

Toby has done something incredible with this book. He has boiled a deeply studied, highly opinionated, multi-trillion dollar field of human endeavor down to its most essential, best researched and expertly practitioned concepts and he’s done it all in simple language that I am convinced even a complete neophyte would find approachable. He has included a number of delightful graphics that help to illustrate these simple concepts about how typical market participants behave and where investment value comes from that, for the first time in my life, I actually found increased my understanding of what I already knew rather than confused me (note: charts, data tables, etc., usually just distract me and I skip them, I am a mostly verbal knowledge acquirer). You really can’t go wrong jumping in this way.

The best part, however, is that he has curated some dramatic and action-packed biographical stories demonstrating how successful billionaire investors have put these ideas into practice. This checks the “inspiration” box I mentioned earlier because it helps the reader see how these ideas were translated into action and it gives confidence that you, too, could stand to benefit in this way.

And finally, he repeats (yes, the book is repetitious) all the neatly summarized concepts into one final summary list at the end of the book that involves 9 rules for a value investor to live by. I am confident that if a new investor referred to this list again and again at each point in his investment research and portfolio management process and asked himself, “Am I living true to this list?” he would be very satisfied with himself over a long period of time if his answer was “Yes”. And if the answer were “No”, then he’d understand exactly what he needed to do to get back on course.

I know Toby personally. He is a highly intelligent fellow, his passion for these ideas and the subject are intense and, if you ask me, he lands firmly in the “Graham” side of the “Graham-Fisher” spectrum of value investing (discussed a bit in the text) that all value investors and followers of Warren Buffett debate endlessly. And that is why I was so pleased that the conclusion of the book included an admonition to “check yourself before you wreck yourself”, so-to-speak. The Acquirer’s Multiple principle itself couldn’t be simpler, but Toby knows, as do all great investors in the Grahamian-tradition, that true risk lies in the behavior and biases of the investor himself, particularly an investor who can’t follow simple principles he knows to be true because he insists on trying to outsmart them.

Don’t try to outsmart what can be simple (though never easy!)… like reading 5 books on the art of investing when you could maybe get away with just two or three. And I am now convinced that Toby’s book should be one of them.

4/5

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