Publicly Generous

But what about when nobody is watching?

GENEROSITY is the act of giving more than we expect of you.

You are probably familiar with the most common form of generosity – public generosity. Giving more when people can see it.

The public benefactor to a prestigious university foundation; the celebrity who campaigns to fight poverty; or the wealthy men on a quest to cure malaria.

Public generosity is valuable, necessary and commendable. We need more of it because equality and prosperity in our communities cannot be sustained without it.

There is, however, a more unique form of generosity – private generosity. Giving more even if nobody is likely to hear about it.

The partner in a firm who takes extra time to make sure his juniors are learning, developing and growing. The mother who makes an extra effort to help her children develop their unique talents. The big shot friend who always makes time for her small town friends.

Public generosity may get you recognition, but private generosity can help you lay a foundation for your life and your work upon which future success can be built.

Are you giving more than people expect of you? And what about when nobody is watching?

Your generosity is needed now more than ever.

The Truth

Will set you free

THIS expression has been a popular saying among business gurus like the late Jim Rohn, and has its origins in scripture.

“The truth will set you free” has a nice ring to it and makes people feel good, but what does it really mean?

Here are three practices that follow directly from the pursuit of truth, and which underpin sustainable business.

1. Accepting things for what they are. A core requirement of good strategic thinking is the ability to accept the world as it is. Business failures inevitably result when executives cling to the past, holding on to an existing business model which may remain profitable (for a time) but which no longer solves the problem it set out to solve in the most valuable or cost effective way.

A contemporary example is Eastman Kodak, which pioneered the core technology used in today’s digital cameras in 1975, but failed to accept the new reality and ultimately filed for Chapter 11 bankruptcy protection in 2012.

2. Acting with integrity. In a world where most Economists and corporate executives believe (or have managed to convince themselves) that the purpose of business is to maximize profits, where do you draw a line in the sand? When is it possible to say enough is enough?

Acting with integrity means saying “no” to initiatives that produce short term profits in a way that causes lasting harm to employees, customers or members of the community.

Standing up for the truth is a sound and sustainable business practice and a contemporary example of where this didn’t happen is Enron.

Prior to its collapse Enron was one of the world’s largest energy companies but the pursuit of short term profits led executives Kenneth Lay, Jeff Skilling and others to embrace mark to market accounting, a dubious practice whereby anticipated future profits were booked on the day the deals were signed rather than when profits were actually earned.

These deceptions eventually led the company into bankruptcy and many of its executives were sued on criminal charges or committed suicide.

3. Seeing something, and saying something. Companies that fail to improve will ultimately fail to survive, and the first step in the improvement process is when employees see areas for improvement and speak out. If people are unwilling or unable to do this, then the performance of a company will suffer.

A contemporary example of where lack of communication crippled business performance was the terrible safety record of Korea Air from the 1970s to the late 1990s.

A cultural issue made it difficult for Korean co-pilots to tell the pilot about their mistakes and the resulting break down in communication led to the write off of 16 airplanes and the loss of over 700 human lives.

The truth will set you free is not just a pithy aphorism. The truth is a liberating force which can clear the way for continued growth and prosperity. A solid foundation on which to build sustainable business.

The Emperor’s New Clothes

THE Emperor’s New Clothes, the famous fairy tale by Hans Christian Andersen, tells a story of a vain Emperor who enjoys parading his fine clothes around town.

One day a pair of swindlers promise to weave a magnificent suit of clothes for him which are so fine, they tell him, that they are invisible to anyone who is unfit for his position or unusually stupid.

The Emperor and his ministers couldn’t see the clothes but each of them pretends that he can in order to avoid appearing stupid. The townspeople, upon hearing the story of the clothes, also pretend to see the clothes.

The story ends with the Emperor parading his new clothes through the streets until an innocent child shouts “the Emperor has no clothes!” and everyone suddenly realises the truth.

The Emperor’s New Clothes is just a fanciful children’s story. Surely nothing this silly could happen in real life, could it?

Apparently it can, and examples abound of social situations that revolve around a convenient fiction. This often leads to hardship and misfortune.

You may have heard people say some of the following:

  1. Property prices always go up (hint: they sometimes go down and quickly)
  2. The purpose of business is to maximise profits (hint: the aim is actually to provide value to other people in a way that allows the activity to be sustained or scaled)
  3. Money is real (hint: money is social fiction backed by trust – it used to be backed by gold but that got expensive)
  4. Quantitative easing is a legitimate monetary policy tool which is not the same as printing money (hint: quantitative easing is ipso facto exactly the same as printing money, and is the kind of activity that led to hyperinflation in Weimar Germany and Zimbabwe)

Can you think of any other examples of “the Emperor’s New Clothes”? Share your thoughts in the forum.

Mumma’s Cooking

Brings the family together

Mumma's Cooking

WE are currently in Portugal and recently stayed at Home Hostel Lisbon, which was voted best medium-sized hostel in the world for the last two years running.

Think about that for a second.

There are thousands of hostels in the world across hundreds of countries, and many of them are excellent.

Home Hostel Lisbon was voted “best hostel in the world” two years in a row.

That’s a pretty impressive achievement.

How do they do it? What makes them the best? And what can we learn from them?

We have three thoughts on the matter.

Our first thought is that the thing which makes Home Hostel Lisbon “best is the world” is the appealing design. Whether it be the chandeliers in the dining room, iPads and flat screen TV with PlayStation in the living room, free iMacs in the computer room, or the simple and appealing branding which is consistent throughout the entire hostel, Home Hostel combines practical functionality with the kind of appealing design you would expect from a hotel or your rich Aunt’s house.

Appealing design is definitely part of the magic, but that’s not the whole story.

Our second thought is that the thing which makes the hostel so great is that it revolves around one superior person, Mamma!

Mamma is the mother of the hostel’s owner, a wonderful Portuguese lady with marvelous cooking. She remembers everyone’s name, takes an interest in what everyone did during the day, and plays the perfect hostess. Every night she serves up a home cooked three course meal (with unlimited drinks!) for the insanely reasonable price of 10 euros. This is not only exceptionally good value in a financial sense but it sets the tone for the hostel and provides a unique opportunity for guests to get to know each other over a home cooked meal.

Mamma is definitely part of the magic, but we have one final thought.

Our third thought is that it’s actually all about generosity. Many hostels subsidize the bed price by charging for ancillary services like Internet or luggage storage, but this tactic can destroy the community feeling. Home Hostel doesn’t nickle and dime its customers. Whether it be the free shot of Portuguese liquor served on arrival, the delicious free breakfast catered each morning (with scrambled eggs to rival Bill Granger), or the “how to get to the airport cards” which you don’t realize they have until you ask the question, Home Hostel Lisbon is in the business of solving problems and delighting its guests.

Mamma will be missed.