The Value of Sewage

The Back Story

What would you do if you won a major lottery jackpot? For many of us our first thought would be “charity starts at home”, and with charity, we may envision shiny new cars, big houses and long holidays in fancy tropical locations. For Mark and Cindy Hill from Dearborn, Missouri their net jackpot winnings of $136.5 million were spent a little differently.  They bought a sewage plant.  The the multi-million dollar question is: What were they thinking?

Gaudiamus Igitur

Money is a funny thing – it came into existence as a tool that allowed people to simplify trading.  Let’s face it, if we all had to keep a few goats in order to obtain a new car, and a few bags of salt to swap for vegetables, we would have been in the dark ages, except there won’t be any cars.  Money at the same time made economic life simpler and more complex.  As a species that has the ability to assign random values to random objects, money is often a confusing thing to people – it represents value but in and of itself it has no intrinsic value.  We can’t eat it, drink it, sleep under it (at least not comfortably) or use it to fight off wild animals.  Money is intrinsically worthless.

Even the value we ascribe to money is all fuddled up.  There is no reference value for an American Dollar or South African Rand anymore, instead one money unit has relatively more or less value than another.  They call it a floating system, like a bubble. And much like bubbles this relative system of floating values grow with nothingness until is pops.

So money has no intrinsic value, yet we use it to exchange things we value – this means that whenever we spend money it becomes a reflection of the things we subjectively value.

What were they thinking?

The Hills decided to spend their money differently – instead of buying ultra luxury items, the couple decided to do the following among others:

  • Build a fire station
  • Build a sewage plant
  • Build a ball park
  • Create a scholarship fund at their old high school

If spending is a reflection of what we value then it is very obvious that, above all else, Mark and Cindy Hill values their community.

Why would this be? If the Relational Mind is to be trusted, it seems that this particular couple has a very strong, established identity.  They didn’t see the need to acquire things that do not reflect who they truly are.  This is because they understand who they truly are and value that higher than the money they won.  With their identities firmly anchored they are able to give the money towards those things they recognised as needing development.  In that way they move into the roles of guardians or what the Relational Mind would call “mentors”.

The lesson to us all

In order to contribute to the world around us, we need to have a clear understanding of the world within us. Once this inner world is clear and we no longer wonder about who we are and how we fit into the world, we become those who lead, those who make the changes that others need. Mentorship or leadership is the expression of our identity in a way that allows others to fully develop theirs.

Yahoo: No more working from home?

The Back Story

A decade ago, as the internet became faster and the economy was still reeling from the dot-com bust, the concept of telecommuting made tremendous sense.  People could work from home, care for their kids, work in their pajamas and essentially live their lives as long as they delivered their work on schedule.  And all of this seemed to work very well for quite some time.  Until now.

Marissa Mayer, Yahoo’s chief, sent out a memo recently stating: “To become the absolute best place to work, communication and collaboration will be important, so we need to be working side-by-side. That is why it is critical that we are all present in our offices… We need to be one Yahoo! and that starts with physically being together.”

The IT world is abuzz with the question we will attempt to answer here: what was she thinking?

What was she thinking?

Based on the message by HR she seems to be quite clear about what she was thinking – if people are in the same physical environment, then they work better together.  But is this all?

To understand executive decisions, one needs to be a bit cynical.  A company CEO is appointed to perform three main tasks namely mitigate risk, reduce costs and increase profits.  Essentially that is the core of what every CEO in the history of every company was asked to do.  It is no different in this case – the HR department may have worded the message very nicely and wrapped the edict in terms that may seem more palatable, but if this message cannot be drawn back to those three primary objectives it would be a waste of time.

The question now becomes a little more involved – it isn’t so much a question of “what was she thinking”, but rather three questions:

  1. What risks did she see in the work-at-home system?
  2. How was this system costing Yahoo money?
  3. How can she increase profits by calling all workers back to the office?

Firstly, the perception of risk is conversely related to the degree of trust in an environment. Business Insider reports that Yahoo has a large number of telecommuters and as a result have been experiencing some difficulty in managing performance.  In fact, some workers were able to “hide” so well that nobody realised that they were still working for the company.  The major risk here was one of paying salaries to workers who underperform and cannot be effectively managed.

The paying of salaries to underperforming workers was possibly the major cost factor that was taken into consideration for this decision.  Not only that, the underperformance itself would lead to lower outputs by the company, allowing them to lag other Silicon Valley companies.  Mayer comes from Google where workers were treated very well, and performed equally well.  In the same report, Business Insider makes this point: Mayer needed to trim the bloat and pushing for this change allows her to make the cuts without explicitly calling it “layoffs”.

If the risk is mitigated and the costs are cut, then the consequence must be profit. This is true here too – by shaking off the “lazy” workers and shaping Yahoo up to become a leaner organisation two financial benefits arise – an increase in productivity and a decrease in the salary budget. Both these benefits impact the bottom line.

But is that all?

CEO’s know that, even though everything boils down to the bottom line, they are still working with people, and that people need contact in order to develop a culture. The direction in which this culture will develop is largely dependent on the character of the leadership.  Mayer’s personality will soon grow into her organisation.  If she is lean and fit, and enjoys working in smaller groups, then that will be the basis of her company.  If she is a controlling dictator that demands 100% obedience, then that will become the regimen at Yahoo.

From what I’ve seen though, she seems to be making smart decisions – bring the company in line with the current culture in Silicon Valley where innovation is the key driving force.  Make sure it is a nimble organisation that can respond quickly to changes in the market and make very sure that you have workers you can trust and rely on to be there when you need them.

And finally…

It remains to be seen how well this would work – breaking an established culture is often like trying to cure cancer.  One can kill off the bad cells, but there will always be a few remaining that, if not managed by the internal defenses of the organisation, can lead to old tumors growing back.

It isn’t enough to just reestablish fellowship in an organisation – one needs to foster the development of individual identity within the new culture by strategically placing mentors in the lead – individuals with experience in that particular culture that can truly lead teams towards real outputs.  Only if that balance is effectively achieved will it be possible for Yahoo to move forward and give Google and Microsoft a run for their money.

And that is the decision of the day.

The $4.4million WordPress Site

The Back Story

A week ago I created this very site using WordPress – my annual hosting fees are about $100 and the theme I used is free.  You do get some very nice themes that cost a few dollars if you really want to go pro.  Nonetheless, setting up this site took me less than two hours in total and since I host a number of sites from a single account, its cost would be equal to about $60 for the entire year (domain name included).

News 24 (A South African news service) reports that  a local provincial government paid R40 000 000 (about $4 400 000 US) to have their web site redesigned.  You can read the entire story here. Incidentally, this web site too is built using WordPress  with a theme that cost $40. Elzabe Rockman apparently signed a three year contract for that amount which brings us to the main question: What was she thinking?

Here comes the theory

The Relational Mind, from which the site gets its name, is a model I use to help organisations understand how decisions work, and why some decisions go right. The basic premise of this model is that the maturity of human beings are the sum of their relational inputs.  Differently stated – you are, because we are.  Since no man is a proverbial island unto himself, nor any woman for that matter, our actions too must be expressions of the relationships that influence us.  The Relational Mind identifies three relationship types that are linked to three facets of the development process namely intra-personal (the relationship one has with oneself), fellowship (the relationship one has with people in one’s immediate surroundings) and mentorship (high impact relationships with significant influencers).

When the intra-personal relationship is active within fellowship, information is transferred between the individual and the people within their immediate surroundings. When fellowship finds mentorship, formation (or learning) happens and finally when mentorship is active for the intra-personal relationship, expression happens.

What was she thinking?

Imagine for a moment you need to make a decision about a medical procedure of which you understand nothing.  The doctor you speak to explains that this is a very expensive operation and, although other similar operations exist, the cheaper ones are typically a “get what you pay for” situation.  You discuss the procedure with your friends of family (none of whom are doctors) and find that everybody thinks the price is high, but it is required so you just need to do it. You also think back on a previous procedure at the same doctor – it went very well and you paid a similar amount for it.  You don’t really know other doctors (or trust them with your history) so you rely on your doctor’s inputs.  All of them lead you to a single conclusion namely that you need to pay exorbitant sums to get this procedure.  Meanwhile your local pharmacist has a $2 cream that your doctors used to cure your condition that he applied under anesthesia.  You could have just picked it up yourself and applied it to the affected area.

It is very likely that Ms. Rockman went through a similar process – the web site design company already had contracts with other provinces, so all her friends concurred that this is the right person to contract in.  Less costly web sites, she possibly presumed, is less costly for a reason and when she reverted to the designer in question she felt confident that his advice accounts for everything.  Intra-personal relationship, fellowship and mentorship led her to a very bad decision.

What went wrong?

The information process requires a certain degree of exploration.  Ms. Rockman should have started by looking at the web site of this particular contender to see what their designs look like, what their history as a company is and what skill sets they have. At first glance she could have seen that this company has no web site for themselves, which must have raised a very red flag.  As such her capacity to judge whether this was a good or bad decision was limited by her willingness to look further than the proposal she had in hand.

Ms. Rockman most certainly did not pick up the phone to ask her friends in the banking industry what the going rate for a good web site is.  She didn’t even have to do it herself – one of her administrative supports could easily have performed the basic research by picking up the phone and getting a realistic view on what such a web site would cost to build and maintain for a three year period as a point of reference.  From a previous article we know that fellowship is anchored in standard, and it was clear that this was her primary reason for selecting this company – her peers all agreed that this guy is the standard.  It wouldn’t be too hard to believe that there was some coercion from higher management to push this decision through – South Africa is a country that suffers badly from the corruption of nepotism and culturalism.

Finally, she probably did not have any industry experts to guide her.  When such a decision is made, it is more often than not the result of an individual relying on the standard set by their peers and the belief that they must somehow know how to make a decision on matters that is in reality well beyond the scope of their expertise.

And the solution…

Maturity is a difficult concept for most people.  Essentially is relates to our capacity to make useful and mutually beneficial decisions within a given context where we have authority.  No person can be fully mature in all contexts, and Ms. Rockman is by no means a web design guru.  The fact is that she (and the Free State Government amongst others) have wasted $4.4 million on a web site that could have been built for a fraction of the price – from where I stand it was the result of overconfidence and a lack of appropriate reference standards.

When we make decisions it is OK to not know something. The most natural instinct we have is to ask friends and family for advice (or even trusty old Google), but more often than not we still make bad decisions because we don’t dare ask trustworthy experts or people who had similar experiences.  The $4.4 million WordPress site is a perfect example of what happens when we do not take care to involve knowledgeable and experienced people in our decision making process.

So, always test what you know by comparing it to the norms and standards of your peers, and have the answer confirmed by knowledgeable and experienced individuals, then make sure that your chosen option is both useful in solving the problem and mutually constructive to all of those affected by your decision (*cough* Taxpayers Ms. Rockman?*cough*)

And that was the Daily Decision.

Decisions, Decisions

Welcome to Relational Mind where we will be exploring all the ins-and-outs of making decisions and suffering the consequences. The format of this particular blog is to pick a random decision from a random decision maker (whom I will select from the news, my personal experiences or tabloids) and pick it apart to try and fathom the processes that delivered a given decision.  Some analyses will be more serious than others, but all will ask the same question: What were they thinking?

My name is Gericke Potgieter – try not to spit at your screen when you try and pronounce it! I have been actively evolving as a strategist over the past 18 years that loves digging into people’s mental processes to try and solve all their puzzles.  During this time I wore many hats, most of them with a large entrepreneurial badge on it.  Today I apply my knowledge and insights to the development of various information and data processing systems.  In due course some of those systems will appear on this site as the Relational Toolset.

Enough about you.  Let’s chat about Yoshimasa Hayashi, a minister in the Japanese government who recently stated that Japan won’t stop whaling practices.  Whaling upsets many people, which is why we are going to ask the question: What was he thinking?

Before we get to the answer, here is a bit of theory: human beings are relational creatures.  When having a heated argument with my more individualistic friends I always ask this question: “If you were the only person on earth, who would you be?” Fact is, you would have no sense of identity, no concept of being “human”, no language – in fact nothing of the traits that make us human will be present.  So it follows that humans cannot exist as functional beings outside of relationships.

 
Not only are we generally relational, we can distinguish three relationship types that form a structure of balance in our development.  The first of these relationships is the relationship we have with ourselves and this relationship is anchored in identity.  The second is the relationship we have with family, friends and other general members of society (called fellowship) which is anchored instandard. And lastly we have significant relationships that have a direct influence on how we express ourselves – these significant relationships can be called mentorship and they are anchored in trust.
 
In order for a person to develop fully, there needs to be a consistent balance between these three relationships.  Unfortunately I have yet to find a society where this is the case.  In the Western cultural environment we place a lot of emphasis on being an individual, but conversely, fitting in with the rest of society.  We seem to be in a constant tug-o-war between identity and standard.  What we do lack is a strong presence of father figures – mentors that can give us direction as we try and assess various social norms and values (standard) against our personal experiences.  So our primary references is “me” as the primary unit of “us”.
 
Far Eastern cultures, of which Yoshimasa Hayashi is a part, veers to the other side. They have a very strong cultural bond (standard) which is reinforced by trusted father figures over time.  Any expression of individual identity that moves outside of the accepted social norms and values are strongly discouraged.  Fathers, kings and ministers will consistently reinforce the standard even in the face of global opposition. In this cultural environment it is “us” and “our mentors” against “I”.
 
So what was Yoshimasa Hayashi thinking?  The same thing that many ministers and were thinking before him – whales are edible, we like the way they taste, we have been eating them for about 1000 years, and because Western culture lacks strong values, we won’t be influenced by their perspective on things.  As a politician he also knows that you do not mess with an industry that in 2010 was worth roughly 4.5 billion yen (albeit a declining industry).
 
Essentially the Far Eastern cultural mindset consists of an endless cycle of standards reinforcement whereas in Western culture it is an endless tug-o-war between the identity of the individual and the standards of the society they live in.  In both instances there is an imbalance that leads to some really bad decisions.  So, Westerners can easily point the finger to the Japanese and shout “Whale Killers!”, but the Japanese may just as well point a finger the the US and say “Cocaine Addicts!
 
The conclusion? It is highly unlikely that whaling in Japan will stop due to pressure from environmentalist groups, just as drug use in the US is increasing in spite of enhanced government efforts.  The only way in which Japan will let go of this tradition is if a) some leader forms a strong opinion against whaling that can be legally enforced and b) that same leader comes up with a way to replace the income generated through whaling.  This process could however take decades  – initially the market for whale products will experience massive price hikes due to large stockpiles suddenly gaining increased value and these profits will have the natural effect of encouraging illegal whaling.  This cycle will be very difficult to break, but if it is done, then Japan may be able to move away from Whales and focus there efforts on some other strange, yet bountiful, animal.