Valuing Wealth

Chapter 2 - pages 25, 26

The foundation of my thinking was that those individuals who make the greatest contribution to their field should reap the greatest returns in terms of power, leadership and of course financial reward.  The other premise is that there needed to be a shift in what was considered a rewarding industry.  For example, actors can make millions of dollars for entertaining American children, while teachers make tens of thousands for teaching them.  Business leaders make millions or even billions of dollars while scientists make a fraction of that.

As a corollary thought, those who made the least contribution should not expect to receive much beyond basic sustenance.  America was founded on hard work, initiative and honesty and these types of efforts would gain reward in the immediate future.  However, those who chose to do very little or thought that life owed them a living were soon to find out that America owed them nothing.

My goal was never, nor will it ever be, to dictate the income, power or leadership that any individual could attain, but rather to have society at large play a greater role in determining what roles are worthy of substantive financial rewards, and which are not.  Just to make a simple argument, does a baseball player deserve to make five million dollars while a fireman makes fifty thousand dollars?  Many Americans of course who believe in complete freedom say yes due to their belief in freedom and the free market.  Many people will find it hard to comprehend that I agree with these principles as well.  What I set out to do though, was to have the market and society change the definition of freedom to personal responsibility and have a free market where ethics, values and contribution were considered the most valuable characteristics of successful people.

excerpt from Chapter 6 - flood example

Chapter 6 - page 102

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One excellent example of “Constructive Capitalism” came from Home Depot who shut all their stores in the Southwest US during the Austin, Texas floods in late 2013.  As part of their relief effort, the Home Depot shipped warehouses full of supplies and sent their staff to the flooded area to immediately start rebuilding the damaged communities.  The employees were paid in full their regular salary and all their travelling expenses.

Hurricane Katrina in New Orleans (August 2005) was still a fresh memory in 2013, and no one wanted to see the same thing happening in the city of Austin, so Home Depot mobilized almost five thousand employees, delivered untold truck loads of supplies and utilized their management skills to deliver on-ground support to those affected by the floods.  Just to be clear, the Home Depot was not involved at all in the initial rescue or relief effort but rather the rebuilding efforts that followed.  Fortunately, the rescue and relief efforts were pretty well managed as opposed to Katrina, so the rebuilding process could start right away.  The Home Depot did not wait for insurance issues, local zoning discussions or the media.  They just started rebuilding and repairing people’s homes so the owners could move back in.

The effect was immediate and astounding for Home Depot.  Home Depot had forfeited a sizable portion of their marketing budget to fund this effort but certainly reaped the rewards from a business standpoint.  Their brand value sky-rocketed as did their stock price following the Austin floods.  By March of 2015, Home Depot’s stock price had almost tripled to just under $200.  When asked about their efforts at the time to make such a large commitment, the CEO said that he just could not sit back and watch people in trouble when he knew he had the resources at his finger tips to do something about it.  He pointed out that Home Depot was monstrously successful in the South Texas area and that he felt that they should contribute as much as possible.  Many share holders at the time questioned his decision as they felt that the Home Depot was going to potentially forego billions in sales as a result of the rebuilding effort and that the materials should not have been just “given-away”.  Home Depot at the time made it clear to the stock-holders, that as a part of the local business community, they had an obligation to be involved in the rebuilding of its communities whenever required.  It is not moral to profit from the suffering of its customers.  This was revolutionary corporate thinking.

Today, the Home Depot has a regular rebuilding program that goes to disaster areas all over the world and pitches in “on-ground” as required.  They are under no obligation to wait for governmental efforts other than not to interfere with rescue efforts.  

The Recognition Era - What It Means "Top Ten" List

As the world becomes less focused on accomplishment and more on recognition here is what we can expect.  Here is a proverbial Top Ten list split into two postings.

Firstly, an overall decrease in quality of just about everything.  From clothes, to cars, to food you name it, it will get worse.  The exception of course will be at the high-end or luxury type items whereby those who can afford quality will be able to purchase it.  Everything will be built or grown to ultimately be disposable so quality will be a secondary goal.  Consumers expect their products now to be functional and design-oriented.  Durability is not something younger generations strive for as they are used to products being replaced regularly due to advancing technologies, evolving trends which has lead to an inherent obsolescence of goods and services.

Two.  Transiency.  There will be an increased growth in movement as people can simply leave one area or sector where they are not getting enough attention and search out greener pastures.  The easiest way to get recognition is to be the "new guy" as expectations are usually lower while attention is usually at its peak.  People will however, will still want to gravitate upwards in their careers so expect a lot more movement as candidates for internal promotion become less and less available.

Three.  Sound-bites.  The recognition era is of course driven by short attention spans and digital media.  Therefore, do not ever expect to have time to explain yourself fully.  Every message including personal conversation has to be delivered quickly.  The result will be that society and business more forward in a piece-meal fashion and requires leadership who can respond quickly and effectively but also mobilize those around them to respond as well.  Think of it as flash mob leadership.

Four.  Inconsistency.  Most people these days hold more of a go with the flow approach.  Just look at the political world to see that what the candidates said five years ago is no longer meaningful nor are they even individually accountable for it.  The world is changing very fast and new information surfaces constantly so what worked last week may no longer be even relevant.  Planning will become less influential when compared to the need for speedy reaction times.

Five.  Success.  Success will not be 100% measured in terms of pay and income.  Flexibility of working, unique processes and freedom of action will become paramount.  No one who thinks they are special want to do things the same way as everyone else.  Quick promotion and titles will be more important.  Expect the companies that get and retain the best people to be the ones with the least amount of management.  Plus, many younger people have access to their boomer parents wealth and know they are OK financially.

Numbers 6 through 10 will be available on Wednesday, June 20, 2012.