Sunday, December 9, 2012

Changing Behaviors!

Thanks for reading my blog!

Positive Reinforcement:

Positive reinforcement is the most effective tool for behavior change.

Last week, I spoke about the use of Fear within media, and begun a conversation around the usage of fear as a motivator for action. The bottom line – it’s extremely effective. Let’s now discuss other alternatives to fear.

Positive reinforcement – a familiar term to many – coined in the discipline of Psychology, in the school of Behaviorism. Most people are introduced to this concept with the context of “Stimulus/Response” and the Pavlov’ian Dog/Saliva/Bell experiment. This knowledge has been expanded and is a driving force within psychology, medicine, marketing, economics, relationships… According to B.F. Skinner(and a lot of other more contemporary research), positive reinforcement is more effective at changing behavior than punishment.

There’s a reason, in the heavily scrutinized medical world, that positive reinforcement is such a driving paradigm within the therapy and rehab world. There’s a reason we create support groups and networks. Positive reinforcement is extremely effective.

What about business?

Marketing and PR seems like the obvious one. Positive reinforcement manifests in many forms within business, from Variable Reinforcement schedules of slot machines, to the sound effects of your apps, and even your text messages. How conditioned are we to responding to the “dings” of our cell phones, ipads, etc. We even acknowledge it, and know that it probably won’t be anything particularly exciting, yet we continue to respond immediately. Behavioral economics is able to look at our micro behaviors, and determine the impact on demand curves, using a multitude of factors.

We know that incentivizing works. We've seen it be successful. We know when it doesn't work(numerous employee incentive pizza parties come to mind…).

My question, is how come it isn't the prevalent strategy being used for effecting global change towards sustainability? Speaking to Norm’s more recent posts about the Harvard Hedge Fund Managers – why do we rewards the skills on betting more so than the engineers who are actually our inventors and creators? The marketing dynamic around “Global Warming” is fear – even if it’s accurate. Getting off fossil fuels and switching to renewable energy – driven by fear of global catastrophes caused by CO2.  


 As I pondered what to write about this week, Health Care fresh in my mind - the headline, "What Hospitals Don't Tell You" came across the radio. "Medical mistakes are now the third highest cause of death in the United States", Dr. Marty Makary. What followed was a recap of his recent appearance at Seattle Town Hall on November 15, 2012. His basic premise was this: "Creating a culture that holds hospitals and doctors accountable for these mistakes in order to bring about positive change in this system." His strategy, transparency within hospitals. As it stands, the amount of information patients/customers have on their hospital trips is limited, and challenging to interpret. Everything revolves around risk management and money. 

The “Hawthorne Effect”(Link to original Harvard Business School article), is essentially "the phenomenon in which subjects in behavioral studies change their performance in response to being observed. 

 What's interesting, is the relationship to transparency and reinforcement. The most obvious one, seems similar to fear:
If someone's watching me, I had better behave, or I might get punished.

And it's more complicated than this! Check out this article: "How the Illusion of Being Observed Can Make You a Better Person". A group of scientists ran a "littering behavior" study, where simply having posters of eyes on the walls, twice as many people cleaned up after themselves! Interestingly, this article was written by a doctoral researcher at the London School of Economics and Political Science.

Thomas Jefferson wrote, "Whenever you do a thing, act as if all the world were watching". I think that this quote speaks to both the punishment and positive reinforcement side of behaviorism. 

How can we use transparency in the realm of business, and our world, to change behavior?

Sunday, November 4, 2012

Keep Questioning Mental Models!

This graph is beautiful.

My first instinct when looking at this great chart, provided by Dr. Norm Becker during his lecture, is how beautifully it illustrates the four variables that make up GDP.

I appreciate numbers. I've mentioned it before, appreciating the context numbers provide. Briefly in class, we talked about what ratios were "acceptable" or not, without thinking about the real context that the ratios might represent.

And, as most of us change agents are aware, GDP provides an important and valuable context; Likewise, we also realize that GDP does not measure many other variables; Often times, when this conversation comes up, Gross National Happiness(GNH) becomes another important context.  Here's a great 3 minute animated video short breaking down GNH for those unfamiliar. Happiness is increasingly being linked to economic outcomes. FastCo published an article looking at how GNH relates to developed countries, referencing Richard Heinberg's book, The End of Growth: Adapting to Our New Economic Reality.

Instead of elaborating about the importance of alternative models in providing more context, I wanted to challenge my own mental models. A research article written by Eric Ezechieli(co-founder of The Natural Step) from Stanford University's School of Education helped me do this.

I believe in education.

Interestingly, as education is increasing in Bhutan, largely due to international aid investment, Bhutanese children are becoming more and more prepared for the industrialized world. Literacy rates have skyrocketed, lifetime expectancy has doubled in the past 50 years(Ezechieli 2003, p.2).

The problem? GNH was dropping in Bhutanese citizens who went through their educational process. This is counter intuitive to the UNESCO's Sustainability and Education Initiative. The first priority was improving basic education, since typically, "in a global economy the countries with the highest illiteracy rates are forced to exploiting natural resources in order to acquire the currency to buy imported goods".  Essentially, as Western Education was imported into Bhutan, largely through expatriated Indian educators, the culture and values of Bhutanese people began to shift.

This is important, as it reflects on both the power of education, and its relationship with value creation.

Ezechieli's study concluded that even when mass education expansion appears to be successful, new challenges will continue to emerge, that require dynamic flexibility of current strategies.

This statement was powerful: "The dominant concept of 'increasing well-being in rich countries and eradicating poverty in the poor ones through economic growth' is obsolete, misleading and, I argue, it represents a menace for the survival of all living beings...It is not addressing the causes of the present disequilibrium. Indeed, the history of the past 50 years shows that this policy is likely to worsen social/ecological unbalances."(p.97)

This also parallels very well with Bryan Stevenson, Van Jones, and Majora Carter's conversations on the importance of social justice, and essentially, how it IS the crux of sustainability.

It's not all doom and gloom though, as Bhutan and the GNH initiative represent an example of an opportunity for visions that go beyond sustainability. "Education.. is the greatest resource to shape and spread a new design, and translate it into action...There is no time to lose"(Ezechieli 2003, p.98).

Sunday, October 28, 2012

An Entirely Complete Systems Analysis of Poverty

Hahahha I wish. When I'm able to provide a full systems analysis of poverty(wishful positive thinking - yay for grad school!), you'll know it before it would ever appear on a blog post...

In Dr. Norm Becker's post, The Cost Of Inequality, he recognizes Joe Stiglitz's perspectives presented in his book "The Price of Inequality".  

5 Important Myths - as presented by Stiglitz & interpreted by me:

1. America is a land of opportunity:

  • Upward mobility of people is heavily dependent on the income/wealth of their parents.This concept is best expressed at the merger of two metaphors. 
    • This land of opportunity, has unequal spaces between the rungs on the ladder of success. The amount required to go from step 1 to 2 is significantly larger than 9 to 10.
    • This difference might be illustrated in Maslow's Hierarchy of Needs

2. Trickle-down economics works.

3. The rich are the "job creators"
  • The rich take their money where the returns are highest - and right now that's in emerging markets - like China.
  • The engine of our economy is the middle class.
  • Forbes - The Real Job Creators: Consumers, this is sort of a hot topic, and really ties in to trickle-down economics, and it's important to understand the context of the flow of currency. It's really easy to get into partisan politics here, and end up with great information that might be biased(Like the unnecessarily controversial Nick Hanauer TED talk).

4. The cost of reducing inequality is too great - and would destroy our economy.
"It doesn't much matter how you get your greater equality, as long as you get there somehow". (Richard Wilkinson in comparing Sweden & Japan; big government & low regulation)

  • This is Richard Wilkinson's TED talk on "How Economic Inequality Harms Societies". I have a lot of thoughts on the myth of "reducing inequality will destroy our economy", and when it comes down to it, I feel that the cost of NOT reducing income inequality is too high. 

5. Markets are self-regulating and efficient, governmental interference is a mistake.

  • 2008. see NYTimes Series: The Reckoning
  • I'm reminded again of Jane Jacob's "Systems of Survival". When conflict arises between the two systems of Governance and Commerce, it typically appears as a two party system:
    • Liberals:
      • At their best: Propose controls and regulations on business that promote prosperity, ensuring true sustainability
      • At their worst: Attempt to unite governance with enterprise, producing marginal efficiency, and low innovation.
    • Conservatives:
      • At their best: True free market, human enterprise, creativity and innovation.
      • At their worst: Ignores the values of global health and habitat, primary interest only their own agenda, eventually leading to collapse. 
After writing this post, I'm reflecting on the importance of this issue. As mentioned in my previous post, "Profit/Prosperity" play a crucial role in the movement towards sustainability. Everything requires some sort of exchange for services. With help from my Education team, we've really started to look at the systems in play within our current educational models, and (no surprise) money is a huge issue. "Access to resources" affects home life, educational institutions, policy writing, etc. 

Relating back to the first myth, "America is a land of opportunity", is something that I want to see. I truly believe that as everyone is able to have their basic needs met, a tipping point of innovation & creation will propel us into the future. There is an obvious parallel at the top of Maslow's Hierarchy and the concept of sustainability.

Sunday, October 21, 2012

Ethics and Utilitarianism

As an Economics newbie, studying Return on Investment(ROI) this week was fascinating. I think most people understand it conceptually by asking themselves, "Is this worth it?". 

Is it Worth What?

What does "worth" mean? In Dr. Norm Becker's blog post, "Why Do Thieves Steal Famous Paintings That Cannot Be Sold?", I'm reminded of utilitarianism, and how definitions of value and utility vary greatly from person to person. As we continue through our education @BGI our capacity to assign numerical numbers to values such as "carbon emission" or "lives saved" will grow. I do believe in the power of numbers, as we can utilize them to aid understanding of the context of our dying world.

And yet, I find myself thinking that these numbers will ever be truly "accurate", because value-systems are so amorphous. A thousand dollars very different things from one person to the next. 

This is important, because numbers matter. We need to do the calculations, we need to understand the picture, and numbers provide a context for that framework. In a digital picture, numbers might represent the amount of blue pixels contained. High values might indicate that the picture has a blue hue, but it doesn't go further than that. Just because a particular investment might have a positive cash NPV, doesn't mean it's the right decision.
The Valuation of Money

What a weird concept.  Particularly as the U.S. currency is described as "Fiat money". How do we assign "value" to something that is structured around a belief system. That said, I understand the importance of currency as a medium of exchange, and don't necessarily believe that a currency has to be "backed".

How do we value services? How much more are we willing to pay for "good" customer service? What's the value of hiring people who are currently unemployed? How much is a picture worth? Or a Christmas tree? What about solitude?

People, Planet, Profit

Something about the "Profit" aspect makes me uncomfortable. I think my personal term would be "Prosperity".

Prosperity manifests in many forms, financial, environmental, social, etc. Using the word prosperity also allows multiple value systems to determine worth. In industry, having prosperity on your bottom line, gives you the motivation to really increase your gains on all fronts! This includes financial prosperity, as not including capital within your business plan could be detrimental!

Macroeconomic Theories

It's funny, as I was researching the "lack of critical thinking" within our educational model, I stumbled across an article discussing the lack of critical thinking within multiple macroeconomic theories.

The summary? There is no such thing as perfect rationality in economics. Likewise the reliance on behavioral economics that people will make "predictably irrational behavior" is an oxymoron. The empirical approach to studying our economy takes place "between perfect rationality and equal incompetence". 

I've always been a believer of balance and context. Particularly when it comes to human behavior; Whether it's recognizing numbers in an ROI as simply setting the context for an investment, or acknowledging that BOTH nature & nurture play a role in development. By truly understanding the context of decision-making, we will be able to make the best and informed decisions.

Gregory Mitchell, the author of the article summarizes it well, "While this middle ground position makes general theory development more difficult, it illuminates ways by which the legal system may foster rational behavior or counter irrational behavior".

Mitchell, G. (2002). Why law and economics' perfect rationality should not be traded for behavioral law and economics' equal incompetence. Georgetown Law Journal, 91(1), 67-94,96-167,95. Retrieved from

Sunday, October 7, 2012

Setting the Context

I pick up the phone; a panicked mother has found her child not breathing. As I walk the mom through infant CPR, I verify her location using her cell phone’s GPS. I send the closest paramedic to their house. Next, I check to see if any police cars are closer to get this kid hooked up to an infant defibrillator. In emergency services, if any of numerous systems fail, it can mean the difference between life and death. My experience as a 911 dispatcher epitomizes the importance of functioning systems. For me, it highlights the imperative need for system change when any component is dysfunctional.

Fundamentally, I am passionate about system change in the face of dysfunction. The problems of our world are all intertwined, and a macro perspective is essential in solution design. Twelve years ago, I developed a long term strategy to gain that macro perspective and achieve my ultimate career goals. This blueprint included building a foundation of education and experience until age thirty, followed by fifteen years in business and intrapreneuership, then finally moving into the education realm. I have remained committed to this “master plan” and am convinced that BGI has created a curriculum and community that would provide me with the knowledge and skills needed to pursue the next step in reaching my goals. BGI is an institution that reinforces two of my most fundamental beliefs: that business plays an essential role in generating solutions to many of our current global challenges and that education is one of the strongest catalysts for innovative system change.

My intention is to use this blog to document my learning and understanding of how our economic context sets the stage for our world.

Consumption diagram
Reading through the NY Times series - The Reckoning, it's startling to learn about the systems that were in place, as well as the intricate manners in which each system influenced each other. It was a weaving of system vulnerabilities; mortgages, bad loans, insurance, credit derivatives, susceptibility to fear, credit default swaps... the list goes on. From my perspective, it's extremely fascinating to learn about, and it's terrifying. When I relate to system thinking, and the massive systems/sub-systems within our world, the challenge of identifying leverage points is something I'm really hoping to gain in my education and experience. 

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