Institutions + Innovation + Detroit

The World Doesn’t (Exactly) Need More Leaders

Lots of institutions – like schools, companies, pundits, etc. – talk about leadership to the point of dogma. At best, this is misguided. At worst, this is dangerous.

What I find problematic is that these narratives imply that leadership is an end in itself. As in, you go to school to become a better leader. Companies, say they’re trying to recruit their next generation of leaders.

Besides, I don’t think “leaders” are what folks are really after. What they’re really after is value. They want people to make things beautiful or make beautiful things. They want people to make their companies, communities, and customers better than they were before. They care about the value, not the means to create it (assuming it’s ethical).

Leadership is merely a means to the end of value creation, but it’s not treated that way. Leadership is heralded as an end in itself. With all the books, courses, degrees, and gurus you think, “I’ve gotta be a leader!”

I take this issue (I acknowledge that it’s a subtlety) seriously because leadership without value creation is dangerous.

To be a leader, a leader needs followers. Ideally, people follow a leader because they are doing something valuable. That’s fine.

However, when you place leadership above value creation (making things beautiful or making beautiful things) it incentivizes people to attract followers even when they aren’t doing something of value.

When they aren’t doing something of value, leaders trying to attract followers tend to do ugly things – coercion, deceit, exploitation – because at the end of the day, if someone who aspires to be a leader isn’t doing something of value they have to make it appear as if they’re doing something of value or force people to follow them.

Of course, it’s helpful to have good leaders when trying to do something of value with a group of people. However, the point is not to be a leader, the point is to do something of value.

That’s why I stand behind the statement “The World Doesn’t Need More Leaders,” because what we need more of is people who create value, regardless of whether they are “leaders”. Leaders just happen to help create it sometimes. By making leadership a destination in itself, not only are we distracting from the true goal of value creation, we’re incentivizing dangerous behavior.

The Risk-Averse Career Choices of MBAs

If I wanted to link-bait this post, I would’ve titled it “Are MBA’s Risk-Averse Scardey-Cats?” I didn’t do that, though, because this topic is actually serious if you think about it.

I’m an MBA at Michigan Ross and many friends of mine are currently studying at Business Schools around the country. Almost invariably, the most highly-desired career paths after graduating from our “elite” MBA programs are Banking and Consulting.

Notice, that these two paths are professional services, more or less (especially consulting). In these careers, you don’t have to deal with the masses. You’re not on the hook for business results creating value for consumers. In other words, when you’re at a Bank or a Consulting firm you don’t have to take the risk of winning in the consumer marketplace, you just help your clients do that.

Oh, and you get paid a lot.

So what it comes down to is getting a big reward (gobs of money and “prestige”) while minimizing risk (because you don’t have to create value on the front lines in consumer markets). And that’s exactly what business schools generally teach their MBAs to do, increase rewards while minimizing risk.

This isn’t to say that consulting and banking aren’t good career choices. I’m merely pointing out that our supposed brightest business students are largely funneling into careers that don’t create value in consumer markets and that Business Schools are huge supports in getting them there.

Is that really what we want? Is that really good for society or even for “the market”?

Also, another question – does this mean that us MBAs are risk-averse scaredy-cats?

Where are you, my dreamers?

Where are you my dreaming friends? The ones with the errant scribbles in your pockets and hopeful, irreverent, conviction. I want to support you, be your friend, and share my dreams with you too.

But first, let me tell you about the types of dreams I don’t mean.

THE WHEN YOU GROW UP DREAM – I think of this as the dream you have for your own life and how you fit into the world. Maybe you want a spouse and kids. Maybe you want to be a PTA president when you grow up. Maybe you want to be a business leader or a sculptor. This type of dream is the answer to the “What do you want to do with your life?” question. These dreams are important, but this is not the dream I mean.

THE LEGACY DREAM – This is the dream of how you wish to be remembered. What will people say about you during your eulogy? In 100 years how will people talk about you? How will you ensure your contribution to the world? These dreams are important, but this is not the dream I mean.

The sort of dream I mean is what I call the DESTINATION dream. These dreams are the visions you have for the world around you, even if you’re not there. The dreams you have about the human condition and the potential of what the world could be. This is the dream of a better destination, regardless of who leads the journey. This is the dream that you can commit to even if it comes true without you or you never get credit for your contribution. The reward of having the dream come true is reward enough.

I came across a story of a Destination Dreamer today, reading this article about Elon Musk (h/t to my friend Dominik).

I’ve never met the Elon, so he may be an ego maniac. But to be honest, it doesn’t sound like it. It sincerely sounds like he wants to colonize mars and rid the world of fossil-fuel cars because that’s his point of view on how to preserve the future of the human race.

Such a Destination Dreamer – especially one with such grand visions – is rare. I have my theories on why.

I honestly feel the world we live in (in particular MY corner of the world, at least) discourages the sort of destination-focused dreams I mean. My world has taught me to set goals, achieve them, and reap the rewards and credit. My world talks about quantifying the results on your resume. My world talks about being a leader and running organizations efficiently. My world scoffs at the liberal arts because they are not “marketable” (which they are, by the way).

Surely results, efficiency, and practicality are important. But let’s not forget about the real, important dreaming.

Where would we be after all if there were no dream about a world rid of slavery, or a country that actively protected life, liberty, and the pursuit of happiness. Where would we be without the dream of eradicating smallpox or malaria. Thinking even smaller, where would we be if no neighbors anywhere imagined a safe street and a park with a small field for the neighborhood kids to play?

These dreams give us the path to carve out a better world and shape it to honor the dignity of the gift of our lives.

Which is why I ask, where are you my dreamers?

To be honest, I’m still working arduously to articulate my dreams – they’ve certainly vacillated throughout my life. Right now I have two interpretations:

I dream about a time when everyone living in Detroit and Southeast Michigan feel like they have agency to live a life of their choosing.

I dream about a world in which communities have systems and infrastructure to prevent human suffering (whether at the neighborhood, corporate, or national level) from ever occurring.

This is why I always think about campaign finance reform and civic engagement. These dreams are why I write constantly about innovation and how to ensure that companies don’t create economic value by destroying social, civic, or spiritual value.

Again I repeat: to all the dreamers out there, I’d like to be friends so that we can share our dreams.

***This is an open offer to anyone reading this post. I’d be happy as can be to let you make a cameo post on this blog to talk about your dreams. I will not edit your content, I only insist that you attach your name to your remarks.

To improve non-profits, mandate disclosure of their results

All non-profits should be required to disclose the results of their efforts to impact social systems. Let me explain why.

CONTEXT

I firmly believe that social impact business models (whether or not they are for profit) will only take off once the sector knows how to measure impact. Moreover, I firmly believe that we won’t really make headway on solving social problems until we start measuring social impact.

Why? Because we can’t work smarter or efficiently without measurement. Measurement provides two critical benefits to any organization in any sector, whether it’s for social impact or in a traditional for-profit company.

1) Measurement provides Managers objective feedback about their performance. Without measurement, Managers can’t tell (with much clarity or precision) whether the plans they enact are actually improving how their organization operates or whether they are achieving results.

2) Measurement provides investors data about whether their capital is being used efficiently. Can you imagine capital markets working without public companies releasing reliable, accurate financial statements? We’re surely not allocating capital efficiently in the social impact sector if we can’t objectively compare one organization against another.

I’ve been zeroing in on this idea of social impact measurement (and that it’s crucial for moving the needle on social issues) for some time and I’ve come to a stark conclusion. We should mandate that non-profits disclose their results rigorously and uniformly.

THE ARGUMENT

Put yourself in the shoes of a non-profit CEO. Fundraising is your organization’s lifeblood. You’re constantly stressed about staying solvent and carrying out your mission. Say you’re evaluating whether or not to rigorously disclose your organization’s impact through a uniform set of audited social impact measures.

As a non-profit CEO I would never voluntarily disclose my organization’s impact results in a rigorous way because the downsides (the costs of data collection /reporting, the risk of looking bad compared to someone else) far outweigh the upsides (the potential for increased funding because my results are good). In other words, as a non-profit CEO I would never voluntarily disclose results because it’s not in my organization’s individual interest.

Moreover, even though it’s the right thing to do, I think it’s unlikely that a movement from within the non-profit community will compel non-profits to rigorously and uniformly report their results. Even though uniformly reported metrics are good for the sector and for the public, it’s not in the interest of individual organizations. Moreover, the sector is incredibly decentralized, making it operationally difficult for a movement within the sector for impact reporting to actually come to fruition.

This leaves us with one simple option: create a uniform set of impact metrics and mandate that all non-profits disclose their results on a regular basis. (I do see one unlikely way of creating a movement inside the non-profit community, which I’ll discuss a bit further down).

Here’s the summary of the argument:

1) Rigorous, uniformly reported disclosures of impact metrics would help solve social problems faster
2) It’s not in the interest of individual non-profits to rigorously disclose their own results, so they will not
3) It’s unlikely that a movement within the non-profit community will compel rigorous disclosure of a uniform set of impact metrics

Therefore, we should create a standard set of impact metrics and mandate rigorous disclosure on a regular basis

I don’t think the mandate I’m suggesting is unreasonable. Non-profits are allowed to operate without paying taxes or having their donations be taxed. This is an enormous operating benefit. Non-profits are given their tax status because it’s presumed they are operating to provide social welfare. We (whether as a regulator or as a funder of non-profits) currently have no way of screening whether they are actually providing social welfare. If they’re getting such a big benefit, why not ask non-profits to justify it so that funders can make good decisions about how they allocate capital?

Moreover, business have to disclose audited financial statements all the time which demonstrates that uniform disclosure is possible with the right set of reports.

Many people I know would argue that “it’s too hard and/or not fair to measure social impact” and I don’t think that’s a reasonable counter argument. Here’s why:

  •  Existing efforts to create social impact metrics are not impressive, nor do they seem like earnest attempts. We haven’t even really tried to do this yet (as a sector and society) so how can we say that it’s too hard?
  • A lot has changed in the world, with the proliferation of digital infrastructures and technologies. One of the biggest challenges to measuring social impact (data collection) becomes more and more feasible every day
  • If every non-profit starts at the same time and is held to the same standard, it’ll even the playing field between different non-profits. In other words, no organization gets punished for disclosing first

AN ALTERNATIVE

If not mandated by the federal government, I think funders and mayors can play a big role in pushing for a standard set of impact metrics. Foundations for example, are a narrower set of players in this ecosystem which means its easier to coordinate their actions. For example, if a group of the 25 largest foundation funders in the country came together, created a system, and required their grantees to publicly disclose reports, they’d be able to compel a substantial amount of non-profits to disclose results.

Similarly, a mayor of a major city wanting to improve the performance of local social sector organizations (whom governments often partner with) could be a convener to get this to happen. If a lot of the big players started after such an intervention, the littler non-profits would have to follow-suit to compete for dollars.

CONCLUSION

To conclude, I think rigorous, uniformly reported impact metrics are crucial for performance improvement in the social sector. I can’t even believe non-profit CEOs have gone so long without such data to manage operations.

I don’t think that will ever happen without a mandate, despite being good for the sector and good for citizens.

A Backdoor Antidote to Money In (Local) Politics

I’m currently reading Lessig’s “Republic, Lost” at the recommendation of my friend Dominik (thanks buddy).  Because the book is about the influence and implications of money in politics, I’ve been thinking lately about how to combat this pervasive force. 

Per usual, let’s start at the beginning – why do people want to give money to political campaigns? This is what I was able to come up with (Lessig does have discourse about this, but, I’ve taken my own liberties):

Candidate Support: They want to raise their “voice” to support the candidate and do not expect personal favors in return
Intrinsic Motivation: They value political engagement and want to participate in the process beyond voting
Reciprocity and Access: They want to curry favor with the candidate and want the candidate to prioritize their interests when elected

If a citizen is donating to a political campaign in the first two instances they probably aren’t donating a lot of money. Why? Because they don’t expect anything in return, and I suspect most people wouldn’t dogmatically support a political candidate enough to drain their savings without expecting something in return.

This assumption needs a bit of defense, but let’s continue and assume the corollary as well – that when people donate huge sums to political candidates it’s because they expect something in return. In return for donating money, they want access to power.

If that’s the case, and we want to mitigate the effects of money in politics, why don’t we just give people access to power for free? Isn’t that how it ought to be anyway? I’m envisioning a campaign where a candidate and his/her staff talk to thousands of constituents personally over the course of a campaign and when in office. My hypothesis is that if you actually listen to people’s problems on a personal level, and talk to them, you can get them to vote or even campaign for you. 

Sure, that still takes money, but potentially much less because people have a real connection to a candidate and their interests are presumably more likely to be addressed as a result.

Of course, this is much harder in non-local elections and I’d have to make many more assumptions about voter efficacy to extrapolate this idea beyond local elections. But why not adhere to this policy in a local election? Even in a city of a million or so people, you could meet with 10s of thousands of people in a few months.

It’s a lot of work for candidates, but isn’t political leaders working directly with the people exactly how we want our republic to function? Who actually wants to continue to have money ridiculously influence politics?

Detroiters, what do you make?

I make ideas, connections between communities, slam poems, and pancakes. Detroit, what do you make?

BERLIN, GERMANY - In the short time I’ve been here, I’ve come to realize that Berlin was Detroit before Detroit was Detroit. We have many lessons to learn from Berlin, but it comes down to this: Make Something.

Berlin has a distinct culture, for the same reason that any city has a culture, people have agency and create things – whether it’s art, food, businesses, or ideas. As people here have gone out and just created, it’s turned Berlin into a vibrant, international, hard-working, party-all-night, entrepreneurial city. It’s really an amazing place.

I’m not suggesting we try to make Detroit to look and feel like Berlin. What I am suggesting though is that we focus on making and creating, because that’s the only way cultures form – when passionate people go out, do what their heart desires, share their experiences, and learn from other people.

Right now, in my opinion, the culture of Detroit is more consuming than it is creating. There are a small group of people creating valuable products and experiences and many more people free-riding and consuming them. That’s fine for a time, but the city will never grow if we consume more awesome things than we create.

We have no other choice by to make things. Working a 9-5 job and calling it a day doesn’t count because those profits and value gets extracted by a private entity…there’s ever any spillover to the community.

So my fellow Detroiters, I think it’s time we stopped trying to do the next big thing and just started created something by following our hearts and sticking with it. Who cares if it’ll get press or get big accolades. Let’s just make something that represents who we are and what we care about.

So, I ask again, what do you make?

Time vs. Money

PRAGUE, CZECH REPUBLIC - Around this time last year, I was returning from Europe to begin my first year of Business School. I’ve learned many things in the past year, but this strikes me as the most important learning, by far:

The essential trade-off in life is between time and money. Time, as it turns out, is more valuable.

There are really only two simple reasons which illustrate why time is more valuable:

-Time is fixed. We cannot trade for more. To make matters worse, we can’t definitively predict how much time we have.
-Most of the things that (truly) make life worth living require time, but only modest amounts of money.

There are many more reasons – in addition to these two – why time is more valuable than money, but these two are pretty compelling on their own, no?

In the past year, I’ve had to make big decisions about my life. These big decisions, really come down to one thing: what do I value more, time or money? In my own life, I’ve chosen time over money and I think that is the better choice.

In the US, our culture (I think) values money too highly relative to time. Money is necessary in human society, so I don’t think its wise for most people to forget about it…but we could stand to forget about it a little. If we did so, we would be better off individually and collectively.

Why? Because valuing money over time makes people do crazy things and it causes them to be unhappy. Marriages, families, communities, and nations fail when people value time over money (over the long-term). It’s a sustainable proposition to value time over money in the long-term. Valuing money over time, in the long-term, is not a sustainable proposition.

Here’s the question I’m grappling with now: how can we start to alter societal narratives about time and money to make it a healthier balance?

Any ideas?

As a shoutout to my Business School friends, here’s another question. When making business decisions (about our careers or when making decisions in our official duties) why don’t we value time?

Observations as a Municipal Ethnographer

Mikulov, Czech Republic – Over the past week, I’ve been in several geographic contexts. Let me tell you where first, and then I’ll share an observation.

This is where I’ve been:

-Detroit, MI (Both the downtown areas, and the neighborhoods)
-The suburbs of Detroit, MI (Rochester, MI to be exactly)
-Long Island, New York
-The inner suburbs of New York City in upstate New York
-Vienna, Austria
-Mikulov, Czech Republic
-A series of towns between Vienna and Mikulov

Even beyond the places I’ve been in the past few weeks, I’ve been to many other cities and towns in my lifetime. Moreover, I’ve been to different pockets of communities within each of these geographies. The key observation I’ve made is based on this curation of cities and towns I’ve done throughout my life.

Upon first glance, I would’ve expected places to be similar based on geographic proximity (e.g., Detroit would be most similar to Rochester, Long Island would be most similar to upstate, Vienna would be most similar to Mikulov, etc.)

Geographic proximity was probably something that really mattered 50 or 100 years ago. But the funny thing is, I think that’s changing. The places most similar to each other are precisely not the places which are geographically closest.

Rochester, for example, felt most similar to suburban Vienna. Vienna felt similar to London, DC, or another Capital cities. The small Austrian towns I’ve rode through felt more similar to Western Kentucky than they did to Vienna or Mikulov.

A theory: economic similarities trump geography and culture
To cut to the chase, here’s what I realized: nowadays, places have more in common with places across the world that have similar economies (industries, education, etc.) and levels of wealth to them. That is to say, they have surprisingly little in common with places that are near them but have dissimilar economies.

Of course, language and culture matter. But, I think those things are starting to matter less because language barriers are falling due to the internet and cheap global transportation give many people the opportunity to experience other cultures.

As time goes on and the world gets “flatter”, those language and cultural barriers will matter less and less – economic similarities will matter more and more.

My roommate on the trek I’m on in the Czech Republic and i were just talking about it. He agreed that my theory is possible and put it this way (note that he’s Korean-American, but spent the last 5 years working in Korea before coming to Ross). If he was on the subway in Korea he’d be more likely to strike up a conversation with a westerner who looked like a businessman, rathern than talking to someone who was Korean but didn’t seem like a business person.

Moreover, he believes that if he were to talk to a non-businessy Korean not only he would be uncomfortble, the person he was talking to would be uncomfortable (assuming his conversation partner had a different socio-economic prfile). In his subway example, wealth and profession (i.e., economic similarity) trumps geographic and cultural commonality.

On first glance, that seems normal. But when you stop and think about it, it’s terribly interesting, no?

Here’s the takeaway (I’m using some of the phrasing from my very smart friend and classmate Adam): now places may have more in common with other places with similar economies and levels of wealth, whereas they used to have more in common with places which were geographically proximate to them.

Implications

If this hypothesis is true – that places in today’s age share greater commonalities based on economy and wealth (note: “wealth” could just as easily mean inequality levels) – it would have far reaching effects on civil society. I don’t know what would actually happen, but I think some of the following scenarios are plausible (these are scary enough, even if they’re only plausible and not probable:

-Nothing will happen. Perhaps, economic affinities will trump geographic and cultural affinities enough for conflict to occur (I don’t believe this, but it’s a reasonable conclusion)

-Economic similarities are self-reinforcing and become more pronounced

-As economic similarities become more pronounced, now, people who are increasingly dissimilar are still living near each other. This leads to conflict and “class wars”

-Institutions (i.e., governments and large corporations) try to manipulate public opinion to distract the poor from economic dissimilarities and growing levels of inequality. For example, political parties could increase attention on issues which distract the poor’s anger from issues of inequality, or, realign the poor’s primary affiliation to nationalistic identities.

Here’s how what I just said could look in practice: a political party fanning the flames on a volatile social issue to captivate poorer audiences (e.g., gay rights) – this is an example of diverting attention from inequality to a volatile issue. National governments pursue military action against another country to unite a country against an external threat instead of internal institutions – this is an example of institutions realigning citizens to nationalistic identities.

Both of these examples sound familiar, no?

I’m not saying this is happening, just that it’s a plausible course of action for any institution if my hypothesis about geograhy and economic similarities are correct.

-Conflict across nations (inter-state conflict) could reduce, but intra-state conflict could rise. The influence of large municipalities and regional governments will rise because of their new importance in managing inequality, economic growth, and societal conflict.

I leave you with this: when you choose who you talk to on the subway, how would you choose? If it was 50 years ago, would you choose someone else?

I think that answer would be different today than it was 50 years ago. If so, there could be far reaching implications.

Remembering the Airplane Landed

VIENNA, AUSTRIA - I arrived in Vienna yesterday, and had the worst travel day I’ve ever had, starting with finding my luggage to be lost upon landing in Austria. Over the course of the day, though, I did learn a very important about placing value on the things that really matter.

As a bit of context, here’s why my day was so difficult:

- My luggage was lost
- It took me almost 1.5 hours to find my hostel after getting off the subway
- I couldn’t check into my hostel until 2pm (I landed at around 10am)
- I don’t speak a lick of German, so It was very hard to talk with people
- I found out late in the day that the following day was a holiday, so I had to make my limited amount of Euros last until I could go to the bank. (I’m trying to avoid ATMs because of the fees)
- The internet connection in the hostel was crummy so it was hard to communicate back home and wrap-up the school-related things I needed to do. Beyond that, it was difficult to communicate with the airline about my lost luggage
- The lobby of my hostel was smokey
- I lost my map, and had to scrape it together with a poorly drawn map in a tourist magazine and maps at bus stops to get back to my hostel
- Like a buffoon, I didn’t pack my toiletries in my carry-on bag, so all I had was a travel toothbrush
- It wasn’t worth it to take a shower, because I didn’t have clean clothes or a towel
- After all this, for dinner I ordered a pizza with anchovies on it, without realizing it. This would’ve been fine, except as it turns out, I can’t stand the taste of anchovies

But I learned a lesson while talking to one of my bunk-mates, an 18 year old Russian girl taking a trip before starting college. She was surprised that I was in fairly good spirits, even though I was in a less-than-ideal situation.

Losing my luggage was out of my control, I told her, so why worry? But as she asked me more questions, I realized the real reason why I wasn’t too stressed:

Despite every frustration I had yesterday, my plane still landed safely, and that was the only outcome of the day that truly mattered.

It was an important lesson in life and leadership. You always have to remember to focus on what matters and put your effort toward that. It’s easy to get caught up in the small stuff, but you can’t let it distract you from what truly matters.

In the case of an airline, it doesn’t matter if you’re luggage is never lost if you’re planes aren’t safe. As a husband, it doesn’t matter if you can provide your family the money to live lavishly if what they truly need is your love and your time.

Focusing on the outcomes that truly matter and seeing beyond the outcomes that don’t is an important lesson. It’s also a valuable skill that the greatest leaders I’ve ever met all possess.

Business and Society’s Deeper Challenge

It is plain to see that the complex problems faced by business and society this century will be incredibly difficult to solve. Business, for example, is contending with the pressures of hypercompetitive markets, increasingly demanding consumers, and an accelerating pace of technological disruption. Society as a whole has even harder problems – climate change, infectious disease, terrorism, traffic, food security, and economic inequality, just to name a few – that are systemic and global in nature.

These problems are too big for any institution – whether it’s a business, a government, or a non-profit – to solve alone. Take the fight against child hunger as an example. All three sectors must work in concert for the system to change: business must develop new, nutritious foods, government must set policies which bolster food access, and non-profits must work on the ground to ensure aid reaches hungry children.

Of course, child hunger is just one example of the many issues that are solvable only if the public, private, and social sectors collaborate.

Because the world’s most challenging business and social problems are too interconnected and complex to be solved by one institution alone, I believe that we are left with two choices. We can either work in siloes and struggle, or, we can learn to work collaboratively across industries and across sectors to solve the biggest problems humanity has ever seen.

Unfortunately, co-creating solutions across sectors – beyond traditional public-private partnerships that are merely funded or operated jointly – is incredibly difficult to achieve for many reasons. Legal structures for collaboration are nascent and governance structures are hard to create. It’s hard to develop effective incentives for all sectors, especially because the shareholder value model is so pervasive in global markets. To add insult to injury, many business leaders and citizens do not even see the value of cross-sector collaboration or believe it is a viable option.

Moreover, even though learning to collaborate across sectors is not a social issue or business issue on its own, it is a critically important challenge because solutions for so many difficult problems require cross-sector collaboration. For these reasons and many more, learning how to work across sectors to solve complex problems, I contend, will be the greatest challenge for the next generation of business leaders.

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