Falling Down and Going Up

I am reading another interesting book, this one is by Father Richard Rohr.  It’s title is “Falling Upward: A Spirituality for the Two Halves of Life.” I find this book enlightening and realistic. At least in my life. A short description might be good. This is the first paragraph of the overview given by Barnes and Noble. “In the first half of life, we are naturally and rightly preoccupied with establishing our identity – climbing, achieving, and performing. But those concerns will not serve us as we grow older and begin to embark on a further journey, one that involves challenges, mistakes, loss of control, broader horizons, and necessary suffering that actually shocks us from our prior comfort zone.” Rohr calls this falling down, while subsequently pointing out that this process actually helps us to move up.

I am always looking for ways of understanding my past, present, and future. I want to grow and be a productive human being in my older years. The last thing that I want to do when I am in my 80’s is sit on my porch and yell out to my young neighbors, because I am so bitter about life,  that they are a bunch of communists. My Dad actually called me that one time. Number one, I don’t want to just sit on the porch when I am 80. I want to be active and productive if and when I hit that point. Number two I want to look back at my first life, as Rohr calls it, and see the value of falling down as it relates to my second life. The last thing I want is to waste time crying over spilled milk.

I have had many failures in the past. Too many to describe here, and I really don’t want put them all into print anway. However, I do recognize that these failures have helped to define who I am today. I feel pretty good in this second life that I have been led to.

It is interesting that I am in a place where I never dreamed I would be. I enjoy being a professor. I love teaching my classes, getting to know my students, and writing down my thoughts. I have several papers I hope to get published soon. So I like my new life.

I love my wife, although we struggle at times, but the cost of discipleship is high, and our relationship is critical to life’s lessons. So although we don’t always see eye-to-eye, the process of disagreement actually helps us fall upward.

As I write this though there is a type failure that I am still trying to grasp its meaning. I am still trying to understand what it is, and how it is helping me move upward. To illustrate this I’d like to describe a conversation my wife and I had on a walk on Sunday. We discussed grades we would give our parents. I stated that I would give my mom a solid A, while I would give my Dad an F. My wife asked, “did he beat you or sexually abuse you?” I said no, and therefore changed the grade to a C-. This caused my wife and I to wonder what type of grades our kids would give us.

This discussion may seem disrespectful to my Dad, but he had a lot of problems that I blame on his upbringing. However, due to some of my experiences I did not want to be like him. Not only did I want to be a great Dad, and I wanted, and want, to be an excellent grandpa. I did have an incredible grand father.

Well, due to circumstances I was not the Dad I wanted to be, and became disconnected and emotionally aloof. This caused problems with my four daughters. I was estranged from my two oldest daughters, and emotionally disconnected from my other two daughters. This has been painful for me, and I am sure not very fun for my daughters.

Over the last couple of years I have come to grips with my loss. I was not the Dad I thought I was going to be. As a result I lost out on being the grandfather I thought I would be, except to one grand daughter that is my life. But I have come to grips with this, and have fallen upward. With the two younger daughters we have moved upward. I feel like I am there for them now, and I think they feel it too. My oldest daughter, that lives in Tacoma, and I have reconnected and we are at peace. I don’t know what this means for the future, but we have started a process.

The one painful spot is the other daughter. I think she is the one the most like me. We are still estranged due to my mistake. I want to fix it, but have no idea how. But if Rohr is right, and I think he is, then this is a necessary process to move into a productive higher life. Right now I don’t see how, but I will trust that God is at work.

And that is my cathartic thought for the day!

Character Or Personality?

Inspiration comes from many places. Today I heard a radio program on NPR that got me thinking. I can’t remember the name of the person who was being interviewed, but she was discussing her book about character.

In her interview she contrasted our past culture of character with our current cultural of personality. It was a very interesting perspective that made a lot of sense to me.

A culture of character is an overall civic behavior that is concerned with integrity. This integrity can be illustrated by what we do when we are alone. What TV programs do I watch when no one is watching. If someone gives me too much change what do I do? Do I keep the extra amount because it was their fault, or do I take the high road? In the old days, the majority of us would take the high road and do the right thing. That is what a culture of character was all about.

This behavior was expected in our leaders. They were to be individuals that behaved the same way alone as they did in front of others. They had a strong sense of right on wrong and chose to live with integrity rather than being phony. Gary Hart attempted to live like this by telling the media to follow his around, they will never see him make a mistake. Shortly thereafter we find him on a boat named Funny Business with a beautiful woman that wasn’t his wife sitting on his lap.

Now we come to our current culture, one of personality. It is not a culture of depth but one of superficiality and phoniness. Leaders in this culture have nice hair, pretty teeth, and tells us what we want to hear. They raise millions of dollars for a campaign, promising us the world, but never follow through on anything. This culture of personality is more concerned with how we look, than how we live.

It seems like we have cheapened who we are and what we stand for.

And that is my short thought for the day!

Capitalist Carpe Diem

I had several responses to yesterday’s blog. The comments were thought provoking, and relevant to this discussion. Some were on the left side of the discussion and some on the right. Needless to say the debate has challenged my thinking. So much so I want to be clear on my stance about our current economic system.

The United States since its inception has chosen to operate as a free market economy. Capitalism is the recognized philosophy of our system of wealth creation. It has allowed people from all over the world to come to the United States, and if they have ambition and work hard, can make a new life. Today’s Wall Street Journal had a great article on Italian immigrants, with a wonderful picture of an Italian family waiting at Ellis Island.

My own history reflects this work ethic. My grandfather and grandmother, on my mother’s side, were Volga River Germans. They escaped Bolshevik Russia, made their way to Canada, and then emigrated to Nebraska where through hard work they carved out a great life. My mother and her two brothers were first generation Americans, and because of their upbringing and training created good lives for themselves.

On my father’s side our family arrived in America in 1741. James MacArthur stowed away on a ship and immigrated to America and participated in the Revolutionary War. His daughter married William Joseph Martin, but I still haven’t figured out how Martin got here. My Dad used to tell me that we came over on the Mayflower, but Christopher Martin, one of the originals on the Mayflower died here with his family. Joseph married Lydia Arthur and had a son name Valerian, who had two sons that fought in the Civil War. I am very proud of the heritage I have from both of the my parents.

The United States is still a land of opportunity. We are having a tough economic time right now, but our entrepreneurial spirit is alive and well. It has not been destroyed by the growing sense of entitlement. There are some of us in this country that feel we are owed affluence just because we are Americans.

Don’t get me wrong, there are people who are struggling. The struggle is not due to their unwillingness to work hard, but to some other circumstance in their life. Often our social systems penalize those folks that want to work hard. An example is a single mother who works a part time job, but because she works a part time job she loses the welfare check that she depended on. Rather than having the ability to dig herself out of her hole, she is penalized for working hard.

What am I saying? Is Capitalism a fair system? Yes, I think it is for those who apply themselves. But do we as Capitalists ignore those who do not have the ability, or even luck, to accomplish what more successful people have done? This is where the debate is. I think, as a Christian, I have a responsibility to work hard. I have been given certain gifts, and therefore have a responsibility to use those gifts to the best of my ability. I try to work hard, while making a difference in this world. I am a Capitalist. I have several college degrees, I spent thirty years at a company and retired, and started a second career which I will hopefully be able to do for a long time. Although I have worked hard and accomplished a few things with my life, I also see my responsibility when it comes to giving.

There are others less fortunate than I. For whatever reason they have struggled with life, and I am not to ignore those people. Jesus mentioned clothing people, caring for the sick, and visiting those in prison. This is why I am so adamant about a Social Capitalism. I am not proposing Socialism, I am proposing we choose to embrace a free market and create wealth, but use the results to help others.  This does not mean more taxes, it means more free choice to do the right thing.

Make money, do it well and do it right. But be willing to help others, not with big government but with big hearts.

And that is my thought for the day!

Another Discussion On Capitalism

The debate on Capitalism continues. Occupy movements, presidential debates, and government policies are drivers for this debate. The question concerning the fairness of capitalism is on our minds. Some of us feel very strongly in the importance of a free market. We scream, as I have, leave the market alone and let it operate in an efficient manner. In my Economics class I and my students discuss concepts such as self-interest, utility, and market efficiency. It is a great discussion that leads to usually challenges the students to think about both sides of the coin. One axiom that is frequently deduced is that as great as capitalism is for economic growth, it is lousy as a means of an equitable distribution of wealth. Capitalism is a system of private property and opportunity for individuals to create wealth for themselves, but we should not stop there. Regardless of whether we feel it is an unfair system, overall it provides civic economic growth, as evidenced by the U.S. economy being the largest in the world. However, this dichotomy is what generates anti-capitalist affects within social advocates. Are these negative opinions valid? Is Capitalism the scourge of society, a tool of the devil? Or is it a civic savior creating an improved lifestyle, and subsequently a greater good for the most amount of people?

As in most cases the truth lies somewhere in between. Capitalism is a philosophy that is a tool of people. How it is implemented, or practiced, determines its virtue or iniquity. Obviously there are many examples of a perceived evil associated with Capitalism. We are just coming out of the great recession that some have used as indicative of what is wrong with Capitalism and private property ownership. However, if a centrally planned economy, and forced distribution of wealth, is so great why has Russia and China moved to more of a Capitalist economic expression. There must be something positive about the system if the premier communist leaders of the modern world are embracing more of a free market practice?

Having been to Russia, and observed first hand the lack of wealth distribution, the failures of a centrally planned economy were evident. However, the inability of the BRIC countries to totally embrace an economic system of free enterprise is also easily seen. State Capitalism is a reality in Brazil, Russia, India, and China. This tells me that there is a perceived civic benefit to Capitalism, but also abiding philosophical reservations.

Marx supposedly was the first to use the term Capitalism, but in a pejorative manner. He correctly identified the ability of Capitalism to exploit the worker. However, the defenders of Capitalism effectively retaliate with the poignant argument of the efficiency of the system. This argument has been pursued since the 1800’s and will not be solved by my comments. I would give credence to the point that Capitalism is the most efficient system for wealth creation that we currently know, which brings me to my point.

I ran across a new phrase yesterday that I has intrigued me. The phrase is “Social Capitalism.” This raised a question in my mind of what this phrase means. The phrase represents a philosophy that proposes Capitalism and Socialism are not mutually exclusive. Social Capitalism proposes that the market works best, and profits maximized, through a proper social management system. In other words, we use the mechanisms of the free market to not only create wealth, but provide opportunities for the poor. As the poor is recognized as a market, capital output is increased. Prahalad uses this argument in his book, “The Fortune at the Bottom of the Pyramid.”  A Social Capitalist system looks at the positives of both a free market and of an “unambiguous process of government regulation,” while attempting to provide advanced opportunities for commerce as well as mitigate asymmetric market events. This is a interesting concept which I need to explore more fully. At its worst it would lead to a State Capitalism, like China, but at its best it could lead to economic benefits for all.

And that is my thought for the day!

More Lessons From Seal Team Six

Early Wednesday Seal Team Six pulled off another amazing mission. They parachuted into Somalia and freed two hostages. The mission was well planned, meticulously executed, and successful. The Seal Team was on the ground for about an hour and killed nine Somali criminals. This type of covert operation seems to be the new strategy in an age of reduced military spending. Although the military plans on purchasing more drones.

What can we learn from Seal Team Six? Obviously the importance of mission. The team had a purpose, it had something it needed to accomplish. We can also learn the importance of planning. Team leadership took the time to properly lay out a strategy that had several contingencies, but through practice and team work, mitigated any possible failure. The team worked together, regardless of differences of opinion and was successful.

Now lets apply this to our government. Is there a common purpose recognized by the President and congress? This is debatable, but I think there is. The mission of our elected officials is to make sure the people of the United States our safe, have clean water, and don’t have to deal with waste, human or other, but over and above that common purpose there are many differences. Instead of working together to debate the plan and set a course for victory, these yahoos refuse to work with one another. It really was depressing to see Boehner sit behind Obama during the State of the Union Address looking like he was continually angry.

I hope our leaders can get it together and begin to operate like a Seal Team Six. I hope they can become good strategists, competent team players, and operationally efficient in the execution of the plan. My fear is, it just may not be the case regardless of who is in the White House.

And that is my thought for the day!

Effective and Efficient

I am feeling pretty good right now about my decision to retire from one career and start a new one. I am enjoying my educational growth as I develop new writing skills for articulation of ideas and classroom teaching skills. Climbing to the mountain top, if you will, has allowed me to take a meta-look at corporate life, and commerce in general, and draw conclusions on the philosophies of economics, management, and leadership. I am enamored by the process, and have found it to be an excellent field to combine my Christian faith with business practice to ensure organizations are effective and efficient, but human friendly too.

Part of my new role is evaluation of current practices within commerce. I try to look at these practices from an academic perspective and debate their value. The purpose of the debate is to generate thoughtful response within my students. Critical thinking will motivate them to decide how they will act when they get into similar situations in the future. Let me give you a couple of examples.
President Obama refused to approve the Keystone Pipeline. I have written in this blog that I felt this was a mistake due to the thousands of jobs this work would create, as well as the elimination of dependency on Arab oil. However, the other side of that argument is with the pipeline we are still dependent on foreign oil, just Canadian oil rather than Arab. Also, as Tom Steyer ad John Podesta argue in today’s Journal, “If we want to cement our status as a leader in the global marketplace, we must extend clean-energy programs like the Production Tax Credit and revive the Manufacturing Tax Credit which helps factories retool for the clean-tech sector.” In other words, rather than looking at the past we need to look forward. This seems to make sense.

Another example of a value debate is the use of Lean techniques in our prison systems. Lean tools are being used by the Stafford Creek State Prison to increase the efficient use of resources at the prison. Examples would be standardized food menus and the use of scan cards to ensure inmates do not eat more than once. Standardization and better controls have yielded savings of about $1.3 million per year on food. Using Lean to save taxpayers some money is the right thing to do.

Having been involved with Lean at my previous company, I see its value. However, how it is accomplished is just as important as measuring results. Getting people involved and engaging them in the design and implementation of lean actions are critical. Administration saves money, and people are engaged in their work and thus more satisfied in their jobs. Or in this case with serving their time.

I love my new career, and I look forward to my new projects: Social Entrepreneurship and Missions and Business. Should be an exciting semester.

And that is my thought for the day!

The Rise of State Capitalism

Last week we had a snow storm in the Portland/Vancouver area. Due to the snow storm, morning classes at school were canceled. Thus my early Wednesday economics class did not meet. Therefore, next week I will need to catch up. One topic I was going to discuss last week was market efficiency. When we leave capitalism alone to work it will become more efficient. It may take different forms, like perfect competition or monopoly, but it does provide an opportunity for all to pursue self-interest. At least that is what the philosophy states.

However, there is a new form of capitalism rising, one that is purported to be the new and improved model. To quote Shakespeare, “me thinks they protest too much.” The name of this new form is state capitalism, and it is very popular in emerging countries. One major proponent of state capitalism is China, but before we go any further we should probably define what is meant by the phrase.

In the 1990’s “most state owned companies were little more than government departments in emerging markets. . .the assumption was that when the market matured, they would close or privatize them.” Now governments like China own companies and are running them for a profit, which in essence is state capitalism. China is not the first nation to operate in this manner. EADS, or Airbus, was started by four governments, but has since evolved into a publicly traded entity. While Singapore ventured into this realm very early.

The fact is for capitalism to work it must be as laissez faire as possible. When government oversteps its bounds and favors one company over another, the other competitors suffer. Also, studies have shown that money and resources are not used as efficiently in state capitalism as in a hands off economy.

State Capitalism is not a fad, it will probably be around for several years. Emerging countries will want to take a hands on approach to economic growth. The West is stagnant, while emerging countries are booming, they desire to make a splash as quickly as possible with their new found wealth. An author writing about this in the Economist stated, “It gives them the clout that private-sector companies would take years to build. But its dangers outweigh the advantages. both for their own sake, and in the interest of world trade, the practitioners of state capitalism need to start unwinding their huge holding in favored companies and hand them over to private investors.”

Then the market can be efficient, and the government can do what is supposed to do, whatever that is.

And that is my thought for the day!

The Benefit Corporation

The temptation I am facing today is to write about the continued failures of our government. However, I think that is just too easy of a target. Our government is going into the tenth ineffective round of deciding what to do with the debt ceiling. On another note, President Obama has rejected the Keystone Pipeline, which created disgust within the Republican ranks. As you can see it is just too easy to take pot shots at our political leaders who continue to take us down the rabbit hole deeper into the world of Alice in Wonderland.

Another easy target could have been Romney and Bain Capital. In an opinion piece in the Wall Street Journal today Daniel Henninger argued that Bain, and other private equity firms, saved United States corporations from the same fate currently experienced by the Europeans. According to Henninger corporate raiders in the 1980’s forced managers to get back to work and improve the effectiveness and efficiencies of their companies. Thus we have the levels of productivity today within commerce that have saved us from a fate worse than death. I have no doubt that if I wrote about that opinion would be diverse.

What I do want to touch on today is a new incorporation law that is revolutionizing social entrepreneurship in this country. This law allows a company to incorporate as a “Benefit Corporation,” which means it is a company that considers social or environmental objectives ahead of profits.  This allows the board and management to pursue social benefits above maximizing profits without the fear of being sued by investors. This is an alternative business model offered in seven states.

Principle-Agent Theory discusses the relationship between owners and managers. It leads to a private property argument driving managers to properly use the owner’s property in a way that provides maximized returns to the owners. If this does not occur then the agent, management, is not properly performing its job. This new business model changes management’s responsibility to provide social benefit first and then a return to the owners. It is not a non-profit model, it is a social business model.

Obviously some would see this problematic. Investors are being robbed of their rightful return. However, investors that feel this way do not need to invest in Benefit Corporations. So I see this as a win-win.

If this would have been available when Ben and Jerry’s Ice Cream started, they would have gone this route. However, now that it is available, the ice cream company, which was purchased by Unilever in 2000, plans to incorporate as a Benefit Corporation within the next couple of months. Unilever has not made any public statements about the plan.

I don’t see this model as problematic to capitalism. I see it as a clear delineation of strategy and business models. Many argue the social responsibility is not a requirement for business, while others, like McKay of Whole Foods, state that it is a necessary part of the modern business environment. Some would say, as Richard Branson does, screw business as usual. This new way of incorporating just clarifies who is doing what. If I am an angel investor who wants to focus on a company that provides a social benefit, I can. If I am an investor who wants to focus on profit, I can. Capitalism wins and so do the people. What a great idea.

And that is my thought for the day!

Power, Corruption, and Corporate Governance

“Power tends to corrupt, and absolute power corrupts absolutely. Great men are almost always bad men.” Bishop Mandell Creighton, 1887.

I would agree with Bishop Creighton that great men are almost always bad men. The operative words are almost always. Jesus Christ was a great man, but He was not bad. John Wesley was a great man, who had a sin nature but had his heart strangely warmed at Aldersgate. This event resulted in an incredible movement that impacted the world and saved a country from the same fate suffered by France.

I agree there are many examples of great people who were bad, so I can’t disallow the good bishop’s comment. We must recognize the fallen nature of humankind, therefore we must admit to the need for appropriate controls within our organizations to protect against power corruption. If you are a CEO of a company with sales of $60 Billion, you have a great level of revenue, more than many countries through out the world. Thus, the danger of corruption is prevalent.

One way that power and corruption is enhanced is when corporate leadership has little or no accountability. Where this practically plays out is in the area of corporate governance, specifically when the board of directors allows the CEO of the company to also be the Chairman of the Board.

This practice is being debated by the Chairman’s Forum, a group representing current and former Chairmen of American and Canadian companies. This group is stepping up its drive to separate the Chairman and CEO positions, thus ensuring a better functioning board and complete separate of duties ensuring better agent accountability.

“The group’s proposed corporate-governance policy endorses appointing an independent director as Chairman after an incumbent CEO-Chairman leave.” The belief is that separation of duties is a much better governance practice.It does appear that more companies are recognizing the importance of this practice. In November, even Apple named outside director Arthur Levinson as Chairman. The argument against this movement is speed of decision-making. “Operational nimbleness,” according to the Dollar Thrifty Automotive Group, “is critical to maintain competitive advantage,” which is why this company just awarded its CEO with the title of Chairman of the Board.

Personally I think the separation is a good thing. It initiates a level of control that will ensure agent efficiency as well as principle oversight. “Supporters of the role split say the setup allows the chief executive to run the business while the Chairman leads the board, recruits new directors and manages CEO succession.”

If power corrupts, and absolute power corrupts absolutely, then separation of duties makes sense. All of us know of examples of business leaders, politicians, and even pastors who have believed they are above the law and the rules don’t apply to them. These powerful individuals forgot who they were in the big scheme of things. I have no doubt that all of us have the tendency to make the same type of mistakes these others did. Thus, we need control mechanisms designed within our governance practices to protect ourselves. I think the separation of duties is a good thing.

And that is my thought for the day!

MLK, Entrepreneurship, and Super PAC’s

This morning I had an opportunity to attend the MLK breakfast at the Oregon Convention Center. Warner Pacific sponsored a table and due to the keynote speaker’s topic the school thought it would be good if I attended. I am very thankful that I was able to attend. Mike Green, who writes for the Huffington Post and is CEO of blackinnovation.org, did an excellent job discussing the similarities between the 60’s and the 21st century. As a solution to the lack of progress, he focused on a couple of activities that seemed very intriguing, at least from my perspective: Black Innovation and Competitive Initiative and the America21 project. The bottom-line to his speech was the need for entrepreneurship. I totally agree with his conclusion.

As a professor I want to help my students become successful. My ultimate goal is helping them find the desire to learn. This, I hope, will become a lifelong goal for all of them. However, in light of this morning’s talk and what I read in Kawasaki’s book on entrepreneurship, I’d like to point out several of Guy’s rules for success. I think they are in line with what I heard this morning.

An entrepreneur is someone who makes meaning. This person is not concerned just with providing a job, but with making a difference. An entrepreneur is someone who has created a product or service that takes us to the next level. Also, the entrepreneur has a mantra, and works on a shoe string because they know how to get things done. The entrepreneur is one who does not ask people to do something they would not do. Success seems to have a character element to it.

We are in a very difficult time in our nation, and character seems to be at a premium. To continue to move forward we need more positive leadership than ever before. This means winning hearts instead of breaking spirits. In 1954 Eric Hoffer made an incredible statement. “Our sense of power is more vivid when we break a man’s spirit than when we win his heart.” This is problematic. Breaking someone’s heart breaks the relationship, while winning the heart is relational and redemptive.

Mitt Romney made a comment today that concerns me. A super PAC that supports him created a very negative add attacking Newt Gingrich. Gingrich asked Romney to take it off the air. Romney responded by saying he would end up in the big house if he talked to the super pac. There are laws that require these big political action committees to be separate from the politicians. The problem with that is the politician has no control over what is being said.

Ted Koppel was on NPR this morning and discussed how this election season just may end up being the most negative in history. Part of this is due to the super PAC having these millions of dollars, and due to limited requirements for truth telling by the Federal Election Commission, I had never heard of the FEC before, PAC’s can say whatever they like, truthful or not. The FCC has strong requirements around truth telling concerning products advertised, but the FEC does not have the same requirements for politicians. Seems really stupid.

Here we have it. We are celebrating a day representing a time and person that changed society for the better. There is also a recognition that free enterprise can help better people’s lives. My morning started so positive. But there is this whole segment of our society that leads this nation, but seem to operate to a different set of rules. They can lie, cheat, and steal, but aren’t held accountable. The older I get the more true the lyrics from the Who become. “Meet the new boss, same as the old boss.” I hope we wake up and tell our politicians and the multi-billion dollar PAC’s that we are going to take it any more. Today is a wonderful day where we remember what positive leadership di for our country, but I hope the negative leadership we are currently experiencing does not undermine our future good.

And that is my thought for the day!