The True Cost of Layoffs

In the interest of full disclosure, I will admit now that I am unemployed due to a layoff, and have also been laid off in the past. Am I bitter? No, but I would have handled it differently. This post examines the benefits and pitfalls of a layoff from the perspective of symbiotic economics.

First, what do I mean by symbiotic economics? I mean that we are all connected economically and that our economic actions have effects on each other. When I spend a dollar at a retail outlet, you will likely receive a benefit as an employee of that company, a shareholder, a vendor, or a member of the community that receives the sales tax. Alternatively, if I destroy value in the economy through theft, dishonesty, tax increases, or otherwise, you will pay higher prices, higher taxes, or miss out on potential opportunities.

I laid out the tenets of my philosophy of symbiotic economics here.

Starting with the paradigm of symbiotic economics, let us examine the ramifications of layoffs. As a shareholder, you may view all layoffs as good for your bottom line, but I would argue that is not always the case. There will be times when layoffs are necessary to protect the value that your firm possesses. If your market does not allow for growth and there is no way to keep your employees engaged productively, then a layoff is probably the best option.

However, there are times when a layoff is used to cut costs and appease investors. On the balance sheet, a layoff is an attractive thing. It allows a company to reduce losses reported in a quarter by offsetting them with a cut in operating expenses. It all comes down to a ratio: the amount of money spent compared to the amount of money earned.

However, this ratio hides many important costs that are all being paid across the globe today. When one firm cuts payroll and another firm hires, then the result is basically a wash. Today, as in many times past, we see too many firms cutting and not enough hiring. Unemployed people do not spend money. Also, growing unemployment makes employed people nervous, curtailing their spending.

If you accept the fact that our economy is symbiotic, then you can predict that reducing spending in retail will reduce the revenue that the wholesalers and vendors receive. Transportation receives less revenue. More employees are laid off, salaries are frozen or reduced, stock prices and mutual funds fall short, and we find ourselves in a viscious circle. Basically, as we see in today's headlines, if everyone cuts headcount at the same time we actually ensure that our next quarter will suffer.

There is another cost that is overlooked. You layoff 10% today, and next year you find that you need some of those employees back. Now you have to spend the money to recruit, evaluate, hire, equip, and train the workforce that you already possessed one year ago. Did you really save money by eliminating their salary? Many HR professionals claim that it costs 150% of salary to replace an employee. It could be higher than that depending on the employee.

There is no way to know what an employee would have learned, created, or innovated during a year. There is also no way to know how much damage that employee can cause by taking your knowledge out the door. I know that elitist executives do not admit the value that their employees possess, and that is shameful. A lot of money is wasted on training and developing human capital, only to see that investment return value for someone else.

The intelligent executive is aware that the best asset that he can invest in with little risk of depreciation walks out the door every day. Investing in your employees can pay tremendous dividends. Plant and equipment alone cannot create wealth without the introduction of the right people. Cash, credit, energy, and brand are all powerless to create market value, but the right people can take advantage of such resources to create value, even in the face of economic adversity.

Recently, a contact of mine started a job on a Monday. On Friday of that first week, the company announced a 5% pay cut in response to economic forces. That person complained to me, the unemployed guy who would have accepted a 10% pay cut rather than a layoff. After scolding this person into a sense of gratitude, I pondered the situation from an executive perspective.

If I had been in my former CEO's shoes, what would have been the best decision to make? He runs an S Corporation, meaning that he has only a few private shareholders to answer to and wields greater power over his company than the CEO of a publicly traded company. He could have decided to accept a loss for the quarter without fear of lawsuits for fiscal irresponsibility. The CEO could have decided to cut costs and salary temporarily, with reasonable expectations that his company would grow again in the near future. The third choice was to cut a certain percentage of salary out of the operating expenses, which he did.

By ignoring the balance sheet and accepting the loss, the CEO would be acting irresponsibly. As a shareholder, I would be disappointed (to say the least) if my investment was not protected and money was wasted. Wasting cash in this quarter could have a detrimental effect on the firm's ability to pay expenses next quarter, putting the firm in grave danger. When the firm is in danger, then the employees, shareholders, vendors, customers, and community are also threatened. That is to say, there are many stakeholders who have an interest in the profitability of a firm besides the shareholders. As an employee, investor, client, or vendor, I want this company to maintain profitability for my own selfish and symbiotic reasons.

My former CEO chose to lay off 4 % of his workforce. Most of these people were good/great employees with unlimited potential. Many of us also possessed proprietary information about the firm's products, methods, and clients. We were 4% of the current workforce, but percentage of the firm's future growth did we represent? We'll never know.

The firm's market is in a current recession due to outside factors, and we all assume that once the global economy turns around, the firm's market will begin to grow again. At that point, they will need to staff up. I have already been told that I will be on a shortlist of employees called first. They already know my work ethic and abilities, and I have already worked through the period of training and connecting. I loved working for that employer and would return today if they called. However, I expect to be in another rewarding position when they finally call and will regrettably turn them down (unless they offer a lucrative salary increase.)

I know for a fact that my layoff represents an opportunity cost for the firm. I learn something new everyday, and will be far more valuable next year than I am this year. I am innovative, passionate, and entrepreneurial. My future includes great potential that they could have harnessed for their own benefit, but will now only read about or compete against. I am sure that the same can be said for most of the other 4%.

If they cannot rehire me and the other 4%, then they will incur the additional expense of recruiting, the cost of training them, and suffer through time it takes to bring someone onboard and get them productive (6 months or longer in the technical world.) They would have been better off if they could have kept us around somehow. That way, when the market rebounds they would simply need to plug us in and reap the benefits.

The company I left spends money on keeping their employees happy. They buy premium coffee, pay for free coke, offer fantastic benefits, and pay above average salary. What if they had cut salary and benefits/perks before cutting headcount? Could they have cut enough to save the quarter and offset future rehiring costs?

When you layoff a group, the people remaining realize suddenly that they are expendable. They realize that they may be next, despite valiant efforts to prove their value. They update their resumes, send out feelers, and surf job websites. They lose any altruistic ideas about helping the company, and begin to serve their own interests more.

Would the same effect take hold under a reduction of pay and perks? I think not. I know for a fact that in the culture I left, the CEO would have been lauded for his efforts to keep the team together. He is already respected by his employees as a generous man, and there is a lot of gratitude in the company for his efforts. The culture was similar to an extended family, and the layoffs are a very emotional topic. I think it is completely reasonable to assume that amidst any grumbling, there would be a lot of employees who felt grateful to remain employed.

Personally, I would have been grateful. We all knew that sales were down and cash was tight, so losing the free coke would have been expected. A 5 or 10% paycut would have been understandable. I could have contributed to another area of the company, and not only added value to the company but a gained valuable set of learning experiences.

My fear is that by laying off workers to save the share price, we ensure reduced revenue for our firm and our symbiotic neighbors for the next quarter. Only the forward-thinking, innovative, and opportunistic leaders will save us from this downward spiral.

When those leaders turn this situation around for us, it will take longer to recover due to the additional expense incurred of hiring and training. If we were innovative and forward-thinking, we would have discovered enough opportunities to keep these employees fulfilled and productive during bad times. We could then respond to economic growth with a strategic and natural hiring process, rather than a hurried and wasteful one.

We would respond to a growing market with employees who had endured a downturn with us and grown more valuable and more loyal. We could respond with a team who is already an expert on our product, procedures, resources, and client-base, and chomping at the bit to conquer the market.

There is a time for layoffs, to be sure. However, I am sure that it is an abused accounting trick which is destroying more value and preventing more revenue than is realized. It takes fear, backward-thinking, and herd-mentality to execute a layoff. It takes an innovative, resourceful, proactive, and visionary leader to avoid a layoff and strengthen his or her business.

We can't set sail until we raise anchor and embrace the potential adventure on the horizon.

The Missing Link

Pardon my absence. I know it has been a long time. It has been an eventful time for me. I have been working like a dog, interviewing for a new employer (to include creating and delivering a presentation in front of my potential peers.) I have been working on my MBA, and both instructors had high demands and higher standards. All along, I have been unable to actually form opinions on the books I have read or ideas that I have processed. Something was missing. I thought of this blog often, but I did not want to write here while I still felt adrift.

Now I think I’ve got it. I have that missing link that will allow me to begin tieing together the loose ends of my thoughts.

First, the dilemma: how can we keep the best parts of capitalism (freedom, motivation, competition, market efficiency, etc) while correcting the worst parts (poverty, lay-offs, oppression, pollution, exploitation, unnecessary stress, etc…) Of course, Socialism, Communism, Isolationism, and various Theocracies address some of these points, but they always wipe out the most important and beautiful aspects of capitalism. I have yet to see a successfully implemented system that eliminates oppression.

The biggest problem I see with capitalism is that there is not a logical limit defined. Once you begin a capitalist venture, you can never arrive at a point and say “I have acquired enough, and now we can just coast.” The whole point of capitalism is to continue to grow indefinitely. A new company can grow their market share with innovative products and marketing. Once commercial can cause market share (and the holy grail of capitalism, profits) to jump in significant amounts. However, every market has a limited amount. Eventually, you can no longer make a large leap of profits by growing you market, because there isn’t enough undecided customers in the market to grab.

This would be a time to rest on your laurels and say, “We did it. We maximized our market share. We can just do what we do best and enjoy the ride.” However, the nature of Capitalism insists that you do something to continue to grow something, and ultimately increase your profits. If you do not, then you will either be sued by your investors or gobbled up by competitor. To stand still in Capitalism is to be run over.

Most companies punish people in order to grow profits, eventually. The easiest way to show growth in a stagnant market is to layoff employees. When you show a significant loss of salary and benefits on your financial statements, investors see growth. Unfortunately, you are laying off human being who have debts, families, and feelings. When someone gives a large portion of their life and immense effort to a company, and their reward is a pink slip, that experience can be dark and disgusting. I know from experience.

We like to demonize CEO’s during layoffs, and criticize them for making millions wile laying people off who make $40,000. It has been said that if a CEO would just forgo a few million for one year, he could save the jobs of hundreds, maybe thousands of employees. However, it is not completely a CEO’s fault. It is the nature of the system. If the CEO reaches the point where a layoff is necessary to fix the financial statement and he chooses to save those jobs out of kindness and a sense of responsibility, he is legally liable. He will immediately be sued, fired, and disgraced for not making the decision that capitalism demands: grow the profits and damn the labor.

If you cannot grow your current market and entering a new market is too expensive, then you must cut costs. Capitalism demands it. We must ship out factories overseas. We must layoff huge numbers, and then hire some of them back next quarter. We must force people to do the work of two employees, with less time and tools available. We must take away the free coffee and increase the health insurance premiums while cutting bonuses, overtime, and promotions. If you don’t like it, there’s the door.

There are two business authors who offer a new perspective on the problem and its solution. In both cases, the authors point out the folly of focusing on costs and instead demonstrate means of increasing productivity. In other words, work smarter rather than meaner.

The first author is Dr. Eliyahu Goldratt. His book The Goal is a parable for the business world, and lays out an argument for his Theory of Constraints. The parable describes a plant manager whose career is on the line. While his company wants to cut back, he slowly discovers a methodology to improve the productivity of his plant without cutting costs or adding expenses. The Theory of Constraints is the key: finding the parts of a business process that add expense, and then solving the problem using strategy, timing, or reordering.

The second author is Dr. Jac Fitz-Enz. His work The ROI of Human Capital: Measuring the Economic Value of Employee Performance points out that if we view our labor as having value just as our plant & equipment, cash and equivalents, and other assets have value, and if we look to appreciate those assets through investment and maintenance, then we will have more fulfilled employees. To paraphrase Dr. Fitz-Enz, no amount of compensation can restore the soul of a life spent in mindless toil…Fulfilling work is a reward for the individual and the enterprise…Providing fulfilling work will develop and retain the most productive workers and allow the firm to enjoy the most loyal customers.”

I don’t have it all figured out yet, I just have a piece of the puzzle that enables me to complete some nagging thoughts and take a new perspective on the problem. Capitalism can be saved and improved not by cutting costs, but my improving productivity and investing in people.

I will leave you with a final thought from Dr. Fitz-Enz that I found enlightening. He draws on work from Nobel-prize winning economist Theodore Schultz when he points out that in the industrial age, we moved materials through our business processes to create a marketable product. Now, in the information Age, we do not move materials. We move information which tells us when and how to move the materials. Perfect productivity can be viewed as a circle. When you gather the factors of productivity, you begin to close the circle by learning what data is needed, when, where, in what form, and to whom. The circle is completed when we transform data into information, and eventually into intelligence.

Fat, Forty, and Fired

Another random encounter has turned out well for me. While entering the local library one day, I glanced at the “Friends of the Library” bookstore that is in the lobby. For some reason, a certain title leapt out at me: “Fat, Forty, and Fired” by Nigel Marsh.

I have purchased hundreds of books and checked out hundreds (maybe thousands) from the library over the years. I have been given books that were hand-selected by intelligent and well-meaning people. I have had books assigned to me by well-educated and researched professionals who were sure that the assigned book was exactly right. Google, Amazon, Borders, and InformIT.com have spent billions on the technology to suggest the perfect book for me. What a waste of time, effort, and money by all of us.

I cannot understand why, but the most memorable, impressionable, and important books in my life have almost all been discovered by a random chance encounter. The predictability of this occurring is slightly higher for me than the average person because I am a bibliophile and spend so much time perusing book shelves.

I do not pretend to have any statistical skills, but I would guess that the chances of finding an important and memorable book purely by accident would be pretty rare—almost as rare as lightning-strikes and lottery-wins. I guess I am just a lucky guy. I sure hope a publisher stumbles on this and realizes I am an untapped goldmine (publishers can email me at lslobodzian [at-sign] gmail [dot] com.

When I purchased “Fat, Forty, and Fired” I expected it to start by describing a situation similar to my own and end by leading me to some needed wisdom and perhaps a roadmap for my future. However, it sat on my bookshelf for months, untouched. Graduate school, work, family, and laziness all conspired to allow dust to collect on the book (and the many others in my “to-read” pile”.) Finally, the timing was right. I had time to read, and I was open to receive Marsh’s message.

I reference many books a month, in addition to the email, articles, white papers, and pages of technical manuals I read on a daily basis. However, I rarely read a book cover-to-cover. If I make the effort to stick with a book, it is the highest praise I can pay the author. For my own sake, and I hope some of you as well, I should take the time now to highlight why I think this book was worth sticking through.

First, I must point out how dissimilar I am to the author. Nigel Marsh is an ad executive and CEO. He is well-traveled, has many influential and wealthy friends, and has made more money in a single year than I have in a decade, I am sure. He was born in England and lives now in Australia. In many ways, he lives in a world that I cannot relate to and suspect that he doesn’t truly know anything about the world I live in. Also, I am not quite forty yet.

On the other hand, he is quite down-to-earth and as I read him I felt like we were not that far apart. He wasn’t born rich and he has to work hard to maintain his lifestyle-it could all be taken from him quickly if he is not vigilante and a little lucky. He is realistic about money, and has faced the possibility of poverty or something near it.

Nigel Marsh strives at being a family man, strives to progress in his professional field, and he strives to make his life meaningful. In the end, that is where Nigel and I meet. He has an interest in Corporate Social Responsibiltiy (CSR), making the world a better place, and raising his kids to be meaningful and productive, as well as happy and healthy.

Nigel opens the book as a guy who wants to be a good family man. He ends up working too much, missing time with the family, and then being either emotionally distant or short-tempered with everyone. I, too, find myself on such a merry-go-round of feeling guilty while working late and missing my family till it hurts, and then getting home to yell and scream and then sit silently in front of a TV. Later, I feel guilty about over-reacting and making children cry and beat myself up inside. Perhaps I make it up to them for a day or two. Eventually, the demands of work initiate the vicious cycle all over again.

We are better Fathers than some men because we at least live with our kids, we make an effort to control and improve ourselves, and we genuinely care whether we are helping or harming our kids. However, good-intentions are not enough with parenting and we both know that. Part of this book is a journey to becoming a better parent.

Nigel is overweight. Pudgy. Out-of-shape. Me too. He has a life-long love of running and generally being active, and wished he were doing more for his health and appearance. Me too. Nigel finds that the time-demands and stresses of work and family make exercise almost impossible. Me too. Nigel’s book is partially a story of inspiration and how-to for the overweight has-beens who aren’t ready to give up yet.

Nigel is a goal-junkie. Me too. We both love to set goals and achieve them, big and small. In fact, goal-setting is our modus-operandi. We both have difficulty understanding how people can continue on for entire lifetimes with few, if any, goals set or achieved. Working on our goals gets us out of bed, gets us through hour after hour, and in our darkest moments prevents us from doing rash and regrettable things. Goals gives us a steady supply of hope, and we are keeping a tight lock on Pandora’s box.

The biggest surprise in the book is that Nigel is an Alcoholic. Me too. He doesn’t reveal this until the middle of the book, and I didn’t see it coming. His alcoholism is probably the greatest contributing factor to my reading the book all the way through, though it is only occasionally mentioned. His experience and struggles with sobriety were reaffirming for me. I will use his example and wisdom to continue to build my sobriety.

At page one, we find Nigel in the darkest days of his life: he has continuing issues in his family that are caused by him, his employer is closing the doors, he is overweight, getting too old to start over at anything (in some people’s minds,) and has an un-addressed drinking problem.

Marsh is apparently well-read, as he has sprinkled his book with quotes and concepts from all over the literary map. History, philosophy, science, theology, and general culture are all represented as he makes a point or draws a big picture. As an example, he quotes an idea from Steven Biddulph’s book Manhood where the argument is made that every man should be required to take his fortieth year off. This would force some reappraisals, rediscoveries, new discoveries, and perhaps change life for the better.

I love this idea. I have always loved the notion of the sabbatical. While I was growing up, I would hear of Priests and Teachers I knew taking a year-long sabbatical after ten years of work, and I have often fantasized about doing the same thing in my own career “someday”. Like many teachers and clergy, I would use that time primarily to further my education. I would also take a trip of a lifetime with the words “adventure” and “exotic” being the key concepts. And I would spend time developing a skill such as playing a musical instrument, painting, writing, or learning a language. Best of all, I would find as many opportunities as possible to include my family and friends in these activities to enrich the experience and the relationship.

Nigel gets laid-off and instead of job-hunting, he decides to take a year off to fix his personal life. He sells his large home and moves to a smaller one. He trims his expenditures and simplifies his life. He takes on responsibilities around the house that he had avoided, such as bathing the kids and taking them to school. He writes and draws. He admits to his alcoholism, quits for good, and attends AA. He learns a lot along the way, and makes it laugh-out-loud funny.

Another major connection I have to Nigel is his goal of a long swim, the Bondi-to-Bronte beach swim (akin to a nautical marathon) in Sydney, Australia where he lives. Nigel is not a strong swimmer or very experienced in the open sea, and as I mentioned before, he is waaaay out of shape. But he sets this goal and starts chipping away at it. At first he can barely swim the length of the pool, but he takes us through an inspiring story of tenacity and ignorance that pays off, but with an unexpected twist that I won’t spoil.

The connection is that I have set the goal of running a marathon this year. October 2008, the Waddell and Reed Kansas City Marathon. I have set the smaller goal of finishing a few 5k’s this summer. I was well on my way last November when I severely-sprained my ankle and was unable to train at all for a few months. Of course, there is the laziness, the overworked, the family-life, and the pain factors that have been excuses for a lack of training. As it stands, I can barely run 3 miles without stopping. But Nigel’s book has fueled my motivation and helped me visualize the attainment of my goal.

The most important tidbit that Nigel provided was how he would set out a running course, and he would walk when he couldn’t jog. He urged himself on by setting small goals along the way, such as, “Run from here to that tree, then walk.” I took away from that the revolutionary concept that it is okay to walk part of the course. In the Marine Corps, it was drilled into me that if I was going to walk instead of run, then I might as well hand over my undeserved male-genetalia and then find someplace to curl up and die. When you are 20 years-old, in fighting shape, and training for combat, that is probably true. When you are 34 with two kids, a stalled career, in the midst of a demanding Graduate program, and 50 pounds heavier than you were at 20 (some of that is additional muscle, right?) then it is okay to walk a little. The point is getting off my gluteus maximus and putting it in motion. After a few months of walk-jogs, Nigel was up to full runs like he used to do, and his body began to show results. I expect the same results. Walk-jog may be embarrassing and humbling, but it is better than sit-and-click (which always leads me to crunch-and-munch.),

Fat, Forty, and Fired is a raucously funny book. There are many times that I laughed out loud, and I rarely do that when I read even if the material is humorous. Marsh has that British humor that I love so much, though I can’t describe it well. He reminds me of Mil Millington, author of the internet classic “Things My Girlfriend and I have Argued About”. The book is not only funny, it is inspiring on many levels—for fathers, for professionals, for men in general, for husbands, for fatso’s, for alcoholics, and for workaholics. To top it all off, there is a payoff for the business community as well.

If I was qualified to make such a remark, I would say that this is one of the most important business books ever written. Nigel has been the CEO of two different agencies. His insight on how to cope with work and life is an important issue to address.

Of course, work/life balance does show up on a 10K report, and it doesn’t result in the kinds of lawsuit and publicity that ethics and security garner lately. Therefore, it is rarely addressed. However, were it to be prioritized and more successfully approached, we could all predict the profits and cost-savings that we would reap from the higher morale and reductions in turnover, burnouts, and health-problems. For instance, any temporary losses in productivity from allowing an employee to coach a team or attend a kindergarten musical would be dwarfed by the cost-savings in health-insurance premiums over the long-term if we assume that family neglect leads to self neglect, resulting in cardio-vascular deterioration over a short career.

Marsh quotes Biddulph as saying: “Our marriages fail, our kids hate us, we die of stress, and on the way out we destroy the world.” At first glance that may seem over-exaggerated, but I don’t think it is far off the mark. Surely, there is a better way to conduct capitalism. I think that Nigel Marsh points us in the right direction.

Marsh quotes Daniel Petra, former CEO of Microsoft in Australia, as reported in the Sydney Morning Herald regarding the life of a CEO: “They have no friends other than work; they have no relationship with their spouse; their kids don’t care about them; they have no hobbies. They lead very insular, single-dimension lives and they don’t have the courage to admit it.” I’ll bet you could apply that on some level to many other professionals. It certainly helps to define the standard of a professional lifestyle to avoid.

Very little of the book offers insight in how to conduct business, but the few paragraphs that apply are absolutely timely and important. The most important lesson that Nigel Marsh teaches us, from his experience as a CEO, is that his position carries with it some responsibility to his employees. All too often, a CEO is overwhelmed by the responsibility to shareholders, analysts, regulators, and the press. Little thought is given to what their roles as senior employee and leader means to the people who make the company work. Marsh offers that a CEO’s primary role is “providing meaning.” He elaborates by saying, “I believe a CEO’s primary responsibility is providing meaningful employment. That doesn’t mean he or she doesn’t have to make the numbers or make difficult decisions. It means he or she has to provide a point for the employees.”

Early in the book, he made a similar point when he said, “I don’t care what they teach you at business school; I view the primary role of any CEO as providing meaningful employment, not taking it away. Any idiot can cut costs; it’s building something valuable (in all senses of the word) that’s the real challenge.” (Added emphasis is mine.) I have long held this belief, and I am glad to see a business leader say it. Finally, there is evidence of intelligent life at the top.

The business guru Jim Collins in Good to Great used the analogy of an organization as a bus. If someone is in the wrong seat on that bus and not contributing, you may consider having that person switch seats on the bus, rather than throwing them off the bus. Of course, discipline problems and ethical issues need to be thrown off the bus. However, if the issue is competency or motivation, you may discover that the employee was forced into that seat and would gladly perk up or contribute more meaningfully from a different seat.

To couple this concept with Nigel’s statement, I think that CEO’s are just playing a numbers game through quarterly lay-offs that is more expensive over the long-term (and more damaging to our economy, which the CEO and shareholders depend on to make a profit.) Rather than a lay-off, a corporation would be better served to redeploy the unproductive employees into a new endeavor (move their seat on the bus.)

The stock price takes a hit in this case, due to the continued expenditure of salaries and benefits. However, those layoffs usually result in a large severance payment to each employee that doesn’t return any value to the stock price, and if your business grows again in the future (as your shareholders expect it to) then you will incur the expense of hiring similar people whom you laid-off previously. In case of two local companies I know personally, the same employee is often hired twice or more over the years by the same company. Perhaps my math is off, but if we could avoid the expense of severance and rehiring, and simultaneously gain some profit or research by redeploying them, wouldn’t we beat our competition while boosting our image, satisfaction, and contribution to GDP/GNP?

Thank you, Nigel Marsh, for a funny, inspiring, and wise book. I discovered it by accident and purchased it second-hand for $6, but it has become one of the most valuable books I own and is added to the short list of great books to re-read.

Art: More of it Please!

What is art? Is it important?If not, why not? If so, why is it so?

I started thinking about art and realized that it may be one of the most effective means of achieving progress. As I considered, I came to the belief that increasing the expression and appreciation of art can improve a person, a business, a government, or a society. The neglect of art has been the kiss of death in every instance. Art is the secret ingredient to life.

These are philosophical questions that have been raised and pondered thousands of times over thousands of years. I think every culture should ask these questions. Every organization and grouping of people should ask these questions. Every individual should question the nature, quality, and value of art for themselves. The old answers and methods are useful guides, but they are not useful answers. Only your own answer is useful to you.

In some ways, it is impossible to avoid these questions. If you accept the fact that movies, books, and music are art (if not, what are they?), then you must know what you like. You can answer whether you appreciate rap music, romantic comedies, reality TV, and mystery fiction. You can look at a painting and tell me if you would hang it in your house, and if so, which room it would go in. Your answers to preferences are based on your own pnderings, even if they are shallow or subconscious.

A deeper, conscious, and perhaps even documented approach to your own answers about the philosophy of art will allow you to appreciate it on new levels. You will begin to learn more about yourself, you will refine your approach to life, and you will develop or expand your own artistic expression.

I think one of the biggest things that is lacking in our society is a deliberate attempt at expecting, appreciating, and expressing art in every facet of our life. To seek artistic expression in business would improve our society on many levels. To seek more ways to combine art with science would make science more beautiful and art more relevant. Religion was once the primary source of inspiration for artists; if more religious people sought to express themselves through high-quality and deeply-considered artistic expressions we would have more beautiful and relevant forms of art and religion.

I think art is characterized by creation. When you really aim for artistic expression and give it all of your thought, emotion, and effort, you create something new. New is not always good and it is not always bad, but it is always required in order to improve anything. To put it another way, you will never achieve any goal you set without some level of creativity. Individuals, groups, and societies are all dependent on some level of creativity to achieve, grow, or progress. That creativity is enabled and enhanced by art.

Humans are slow in comparison to other living things. In fact, there are few animals that couldn't catch us if we were limited to our own feet and muscles. We have very limited senses; most animals, bugs, birds, and fish have senses that we can only dream about. We are weak when it comes to most animals, especially if you compare our strength to our body size. Elephants are stronger than us in every way, ants are stronger based on a ratio of body size to carrying capacity.

Even so, we have one advantage over every living thing: we are creative. Even though we cannot see as well naturally, we have developed ways of seeing our world that no other living thing can see. Despite our limited mobility and lack of swimming or flying capacity, we have created vehicles that exceed the limits of every other living thing. Our creativity has allowed us to travel to places that cannot support life without our creativity. In many ways, our creativity has exceeded the capabilities of natural life. Our creativity has the potential to allow us to create life on our terms and perhaps achieve immortality or timelessness.

The creativity that allows us to rise to the top of the living world despite our shortcomings is based on scientific technology. However, science alone is simply a matter of explanation and experimentation. Science allows us to discover and explain the details of our world, but science does not create anything new without art.

In order for Einstein to create the equations that explain the speed of light and predict the effects of energy consumption in impossible-to-achieve conditions, he needed to think artistically. By attempting to think in ways that no one else had previously done, and expressing new ideas in a meaningful way, Einstein required qualities that are true of artists rather than scientists. A scientist understands fundamental theories and mathematical methods, but artists see the unseen and venture into the unknown.

Music and paintings were once devoted to religion. Huge Buddhas, ornate Mosques, and paintings of biblical scenes are studied thousands of years after they were created by atheists, skeptics, or adherents of other religions. Even though I am not a Muslim, I can appreciate the mosaics of the Arab world. On the other hand, the ugliest religious men ever--the Taliban--banned art in every form and destroyed one of the most important and awe-inspiring works of art in the world.

Art can make religion inspiring and beautiful. I think our current state of religion (in almost every form) is focused more on theology, armumentation, competition, and defense. The religious art that exists is rarely as inspired and fresh as it once was. I see many artists imitating or copying other artists and produciing art that is vanilla and predictable. Perhaps I am missing it, but I am not seeing religious art that breaks new ground and sees new perspectives like Michaelangelo and Bach.

In the history of western civilization, there are two key periods to understand: the dark ages and the renaissance. Both of those periods are defined by the value they placed on art. In both instances, the quality of the average person's life was relative to the value placed on artistic expression. Art is a key factor in raising or threatening the quality of a person's life. For example, compare the standard of living in Turkey and Afghanistan. There are so many similarities between their history, culture, religion, and geography. Even so, the standard of living and level of artistic expression are both high in Turkey while they are extremely low in Afghanistan. That is not a coincidence, nor is it an isolated example. It is a constant throughout history in every region and culture: Art is required for life to have substance, quality, and meaning.

Art can be an expression of beauty. In your house, if you have a wall, floor, or object that is boring, shabby, or even ugly, you can immediate change the feeling of the entire room with a simple and beautiful piece of art. Take a windowless, gray basement and add a woven rug and a mural--now it is a comfortable place to spend time. Take a plain, white refrigerator and add a 1st-grader's work of art, you immediately brighten the whole kitchen. Studies have shown that adding art to the workplace can measurably boost creativity and morale (if other factors are in place such as management, market, and salary.)

Sometimes art is required to express an emotion, and the result is not beautiful. Art can be used to inspire guilt, fear, outrage, patriotism, shame, motivation, focus, or humility/awe. The key is expression and communication. Our words can be spoken or written in any volume or size and still find themselves ineffective at communicating a message fully. However, art is always an effective method to communicate a message or emphasize our words. The next time you drive down a road, compare your own reaction to signs of only text (Street signs, etc...) to signs that include pictures (Cautionary road signs or advertisements.) McDonalds has found that a picture of a Big Mac has a greater effect on their sales than any slogan or logo.

In that same vein of communication, it is sometimes necessary to use art to provide perspective. I can explain the solar system's structure a million times to you, but you may never understand it until I show you a picture of it. The perspective of a bird's-eye view can be all it takes to understand complex concepts. Perhaps such a picture would have been useful to Galileo as he argued against the church in favor of heliocentrism.

As previously mentioned in one example, art improves business. Art is not automatically profitable, but neither are other business concentrations. Businesses have failed that were based on creating new art, such as record companies and graphic design firms. However, businesses have also failed because they were so focused on the bottom line or financial gimmicks that they forgot to be creative and attractive. In my mind, the best way to illustrate the value of art in business is to look at the auto industry: beautiful and creative cars will make money of they are also marketed and manufactured intelligently. Ugly cars without creative features, like the "Yugo", will have a rough time in the market no matter how carefully they are managed.

With the word "art" many people immediately think of paintings, music, or poetry. I think that definition is too narrow to define art, and it is counterproductive. In fact, any attempt to define art threatens to limit its impact on our world. The looser we allow art to be defined, the broader we are able to consider our artistic expression and make it relevant and beneficial.

The point I want to make here is that art should always be bigger than our imagination, which allows our imagination to grow. Art is a product of our imagination. It is also a source of fuel and fertilizer for imagination. Without art and imagination, we would not have cars, computers, or even peace and prosperity.

It takes an artistic and imaginative mind to find a way to end war or to expect a life that is devoid of violence. I expect to spend every day of my life without hearing a gun-shot, without having to kill another person, or having to bury a person I love who was killed by violence. It is easy for me to think in such a way because it is a life I have always known. It will require imagination for people in Darfur, Iraq, or Afghanistan to envision a life without violence; artistic expression will enable people to expect peace and seek its implementation.

A look at recent history will demonstrate the power of art for good or evil. In Nazi Germany, Soviet Russia, and China's Cultural Revolution, all expressions of art were hijacked by the government and used to control the populace. Expressions of art were used by the baby-boomer generation to change our perspectives of war, race, and gender. Art is heavily used in marketing to increase sales; some people watch the Super Bowl just to see how artistic the commercials will be.

The term "craftsman" is used less frequently today than it was in the past, and is often misused. A craftsman was once a person who no only performed a task but did so artfully. They didn't just make a table, they made an object that was as beautiful as it was useful. We tend not to buy tables from craftsman anymore; we expect our tables to be cheaper and settle for simple or common tables that are mass produced on machines. An artist may be used to design the table, but after the 10,000th copy rolls off the line is it really a work of art?

I like having affordable products available to me, but I do not like the fact that mass production is more valuable than craftsmanship. It is a real loss that in place of craftsman today, we have machines that are incapable of creation, or low-wage employees that are neither empowered nor inspired to be creative. We are beginning to imitate the futuristic visions of artists such as George Orwell, Alduous Huxley, and Roger Waters. Even though we can find items that are pleasing to the eye and fulfill the functions they were intended for, it is rare to find consumer goods that contain craftsmanship, creativity. originality, or true beauty. Mediocrity seems to be the expected and accepted standard.

We need to think more about art. The same old ways of looking at business, science, religion, and life should be refreshed, enhanced, or replaced by new perspectives and ideas. By infusing artistic expression into our daily lives, in everything we do from cooking to dressing to working, we add to our pleasure. Art can be fun. It can be healing and refreshing. It can wake us up from mediocrity and monotony.

Art allows us to experience more of life. If you watch a movie and only understand half of the jokes, then you only enjoyed half of the potential that the movie offered. How much more would you enjoy that same movie if you understood all the jokes, assuming all the jokes were funny? As Shrek might say, life is like an onion; it has layers. As you peel each layer back, you find another layer that was once concealed to you. Through art, we discover perspectives and sensations that were once concealed to us.

If you have read this blog for any length of time, you should expect a mention of my favorite subject, Corporate Social Responsibility (CSR). I think that it takes the same area of our brain that creates and appreciates art to appreciate and implement CSR. Like art, CSR can open up the perspective of a business and its people, increase morale, expose and enhance beauty, and stimulate creativity. By looking for ways to be profitable while acting responsibly with everyone affected by your operation, you consider more solutions to business problems, some of which may be better than the solutions you would have considered without CSR.

By using art to create beauty, inspire emotions, and provide perspective, an artist makes his and her world a better place to live. Like karma, by sending out their art they receive a better world to live in. If a business uses CSR and attempts to express the qualities and attributes of art, they too will improve their world. They will find that their market responds to them in new ways, that their competitors become more civil, that their vendors and communities partner with them and root for their success, and that their employees are more effective and less destructive. CSR is not just a method of limiting liability and negative press; CSR can be a method of artistic expression that increases profitability and effectiveness for a business. Moreover, it can make business enjoyable at every level.

Why Be Significant?

I find it funny that as I learn lessons that I can apply to my life to make be a better man, I find that the same principles can be applied to a company to make it better. The self-help strategies found in How to Win Frinds and Influence People, Think and Grow Rich, Thank You Power, and The Secret can be applied to either an individual or a company and achieve the end result of effectiveness. As I work my way now through The Purpose Driven Life I am finding a similiar result.

I will start with myself. Day three of The Purpose Driven Life teaches, among other things, that "Knowing your purpose gives meaning to your life" (page 30.) The author, Rick Warren, goes on to say that by providing meaning, your life gains hope and significance. The word significance stood out to me. That is the word I have been looking for on this "Journey of Spiritual Discovery" that I am on. The end result that I intend for my life can best be defined as significant.

I always ask "Why". If I am told to do something, if the recipe calls for something, at every step in the instruction manual, I have the habit of asking "Why". I think that asking "Why" raises my level of consciousness and allows me to learn lessons that would otherwise be missed. I think that if I ask "Why" as I learn, my learning is more effective and efficient.

The question of "Why" is what lead to my "Journey of Spiritual Discovery". It is the fuel that keeps the journey moving along. As soon as I am no longer curious about "Why", the journey will transform into another pursuit.

To have finally found a word to describe my intention is a big step. Now that I know I want to be significant, I can refine my quest and focus on the lessons and methods that provide the intended result. Further clarification is required, however.

Now I have a new "Why": Why do I want to be significant? As Warren points out, there are bad things that may be driving us: anger, resentment, guilt, etcetera. The best driver, according to Warren, is God. The question for me is: What is driving my desire for significance?

I spent a few minutes Googling "significance" to see if anyone had anything to say about why you should be significant. It seems to me like it it is assumed that if you want to be significant, you should already know why. Or, perhaps it is just assumed that is a fundamental value.

For me, there isn't a point to living an insignificant life. To spend an entire life and achieve nothing (or worse, to leave more damage than creation) is not a life to me. I have known people like that; as far as I know, the only thing they did was tranform oxygen into carbon dioxide. It is as if they never even lived.

Significance is not scalable in my mind. Mother Theresa was significant to millions. My third grade teacher, Mrs. McGlaughlin, was significant to me and perhaps a few hundred. It is the same achievement in my mind. I think that Einstein's mother is just as significant as he is, especially since you cannot have the latter without the former.

Now I can refine my thoughts to "What" and "How". What is significant for me? How can I achieve that significance? The Journey allows me to chart new ground and answer questions that will keep me going when times get tough.

As I think of this for me, I habitually try to apply it to CSR. Can a company be significant? What would make it so? Why should a company seek significance?

Under the tenets of Capitalism, a company's significance is defined by profits. However, what is significant about profits in the grand scheme of things? It seems to me that there is something more significant than profits. Assets and equity are significant too, but I am thinking about people.

When I think about significant companies, I immediately think of companies who have made an impact on the human race in a good way. They developed new technologies that everyone uses, like Microsoft, GE, 3M, and Intel. Significant companies changed how we do business, like IBM, Cisco, and Ford.

The most significant companies are the ones who have provided the most benefit for humanity, in my mind. Significance, for me, is defined by how you affected the quality of other lives, how you inspired and influenced people, what you created, and what you leave for posterity. Profits, assets, and equity are fleeting; they can be eaten up rapidly by poor management or global inflation. However, if you provide education, technology, and inspiration to a third world village, you leave something for posterity. If you start with a polluted wasteland and transform it into a thriving ecosystem, that would be significant.

In capitalism, it all comes down to getting people to spend their money on you, and convincing them to spend more money than the costs you incurred. The most important factor in a customer's buying decision is their perception of the company they are buying from. Therefore, a company that is perceived as significant will be more likely to attract potential customers and achieve profitable sales.

Of course a company needs to be profitable, just as a boat needs to displace rather than absorb water. A company's efforts at research and development are vital to not only maintaining long-term profitability, but also to achieving significance. However, the profitable and innovative company that makes a positive impact on humanity will achieve a level of significance that elevates their market share, propels their share price, motivates their employees, and embraces their community.

Significant companies can not only expect profitability, they can expect to enjoy doing business. So it is with significant people. Life is enjoyable on a whole other level when you know you are doing something significant. As every artist, parent, and craftsman can tell you, there is unexplainable joy from creation that does not fade quickly.

Attraction, Gratitude, and CSR

Yesterday I mentioned how I am discovering the power of my thoughts on a whole new level by using the principles of "The Law of Attraction" and the "Science of Gratitude". This is a growing movement right now. Because of the popularity and marketing of the books The Secret by Rhonda Byrnes and Thank You Power by Deborah Norville, thousands of people at once are discovering these powerful forces.

What I have not heard mentioned yet is how these exact same principles can transform a company on so many levels. Corporate Social Responsibility (CSR) has proven to be an effective business strategy in many arenas. Lately, it is usually only spoken of in terms of environmentalism. Politics is the force driving CSR, so whatever force is driving politics will logically filter down to CSR. Global Warming is the hot topic now, so it hogs the spotlight.

While our environment is very important and should take a prominent place in our discussions, I think that we should realize that other issues deserve our attention as well. We should also realize that CSR has other facets that can benefit a corporation as well as its stakeholders. Just to name a few, there are issues of diversity of the workforce, giving back to the community in a tangible way, enforcing CSR standards on your vendors, and improving the customer experience.

I apply the law of attraction to my life by thinking positive thoughts about what I desire. I do so with a firm belief that I will attract those things into my life. The result is that the soundtrack to my thought life contains less negativity and focused, positive concentration on my goals and desires.

Once I accepted the validity of this concept and recognized the benefits of it, I realized that a corporation can make this work for them even more powerfully than an individual could. The funny thing is, they are often unaware of how they are using some of the principles of the law of attraction right now. If they deliberately set out to think as a group about a goal and attain it, I am sure that company would conquer their market and exceed expectations.

The people who are teaching The Secret call it the "Law of Attraction" but I don't think it is a law that always works. I believe that at all times there are other forces at work: gravity, thermodynamics, etc. In addition, you have other people manifesting their thoughts. In The Secret, they teach that if you are in a car accident it is because you attracted that to you with your thoughts, even if it was inadvertent. I think that there are times when you are simply in the wrong place at the wrong time while someone else is manifesting their thoughts in some way.

Not only can we be affected by other people's thoughts, but we can combine our thoughts together. I think that if several people concentrate at once, that their thoughts together can affect their world. That is why sporting events can be more exciting when you have friends beside you or you go to a stadium. I think that is why movies are always better in a theatre. And I think that is a major force in the success and failure of corporations.

When you see a corporation full of excited people who all have the same purpose in mind, like Google and Wal-Mart, you find that they are unstoppable and limitless in their power to conquer markets. When you have corporations like Ford where you have several groups competing against each other and various visions, you see struggle despite having all the ingredients for a successful corporation.

Wal-Mart has underpaid employees, from executives to associates. They have a tiny headquaters far from civilization. Even so, they grow, profit and innovate like no other corporation. They penetrate "unpenetrable" markets, they exceed revenue forecasts, and they keep finding new sources of revenue.

Ford has an illustrious history, international brand recognition, some of the brightest professionals from many different fields who are highly compensated, and a network of invested interests to support their every need. Even so, they have been surpassed in several markets, have had to close dealerships, and there is little hope for the near future.

Wal-Mart has a vision and purpose. They have a corporate cheer. They strive to keep all levels of employees in close contact with each other. There are voices of dissent in Wal-Mart, but they are few. The vast majority of Wal-Mart is solidly in step with the vision of low prices, everyday.

Ford is divided in so many ways, it would take all day to point them out. To name a few: They own various businesses that do not synergize. They have unions with one vision and executives with another. They have the Ford family vs. the other shareholders. Their international business is at war with their American masters. The franchise owners disagree with the corporation on the business model. The customers of Ford even seem to disagree with each other on whether Ford is a low-price product or a quality product.

The point I am making is what Abraham Lincoln was trying to say: a house divided against itself will fall. If a company can find a way to focus everyone's thoughts on one goal, they will achieve exactly what they set their mind on. The only challenge at that point is having a dream as big as the resources available to you. Remember September 12, 2001? It was a rare moment when all Americans were thinking and feeling the same thing and having the same desire; no one ever wants September 11th to happen again, but I think we all agree that our nation would be better off if we could agree like we did on September 12th.

From the "Science of Gratitude", we learn that being grateful at all times is a powerful force. Even if we are facing adversity, if we count our blessings we realize that we are at the starting point of a great future. This applies to companies as well.

Truly grateful companies that fail are rare. I can't think of one off the top of my head. I can think of thousands of companies who have found success while showing gratitude. I would argue that it is easy to prove that their gratitude is a major factor of their success.

Have you ever worked for a boss who seemed to be truly grateful for your work? I have had bosses who recognized my extra efforts; I was more likely to make an extra effort if I knew it would be recognized. I am not talking about cash, I am talking about a nod or a word of thanks. Cash is always welcome, and it is appropriate if my extra efforts resulted in additional revenue or cost-reduction. However, if all I did was add an extra column to a report or I reorganized the supply cabinet, all I need is thanks and I will find some other way to go above and beyond.

One boss looking for opportunities to thank his or her employees could transform a department. If you take it up to the corporate level, you can create a culture of gratitude. There are all sorts of examples where companies train their management, implement recognition programs, and provide employee appreciation days or Christmas bonuses to show their gratitude. A company's benefits program is often a strong indicator of their gratitude to their employees.

A corporation has other interests to be grateful for. First of all, there are the stockholders who risk their money on the company. To show them gratitude is easy: pay a dividend, grow the business, and stay out of trouble. Corporate officers who pay themselves rediculous bonuses and spend millions on perks are ungrateful. Companies like Wal-Mart who keep their executives in a thrifty mindset are expressing gratitude to the people who have risked their savings on company.

A corporation needs to appreciate their customers as well. The Bell Telephone companies did not do this while they held a mopnopoly on the market. In 1996, that market was opened to competition, and customers fled in droves. The same happened in cable TV markets when satellite TV became affordable.

On the other hand, market research has shown that people will knowingly pay higher prices out of loyalty or preference. For instance, I will always get my oil changed at Keystone Chrysler in Mission, KS. I started going their because they were a customer of mine. Because my company did not appreciate them enough, they are leaving us. However, I will not leave them because they have shown their appreciation to me every time I go in there. I don't know if they are the best bargain in own, but they treat me the best and that is worth it.

Look in your wallet and identify all the cards you use earn points at your favorite businesses. Not credit cards, I am talking about the rewards cards. I have cards for Borders, True Value, Price Chopper, and Holiday Inn, among others. When I travel, airlines and hotels show me appreciation by awarding points to me. They know that my company is paying the bill, but they also know that I likely influenced the decision and they appreciate that.

For me, the "Law of Attraction" and the "Science of Gratitude" define the fundamental principles of CSR and make its implementation easy. If a company wants to improve its situation, it has to get everyone focused on the same goal. One way to begin to focus people is to provide them with a goal they can all agree on: clean water, feeding hungry kids, or maybe improving education. A focused CSR intiative could be the first step in focusing the various stakeholders on unifying a corporate mission.

For instance, at Ford they could all choose the goal of wiping out malaria on the continent of Africa. I predict that it would not be hard to get the employees to agree to give up a little time and money to help out on that mission, no matter what color their collar is. Moreover, surely every Ford customer wouldn't mind financing an extra $20 on the purchase of their car to be donated to the cause? The communities around Ford plants would probably forgive many offences if they knew that Ford was making a difference in fighting Malaria.

Can you see the worldwide marketing campaign now: "At Ford, we not only build safe and efficient cars, we reduced deaths from malaria last year by 25%". After the one unifying mission is in full swing and everyone feels good about it, a discussion about Ford family interests or collective bargaining would have a channel and a meeting point. Everything else would just be details. There would be evidence in everyone's mind that they can all work together efective on malaria, so why not on other things as well?

If there was more gratitude at Ford, they would be a very different company. Even Wal-Mart could learn a lesson here. To be honest, if Wal-Mart showed more gratitude to their entry-level associates they would probably move from company to cult. Seriously, if an unskilled and unambitious person knew that they could go to Wal-Mart, work hard at the entry level for twenty years, and be rewarded with a livable wage and basic benefits, they would devoted to the end. They would jump on a grenade for a company like that.

This is the major failing of the Conservative Political mindset. We believe that the marketplace efficiently establishes rates of pay based on supply and demand. However, like the "law of attraction" there are other factors that can influence supply and demand. Many of my fellow Conservatives speak disparagingly of low-skilled and unambitious employees. They seem to believe that these people are by-and-large lazy and unethical. I cringe when I hear a person of my political philosophy saying that poor people need a kick in the pants, or that all they have to do is [enter activity here] and they would get ahead.

In real life, it is more complicated than it is in the mind of many Conservatives. I do not propose that we should pay janitors the same as engineers or CEO's. However, if the guy is happy as a janitor and doesn't want to be a manager or take college classes, why can't we just be grateful to have a good janitor and reward his hard work and attention to detail with a livable wage and decent benefits. If the janitor is good, he should be able to afford a decent car and a decent place to live, provide his family with a comfortable life and reliable health care, and set aside some money for retirement.

Are you so far unconvinced that we should pay a janitor more than the market requires right now? Okay, close your eyes and imagine your company without a janitor. Can you see the trash? Can you smell the bathroooms? Can you feel the insects and rodents crawling up your leg? Now do you appreciate your janitor? If so, pay him like you mean it. Only an idiot could make an arguement that janitors who do their job well shouldn't be paid better.

The alternative is what we have now: dirty bathrooms, unmotivated janitors, and janitor's kids growing up without every seeing a dentist or a regular doctor. You have things being stolen by the night cleaning crew to help them compensate for their status and treatment. You have high turnover because they can always make ten cents more per hour down the street.

Public school janitors are an example of how this can work well. Have you ever heard of a school janitor strike? I haven't; certainly it is rarer than a teacher's strike. The janitors who I knew growing up would help us with anything we asked. They were always seen doing something productive, rather than spending the whole day on a smoke break. They knew they had it good, and that their retirment would be taken care of. They enjoyed their work. Therefore, they did their job and a few extras along the way.

You will notice that I use the words "livable wage" rather than "living wage". This is where I define myself as a conservative. I think that if the government legislates minimum wages, they end up making the situation worse rather than better. When the minimum wage goes up, the law of supply and demand becomes the primary factor here: there are now less job opportunities available in the economy.

You see, there is a certain amount of money available for wages at any given time. Let's say that in Kansas City for 2008, there is $1 billion available for wages. In the current conditions, lets say there 1.5 million jobs, of which 500,000 are at the minimum wage. Now, add a city law requiring an additional "living wage" increase of $2.00 per hour on top of the federal minimum wage. What happens?

If Kansas City increases the minimum amount that you can pay an employee without also increasing the amount available to pay wages somehow (through a tax cut or other established means), then you have essentially ensured that job opportunities in Kansas City will decrease.

If you increase the amount a business has to pay in wages without increasing their revenue by that exact amount simultaneously, then the money will have to come from somewhere. Many leftists would say that the business owner should willingly give up some of their profits to their employee. I agree, but that cannot be legislated. If the business owner does not decide on their own to give up those profits and does not accept a reason to do so, then they will simply decrease the number of employees that they have on staff. Alternatively, they will take their business to another city or country. See China for a dramatic example of that. You will have some employees laid off and now receiving no wages rather than minimum wages (increasing the burden on public assistance). The employees who are left will have to work harder for the same pay.

What many leftists do not understand is that business owners who are most affected by minimum wage increases and living wage laws are not enjoying huge profit windfalls. There are many businesses who are just barely getting by or are working hard to grow into their market. The owners do not have equity or cash, they just have debt, bills, and an idea. By increasing their overhead without increasing their revenue, you have limited that business owner's effectiveness. Maybe they were competing against a Chinese company and gaining ground; now that you have increased the minimum wage they are unable to compete with the Chinese company. Surely you'd agree that is not best for the minimum wage employee, the city, or the country. Only the Chinese would root for that scenario.

When we express gratitude, we are rewarded. The quality of our own thoughts and emotions are improved. Our cummunications with, and relations to, other people are improved. We begin to receive back the karma we send out. People begin to send us more favor because they know we will appreciate it and think we deserve it.

When a company appreciates people, they gain power. They can negotiate with unions easier because they are already known as an appreciative employer. They can earn favor from their customers and communities. They earn loyalty and extra effort from their employees.

If corporations are grateful for what they receive, they receive more. In that case, unions become unnecessary...if other factors are taken care of as well. Minimum wage increases become unnecessary. In fact, in a perfect world of appreciative corporations we wouldn't need to worry as much about Social Security reform, insolvency and bankruptcies, health care and medicare, and elderly people living on dog food. Marketing costs would be lower because people would mention your good works and good products together in excited tones for free. Political backlash in foreign countries would be minimized because who wants to bite the hand that irrigates, educates, and feeds them? If oil companies in Venezuala had been more appreciative of their hosts, we never would have heard of Hugo Chavez.

Think about companies like Jet Blue. They have a vision for their employees: let them spend more time at home with their family. The employees are committed to this vision; they appreciate the policy and the policy makes them feel like they are appreciated by their employer. Therefore, their minds are now open for Jet Blu to add a vision. The employees of Jet Blue are more likely to hear the vision, accept it, focus on it, and work on it together because they are already in a position of gratitude. Now, Jet Blue can say, "Always try to upsell a flight to Salt Lake City with every call" or "Reduce call time by 1 minute without reducing revenue or customer satisfaction" and the employees will be more likely to accept the vision, focus on it, and achieve it.

I would like to point out that when a company expresses gratitude, it must be sincere. It will take thought, discussion, and soul-searching to reach a point of effective sincerity, and that path leads through profitable analysis and brainstorming. Only sincere gratitude will allow a company to maximize its effectiveness during implementation. Insincere gratitude will just be a cardboard cut-out of what they could be benefitting from.

To top it all off, people can smell the difference. If Pepsi implements a truly sincere gratitude program and Coke copies it without sincerity, the end result will be tremendous dividends for Pepsi and miniscule or negative dividends for Coke.

I have said before that CSR needs to be sincere. It is great if a company donates money to a homeless shelter, whether they are sincere in their effort or just doing it for publicity. However, an insincere comapny will end its efforts as soon as they feel they have milked that cow dry. A sincere company will continue its efforts even when the cameras shut off. That sincerity will generate a special kind of loyalty among its stakeholders. Employees, communities, NGO's, customers, vendors, suppliers, and even shareholders will recognize and reward sincere efforts at gratitude and responsibility.

People are less likely to sell off a stock at any price if they really like the company, while they will sell at the drop of a hat if they do not have any feeling for the company. The difference has saved some companies from the total wrath of bear markets; compare Cisco and Google to some of their fallen comrades over the last 10 years.

How does a company implement sincerity? That is a topic that has failed to show up in any business book I have read. However, in considering how to get the "Law of Attraction" and the Science of Gratitude" to word in a corporation, I realize that it all starts with gratitude.

If the leaders of a business sit down and discover the things that they are truly thankful for, they will have a great starting point for implementing CSR. No matter where a company is financially and strategically, they have something to be thankful for. Once they start listing those things and then reaching out to express gratitude, they will see the ship start to turn. Each time they do this, they will find that their gratitude attracts more things to be thankful for. By thanking a vendor for meeting a deadline, they will find that they not only get better service but they also get price breaks or extra service. By appreciating the employees they have, they will find that the quality of employee that they attract increases. As they reach out to their communities, they will find that they get attacked less and defended more. Appreciating customers attracts customers, and their marketshare doubles.

At some point of considering the things to be grateful for, you begin to appreciate democracy, capitalism, clean water, lack of war, an educated workforce, quality of American healthcare, and so many other basics that we usually take for granted. A company who sincerly appreciates what they have will naturally want to provide some essentials of civilized life to a people who do not have it available to them. That is when their attempts at CSR will turn the world upside down.

The difference between sincere and insincere attempts at CSR are obvious. Sincerity adds a level of passion, detail, and effectiveness that is unknown by insincere companies. Why should a company seek to sincerely implement an effective CSR initiative?

1. Because it increases your leverage amongst your stakeholders: employees, communitiues, giovernments, vendors, customers, shareholders.

2. It multiplies your marketing efforts.

3. Because you find that you are truly thankful for what you have and you want to express your gratitude--hoping that your karma comes back you.

How to Win Customers and Influence Markets

There is a fantastic book that I re-read almost annually: "How to Win Friends and Influence People" by Dale Carnegie. The principles in this book will allow you to enjoy your life regardless of your circumstances and it will allow people around you to enjoy you more.

The trick is this: be sincere as you focus on other people's interests and ego. If you are selfless in identifying and referencing other people's interests and you stroke rather than threaten another's ego, you then have an opportunity to selfishly pursue your own interests with that person. Of course, you cannot be malicious or greedy with a person while remaining sincerely interested and humble, so Carnegie is not teaching techniques for bad people to gain influence.

I find that he is re-teaching me to be good. I learned most of this stuff in church and from my parents when I was little. Maybe not the specific techniques, but the underlying principle of humility, suppression of self-interest, politeness, and sincere interest in other people's interests. I rejected it in my teen years and continued to ignore the lessons as an adult because I was surrounded by selfish, greedy, cynical people who would throw their own mother under any moving bus to achieve a perceived benefit or promotion.

What Carnegie adds to the lesson of manners and morality is the selfish benefit to me. I had no idea that being polite and humble could benefit me directly. I thought I was just doing it to please my parents, the "authorities", and a God who seemed not to like me. I thought that if I did not counter the meaness of life with more meanness, I would get taken advantage of. If I had known that there were tremendous benefits to being a nice guy, I would have stuck with it a long time ago. As it is, being cantankerous and cynical while feeding off of negative energy was simply leading me down a lonely road of alcoholism, depression, and future ulcers, cancers, heart-attacks, and black-eyes.

We do everything for selfish reasons. We give to charity because we feel warm and fuzzy, because we hope to benefit from that charity in the future (Hospice, Cancer Society, Red Cross, Blood Bank), or because it puts our name on a placard, list, brick, or building. We sacrifice for our kids so that they do not end up in jail, living with us, embarrassing us, or to make sure they beat the neighbor's kids at whatever they do. We give our spouse backrubs and cook their dinner in hopes that they will soon do something nice for us (or do something nice to us.)

To sum up, Carnegie has taught me that it is okay to let the other person think that they have the upper hand or think that they are more important than me; in the end, I will get what I really want from the relationship. Being nice, humble, and sincerely interested in the other person pays off in selfish ways, and does so more effectively than deception or force. There are more benefits and less consequences to convincing people to willingly give you their favor, money, support, or permission than in forcing it from them or tricking them out of it.

However, I am not writing a book report here. I want to synthesize the information I read and reapply it in a new way. Dale Carnegie has written a manual for the application of a corporation's CSR philosophy. As I listened and thought about how I could improve my game with Carnegie's principles I kept thinking of how these principles could help a company gain market share, improve vendor relations, lower costs, increase employee loyalty and productivity, enhance the public image, and so many other applications.

Therefore, the next few posts will talk about how Dale Carnegie and CSR can make a company more profitable, stable, recognizable, and resilient to negative events and forces.

A Good Idea Gone Bad

My company has a lot of bad ideas. I suppose almost every company has bad ideas and I tend to notice my company's stinkers because they affect me directly. However, I have worked for several companies, as well as the federal government (!) and haven't noticed the quality and quantity of bad ideas that affect me today. If you saw the size of the cell phone that my company expects me to carry, or the convoluted and unnecessary processes that I have to follow daily, you might actually shed a real tear for me.

Don't get me wrong, it is a good company overall and a great job, it is just in a slump of confused management right now. The people who lead me have not been in a classroom for a long time, nor do they read current business literature. They will soon move on, whether by choice or by force. I am grateful for the opportunities I have at this company, but I will be more grateful when better leadership arrives. In time, that leadership will be me: I hope I do not forget the lessons I learn today as I look at good ideas gone bad.

The pictures below are just one of many ideas that my company has that start with a good idea, but wind up with a horrible idea at implementation. These are three of the four doors that the employees can use to enter and exit the building:

Here is how it works: If you are outside, you scan a security badge. The outside door opens and you enter the isolation chamber. When the door behind you closes, the glass doors open. They will not open until the door closes behind you, and that door is on a heavy, hydraulic closer, so you can't quickly slam it shut. In fact, you cannot be in a hurry at all with these doors. They sense your urgency and move slower, I swear it. If you are leaving, you push a button. The glass doors open slowly and you step in. They close behind you, and only then can you open the next door. Again, patience is required.

The purpose of the isolation chamber is to make sure that only one person goes through the door at a time. My company handles sensitive data, and they want to make sure that everyone in the building is authorized. To be clear: we are not talking about national security, we are talking about social security numbers and bank account numbers. If it was national security, they would post guards at the entrances. For personal identities, they want a cheaper solution.

As you can imagine, this creates a bottle-neck when you are trying to get in or out. If you are trying to leave at 8am or 1pm, as everyone else is coming in, you might as well get comfy. Also, don't try to leave through the door to the smoker's porch, ever: it is a pretty busy door.

Which leads me to the next point. Each person spends about 20-30 seconds in the closed isolation chamber. That leaves plenty of time to leave your personal scent behind and enjoy the last person's. I am a little sensitive about scents, and there are a lot of them in my company. There are some scent-neutral people, and a few ladies who smell heavenly. On the other hand, there are the smokers, who stink. I used to be a smoker, so that is why it is so repulsive to me. There are also occasions of bad hygiene, cologne that expired in 1977, garlic and onions, and flatulence. Luckily, one of those doors is shared by only 5 people and used rarely.

The door for the engineers in our shop is less odoriferous and experiences fewer bottle-necks. However, it is the least-useful of all the doors. We engineers are often carrying arm-loads or cart-fulls of electronics. There is a way to use a key to lock the doors open for this purpose; of course, we have not received the key after 2 months of using this door. We have to hold the glass back while we drag the cart in; therefore, the door can be violated easily and serves no useful purpose.

What if there were an emergency, you ask? Supposedly, if the alarms sound, the doors automatically lock in the open position. However, if there is no alarm, it is business as usual. Therefore, if someone starts shooting or a chemical is released (accidentally or purposefully), you will have to wait your turn to exit. If there is an electrical fire, structural collapse, or severe storm, which knocks out power before the doors are opened, you will have to make your way to the nearest breakable window. The Facilites Manager looked very concerned and sincere when he told me, "We are working on that."

I wonder if anyone in my company is truly claustrophobic, and how they feel about these doors... I doubt anyone in management wonders about such things.

If your personal information resides within my company, you will be pleased to know that it is being safeguarded as best as we can. However, we may have to sacrifice a few employees in the process. I may have to take a bullet for your SSN one day. Any company that thinks these doors are a good idea is bound to push at least one gun-nut to snap and shoot up an office. God forbid, of course.