Business lessons from social movements

My friend Erin raised an interesting question a few weeks ago, during the height of the Ferguson protests. Here's a snippet of what she wrote: "I would love to hear a good lecture/discussion (of series of the same) on the business of social change. I think what people fail to realize about the Civil Rights Movement is how deliberate and strategic its leaders were. For example, they chose Selma for the march for specific reasons...

In the end, a comparison of Selma and Ferguson (and even Occupy Wall Street) would be more than warranted. It’s a different day and time, in some ways, but thought-provoking to consider the definition of tangible metrics for success, identifiable leadership, legal and political leverage, and management of public opinion."

On this point, I agree. It is interesting and important to understand what makes certain transformative efforts successful versus others. In a sentence, though more discussion is obviously warranted, what strikes me about Selma vs. Ferguson is how focused the activists in the Selma were, compared to today's protests.

And that's a lesson for leaders today, when leading other people it's crucially important to focus.

WHY, WHAT, HOW

There are three questions which bring a goal into focus - why, what, and how. Most of the time, business leaders focus on the how. What I think makes organizations and movements (like Selma) effective is very clearly defining the "why?" and "what?".

I think of why, what, and how like a road-trip. What is the destination you want to go to. Why is the reason you want to take the trip. The how is the route you take, the stops you make, and how you pack the car.

The what and why function like the lenses on SLR cameras. An SLR lens has two calibration steps. First, you rotate one of the focus rings to get the framing of the shot in the right range. Then, you rotate the second focus ring to get a clear image through the viewfinder.

Similarly, defining the "why" casts a compelling big-picture frame. Then, defining the "what" helps everyone understand exactly what matters within that frame.

DEFINING WHY AND WHAT

What's difficult is clearly and actually defining "why" and "what." If a leader is able to clearly define these things to his/her team, choosing the "how" is much easier in turn.

Different types of leaders start in different places to define these important questions of what and why. For discussion's sake. Let's assume we're a visionary leader who gets an image of what the future could be and clarifies that vision as he goes.

First, define a vision - this answers who and what.

• Vision (Who's involved in the future and what do we want that future to look like?). This is a detailed, sensory, emotive perspective on what the future should look like. Zingerman's is very good at this and I learned about visioning from them. Steven Denning and other members of the Global Peter Drucker Forum are customer centered - and I agree with their contention - which is why "who" is an essential part of this question.

Then, define why this vision is compelling, using each of these angles:

• Convictions (Why do we care?) - Strong beliefs tied to intrinsic motivations give people the fortitude to achieve a goal. This is an exercise looking inward.
• Context (Why now?) - This is an exercise looking outward. In the organizations market/operating environment, why is this vision worth pursuing now? Is there a regulatory change? Is there a new technology? Why is the external environment ideal now rather than later?
• Capabilities (Why us?) - Each organization has a unique set of resources and skills which lend themselves to achieving different visions. What capabilities do you have which make your organization ideal to go after this vision?

Finally, define the target by addressing the remaining "whats":

• Purpose (What outcomes do we want to see?) - A vision is broad and purposes are specific objectives. These are smaller, incremental pieces of the larger vision which can be measured and tracked. What are the small group of things that you must achieve for the vision to come true? Define them.
• Priorities (What matters most, and, what doesn't matter?) - People in an organization need to know what's highest priority and what's not, so that effort and resources are used wisely. Defining what's not important is just as necessary as defining what is.

If a leader, a company, a movement, or any other organization can define the answers to these 6 questions, they have a chance at accomplishing tremendous transformations. And, if you clearly define the whats and whys, it much easier to craft a strategy (a how) to actually get it done.

That's why I think movements like Selma were successful - they were able to clearly define what and why, and then pick the right how to actually make their vision a reality.

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Also, I'd encourage you to read John Hagel's recent post on terrain vs. trajectory-based strategy. It gave me a good boost in congealing my thoughts here.

The questionable accountability of non-profits

Organization's tend to work better when independent entities (like boards or regulators) hold them accountable for their actions. That's why public companies have boards of directors - to make sure the company's leadership team is effectively advancing the interests of shareholders. Similarly, government entities like the SEC and FDA exist to make sure companies follow the law and aren't causing harm.

Who holds non-profits and foundations accountable for their day-to-day actions?

Non-profits are given tax exempt status because they serve a charitable or other purpose that is in the public interest. Most non-profits I know, though, don't have independent boards that make sure the organization is appropriately serving a charitable purpose or doing it effectively. There also isn't a government entity that regulates the day-to-day management of non-profits.

Sure, non-profits have boards of directors, but those directors aren't independent. Directors are often close allies of the non-profit's founder or are big donors or who have private interests in addition to any public interests they have. And those boards aren't selected or monitored by the public. Rather, the selection and operation of boards are often heavily influenced by the chief executive of the non-profit, further blurring independence.

I'm not suggesting that the non-profit that you or I donate to is corrupt, run poorly, or otherwise complicit in some level of malfeasance.

What I am suggesting, however, is that the systems of governance that most non-profits have in place would make it very hard to know of malfeasance when it occurs, because non-profits police themselves.

On balance, do you know of any institution that polices itself effectively? Do you have any reasons to think non-profit organizations would be better at policing itself than the average institution?

An ethics lesson from the Shawshank Redemption

One of my favorite quotes from any movie is from the Shawshank Redemption. In the film, the character played by Tim Robbins (Andy) says you either "get busy livin' or get busy dyin'." It gets me every time. [Here's a link to the video clip]

It's obviously an inspiring scene, but it also brings an interesting observation about human behavior to light - we have a hard time staying where we are.

Andy suggests that as we go through life, we can't stay at the same equilibrium indefinitely. Rather, he says, we either get better or get worse. There's no such thing as staying where you are.

And so it is with acting ethically. I do not think ethics is as simple as drawing a line in the sand saying "I will not cross this line". If that's how we chose to manage ethical behavior we will always lurk toward acting unethically. In real life, it doesn't work for ethics to be a standard.

Rather, ethics is a practice. We have to constantly strive to be more ethical and live our ethics more fully. It's something we must work on every single day. If we don't do that, we'll surely become more unethical as time passes.

Ethics isn't something that can be maintained as a status quo. We must either get busy being more ethical or get busy being less ethical. There's no in between.

Business should be truly ambitious

I read two articles about ambition, risk, and innovation this morning. I'd like to share these articles and the thoughts they inspired about business's role in society and my own moonshot goal. THE ARTICLES

"The golden quarter: Some of our greatest cultural and technological achievements took place between 1945 and 1971. Why has progress stalled?" - Why was the post WWII period to technologically groundbreaking and why hasn't the trend continued? This article explores why.

"Google's Larry Page: the most ambitious CEO in the universe" - This is a profile of Google CEO Larry Page (who's a Michigan Alum, by the way) his approach to management, and his aspirations for Google & humanity.

Both pieces are more than worth reading. And as I said before, they helped me get one step closer to crystallizing the "moonshot" everything I do works towards.

But it also helped me better articulate my point of view about business's role in society. I'd like to share that with you first.

BUSINESS SHOULD BE TRULY AMBITIOUS

I'm an MBA at the Ross School of Business, and the new Dean has articulated how Ross is the school that creates leaders that make a positive difference in the world. The implicit assumption there, from my perspective, is that business should make a positive difference in the world.

I don't disagree with this (very much) as an outcome. What I disagree with strongly is the framing, because it doesn't emphasize what's really important. This framing misses the deeper point of ambition.

What I see now is that business should be truly ambitious. What I mean by that is business should create products and services for customers that solve their most challenge and most valuable problems. It just so happens that the most ambitious things are the ones that make a positive difference in the world. So I think it's a subtle mistake to advocate for business's purpose to be making a positive difference in the world, what really matters is for business to be ambitious.

If you do that, making a positive difference in the world is sure to occur. Notice however, that the corollary (if you advocate for making a positive difference, ambition is sure to follow)  is unappealing and untrue. Put another way, what's the point in making a positive difference if it's incremental and not ambitious?

Business shouldn't be about incrementally improving software or developing a slightly more differentiated laundry detergent. Business should do be doing things that are hard and profitable, not easy and profitable. Business should be doing ambitious things that are worthy of the sector's resources and its brightest minds.

Something that truly kills my heart a little bit is to see tremendously bright people join companies that put their talents toward banal purposes. If a mind is a terrible thing to waste, wasting a great mind on uninspired ends is a tragedy.

And that's what I learned, It doesn't matter if we mint business leaders who make a positive difference in the world if they aren't truly ambitious when selecting the problems they choose to solve.

As many of you know, I've had a number of qualms with business school. I think the root of my frustration is that at its core, it doesn't breed true ambition.

MY MOONSHOT: "MANAGEMENT AS FREEDOM"

I think a moonshot - a transformative goal that far exceeds the possibilities of the present day - is something everyone should have. These moonshots are the goals that matter so much to you, you don't care if you fail when trying to achieve them. It's something that you want to take risks to achieve and want to connect with others around.

Moonshots are goals that evolve and become more clear as time passes. Here's my latest understanding of my moonshot.

In the past 100 years or so, organizations and management have been about control. Management has tried to centralize, streamline, and bring consistency to the organizational world. The way organizations treated people was like interchangeable parts in a machine.

I don't believe that management should focus on maintaining control anymore. Management should be about freedom.

I want to rewrite the playbook on management - from its purpose to its strategies to its tactics - so that it focuses on freedom, not control. This means rethinking a host of things, like leader-follower relationships, collaboration, cross-sector partnership, metrics, technology, strategy, and others.

My moonshot is to fundamentally change the practice of management so that every organization in the world is rooted in freedom and not control.

WHAT DO YOU THINK?

• What's your moonshot?
• Am I full of it? Is business truly ambitious?

I want to quit football, but I can't

I haven't heard many people express tension about football (aside from their respective team underperforming) but I don't think that I'm the only one that feels it. Between the media buzz at Michigan, domestic violence, and concussions, though, it helps bring to light what I think many are feeling - we want to quite football, but we just can't. I WANT TO QUIT FOOTBALL

The problem I have with football is that it's not consistent with my values. It's violent. It tends to be excessively masculine and at times, homophobic. It's also laden with horrific injuries and physical consequences for players - whether it be professionals or pee-wees.

I don't care for violence, and I don't think that excessively masculine environments are comfortable. In fact, I'd argue that excessively masculine environments are not just uncomfortable, they're dangerous. They give young males a very skewed view of what being a man is supposed to be: brute, aggressive, and tough - leaving little room for empathy, intellect, and admitting weakness.

These issues with football and football culture are no longer merely perceived, they are real. There are real cases of homophobia (although some would allege that the case of Michael Sam doesn't indicate homophobia), and the effects of concussions. There are very real cases of domestic violence in the NFL - whether it's Ray Rice or Adrian Petersen.

Just this weekend it was released that a football player at OSU with recent concussions may have committed suicide. To be sure, correlation isn't causation, but there's a creeping number of cases like this one and in the long-run new research being conducted on football-induced brain trauma may indicate that these cases are not merely correlation.

In addition to serious, life-threatening issues there's also a litany of daily annoyances caused by football. On the more substantial end, the NCAA is often accused of being corrupt and college football has a host of issues unto itself. On the less substantial end, I'd contend that after the first 5 minutes, most conversations about football are horribly boring and uninspired (this is something I noticed once I stopped watching football regularly).

Whether it's because of deep moral misgivings or minor frustrations, there are plenty of reasons to want to give up football.

BUT I CAN'T

I want to give up football, but I haven't been able to yet because of its redeeming qualities. Every time I try to give up football, I remember that it's part of who I am and part of who we are as a country.

We have many football traditions in high-school, college, and beyond - nostalgic times that seem almost synonymous with growing up in midwestern America. And despite the overly masculine environment football creates, I learned great lessons as a football player - I played from 8th grade until 10th grade - about persistence, handwork, and teamwork.

There are also wonderful stories about upstanding football players that use their celebrity status to be role models for others. There are also stories of football being a way for kids going to college that wouldn't have had the chance otherwise. I know that nothing makes domestic violence okay, but some of these heartwarming stories make it easier to forget the horrible stories tying football to violence.

For me, football has been a rite of passage. It's an excuse to chat with my buddies about a common experience and the fantasy football league I'm in is a way to keep in touch with old friends. I distinctly remember the times I've been in the Big House for games and I remember when Michigan won the National Championship in 1997. I remember football practices and super bowl parties. Homecoming games and the Rose Bowl Parade. Now, those memories include Robyn (my girlfriend), Robyn's family, my family, and many other friends - both male and female.

The idea of football is so difficult for me. On some level, I hate football and what it stands for. But in another way, I love it.

WHAT DO YOU THINK?

• Would you quit football?
• Is it okay to be a patron for something that you don't agree with entirely?

The day the protests stop

In America today, people are talking about Ferguson. They are reading about it, I hope, from sources representing a variety of viewpoints. Even more, still, are sharing their opinions about the matter. People are protesting, too, and that's what I'm most thankful for. Of course, I'm not thankful for any of the violence and the reason there has to be a protest at all. But the protests mean people still care and still believe that their actions could pressure institutions to change.

The day the protests stop - meaning that they never occur - is what worries me the most. Because when the protests stop it means that citizens have lost their appetite for bettering their communities. It means they have become so disillusioned in their government that they think that trying to change it isn't worth the effort.

I'm glad today isn't the day the protests stopped. I hope that day never comes.

Twitter matters because it is a stethoscope

Twitter has a stratospheric valuation based on the fact that it can sell advertisements to its expansive user base. And that makes sense for investors. But I think that model of Twitter - as a microphone for advertisers - misses the platform's real power as a stethoscope for institutions to listen directly to the masses. Think about it. The POTUS, the Pope, and the Dalai Lama are all on Twitter. Multinational corporations are on Twitter. Celebrities and even airlines you want to complain about are on Twitter. You can tweet at all of those folks and they might actually respond.

I have personally engaged with really interesting people and institutions on Twitter that I've never met in person. It's incredibly liberating to have access to institutions with power. Never before in history has it been easier for an individual without formal power (read: people like me) to collaborate with those that have lots of it.

That flipping of the model could be world-changing, and I'd argue it has been already. Twitter doesn't seem to have done that intentionally, but that's what's happened.

Twitter is trying to make gobs of money by giving advertisers the ability to shout their shouts as loudly as possible. But wouldn't it be interesting (and more valuable) if Twitter instead focused on helping institutions listen instead of shout?

WHAT DO YOU THINK?

• Do "the masses" really have an appetite to share their opinions, ideas, and stories? Do institutions have an appetite to listen?
• If "the masses" really do care about sharing their opinions, ideas, and stories, why don't they now? For example, civic participation isn't exactly rampant in the USA.

Why society depends on love

I thank God everyday for the unconditional love I have in my life. I'm so lucky to have a girlfriend, family, and friends who love me even when I do stupid things or am sinful. And yes, it feels good to be so loved, but there's a societal benefit to that love as well - it tames my human instinct for greed. I, like anyone else, have impulses that I'm not proud of. Let's take business school as an example. Being in business school, I've learned a lot about how to make money. As a result, I've developed a strong ambition to make money, make impact, and make things happen. On the one hand, this ambition is important because it compels me to act and give effort toward things. On the other hand, it compels me to take, and take ruthlessly.

If unchecked, this ambition will become greed. I know this to be true, because it's a theme that runs throughout history. I am not immune to this the fallibility of human nature.

And that's where love comes in. It checks my ambition and greed.

The love that Robyn, my family, friends, and even strangers sometimes, give me is not something I feel afraid of losing. I feel secure in it and know it is there to catch me when I am at my lowest. It's something I can lean on.

That love is enough for me to be happy. Even if I'm not successful in my career or in other pursuits, having and giving love fills me up. Because I have and give love, I do not have to worry about replacing the space it occupies with money, prestige, or power.

This is good, because when money, prestige, and power become an end in themselves, it makes us do funny things. It makes us behave unethically and robotically. At best, the lust for money, prestige, and power stress us out. At worst, that lust will drive us to madness.

Even though, I think hippy-dippy interpretations about love in society are bit superficial, I think those that talk about society needing more love are on to something. Love isn't just something that's nice to have as an individual. Because it's a calming force that tempers greed and the darkest parts of our humanity, love is something society depends on.

Jobs pay a lot when they suck

I don't think a high salary necessarily indicates that a job is "better." Most of the time, I think jobs are high-paying because they suck. Of course, I'm being a bit hyperbolic, but, here's what I mean.

Let's say there's a dollar value, let's call it $I (for income), and $I is the average amount of money people in America need to have a pretty good life. Nothing super fancy, but something nice enough that the average person is happy with.

Now, why would anyone take a job that pays more than $I per year? After all, if you're happy with I, why bother doing something that requires more effort (which is presumably the case because you're getting paid more).

There are two types of reasons:

1) Because you're awesome 2) Because the job sucks

BECAUSE YOU'RE AWESOME You might take this job for more money, because you're valuable. Maybe you have a special set of skills and therefore, companies have to pay you more because of competition in the marketplace. If they don't pay you a premium, someone else will. You get paid more because you're awesome.

This is ideal, because you're not sacrificing anything to get higher pay. You're happy, and you are really skilled so you get paid more. Wonderful.

BECAUSE THE JOB SUCKS An alternative explanation for taking the job that pays more than $I per year is that something about the job makes it less desirable. Maybe it's because you have to work many hours, or the work is physically demanding. Maybe it's boring or worse, maybe it's not meaningful. Maybe it's humiliating or dehumanizing work. Maybe the job is difficult and you're likely to fail. Maybe the work/company isn't prestigious. Maybe it's stressful.

In this scenario, if the company doesn't pay you a premium you wouldn't want to do the job. You get paid more because the job sucks.

In reality, the wage we're all paid is probably a mix of both - being awesome and the desirability of the job. If you  have a high paying job it's worth asking yourself, and I direct this at my MBA classmates, is your job REALLY paying you a premium because you're awesome, or because the job sucks?

WHAT DO YOU THINK?

• How much of our educational life prepares us for being awesome, and how much of it prepares us for dealing with stuff that "sucks?"
• What careers do you think are the most desirable? How much does it pay? Does it seem high or low, why?
• Are there other reasons why some jobs pay a premium?

Detroit is not a laboratory

Detroit is not a laboratory, but we should be scientists. Here's some explanation about where I'm coming from. DETROIT IS NOT A LABORATORY

One of the narratives I've heard about Detroit, especially when stories about Detroit are told to those not currently living here, is that Detroit is a laboratory. It's a blank slate, a place where enterprising folks can experiment and make something for themselves. Detroit, the story goes, is the new wild, wild west and a low-cost place to take risks and try something new.

That's not exactly true because Detroit is precisely NOT a blank slate. The City was founded in 1701. It had over 1.5 million residents at its peak, and there are still over 700k that live within the city limits - not to mention the many more in the metro area. Detroit already has a culture, and monuments, artifacts, and history. It has major sports teams, and Universities. We've started cultural, economic, and social movements in our storied history.

Detroit is the opposite of a blank slate.

I mention this because talking about Detroit as a blank slate / laboratory can make locals feel marginalized - like they're in a petri dish, under observation, and without agency. More and more, I feel that way too when folks talk about Detroit as a "laboratory."

BUT WE SHOULD BE SCIENTISTS

That said, there are lots of people - both long-time residents, and new comers - trying new things and figuring out what works to make life in the City better. And I think that's great. Detroit isn't a city that works for everyone. It can be better, it can "rise from the ashes" as we Detroit's like to say.

The way we get there is being scientists - by observing, listening, trying, failing, succeeding, learning, and sharing. Being a scientist doesn't have to mean treating the city - and those in it - like part of an experiment. What it does mean being curious, humble, and learning by doing.

I'd also say that "being scientists" is part of who we are as Detroit's. We've always been creative people, who work hard and build new things. And so we should.

It's not lost on me that this is a subtle distinction, but I think it's an important one.

When Facebook isn't free

I've been asking friends a simple question over the past month: if Facebook started charging a monthly fee, what's the most you'd be willing to pay? Take a second and think about your answer.

Most people I talked to, unsurprisingly, said $0 is the maximum they'd pay for Facebook. 1-3 people said they'd pay $5 a month for Facebook, assuming all their friends stayed on the site.

This is remarkable to me, because so many people are on Facebook and people spend so much time on Facebook. In fact, the average American spends 40 minutes on Facebook, according to a July 2014 report. That's a remarkable amount of time for something that's close to value-less, based on the results of my straw poll.

Why do you think this is the case?

I'd contend because Facebook is free. The thing is, it's not. Time has a tremendous opportunity cost - there's so much other stuff you can be doing with time. Especially when you think of Facebook time in aggregate - what would you do with an extra 250 hours a year?

Perhaps that's also why folks use Facebook profusely. It's hard to imagine what you would do with an extra 300 hours a year. It's less daunting to just use Facebook, than to go through the deep reflection required to imagine new possibilities for your own life. We don't exactly live in a society with that's facilitating of that sort of imaginative visioning, unless you grow up with uncommon privileges.

That's a deeper issue, I'd say, than the fact that folks use Facebook a lot. What would it take to create a world where people are more likely to imagine a different future for themselves, rather than use that time on Facebook?

Enter, the liberal arts.

Knowledge, Skills, Wisdom (and Liberal Arts)

I've been fairly amazed by the proliferation of online learning platforms, like Coursera, Skillshare, Khan Academy, and others. They're remarkable, I think, because they decouple "learning" from needing to interact with a person in real-time. You can learn from a screen and/or a computer and still have it be more interactive than a book.

As a quick point of reference, I'd argue there are (roughly) three types of things we learn:

• Knowledge - awareness and understanding of a topic. Knowledge answers what something is.
  • Sample Online Platforms: Coursera, Khan Academy
• Skills - an ability required to complete a task. Skills are an answer for how to do something.
  • Sample Online Platforms: Skillshare, CodeAcademy
• Wisdom - a virtue which helps decide what to do. Wisdom is an answer for why to do one thing versus another.
  • Sample Online Platforms: Do you know of any?

If you look at online learning platforms, you'll find that most platforms fall into the knowledge and skills categories. The only platforms that come close to developing wisdom are things like TED and BigThink and even so only with certain talks. TED and BigThink are more like insights - when other people share their wisdom. True wisdom, I'd argue, is something which must be internalized.

The thing is, developing wisdom takes practice, thoughtfulness, self-awareness, and reflection. It takes asking tough questions and sitting with them. It takes a broad diversity of people and disciplines around you to develop.

Wisdom is the stuff of deep truths. Developing it is hard. I think that's why you find plenty of online platforms exchanging knowledge and skills but few, if any, developing wisdom.

HIGHER ED

It seems to me that colleges and universities can't win if they hang their hat on distributing knowledge and skills unless they do most of it cheaply on digital platforms. Online courses for knowledge and skills will always be cheaper than in-person ones.

What colleges and universities can win on is wisdom. They can offer meaningful experiences and a diverse community. They can offer mentors and teachers. They can provide coaching and external influences. In other words, they can provide the right environment for students to develop wisdom through practice.

They also have the liberal arts. Because of its diversity, propensity to uncover truths and deep questions, and it's depth, it seems to me that the liberal arts are essential to developing wisdom.

Even if you're an engineer, business person, doctor, or lawyer, the liberal arts are essential. Why? Because the liberal arts cultivate wisdom.

--- photo credit: Russ Allison Loar via photopin cc  

Exploring Business Strategy via Fantasy Football Drafting

When deciding on a business strategy, it's important to choose the right target and frame challenges correctly. In fantasy football, for example, you can frame the objective when drafting in one of two ways (note that I'm thinking of a standard draft, not an auction draft): 1. Draft the players who will score the most points 2. Draft the team that will score the most points, against my opponent, week after week

Here's how the drafting strategy changes based on how you frame the objective -

If your objective is draft the players who score the most points, you:

• Draft stars because they score a lot of points
• Draft players who are anchors of their respective teams because they are perceived to score more points
• Draft sleepers because you want to get more value for your pick (and appear to be smarter than your friends)
• Draft kickers and defenses in late rounds because they usually score low amounts of points

My objective is to draft a team which scores the most points, against my opponent, week after week. So, this is how I draft my team:

• Draft stars because they score a lot of points (duh)
• Draft players on teams that are expected to win games (this reduces variability because if the team is better, they will likely score more points, even if they aren't at the top of the depth chart of their individual team). If you've ever drafted an offensive starter on the Oakland Raiders you know where I'm coming from
• Avoid players who have had major injuries or off-the-field issues (Ray Rice, AP, anyone?)
• Draft players in contract years (because they are more motivated to do well)
• Spread out bye weeks (so you can prevent having two stars out of your lineup in the same week)
• Draft defenses and kickers early (their expected value is higher) You play defenses and kickers 16 out of 17 weeks so they end up being higher contributors than a bench player you only play during bye-weeks. Also, there's less depth at those positions so drafting late gets you lemons
• When trying to draft sleepers, determine how the team has improved in the offseason to determine whether the player is now surrounded by better teammates

I've had fairly good results once adopting this strategy, but my fantasy football strategy is beside the point. The point is, how you frame your objective dramatically affects your business strategy. So choose the right one.

Society is every company's debtholder

I'm not convinced society should be companies' customer and shareholder or whether it should be, but I strongly believe that society is and should be thought of as every company's debtholder. WHY SOCIETY IS A DEBTHOLDER In short, a debtholder lends resources to a business (i.e. money) and expects the money to be repaid. In exchange for the risk that the company won't be able to pay them back, they insist upon charging a fee (interest).

In addition to that, debtholders aren't "residual claimants" if and when the company goes bankrupt. What that means is if a company goes bankrupt debtholders aren't the last people paid when the company's assets are liquidated (shareholders are).

Society is definitely a debtholder of sorts for a business because it does lend resources to companies that they risk not being "paid back" for, in effect. For example, society "lends" the following resources to companies:

-Enforced rules which create fairer markets -Clean water and air and access to other natural resources -An educated workforce -Roads and infrastructure to transport goods -Assurances for citizens which transfer the burden of social welfare (e.g., unemployment, healthcare) to the state -I could go on

Moreover, companies are getting a a great deal on all these resources. If companies privately tried do these things it would be astronomically expensive, even if they were possible. My guess is, the value companies get from these resources far exceeds the amount they pay for these resources in taxes.

If companies don't compensate government for the risk they are taking to invest in resources, we all run the risk of the government running out of money to keep lending these resources to companies. For example, if companies don't reinvest (i.e., pay back their "interest") in the workforce, eventually the workforce will be so devoid of skills to the point where government provision of these resources becomes unsustainably costly.

THE BOTTOM LINE

So here's the takeaway. Companies uses resources that society lends. They ought to pay their "interest" on these resources or eventually there will be no resources left to lend.

Why non-profits and government are harder than business

In my time at the Ross School of Business, I've come to believe that it's much harder to run a non-profit or government organization than it is to run a business. One of my professors even brought this up in class, explicitly, yesterday. Here's the basic reason why.

In any organization you have to do two basic things, create value and secure the resources you need to create value. This dynamic looks different across sectors.

In business, you end up creating value for and getting resources from the same people - customers. In non-profits and government the people who fund (or vote for) you and the people you serve are different. This makes non-profit and government management fundamentally more difficult because you have to manage the needs of two groups of people (who have different interests) at the same time.

To reconcile this dissonance in government, you could either get funders/voters to care about the needs of all. Or, you could just get everybody to vote.

What's Missing From "Business For the Social Good"

When it comes to "business for the social good," there are many examples to be proud of. Bill and Melinda Gates are fighting malaria. Warren Buffett advocates that billionaires give their money away. Many others have signed The Giving Pledge. In addition to all this, many businesses participate in corporate social responsibility activities or pro bono work. All this is great. However, I'd like to point out that proponents of "business for the social good" are largely motionless when it comes to fixing political issues which cause social problems in the first place*.

There are underlying schisms in the political systems which exacerbate or increase the likelihood of market failure. Business interests overlook these issues. For example, when's the last time you heard a corporation advocate for campaign finance reform or billionaires (with Warren Buffett as a sort-of exception) talk about fixing loopholes in the tax code?

With limited exception, business interests are silent on underlying political and institutional issues to the social problems they are trying to solve. They fix market failure ex post instead of working ex ante to create a more resilient political system which prevents market failure in the first place.

I appreciate all business interests do for society, I really do, and for that they should be lauded. But, I don't think we should ignore the fact that corporate interests and billionaire philanthropists are ignoring the gorilla in the room: fixing political systems so their money isn't as needed to fix social problems.

Most companies, I'd argue, actually do the opposite of fixing political and institutional problems. Instead, they actively try to exploit political systems to improve their chances of winning in the marketplace.

If companies are not actively trying to bend the rules in their favor, they are silent. I can't think of one business interest (though I'm sure there are a few) that lobby for fairer markets that are aligned with the public interest.

Business schools are mostly silent on this issue, too. Not once in my MBA so far, for example, have we talked about whether business has the responsibility to advocate for fair and efficient markets. In class, we assume that markets are fair, businesses play by the rules, and that businesses don't actively try to bend the rules in their favor.

The problem with that assumption is that it's undoubtedly false.

* - Why? Because fair, competitive markets are bad for business.

Reimagining Healthcare, Education, and Government

I have been, and likely always will be interested and motivated to improve how institutions work. The three biggest institutions of our time that need to be reimagined are healthcare, education, and government. I don't think this is because healthcare, education, or government are inherently flawed or because the good folks working in those realms are foolish or stupid. Rather, I think those three areas are the last institutions to be reformed since the beginning of the information age because they're the biggest, gnarliest, and most difficult to change.

If you claim to be interested in "systemic change" and you're not working in healthcare, education, or government I'd seriously question your understanding of modern-day problems or your courage. These domains are where all the action is*.

* - It's worth noting that all these domains are inextricably linked to cities.

The World Doesn't (Exactly) Need More Leaders

Lots of institutions - like schools, companies, pundits, etc. - talk about leadership to the point of dogma. At best, this is misguided. At worst, this is dangerous. What I find problematic is that these narratives imply that leadership is an end in itself. As in, you go to school to become a better leader. Companies, say they're trying to recruit their next generation of leaders.

Besides, I don't think "leaders" are what folks are really after. What they're really after is value. They want people to make things beautiful or make beautiful things. They want people to make their companies, communities, and customers better than they were before. They care about the value, not the means to create it (assuming it's ethical).

Leadership is merely a means to the end of value creation, but it's not treated that way. Leadership is heralded as an end in itself. With all the books, courses, degrees, and gurus you think, "I've gotta be a leader!"

I take this issue (I acknowledge that it's a subtlety) seriously because leadership without value creation is dangerous.

To be a leader, a leader needs followers. Ideally, people follow a leader because they are doing something valuable. That's fine.

However, when you place leadership above value creation (making things beautiful or making beautiful things) it incentivizes people to attract followers even when they aren't doing something of value.

When they aren't doing something of value, leaders trying to attract followers tend to do ugly things - coercion, deceit, exploitation - because at the end of the day, if someone who aspires to be a leader isn't doing something of value they have to make it appear as if they're doing something of value or force people to follow them.

Of course, it's helpful to have good leaders when trying to do something of value with a group of people. However, the point is not to be a leader, the point is to do something of value.

That's why I stand behind the statement "The World Doesn't Need More Leaders," because what we need more of is people who create value, regardless of whether they are "leaders". Leaders just happen to help create it sometimes. By making leadership a destination in itself, not only are we distracting from the true goal of value creation, we're incentivizing dangerous behavior.

The Risk-Averse Career Choices of MBAs

If I wanted to link-bait this post, I would've titled it "Are MBA's Risk-Averse Scardey-Cats?" I didn't do that, though, because this topic is actually serious if you think about it. I'm an MBA at Michigan Ross and many friends of mine are currently studying at Business Schools around the country. Almost invariably, the most highly-desired career paths after graduating from our "elite" MBA programs are Banking and Consulting.

Notice, that these two paths are professional services, more or less (especially consulting). In these careers, you don't have to deal with the masses. You're not on the hook for business results creating value for consumers. In other words, when you're at a Bank or a Consulting firm you don't have to take the risk of winning in the consumer marketplace, you just help your clients do that.

Oh, and you get paid a lot.

So what it comes down to is getting a big reward (gobs of money and "prestige") while minimizing risk (because you don't have to create value on the front lines in consumer markets). And that's exactly what business schools generally teach their MBAs to do, increase rewards while minimizing risk.

This isn't to say that consulting and banking aren't good career choices. I'm merely pointing out that our supposed brightest business students are largely funneling into careers that don't create value in consumer markets and that Business Schools are huge supports in getting them there.

Is that really what we want? Is that really good for society or even for "the market"?

Also, another question - does this mean that us MBAs are risk-averse scaredy-cats?

Where are you, my dreamers?

Where are you my dreaming friends? The ones with the errant scribbles in your pockets and hopeful, irreverent, conviction. I want to support you, be your friend, and share my dreams with you too. But first, let me tell you about the types of dreams I don't mean.

THE WHEN YOU GROW UP DREAM - I think of this as the dream you have for your own life and how you fit into the world. Maybe you want a spouse and kids. Maybe you want to be a PTA president when you grow up. Maybe you want to be a business leader or a sculptor. This type of dream is the answer to the "What do you want to do with your life?" question. These dreams are important, but this is not the dream I mean.

THE LEGACY DREAM - This is the dream of how you wish to be remembered. What will people say about you during your eulogy? In 100 years how will people talk about you? How will you ensure your contribution to the world? These dreams are important, but this is not the dream I mean.

The sort of dream I mean is what I call the DESTINATION dream. These dreams are the visions you have for the world around you, even if you're not there. The dreams you have about the human condition and the potential of what the world could be. This is the dream of a better destination, regardless of who leads the journey. This is the dream that you can commit to even if it comes true without you or you never get credit for your contribution. The reward of having the dream come true is reward enough.

I came across a story of a Destination Dreamer today, reading this article about Elon Musk (h/t to my friend Dominik).

I've never met the Elon, so he may be an ego maniac. But to be honest, it doesn't sound like it. It sincerely sounds like he wants to colonize mars and rid the world of fossil-fuel cars because that's his point of view on how to preserve the future of the human race.

Such a Destination Dreamer - especially one with such grand visions - is rare. I have my theories on why.

I honestly feel the world we live in (in particular MY corner of the world, at least) discourages the sort of destination-focused dreams I mean. My world has taught me to set goals, achieve them, and reap the rewards and credit. My world talks about quantifying the results on your resume. My world talks about being a leader and running organizations efficiently. My world scoffs at the liberal arts because they are not "marketable" (which they are, by the way).

Surely results, efficiency, and practicality are important. But let's not forget about the real, important dreaming.

Where would we be after all if there were no dream about a world rid of slavery, or a country that actively protected life, liberty, and the pursuit of happiness. Where would we be without the dream of eradicating smallpox or malaria. Thinking even smaller, where would we be if no neighbors anywhere imagined a safe street and a park with a small field for the neighborhood kids to play?

These dreams give us the path to carve out a better world and shape it to honor the dignity of the gift of our lives.

Which is why I ask, where are you my dreamers?

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To be honest, I'm still working arduously to articulate my dreams - they've certainly vacillated throughout my life. Right now I have two interpretations:

I dream about a time when everyone living in Detroit and Southeast Michigan feel like they have agency to live a life of their choosing.

I dream about a world in which communities have systems and infrastructure to prevent human suffering (whether at the neighborhood, corporate, or national level) from ever occurring.

This is why I always think about campaign finance reform and civic engagement. These dreams are why I write constantly about innovation and how to ensure that companies don't create economic value by destroying social, civic, or spiritual value.

Again I repeat: to all the dreamers out there, I'd like to be friends so that we can share our dreams.

***This is an open offer to anyone reading this post. I'd be happy as can be to let you make a cameo post on this blog to talk about your dreams. I will not edit your content, I only insist that you attach your name to your remarks.