Med Jones - Investment Strategy - Happiness Economics - GNH Index / GNW Index - Financial Crisis Prediction - Economic Strategy

Bio
 

 Happiness Economics. Investment StrategyCEO Leadership.

 

 

International Institute of Management

Med Jones (Yones)

 Selected Opinions, Quotes, and Lessons Learned

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(Disclaimer)

Some of the opinions expressed on this page do not represent the institute nor do they represent complete or permanent views of the author on any topic. If some opinions are shared with other authors, it does not mean the author subscribes to a certain political or economic  school of thought. The quotes  should not be taken out of context or used for, or against any single person, business or political entity. The content is shared for educational and entertainment purposes.

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On Asymmetric Conflicts

  • History is full of examples of smaller powers taking on a much larger power and winning. We see it in individual conflicts (David vs. Goliath), law (Hinkley contamination case), business (Google vs. Yahoo), politics (Obama vs. Clinton) and military (Vietnam vs. USA).  [On asymmetric competitive strategies]

  • Status, size, money, power, reputation, prestige, awards, and affiliations are all a temporary advantage that can be overcome by a persistent opponent armed with a true cause, unwavering will and a smart mind. The more powerful can win some battles, but with the right strategy the less powerful can win the war. We learned from the legal case of Robert Kearns vs. Ford Motors Inc., and later Chrysler Motors that a single creative person with a lasting stamina and no law degree can take on and win against a much larger and richer opponent armed with top lawyers. [On how to win a conflict with asymmetric powers]

On Integrity, Journalism and Academia

  • How to tell if you are being deceived or manipulated? The following signs are telltale that someone is trying to corrupt the truth or fool you: Instead of responding directly to an argument, they attempt to discredit the source or its motives.  They will minimize the grievance  of the opposing party or exaggerate their offense. They will pull rank or talk qualifications and prior achievements rather than address the question directly. They will claim that you cannot equate between them and the opposing parties, they are exceptional, superior or serving a higher purpose. They will mention  common names or affiliations to impress you or bring you to their side.  They will try to change the subject and make it about something else. They will call for the "greater good" or the "higher cause" to justify oppressing or censoring the their victim. They will attempt to attack the victim to hide their own mistakes. They blame it on the system, "everyone else is doing it", they have no other choice. They will attempt to bribe you directly or indirectly. They will straight lie and contradict themselves. If you catch them lying they claim to have misspoke or miscommunicated. If all fails, they attempt intellectually bully you, by attacking you to deter from the pursuit of truth on that subject. A journalist cannot be a successful without a full knowledge of the tactics of deception, otherwise can s/he become a tool for the manipulator rather than a guardian of truth. Ask your intuition, are they playing on your favorable biases, hiding something or not telling the whole truth.

  • We studied the science of truth and deception carefully. If you want to know if someone is corrupting the truth or hiding something, look for one or more of the dozen most common deception tactics. IIM compiled the following checklist for journalists and truth investigators:
    1.   Giving a general answer to a specific question
    2.   Using too much information to overload and distract the enquirer
    3.   Trying to change the nature of the dispute
    4.   Attacking the enquirer to deter from the pursuit of the truth
    5. Using false and/or misleading statements and blaming it on miscommunication
    6.   Making up a defense that did not exist at the time
    7.   Using inconsistent or contradictory or hypocritical statements
    8.   Dodging or evading direct questions
    9.   Using selective referencing
    10. Omitting material information
    11. Pretending to be a victim or getting offended
    12. Ending communication unilaterally to avoid more difficult questions

    Some might make an honest mistake, but if their communication exhibits two or more of the above signs, then, they are more likely than not, trying to corrupt the truth, hide something or fool you.

  • The scope of collusion and cover up of the Boston Church's abuse should not come as a shock. People in power will go to great lengths to keep it. The untold story is not the abuse - it is the corruption of the network of power connecting the church officials, journalists, lawyers, and others who participated in burying the story for so long. [On the award-winning "Spotlight" movie]

  • When academics and politics intersect, it' is usually academic integrity that suffers. An academic must make a difficult choice, become a political ideologue or keep an open and independent mind to protect against bias. Either you are a politician or an academic, choose one. [On the politics of academia]

  • There is no lasting power without integrity. You can take short cuts to gain power, but if you violate integrity, you can never keep it for long. Once you are caught, you will have to pay dearly and sometimes from the least expected sources.

  • In my career, I learned not to confuse celebrity with competency or integrity with ideology. Some of the most famous and idealistic people are not nearly as competent or as honest as they appear to be. When the stakes are high, they will more likely corrupt the truth and rationalize unjust enrichment or power gain at the expense of others.

  • There are no left or right journalists. There are left and right propagandists. Journalism, by definition, is independent; its sole function is to seek the truth, not present or validate half-truths. Truth or corruption are not exclusive to any single group. A telltale sign of biased, mentally captured, or corrupt journalists is overwhelming criticizing  one political party and being silent or apologetic for another for the same actions.  If you want to know which lobby captured a group of journalists or a media outlet, look at the balance of coverage, who do they report on, and more importantly who do they not report on. Unfortunately, in this day and age, the only way to find the full truth is to read opposing media outlets and try to distinguish facts from opinions. This is not an easy task. Smart investors, can see that there is a real business opportunity for an open and balanced media. They can succeed only if they reign their own affiliation biases and that is hard to do. An even better opportunity is to create a media business that assess the credibility and journalistic integrity of each political reporter [On journalistic bias]

  • How to tell if a journalist has integrity? Identity, political or ideological affiliation is never a consideration in their reporting or censorship. The role of a journalist in the society is to speak truth to power, not to protect certain powers at the expense of the truth. [On journalistic integrity]

  • The rising popularity of "fake news" is not due to the Internet, it is more due to the political bias resulting in the lack of balanced reporting, integrity and trust in power-connected mainstream media. The law of media balance dictates that if you censor opposing points of views in your media, you will create an opportunity for the rise of another media to restore the balance, even if that media is unbalanced and riddled with fake news. Truth cannot be buried for long, it will find a way to manifest itself in all forms, including arts, fiction and sometimes even in what they call as "fake news" websites. [On balanced reporting]

  • If you are open-minded and smart, sometimes, you can see a truth in some "fake news" and the lies in some "real news". [On true vs. fake news]

  • The sudden fear of "fake news" on social media has less to do with the truth and more to do with the control of narratives or capturing your mind. Media is a tool of power. The powers in control of mainstream media are losing control to new independent media sites, and they will do everything they can to prevent the distribution of that power. They will pretend that they care about the public interest and the truth; they will find a way to pressure the executives of the popular social media sites to censor content and control information under the disguise of fighting "fake news". They pretend that most people are stupid and that they are the guardian of truth. However, without open and equal access to information, there is no truth or real democracy. If I were to choose between open media polluted with some fake news vs. controlled media with no fake news, I will always side with the open media. The power to choose should be in the hand of the user not the executives of the social media or the lobby working behind them. If social media executives repeat the same mistakes of the mainstream media, they will create an opportunity for a competing media to take away their subscribers.

  • The powerful elites love people's democracy as long as they are winning elections, but when the people elect an anti-establishment outsider, then those people are less intelligent, less moral, misinformed or manipulated and they must find away to nullify the election and bring  back their own representatives for the "good" of the country.

  • The powerful elites love free speech and free media as long as they control the narrative, when the opposition voices become more popular, then they use the excuse of few extreme fringe voices to filter and censor critical opposition voices the "poison" and "misinform" the public opinion.

  • If you think that academia is a shining example of integrity, think again. No industry is immune to corruption. We have experienced more corruption of truth, collusion, tribal behavior, and even academic cartels than the industry would like to admit. [On Academic Corruption]

  • In general, we have seen some implicit bias in academia to reference certain sources instead of others; the bias is usually in favor of celebrity authors, authors at intergovernmental organizations, certain universities, journals with high impact factors, and certain academic, political, and other affiliations. This selective referencing usually comes at the expense of original sources. Proper enforcement of academic research standards, by integrity offices and editors may help fix this issue. [On academic bias]

  • The most common technique used by sophisticated plagiarists to disguise the kidnaping of the work of another author is to "reverse-engineer" an idea in a paper by citing individual knowledge elements in other earlier publications, but leave out the author of that idea. This way, they can show that they arrived at the same solution on their own and justify their ill-gotten academic or financial gains. If they are famous or have a large sponsoring platform, they might overshadow the original author in the number of citations and financial credit.
  • [On plagiarism]

  • In our experience, we have seen how the public is influenced by a well-orchestrated government lobbying and media campaign, especially when endorsed by leading academics at inter-governmental organizations.

On Economics and Economists

  • There is no scientific discipline with so many conflicting views and opinions like economics. Unlike physical scientists, economists cannot seem to agree on some of the most fundamental concepts of economics. They appear unable to  distinguish between their own opinions, biases and facts. Some of them appear to form political-academic cartels to promote common political interests and ideologies rather than science. The politically savvy among them rise to the top and go on to cause a lot of damage, never taking responsibility for their own mistakes and always blaming it on other economists, externalities, and schools of thought.

  • When I was young, my parents told me that if you make fun of others, you might end up like them. So, I never made fun of others, except for economists. Today, I'm being branded as one. Despite the heavy cost to my self-esteem, it is still fun to make fun of them (or us) every now and then.

On Predicting the Housing Bubble, the Great Recession and Recovery

  • Like others, I have been subject to academic arrogance and ridicule, there are economists who could not bring themselves to believe that someone unknown outside their profession with all the brilliant scholars could have succeeded where they failed. One reaction I got, "I'm an economist and never heard of him". Now that is  arrogance based on ignorance. To be fair, there were some open minded economists, who are not burdened by their egos and groupthink biases. In this profession, you will find that only a few who will give credit to someone else, it is simply hard on the ego.

  • Do you wonder why most economists could not predict the economic crisis of 2008, let alone, solve the most important lingering economic problems? It is not the lack of intellect, it is the outdated academic curriculums and decision models. They do not fully understand some of the most basic units of any economy, namely, the entrepreneur, the enterprise, investors and investments. Unfortunately, most economists who advise governments on economic policies, never started or managed a business in their life. So, how do you expect them to give proper advice without real-life knowledge of the complex business decision models, including managing investments, risks and opportunities. Most economists are well-versed in theories and statistics, but unlike engineers and doctors they are not trained to diagnose the root causes of complex problems, and unlike entrepreneurs they do not have the level of creative thinking and real-world problem-solving experience. Solving complex economic problems requires a neurosurgical precision. Would you choose a medical theorist who never practiced medicine in real life to operate on any one's brain?

  • Since 2001, the U.S. economic growth has been largely fueled by rapid increases in asset prices (housing bubble) and consumer debt, rather than development projects, which result in non-sustainable debt-driven growth... Due to the housing bubble in recent years, U.S. homebuyers took on more debt to buy overpriced homes, thus reducing share of disposable income. Many Americans refinanced their homes during the real-estate boom to pay for living expenses. With the expected housing bubble bust, Americans could lose a significant part of their wealth and savings...The slowing economy will lead many small businesses and individuals to go bankrupt... [Working Paper The U.S. Economy Risks and Strategies 2007-2017 and Reuters Interview]

  • The worst thing that could happen to any economy is the loss of confidence. [Warning on the impact of the housing bubble burst, subprime crisis and bankruptcies leading to the Economic crisis of 2008]

  • The general economic decline cycle will bottom in 2009 and we could see stability sometime in late 2009 or early 2010, then we will be back to modest recovery in late 2010 or early 2011. However, the real estate, construction and financial industries will bottom out in 2010, the recovery could start in 2011. [On forecasting the recovery in 2009]

  • My main concern is that the recovery was created by an accounting trick; they took the bad assets off Wall Street and (effectively) put them on the government's balance sheet. It is merely a psychological trick to rebuild confidence in the financial markets. It worked! ..Wall Street recovered, but the US tax payers and main street businesses will have to pay for it through higher taxes, higher interest rates, inflation or a combination that will eat future profits and spending power, thus hindering growth rates for a long period of time. The only hope for a real US recovery is from the private sector, US companies selling new innovations globally in industries such as nano-tech, biotech, and converged media. The real economy, Clinton's surplus and recent US wealth was built by entrepreneurs and companies such as Apple, Google, Boeing, and GE. The future will not be different. Only an innovation-driven economic growth can attract foreign investments, generate enough revenues to pay the debt and re-energize growth again.  [On the drivers of real long-term recovery in 2011]

  • When you try to predict another crisis or lack of it, you can never underestimate the stupidity or genius of the leadership's decisions. [On Predicting Economic Crises]

  • Therefore, in the short-term there is little risk of another crisis, but the US leadership should not forget that global competition is growing. The superior gap of manufacturing, services, knowledge and innovation is diminishing. In the long-term the dollar will eventually be replaced as the international trade and investment currency. If they do not fix the national economic problems in the short-term, we will all face a bigger crisis in the mid and longer terms. Make no mistake, US will recover; it is just that the road to recovery is rocky with potential setbacks, and we have to pay for our mistakes like everyone else. [On the long-term risk to the US economic problems.  2011]

  • Because there are many uncontrollable variables, no one can forecast the future with 100% accuracy; however, by refining your investment decision-making framework and processes and by cleaning your information inputs, you can increase your success rate significantly. You only need to be more right than wrong to be a successful investor. [On investment best practices]

  • I'm against abolishing the Fed; however, I advocate for major reforms. The solution to our economic problems does not lie in  demonizing entire banking system, but in restructuring the global financial system to improve governance, transparency,  and accountability.

  • IIM is not a fan of expensive stimulus packages. It instead favors job creation through funding of small businesses. The most cost-effective and quickest method to stimulate the U.S. economy is to support job creation through US small businesses and innovation development. U.S. Census Bureau statistics show that 98 percent of all U.S. firms have less than 100 employees. These 27 million small businesses create over 85 percent of all new jobs and employ over 56 percent of all private sector workers. The focus of development programs should be innovation development, export and employment support. This solution would be a less of a burden on the taxpayers; it can be implemented without too many new legislations, and would have a much faster positive impact on the economy. [A sustainable economic recovery policy]

  • Despite accurately forecasting the housing bubble burst and stock market crash of 2008, the great recession of 2009 and recovery of 2010-2011, we advise investors against investing based on our forecasts. Unlike physics and engineering that are based on physical laws, economic forecasting is inherently uncertain or unreliable. All of our opinions are at best guesstimates that can and do change after a day, a week, a month, or a year. The main problem with economic forecasting is that the global economy is a complex, dynamic networked system and is a product of human psychology (and emotions). One major natural event or political decision can accelerate or delay a cascade of events and changes the entire forecast in the short-term or long-term. Our forecasting model is not perfect and we do make errors. Still, our goal is to be more accurate and less wrong. [On the accuracy of economic forecasting,]

  • The economic and political polarity of raising or reducing taxes, free trade vs. trade war, economic expansion and contraction cycles, and other factors can and do change our forecasts. We call it  "Polarity Forecasting", which includes interest rate polarity, taxation polarity, stock market polarity and so on; that is we attempt to forecast the polarity frequency and duration of interest rate and the stock market value, as more likely than not, to rise and decline over the long-term.


On States' Socioeconomic Integrity Theory

  • The integrity of states is ruled by the socioeconomic integrity (and wellbeing) theory. The degree of the stability of any social system is proportional to the degree of its economic growth and vice versa. Stated differently, the risk to national integrity increases proportionally to the country's economic decline. When the members of a sociopolitical system share the same economic interests and the existing system produces enough economic opportunities to meet the needs of the members, they are likely to tolerate existing differences and work together towards shared benefits. On the other hand, when the system fails to produce enough economic opportunities over a long period of time, the members of the system are likely to compete more aggressively for existing resources, causing divisions among the members to grow stronger. The degree of social cohesiveness will diminish and divisions could take different forms such as ethnic, religious and geographic conflicts and at times class warfare or civil wars. If not managed properly, such sociopolitical systems can become dysfunctional. If the dysfunction is left untreated, at a certain point it will take more energy to fix the system than to let it collapse.

  • Adversity is the enemy of diversity - a prolonged economic hardship can result in a more intense competition for resources among various demographics, leading to resentment toward unfair distribution of power and wealth; if not addressed early and properly, this can lead to stress on national unity, unrest and even civil conflict.  History teaches us that people from different religions and ethnic groups can be united around one shared economic goal – equality and prosperity for all. We saw that in the rise of the communist USSR. When the economic policies of the USSR failed, ethnic and national divisions took the forefront and the USSR was dissolved. That can happen to the US. If we are hit hard enough by hyperinflation and currency collapse. How the divisions evolve and what forms they will take depend on the type and speed of the government's reaction. It is too early to foresee such events. However, it is important to note that no country is above the socioeconomic laws, the US included.

  • Most people think that the current Middle East uprising is ignited by democratic aspirations. In my opinion, it was ignited by the high unemployment rate meeting food inflation. Democratic uprisings and civil unrest manifest the underlying economic distress. In the West, the economic pressure can be dissipated via elections and the democratic change of governments. The unrest did not start in the Middle East and will not end there. The spread of the unrest is determined by the rate of economic decline, unemployment and inflation in each country. Just look at what happened in Greece - we saw civil unrest, similar violent protests happened in the UK by students in response to the proposal of the government to increase tuitions. These events are simply the result of the global financial crisis and the long-term accumulation of wrong economic policies. China and Asia will have to act to prevent the emerging financial bubbles. (Despite the challenges) the global economy will overcome these challenges. [Wall Street Italy - A European Perspective on Global Economic Crisis and Recovery.]

  • Religions taught me that the love of money is the root of all evil. After studying  economics, I discovered that scarcity is the root of all evil. Socioeconomic policies should focus on fighting scarcity, not growth. To prevent future domestic and international conflicts, economists should design an economic system that allows  open access and growth for all. Violent conflicts are almost always the result of unfair structural barriers erected in favor of one group at the expense of other groups. The current economic systems are not designed to prevent civil or international conflicts, they are more designed to accumulate and gain power. If you want world peace, you need to restructure the global monetary and economic systems from a centralized hierarchal order to a more peer-to-peer network design. Blockchain technology can help with that.

On Virtuous and Vicious Economic Cycles Theory

  • Over the long-term, if government revenues continue to be more than expenditures (surplus), then the economic health of the country improves, because the government can afford to invest in development projects such as research and development, education and infrastructure. With more income, the government can also afford taxes reduction, thereby increasing corporate profits and attracting more foreign investors, resulting in more economic activities, creating more jobs and enlarging consumer spending and government revenues despite income tax cuts. It is what I call a virtuous economic cycle.

    Over the long-term, if government revenues continue to be less than the expenditures (deficit), then the economic health of the country worsens, resulting  in higher accumulated debt. An increasing government debt will result in higher interest payments, and less money available for socioeconomic development. To pay for the debt, the government will have to raise taxes, which will reduce the competitive position of the country in the global economy and chase investors away resulting in less economic activities and more job losses. In order to avoid higher unemployment rate and social instability, the government would have to raise more debt to fund spending on welfare resulting in raising the interest rate which will increase the cost of money, reduce corporate profits and slow economic investments, resulting in more job losses and reduced government revenues, despite income tax increase. It is what I call a vicious economic cycle.

On Information and Education

  • In the Internet Age, Information is Cheap. Education is Expensive

  • The current executive education models do not bridge the critical knowledge-implementation gap. There is a need for a more effective and efficient training model that not only develops the general managerial knowledge, but also directly works on solving company-specific business problems and delivers actionable solutions [ On Executive Education Best Practices]

  • I found that success comes from a few key decision-making models and management best practices. Everything else is noise. In the information age, the major challenge is not the lack of information, but rather information overload. Success is not about how much data you have; it is about what and how you use the data to make successful decisions. [On Information and Decision Making]

  • Most current global academic and accreditation systems of management education require a major update in content, delivery and evaluation methods. Although the need to establish a set of minimum educational standards is justified, in our experience the current accreditation systems are highly bureaucratic, outdated, anti-competitive and inhibit innovation and advancement. The Institute's research revealed that spending two to three years in a traditional MBA program is becoming more costly and less relevant.

On Strategy

  • The CEO’s key challenge in formulating and executing the right strategy is not in finding the right answers to the tough questions, the challenge is in asking the right questions [On how to Evaluate a CEO]

  • Sustaining high business performance is a product of continuous strategic alignment [CEO strategy]

  • The ways in which senior executives allocate, manage and position their new digital assets and knowledge resources will have a strong bearing on the firm’s ability to compete successfully in today’s global digital economy. [Conference paper]

  • Complexity is a sign of intelligence. Simplicity is a sign of wisdom  [CEO strategy]

On Globalization

  • Knowledge networks will revolutionize the global economy. They will change the way we think, learn and work. The prosperity of a nation and its people will be determined to a large degree by how well they can leverage the global knowledge networks to develop their resources, collaborate, innovate, and market their products and services [On knowledge networks and globalization strategy]

On Economic Forecasting and Investing

  • Most economists and financial analysts are statisticians or quantitative analysts, with little or no real-life business experience. Few have strong knowledge of the business drivers and qualitative forces that drive investment and operational decisions. Without that knowledge, one cannot accurately assess the  performance of assets and markets. [On investment best practices]

  • Forget about whose advice you buy. Be careful what advice you buy, mine included. When you decide to buy an advice, buy it based on its merit not on the source. That is the ABC of critical thinking. [On investing]

  • A lot of investors follow investment gurus and leading investment banks. Investment by imitation is not an investment strategy. [On common investment errors]

  • The poor work to make money for the rich; the middle-class work to make money for themselves; and the rich make money from the work of the poor and the middle-class.

On Investment Management

  • Success in investing boils down to one thing - decision-making. Wrong decisions are based on lack of information and misinformation or wrong decision models. Making the right investment decision requires a detailed set of information about macro and microeconomics conditions, markets, sectors, industries, companies, qualitative and quantitative analysis, fundamental and technical analysis, behavioral finance and risk management. [On the science and art of investing]

  • Unfortunately, a substantial part of the information available in the media is just noise and the advice of many analysts is based on either incomplete decision-making framework, or is contaminated with biases and misinformation. We learned that the ability to distinguish between valid and invalid assumptions, more important vs. less important information, and to control the emotions of fear and greed during the ups and downs of markets is key to the success of an investor. [On the science and art of investing]

  • One reason that led to the spike in gold prices over the past two years is that the central banks of countries such as China, Russia and India, have all increased gold as a component of their foreign exchange reserves. Add to that the consumer and investment demands driven by gold traders and the media blitz exaggerating the impact of the crises and prophesying the demise of the US dollar.  To me, gold belongs with a class of speculative investments and should be kept to a minimum in long-term investment portfolios. This statement is valid until the world adopts gold as the main component of a new international currency. [On the Gold Bubble of 2011]

  • Let's say that you invested in a stock and the stock value gained 50% in the following year (your wealth and happiness investment increased by 50%). It would be pre-mature to conclude that you are a genius and your investment formula is accurate. This explains why most investors, including professionals, lose in the stock market. Any decision model in a hyper-dynamic (continuously and fast changing) environment needs at least 10 years of performance data to draw a reliable conclusion on what is the best investment formula or decision-making model for long-term investment.

  • The truth is that when people invest on Wall Street, they are essentially making bets about the future. No one has a crystal ball, including, yours truly. It is not wrong to make bets on the future value of stocks or other assets, as long as you realize that they are bets. Informed bets are better than uninformed bets. Consideration of opposing bearish or bullish information enables smarter bets. Risk management is critical.

  • Stock market asset valuation is a tricky business. A significant portion of the value of an asset depends on external variables and events; these events are usually amplified by media and investors’ emotions. Some stock market investors and traders use macroeconomic forecasts for their investing activities. It is important not to forget that the stock market is a collective socioeconomic being with continually changing and complex layers, players and moods. It would serve investors not to consider any internal (company) or external (economic) forecast as permanent, but rather a snapshot with a continuous update to reflect new forces, players, and the changes they bring to the asset value.

  • It is more difficult to consistently predict the next market move with high-accuracy, but it's easier to predict the prospect of a healthy and profitable company in favorable macroeconomic and microeconomic trends, even in tough stock market conditions. Buying the stocks of such companies early or during a stock market correction can make investors richer, but jumping all in, indiscriminately is a risky move. Cautious investing and diversification might cause investors to miss on several high-growth opportunities, but at the same time, it will preserve the investors’ money and peace of mind. In general, over the long-term, the “slowly but surely” informed selective investment bets beat betting all the chips on the gambling table of the ups and downs of the stock market.  

On Government Management Best Practices

  • The best way the U.S. government can implement a new change effectively and efficiently is to adopt the private-sector management best practices [On Economic Reforms]

  • Equal opportunity is not truly equal until all U.S. populations have equal access to the same quality of education and equitable development programs. [On US Socioeconomic Policies]

On CEO Leadership

  • It is not possible to have a politics-free organization. The desire for power and control is part of human nature. Successful business leaders know how to leverage organizational politics by setting performance-oriented instead of resources-oriented political rewards. [On political leadership]

  • A CEO's performance is as good as the performance of his middle managers [On leading from the middle vs. leading from the top]

  • Leadership excellence requires a balanced mix of paradoxes. Leaders need to be visionary yet practical, teachers yet learners, and believers yet open-minded. [On leadership characteristics]

  • The leadership team is the most important asset of the company and can be its worst liability [On dysfunctional leadership]

  • In the desert, a camel is better than a horse. [On situational leadership: speed vs. stamina]

  • I discovered that anything that can go right will go right! The wrong cannot last forever. – I’d like to think of it as the Anti-Murphy’s Law [On Optimism and Leadership Perspective]

  • There is a need for an integrated system, which includes best practices, tools and processes, to ensure succession planning and performance development of the management talent pipeline at all managerial levels, not only at the CEO level. [On Board Governance]

  • Even fast-growing and profitable companies can develop bad internal politics and unproductive work habits that will eventually lead to declining performance. [On Workplace Politics]

  • A continuous supply of high performance executive talent is probably the only sustainable competitive advantage in today’s global marketplace. [On Leadership as Strategic Competitive Advantage]

  • Since the leadership team can be the firm’s most valuable asset or its worst liability, leadership development should be a core business management process sponsored by the CEO, overseen by the board of directors, and facilitated by the HR department. [ On Leadership and Human Capital]

  • Leadership is the most important competitive advantage of a company, not technology, finance, operations or anything else. Leadership formulates the company's business strategy and builds its resources, including its people, finances and operations. [On Leadership Development]

  • Companies that fall short on managing leadership succession and development end up facing performance challenges due to market changes and talent attrition. Those firms will be forced to hire untested external talent or promote internal staff with an inadequate skill set [On Succession Planning]

On Gross National Wellbeing (GNW) Policies

  • Why choose happiness as a subject for economic research? The answer is simple: mental and emotional well-being of citizens improves their performance and broadens the intellectual, physical and social resources of a nation. [On Gross National Happiness (GNH)]
  • Unless you provide them [economists] with the framework to manage and track the well-being and happiness of their people they’re not going to do anything about it.

  • The role of government should shift from managing economic growth to socioeconomic development. American public policy should shift its focus from the standard of living to the quality of life and material possessions to well-being (physical, mental, and material) [On Gross National Happiness (GNH)]

  • Equal opportunity is not truly equal until all U.S. populations have equal access to the same quality of education and equitable development programs.

  • If one googles “antidepessants” he gets about six million pages. If he does the same for "depression prevention" you will get less than 50 thousand. If you google "happiness education" you will get less than 500 results! Even when using different search phrases, the results are more focused on treatment than prevention. Many mild to moderate depression cases can be eliminated or at least greatly helped with personal life management and happiness education The Institute recommends that happiness education starts in schools by providing basic social education in applied formats to personal and relationship management including basic psychology, self-awareness, leadership development, communication skills, conflict resolution, and basic sociology (social contracts and civil duties).

  • Governments have metrics to monitor your money. Do they use a metric to measure the citizens’ wellbeing?! [On Gross National Wellbeing and Happiness (GNW / GNH) and Socioeconomic development policies]

  • "The pursuit of happiness" is an American myth. The ideologies and governments of this century that promised happiness, have left people with more material possessions, but less psychological well-being. Many of the citizens are emotionally bankrupt and unhappy. The demands of life in our current socioeconomic system require that we keep running and running with little or no breaks....Like their parents, most young professionals will drift through life racing for the "American Dream", go through very expensive trial-and-error lessons and struggle to achieve happiness and fulfillment. [On social well-being the need for education reforms]

  • To be objective, it is not entirely the fault of the government. More has changed in the last decade technologically, culturally, politically and economically than the entire past century. The degree and speed of change has posed enormous challenges for countries, organizations and their people.

  • One of the important applications of the gross national wellbeing (GNW) solution is for public investments to measure the strategic wellbeing return on investment in public policies and projects. We call those metrics ROW (Return on Wellbeing) or Return on Happiness (ROH) instead of the traditional ROI (Return on Investment). In our opinion, researchers need at least 10 and preferably 15 years of performance data to make reliable conclusions on ranking and complex multidimensional policy issues. They would also need to study the ranking in relationship to major events and policy changes, as well as study the happiness in different demographic groupings. Ranking countries without such contextual information or without sufficient data can result in misleading and harmful conclusions. 

  • The truth is, because happiness science is new and we are all learning. Research and professional integrity demands that any author that publishes country rankings should disclose the limitations, reliability of their data, methodology and conclusions of such ranking.

  • Our definition of individual (and collective) happiness and wellbeing is that they are a product of an internalized formula interacting with an external dynamic socioeconomic system.

  • Your wellbeing (subjective and objective quality of your life) is a product of the individual and collective decision-making model (in democratic societies) and in relationship to different living environmental resources and socioeconomic conditions. Many times, the return on investment (life actions) depends on external forces of the socioeconomic system and their dynamic relationships to your actions.

  • Wellbeing is both physical (objective) and mental (subjective). Happiness is mental (subjective). In our opinion they are both interconnected and affect each other, you cannot have one without the other. Chronic stress, anxiety and/or depression can lead to behavioral dysfunction and decreased state of physical and social wellbeing and vice versa. This applies to both individuals and groups (families, organizations, communities, and countries). Our research since 1998 showed that certain demographic groups and even countries can collectively (on aggregate) be happier, healthier or more stressed and depressed. For example, prolonged conditions of economic adversity, discrimination, civil conflict or wars can result in thinking and behavioral dysfunction that will negatively impact their socioeconomic, political development and progress. Therefore, our proposal to integrate both objective and subjective measures was considered essential to changing socioeconomic development and government policies.

  • Another research flaw missed by many happiness and wellbeing studies and rankings is the psychological and social factors of adaptation (or getting used to difficult conditions). This factor is not addressed in any of the surveys we looked at. The popular subjective wellbeing surveys are full of such bias. This adaptation bias of self-reported happiness or satisfaction with quality of life is great for survival and social cohesiveness, but bad for researchers looking to quantify the answers objectively. It requires significant changes in research questions, methods and design.

  • For such critical global (happiness ranking)  initiatives, accuracy is more important than PR (public relations).

  • On an individual level, happiness is a product of an internal personal formula interacting with a dynamic socioeconomic system. It would be counter-productive to judge your wellbeing based on your happiness for a short period such as last month or last year, alone. Happiness and wellbeing cannot be measured without long-term contextual data. Sometimes short-term happiness can be harmful to your long-term wellbeing (e.g. drugs, alcohol, gambling winnings, etc.). Sometimes short-term stress can be useful for your long-term wellbeing (e.g. going to school and passing exams, changing a job, or a city). Your investment in learning adapting or managing the changes might turn out to be net positive or negative to your subjective (happiness) and objective (physical) wellbeing.

  • In short, your choices of college education, work, marriage, friends, political party and other activities cannot be meaningfully measured in a snap shot in time. Researchers need to measure them over a decade or two.

  • For us wellbeing and happiness are metrics used to measure progress (change or adaptation) in relationship to the external living environment. Seen this way, it is a more accurate measure of wellbeing and happiness than using a collection of isolated snapshots of self-reported feelings collected over a day, month, or a year.

  • On a collective happiness level, happiness and wellbeing are a product of the interaction of the unifying (or common) belief system and collective actions (such as majority voting) with the socioeconomic conditions of that group (e.g. a country). Take an example of a debt-driven national economic growth policy — it will let a group of people happy, and it might be necessary to overcome short-term suffering of labor layoffs, but if the debt is too high and the debt was used for consumer activity instead of investment, then there will come a period of austerity, suffering, or loss of wealth through inflation to service the debt. The net effect of happiness from one year to another can be positive, but in the long-term, it can be disastrous. Many developing countries spend decades suffering to try to get out of debt used for unprofitable public spending. We had first-hand experience in several poor and developing countries in Europe, Latin America, Africa and Middle East who are involved in similar vicious cycles of borrow, spend, suffer, recover, borrow, spend, suffer, and repeat. Superficial snapshot ranking of people’s happiness without detailed and proper analysis of context, causes and effects, internal and external forces interaction can be more harmful than helpful.

On Economic Policies

  • Lack of regulation is as bad as over-regulation. Governments should not regulate free market choices, instead they should regulate to maximize accountability, transparency, and the protection of consumers and investors against abuse of power, conflict of interest, and negligence; anything else can become counterproductive to economic growth. [On regulation debate]

  • Countries that quit producing real products, spend more than they produce, lag in education, burden their middle class with higher taxes, and continue to import billions from other countries, bail out failed businesses and reward bad behavior, investing in wars instead of education, will eventually lose their leadership and
    wealth. [On US bad economic policies]

  • Any economy that is built on uncontrolled debt will eventually crash. [On US Economy Crisis]

On the New World Order, Crises and Conflicts

  • After the collapse of the USSR, the US became the world’s sole superpower both, militarily and economically. The mistakes of our political elites led us to where we are today. I do believe that we will recover from the next crisis too. The US will not turn into a third world country or a poor nation; however it is unlikely that we will not be the only superpower or be the super-rich country. Wealth is being distributed globally and the world is becoming multi-polar. This is evident by the expansion of G-7 to G-20. In the next 7-10 years, if the US macroeconomic trends remain in the same direction, while other countries are growing in power and wealth, we will lose our leadership. We will become like the UK, an influential political and economic player but not the sole super power or the global economic empire it used to be. This is true for all past and future powers, the gap of knowledge, wealth, development and power between nations is reducing and the reign of super powers is shortening. Just look at the history of the Roman, Islamic, Russian and British empires, they are getting shorter. In business and economics, the same cycle applies; Look at Ford, IBM, Nokia, and others blue chips, the cycle of change is becoming faster. There is an increased rate of trade and knowledge exchange, spread of innovation, industrialization and entrepreneurial cultures around the world; the net result is more distribution of wealth, reduction in power and wealth gaps between the US and rest of the world and a natural change of the world order.  [On the decline of the US Superpower  2011]

  • To understand what is happening (Middle East civil unrests and  conflicts) and what is going to happen you need to look at inflation as a force of pressure. If the socioeconomic system of a country is open and democratic, the pressure will dissipate through the elections and peaceful change of government. On the other hand, if the system is closed, it might be able to contain the pressure for a while, but the pressure will build up with time and at a certain point, it will exceed the strength of the system causing it to crack. We saw it in Tunisia, Egypt and other countries before them. In other nations, this pressure release may take other forms such as racial, ethnic, or religious conflicts. Rulers who learn from history and create a socioeconomic system that is open will achieve stability and continuity. Those who fight against the socioeconomic laws may win some battles in the short-term, but they will lose the war. From a global perspective, what is happening today is simply part of the process of moving towards the new world order and part of the shift of power from the West to the East. The Middle East is at the center of that change.

  • In the US we had our share of civil conflicts driven by economic forces. The European immigrants brought slaves from Africa to use as cheap labor for farming the land. The color of their skin was only a rationalization for the continuation of the slavery system. All the segregation and discrimination rules against the blacks at that time were made to preserve the existing economic system and the interest of its beneficiaries. Although history books attribute the American Civil War to states and civil rights, the driving force behind the war was the conflict of economic interests. American rulers learned their lessons early on and created a socioeconomic system that allowed a free distribution of wealth and power. Today, we have a black president, we have more people leave their parents’ economic class and become richer regardless of their religious, ethnic or national background. Despite having more diversity than any other nation, we still have more stable national politics. If our elites try to limit the openness of the socioeconomic system, the system will be corrected in any number of forms including civic unrest. When Bush's administration invaded Iraq and bailed out Wall Street, the people brought in Obama. When Obama bailed out Wall Street again and considered raising the tax on the people, the people brought the Tea Party into power and the ruling party lost control of the Congress. Corrections are made via peaceful elections.

  • All  conflicts are driven by economic interests. It is essentially about the control of resources.  Religion, ideology, nationalism, ethnicities, freedom and other slogans are only tools to mobilize support to win over the opponents and gain more control.

  • The inflationary pressure forces and socioeconomic laws are also applicable to international relations. The historical crusades against Muslim lands, the colonization of Spain by the Muslim Moors and India by the British were all driven by economic interests, despite the advertised reasons that were used to mobilize their armies at the time. The invasion of Iraq was not about spreading democracy or weapons of mass destruction, it was about the oil. Iraq has one of the world's largest proven oil reserves. Oil is a strategic US economic interest, especially with the rise of China and India, and the rise of the global demand for energy resources. 

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Last Updated: August 6, 2018.