Decisions, Decisions

Like most teams, my project group has had some difficulty making some of our decisions over the last few months. To be fair, we've done a fairly good job of making smaller decisions regarding tasks or even individual roles. But coming to a consensus on bigger content-oriented questions has been difficult at times, and set us back on the project timeline. Last quarter we didn't pick our problem statement until about a month into the quarter, and we're still picking the organization we'll be auditing this quarter.

So what goes wrong to cause decision-making so difficult in teams, and what can be done to make these decisions easier?

We decided to read "when teams can't decide," an article by Frisch in the Harvard Business Review.

Frisch argues that one of the big problems is that many teams don't ask the right question when a decision needs to be made...

He also talks about the executive decision when an impasse is reached, and how it can lead to resentment and lack of buy-in.

So how can teams come to a decision that will be accepted and embraced by all the members? In a group of four like ours, this buy-in is extremely important.

I think we'll need to frame the question and desired outcome better. What exactly are we looking for from the organization we pick? Do we want an organization that is a leader in the field so we can build on what they're doing right? Maybe we want a company that is making good money? Maybe we want to look at an organization with the same mission statement as us but which is struggling so we can make some helpful recommendations? Or maybe we want someone who will be excited to work with us and share lots of information.

If we can agree on some criteria first, then I think that picking an organization will be much easier.

Back at it with an interesting concept for student loans!

Hi everyone! After a nice long break it's time to get this thing going again.

Having learned last quarter about the current systems in place keeping so many low income students from finishing college, this quarter we will be looking at an organization that is currently working to address this problem. We will then recommend changes that would make that organization more effective.

Something my team discussed at a recent dinner was the idea of tying financial aid to personal and career counseling. As we found last quarter, two of the most important reasons for college graduation failure are finances and stress. What if we could kill wo birds with one stone? What if we required that, in order to receive a low-interest loan, a student must meet with a counselor twice a month to work on personal issues holding that student back? Could we assure financial stress relieve coupled with significant improvement in stress management and life skills? Could this significantly help with college graduation rates for low income students?

First, we need to answer a few important questions.

How do we sell the idea to investors?

Investors want to have reassurance that either their investment is low risk, or that their risks are balanced by a high potential payoff. I believe that the former would be the main argument we'd have on our side. Here's why: Most of the risk involved with student loans is the threat of missed repayment. Students who don't graduate have a hard time finding a good job. If they don't get a good job, then they can't repay their loans. If we can do something to significantly increase graduation rates and get good jobs, even if that costs more, we can increase repayment and potentially offer loans to students traditionally considered "riskier" and offer lower interest rates. I believe the costs of providing counseling would be minor and be offset by higher repayment rates. But even more importantly, this could make significant strides in lifting low-income students out of poverty.

What would the students be coached in?

Personal development, career development, study skills, stress management, relationship management, and financial management would be a few of the areas in which any student would greatly benefit, but especially a low-income student. The content would be similar to what we focus on in Leadership and Personal Development at BGI, but tailored to undergraduate students. Counselors would be trained in and focused on helping students to graduate and find a successful, fulfilling career. Upward bound might provide a useful model for coaching and counseling students.

Of course, there's still some research we'll need to do, such as the effect of counseling on student graduation, typical student loan rates, and the cost of providing counseling, but I believe this may be a great opportunity to greatly impact the lives of many students and begin to address income inequality in our country.

 

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Consumer Christmas

[This post was meant to be written on December 9. Instead, I waited 'till the eve of the apocalypse for additional emphasis.]

After weeks of academic writing, it's time to let my hair down a bit and share some opinions! I just finished my Christmas shopping. All in all I think I spent $160 dollars, mostly on useful new things, some made-in-Seattle candle holders, and a few vintage records.

However, by tradition, my maternal extended family insists on a yearly $50 gift - we draw names from a hat and give that person something they probably don't want or need, since it would be rude or shameful to ask for something specifically. And besides, Christmas is about extravagance, not usefulness. It's the most shoppingest time of the year!

This gets me thinking about consumerism in our culture. Last week (let's call it that) I wrote a bit about gross national happiness as an alternative measure to GDP. Consumption is a major driver of GDP in America, and the holiday shopping season is often touted as vital for the American economy. Christmas has the power to create jobs, defeat the terrorists, and save America from certain doom!

According to a recent Gallup poll, Americans on average plan on spending $770 on Christmas gifts this year. 30% plan on spending more than $1,000. While this is off from the 2007 peak of $866, this is still a lot of money and will certainly put a dent in the finances of many Americans. So why do we spend so much on Christmas?

Are we Brainwashed?

Think about it.

Ho-Ho-Hos

Garland

Giant Red Bows

Twinkly Lights

Candy Canes

Jingle Bells

The Smell of Freshly Cut Fir Trees

It's like one giant Pavlovian orgy intended to get us to spend all our money in one month. At the first three notes of "Deck the Halls" we're bending over and asking how much it'll cost us. Then we wake up the day after Christmas and ask ourselves why Christmas just didn't feel like Christmas this year. Wash, Rinse, Repeat.

From our first winter as a child, we are brought up to expect magic every year on December 25. We're told tales about a big fat man with a beard whose sole purpose in life is to stealthily give us useless toys in exchange for some cookies and milk, so long as we're good for the two weeks leading up to Christmas. It's all an elaborate bribe as far as I can tell, perpetuated by the companies who profit from our out of control spending: advertising agencies, toy manufacturers, Macy's, Walmart and Target.

Is Christmas really that great for the economy?

A CNN Money article (from Canada where they're experts on Santa) discusses this question and finds that, with so much of our money going to Asian manufacturers, the economic impact of Christmas may not be as significant as we've been told. Add in the argument that our money is being spent inefficiently on things with little use while building up debt that will hamper future spending, and the case for the Christmas boom sounds a little bit shaky.

And of course this is ignoring the immense environmental impacts of an elaborate Christmas. For instance, how much of our wrapping paper and ribbon is simply thrown away after one day of use? How many gifts are manufactured using coal, shipped to America using bunker fuel, and trucked to warehouse, store, and home before sitting idle and useless in a closet until they are rediscovered and thrown in a landfill? Could this energy and money not have been used for something worthwhile? Paying off household debt, for instance, or donated to a charity? And of course all of this is mere distraction from the things that make the holidays meaningful: goodwill, family, charity, and staying sane during the dark of winter.

An alternative Christmas

I fully intend to institute a gift-free Christmas next year, in order to focus on those closest to me. Eggnog, twinkly lights, candles and a wreath should be enough to have a cozy Christmas with loved ones. I'll just have to see what my family thinks about breaking with tradition.

Toward a new meaning of success

 Something I've been thinking about lately - and which we've discussed in class - is the idea that our measure of economic success is off. For decades our government and economists have focused so much on growth in Gross Domestic Product without thinking about whether GDP is a worthy measure, or what our true goals are. GDP basically measures how much money changes hands in the economy but doesn't measure all of the other transactions and activities that help to provide quality of life. When someone does a home repair or babysits their grandchildren, GDP measures these as less valuable than, say hiring a repairman or sending kids to daycare, because no money was changed hands. However, I would argue that these activities performed by self or a loved one are more valuable in improving one's happiness.

Even more, is a family dinner, a hike, a bonfire at the beach, or a hug represented in the GDP? Only marginally. GDP seems to only measure one element of the life of a country, and yet it is often held up as THE main indicator of the progress of a country.

So what should we be measuring?

Let's start by examining a few elements that make a good place to live.

• Personal freedom. 
• Social mobility. 
• Support of family and friends. 
• A healthy environment. 
• Useful infrastructure. 
• Access to work and knowledge. 
• Access to healthy food and quality shelter. 
• Freedom from crime, fear, and government corruption.

Few of these are measured by traditional economic metrics. What do they all have in common? I would say they are all means to one common end: human happiness.

Toward a measure of gross national happiness

Bhutan has begun to use  "gross national happiness" as its main measure of national success. That is, if the economy is growing by western standards but its people are unhappy, the government must act to improve the quality of life of its citizens. I believe we should consider following this model.

The GNH index used by Bhutan measures the four following pillars:

• good governance
• sustainable socio-economic development
• cultural preservation
• environmental conservation

Those have been further divided into nine "domains:"

• psychological wellbeing
• health
• education
• time use
• cultural diversity and resilience
• good governance
• community vitality
• ecological diversity and resilience
• and living standards.

I believe that if the United States were to begin incorporating such a measure into our national goals, we would all be better off, and we would do things quite differently. Rather than simply focusing on the bottom line, we would begin to make strides toward the well-being of the economically disadvantaged. Indeed, some of the harmful economic activities so prominent today might begin to lose their luster as we begin to focus more on what truly makes human beings happy.

Fiscal Policy and Unemployment

Sorry everyone, this post is going to be short tonight as I'm fighting a bug and really need a full night of sleep. This last week has been challenging as I try and fit in more schoolwork to an ever busier week. I'm confident I'll strike a balance as I move from a mode of scarcity to a realm of possibility, but whoever said that November was going to be a difficult month in our first year at BGI was right!

Anyway, we've been discussing fiscal policy and its effect on the economy. Expansionary fiscal policy can directly effect GDP and create more jobs. One question that we need to ask is, can we combine expansionary fiscal policy with investments that will make long-term benefits for the economy and society as a whole? The Bush tax cuts and military spending hikes may have grown the GDP, but at what expense? Arguably, we made the rich richer, the poor less secure, and created a culture of fear and instability, while partly setting the stage for the largest recession in recent memory. This led to more power in the hands of the powerful serious tension and polarization in our politics. Hardly a positive development.

On the other hand, the American Reinvestment and Recovery Act (or ARRA) of the last four years, while modest, has sought to invest in infrastructure projects and various programs that can have a lasting positive impact. Particularly valuable is the investment in public transportation, which benefits the middle class and improves connections within and between cities. The construction projects themselves provide thousands of jobs, while the systems, once running, will also provide jobs while improving connections between people, which can help lead to a more vibrant economy. Like the great freeway expansion of the Eisenhower era, creating something valuable and tangible with our government spending has the double impact of injecting money into the economy immediately and supporting long-term economic health.

Assets and Liabilities

Goodness gracious! Another busy week. I committed months ago to hosting a Halloween party on Friday, without understanding how much time and energy my coursework would require. It was a fantastic time and one friend even called it "the party of the year," but I'm paying the price right now. Time and energy are a limited asset at the moment, while I suppose sleep debt is a short-term liability. Basically, I feel like I'm over-leveraged right now and that won't change until my work schedule subsides next week. (How's that for internalizing our economics lingo?) Live and learn.

Some of the research and reading I've done this week has centered around structural versus cyclical unemployment, and their roles in the current economic climate. Structural unemployment refers to a mismatch between jobs and workers. That mismatch can be in skills, geography, experience, or any number of other factors. As the economy changes along with the types of goods and services we consume, there will naturally be a mismatch as workers in old industries will lack the jobs for new industries. While I'm sure this plays some part in the currently high under- and unemployment rates, this Atlantic article and this Reuters article both argue that the more pressing and dominant issue is the overall lack of jobs. In fact, according to Economytrack.org, the number of unemployed workers per job opening peaked at over 6 in 2009, and is still hovering above 4. And high-school graduates fare significantly worse than college graduates in competing for middle-education jobs in the current economy.

So maybe adequate or appropriate education (or lack thereof) is not the dominant issue facing recent college graduates. If much of the workforce is overqualified, then the real goal should be job creation, not reeducation. But what about jobs outside of the current employment system? Can we just sit around and hope that something will change and all will be okay? Some on the right think that simply cutting the taxes on the rich will fix the economy, but Norm's recent blog post suggests otherwise. And what if the current economic system is broken? Perhaps limited participation in the existing system of greed and exploitation is possible. Perhaps there are other ways to live a productive, comfortable, happy life outside of corporate America.

As Jill mentioned in a comment last week, there is a growing trend of young people creating their own economic opportunities - creating a new economy where the roles of giant corporations are limited and flexibility and relationships are paramount. For instance, Airbnb hooks up vacationers with property owners who want to rent out empty rooms or homes for some extra income. Taskrabbit allows people with valuable skills or physical resources and free time to bid on tasks ranging from raking leaves to planning a party. Time banks offer a similar function, except helpers are paid in time credit, which they can then use to pay for other services from members of their communities.

These are just a few ideas for how we might improve income among unemployed and underemployed college graduates while providing more meaningful interaction and services. But how about the psychological impact of the last four years, and the feelings many of us hold that we are now outsiders, disenfranchised from the mainstream of society? Can these alternative economies start to heal the wounds of unemployment and disappointment, or will it take a wholesale shift in the economy for the disenfranchised to feel validated? I hope to examine that in next week's blog. Stay tuned!

What's holding college grads down?

Now that we're moving into systems analysis in our group projects, I thought I'd take a first swing at some of the reasons why I think recent college graduates are having trouble finding meaningful work. Sure, as Norm mentioned in a recent blog post, GDP is up 2% over the last quarter. That's great for those whom it helps, but there are still huge amounts of people who are down and out, even college grads. Let's examine what's keeping them back.

Fewer Jobs

Of course, this is the most obvious reason. Jobs are indeed harder to come by in the current economic climate than they were 10 years ago. This is due to a number of factors. Besides the general economic malaise with its accompanying layoffs and lack of hiring, the nature of the American economy has shifted over the last 50 years, from a manufacturing-based economy to a financialized and monopolized economy, where the presence of large firms and their economies of scale means fewer employees are needed for the same amount of work. Technology, such as computers and robots, has also made some jobs redundant. For instance, significantly fewer workers are needed to make a car than were needed 50 years ago. I think that lots of these traditional jobs are gone and will never come back, and the recent economic depression only hastened that process. 

Lack of Confidence

On an individual and personal level, being out of work, whether after graduation or a layoff, can be extremely damaging to someone's confidence. That lack of confidence can limit the goals one sets and the energy to pursue those goals. One can feel unmotivated and much less willing to take risks, especially when those risks involve spending money. Lack of confidence can also hurt performance in interviews. I think this is a self-reinforcing cycle until a major change helps to break the chain. This is certainly the case for myself. It's been nearly 3 years since I was laid off from a consulting job that I was fortunate to land after college. The hung-ho, confident outlook I had through college is only now starting to return now that I'm at BGI and surrounded by such an amazing community.

Misplaced expectations

On the flipside, the Echo Boom was one of the most privileged generations in the history of the world. We expected things to be easy for us - that college would put us into a stable, well-paying job with a comfortable retirement. We expected convenience and immediate gratification. Perhaps we even expected a hollywood life, because that's what we're bombarded with on TV. We expected an easy life. Perhaps we were too complacent. Perhaps growing up in comfort, we missed out on the do-it-yourself ethic that our great-grandparents knew. But this is changing. We've learned some hard lessons, and a new bottom-up economy is emerging in the vacuum. 

Insufficient Education

Perhaps one of the problems is the degree itself. Or to be more specific, the content of the education. Maybe colleges aren't putting enough resources into preparing college graduates for a changing job market in which things are no longer neatly laid out for us. I was fortunate to have a career-oriented degree in which resumes, cover letters, team-building and conflict resolution were part of my coursework, but many students, particularly in the liberal arts, have no clue as to how to build a career outside of academia, due to no fault of their own. 

These are just a few contributing factors in the underemployment of many college graduates, and I'm excited to explore more soon.