Category Archives: Business

The Quest for a Life of Leisure: Prisoner’s Dilemma in Food Production

In a conversation about “vegan food in the workplace,” I heard a thoughtful comment that reminded me of the Prisoner’s Dilemma. Before I paraphrase the comment, here’s a quick video to refresh your memory on the Prisoner’s Dilemma:

So, now that we have a better understanding of the Prisoner’s Dilemma, let’s get back to the comment. Essentially, the person was making the argument that large-scale commercial agriculture and farming is unsustainable, harmful to plants, and harmful to animals. The person was making the point that this problem stemmed from the business models/practices required to sustain them (and not the animals/plants themselves). Further to the person’s point, they explained that we also play a part in this by the way we purchase food. Regardless of whether we buy local, wild-caught food or buy large-scale commercialized food, there’s still an impact on the environment.

Upon hearing this comment, the first thing I thought of was the Prisoner’s Dilemma. Let me explain. There’s a demand for food. Consequently, businesses will satisfy that demand by supplying food. [Econ 101, amirite?] But how businesses satisfy that demand is where things get tricky. They could do so in a number of ways, but let’s simplify it into two: large-scale commercial agricultural production or small-scale local farming. If businesses were to focus on small-scale local farming, they’d be supplying food for the town (or maybe the town and some neighbouring towns). Businesses that focus on large-scale commercial agricultural production aren’t supplying food for a town, they’re supplying food for a country or – countries.

The two-by-two that I see here is that if businesses “cooperated,” they’d be supplying food for the local town(s) and “everyone” would be satisfied (consumers get food, businesses make money, environment is ‘harmed’ as little as possible, etc.). The possible hitch here is that businesses see an opportunity to make more money, so they scale up production into a major agricultural conglomerate (i.e. food for countries). That’s not to imply that this is “bad,” just that the opportunity exists and many businesses seek to seize it. In so doing, that provokes other businesses to do the same – the businesses are “betraying” each other, leading to externalities borne out by things like the environment. [NOTE: I’m aware that this example is very oversimplified and does not represent the state of food in all countries, especially where food shortages exist.]

The irony of the race-to-the-bottom is that, often times, the people running these businesses are all in it for the same thing:

An American businessman was standing at the pier of a small coastal Mexican village when a small boat with just one fisherman docked. Inside the small boat were several large yellowfin tuna. The American complimented the Mexican on the quality of his fish.

“How long it took you to catch them?” The American asked.

“Only a little while.” The Mexican replied.

“Why don’t you stay out longer and catch more fish?” The American then asked.

“I have enough to support my family’s immediate needs.” The Mexican said.

“But,” The American then asked, “What do you do with the rest of your time?”

The Mexican fisherman said, “I sleep late, fish a little, play with my children, take a siesta with my wife, Maria, stroll into the village each evening where I sip wine and play guitar with my amigos, I have a full and busy life, senor.”

The American scoffed, “I am a Harvard MBA and could help you. You should spend more time fishing and with the proceeds you buy a bigger boat, and with the proceeds from the bigger boat you could buy several boats, eventually you would have a fleet of fishing boats.”

“Instead of selling your catch to a middleman you would sell directly to the consumers, eventually opening your own can factory. You would control the product, processing and distribution. You would need to leave this small coastal fishing village and move to Mexico City, then LA and eventually NYC where you will run your expanding enterprise.”

The Mexican fisherman asked, “But senor, how long will this all take?”

To which the American replied, “15-20 years.”

“But what then, senor?”

The American laughed and said, “That’s the best part. When the time is right you would announce an IPO (Initial Public Offering) and sell your company stock to the public and become very rich, you would make millions.”

“Millions, senor? Then what?”

The American said slowly, “Then you would retire. Move to a small coastal fishing village where you would sleep late, fish a little, play with your kids, take a siesta with your wife, stroll to the village in the evenings where you could sip wine and play your guitar with your amigos…”

And maybe that life of leisure is closer than we think or, maybe, as the above parable suggests, we had that lifestyle before we “betrayed” each other in the Prisoner’s Dilemma. In an article I read recently in The Atlantic [Emphasis Added]:

The Ju/’hoansi [of Namibia] not only managed to feed themselves better than many in the industrialized world, but that they did so on the basis of only around two hours foraging a day, and cheerfully spent the rest of their time on more leisurely pursuits such as napping, playing games, and making art.

[…]

Over time, a more sophisticated picture of the Ju/’hoansi’s affluence emerged—one I saw firsthand living in southern Africa for 25 years and one I describe in my recent book. The Ju/’hoansi had an unyielding confidence in the providence of their environment and in their knowledge of how to exploit it. This meant that the Ju/’hoansi, like other hunter-gatherers, focused almost myopically on the short term—if the environment always supplied food and materials and the seasons were broadly predictable, what point was there in worrying about the future? This confidence also meant that the Ju/’hoansi did not store food for more than a few days and only expended energy on securing just enough to meet their immediate needs.

The Ju/’hoansi shared their food with one another according to a set of social prescriptions that ensured pretty much everyone, including the young, old, or disabled, got a share. As a result the Ju/’hoansi were also thoroughly egalitarian, mercilessly ribbing anyone that developed delusions of grandeur and seeing no point in accumulating wealth or formalizing systems of exchange.

NOTE: This was cross-posted.

Read as if You’re Presenting: A Backdoor Argument for Oral Exams

In my experience, the best way to retain the material you’re reading is to be giving a presentation on said material. That might sound a little odd, but consider it for a moment. If you have to present on a topic, when you’re reading about that topic, you (should be) reading just a little bit closer and maybe a little bit harder such that when you’re up in front of a crowd, you’ll be more inclined to remember what you read.

It turns out, this anecdotal experience has been studied:

A recent study in the journal Memory & Cognition showed the effect that reading with intention and purpose can have. Two groups were given the same material to read—one was told they’d have a test at the end, while the others were told they’d have to teach someone the material.

In the end, both groups were given the same test. Surprisingly, the group that was told they’d have to teach the material (rather than be tested on it) performed much better:

When compared to learners expecting a test, learners expecting to teach recalled more material correctly, they organized their recall more effectively and they had better memory for especially important information.

Having a clear question in mind or a topic you’re focusing on can make all the difference in helping you to remember and recall information.

Intuitively, this should make sense. When some folks read “for the test,” they’re not necessarily reading with the intention that they’re going to remember the information after the test. Put differently, they’re almost always not reading the material for an oral exam. This reminds me of something I wrote a few years ago:

Presumably, the students could get through the entire semester and finish with an “A” in the class without having to say anything. I realize that a great deal of communication in today’s world is completed online and through writing, but isn’t our ability to communicating orally important, too? At least, shouldn’t there at least be some time spent on it?

In that post, I was suggesting that there be a rebalance from written exams to oral exams — in part — because in my experience, there’s a deficit in the oratory skills of students in university. Even if we ignore the epidemic of fear of public speaking, most students don’t get nearly as much time practicing their oratory skills as they do their writing skills.

As luck (?) would have it, should there be this shift from written exams to oral exams, not only would the education system be strengthening people’s ability to communicate, but there would also be an effect in having people better remember some of the things that they’re learning.

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To be honest, when I sat down to write this post, I had no idea that I was going to be strengthening my argument for having more oral exams in university and that’s — in part — one of the arguments from the article I initially referenced:

Association is a peg upon which you hang a new idea, fact, or figure. When you know where the peg is located, it’s a lot easier to find what you’ve hung upon it. As you read and come across new ideas and thoughts, you’ll want to connect and associate these with familiar memories as a means of creating a bond between old and new. There are many different ways to create associations in your mind, from pairing new thoughts with familiar objects, to creating acronyms.

So, next time you sit down to read your saved article on Pocket, catch up on a book on your Kindle, or read the Sunday Times, consider that the best way to retain some of the things you’re about to read might be if you were to pretend you were going to be giving a presentation on the material.

Do New Stadiums Lead to an Increase in Business?

Unless you’re familiar with the literature in this arena (no pun intended) or you know about Betteridge’s law of headlines, the title of this post is actually still an unresolved question for you. Well, I won’t delay the inevitable: according to research published earlier this year, the answer is no — new stadiums do no lead to an increase in business.

There are two things I want to talk about as it relates to this research. The first is Richard Florida. If this area is an interest of yours, there’s a good chance that you’ve come across him. Florida has been a professor for the last 20+ years and has written extensively on cities. Here’s a post I found from him within the last year that talks about the very thing that the journal article discussed:

The overwhelming conclusion of decades of economic research on the subject is that using public funds to subsidize wealthy sports franchises makes zero economic sense and is a giant waste of taxpayer money. A wide array of studies have shown that professional teams add virtually no income to local economies. In fact, some of them find that large subsidies actually have a negative effect, taking money out of the local economy. Aside from the jobs generated by actually building the stadium, most jobs inside the stadium—selling food and beer or working at team concessions—are low-paying temp jobs. It’s even worse for football stadiums, which are used for games at most a dozen times a year, and maybe a few more times for concerts or large events. Public economic development dollars can be put to much better use on things besides subsidizing sports teams and their wealthy owners.

Ultimately, the burden of public subsides falls disproportionately on small cities that are the least able to bear the cost. For example, a $200 million public subsidy for a new stadium ends up costing a small city like Santa Clara roughly $1,650 per resident, compared to just $50 a person for L.A. And, of course, teams in bigger cities, with their bigger markets and more revenue, often do not need subsidies at all.

The reason I raise Florida’s name is because I was surprised that I didn’t see his name mentioned in the journal article. To be fair, I don’t think that Florida has done any primary research in this domain, but I would have thought that even in the opening introduction or literature review that there may have been some reference to Florida’s constant discussion of literature like this.

Anyhow, the second thing I wanted to talk about is something that might not be measurable. Well, it might not be measurable in a simple way. As a former amateur athlete, I have a special place in my heart for sports. Certainly, there are plenty of things that one could classify as “wrong” about sports, but part of me still wants to defend it/them and I’ll be upfront: that might be part of what’s going on with this section of this post.

Something I didn’t see in the article (and probably something I wouldn’t expect to find in any well-written article) is a measure of (or discussion of?) the positive externalities that result from a city’s team winning the championship or even the spillover effects from the possible positive externalities. Now that’s a tortured sentence. I’m talking about how the residents of a city feel after their team wins the championship (in a given sport). Naturally, not everyone would be watching (or care), but for those that are fans of the team that wins, there would certainly be elevated levels of joy and happiness immediately following the victory. If there were studies done on this, I suspect that there might be comparisons to those who have won the lottery in that a couple of months after, lottery winners return to a similar level of satisfaction/happiness that they had prior to the lottery win.

I wonder, though, could we measure the economic gains for a city from this positive externality and the resulting spillover effect (in this case, let’s say the spillover effect would be the “pay it forward”-ness of joy from the fans of the team to the non-fans that the fans will be interacting with in the weeks following the city’s team’s victory). Even if there is a tangible effect that can be measured, I’m sure that any reasonable cost-benefit analysis would still conclude that a new stadium isn’t worth it for a city.

ResearchBlogging.orgHarger, K., Humphreys, B., & Ross, A. (2016). Do New Sports Facilities Attract New Businesses? Journal of Sports Economics, 17 (5), 483-500 DOI: 10.1177/1527002516641168

The Complications of Spoken Confidence

Sometime last year, I came across a speech from the 2015 Toastmasters World Champion, Mohammed Qahtani. If you have a few minutes, I really suggest you take the time to watch it. OK, let’s say you only have a couple of minutes: just watch the introduction.

**SPOILERS BELOW**

While I’m not a fan of Qahtani’s parenting style (either option), I’m going to skip over that for now, as it’s not the main reason for writing this post. I’m also going to skip over the stereotypical portrayal of scientists, again, as it’s not the main reason for writing this post (but I will say that I’ve never meant a scientist who confirms that ‘stereotypical portrayal’). The main reason for writing this post is the first few minutes of the video. The startling anecdote that Qahtani shares about smoking and diabetes. Be honest — did you believe him when he said, “the amount of people dying from diabetes is three times as many dying from smoking?” Based on the audience’s response, I suspect that there are probably — at least — some of you who didn’t know this. To be clear, it’s not my aim to make you feel bad about this. If this isn’t a piece of data you’ve been exposed to at some point in your life, you probably have little reason to know. (Unfortunately, smoking is part of my family history, so I knew Qahtani was up to something when I heard him make that statement. Oh, and if you’re curious, WHO posits that smoking is the leading cause of death where 1 in 10 adults worldwide [!] die as a result of it, whereas diabetes is ‘only’ the 7th leading cause of death in the US.)

Circling back to the video… conviction. Did you notice the conviction with which Qahtani parroted the statistics about diabetes and smoking? He said it so assuredly that it almost makes you want to believe him (or at a minimum, question whether what you thought you knew about those two pieces of statistics was true or not). When I saw him do this, it reminded me of the hundreds of articles you see published each year that advise people on how to sell themselves or their company. The infamous elevator pitch.

Invariably, when you read articles (or books!) about how to give a good elevator pitch, you’re going to find that it’s very common that one of the most important things you can do in that elevator pitch is to be confident (or passionate or some other synonym that fits nicely into the author’s acronym). Don’t get me wrong, confidence is certainly important when it comes to making your elevator pitch, but in seeing Qahtani express himself with an air of confidence, it made me wonder about the human fallibility, with regard to elevator pitches.

Sure, I suspect that for people who’s job it is to listen to elevator pitches on a constant basis will tell you that they have a finely tuned BS-detector, but what about the rest of us who haven’t spent 10,000 hours listening to elevator pitches? I bet you’re thinking that you don’t have to worry about that when it comes to your field because you’re an expert. OK. Let’s accept for a moment that you are — what about all the other fields that you haven’t achieved “expert” status in — what do you do there? Well, I suppose you/we could perfect y/our BS-detector, but I suppose there’s still the possibility that you might make a type I/II error (depending upon your perspective). That is, there’s still the possibility that you might miss the BS for what it is and it’s also possible that you might incorrectly assess something as BS when it’s actually gold!

On that note, I want to leave you with the powerful words of Dr. Maya Angelou, on words:

Why It’s Important to Have Diversity (in age!) in Your Work Teams

If you had to guess, would you say that younger people or older people are better at learning abstract causal principles?

When first thinking about this question, I would have thought that older people would be better at this given that they have more experience and that they might have been in analogous situations. However, the research seems to indicate that younger folks are better at things like this. Here’s a passage from the researchers that specifically address my thought that experience would be helpful:

The very fact that older learners know more may make it more difficult for them to learn something new. Once a learner has inferred a general principle (e.g., that people act because of their traits, or that individual objects, rather than combinations of objects or relations between them, have causal powers), that principle may constrain his or her interpretation of new data. Causal relationships that conflict with that principle may then be more difficult to learn.

Certainly this research is important, but the thing I want to highlight here is work teams. Specifically, this study points to the importance of having diverse w0rk teams. It’s important to remember that diversity doesn’t just mean people of different genders and different races, but people of different ages, too. If we mix in folks with different “levels of experience,” we might have a better chance of coming up with a solution to the issue than if we just used folks who were all of the same level experience.

Further to that, I was thinking about how this research comes into play when we think of top management teams or corporate boards. Recall the post I wrote recently that discussed the importance of diversity at the board-level. I don’t remember there being anything related to age in that article, but I also suspect that conducting research on age as it relates to boards or top management teams might be difficult. Usually, we find folks who’ve reached a certain level of experience before they’re considered for work on a corporate board or considered for a promotion to the top management team. Maybe we need to start thinking about considering some younger folks for positions in these roles.

ResearchBlogging.orgGopnik, A., Griffiths, T., & Lucas, C. (2015). When Younger Learners Can Be Better (or at Least More Open-Minded) Than Older Ones Current Directions in Psychological Science, 24 (2), 87-92 DOI: 10.1177/0963721414556653

Perseverance Negatively Correlated with Counterproductive Work Behaviours

New research shows that perseverance might be a key character strength when it comes to counterproductive work behaviours. The researchers were interested in finding the character strengths that were most correlated with work performance and counterproductive work behaviours (things like absenteeism, lateness, incivility, etc.). As the title of this post suggests, the researchers found that perseverance is the character strength that is most negatively correlated with counterproductive work behaviours. Meaning, when a person is found to have a lot of perseverance, they’re also found to have a lower level of counterproductive work behaviours.

In thinking about these findings, the thing I most wonder about is when we draw out perseverance to an unhealthy form. That is, of course, it’s great when employees are driven and they persevere, but what happens when they “go over the edge” in their pursuits? I suspect that as we get employees who persevere to these great lengths, it should no longer be thought of as a character strength. And similarly, the negative correlation with counterproductive work behaviours might not hold. In fact, I’d expect that we’d then see a positive correlation with counterproductive work behaviours. Meaning, when the perseverance becomes pathological, I’d expect the employee to exhibit some counterproductive work behaviours. Of course, this is all speculation, so it’d be interesting to see someone test for this in future iterations of this research.

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The researchers of this study also tied in studies on the Big 5, specifically as it relates to conscientiousness. It seems pretty well-known that conscientiousness is the characteristic of the Big 5 that is mostly closely correlated with work success and so the researchers of this study made mention of the fact that perseverance is shown to be highly correlated with conscientiousness. If we draw this out a little, the implication is that employees who demonstrate perseverance as one of their character strengths should also show signs of higher work performance (through their expected Big 5 personality trait of conscientiousness).

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I suspect that research like this will give folks in HR something else to look for when recruiting new employees. There was already information out there about conscientiousness, but now they can also look for candidates who demonstrate a higher degree of perseverance. Maybe when contacting their references, the recruiter can ask about whether the candidate has demonstrated (or how the candidate has demonstrated) perseverance in their work.

ResearchBlogging.orgLittman-Ovadia, H., & Lavy, S. (2015). Going the Extra Mile: Perseverance as a Key Character Strength at Work Journal of Career Assessment DOI: 10.1177/1069072715580322

Board Diversity Paramount for Achieving Corporate Benefits

Earlier this year, there was some interesting research published about board diversity, as it relates to achieving corporate benefits. Specifically:

Board diversity improves governance and product development especially in firms led by White men CEOs. There are at least two important implications of these findings. First, we have no evidence that firms with White CEOs and diverse boards experience greater conflict than other firms due to distrust, lack of social similarity, or resultant communication barriers. Indeed, it appears that the presence of ethnic diversity on the governing body only advances strong corporate governance.

I should clarify that the researchers acknowledged the limitations of their findings because they limited their sample to Fortune 500 companies. The second implication:

Diverse leaders may bring perspectives, priorities, and ideas to organizations that significantly affect organizational trajectories. In particular, minority leaders at the board level affect the likelihood that a firm will pursue strong governance and effective product development. This strongly supports the business case for diversity. Our findings also suggest that relative numbers and influence on the board in conjunction with the CEO matter for realizing the benefits of diversity. Both the percentage of minorities on the board and the presence of influential minorities significantly impact governance and product innovation when traditional leaders serve as CEOs.

This is certainly not the first study published about the importance of board diversity, but I find this one particularly interesting because it puts things in the context of corporate benefits, which is something that I would think might be more likely to motivate action.

The researchers also draw attention to a specific avenue for further research: top management teams. I would suspect that we might find a similar effect, with regard to diversity, when studying the composition of top management teams. The importance being that different perspectives are represented and diversity is one of the ways to do that. It could be, however, that this same effect doesn’t hold when analyzing the level of top management teams, which would then increase the importance of having diversity within board composition.

ResearchBlogging.orgCook, A., & Glass, C. (2014). Do minority leaders affect corporate practice? Analyzing the effect of leadership composition on governance and product development Strategic Organization, 13 (2), 117-140 DOI: 10.1177/1476127014564109