The economic recession – what does this tell us about ourselves?

Our economy these days seems to be in free fall – we hear one bad new story after another, and at the end of all those stories are ordinary people, fearful of the future and in many cases, devoid of hope. I like to remind people that this is not a natural disaster – there was no earthquake, flood or drought. No, rather this was a failure in our collective thinking. I live in the beautiful city of Vancouver, and for the past 5 years or so I have heard many people (mostly homeowners) declare that Vancouver property “just goes up and up”. Talk of a bubble was immediately dismissed – how can there be a bubble after all? – this is one of the world’s most desirable places to live!

In mid-2005 The Economist’s main story was entitled “After the fall”, and the cover showed a falling brick inscribed with the message “house prices”. In this article they pretty much predicted that house prices would eventually crack worldwide and that it would lead to the current state of world affairs, which is still unfolding. The only problem is far more people chose to believe what was mainstream and convenient at the time, versus trying to get their head around a technical article like that. Most people don’t realise that in inflation adjusted dollars, North American house prices were essentially unchanged from 1890 to 2001, as evidenced by the Case-Schiller home price index.

This is how thinking failures occur. People have a natural tendency to focus on the short term versus the long term, and fail to anticipate what is around the corner and over the horizon. It is far easier to believe what is mainstream and in many cases convenient.

Being able to anticipate events and to understand connections between seemingly disparate data is actually a leadership skill. Some call it strategic thinking, while others call it critical or systems thinking. Leaders who have this competency are more likely to do the right things over the long term. In fact studies have shown that this ability is more highly correlated with successful leaders than any other competency. It can be learned, but only by those who have self-awareness (like any other leadership skill). To understand to what extent you are able to think strategically, ask yourself:

a) Did you believe that Vancouver’s rise in housing prices would continue, or “stabilize” at some value at over 2.5 times the 2003 prices?
b) Did you anticipate the impact of the bursting asset bubble on your own business?
c) Do you believe that human needs can be fulfilled in the long term through trading off and our environmental heritage?

I’ve asked these three questions for some good reasons. The first question concerns our ability to think strategically and critically, versus “following the herd”. The second question concerns our ability to adjust our plans to cope with anticipated events – the more change can be anticipated, the less painful the adjustment. The third is the ultimate test – we are often told that environmental considerations must be subservient to immediate human needs such as jobs, putting food on the table and paying the mortgage. Systems thinking theory tells us that human well-being will become progressively worse if the environment continues to deteriorate, so that environmental concerns actually do need to come first. What is bad for the fish is ultimately bad for the fishermen too.

Russ

Sustainability – a question of personal leadership

Sustainability - a household word these days, but what exactly does it mean? These days many organizations have sustainability initiatives, a very good sign in this world of human-induced climate change and a rate of extinction unsurpassed since the demise of the dinosaurs 100’s of millions of years ago. The devil is in the details however – every individual has a different definition of the word “sustainable” - often called “green”. Have you ever received an advertising brochure in the mail claiming that the use of 30% recycled paper saved 245 trees? What about the 500 that were lost to make the same brochure?

Try the following exercise – take a look into the eyes of your kids or grandchildren if you are lucky enough to have them. Then ask yourself what you would like the world to look like 40 or so years from now. Would there be wars over land, oil or water? Would the society be made up of rich and poor, or mostly “middle-class”? How many human beings would exist? Would species still be going extinct at 10’s of thousands of times the natural rate? How much of the land would be in pristine condition? Would the recently lost 90% of large fish in the sea have returned? When you have this picture in your mind, work backwards – what steps does this mean we need to be taking, and what role do you need to play?

Today I went to a food court in a public place I often enjoy with my 3-year old child, one that prides itself on environmental education for youth. As usual, when I ordered my food I passed them a dish that I brought from home and asked that they serve my food on this versus disposable plates. The cashier said “that’s nice to see that you are trying to save the environment” and promptly gave me a discount on my food. 5 minutes later they called my number there was my food - on a disposable plate! It seems the people in the kitchen were not used to people with “strange” requests like mine. You see - sometimes I lose and sometimes I win, but it does not help to cry about it – much better to learn to play the game. I’ll never give up – because I know what kind of world I want. Do you?

Russ