#3 Success defines us

Note: This is the third post of the book after the introduction. If you’re new to the book, start with the introduction. Or visit the full table of contents.

Mr Burns

Everyone, absolutely everyone - desires success. This is the single most important thing to understand if we ever want to see change. No-one wants to fail. It happens, frequently, all the time. It’s a constant state of being for many of us. But when we hold something up as success, people will try to achieve it. When others attain success, people ape their behaviours to get the same results. Whether it’s: praise, acceptance, admiration, material gain, happiness - freedom. Whatever the reward, ultimately success is what we want.

How we view, measure and achieve success defines our behaviours as a society and in business. The definition of good or bad is subjective and dependent on your: moral compass, ethics, politics, religion - your upbringing. These guide your day to day actions. Success is a defined end goal - confirmed by your community, your peers, society. We all strive for it.

Governments, society, dominant economic theory all compound the idea that wealth equals success. But, it’s clear that our nation’s de facto measure of success i.e. ever increasing Gross Domestic Product (GDP growth and output - ergo wealth) - is not sustainable. This growth has a finite end. We live on a planet of a certain size, with certain resources. They are not limitless and therefore neither is our growth. This is not new news, it’s a simple fact and one that takes very little understanding to establish it as so.

And yet people choose to ignore it. For years every major government on earth, has set out their GDP growth targets. When they’re aimed high, good times. When low - stagnation, recession, depression… So growth equals success right? No. Contrary to what we’re taught. Because as clear as day this growth is not sustainable. The lack of sustainability is a fact. Though facts do not always convince people of the need for change (forcibly preventing from alluding to the political sphere here).

So if not GDP growth as a measure of success (because - that’s what got us here) - then what? Luckily the unsustainability of all current economic theory, the mammoth in the room, does finally seem to be getting some recognition. This is in no small part due to the publishing of ‘Doughnut Economics’, a work by Kate Raworth of Oxford University’s Environmental Change Institute. A book where Kate establishes the glaring flaws in current economic theory and suggests a better way, where success = sustainability.

Rational economic man

The major flaw (as inadequately summarised above), is that all current, prevailing economic models, those that underpin capitalism the world over - have no consideration for the limitations of our planetary resources or the wellbeing of its people. The goal in this world order is endless growth and wealth creation, regardless of wealth distribution. A giant ponzi scheme then, the rest be damned. Which seems a little - inhumane. But prevailing economic theory is just that - theory and it’s proving false. It is based on a Victorian workhouse perception of people’s motivations.

This is a simplification but a lot of theory is based on the persona of; ‘rational economic man’. It is the belief that there are key drivers that cause people to become useful units of productivity. Rational economic man is driven by; self interest, material gain and contractual obligation. As a side note there may be some that start to think this rudimentary simplification of economics is a step too far. But at the root of anything complex is a simple concept, vision, idea. It’s key to what we’re doing in this book that you strip back the unnecessary noise you often find in business and get back to basics. Agile is a great example of this - the original manifesto is a list of 12 key principles. That’s it. Yet you get into SAFe (scaled agile for enterprise) or other corporate versions of implementations, and you end up corrupting the original values, by creating rigidity, by undoing what the manifesto was set out to do.

Imagine if you’re building out a product or business. One of the first things you do is identify your audience, who is going to use the thing you’re creating. And one of the first mistakes people can make is to fabricate who their audience is, what they want, what motivates them. Building a profile of that person or group of people based on their own assumptions without any data or research. They think they already know their audience, because they’ve reinforced their own ideas over time while they’ve fixated on the perfect business they’re building to meet a need that obviously exists. This is how much of business thinking has come to be, by building on the ill founded principles of rational economic man and what supposedly motivates us as humans to be productive.

Simple principles, complex people

If you walked into a room with five people you’ve never met and you’re asked to pick the holiday destination they’d most like to go to in the world, based on your assumptions of how they look, how do you think you’d do? I reckon you’d be highly unlikely to get it right, whether you’re a travel expert or not. The fit young guy you chose for Ibiza could turn out to be a yogi, preferring to holiday at silent retreats. The old guy you send to the Maldives is a cold water swimming enthusiast, adrenaline junky who weirdly also hates to fly. The 50 something lady with three kids going on the all inclusive family holiday, is recently separated, has a nanny and is exploring a new found single ‘tinder’ life.

Go a step further, try to give them a holiday agenda, activities, meals, drinks, rise times, bed times. What’s the likelihood of getting a full 10/10 for what they’d choose? Slim to none. How do those odds improve if you just walked up to them and asked “what do you want?” 100% That’s user centricity.

More of a wider argument to do research and gather data than just ‘know your audience’. But you get the point. A simplistic view of what drives human behaviours is not good enough to deliver a product or business, let alone build complex theories and systems upon. You can’t build on foundations of sand. This is what the rational economic man is. Bad data, sandy foundations. The more you build your business on assumption and bad data, data with gaps, the more you build in the likelihood of bias and error. The shallower the research the less likely you’re going to build the right thing or make the right decisions.

If you want to learn more about user research and empathising with your audience’s real needs, IDEO have long been in the game and have a whole host of resources available in their design kit. Here’s something to get started on user interviews.

Scooching back to the Victorian idea that people are driven by; self interest, material gain and contractual obligation, you can quickly dispel this thinking when you look at real world examples. For instance, where are those people driven by a need to help others? Look at the NHS, where people are consistently underpaid and overworked yet save millions of lives and struggle on in a pandemic with little in terms of reward. Look at the third sector where people often freely volunteer their time for literally no material gain. Where is the representation of those people driven by belief - faith. Look at all the things achieved (good and bad) in the name of religion. Too many to mention.

NETFLIX level autonomy

Now look at the resulting behaviours of people when they’re freed from obligation and given autonomy. Netflix may not be the best example of sustainability given recent research into the carbon footprint of streaming (30min of Netflix fix is reportedly the same as driving a car 200m) and the difference in damage between SD, HD and 4K. They are however a pretty good proof point that people in successful business are not only driven by; self interest, material gain and contractual obligation.

NETFLIX and its founders Reed Hastings and Marc Randolph are well known for their corporate culture, ‘people over process’ and ‘dream team’ approaches. Simple policies such as unlimited holiday for permanent employees are more than a slight nod to Teal principles that put autonomy at the heart of business. They make huge inroads into building trust between colleagues. If you’re a selfish self motivated individual, you will likely abuse the system. However if you combine this autonomy in holiday allowance, with the widely reported ‘keeper test’ then those abusers of the system won’t be in the system long. ‘The keeper test’ is a simple question asked by managers of employees:

“If one of the members of the team was thinking of leaving for another firm, would we try hard to keep them from leaving?”

Alone, a policy such as unlimited holiday will not work when implemented into a traditional hierarchical corporate, because the business doesn’t have the other checks and balances in place needed to allow it to work. The traditional corporate hasn’t been built from the ground up to attract the right ‘personalities’ and people. It’s another example that you can’t drastically change one piece of a large system and expect it not to be at odds with the whole. You need a holistic approach to business as NETFLIX sets out:

  1. encourage independent decision-making by employees
  2. share information openly, broadly, and deliberately
  3. are extraordinarily candid with each other
  4. keep only our highly effective people
  5. avoid rules

Unlimited holiday as a policy has seen some recent controversy. If you attract driven purposeful people, there’s also a risk that those people will give more of themselves to the business and fail to take enough self-care time for themselves. Though this is less about the policy itself but more about implementation and having those right checks and balances. You could for instance have a minimum holiday to take too. Plenty of people are taking less binary approaches like unlimited holiday and experimenting further with flexible working instead.

Personally in 2020 I’ve seen little of the driving behaviours of rational economic man. From the global response to Covid-19, to the thundering effect of Greta Thunberg and the rising up and solidarity in the face of institutional racism #Blacklivesmatter. There are endless examples that show it is; a cause, a belief, our values, our empathy and desire to help others that are the strongest drivers and that we don’t need to be materially to be rewarded or forced to take action. Purpose drives us.

Back to the Doughnut

Flying in the face of conventional theory, Kate Raworth offers us the economic doughnut. A new visual representation of an economic model whereby the outer rings of the doughnut are the limits of our planetary resources beyond which we should not go. Else our climate, ecology and planetary health ergo our society’s health is damaged. The inner ring is based on the UN’s sustainable development goals and the minimum sufficiency in those things we need as a people to lead a good life; health, education, housing, energy, democracy, food, water, sanitation. If we drop below this inner ring, people are suffering.

Doughnut economics diagram

Kate’s framework does two important things. First it rewrites what we as a society, as humanity - hold up as success. Sustainability is the goal, not growth. And it doesn’t do this simply from an ideological stance, the heavily flawed nature of our current system is plain to see. If we don’t change our measure of success, we all fall off a cliff. Second, it gives us a plan of action. There is in every walk of life often a lot of talk and very little action.

People may argue that the doughnut model is just that, a model. Not put into practice. That there are far more established, proven examples of capitalism at work. But rampant capitalism doesn’t work does it? It’s not sustainable. The ironic thing is that when a start-up comes cap in hand looking for funding, every Venture Capitalist with their head screwed on will ask, “but is it scalable?”. When you ask this question of capitalism in its current form, the answer is no. So don’t invest. Stop building new ventures based on the same model that doesn’t scale.

With every new idea comes a proof of concept, an MVP, a pilot, a pathfinder. A way to validate that what we’re doing works. The Doughnut is no different and in April 2020 The Guardian reported that in rebuilding the economy post Covid-19, Amsterdam will be using Doughnut Economics as the foundations of any recovery plan. Of course there’s more detail and planning that’s gone into current economic theory. It’s had its foundations in place for several hundred years and more than a few contributors. Whole economies are quite obviously built on it.

“The hardest thing in the world is to change the minds of people who keep saying, ‘But we’ve always done it this way.’ These are days of fast changes and if we don’t change with them, we can get hurt or lost.

Grace Hopper

Anything new starts with foundations and principles. It’s how you build on these foundations that’s important. Look at every start-up struggling to scale and every corporate looking to build a start-up culture. There seems to be a problem at both ends of the scale, each is missing something they perceive the other to have. Quite the enigma that. It just shows, business needs a radical redesign.

This is #TheFalseEconomy

We’re taking a break for Christmas and will be back in the New Year on Friday 8th Jan. Take care everybody, enjoy the small things. x

If you want to talk about and explore anything we’ve said, get in touch, we’d love to hear from you because it makes us better.

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#2 Facts fight fiction
#4 The Moonshot. Can we do this?

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