Marginal thinking

One of the first thing that each student learns in business school is how to evaluate alternative investments.

It starts by ignoring sunk and fixed cost and instead calculate and make a decision based on marginal costs and revenues.

The problem with this formula is that it almost always shows that the marginal costs are lower and marginal profits are higher than the full cost.

We assume that our current assets, our current model of doing things will continue to be profitable and valuable in the future.

Except, past performance is not indicative of future results. There is no guarantee what sells today is what will sell tomorrow.

We fall into this trap of thinking in terms of marginal cost: we don’t comprehend the full cost of our actions.

And the same can be said in how we make everyday decisions. We don’t fully grasp the cost of one more cookie or to charge the credit card just this once.

We put more confidence in what we can measure instead of what we can imagine.

How powerful is a placebo?

It turns out that by simply re-framing what exercise is, it will help someone lose weight.

Things like the smell of a new car signals luxury, the $42,000 price tag on a pair of skis helps people ski faster, the horseshoe hanging on a wall helps make the steak taste better…

Placebos remind us what we think is authentic.

Ultimately, they are stories we tell ourselves about people, products and services—even to the point that it can change the way our brains and bodies respond.

“I’m not good enough”

Discursive thoughts are like an emergency alert system. They flash through our mind over and over again, incessantly. A broken record, stuck on repeat.

This resistance, that voice in our head that tells us we are not good enough, subverts us from doing our best work.

Here are three strategies that are helpful in combating the enemy from within:

Thinking. 

Pema Chödrön invites us to gently say the word “Thinking.” As if your thoughts are like clouds passing through the sky. Acknowledge they are there and simply let them pass through.

Make better art. 

When things are not going well—you lost your job, that proposal you worked on for three months was axed, your presentation bombed—beloved author Neil Gaiman has an invocation: when the work you do is not working, make better art. And then you keep making better art and keep making better art, until, the work gets better.

Thank you.

What does Ulysses, Moby Dick and The Great Gatsby have in common? Each of them have one-star reviews on Amazon. No author ever got better by reading her one-star reviews. For all the critics, trolls and haters trying to tear down your work, just say Thank you. Thank you for taking the time to read this. Thank you for having the courage to speak up. And now you can go back to work. Because it’s not for them. An artist understands that she isn’t trying to change everyone, just someone.

How access has transformed us

This is Yuri Gagarin…

220px-Yuri-Gagarin-1961-Helsinki-crop

…the first person to travel in space.

And this is where Gagarin lived for two years during WWII when Germany invaded Russia:

mudhut

How does one person go from a mud hut to outer space in their lifetime?

The answer: access to opportunities.

Access is the modern miracle we live in today.

Access is the key to creativity, innovation and change.

The result of which is prosperity.

Motivation in the workplace explained

According to Gallup, 71% of US city workers are unhappy and disengaged with their jobs.

Why?

1) Proper Hygiene

Proper hygiene means that working conditions are safe, pay and benefits are sufficient, plenty of job security and growth opportunities. Once a workplace is clean it doesn’t mean that people will like their jobs—they just won’t hate them.

2) Motivation

Motivators include responsibility, doing work that is meaningful and challenging and making a contribution.

Notice how pay is a hygiene problem, not a motivator. Indeed, it is hard to have someone give that 110% when they struggle to put food on the table.

On the other hand, motivators like making a difference in the world is an internal incentive. External incentives, however, like money, are not good substitutes for making our work (and lives) meaningful.

The bottom line: no one wants to work for a place that feels dirty.