Recently, in a variety of settings I am observing the issue of trust impacting business relationships.

Obviously, trust is at the foundation for business transactions – that the vendor will provide the goods or services purchased, that the goods or services will be at the quality level described initially, and that the customer will pay for the goods or services in the time frame agreed upon.

Another area of business where trust is impactful is in the employer / employee relationship – where the employer follows through on commitments communicated to the employee and the integrity level of employees to be trusted to access to information and resources.

This past week I was talking to a business owner who described a situation where he had hired a sales manager (in early 2008, prior to the financial crisis hitting) who in turn started hiring a fairly high cost sales staff. Whenever the current owners or management team raised issues or asked questions of the sales manager, he reported replied, “Do I have to earn your trust or earn your mistrust?” (implying they should trust him until he proved untrustworthy.)

I replied that this was the wrong question. And, in fact, I find much communication around the issue of “trust” is not laid out properly. I do not believe that the question is: “Do I trust you?” (or “Do you trust me?”). This is too broad.

Trust is situation specific. The more appropriate question, I think, is: “For what do I trust you?” Or, “What am I willing to entrust to you?” (responsibility, privileges, resources). I may trust you to hire staff within a budget amount but I may not trust you to have total access to all of the company’s financial data. Or, I may trust you to pay bills with appropriate procedural checks and balances but I don’t trust you to have total access to the company’s financial resources without monitoring.

Think back to common family situations. Teenagers often complain to their parents, “You don’t trust me!” But again, the real issue is “trust you to do what?” I do trust you to choose good friends and to tell me the truth about where you are going, but no I don’t trust you to drive three hours late at night in a car with four of your friends on a snowy night.

Generally speaking, trust is earned — either from prior behavior with other individuals (that is why we trust professionals who have gone through training and certification in their profession, but we often also check references of people with whom they have worked) or in their behavior with us. We trust others (in the defined areas of responsibility) based on previously demonstrated responsibility in similar areas.

[I do admit that in many daily interactions we confer trust to others when we have no specific basis to do so, other than assuming most people are trustworthy in daily life transactions. However, this level of trust varies greatly across individuals’ own personal history and life experiences.]

I find that people (both business owners and parents) tend to get “burned” when they give more trust and responsibility to others when the person hasn’t demonstrated a basis for that trust.

A second area where I find business owners and managers tend to get taken advantage of by others in the business world is when they ignore early warning signs of mistrust. Partly due to the self-reinforcing tendency that we don’t want to admit that something may be wrong (and that we made a mistake in hiring this person), and sometimes partly due to people’s propensity to want to believe the best of others - we wind up overlooking early warning signs of a person not being trustworthy. As a result, we continue to entrust responsibilities and resources to the individual and find out later they weren’t trustworthy in how they handled the responsibilities - digging a deeper hole and creating more problems for the business.

So, where do we go with all of this?

First, I would suggest to accurately define the parameters of trust in relationships. Using a framework such as, “I am willing to trust you to…” Sometimes, it may be appropriate to say, “I am willing to trust you with… because you have shown yourself responsible by… ” Additionally, sometimes you may need to add, “…but I don’t feel comfortable yet in giving you the responsibility to …” Finally, it is helpful to clarify what responsibilities need to be demonstrated in order for you to trust the individual with more areas (this is really helpful in dealing with teens - versus the arbitrary “when I feel comfortable”.)

Secondly, I would strongly encourage each of us to pay attention to early warning signs of problem behaviors. This can take many different forms, including:

*the facts just don’t add up

*you are getting reports from clients and customers and other trusted team members, about some problems in a team member’s behavior

*the team member responds to questions and challenges with a “don’t you trust me?” type of response

*the team member is quite adept at making excuses, blaming others or circumstances versus admitting they made a mistake or error in judgement.

How should you respond to early warning signs?

a) talk to the individual about your concerns; often your concerns may be due to misperceptions or miscommunication;

b) obtain verifying information by an independent third party;

c) set up processes and procedures to monitor transactions

d) document the issues and behaviors which are creating concerns for you. Often the weight of evidence over time becomes significant, while no one specific incident is that large.

I think it would be wise for each one of us to consider the following old saying,

“Wise individuals see danger ahead and avoid it, but fools keep going and get into trouble.”

Would you like to:

• remember better what you have read?
• hold onto more information in your head?
• be better at figuring out multiple-step math problems?
• remember where you place items?
• recall what you wanted to say earlier in a conversation?
• not forget what to get from a room you just went into?
• stay mentally focused better during conversations or lectures?
• not be so easily distracted by noises and actions around you?

If so, then welcome to the field of cognitive training (or “brain training”, as it is called by the popular media.)

This weekend I had the opportunity to attend a conference in Austin, Texas for a gathering of international experts (from the U.K., Sweden, Japan, Canada, and the U.S.) on one form of cognitive training — that which focuses on a core skill called working memory.

Working memory (as compared to short-term memory or long-term memory) is the ability to hold onto information while you are using it.  It is the combination of short-term memory and processing information.

So working memory is utilized when you:

• read instructions for installing a new garbage disposal in your kitchen and you try to remember the first three steps.
• are downstairs and make a list in your head of the things to remember to get from your basement.
• are running errands and you have a list of places to remember where to stop.
• try to figure out in your head what a 15-20% tip would be on a meal costing $45.00 .

This weekend we were exposed to new, and exciting research on how children’s, adolescents’ and adults’ working memory can be improved through computer-based training and its practical impact on their lives.

For example, we heard about:

  children survivors of brain tumors and leukemia. These children often lose significant cognitive, intellectual and academic abilities as a result of the chemotherapy and radiation therapy they receive.  Research being conducted at Duke University Medical Center is finding that working memory training appear to be able to reverse the losses previously experienced.

  autistic spectrum children and adolescents who also have problems with attention and poor mental focus. A multi-disciplinary outpatient treatment facility in Michigan is finding that, in addition to treatment by medication, computer-based working memory training often has positive effects on the social and emotional functioning of these students.  Parents report fewer “emotional meltdowns”, more awareness about their feelings, and better impulse control.

  elementary school ADHD students.   A group of researchers in the U.K. have found that after completing a working memory training program for five weeks, students’ academic abilities improved in reading comprehension, math reasoning, and being able to follow multiple-step classroom instructions.

Additionally, researchers are finding that:

 -working memory ability is a better predictor of academic success than students’ IQ scores.

 -deficits in working memory are highly common for children with genetic disorders.

 -traditional classroom instruction requires high levels of working memory for students.

 -students with low working memory: a) forget crucial information; and b) fail to successfully complete tasks.

To learn more about working memory, what it looks like in daily life, and to take a brief working memory assessment, go to www.aboutworkingmemory.com . 

There is a fascinating website that shares individual’s stories (preschoolers, school-age students, adolescents, and adults) who have been helped by receiving training for their working memory abilities.  And for those of you who would like to find out more about the training itself, visit www.workingmemorysolutions.com or www.cogmed.com . 

These are exciting times in the area of brain training and its impact on our daily lives!

I don’t know about you but a lot of my daily life can be contaminated by anxiety – not major, life-crippling anxiety, but those small little worries about daily life activities and events.  And if I am not careful, anxiety can almost rule my day.  While I’m doing one thing, I’m worrying about the next event or meeting.  What a waste.  It is not the way I want to live my life.

So let’s talk about ways we can manage these worry-focused thoughts.  First, let’s briefly define what anxiety is. 

First and foremost, anxiety is fear (usually a “small” fear).  We are afraid we are going to be late.  We worry about what others will think of us.  We are concerned about being adequately prepared for a meeting / speech / test / presentation later this week.

Secondly, we can note that worrying and being anxious is about the future – something that is going to (or may) happen at some point after “now”.  We don’t worry about the past, although we may worry how our past actions or decisions will impact the future.

Finally, most anxiety has some component of circumstances you can’t totally control.  Some people worry about the weather, others about the stock market, or traffic; some are anxious about what other people will think about them.  [Think about it – if we are worrying about things totally under our control, we could effectively manage the anxiety by just doing the action necessary.]

Now let’s identify the three most common responses to anxiety (I seem to be thinking in “3’s” today):

            1. Action.  A lot of people (myself included), do something when they are anxious.  It may not be productive activity – but doing something gives the person a sense that they are helping the situation (this may or may not be true).

            2. Paralysis.  Others tend to become paralyzed when they are anxious.  They don’t know what to do, so they withdraw, become passive and do nothing.  Frequently, these individuals also become highly internally focused, focusing on their thoughts and feelings.

            3. Rumination.  This is the third response, that can go with either action or paralysis.  Some people focus on what they are worrying about – and continue to think and talk repetitively about their worries.  This response can lead to a self-stimulating cycle of increasing anxiety.

So, what can we do when we are anxious?  Here are some ways to manage ourselves:

            *Limit the amount of “future” that you allow yourself to think (and worry) about.  Since worrying is all about the future, the more “future” that you allow yourself to be concerned about, the more opportunity there is for things to worry about.  So just focus on today – take “one day at a time”.  In highly stressful circumstances, you may even break the day into smaller segments (“I’m going to get to lunch, and then figure out the rest of the day after that.”)

            *Determine what you can do to manage the risks you are concerned about.  If you are worried about getting a low grade on a test, make a plan and schedule to study for it.  If you are concerned about ‘blowing’ a presentation, prepare the best you can.  If are anxious about being late to an appointment, leave early and allow extra time for unplanned events.  Make sure and take small steps to implement the plan.

            *Avoid people, unnecessary situations or input that increase your anxiety.  There are some people who are chronic worriers and have a fearful approach to life.  If I  am anxious myself, I try not to be around these people too much so they don’t feed my own anxiety.  Or if I am worried about the economy and my retirement savings, I will limit how much financial news I will expose myself to.

            *Distract yourself with positive activities.  Sometimes there are situations where all you can do is ‘wait’ (for example, waiting to hear if you were accepted into the college of your choice; or waiting to hear if you got the job you applied for).  When there is nothing you can really do to make the situation better, it may be good to go ahead and live life – go for a run, spend some fun time with friends, do some other work or tasks that need to be done, read a book, help somebody else in need.

            *Be thankful for the positive things in your life – especially the ‘little’ things.  Gratitude is a great antidote for a lot of negative things in our lives, including anxiety.  Look for little daily things that you appreciate – food to eat for breakfast, a nice cool morning, being able to work inside when it is raining outside, having family and friends that care about you, a car that starts, and so forth.

            *Build competencies into your life that will help you deal with ongoing challenges in your life.  Sometimes there are circumstances in our lives that are going to be there for a while – financial hardship, long work days, being away from family and friends.  And it can be helpful to have a longer term view on dealing with these situations – figuring out what you can build into your life that will help you long-term in dealing with the challenges you face.  Work on a ‘tighter’ budget, figure out some ways to earn a little extra money, develop an exercise program, learn how to use Skype to keep in touch with people over long distance.

So, that’s it. For those of you fellow-worriers or anxiety addicts, maybe there will be some advice that can help reduce your daily anxiety level.  Have a great week!

This week I had the opportunity to attend a conference where both John Townsend (author of Boundaries) and Henry Cloud (author of Integrity) spoke on leadership.  Here are some notes of thoughts that I felt were interested and helpful.

John Townsend

Research is verifying the relationship between character, interpersonal skills and performance outcomes.  That is, if you work on the “inside” issues you will see improvement in performance outcomes. (See below for why this is the case.)

Life is more than making right choices – doing cost/benefit analyses.  There are two sets of information that leaders need to listen to – external (verifiable objective facts) + internal (listening to your ‘gut’).  True reality is a combination of objective information plus subjective intuition.

Values  — values are those things that you believe in to the point that they dictate your decisions.

Leaders need to focus less on what the mission statement says their core values are, and get an objective observer to share the values they observe in how the organization actually functions (i.e. focus on what their values are versus what they should be.)

The pendulum is swinging in leadership development from a pure focus on strategic planning, setting goals, managing by objectives, and the variety of technical processes to improve performance to also paying attention to the emotional side of life (and business).  Not focusing on feelings for feelings’ sake, but understanding that feelings play a role in both decision-making and in working as a team.

In decision-making, feelings play the role of relaying signals to the leader – signals that need to be paid attention to and investigated.  Anxiety (or concern or fear) is signaling that there may be a potential danger to heed.  Investigating the reality of the risk and taking steps to manage the risk (if it is real) is wise.  Ignoring the signal could be reckless.

Interestingly, Townsend indicates that the positive function of anger (irritation or frustration at lower levels) is an indication that you have a problem to solve – something is going on that you don’t like.  Now the problem may be internal – that you have unrealistic expectations that aren’t being met.  Or the problem may be external – that someone’s performance is not acceptable and needs to change.

A third emotion he cites that is critical to the business world is passion.  I personally have never considered passion as an emotion previously.  But it makes sense.  Townsend describes passion as “focused desire”.   And most successful leaders have or have experienced passion – that burning desire to do what they are called to.   A challenge for some leaders is that they lose the intensity of their passion / desire over time (which is a whole additional topic of discussion), while others struggle in maintaining the focus of their passion.

[Out of deference to Dr. Townsend and his intellectual capital, I am not going to list all of the positive and negative emotions he addressed in his book Leadership Beyond Reason:  How Great Leaders Succeed by Harnessing the Power of Their Values, Feelings, and Intuition.  Get the book – it is a good, solid leadership book with a unique perspective on the role of feelings in leadership.)

Townsend also believes that emotions play an important role in working effectively together with team members  — negative emotions among team members impede effective functioning, while positive feelings between colleagues facilitate better performance, both individually and as a unit.

He also describes the power of emotions in bringing to mind past relationships (what he and other psychologists call “internal relationships”) – those people who influenced us significantly in the past (parents, teachers, mentors, coaches) and still influence us “in our head”.  Dr. Townsend gives excellent examples of how leaders become stuck in their personal and leadership development because they can’t get past old messages from internalized relationships (“You’ll never amount to anything.”  “In the end, you’ll always screw it up.”)

A key application for me is that both Dr. Townsend and his colleague, Dr. Henry Cloud (whom I also heard) are seeing the need for coaching in the “middle space” for leaders.  There is plenty of coaching and leadership development in the strategic planning, becoming a change agent, etc. space.  And many leaders don’t need (or won’t get) heavy duty “counseling” focusing on personal problems.  But Dr. Cloud argues that there is the “middle space” that needs to be addressed – where a leader’s personal development has not kept pace with the growth of his organization and his or hers resulting responsibilities.  So there is a gap between the weight of their professional responsibilities and the development of personal skills and abilities to effective manage the demands.  Issues in this middle space include recurrent patterns of interpersonal difficulties (types of people you don’t work well with),  anxieties and fears that are making you hesitant to make decisions, personal and family  issues that are interfering with your performance by sapping your emotional energy, etc.  Business leaders need help working though these issues so that they can continue to become more productive leaders (which is the goal of the process).

One last interesting point Dr. Townsend  made about leaders.  Leaders are essential persuaders – they persuade others to follow them.  Initially, they do this by casting vision, identifying goals that will lead to the vision, communicating out a plan to reach the goals and then inspiring his team to share the vision and implement the plan.

But there is a difference between initially persuading followers and keeping them engaged.  For team members to continue to stay engaged with the vision and task, they need a sense of being listened to , understood and cared for by the leader.  This is a different skill set than the initial persuasive skills and many leaders either haven’t developed, don’t value or don’t practice the empathic listening to their team – and this ultimately leads to loss of enthusiasm, discouragement and conflict – for the unheard team member will find someone who will listen to them (other colleagues, other leaders) and this can lead to discontent and division within the team.

I’ll stop there.  “He who has ears to hear, let him listen (and act!)”

Given the multiple “hats” that I wear professionally, some people know only about certain areas of service I provide (for example, consulting with successful business families) and not with other areas (evaluating individuals with ADD / ADHD and learning difficulties).  So I thought I would share some about the ADD / ADHD side of my work.

Although many people talk about “Adult ADD”, from a professional point of view there is no “ADD” anymore.  It all falls under ADHD, even for those individuals who are not hyperactive nor excessively fidgety.  There are actually three subtypes of ADHD:

• the hyperactive - impulsive type (sort of the classic “wild boy” that many people think of when they think of “hyperactivity” — on the go non-stop, high energy, difficult to control, loud (often), accident-prone (because they move or do things before thinking about them), etc.
• the inattentive type.  This used to be called ADD without hyperactivity.  These individuals primarily have a hard time focusing, concentrating, are easily distracted, lose their train of thought.  In girls, they were sometimes referred to as “airheads” or “space cadets”.  Guys were referred to as the “absent-minded professor-type”.  These people aren’t hyper or fidgety but they lose things easily, and are pretty disorganized.
• the combined type — that has some aspects of both.  This individual could be a “full-blown” ADHD person who is hyper, impulsive and distractible.  Or they could just be inattentive, distractible and impulsive.

A key point to note is that the person does not have to be hyperactive to be ADHD.  This is often confusing to people — I frequently hear “Well, he can’t be ADHD because he isn’t hyperactive — maybe ADD, but not ADHD.”  And I understand what the parent is saying. It is just that (from a professional’s use of the term) really no one is just ADD anymore.  [But parents and teachers still frequently use the term.]

I have been evaluating individuals with ADHD for over twenty years now, and have seen 4,000 plus students (from 5 years old to senior adults).  And frequently, after evaluating a school-aged child, the parent (often the father) says — “You know, J.D. reminds me of me as a child.  I really struggled with the same issues — and still do.”   This then can lead to an evaluation of the parent and, lo and behold, they also are ADHD (research shows that about 50% of fathers of ADHD students are ADHD themselves.) So let’s talk a little about Adult ADHD and what it looks like.

1. First, it is important to note that many very successful people are ADHD.  Some of the characteristics of ADHD (high energy, being socially outgoing, a risk-taker) help individuals become successful entrepreneurs, salespersons, entertainers, athletes, and law enforcement officers.  (You don’t tend to find too many ADHD accountants or actuaries!)  But it is also important to know that these same character qualities limit these professionals success — risk-taking in moderation (with appropriate judgment, due diligence, and risk management) can be good.  But excessive risk-taking — without the necessary ability to “wait and see”, investigate further, etc. — can lead to poor decisions with damaging results.
2. Secondly, just like ADHD students vary tremendously in their individual profile of ADHD characteristics, so do ADHD adults.  Having said that, there are some common daily life symptoms:

*Great starters. Poor finishers.  ADHD adults are often imaginative and creative.  They come up with great ideas, and even start out on the new path with lots of energy.  But they quickly can become distracted, discouraged, or overwhelmed with the details to make the project work.

*Struggle with managing paperwork.  ADHD adults can do some paperwork, for a while.  But too much paperwork overwhelms them.  And they have a hard time keeping on top of a lot of paperwork over time.  They build piles on and around their desk.  And they usually need the help of a very effective adminstrative assistant (or spouse) to clean up their piles.

*Forgetful.  An ADHD adult would “forget their head if it wasn’t connected”.  They lose their keys, their wallet, their glasses, their checkbook, important paperwork, . . . One of their most used phrases is “Has anyone seen my ….?”

*Time management issues.  Some ADHD adults tend to be chronically late to appointments, not having a good sense of time.  Others, because of their struggles in this area, overcompensate and leave early for appointments — so that they won’t be late.  A large number of ADHD individuals tend to underestimate how long it takes (or will take) to complete a task — and so they are always running up against the deadline to complete the project.

*Impulsive behaviors.  Think about doing or saying things “on impulse” — and that is the struggle many ADHD adults have.  They speak they mind bluntly.  They interrupt others.  They make quick decisions without thinking through all of the issues.  They spend money quickly and easily.  They can be impatient with others (or circumstances).  They can be easily frustrated and have a quick temper (especially when they are tired, hungry or stressed.)

*Struggle with focus and concentration.  Many ADHD individuals complain about not liking to read (they rarely read the assigned books in high school or college).  They can’t remember what they just read.  Sitting through lectures is torture for them.  They can just sit and watch TV or a movie — they have to be doing something else at the same time.  They forget what they were just going to say, or why they came into the room (it is probably a different issue if you are 50+).

There are lots of other common symptoms of Adult ADHD; these are just a few, but they give you a start.  For more information go to this website on diagnosing ADHD in adults.

So what to do if you think you, your spouse, your boss or your business colleague is ADHD?

First, find out some more.  A couple of good books are Driven to Distraction and Delivered from Distraction, written by two ADHD doc’s, Hallowell & Ratey.

Second, see what resources are available.  www.addwarehouse.com has numerous books and videotapes on Adult ADHD, including ones specifically for women.

Third, it is important to know what treatments are available.  Most people jump to the conclusion that treatment by medication is the only alternative.  Although medication can be helpful, there are other ways to help ADHD adults.  Coaching for ways to manage their primary problem areas can be effective.  Also, there is a relatively new computer-based cognitive training program that has been shown to be highly effective as well.

I could say a lot but more, but for those who really need this, I’ve already pushed the limits of their ability to focus this long.  Have a great week!

I like to learn from others who have been successful.  In our culture, some people look to successful business leaders; others look to athletes or entertainers.  I find some of the best advice from wise people from the past — from classic literature from previous civilizations and cultures.

Here are some thoughts from a king and writer of literature from about 3,000 years ago:

Wisdom in the most important thing; so get wisdom. If it costs everything you have, get understanding.  Treasure wisdom, and it will make you great; hold onto it, and it will bring you honor.”   He goes on to espouse the pre-eminence of acquiring wisdom, and that it will lead to virtually everything else good in life — wealth, influence, health, and peace.

So the question becomes — how does one become wise?  The author responds to this question:

Don’t follow the ways of the wicked; don’t do what evil people do.  Avoid their ways, and don’t follow them.  Stay away from them and keep on going, because they cannot sleep until they do evil.

The author then lays out the principles for obtaining wisdom:

1. Be careful what you think, because your thoughts run your life.
2. Don’t use your mouth to tell lies; don’t ever say things that are not true.
3. Keep your eyes focused on what is right, and look straight ahead to what is good.
4. Be careful what you do, and always do what is right.
5. Don’t turnoff the road of goodness; keep away from evil paths.

So to summarize, he encourages his readers to:

• manage their thoughts,
• watch what they say and speak with honesty,
• keep focused on the good
• act with integrity
• keep away from those who repeatedly make poor choices.

I find these thoughts interesting and applicable to our lives today because there are so many voices telling us what to do and how we should live.  Being past 50 years old and having had the opportunity to view different economic and political seasons, it has become more evident to me that living according to patterns of behavior that have been proven over long periods of time (decades, centuries) is wise.

Although some patterns (leveraging business ventures through credit, buying now and paying later for personal purchases) can work within a short time frame or certain conditions, living within one’s means, saving for the future, and taking preventative steps to manage potential risks seem to work well over the long term.  They are not as exciting, and also are not as potentially rewarding within the short term.

Some may say:  “Desperate times call for desperate measures” and this may be true.  But many desperate people have perished by making unwise decisions in their desperation.  I hope this does not become the case for our country.

An entry I wrote in April about the challenges owners and managers of businesses face in today’s economic environment was published in today’s business section of the Wichita Eagle.  If you missed it previously, you can read the article on the Wichita Eagle website.

Today’s economic environment is taking a huge emotional toll on business owners and managers.  Given the shrinking economy, with orders for manufacturing being canceled or put on hold, with little happening in the construction industry, and with the general public spending less at the retail level — many businesses are having to either cut back employees hours or let them go altogether.

The “hidden” story behind this pattern is the huge emotional strain business owners and managers are experiencing.  And I am hearing from more and more of them each week.

One manufacturing executive told me he volunteered to take a 50% pay cut (his company is owned by a larger private corporation), even though his superiors suggested a 4% reduction for management.  He told me he couldn’t, in good faith, see his employees take a 20% reduction (by means of going to 32 hours per week from 40 hours), and not take at least the same level of reduction.

Other business owners are sharing with me the pain of having to let good team members go, because they don’t have the work needed to cover the overhead.  Some owners are losing sleep and experiencing a level of anxiety they state they never have had previously.

I grew up in a family-owned business.  My father, mother, grandfather and uncle worked together in a manufacturing firm.  And I vividly remember during the economic struggles of the 1970’s conversations during mealtimes about my dad’s concerns.  As a teenager, I was struck by the level of responsibility he felt for providing work (and thus, income) for his employees.  He frequently would share he felt terrible whenever he would have to let someone go, because of the impact it would have on the family — especially the children.  So he tried everything he could to keep them employed, even if it meant having them do tasks that were not directly revenue producing.  The stress of the situation wore him down emotionally, and physically.

Today, business owners struggling with the same issues.  Here are some of the burdens I see them carrying:

• A sense of responsibility in providing for others.  Often, in our culture, business owners are viewed enviously of “having it all” — financial success, time freedom, prestige … Those who own businesses know the other side of the coin — the financial stress of making payroll and paying creditors, and the knowledge that other individuals and families are counting on you to provide for their income.
• Balancing competing needs and demands.  Yes, your employees need work and income.  But the owner must also “keep the ship afloat” — you can’t keep people employed and risk losing the whole business.   Similarly, a business’s vendors and suppliers need to be paid (they have employees, too), but if you pay them, you may not be able to have sufficient funds for your own payroll.
• Guilt.  “I should have …”  or “I shouldn’t have …”  Business owners are experts at second-guessing themselves and expecting themselves to have perfect judgment.  Business owners feel guilty for having to let employees go.  They feel guilty to the remaining team members for not letting other employees go sooner.  And they especially feel guilty for “not having seen this coming.”
• Lack of knowledge about the future.  As the saying goes, no one knows what the future holds.  This is also true for business owners.  But, ironically, they are often asked by others (colleagues, employees, customers, family members, friends) to divine the future:  “When do you think this will turn around?”  And the lack of predictability in our current economic environment wears heavily on business leaders — it is very difficult to make decisions about the future when even the short term (3 to 6 months) is highly unpredictable.
• Pressure from numerous fronts.  Business owners have numerous parties who place pressure on them — their customers, their vendors, their employees, the community, their family, their church and charitable organizations.  And most of these groups are generally unaware of the other parties involved in the business leader’s life — and they are primarily focused on their needs.
• Need for wisdom and discernment.  Most successful business owners (that is, those who have endured difficult times previously) are humble individuals.  They know that they don’t know everything, and that, almost more than anything, they need wisdom and discernment in how to manage during these tumultuous times.   The goal often becomes survival, and they are willing to do what is necessary to accomplish this goal — even if it means not “looking” successful, or taking on responsibilities that are beneath their title and position.  And they are almost always willing to accept counsel from others.

So, the next time you are interacting with someone who owns or manages a business, take some time to listen to them.  Ask them how they are doing.  Give them a word of encouragement or appreciation for all they do for their employees and the community.  And try not to ask them to do something for you — they have enough demands in their life as it is now.

As a psychologist, I naturally find myself observing people’s behavior — their choices, what they are saying, and how they are feeling.  And this is the case now, in the midst of the difficult economic times in which we find ourselves (I am consciously choosing not to use the term “financial crisis”.)

There are three core aspects to any situation that involves human perception and response:

• Reality.  What actually “is” — the facts of the situation. (Using a non-related example: the temperature — which is about 30 degrees F. on a mid March day.)
• Perceptions. How people perceive, view, and interpret the facts.  (Regarding the weather, it seems excessively cold and wintery for this time of year; especially since it was 70 degrees for a few days last week.)
• Reactions.  How people respond both to the reality and their perceptions of the situation — their opinions, feelings, and behaviors. (Many people are somewhat irritable, complaining of the cold [because “it should be warmer”], some people are going on trips to warmer climates.)

These issues are relevant to the current economic challenges we are facing.  First, we must ask ourselves: What are the facts?  Some include:  a) real estate values have dropped significantly (30%-50%) in the past six months;  b) stock values have also decreased significantly (40%-50%) and are the lowest level they have been in decades;  c) as a result of these two factors, individuals’ and families’ financial worth is far lower than it was this time last year;  d) numerous companies are laying off workers and unemployment is at 8%, also a high mark for recent years;  e) financial institutions and the credit market are stressed;  f) the Federal government is taking significant steps to try to rectify the situation.

The next two areas are where we as individuals, families, businesses, communities and a nation, can get “tripped up”, if we are not careful.

Two unhealthy responses to difficult situations include:

1. Ignoring the facts.  As Jim Collins emphasized in Good to Great, successful companies (and by inference, individuals, families, et al) need to brutally face the facts of reality.  Acting like “what is” really “isn’t”, doesn’t help.  Some people call this denial.
2. Panicking and making emotionally-based decisions.  Yes, these are difficult times.  Is it a “crisis”?  Maybe.  Time will tell.  But becoming frantic, making quick not-well-thought-through decisions is not a good strategy.  (Note that some people become paralyzed when they panic and “do nothing” — which may not be a helpful strategy either.)

So what are healthier ways to respond to the current situation (”healthier” as defined functionally by thoughts and actions that lead to survival and better functioning in the future):

• Pay attention to important facts, but don’t become overwhelmed with more information than you can process (and filter out extraneous “noise” — other people’s thoughts, feelings & reactions).  It is important for each of us to understand what is going on in our country, communities, and the world.  But Americans have become ‘news junkies’ and taken in more information than we can possibly manage, process, and respond to — especially on talk radio and cable TV news channels.  The basic facts are there and that is largely what we need to know.
• Make reasoned decisions that lower your exposure to the risks that you can manage.  Each of us can make some individual decisions that can help us manage our own risks — whether at an individual, family, or business level.  Steps like managing expenses more closely, not going into unnecessary debt, and taking advantage of purchasing opportunities due to the economic situation — all are reasonable steps.
• Be thankful and learn to be content.  Most of us are still in situations where we have jobs and income, a place to live, food on the table, and live in safety (I do not want to minimize those who are in more difficult circumstances, but these situations are still true for most Americans.) If this is true for you, be thankful.  There are billions in the world less fortunate.  Also, learn to be content with what you have — your job, your car, your life circumstances — versus focusing on what you wish was different or “what should have been.”
• Be gracious and generous to others.  Most of us know individuals, families and businesses who are struggling currently.  A trap that some fall into is to be judgmental of others — thinking that they are in their current circumstance because “they didn’t …” or “they shouldn’t have …”.  In some cases that may be true.  But in most cases, people are where they are due to many circumstances out of their control.  [In either case, how does it help them to judge them?]  We now have the opportunity to be warm, caring and supportive — and potentially to be generous in some way (maybe with our time, maybe by connecting them with a potential employer).
• Manage your own stress effectively.  Try to limit your exposure to negative spins on the current facts — anger, resentment and bitterness don’t lead to a healthy life.  Manage your own thoughts, worries and anxieties.  Exercise.  Sleep. Take time for re-energizing yourself.  Spend time with friends and family.  (All things that we know we should do.)

Just as many individuals recount some of the more difficult periods in their lives as the most rich and rewarding times, so we also have the opportunity to come through these current circumstances as stronger individuals, families, communities, and possibly, a stronger healthier nation.

So, “Carpe diem!” (along with grace and peace in your daily life and relationships).

I have been collecting some articles on psychology and wealth from a variety of journals I receive, and recently there was a group of articles published in the Monitor of Psychology which is published by the American Psychological Association.  I thought I would briefly share some of the information reported.
One article in the January 2009 Monitor entitled “Mind over money” was an interview with Dr. Paul Zak who is the founder of the Center for Neuroeconomics Studies.  He is the author of a recent book, Moral Markets: The Critical Role of Values in the Economy (2008).  In discussing the neurology and brain functioning of certain behaviors, he states: “You need to know that your brain is prone to overreaction. . . When there’s a lot of uncertainty, like there is in the stock market, it turns out that making decisions involving money generates strong activation in the areas of the brain associated with fear. .. Studies have shown that brain areas that process risk are the same ones that process pain, so the brain’s reaction to this fearful, uncertain environment is ‘Get away!’”

Dr. Zak continues, “The same dopamine [a brain chemical] system … also activates when we get any kind of new news.  One thing I suggest .. is not to watch TV, where you’re going to get all this rumor and innuendo. Wait until the next morning and read the papers.”

“Just as we saw an overreaction when the market was trending strongly upward, I think we’re also seeing an overreaction as the bubble is bursting.  The brain has put you into survival mode.”

Another article, entitled “What’s Behind American Con$umeri$m?”, (from the July / August 2008 Monitor on Psychology) attempts to answer the question is:  ‘Why do Americans consistently spend more than they earn?’  For example, since 1982 it is reported Americans’ personal savings rate has dropped from 11 percent to below zero.

Some different ideas postulated to answer the question of reduced spending include:

• When we are under stress (as most Americans are), we are more at risk for spending.
• The availability of credit cards to young adults conditions them to the process of incurring debt at a young age.
• Credit cards also facilitate impulse buying (more than buying with cash or checks.)
• We are bombarded with constant messages to spend through TV, the Internet, catalogs, print media and bathroom stalls, airplane tray tables, even egg shells.

Finally, “The Price of Affluence” discusses recent research which shows that “privileged teens may be more self-centered — and depressed — than ever before.”  Although this is really not ‘new’ news, the theme continues.  One of the authors cited, Dan Kindlon from Harvard, has written an excellent book, Too Much of a Good Thing: Raising Children in an Indulgent Age.

Another psychologist, Madeline Levine, believes that much of the mental distress is created by a fear of failure (both by the teens and by their parents).  In fact, one study indicates that parents who overemphasized accomplishments were more likely to have teens who were depressed, anxious, or used drugs.  Additionally, it is suggested that parents not shield their children from early life disappointments — let them try and fail, and learn from it.

I have written previous entries that may provide some additional information (a few worth looking at are: The Price of Privilege; The Dark Side of Wealth; Contentment - A Counter Cultural Concept ).

Have a good week!