Mirsky's Desk | Ideas on Leadership, Business and Technology

Been a busy past few months in my new role as CTO of CustomMade.com. After dusting off my coding hat, creating a new architecture for the website and building a new team to advance the product, I’m happy to get back to writing and all those old notes that I keep meaning to revisit.

If there is poor management and leadership in an organization, the bottom of the totem pole is the first to notice. They’re like the canary for the coal miners.  Some how, they become restless when there aren’t the right goals for an organization or they complain about inconsistency of policy or get down right frustrated when their bosses don’t let them do the job they were hired to do, all well before someone above realizes.

Although they might be the bell-weather for larger systemic organizational issues (more on this in another article), the productivity of an organization is often guided by the level of management right above the “do-ers.” Of course, I think its early in our careers when we find managers who are the most challenging to deal with and probably most influence our ability to be effective.

The cause is usually simple too: if a manager is overseeing people new to the workforce, that first-level is often who has the least experience too. And it’s amazing, these were the folks who were the ‘canaries’ not too long ago, pointing out the same issues that they themselves are now causing.

I see many of these young and inexperienced managers, nervous about how they will perform in their new role.  And the end up at the extremes of style, either micromanaging (because nobody is going to ‘screw up’ on their watch) or under-manage (because they still want to be friends with the people who used to be their colleagues).

Although the symptoms are several, there is a new skill a manager needs to acquire that you can rarely pick-up in a non-leadership position: delegation. What is often taught and what people often draw upon is their problem solving ability, breaking down a large problem into smaller components and handing these out to the various team members to complete.  And it’s a good starting point, as many of the people promoted to being entry-level managers are being moved to this next level because they have demonstrated this important ability.  And yet, this is exactly the mindset that causes frustration in the employees being managed as they get handed a task and not a responsibility.

Many of my studies in anthropology focused on linguistics, and therefore, when I first start to examine these kind of distinctions, I often go back to their base definitions and look at their etymology (the study of words, which is not to be confused with entomology¹, epidemiology² or etsymology³).

“A sense of duty or obligation”⁴ is a good start.  By handing an employee responsibility, you instill in them a sense of honor and pride in the work associated with the effort in front of them.  You enable them to stand on their own, do and a sense of accomplishment when they’re completed.  Without this, people start getting frustrated, showing a lack of motivation and often produce poor quality results.

But even better is Oxford English Dictionary⁵: “the ability to act independently and make decisions.”  And with this lies the paradox of being a manager; people want to be in control, feel like they are choosing the path of proper execution, but as a manager, it’s your obligation to make sure they are making the right decision.

In contrast are tasks defined by the O.E.D. as “a small piece of work” or “chore.” If I’ve learned anything from my childhood in taking out the garbage or doing the dishes, chores are not things one looks forward to. Yes, they are necessary. But if our entire work life is made up of these, it’s dull, boring and in the end not very fulfilling — which is neither good for the individual nor good for an organization trying to retain a smart and productive workforce.

1. study of insects
2. study of diseases
3. study of crafts, newly coined by my friend Ginevra
4. Webster’s English Dictionary via dictionary.com
5. Funnily enough, their website claims it’s “The definitive record of the English language” – is that really possible?

I had hoped to wait to write a few articles on other topics before I addressed the current economic situation.  Mostly because I have found that everyone thinks they are an economist or a policy maker and, as such, everyone has a theory , an explanation and/or a solution to this economic “chaos”.  I certainly have found no easy answer, but by breaking it down into pieces, I’ve been able to contemplate the underlying causes and make sense of the chaos.

also note: there were several other alternative titles to this article, all of which were equally amusing¹.

With the Federal Bank’s recent move to lower the target interest rate to the range of zero to one-tenth percent, the media saw this as an unprecedented move. Whether or not it is the right thing to do – and I do believe it was² – will be debated for many years to come. However, it is a stark example of the two parts that economic policy effects: the money supply and confidence.

The first is much easier to describe. There needs to be currency in the market to do business (and I’ll ask the economist to bear with me as I avoid the differences between currency, money base, money supply and money multiplier).  In order for institutions to lend (which spurs economic growth through investment), they need capital.  If capital is tied up in other investments and, even worse, those investments disappear through default, the supply in the overall economy of currency will decrease. It’s a central bank’s role to keep this stable. In order to encourage institutions to lend at a specific interest rate, a central bank can control the amount of currency available for people to conduct trade, purchases and investment by buying and selling government securities. And it’s not that they are printing or destroying currency, when they sell securities, they remove the currency used to purchase these securities from the marketplace, thereby making it unavailable for use by companies and individuals. Buying does the reverse; they inject capital when they take ownership.

Whether people actually want to make the investment with the available money is the second part, and it’s a little more fungible. Investors need to feel comfortable that the money they have tied up in investments will be paid back. Lack of confidence is often associated with higher risk premiums³ and, although many institutions have risen up to quantify this ability, I believe this is an emotional decision. Even some of the terminology leads to this conclusion; for example, there can be a “crisis” of confidence.  Crises don’t happen to emotionally stable people; they’re called challenges. But it’s not a challenge of confidence, it’s a crisis of confidence.  Crises happen when it pushes one beyond our emotional ability to handle a situation.  And this emotional part of economic policy has been attributed to causing some of the largest changes in a country’s economy. Lack of confidence contributed to the hyperinflation in Latin American countries in the late-’80s and early-’90s. Over-confidence contributed to the internet “bubble”((often misused, overused under-defined term)) in the late-’90s and the most recent real-estate “bubble”.

So by economic policy, a central bank also hopes to control both the money supply and confidence in the marketplace.

The recent move, therefore, raises another interesting question: can you go below a zero target interest rate? Normally, and for simplicities sake, interest rates are viewed in they following way: when a lender gives money to a borrow, the interest is the amount of money the borrower needs to give back to the lender in addition to the original amount borrowed.⁴ So, if we’re not careful, we’re tempted to rephrase the original question, if the interest rate goes below zero, are we, in effect, lending money and paying people to take it from us?

Before I continue, I should also note, that this process of managing the money supply is a typical, regular part of daily monetary operations for the Central Bank. Buying back and offering government securities to banks is a common and ongoing process to make sure the money supply stays as constant as possible for a given economic time (e.g. inflation, growth, decline, etc.). And I should also clarify, this is distinctively different that economic stimulus plans and “bailouts” as those are investments (debt or equity) in institutions that is required to be eventually paid back.((more on this distinction in another article))

We should remember the discussion above, the target interest rate is not really about interest, it’s about money supply: does the economy have enough capital to operate and allow business to continue. So if necessary, and rarely done, a central bank can inject capital into the economy with other mechanisms.  But, the Federal Reserve is keenly aware of it’s other, albeit perhaps more suruptitious goal, to maintain confidence.  By saying that “they had other avenues at their disposal” in addition to the target interest rate, the Central bank was reassuring people that they are willing, able and ready to take any steps necessary to foster the economy.

1. nakedness as the tide goes out or money DOES grow on trees
2. a shrinking money supply constant is what is resoundingly thought of as to have caused the Great Depression
3. a borrower needs to pay more interest depending on the probability they are to pay the money back
4. Various ways, sometimes complex, to calculate based on time-value of money, various compounding frameworks, risk premiums, etc.

“Social networking” is all the rage. No surprise, right? It’s more than likely even how you found this article, actually. But as I’ve watched and participate in this new phenomenon over the past few years, I am truly amazed at the influence it can wield. Barack Obama’s presidential campaign is the just the latest of a multitude of examples.

But for all the hype, buzz and hoopla¹, being social and networking with people isn’t anything new.  Social networking just found a way to tap into basic, human (or animal) desires and emotions that we’ve been cultivating for millions of years:

• Feeling connected. Most (if not all) animals have the need to feel connected. So much so that we’ve given names to those communities in both the animal kingdom (gaggle of geese, school of fish, etc.) and within the human race (family, extended family, fraternity, clique, etc). Humans need to have a sense of belonging and showing their identification (e.g. religious groups, nations, gangs, alumni organizations). And with facebook (or LinkedIn or etc.), I know where I belong because I’ve signed up to be a fan, watch a page, tell the world where I belong.
• Show and Tell. Although we have to be taught to share in kindergarten, there are very few kids who don’t have the inate desire for showing their friends, teachers, parents or sometimes even strangers on the street a picture that they’ve drawn. And now, we can share with the world by uploading pictures, thoughts, comments and commentary.  Share with the world instantaneously (without the cookies & milk or naps on little pieces of carpet, unfortunately).
• Competition. Even the earliest societies have formed games and teams to see who’s the best. Mayans, romans, greeks are main examples. But this instinct, I believe, is more primal and probably stems from our earliest animal instincts to be survival of the fittest. Instead of lions fighting over a gazelle like lions on the African plain or tigers in the jungle urinating on their territory, we can mark out our social environment by showing the world how many connections we’ve made or friends who’ve accepted our requests. Look everyone, who’s Mr. or Ms. Popular now.
• Nostalgia. This is an area that sets us apart from most other animals. Humans love history. We dwell in the past, we study the past, we try to learn from the past… and we try to relive it.  Understanding where we come from (whether you look to evolution for explanation or look to religion for guidance) is something that humans have focused on for a long time.  Now, we can reconnect with friends and remember all the good times without leaving our home. Our memories are stored and instead of just being in photo albums on a dusty shelf, we can build a collective historical record of our lives.

We’ve been naturally trying to do all of these things for a long, long time; they’re innate to being human.  Technology has enabled us to express them now in a way that is conscise, consolidated and requires much lower effort than before.

And as companies jump on the bandwagon, trying to figure out how they can leverage to make profit directly from a website or indirectly help get their product or service known to more people, I’m puzzled. If a company is just waking up to the fact that they need to address their customer’s needs and values in this way, isn’t that concerning?

1. bustling excitement or activity; commotion; hullabalo| full definition

Starting something new is a challenge, and mostly because we are hampered by the end of something that has recently drawn to a close. But it is at these moments, the emotions tied to the past somehow trigger our innate tendency to be resilient and allow us to tackle the opportunities ahead. At the end of a job, there is a possibility of a new milestone in one’s career. At the end of a relationship, there is the possibility of finding the next.

Although launched many months ago, this took a back seat to a full-time job (and shortly thereafter a full-time job search) as well as a full-time executive MBA program. And as I approach the last two days of classes, say goodbye to my classmates and friends here, I look forward to starting the next part of my career…. and the next stage of my life-long learning process.

I sincerely believe that this blog will be an important part in order to synthesize what I will be witnessing along the way. Along with an envelope full of notes from lectures and a Moleskin notebook nearly full of thoughts, I look forward to sharing my musing on past experiences and things to come here at Mirsky’ Desk.

Enjoy!