Employees who do not have high levels of education and technical skill will be continually insecure and will be displaced if they are not continually keeping ahead of the marketplace.  The most painful point the reporter makes is that anyone who starts his or her work career with major family or other responsibilities will have difficulty keeping current with the skills needed.  Maddie Parlier is 22 years old, has completed high school, but has not gone beyond it, is a single mother, and has no spare time or money to take courses and upgrade her skills.  She will be vulnerable to a future replacement by technology.

The problem with the increasing inequality of outcomes in our society in a time of global competition, continuous price pressure, and technology advancement is that continuous education and skill development are more important than ever.  However, achieving this goal is particularly difficult for those individuals who enter the workforce with the handicap of obligations that make continuous learning extremely difficult.

The story about Maddie Parlier begs two questions:

• Why did a woman who is obviously smart and a hard worker not continue her education beyond high school?
• How does someone like Parlier, with time-consuming family responsibilities, find the time to continue to upgrade her knowledge and skills outside of work hours?

When we consider these questions, we are inevitably led to a different way of defining the problem than is customarily used in analyses like these.

Why individuals like Maddie Parlier do not continue in school

My dad, who died in 2001, was a very intelligent person, with great wisdom and insight, and a continuous learner as an adult, but he dropped out of school after the 9^th grade.  My mom, also a person of great intelligence who was a continuous reader and learner all her adult life, dropped out of school after the 11^th grade during the early part of the Depression.  Why?

For them, going to school was an unpleasant and unproductive experience.  The classrooms experience did not engage either of my parents sufficiently to keep them in school, so they dropped out at the earliest possible opportunity.  While it is easy to say that we need better teachers and schools, the bigger problem is that schools do not teach people how to learn.  The educational paradigm is fundamentally flawed. Educators make the judgment that individuals have varying learning abilities, and assume that some people will learn, and others will fail to learn.

I can relate to my parents’ experience by what happened with subjects in which I did not do exceptionally well, like biology, chemistry and physics.

These subjects were taught in a standardized way.  I did not master them, but got good, although not exceptional, grades by sheer hard work and will power.  However, as an adult, I saw their value, and became genuinely excited to learn about the underlying principles of each subject. My daughter even gave me a brief chemistry tutorial on equation balancing recently.

Every one of us gets interested in a subject for different reasons, and we learn in different ways.  I think metaphorically and structurally, and recall information most effectively when I can engage multiple senses in learning the subject.

People have told me I have a photographic memory.  That is not true. I have a photographic memory on certain selective categories of information, but have a below-average memory on others.  My wife can remember the location of a house by a visual map of the color and style of the house and the houses around it.  She remembers foods she ate at a restaurant decades ago, and can even discern differences in the taste of an item from what she ate years ago. I cannot remember what I ate last Saturday night at the local tapas restaurant.

Why do I learn and retain information?

• The subject matter has to be important enough to want to retain it.  I tune out on information that will not matter to me, or that does not strike me as interesting.
• I take copious notes.  Contrary to popular belief, I do not file the notes, but review them once and discard them.
• When I take notes, my handwriting is highly legible, so that I can re-read what I have written.
• If a particular note is important, I underline it.  If it is exceptionally important, I place an asterisk next to it.
• After taking the notes, I re-read them, and I recite what I have written, so that I can hear from what I have written, in addition to seeing it.
• If the notetaking on a subject reveals a particular way of organizing and structuring the information, I create a visual structuring on the page of the notebook, either in the form of a graph, a flow diagram, or a chart.

The more of these tasks I perform, the more likely it is that I will remember what I have written.

My mother used to joke that the reason she dropped out of school was because she was required to do a paper on Sir Walter Scott’s Ivanhoe in her final semester as a junior in high school. I am sure that no one engaged with my mother in a way that helped her find meaning in the assignment.

Rather than trying to shoehorn every student into a one-size-fits-all educational system, let’s try to figure out the different ways in which to engage increasingly diverse populations in the art and the technique of learning.  The goal is “learning,” not “education.”

How do people with overwhelmingly complex lives carve out time for continuous learning, particularly of highly technical subjects?

How does someone like Maddie Parlier possibly carve out time to upgrade her skills?

• We have to create learning processes that provide more flexible self-learning opportunities.  It would be unfair to expect Parlier to attend a classroom course outside work hours, given her single-parent responsibilities, but she can learn online or in other ways.  If there are fees for such courses, she should be reimbursed under a company’s educational assistance program, just as she would if she were attending a class.  We need to make continuous learning as convenient and cost-free as possible.
• We have to teach people how to use small blocks of time as effectively as possible. A single mother holding down a job does not have big blocks of time for learning.  She might get a series of 5-minute blocks of spare time. We need to figure out how she can use them for learning exercises.
• We have to teach people how to multi-task more.

Alternative learning methodologies

Learning can happen anywhere, any time.  I love the text-to-speech feature of my Kindle, especially when I am in my car and can have the experience of listening to an audio book, even if it is in a computer-generated voice. I learn from online demonstrations of subjects.  I also have found that certain TV programs have presented subjects with far more impact than I have ever learned them in a classroom. My friends showed me about the many free tutorials on YouTube. I have even learned from a casual face-to-face encounter, such as a cooking demonstration at a supermarket or a restaurant.  We should test individuals to determine how they learn best, and should draw from their insights and experience, even at an early age, to figure out what is most likely to excite them. Courses should be created in ways that enable them to be delivered remotely and in a multiple ways.

What always amazes me about learning is what we discover about how people of all ages engage with the world.  Some people learn through video games and master complex subjects.  Others gain a great deal of insights from friends, work colleagues, peers, and even online communities.  Even today, I find that my best learning about potential applications for my I-Phone comes from other users.  One of my nephews told me about a new application called Soundhound, which enables my phone to pick up music sounds in a public place and identify the song and the artist.

In essence, everyone can learn, and we should figure out how to make that learning process happen.

How does learning fit into a busy schedule?

It is easy to criticize people who do not take time to improve their skills.  However, in the real world, people have multiple jobs, are juggling time-consuming family responsibilities, and often have challenging commutes to and from work.  Moreover, many jobs are physically and mentally draining. For many people, the ability to take time to learn simply does not appear to be there.  How can we help people carve out the time to learn?

• We need to show people how to simplify their lives, reduce the wear-and-tear of daily activity, and create learning time.  Too many people drive to work alone every day.  Even when public transportation is unavailable, there are many underutilized carpooling, vanpooling, and ride-matching services available to people.  I gained an extra 90 minutes a day of reading time when I commuted by train between New York and Connecticut. When shuttle services between the train station and the office were unavailable, many people gave me rides to and from the train, and I learned a great deal from them.
• Buying hot, healthy pre-prepared food virtually eliminates cooking time, and frees up time for other activities.
• If I were a young parent today, I would be looking for tools to order groceries, clothing, supplies, hardware and other items online for home delivery to save on shopping time.

If large blocks of time cannot be created, then we have to coach people how to use smaller time blocks more effectively.  I always felt that one of my advantages over other people was the use of 1-5 minute time blocks.  When I watch live television, I put the set on mute during commercials, set an alarm for 3 minutes, and do something productive. More and more, I record programs to reduce the watching time from the original running time by fast-forwarding through commercials. I recapture that time for other purposes.

How do I use 5-minute drives to and from the coffee shop? I turn my Kindle into an audio book and listen to a few pages while driving.  The Kindle also can be read outside while I am walking and even while I am waiting in line at the grocery store or some other retail outlet.  I have done a lot of reading in the security lines at airports, while I watch other people stare into space.  I also remember doing work during the many times I waited with my children at the pediatrician’s offices as they were growing up.  I took my own materials, rather than relying on what the doctor’s office had available.

Everyone has spare time. The only question is how to take advantage of it.

We need to teach people how to multi-task more.

When my children were young, I used to take them to the local doughnut shop, get a cup of coffee, browse the newspaper, and talk with them.  It was a great bonding experience for us, and I typically read to them and talked about whatever I was doing.  I also used to take them to museums on Saturdays and Sundays and learn as they were learning.

Today, the shoe is on the other foot.  When I am with my adult children, I ask them about what they are learning, what books they are reading, what movies or videos they have seen, and what places they would like to visit, and why.  My daughter is great in the sciences, so she continually directs me to good resources.

Also, as I noted above, we have a lot of waiting time in our lives that can be usefully deployed. Today, many people use their cell phones to talk or do text messages while they are waiting for someone, but it is easy to convert some of that time to learning time.

We have to change the paradigm from schooling to learning.  We have to change the paradigm from learning as a highly standardized activity to a highly customized one. We have to change the paradigm from learning as a process that takes place within specific certified courses to one that can occur anywhere.  I have no problem with testing people to see what they have learned, and rewarding them for having achieved a certain level of competence, but we need to make it as easy for them as possible.

This skill and knowledge gap is solvable. We can help the Maddie Parliers of the world compete in the global economy and support their families.

Unlike Walt Mossberg, whom I quoted the other day, or the many other commentators who celebrated Jobs’ successes, Schulz focused on the fact that Jobs had many major failures along the way, including the Apple I computer, the Lisa computer and the NeXt computer.  He was asked to leave Apple in 1985 and did not return until 1997.  Steven Jobs failed repeatedly and publicly, and he paid in the short run.  However, today, the Apple employees and shareholders are more secure and richer than they ever could have imagined.  He invested repeatedly for the longer term.

That article and the reflections on Steven Jobs’ failures caused me to think about other transformative individuals are their repeated failures, as well as the many failures that have occurred in my life.  Two individuals who have talked, present and past, about their failures were Thomas Edison and J.K. Rowling, the author of the Harry Potter novels.  Edison celebrated his unsuccessful attempts to solve problems through innovation because, as he said, he learned what did not work and it helped him figure out better what did.

More interesting than Edison has been the life story of J.K. Rowling, who, after college, failed at marriage and an early attempt at writing before she finally began to succeed in her late 20’s with the Harry Potter novels.  Rowling gave a commencement speech at Harvard in 2008 at which she spoke about the many benefits of failure, among them, the focus it gave future efforts, the self-confidence and inner security it generated, the wisdom it helped her developed, and the fact that it helped her separate real from “fair weather” friends.

As I have gone on many journeys in my life, I have had both mistakes and colossal failures.  I failed at my first two jobs out of law school, both with reputable law firms.  I made mistakes along the way as a business executive.  I made investment decisions that failed.  Since retirement, I have had many failed attempts to raise money for both Dossia and my film From the Rough, and, although I am more confident about success in both cases, I have actually been propelled forward by the failures.

Each failure requires careful study to understand its lessons.  Oddly enough, my failure to secure traditional major studio financing for the film has taught me that the film very likely has a large underserved market that the traditional studios have ignored, the market for films directed at women and people of color.  The film The Help appears to be supporting my assumption that there is a market for intelligent content directed at audiences Hollywood has left behind.

I have been told that I was stupid and naïve by people experienced in the market spaces in which I initially failed, only to find that I was getting that feedback more because I threatened an established order than that my initiatives were flawed.  My health care vision has been proven right over the last 20 years, despite the fact that I was not taken seriously by industry experts when I first articulated it 20 years ago.

My unsuccessful attempts to accomplish something had the effect Rowling discussed in her commencement speech:

• They increased my determination and will to succeed;
• They helped me sort out real friends from pretenders;
• They helped me seek out help and build support systems I would not have needed if I succeeded immediately; and
• They helped me focus my life on what mattered most.

What particularly resonated with me about Rowling’s remarks was her comment about those who refuse to take the risks of failure.  She referred to them as the “willfully unimaginative.”  She said that they become imprisoned in a psychological world in which their fears and even their nightmares get more frequent and more intense, because they get more removed from the messy real world in which failure is an everyday occurrence.

As I call on large corporations today for Dossia, I see these people every day.  I see them also in government and even sometimes in the not-for-profit sector.  They experience huge stress and expend significant energy worrying about low probability events.  In so doing, they increase the odds that something very bad will eventually happen to their organization, and, perhaps, to them.  When someone worries about low probability risks and tries to avoid them, they usually take their eye off the ball relative to higher probability risks and end up not being able to avoid them.

It’s sad, but I see large corporations inadvertently engender risk-averse behaviors by stupidly conceived downsizings and restructurings.  They announce a big layoff, take a long time to execute on it, and make everyone progressively more insecure, not just during the period of the layoff, but well beyond it.  Survivors learn the wrong lesson from avoiding a layoff.  They become more cautious and put their organizations at much longer-term risk.

I spent a lot of time talking about failures when I led Pitney Bowes, and getting people comfortable with the idea that, if they failed, it would not be the end of the world.  I met with many people we had asked to leave the company, and I deliberately told them that there was life after Pitney Bowes.  I shared my experience with failing at two successive law firm jobs, and being asked to leave the second firm.

This is a time unlike any in my lifetime, although every time period looks more stable and placid in hindsight than it was when people were living through it.  The good news about a turbulent time is that failures happen more often to more people, and there is less of a stigma attached to failure.  Individuals can experiment more, fail faster and more often, and find the right future path sooner and more painlessly than they could at a time when everyone is expected to succeed and failure stands out more.

We should be celebrating the intelligent and determined unsuccessful efforts of people, perhaps as much as we celebrate successes.  That is why, while I commented on Steven Jobs success a few days ago, I want to make sure that I give equal time to his failures.

Today, I have an I-Mac desktop computer, as does my wife, a MacBook Air laptop, as do my sons and my daughter, an I-Phone, as does my wife, and an I-Pod, as do every member of my family.  My wife even has an I-Pad, so she can read her emails more easily.

I prepared this blog, along with most others, on my MacBook Air, which is my work computer, since I take it everywhere.  It holds my PowerPoint presentations as well, and my Kindle software that enables me to read books anywhere I take my computer.

There are many things about the Apple technologies I do not like. There is an excessive drain on the batteries for the phone and the laptop.  The address books and calendars among my laptop, desktop, and I-Phone, do not properly synchronize, in spite of what Apple has advertised. The touch screen on the I-Phone is unresponsive, when I am hot and sweaty on a hot, sunny day.

Nevertheless, Apple Computer, under Steven Jobs, has profoundly changed many lives, including mine, for the better, as Mossberg has pointed out.  The I-Pod was the first Apple product I acquired.  It amazes me to this day that I can have the equivalent of five old-time jukeboxes worth of music of my choice anywhere I take this tiny I-Pod, and that I can dock it in a little holder at home and have it play anywhere in the house.  Jobs revolutionized music by enabling people to get individual songs of their choice from an online retail store legally, without buying albums and without having to search several retail outlets.  The old 45 records are the closest comparison to the I-Pod, since one could buy his or her favorite song individually, but even there, the purchaser also had to buy a song on the flip side of the record, and had to shop at retail stores to get the records.

The MacBook Air is a lightweight device of excellent quality, but, more importantly, it is supported by an excellent service organization that, for a flat annual fee, is able to deliver great telephone and in-store support with scheduled appointments or emergency support.  The Apple service capability, more than the quality of the computers and software, is what caused me to switch from a PC to a MacBook when I left Pitney Bowes.

The I-Phone has changed my life in many ways.  The instant access to e-mails, to a full address book, and to a calendar enable me to do business anywhere. The location service software has enabled me to find my way around places when walking, as well as driving, because of its GPS features.  It has replaced my clock radio and the hotel wake-up call as my alarm clock.  It has also become my camera and my snapshot album. It enables me to keep track of major news and sports items, and to look up information anywhere I can get on the Internet.  It will become extremely important as a repository for health records once clinicians, hospitals, and labs become as automated as pharmacies.

When I was in a rural part of Italy this summer in which my cell phone service and my Internet coverage was spotty, I was reminded of how we now take for granted relative to Jobs’ contribution to our lives. As I see stories about the uprisings in the Arab countries and in other parts of the world, I became even more appreciative of the degree to which the handheld devices Jobs invented put so much power in the hands of individuals that he has changed political systems and how people get elected and govern.

There are only a few people who leave that kind of imprint during their lives.  It is unfortunate that his health does not enable him to continue as CEO, but I hope that he finds the energy to keep contributing to our society and transforming it for the better.

These theories are certainly part of the explanation, but I would offer another explanation: that we are in the midst of a long-term redefinition of the skills and capabilities our economy needs, as well as the way we govern ourselves as a society, and that, as a result, there is a serious mismatch between the skills our economy needs and the skills and capabilities available within our country.

Our economy, our labor-management relations, our government tax collection systems, our communities, and our social relationships are build upon an economy based on regular full-time jobs with well-defined and relatively stable definitions of job responsibilities.  However, the world we are entering makes our ways of organizing work, labor-management relations, tax collections, communities, and social relationships obsolete.

When young people ask me about how they can have successful careers, I tell them that there are three ways of defining their career objectives: around a job or a profession, around working for a particular organization or industry, or around a mission or cause.

Career objectives organized around jobs or professions

In the past several decades, we have heavily emphasized training people for specific job categories and causing them to define themselves around a particular job category.  People get jobs as teachers, lawyers, accountants, consultants, general managers, IT professionals, auditors, engineers, or HR managers or professionals.

In fact, I think we have gone overboard in rigidly defining jobs and professions by creating state and local licensing requirements that have significantly raised entry barriers and lowered employment in many professions.  For example, to get a license to cut hair at a barbershop in Connecticut requires a one-year course of study that costs a person $20,000.  While there are good reasons to require education, training, and certification for hair cutters, since they handle sensitive and potentially toxic chemicals, I find it hard to believe that the certification process should cost an applicant $20,000.

Colleges, universities and training schools, as well as governments, like the idea of slotting people into job categories.  It is easier to organize curricula around job categories, and, as noted above, it can be highly profitable to train people for specific, licensed job categories.  It is easier for government regulation and reporting to attach people to specific jobs.  Unions can more easily organize around particular crafts and job categories.

The problem with this form of career organization is that, from time to time, particular types of jobs or professions become very attractive and end up creating surpluses of people with job-specific skills.  This happened with aerospace engineers in the 1960’s after the space program was phased out, with journalists after the Internet obsoleted traditional print journalism, with IT professionals after the hiring surge caused by Y2K ended, and with lawyers after companies found ways to automate what lawyers used to do.

Over a much longer period of time, productivity improvements will obsolete any particular narrow job description that pays a high salary or that, even at a low salary, employs a lot of people.  Agriculture has employed progressively fewer people, as has manufacturing, and we are seeing a similar reduction in call center workers as we move more toward self-service.  In the next decade, I predict that retail cashiers in large stores will decline as technology moves us more toward self-checkout systems.

Today, we have many people trapped in jobs or professions for which the supply far exceeds the demand.  Creating more specific jobs in specific categories is not a good way of managing and sustaining an economic recovery.

Organizing careers around companies or industries

This was a popular way of building a career after World War II and into the 1980’s and still remains as a way of thinking about career planning.  In the 1940’s through the 1970’s, people entered the automobile industry because it seemed large and stable.  Today, the U.S. automobile industry has probably shrunk permanently because we have declined from purchasing 17 million new passenger cars a year to about 11-12 million, as cars become more reliable and their replacement cycles lengthen.

Large companies relentlessly shrink their workforces over time, even in good economic environments, especially as they seek more productive and lower cost work environments, so the notion of attaching oneself to particular companies is obsolete.  When I was growing up in Rochester, New York, cousins and friends urged me to seek safer employment in companies like Eastman Kodak and Xerox Corporation, companies that have a fraction of the jobs they had 40 years ago.

Government and health care jobs have increased significantly in the last decade, but government jobs are already shrinking, and I predict that health care jobs will as well.  We will find ways to get more health care tasks done offshore or through technological means.  For example, the task of drawing blood will move from being a high-skilled task in a laboratory to a self-administered task for many applications.  We will still need nurses trained in drawing blood intravenously, but the occasions when intravenous blood draws will be needed will decline over time.

Careers organized around missions, causes, or problem areas

To me, the most sustainable careers are those organized around a mission or a cause that will take decades to address.  We are blessed or cursed, depending on one’s perspective, with societal issues that are going to take years, if not decades, to address.  Those who can identify recurring work responsibilities needed in the addressing of those missions, causes, or problems can secure long term employment.

For example, America will have a long-term need to rebuild its crumbling infrastructure. It will be several decades, if ever, before we complete this process. Those with skills deployable on the process of rebuilding America will be employable for a long time.

We have a shortage of civil engineers and systems engineers to do the work on the major capital projects required for this rebuilding process Relative to other professionals, such as attorneys, those who can help manage environmental, land-use, and financing issues will be employed for a very long time.

Funding may ebb and flow, but we do not have the luxury of stopping work on these projects.  Moreover, even if a specific type of professional work declines, there will be adjacent spaces in which work will be needed.

We have big, long-term societal problems, such as the rebuilding of our crumbling infrastructure, the sustainability of our environment, the need for energy conservation and efficiency, and the reskilling of our workforces.  We also need to deliver services to turn our least productive citizens into more productive members of our society.  Those who focus on societal needs and then work backward to what tasks are required to meet those needs are most likely to figure out what skills are needed and then to develop those skills.

We have to get away from rigidly defining jobs and certifying people into those jobs, and to move toward defining broad societal needs and deploying people toward meeting those needs.  Government can facilitate these processes by organizing stakeholders to address them, but it is a hopelessly inefficient and slow stakeholder in creating jobs and filling them with people that can meet complex and often fast-changing needs.  Government also has to get out of the business of creating large and inflexible entry barriers for jobs and professions.  To the degree that licensing requirements exist today, government needs to have a process of revisiting those requirements every few years to insure that they still make sense.

It is a tragedy that we have so many potentially productive Americans on the sidelines, either collecting unemployment benefits, or, in some instances, having exhausted their benefits when there are so many compelling societal needs that remain unaddressed.

Whether he made a values-based judgment that he had simply received a windfall and did not deserve to profit simply from being in the right place at the right time, or whether he believed that he would receive more long-term economic benefit from giving up the ball does not matter: he did an admirable thing.

Everyone’s behaviors are on a continuum from being totally generous of spirit to others to being totally mercenary and interested only in helping oneself.  To be generous of spirit does not mean that one withdraws from the capitalist system, lives like Mother Teresa or Paul John Paul II, and deny or give away everything material.  A person whom I consider an example of practicing behaviors that are generous of spirit, and whom I have always admired, and got to meet by serving briefly on a board of directors with him, is Neil Armstrong, the astronaut who was the first person to walk on the moon.

His behavior that I would consider exceptionally generous of spirit is his refusal to engage in any behavior in which he personally profited from his status as the first person to walk on the moon.  He could have made millions of dollars in commercial endorsements from his lasting fame and celebrity, but he steadfastly declined every opportunity to do so. He has lived a successful life and is a wealthy person, but he recognized that many people contributed to his accomplishment as an astronaut and that he should not draw a disproportionate benefit from it.

I have aspired to be more like Neil Armstrong in not trying to extract maximum economic benefit everywhere I could.  I have given free advice to many people for which they would have paid thousands, or even tens of thousands, of dollars, or arranged introductions that have resulted in financial success for others without receiving any short-term economic benefit, even when I was not financially secure earlier in my life.  I did well financially, although I could have done better.  I never once negotiated my own compensation package, even when others around me negotiated theirs.

I have met many people who have given generously of their time, their insight, and even their services and not asked for anything in return in the short run.  I have also worked with people whom I know could have driven harder bargains with their employers.  I admire athletes like Hall-of-Fame baseball player Tony Gwynn, who stayed in San Diego and made far less money than he could have made with many other teams.  I also admire teachers who have stayed in seniority-based public education compensation systems and foregone great opportunities to make far more money in corporate training and education positions.

At the same time, I have experienced extreme distaste and stress by encountering people who think of the world as a place in which they have to extract compensation for every deed with economic value and have to extract as much as the market will allow them to extract.  People who expected to be compensated for everything they did were very common in New York.  Many jobs only made economic sense if the jobholder could get tipped consistently.  However, there was a broader philosophy that no one ever did anything for others without getting paid for it, and closely related to the fact that everything could and should be compensated was a philosophy that everything was for sale.

I remember the scene in the 1991 film Goodfellas, in which the protagonist Henry Hill takes his future wife on a date to the Copacabana.  From his car to his front-row table, he passes many hotel and restaurant workers and hands out money to every one of them.  The front-row table clearly would not have been available to anyone else.  It was moved into place and set up especially for Hill and his date.  That scene was director Martin Scorsese’s depiction of a culture in which everything was for sale and that such a culture was so ingrained that it was a regular part of everyone’s daily routine.

In 1980, the 12-year-old son of one of our neighbors regularly cut our lawn.  He was receiving what we thought was a fair price for his services.  He tried to double his price, and when we asked why, he said that his parents told him to see how much he could get from us.  He was told that if we objected, he could negotiate downward, but that he should try to maximize his short-term return.  We never employed him again, and I sent him a note telling him why.

What the Christian Lopez story reminded my wife and me about ourselves was that we are people who believe strongly that our capitalist system works best when people give value without expecting to be paid top dollar immediately for everything they do.  George Gilder, an American writer, philosopher, and Republican activist, wrote a powerful book in 1981 entitled Wealth and Poverty, in which, among other things, he described capitalism by saying that it “begins with giving.”  What Gilder meant was that capitalism, by its nature, requires one or more individuals to expend capital at a point in time and to provide goods and services for which he or she will get rewarded at a later point in time.  Capitalism requires an act of faith that investment will yield later reward.

To the degree that everything someone does requires immediate reward, the capitalist system collapses.  Such a system usually does not enable the granting of credit, except in a very close circle of family and friends.  Credit given to people one does not know is essential to the optimal growth of an economy.

Unfortunately, America has moved progressively toward a country in which there is more and more distrust, and more of an expectation of immediate gratification and maximum economic reward.  Some of this is a result of an increasingly mercenary society.  Some of it is the result of people being influenced by others to become more mercenary than they would be on their own.  Sadly, some people have become more mercenary as they have become more financially desperate.

I was saddened by the experience with the 12-year-old boy. He seemed liked an enterprising young person who could have been generous of spirit, but whose mind had been poisoned by his parents, with whom we ultimately had a dispute on unrelated matters.  I do not know what effect, if any, our refusal to continue to do business with him had on his values, but I suspect that his parents probably found a way to deflect the blame for that situation on to us.

It is reassuring that there are people like Christian Lopez in the world.  He did the right thing.  He may, or may not, ever receive economic benefit comparable to what he gave up. However, if he lives the rest of his life with values consistent with those that led him to make the quick decision to return the ball to the guy who truly created the potential for its economic value, Derek Jeter, he will live a far more satisfying life, and he might even be more financially successful than he otherwise would have been.

Here’s to you, Christian Lopez!!!

Whole industries and marketplaces, and often political and social paradigms, depend on people willfully denying reality.  In health care, the stubborn myth is that more care is always better care.  This myth enables health care providers to make more money, not have to make tough end-of-life decisions, and appear to be giving the patient what he or she wants.

Excessive care often puts the patient in worse position than if no care were given.  Many drugs are ineffective and have negative side effects. In certain cases, aggressive cancer treatments shorten life. Surgeries not only do not correct the problem for which the surgery is done, but create other complications.  The Dartmouth Atlas Survey, which was created by Dr. John Wennberg, has demonstrated over several decades that there is no relationship between the intensity and cost of health care across regions and the health outcomes.  It often happens that we spend more and get less for our money.

We willfully deny this self-evident truth, because, if we acknowledged it, we would have a health care system with different winners and losers.  Many high-cost health care regions would lose revenues and jobs.  More painful end-of-life conversations would have to take place. Society as a whole would be far better off, but many individuals would have painful readjustments.

Similarly, in the film industry, there is a deeply imbedded view that commercial success for films is totally random.  It is best reflected in how many people have interpreted a famous quote by William Goldman, an author and Academy-Award winning screenplay writer: “In the end, nobody knows anything.” Goldman meant to point out that making commercially successful films is an art, rather than a science, and that there are no guarantees of success.

His thoughtful observation has been distorted into a view that commercial success is totally random.  This view of success as being random is insidious because it denigrates the value of intelligent planning and execution, as opposed to the seat-of-the-pants decision-making many people make.  It turns every filmmaking endeavor into the equivalent of playing the exceptionally low-odds Powerball lottery. It also justifies making no significant changes to what intelligent film industry executives know is an unsustainable business model.

The unpredictability myth enables some to resist any changes in business practices that would increase predictability and likelihood of success.  Companies like Epigogix, which offers predictive modeling on film screenplays, and Opera Solutions, for which I am an advisor, which provides data analytic solutions for increasing the yield on film recommendations to customers, prove that, while results can never be guaranteed, the odds of success can be significantly improved.  There are many film industry executives who have developed extremely workable and intelligent business models, but what has made them successful has not been universally understood or copied.

Among politicians, a similar, deeply imbedded paradigm is that success is a result of luck.  Politicians, many of them far left Democrats, refer to taxes that redistribute wealth as “progressive” and as “ways to help the less fortunate.”  To them, the difference between success and failure is a function of how lucky breaks are distributed.

Success is a combination of smart decisionmaking and luck.  Malcolm Gladwell, in his book Outliers, argues that Bill Gates’ success was heavily influenced by computer access he had at his prep school.  He also gives many other examples of people who had similarly privileged access to resources needed for future success.  Bill Gates clearly had an opportunity not available to many Americans in the 1970’s.  However, Gates was not the only student at that school.  Others had the same access, but he was the only one who took full advantage of it.

In my life, becoming the CEO of Pitney Bowes involved a great deal of luck.  However, my work, and the assistance I received from family and friends over a lifetime, enabled me to benefit from the lucky breaks when they came.  I worked hard, deferred many gratifications, and experienced a lot of resentment from those who chose not to work as hard.

Other than lottery winners, there are no instant successes.  Many so-called “overnight successes” are really cases of people who have labored for years to be ready to take advantage of the one big break.  I wrote about this in a blog some time back about the difference between the way Bill Wyman accurately chronicled the Rolling Stones’ success, compared with how popular media described it.  Popular accounts of the Rolling Stones’ origins focus on the early partnership between Mick Jagger and Keith Richards and imply that there was instant chemistry and genius yielding early success.

Wyman, a founding band member, told a different story.  The individual band members toiled for years as solo performers and members of other bands.  They experimented with different musical styles, inspired by artists like Lonnie Donegan who led the way with musical pieces that combined multiple musical genres. The Rolling Stones did not achieve instant success, but built the foundation for what appeared to be instant success after the Beatles led the way in the U.S. in 1964.

Even those cases of performers “discovered” decades ago in various Los Angeles area soda shops, such as Lana Turner at Schwab’s drug store, often leave out the foundational processes that led to the “discovery” or that followed it.  Turner grew up under very difficult circumstances, being born in Idaho and moved to San Francisco as a child, and worked hard to be ready for her break.  She made a number of gutsy decisions, including a decision to leave one studio and join another as a teenager.

With the exception of lotteries and those smart enough to take their casino winnings and save them, there are relatively few cases of lucky, overnight sustainable successes.  When people get lucky and win lotteries, they often are unprepared to deal with the consequences of success and either lose their money over time or experience huge disruptions in their lives. A great TV show in the 1950’s The Millionaire, depicted people presented with a tax-free million dollar check (comparable to $10 million today) from an anonymous donor, who often struggled to live with their newly-found wealth.

Adherence to myth is unaffected by one’s level of education and wealth.  Many educators with advanced degrees adhere to the myth that, if only we gave teachers and schools more money, the quality of education would improve.  Clearly, good educators would benefit from having more resources.  However, giving a poor or mediocre teacher a higher salary and smaller classes with more equipment and supplies in a nicer facility will not turn that individual into a better teacher.  Moreover, someone ill-equipped to teach does not get better with experience.  Teachers’ unions and other advocates of more education funding would be much more credible if they acknowledged that many members of their profession do not belong in it.

What do we do about these persistent myths?  First, acknowledge them in a non-judgmental way. Second, recognize that, if there is economic dislocation from changing a paradigm, such as the amount of health care we deliver, the way we evaluate potential feature films, and the way we fund education, we need to anticipate and address that economic dislocation.  Unfortunately, people rely on the rules of a marketplace, a business, a government, or a system, and we need to transition them to some degree to a new system. In the transformation of electric utility service, we call these obsolete systems “stranded costs” and we develop plans to pay for phasing them out. All this obsolete health care, education, and government infrastructure is a “stranded cost.”

Most important, we need to recognize that every myth or paradigm is a temporary way of thinking about the world.  We must stop reinforcing the notion that there is a fixed way of thinking about the world that, once learned, will give someone a permanent advantage.  Experience is valuable, but the most important lesson that we need to recognize is that, sometimes, experience gets in the way of insight.  The art of being successful is knowing when experience is useful and when it must be discarded.

Life is inherently uncomfortable and insecure.  We should not teach our children to seek security and certainty, but to build resilience, continuous learning skills, and the capability to address the widest range of life’s challenges.

Our government not only subsidizes home ownership through the home mortgage interest deduction, but it has created a variety of tools to enable lenders to make home mortgage loans to more people.  Lawmakers have always believed that broad-based home ownership is an inherent societal benefit, because they believe it creates a greater stake in the well being of the community.  Independent of whether owning a home is a good investment, American lawmakers want as many Americans as possible to own, rather than rent, their residences.

However, is this a good idea?  For someone who has a limited amount of discretionary income or asset base, using most of one’s discretionary assets to acquire a home may be a very bad idea.  If a person invests all of his or her savings in a home, the decision violates many principles of good financial management.

Don’t put all your eggs in one basket.

Buying a home with your savings is truly putting all your eggs in a single basket.  It is worse than that.  It is putting those savings in a highly illiquid asset that can only be bought or sold in its entirety.  One risk management tool any of us can use with stocks and bonds is to cash in a portion of our investment to protect the rest of the investment.  That option is not available for the purchase or sale of a home: it is an “all-or-nothing” proposition.

Don’t invest in an asset in which there are many independent factors that could significantly depress its value.

When we buy the stock of a public company, the Securities and Exchange Commission makes publicly traded companies describe a wide variety of risk factors.  The most common thread among these risk factors is the existence of single points of failure.  Companies have to disclose risks such as the dependence on a single product’s revenues, a single large customer, a single regulation, or a single patent or trademark.  In cases in which companies disclose these risks, they are considered “single points of failure.”

Airplanes have redundancy built into every critical system because airlines and regulators demand systems that cannot fail because of a single defect.  There are back-up engines, power systems, and controls.

Yet there are many single items that can cause the value of a home to drop significantly.  My wife and I experienced this with the first home we bought 32 years ago.  The federal government forced the state of Connecticut to allow trucks exceeding 80,000 pounds to use I-95, which was not far away from the home we had bought a few months before.  The increased noise and vibrations from the larger trucks significantly depressed our home’s resale value. We lost every bit of our equity.

We invested in a cooperative conversion project in New York City a few years ago.  We lost every penny of that investment because of tax law changes, and because New York City required every newly renovated or build housing unit to be 100% accessible to people with disabilities.

While we had successful real estate investments along the way, we learned the hard way that a single change in the law or some other factor outside our control can wipe out an investment in a home.

Don’t invest in something in which the other party has inside information and you do not.

The U.S. government, as well as every state, protects everyone who buys or sells a publicly traded security from the disadvantage caused by a party on the other side of the transaction who gains unfair advantage by having material inside information. However, there is no such protection in residential real estate transactions.

Buyers have the ability to get a home inspected and to do their own investigation about a home’s market value and the factors which affect it.  However, if a seller knows that someone is considering an action that will affect the home’s value and the buyer does not, the buyer is out of luck.  Similarly, if a buyer knows that a business is considering building on a piece of land and will pay premium prices and the seller does not, the buyer has a huge edge.

Don’t invest in something in which you have open-ended liability.

Homes are money pits (there was even a film by that name starring Tom Hanks some years ago), especially older homes that are often the ones available to first-time home buyers. My wife and I have had basement flooding, a leaky roof from the ice accumulation this past winter, and an underground oil line leak from a poorly insulated oil line.  Although we had sufficient resources to correct all these problems, they resulted in huge, unbudgeted expenses, even after insurance claims were paid.

When my wife and I were about to sign the contract on building our current home in 1993, our attorney Tom Skidd, from Cummings & Lockwood, told us that, before we signed our contract to get the home built, he would bring over something we had to review.  I expected to get a legal memorandum, or some educational materials on the legal risks of buying and owning a home, or an instructional videotape.  Instead, he gave us a videotape of the old Cary Grant-Myrna Loy film Mr. Blandings Builds His Dream House, a wonderful movie that depicted not only the financial and technical problems of building and owning a home, but the relationship tensions a home buying or building process creates. He was and is a very wise person, and we avoided many pitfalls because of him.

The National Urban League and many of its affiliates, and Operation HOPE, a financial counseling firm, have done great work counseling first-time home buyers, and I am proud at what the Urban League has particularly accomplished under Marc Morial’s leadership in the last few years, since he reacted to the housing crisis with a far more expanded set of offerings than had been the case before that.

Final observations

The biggest single lesson from all this is that we need to rethink some long-held assumptions about the benefits of home ownership.  Having a stable and engaged civil society and people committed to the betterment of their communities is critical to the effective functioning of representative democracy.  Whether home ownership is the right way to achieve this goal needs to be re-examined.

The assumptions underlying many of our health care policies are that people are most motivated to do what is healthy for them and their families, and if we could only get them good information, and good and affordable care, they would do the right things.  Unfortunately, the reality is much more complex.

As the Duerson case, as well as many other cases involving athletes, show, many athletes deliberately engage in unhealthy and dangerous activities because they value the experience, and, to some degree, the money that comes to them from playing a sport at an elite level.  By the way, I do not think money is the prime motivator.  Otherwise, why would scholastic and college athletes engage in the same destructive behaviors as their professional counterparts?  Also, if we go back several decades in any professional sport, the financial rewards for professional athletes were not that great, but they still played violent sports.

What struck me in a TV interview with Duerson’s wife and son was the comment by his son that Duerson had died because he played a sport he loved and experienced one of the highest accomplishments an athlete can have: being part of a world championship team.  If we were to turn the clock back to the beginning of Duerson’s career and tell him that playing professional football would so damage his brain that he might commit suicide by age 50, it is unclear whether he would have made a different decision.

Similarly, many athletes become heavy users of performance-enhancing substances, despite strong evidence that those substances eventually destroy their health, because they believe that the substances will give them a competitive advantage, or, at worst, allow them to stay even others also using performance-enhancing substances.  The only thing that has changed in the last several decades has been the substance of choice, but the propensity for many athletes to seek out an extra edge has not.

In the rest of the population, we have found that every person has life goals and priorities, of which health is a contributor or an inhibitor.  People cannot relate to “optimal health.”  They can only relate to the benefits optimal health brings to them, or the problems that less-than-optimal health creates for them.  Why does this matter?

If we are to use the many tools available to us to make people healthier and reduce our society’s runaway health care costs, we need to tap the more fundamental behavioral motivations that drive their health decisions:

• The 50-year-old who has just had triple-bypass surgery may be more receptive to giving up tobacco usage, because failing to do so may be fatal.  However, the more fundamental motivation for that individual may be more concrete, like the desire to care for grandchildren or to pursue pleasurable activities.
• The 25-year-old single woman probably cannot be induced to give up smoking by making her afraid of lung cancer, especially since smoking usually makes people thinner than they would otherwise be, but if it reduces her chance of marrying the person of her dreams, she will find a way to curtail her tobacco usage.
• The teenager who drinks alcohol is more likely to be motivated by the desire to be accepted by peers than by whether alcohol consumption is healthy or unhealthy.

What does all this mean?

• To a significant degree, we have to supplement traditional health care system tools with personalized coaching that helps an individual figure out his or her deep life goals and that helps further those goals through healthy behaviors.
• The coaching may be face-to-face, telephonic, or even online, or some combination of all of these methodologies, but it must be tailored to how a coach might build trust with individuals to help them live healthier lives, while pursuing their life goals.
• The source of coaching will vary by person.  Over the years, I have found that it can be peers, nurses, pharmacists, doctors, behavioral health counselors, psychologists, mentors, supervisors, parents, siblings, or revered relatives or members of the community.  Most people have several sources of trust.  The sooner those trying to help individuals be healthier can find those trusted sources and match individuals to them, the better.
• Sometimes, changed circumstances also change life goals.  Earlier in life, individuals are motivated by wealth accumulation, the desire to start and build a family, or the desire to get secure employment and build a career.  Later in life, financial security, retaining connectedness to loved ones and the desire to have accomplished something meaningful matter more.  Matching health goals with life goals is an ongoing process, not a one-time effort.
• Everyone has life events that shock them into making changes in their behaviors, whether the event is a divorce, becoming a parent, losing a job, having an accident, or getting diagnosed with a life-threatening condition.  Health counselors need to understand how those life events alter life goals and change the health coaching patterns.
• As individuals are either too young to have life goals and are very dependent on parents or other guardians, or too old to care for themselves, the health care system needs to recognize that there are individuals who will have far more influence on an individual’s state of health and wellbeing than the individual himself or herself might have.

As I have learned more about Dossia, the personal health record platform, that we offer through the Dossia Service Corporation, it has become clearer that, while we can be successful in empowering individuals to manage health and health care to a degree by providing information and insight, there need to be other motivators, such as financial incentives, recognition from winning games and contests, and the ability to engage in more life activities.  We can offer Dossia as a standalone data repository, but its greater value derives from its integration with broader life goals to which optimal health contributes.

What makes this article insightful is that it takes apart batches of job tasks and looks at the skills required for each one, and their replaceability by technology or self-service solutions.  Beyond the obvious example of toll takers, which, thankfully for all drivers, are rapidly disappearing, he points out that jobs which exist because of the need to move physical items or information, jobs which exist solely because supply is artificially limited or restricted, or which exist because of artificial or gimmicky price and value differentiations, or because of government-conferred monopolies will disappear over time.

We can think of many examples of these jobs.  Many other jobs we believe to be relatively secure and resistant to changing conditions will decline in number:

• Jobs that help people get from one place to another for work tasks and meetings may decline over time.  The simplest solution to traffic congestion is a reduction in travel of all kinds.  We can do more work on computers where we live, including meetings, webinars, and telephone conversations, that obviate the need for as many people to travel to a single place every day to fulfill their work responsibilities.
• Things we used to acquire through face-to-face retail transactions are rapidly being replaced by home deliveries or video downloading.  For example, every video rental store in our community has gone out of business in the last 18 months.  Video on demand or home delivery of Netflix movies has replaced what those stores used to do.
• Self-service machines are replacing humans in many tasks.  For example, in many cities, particularly in Los Angeles, I almost never seeing parking garage attendants in public parking lots.  We pay for parking at a machine and exit by placing our parking receipt into a machine at the exit.

However, even more interesting than these examples are the cases in which traditional professional tasks are being either replaced or downsized, done by people outside the United States, or done by people with lower level skills.  For example, in the health care field, many state laws still require laboratory tests to be ordered by physicians, which requires an individuals to visit a doctor’s office to get a reading on vital metrics like cholesterol, glucose, or triglycerides.  However, other states now recognize that the individual is capable of going to a lab, getting a test, reading the interpretive results, and then consulting the doctor, if needed.  These gatekeeper functions for physicians have to disappear because they are not good uses of the physician’s time.

Lawyers have begun to lose work to self-service functions for a generation.  Many people can draw up a variety of legal documents with a little help from the Internet, and can do more of the work on contractual documents that used to be done by lawyers.  The jobs that require professional credentials, such as lawyers and doctors have many tasks that truly require their credentials and experience, but there are many tasks that the client or patient can perform, and others that a less-skilled professional can perform as well.

This is significant because it suggests that, as Kessler points out, we will have many longer-term unemployed people from occupations that did not used to produce them.  The best solution for those people is to reinvent themselves, not to beat their head against a wall trying to find another job like the one they lost.  Generally, when a major newspaper, magazine, or TV show profiles someone who has been unemployed for a long time, that individual has trapped himself or herself in too narrow of field of vision in a job search process.

We have to teach those who find themselves unemployed to redefine their assets and their aspirations to look at opportunities where the economy is growing, not where it is shrinking.  The biggest challenge for unemployment is in those communities in which the entire community is depressed, in some instances, the entire country.  In a recent set of stories about Ireland, articles have commented on the fact that, at the peak of Ireland’s financial bubble, 25% of the population was employed in the construction industry.  This is similar to Las Vegas and Arizona.

People trapped in these communities who cannot leave need to create an export opportunity, in which they sell goods and services to people outside the community and bring wealth into it.  The most difficult challenge is figuring out what people somewhere else might need that an economically depressed community can create and export.  To perform this analytic process, depressed communities often need to bring in individuals to think more expansively about the communities’ potential than the people living in the communities can do on their own.

No job is secure because its requirements will change.  Some tasks will disappear and others will emerge.  Those who recognize this reality will do just fine.  Those who deny or fight it will be highly stressed out.

That comment has not only stuck, but seems more astute than ever.  I have been both more admiring of people who stick their neck out, and more frustrated with those who should, but do not, when tough situations occur.  In the last few years, we have moved into the most difficult economic environment since the 1930’s.  It has effectively “smoked out” whether people want to embrace tough decisions and engage others in constructive conflict, or whether they will develop even more elaborate ways to avoid those decisions.  I have seen more of both kinds of people in the last three years than ever before, especially the non-performers who have learned to survive by “pretending” to perform.

Most commentators who worry about the U.S. global competitiveness focused on the poorly educated and unskilled part of our population, and they are right, to a degree, to do so.  We cannot have half our population poorly prepared to compete in a global economy.  However, what might be an equally large problem is that a good chunk of our educated population is drawing high salaries while being unproductive.  Our problem is not only the uneducated and unskilled parts of our population, but also the educated and skilled parts that “pretend” to add value, but do not.

I have worked with three highly unproductive, inefficient sectors of our economy in recent years: health care, government, and, more recently, the entertainment industry.  In all three sectors, there are some common elements that drive a lack of productivity:

• People in key leadership positions not only are not held accountable for results, but work actively to prevent stakeholders from getting data that would allow stakeholders to figure out whether these leaders are performing and adding value.  In health care, providers fight hard to keep performance data from being collected and published, so patients and payers can figure out who is good at delivering particular kinds of health care. Government unions are militantly opposed to having voters get financial reporting to describe what government is spending, based on generally accepted accounting principles, something Connecticut Governor-elect Dan Malloy has encountered with his promise to deliver greater transparency.  In the entertainment industry, there is actually a term for the deliberately confusing and complex accounting film studios do to prevent investors and shareholders from figuring out whether a film is profitable: “Hollywood accounting.”
• All three sectors have many well-educated people who attend conferences, give speeches, hold meetings, and develop complex analytic systems, but with no visible benefit.  I do not want to convey the impression that nobody in these three sectors is productive or makes worthwhile decisions, but those who are productive have to work around and battle the large lumps of people who are not. As a person actively entrenched in both the health care and the entertainment industries, I am astounded by how money and time goes into conferences to explain laws and regulations, to describe theories of how the world should be, and to allow people to socialize and network, with no apparent benefit for the organizations of which they are a part.
• In all three sectors, many people unconsciously, but deeply, fight change with vocabulary and conceptual frameworks that are obsolete, flawed, and often intellectually dishonest.  During the so-called “health care reform” debate, we saw some Democratic proponents of the legislation consistently use the term “health care access” when they really were referring to “health insurance access.”  An insurance card is not the same as a doctor’s appointment, but they did not care.  It was in their interest to confuse the issue.  Republicans were equally culpable in using the term “death panels” to confuse the issue of end-of-life decision-making.

In government, elected officials who advocate higher taxes to transfer money from “the rich” to “the middle class” and “the working class” are really advocating that money get taken from a public that has uncertain loyalties and is hard to solicit for campaign funds and transferred to unionized government employees who can be tapped for campaign contributions through union political action committees and to other special interests.

In the entertainment industry, there are many myths about how unpredictable success is, but those conceptual systems really justify a business model that allows major studios to continue to fail more than half the time.  There are many examples of consistently successful filmmakers, like the African American filmmaker Tyler Perry, whom the studios refuse to understand and refuse to copy, because shareholders of those studios would not need the overhead they create.

• In all three sectors, money keeps flowing in, and the sectors continue to consume a disproportionate share of the economy.  However, the distribution of financial rewards is skewed in some dysfunctional directions. The main problem is that, in all three sectors, there are many decisions made to keep organizations going solely to keep people employed.  In health care, it is almost impossible to close a poorly performing hospital that delivers poor quality, because the hospital is usually a major employer.  In government, it is very difficult to lay off unproductive performers.  Governments provide voluntary termination packages, which are poorly targeted, but they do not close down unproductive operations.  In the entertainment industry, the large studio production lots are used infrequently, but they remain in prime Los Angeles area real estate.

These are not the only sectors plagued with well-educated, unproductive people.  People in many large Fortune 500 companies have high-paying jobs, particularly in the legal, accounting, and consulting professions, and maintain their employment by being highly creative in keeping other people from getting things done.  Compliance activity keeps growing, and more time is spent in boardrooms and executive suits complying with the latest fad of the day.

One of the reasons we like professional sports is that it is one of the only business sectors in which there is no room for unproductive people.  As someone who is most exposed to the New York media, I am struck by how brutally the sports pages critique performance of superstars like Derek Jeter, contrasted with how the front pages report on how we tolerate schools that successfully educate a small portion of the students who come through them.  Athletes are paid a lot of money, but even when they are not, such as college athletes, their performance is closely scrutinized.  Performance metrics are not only thorough and detailed, but they keep improving.  There is no sentimentality or pity for poorly performing athletes; they lose their jobs and are expected to find some other line of work if they cannot succeed.

There are no “pretenders” in sports.  We have to eliminate the tolerance for highly paid “pretenders” in the rest of our society.