Better Than Capitalism

I thought it would be helpful to include an illustration of what I mean by the two reasons we follow a leader.

As I tried to reduce leadership to its most basic elements, I was left with two principles: willingness to be responsible and knowing where to go. The relationship between the two feels straightforward, but it’s a little more complex than it immediately appears.

First off, to describe those who aren’t leaders. A person who doesn’t know where we’re going and isn’t interested in shouldering any responsibility for getting us there is simply incapable of being a leader.

Someone who knows where to go but isn’t interested in the responsibility is different. This person is capable of leading but refuses to do so. Those who distinguish between a “boss” and a “leader” are describing this sort of person.

The person who doesn’t know where to go but is willing to take the responsibility is really incapable in one sense. They’re incapable because at the beginning they don’t have the knowledge necessary to attain the objective. But their willingness enables them to figure out how to get to the destination and (maybe) gives them the determination to keep trying. This person isn’t guaranteed to get us to the goal but, at least for a while, they’ll help us move along the path.

The best leader is the one who knows how to achieve the goal and is willing to take responsibility for getting us there. Because they know how to get to the goal, they can direct us with confidence and a minimum of trouble. Because they’re willing to be responsible they understand that they’ve accomplished very little if they reach the destination alone. They understand that their role isn’t just to reach the goal, it’s to expand (and probably extend) the capacity of each follower so that we can reach the goal. No guarantees of success here either, but this is the closest we can get.

P.S – I know, there are other important dimensions to leadership. But simplifying to two classes is a helpful way to start thinking about it.

Wanting to lead and leadership are not the same thing.

We follow leaders for two reasons: either they know how to get where we’re trying to go, or else they don’t know but they’re willing to shoulder the responsibility for getting us there anyway. It’s important to understand which one we’re dealing with, because the skills and attitudes required to lead and to follow in the one case are very different from the ones required in the other.

If you want to lead, it’s best to figure out which one you are, then be very clear about it with those who are following.

To reliably build a successful business, you need to add value. To build a company like Ford or Apple, you have to deliver market-changing value at an individual scale. Henry Ford didn’t just succeed because he had a great business plan or the right attitude about work (although they undoubtedly helped), he succeeded because he revolutionized transportation 15 million times. Apple isn’t just succeeding because of its slick design, it’s succeeding because since the introduction of the iPod (really since the Apple II, with a bit of a detour there in the middle), it has revolutionized the experience of personal computing a billion times.

What value are you adding? And for which people?

A syllogism and a related thought:

The quality of a relationship is a reflection of the trust between two people.

Vulnerability is defined as “uncertainty, risk, and emotional exposure.”

Our willingness to be vulnerable, then, is a measure of our belief that our action will increase the trust in a relationship.

In his essay The Crisis, Thomas Paine shared an anecdote about a tavern-keeper who, standing at the door of his tavern with his child in his arms and faced with the prospect of war with England, declared “Well, give me peace in my day.”

Tom’s response was that a generous parent should have said, “If there must be trouble, let it be in my day, that my child may have peace.”

There’s no question that peace is preferable to trouble. Thankfully, we’re not especially likely to face the reality of war or its personal effect on our children. But if we’re to truly be leaders, vulnerability means that we have take the position of the generous parent in the challenges we do face. It means that we have to be the ones who will stand up and say “I can take this if it means someone else won’t have to.”

I wish it were easier. But then, if it were, it probably wouldn’t be worth it.

Yesterday I listened to Mike Rowe’s recent interview with Charles Koch. It’s fascinating all the way through, but toward the end Mike asked Charles “What are you reading?” That question made me sit up straighter in my chair as I listened for Charles’ answer.

Reading, and reading well, is an immensely valuable skill. At its heart, the ability to read is the ability to be communicated with, to receive and understand another person’s thoughts. Because it’s impossible to interrupt,  the speaker is allowed to carefully develop his or her ideas. And because the speaker isn’t in control of the conversation, the reader can take time to consider what’s being said very carefully: digesting it, interpreting it, and comprehending it as time and space allow.

But as valuable as reading is, it pales in comparison to the act of sharing what you’ve read with someone else. In fact, I can’t think of a better way to connect meaningfully with someone than to discuss what you’ve been reading.

I have a good friend who’s a successful lawyer and businessman. He’s a bit older than me and I look to him as a reliable mentor. We get together a couple of times a year for lunch and I always look forward to our visits. Every time we get together, he asks “What are you reading?” This question is one of the things I most look forward in our visits. We share notes about what we’re reading and we often both walk away with new additions to our reading lists.

In the process, we learn about each other. A good partner will engage with you in your experience, alternatively sharing in the thrill of discovery and broadening your understanding. They share other things that have affected their own reading, and even when they disagree with you they encourage you to read more.

But the best reading doesn’t stop at the sharing of it. The best reading moves you to change. It reshapes you and enlarges you. It’s what happens when you first began to understand what Atticus means when he says it’s a sin to kill a mockingbird.

There’s so much to do. So what are you reading?

My wife and I got together with our friends a couple of weeks ago. As the night went on we chatted and laughed and commiserated with them about life as young parents trying to get it all done without letting anyone see us break a sweat. In the middle of the laughter and the tears, my wife wondered why we try to snooker everyone else: they all know we’re faking it, she said, because we’re all of us in the middle of “having a human experience.”

It might be because I’m reading Brené Brown’s book Daring Greatly or it might just be because she was right on, but either way, I’ve I’ve thought a lot about what my wife said.

It’s probably as much a reflection on me as it is on anything, but it seems that work is the place where people are least willing to be seen having a human experience. I think there are many reasons for this, not least because of the pervasive attitude that work is—or ought to be—a pure meritocracy. I can’t count the number of times where I’ve heard people say “we only work with the best,” as if there’s some objective way to measure who is the best and who isn’t.

The more I think about it, the more I’m convinced that this sort of thinking—the sort of thinking that leads us to say we only work with the best—is one of the more pernicious riffs on the shame/guilt dichotomy that Brené discusses in Daring Greatly. Put briefly, the difference between shame and guilt is the difference between “I’m a bad person” and “I did a bad thing.” The little ditty about working only with the best is particularly noxious because it sounds so true.

But it’s not true. As a matter of simple statistics, it can’t be true; there’s simply no way for every organization that claims to work only with the best to actually have engaged the best person in that particular field.

More problematic than that is what this idea does to those who try but don’t succeed on their first try. The message to those folks is “you’re not good enough.” That message gets repeated a thousand times a day in a thousand different situations. We’ve all heard it.

But even more problematic than that is the fact that in this framework, even success is not necessarily a relief. For many of us, each success is only a temporary reprieve from the need to prove our worthiness.

Those who don’t get caught up in the rat race are those who have learned, like my wife, that really we’re all just in the middle of having a human experience. Life isn’t really about surrounding ourselves with “the best.” It’s about surrounding ourselves with people and trying to help them do their best.

Recently, Simon Sinek said “We must find a purpose or cause to pursue otherwise all we have left are our imperfections.”

We must find a purpose or cause to pursue otherwise all we have left are our imperfections to focus on

— Simon Sinek (@simonsinek) November 30, 2015

We can find such a transcendent purpose when we devote our business lives to serving our neighbors instead of chasing money.

Shortly after I started my little hiatus a month and a half ago, my wife turned on a light bulb for me. I was trying to describe the point of what I’m trying to do, both with this blog and with my career, when she asked something like “aren’t you just saying that our business is people?”

And she’s exactly right. Our business is people.

I’ve struggled for the better part of a year to describe my first principles, ever since a colleague challenged my inability to effectively describe what I’m trying to do here. This is it: our business is people.

I advance this principle in direct opposition to the idea that business is “carried on primarily for the profit of the stockholders.” I know that this makes me different from many of my fellow capitalists, who are steeped in the modern American interpretation of capitalism that followed the Michigan Supreme Court’s declaration in Dodge v Ford Motor Co. In this, I feel a lot like Arthur Brooks (president of the American Enterprise Institute), who said of his conversion to capitalism:

“I was feeling more idealistic than ever. The more I read and learned, the more I believed that everyone—poor, rich, minority, immigrant, everyone—should be able to earn their success. I realized that free enterprise could build a better, more humane world on a mass scale, so long as the United States had the moral confidence to live its own values and share them with the world.”

Like Arthur, I’m a convert. Not to capitalism, but to the idea that our participation in the free market can and should be an exercise of our moral convictions. I believe it down to my toes.

One of the most compelling aspects of this conversion is that it has helped me understand how to apply a scriptural passage that has long captivated me. In my Mormon tradition, there is a story about a prophet named Jacob. Near the end of his life, Jacob preached to his people, calling on them to live more godly lives. Right in the middle of it, he tells his people:

“Think of your brethren like unto yourselves, and be familiar with all and free with your substance, that they may be rich like unto you.

“But before ye seek for riches, seek ye for the kingdom of God.

“And after ye have obtained a hope in Christ ye shall obtain riches, if ye seek them; and ye will seek them for the intent to do good—to clothe the naked, and to feed the hungry, and to liberate the captive, and administer relief to the sick and the afflicted.”¹

Jacob was a humble man and a great leader. When I first read this passage as a boy, I thought it meant that I was ok to chase my dream of becoming fabulously wealthy. I just had to figure out that whole “kingdom of God” thing and I’d be set. I’m essentially a good person, I figured, and I’ve pretty much always wanted to do good, so I just had to keep that up and God would give me the riches. As I’ve matured I’ve realized that’s not it at all.

I’ve realized that the point of this scripture is to point us toward each other, to help us see that seeking the kingdom of God inevitably and necessarily leads us to looking out for our neighbors.

Simon Sinek captures the idea in a different way. Speaking of leaders, he explains that part of what offends us so much about the CEOs who receive such disproportionately high salaries is not so much the money that they have received, but that they have “violated the very definition of leadership. They have violated this deep-seated social contract. We know that they allowed their people to be sacrificed so they could protect their own interests, or worse, they sacrificed their people to protect their own interests. This is what offends us, not the numbers. Would anybody be offended if we gave a $150 million bonus to Gandhi?” The video is below, and the relevant portion starts at around the 7:32 mark.

[ted id=1998]

Like Arthur Brooks, I believe this is a moral issue. To say that our business is people is to make an explicitly moral argument. It stands in opposition to the moral argument that a business exists primarily for the profit of its stockholders. And like Arthur Brooks, “I hear pretty frequently that we should focus on economics and not morality. That is dead wrong and a false choice besides. Economic issues are moral issues. Americans are not materialists. The vast majority of Americans want public policies that are not merely economically efficient, but also morally just.”²

We can build business that is both morally just and economically efficient. It starts by aiming at the right goal: people.

This time last year my fourth child was born, so I took a month off of writing the blog. I’ve written every week since then.

This year, I’m taking a month off so I can revisit and recharge. See you in a month.

Over the weekend I listened to a talk by one of the leaders of my church. In it he shared a principle he has learned while working to understand how to help those who live in poverty throughout the world. That is, “the greater the distance between the giver and the receiver, the more the receiver develops a sense of entitlement.”

This principle isn’t a new principle. I’ve even talked about it on this blog before. Moses Maimonides taught the principle in his formulation of the highest level of tzedakah, or charity. According to this tenet of Jewish thought, the highest form of giving is the one in which the giver knows (and is known by) the recipient and gives a present or a loan, enters into a partnership with him, or finds him work so that “his hand will be fortified so that he will not have to ask others [for alms].”¹ In this form of charity the giver and the receiver are brought into close proximity and are thereby allowed to better understand the position from which the other approaches the relationship.

The opposite sort of idea has become firmly entrenched in modern life. In law school we’re taught to evaluate the quality of our clients’ transactions against the idealized arms’-length transaction. The arms’-length deal stands opposite to the close deal, the one where both parties are so close to each other that we question their ability to judge the merits objectively. The distance that is a consequence of the arms’-length deal becomes a proxy for objective quality.

The problem is, I don’t think it’s only the receiver who develops a greater sense of entitlement as a result of this increased distance. As managers and as business owners we’ve been taught to manage the distance carefully. All of this distance, in the end, seems designed to keep us from caring about each other too much. After all, it’s only business.

The way to build an otherish business is to stop serving these faceless interests. It’s to reorient your priorities so that you enable your employees and your customers to become self-reliant, then to teach them (if you can) to turn around and pay it forward. The only way to do that is to get close to them.

Today is the day for pushing past the malaise.

Doesn’t matter what day it is, today is the day.

It’s the only way to ever get change to happen. It’s easier to leave, but leaving only changes your surroundings.

When I started this blog a year ago, I naïvely believed that no one else was seriously talking about how free market, conservative principles are the most effective means of fixing the problems of poverty and social inequality. How glad I am to have been wrong.

Over the weekend I found this video and this TED talk from Arthur Brooks, who is an economist and the president of the American Enterprise Institute. Go watch them. The few minutes you’ll spend with those videos could be the most valuable time you’ll spend this week.

In those videos, Arthur effectively makes one of the central points I’ve been trying to make for over a year now: “[Y]ou know what we need? You know what the social justice agenda is for conservatives today? It’s a hope agenda. And a hope agenda has three parts: work, entrepreneurship, and education.”

I passionately agree with the vision Arthur lays out. He’s not only describing why we as conservatives should be concerned with the prosperity of all Americans, both those who agree with us and those who don’t, he lays out a framework that will help to answer how we can start to achieve it.

At its core, the free market—Adam Smith’s capitalism—is about enriching the lives of every single person. We can make this vision of capitalism a reality through simple changes in the way we approach our businesses and our neighbors. Those changes start with taking a fresh approach, with thinking about how we can help others see the virtue in work and in the enterprise of building their lives.

For me at least, that change will start here. I haven’t yet figured out what it will be, but I’m changing the name of this blog. “Better Than Capitalism” is a strawman – I’m not writing about something better than capitalism, I’m writing about how to help more people through the application of conservative principles and a right understanding of how the world works.

In the longer run, the change will also involve doing more than blogging. Arthur Brooks can make his living as an economist, a thinker, and a speaker, but I want to be a doer. I want to take the principles that we have identified and put them into practice. More than that, I want to show you that they work in the hope that you’ll emulate them.

We don’t need the government to fix the problem of poverty. We can do it ourselves and it will mean so much more if we do.

Samuel Johnson is said to have once written that “The true measure of a man is how he treats someone who can do him absolutely no good.”

I think that’s true.

But as poetic as it is, it suffers from entirely too much symmetry.

I listened to a fascinating conversation this week between Marc Andreessen and Clayton Christensen. In that discussion, Clayton talked about some of the things that got him to write his book How Will You Measure Your Life.

Right before the conversation ended, Clayton talked about an experience he had as a young business consultant. Faced with a looming deadline and a team who expected him to step up, Clayton was asked to work over a weekend. Despite the intense pressure from his boss, Clayton steadfastly refused to work the weekend because it would have meant violating commitments he had made to his wife and to God.

Angry and bewildered at his obstinacy, Clayton’s boss asked him whether “Just this once, in this particular extenuating circumstance,” if Clayton could just make the sacrifice to get the project done.

But still Clayton refused.

Now, years later, Clayton explains, “It turns out that that decision is one of the most important decisions I ever made, because it turns out that my whole life has been filled with an unending stream of extenuating circumstances and if I had said ‘Just this once’ the next time it occurred and the next time, it’s easier and easier. And I decided that it is easier to hold to our principles 100% of the time than it is to hold on to them 98% of the time.”

You see, it really doesn’t matter whether we’re dealing with people who can do us good or not. The true measure of a person is how we treat anyone we meet.

So it’s really important to hold on to the right things.

The culture we’re building here is the kind of culture that doesn’t stop at the free market. Having taken stock of the world in which we live, with all its beauty and its injustice, this culture pushes us to ask what we can make right.

The funny thing about writing a blog is that anybody can do it, which I’ve proved for the last 52 weeks.

One year in, I’m convinced of a few things:

1. Winning in business means much more than maximizing ROI in terms of dollars and cents.
2. In blogging as in anything, maturing is a hard process.
3. Transparency lowers the transaction cost of everything.
4. The old saying about actions speaking louder than words is true. Talking about being otherish in business, by itself, isn’t going to change the world. I may not succeed, but my message doesn’t stand a chance of spreading unless I do more than write about it.