Price of Everything - Value of Nothing
Friends!
Yesterday was the 4th of July. US Independence day. I must say it sent my soul in many different directions. Independence might not be the sentiment that most of us feel at this point in time as we are, to varying degrees, held hostage to a microscopic organism we don’t fully know, we can’t fully stop and we certainly prefer not to get. However, it is important to stop and reflect on the incredible progress that the past few hundred years have brought to most human beings. It's too easy to take it all for granted. And we shouldn't. But I must confess, I was not in a celebratory mood. I should be, I know. But I just wasn't. I guess the work ahead feels more pressing than the achievements of the past.
While sadly, some are still suffering from lack of independence, I think it is fair to say that many of us might have been blessed with too much of it. Independence from what? That is the question to ask. I believe we now have entered a state where INTERdependence seems to be more important. Ultimately we have to live in symbiosis with other people, with our planet, and with our communities in order for our entire system to thrive.
Our economic system is a case in point. I have believed for a very long time that shareholder primacy is not in the best long term interest even for the shareholders. In the long run, shareholders of a company are best rewarded when a company can live harmoniously with all its key stakeholders. Customers, employees, and local communities. I have written here before (and will do again for sure) that our short term focused world has caused a myopic and A.D.D. (attention deficit disorder) condition of capitalism. It isn’t that investors or people inside a business don’t care about other things, it’s just that when financial returns are calculated in days, weeks and months rather than years, our investments in “slower-moving systems” (such as people, planet, reputation, communities, etc) are simply not made, since the time from investment to the time of seeing the rewards of such investments is longer than the hold times of most investors. Out of sight, out of mind, you could say.
This week I read and listened to several great pieces that reminded me of how incomplete our way of measuring success really is. To some extent, this is a follow up on the last few posts of symptoms and causes and means and ends. Oscar Wilde famously said that “the cynic knows the price of everything but the value of nothing." Below I have posted a few of those pieces plus a few bonus pieces. As usual, I recommend you read and consume this by clicking “open in browser” above in this email. That way podcasts and other media can play right on your phone or whatever device you are reading this on.
Mariana Mazzucato and the problems with economics
Mariana is a professor in Economics of Innovation and Public Value at University College London. She has written the book The Value of Everything. I was introduced to her work last year at the TED Summit in Edinburgh where she gave this great talk. She published this article in the New York Times this past week. It captures much of my own beliefs around what's "wrong" with aspects of capitalism and also reminded me of what Paul Hawken said to me 30 years ago when I complained about why we price externalities so incompletely (and inhumanely). He said: Mats, there is nothing wrong with capitalism, we just haven’t tried it yet. Mariana talks about the difference between “extracting” value and “creating” value. She talks about the problem of “socializing risks but privatizing rewards”. It creates an asymmetry of risk that have favored some very few disproportionately and disadvantaged all the rest. This is such an important conversation. Price and value are NOT the same things. We can only manage what we measure and as long as we only measure price we won't get much value!
Brian Chesky and leadership in crises
Brian is the co-founder and CEO of airbnb. I have been inspired by his leadership and the clarity of his conviction for many years. He is a designer by training. And he looks at most challenges in the world as design problems. And I think he is right. If we are unhappy with certain outcomes, it is not because we are necessarily bad or that it is impossible to get a different outcome. It’s because that very system is poorly designed. So when they created airbnb most people thought that you could never get people to be comfortable sleeping in other people's apartments and create the trust necessary for those exchanges to happen at scale. Brian and his team “redesigned” just about everything and created an incredibly trusting ecosystem that since then has been very powerful. In this interview (you can play it below if you are on my site) with Fortune’s Alan Murray and Ellen McGirt, he shares many inspiring ideas around leadership in crises, why principles matter most, and what leadership should be about. Brian for President is all I can say! Loved it. If you are interested in how design is used to reduce barriers to trust you can watch his co-founder Joe Gebbias talk on that topic here.
Redefining Winning
This is a very insightful piece by Tim Leberecht who after a long successful career in the world of business, mainly in architecture and design, wrote a book and launched The Business Romantic Society. Tim, as you can imagine uses love as a way to “counterbalance” our age of machines. A very worthy, human, and important endeavor to say the least. I found his article about redefining winning to be very important and touches on the theme of this post relative to value and price. We are to a very large extent what we celebrate. On our path to a different future, we must also redefine what winning and losing really means. What constituted winning in the past certainly can’t be the same as winning in the future. We have to replace our old (out of date) heroes and images of success in favor of celebrating the ideals that will take us to a different (and better) future.
Classical Music and Mozart - BONUS 1
Ending with a small tribute to classical music and to Mozart. I was moved by this piece in NYT this week where they asked a number of people what their favorite Mozart piece was and why. It stopped me in my tracks and made me re-appreciate the beauty and gifts of Mozart and classical music. I don’t know why I so rarely put it on but this made me make a commitment to do so more often. Enjoy!
SWEDISH FRIENDS - BONUS 2
I am a big fan of the Swedish radio program SOMMAR. It's become over many decades a classic Swedish summer institution. Swedish Public Radio selects "hosts" that are given 2 hours of prime time where they can talk about anything they want. It's almost like a giant Swedish community conversation. In 1998, I was lucky, fortunate, and humbled to be chosen and I publicly tried to express some themes that I discuss in this newsletter. It was obviously a long time ago and hopefully, I have learned many valuable lessons since. But I decided to post that talk for my Swedish audience here since it is SOMMAR time right now and talks from 1998 are not so easy to find. But they are in Swedish. Sorry!
More importantly, this week, the co-founder of Klarna and now founder of Norrsken, Niklas Adalberth gave a very honest, vulnerable, and generous talk about why he has committed his significant wealth to philanthropic entrepreneurialism and what he has learned from chasing the wrong goals. It was inspiring.
Have a great week!
