I’m So Tired

I’m So Tired

As I talk to my CEO clients and others across the work spectrum, the common refrain that I hear is, “I am so tired.” Somehow, I feel I have Lili von Shtupp’s lyrics stuck in my head on repeat.

“I’m so tired
Goddammit, I’m exhausted
Tired, tired of playing the game
Ain’t it a crying shame
I’m so tired.”

So why is everyone tired? I put it down to three things: Zoom Fatigue, Long Hours, and our environment.

 

Zoom Fatigue

Zoom Fatigue is real! Before COVID hit, roughly two-thirds of all social interactions were face-to-face. No more. Most of us still talk in person with the people we live with and maybe with a friend or two who we have allowed into our pods. There may be the occasional chat with the cashier at the grocery store, restaurant, or the UPS delivery person. However, almost all other interactions, work conversation, book clubs, dinner parties, joking around at the gym have either disappeared or moved online. Thus, nearly all of us are yearning for more social connections.

With the onset of COVID, Zoom, Teams, Skype, other video calling systems calls took off. Not only that, but telephone calls, which had been declining in favor of text, were like Mark Twain: the report of their death was an exaggeration.

  • AT&T reported that from mid-March to May 1, wireless voice calls peaked at 44% above typical levels, and Wi-Fi calling more than doubled.
  • In March, Verizon was reporting an average of 800 million wireless calls each weekday. That’s nearly double the number of calls made on Mother’s Day, typically the busiest call day of the year.
  • According to an RBC analyst, Zoom average 148.4 million monthly active users in Q2 2020, up 4,700% year over year.

So while we are communicating through new and old channels, it is different. According to  Jeffrey Hall, a professor of communication studies at the University of Kansas, “Compared to face to face, texting and using social media, energy use during a Zoom call is higher. It was more intense than these other [modes].” Besides, Hall’s research shows that video calls also seemed to heighten not lessen loneliness. “People said, after the fact, that they felt lonely, less connected [on video chat].”

Hall argues Zoom fatigue is real. “Zoom is exhausting and lonely because you have to be so much more attentive and so much more aware of what’s going on than you do on phone calls.” We are also asking everyone on the call to have their cameras on see how people are doing, but then you are also watching yourself speak. Research shows that when we’re on video, we tend to spend the most time gazing at our own faces. So, hide from view. Also, when on video, we also focus on other’s backgrounds as well. We can see their furniture, plants, and artwork. We start straining to see what books they have on their shelves. Processing all these stimuli takes a lot of very energy, increasing mental fatigue. Also, bandwidth issues causing blips, delays, and cut off sentences create confusion.

Not only that, but video calls make it easier than ever to lose focus. We all believe we absolutely can listen intently, check our email, text a friend, and post a smiley face on Slack within the same thirty seconds. Except, of course, we don’t end up doing much listening at all when we’re distracted. Not only that, but it quickly becomes obvious to the others that you are not focused and mentally checked out, which is a distraction to the entire group.

Finally, there are issues of co-workers being invited into your private living spaces and all the issues that bring with it. People are questioning coworkers’ tastes in art and home décor and being exposed to more of their online chat participants than expected. The latest to fall foul of that was New Yorker writer Jeffrey Toobin, but there are cases of mothers being caught nude on their children’s school zoom calls, and much worse.

According to Hall, phone calls, by comparison, are less demanding. “You can be in your own space. You can take a walk, make dinner.” 

How to combat Zoom fatigue

I believe there are a few steps we can take to reduce Zoom fatigue, and they are:

  • Basic teamwork blocking and tackling. Start meetings asking about the team and how they are doing personally. Recognize contributions. At this time, we are all suffering, and recognition helps lift our spirits. Celebrate victories. There aren’t many, and we need to celebrate more.
  • Have an agenda. No Zoom call should occur without a clear agenda on what is to be covered in the call. Also, whoever called the meeting has to ensure that everyone sticks to the agenda and needs to quieten those that continue talking. I have noticed that it is hard to get a word in on a Zoom call if others keep talking, so the meeting head needs to use the mute button generously at times.
  • Fewer meetings. Since Zoom meetings are exhausting, we need to limit them. Since we are all craving connection, it has become like cc emails. We include everyone, but not everyone needs to be on all calls. If there is an agenda, those that don’t need to attend can say so. Remember Jeff Bezos’s 2-pizza rule. No more than 6 to 8 people. The more people, the more unproductive the meeting becomes.
  • Shorten meetings. When meetings are too long, attendees tend to switch to offline mode and focus on emails or messages. Meetings have reverted to a 1-hour standard, but why? Push your team to do better and make it a company priority to set a new meeting standard of 30 minutes maximum. Make it short and sweet, and keep the focus on the issues at hand.
  • Avoid multitasking. Researchers have found that people who multitask can’t remember things and their more singularly focused peers. So, during your next video chat, close any tabs or programs that might distract you (e.g., your inbox or Slack), put your phone away, and stay present.
  • Build-in breaks. Take mini-breaks from video during longer calls by minimizing the window or just looking away from your computer completely for a few seconds every so often. Your colleagues probably understand more than you think — it is possible to listen without staring at the screen for a full thirty minutes. This is a time just to let your eyes rest for a moment. If you are stuck in a day of back to back Zoom meetings, building a 10-minute buffer between calls to stretch and walk.
  • Reduce onscreen stimuli. Encourage people to use virtual backgrounds, preferably ones that don’t move, or agree as a group to have everyone who is not talking turn off their video.

Also, Hall suggests three more rules:

  1. Tighten the circle of people you communicate with. In technology, as in life, we have layers of intimacy. According to Hall, “It’s not the case that more is better. We can only maintain so many relationships at a time.
  2. Build communication into your routines. “Have something on the calendar that you repeatedly do, make it a part of what’s on your daily or weekly or monthly to-do list,” Hall says. I have a monthly Zoom call with some high school friends, which has been a great way to reconnect and chat through all we are going through.
  3. Strengthen the signal. Use communication methods that make you feel the most connected and think about the content of your interactions. As Hall says, “We’re still human beings who need each other. We’re going to use technology to recreate the things that we need.”

Long hours

With COVID, our workspace has invaded our homes. The separation of relaxation and work is lost as so we work longer. Also, many of us are dealing with our children’s challenges at home learning virtually, which is a huge distraction and prevents many from doing their jobs. As a result, work gets moved to when the children are done or asleep, lengthening the workday. Effectively we are all working continual overtime.

However, research shows employees who work overtime hours experience numerous mental, physical, and social effects. Significant effects include stress, lack of free time, poor work-life balance, and health risks. Besides, employee performance levels fall, and there is an increase in tiredness, fatigue, and lack of attentiveness. Here is a list of things you and your employees can do to reduce stress.

From what I see and hear, everyone is experiencing this. The initial increase in productivity with the onset of COVID has gone, and overall productivity has fallen. There is overall euphoria for those whose children have returned to school as they are regaining time to work and then be engaged with their children at the end of the day.

How to combat long hours

Combatting long hours is more difficult than Zoom fatigue. But realistically, COVID will affect us for another year, so you need to adjust your planning to that reality. During the winter months, it will get worse as outside activities become more limited. However, here are some suggestions.

  • Be disciplined with your calendar. Don’t allow it to fill up with meetings. If you are in the C-Suite, ensure that your people limit their meetings, both in time and number. As mentioned above, move meetings to 30 minutes and limit the number of back to back meetings.
  • Build-in breaks. Every two hours, take a 30-minute break. Walk around the neighborhood, meditate, or do yoga. The break in the routine will be mentally stimulating.
  • Take time off. Encourage people in your organization to take time off. From the data out there, the amount of unused PTO is at record levels. However, estimates are that unused vacations cost the U.S. $224 billion a year. Allow for a day off for the organization. Be clear about your annual leave and other paid time off guidance, especially if they have changed during COVID. Not only that, but encourage people to go something different other than sit at home. Currently, I am sitting in San Francisco with some friends. The change in scenery and environment is incredibly refreshing and mentally revitalizing. Read more at Managers, Encourage Your Team to Take Time Off.
  • Find a hobby. We are trapped in our homes. So we need to find something outside of work that is mentally refreshing and brings us happiness and excitement. It is a great time to find a new hobby, read some of the classics, or finish those DIY projects that have been on our to-do list forever. I found archery that way as I would go into a zone for the entire time, and it provided a break. A CEO I know has joined her husband doing woodwork, and it is something they both look forward to at the end of the day.

 

Our Environment

We are heading into the holiday season, and this year it is going to be very different. For those with college children, they will be home much longer. There will be no parties and few opportunities to socialize. There will be little shopping at malls for gifts, but UPS, FedEx, and Amazon trucks will fill the road. Those with extended families are likely to travel to see them. After nine months of COVID, this is what we have to look forward to. Not only that, but we can expect COVID to be disrupting our lives for another nine to twelve months. All of which is mentally draining.

How to deal with this. The best way, in my opinion, is the Stockdale Paradox. James Stockdale was held captive during the Vietnam War as a prisoner of war for over seven years. Stockdale was repeatedly tortured during his captivity and had no reason to believe he’d make it out alive. To stay alive in this hell reality, Stockdale embraced both the harshness of his situation with a balance of healthy optimism. The paradox, as he put it, “You must never confuse faith that you will prevail in the end — which you can never afford to lose — with the discipline to confront the most brutal facts of your current reality, whatever they might be.” In its simplest form, the paradox is the idea of hoping for the best but acknowledging and preparing for the worst.

Of course, as a follower of the ancient Greek Stoic philosophers, Stockdale may have had an advantage, but we can all learn from the paradox. The paradox holds a great lesson for how to achieve success and overcome difficult obstacles. It also challenges unbridled optimists and those positivity peddlers whose advice we are encouraged to follow. In discussion with Jim Collins for his book Good to Great, Stockdale spoke about how the optimists fared in the prison camp. The dialogue goes:

JC: “Who didn’t make it out?”

JS: “Oh, that’s easy, the optimists.”

JC: “The optimists? I don’t understand,” I said, now completely confused, given what he’d said a hundred meters earlier.

JS: “The optimists. Oh, they were the ones who said, ‘We’re going to be out by Christmas.’ And Christmas would come, and Christmas would go. Then they’d say, ‘We’re going to be out by Easter.’ And Easter would come, and Easter would go. And then Thanksgiving, and then it would be Christmas again. And they died of a broken heart. … This is a very important lesson. You must never confuse faith that you will prevail in the end—which you can never afford to lose—with the discipline to confront the most brutal facts of your current reality, whatever they might be.”

Your organization—or unconscious mind—may be hoping on some other event or date after which some version of “rescue” will come: a vaccine, a cure, a reliable and cheap test, the acquisition of herd immunity.

However, to review the brutal facts, none of these developments are likely in the foreseeable short term. There is a possibility that there may never be a fully effective vaccine or cure; this virus may be something that we live with and manage for years to come. If that is the case, we will have to change elements of our social interaction in unprecedented ways that may well lead to irrevocable social changes.

Besides, the effects of the virus today ensure there will be no normal to return to, as this incomplete list indicates:

What to do?

With regard to business leadership and management, this duality helps to guard against the onslaught of disappointments that COVID delivers in the business world. Optimism drives innovation; however, we need to maintain realism and not over-optimistically chase something that can’t happen.

The COVID crisis is affecting your employees in very different ways depending on where they live, what they do, their family situation, and their understanding of and expectations about the pandemic, among other factors. As a result, your team members are probably in different phases of reaction to the crisis. Keep this in mind and here are some additional suggestions.

  • Start meetings by having each person introduce themselves by their name, job title, mission, and their immediate tasks. Doing so brings people back to themselves and helping them begin to focus again on their roles, relationships, and tasks which is of utmost importance. The important role of a leader during a crisis is to consistently articulate the organization’s purpose and connect each day’s tasks to it. Without this, people drift. While the need for planning is crystal clear in acute, short-term crises. Planning in a long-term situation where the threat to survival rolls on monotonously day after day is not always so clear. This is because planning automatically implies a future, and this future is frequently in doubt. All leaders, not only those in the C-suite, must understand the organization’s purpose, values, and how those connect to each day’s work. Managers have at least as much impact on team morale and performance as the overall organization itself does. In crises, people tend to rely on the authority figures they already know and trust even more than usual. And remote work means that a direct manager may be an employee’s only real point of contact with the organization.
  • Regularly ask at meetings: “What is something that doesn’t fit in, that doesn’t make sense?” As we face a rapidly changing set of circumstances knowing what data points matter is difficult. Ensure there is time to discuss facts that don’t seem to fit the narrative. During a crisis, we automatically discount our experience and lean towards denial. To fight these cognitive biases, we must be made aware of them. As you and your team move through this time, you will sometimes lose focus, make mistakes, and have errors in judgment. The key is to normalize admitting these mistakes and analyzing them. Make discussing weak spots, harm reduction, and damage control part of the weekly meetings. This will lead to better decision making going forward.
  • Enable ways for your team to surface both their deep faith and their real fears. Engaging in “As if” exercises, roleplay, and assigned mental exercises can help teams articulate thoughts and feelings that may be too threatening to acknowledge otherwise. “Having a value system, a sense of identity, a purpose for one’s existence increases the odds of survival and resiliency.” When deciding on a course of action, have team members engage in mental contrasting. Mental contrasting requires a person or team to (i) visualizes a goal and its rewards, and (ii) visualizes what obstacles, including their own behavior, stand between them and their goal. It is necessary to envision both the positive and the negative. According to W. Von Bergen and Martin S. Bressler, when people focus on only positive thoughts about the future, “they literally trick their minds into thinking they have already succeeded and, so, do not need actual efforts to attain something perceived as already acquired. However, completely disregarding positive thinking is also not effective. With purely negative thoughts, people convince themselves that they have already lost the goal, so, again, there is no need to make the efforts necessary to achieve it.”
  • Have faith. Ask yourself: What were your highest values in January 2020? For you as an individual or for your company? Those values still matter, and those ideals did not change because of COVID. So, ask:
    • What are your brutal facts? What is your deepest faith?
    • What would your version of the Stockdale Paradox be?
    • What does your organization exist for?
    • What is your organizational purpose? How engaging is it?

I hope some of this helps. Hang in there and have faith. The road may be rough, but as John Lennon said, “Everything will be okay in the end. If it’s not okay, it’s not the end.”

Copyright (c) Marc A. Borrelli, 2020

Your organization—or unconscious mind—may be hoping on some other event or date after which some version of “rescue” will come: a vaccine, a cure, a reliable and cheap test, the acquisition of herd immunity.

However, to review the brutal facts, none of these developments are likely in the foreseeable short term. There is a possibility that there may never be a fully effective vaccine or cure; this virus may be something that we live with and manage for years to come. If that is the case, we will have to change elements of our social interaction in unprecedented ways that may well lead to irrevocable social changes.

Besides, the effects of the virus today ensure there will be no normal to return to, as this incomplete list indicates:

What to do?

With regard to business leadership and management, this duality helps to guard against the onslaught of disappointments that COVID delivers in the business world. Optimism drives innovation; however, we need to maintain realism and not over-optimistically chase something that can’t happen.

The COVID crisis is affecting your employees in very different ways depending on where they live, what they do, their family situation, and their understanding of and expectations about the pandemic, among other factors. As a result, your team members are probably in different phases of reaction to the crisis. Keep this in mind and here are some additional suggestions.

  • Start meetings by having each person introduce themselves by their name, job title, mission, and their immediate tasks. Doing so brings people back to themselves and helping them begin to focus again on their roles, relationships, and tasks which is of utmost importance. The important role of a leader during a crisis is to consistently articulate the organization’s purpose and connect each day’s tasks to it. Without this, people drift. While the need for planning is crystal clear in acute, short-term crises. Planning in a long-term situation where the threat to survival rolls on monotonously day after day is not always so clear. This is because planning automatically implies a future, and this future is frequently in doubt. All leaders, not only those in the C-suite, must understand the organization’s purpose, values, and how those connect to each day’s work. Managers have at least as much impact on team morale and performance as the overall organization itself does. In crises, people tend to rely on the authority figures they already know and trust even more than usual. And remote work means that a direct manager may be an employee’s only real point of contact with the organization.
  • Regularly ask at meetings: “What is something that doesn’t fit in, that doesn’t make sense?” As we face a rapidly changing set of circumstances knowing what data points matter is difficult. Ensure there is time to discuss facts that don’t seem to fit the narrative. During a crisis, we automatically discount our experience and lean towards denial. To fight these cognitive biases, we must be made aware of them. As you and your team move through this time, you will sometimes lose focus, make mistakes, and have errors in judgment. The key is to normalize admitting these mistakes and analyzing them. Make discussing weak spots, harm reduction, and damage control part of the weekly meetings. This will lead to better decision making going forward.
  • Enable ways for your team to surface both their deep faith and their real fears. Engaging in “As if” exercises, roleplay, and assigned mental exercises can help teams articulate thoughts and feelings that may be too threatening to acknowledge otherwise. “Having a value system, a sense of identity, a purpose for one’s existence increases the odds of survival and resiliency.” When deciding on a course of action, have team members engage in mental contrasting. Mental contrasting requires a person or team to (i) visualizes a goal and its rewards, and (ii) visualizes what obstacles, including their own behavior, stand between them and their goal. It is necessary to envision both the positive and the negative. According to W. Von Bergen and Martin S. Bressler, when people focus on only positive thoughts about the future, “they literally trick their minds into thinking they have already succeeded and, so, do not need actual efforts to attain something perceived as already acquired. However, completely disregarding positive thinking is also not effective. With purely negative thoughts, people convince themselves that they have already lost the goal, so, again, there is no need to make the efforts necessary to achieve it.”
  • Have faith. Ask yourself: What were your highest values in January 2020? For you as an individual or for your company? Those values still matter, and those ideals did not change because of COVID. So, ask:
    • What are your brutal facts? What is your deepest faith?
    • What would your version of the Stockdale Paradox be?
    • What does your organization exist for?
    • What is your organizational purpose? How engaging is it?

I hope some of this helps. Hang in there and have faith. The road may be rough, but as John Lennon said, “Everything will be okay in the end. If it’s not okay, it’s not the end.”

Copyright (c) Marc A. Borrelli, 2020

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I believe t is several things. First, the Fed has flooded the economy with funds through the CARES Act, the Main Street Lending Program, to name a few. The money has to go somewhere, and there is FOMO – Fear of Missing Out – so everyone is piling into the leading tech stocks. Further evidence is:

1. Junk bond debt issues, as shown above. The demand for yield is high as government debt, and AAA debt is offering such low yields. Thus record amounts of questionable paper have been issued to meet this demand.

2. SPACs. Look no further. Everyone and their dog is jumping into the SPAC space. These blank-check companies have raised about $41 billion, year to date, which is more than the last ten years combined, and Since July 1, about $29 billion. Currently, I understand that over 40 SPACs are looking for merger partners. As I have mentioned before, SPACs tend to overpay, reducing the returns for investors. Given that there are so many buyers right now, we can expect the prices of merger partners to rise and the quality to fall. Of course, the people who make the real money buy the founders’ shares and get the “promote.” Take the case of Alec Gores, who put just $25,000 into his SPAC when went public in January. Once their acquisition is closed, their 0.6% stake will be worth $96 million. Not bad work if you can get it. However, if the founders are doing so well, my advice is to stay away. The SEC is concerned that investors don’t understand how the incentives relate to pay in a $PAC compared to a traditional IPO. There may be regulation.

3. Is Palantir the latest WeWork? According to the Wall Street Journal, bankers have told investors that shares may start trading at $10, valuing Palantir at almost $22 billion when it goes public through a direct listing on September 30. Valued at $20 billion in 2015, Palantir has seen some increase in value. However, in the private markets, it is trading below $20 billion, and this month PitchBook valued Palantir at just $8.8 billion. As I mentioned last week, Scott Galloway in PalanThiel: The Uncola pointed out that “But at 17 years of age, and after raising $3 billion, the ‘start-up’ has never made money. In 2019, Palantir lost $580 million on approximately $740 million in revenues. The idiot client they serve (U.S. government) lost 25 cents on the dollar ($1 trillion deficit vs. $3.5 trillion in revenues) in 2019 vs. 78 cents at Palantir. The firm spent $911 million in marketing over the last 24 months, roughly half of what Tide detergent spent over the same period. The firm has 125 clients, 3 of them accounting for 28% of revenues. Palantir feels more like a services firm, with tech at its core (e.g., Accenture), but one that, unlike a services firm, is massively unprofitable.” Driving all that success if CEO Alexandar Karp, who paid himself $12 million. If the market is valuing this at $20 billion, we must be close to the top!

 

The Housing Market

For those that haven’t noticed, the housing market is booming. Many of us stuck inside have realized that we don’t like our homes are moving. In August, new-home sales increased at the fastest rate since 2006. All this demand is causing a supply and demand problem driving up prices.

However, not for long. As I predicted in April, many people are straining to pay their mortgages. Industry analyst Keith Jurow expects “several million” people will have gone nine months without making a payment when the Federal Housing Finance Agency’s foreclosure and eviction moratorium expires at the end of the year. In July, 17% of FHA-insured mortgages were delinquent, according to the Department of Housing and Urban Development. In NYC, 27.2% of mortgages were delinquent in July.

With so much new supply coming online soon, prices may drop, and those that bought now may find they purchased at the top.

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Need to Escape, Flights to Nowhere!

Need to Escape, Flights to Nowhere!

As I have discussed several times, we are struggling in the COVID world of working more hours, with more conference calls, little time to turn off and recharge. However, breaks are more critical as we need downtime from deadlines and stress and to recharge. Burnout is becoming a large factor and causing falling productivity among all of us. We work longer but are less effective. Thus while overall productivity may be ahead, the cost is enormous.

Furthermore, with Zoom, Skype, Teams, Hangout, etc., there is a belief that since you are at home, you are always available. One executive I know has been in the Azores for a couple of weeks with his wife as she is from there. A board he is on just rescheduled its board meeting, and he is facing a board meeting from 12 am to 3 am, which in my opinion, is ridiculous. We all need to understand that many of us are no longer where we were during regular times. Some are at vacation homes, some are with elderly parents, some are stuck in other countries, and some are homeschooling kindergarteners first thing in the morning. Thus, we need to adopt a much efficient approach and ask if times are convenient for all the call’s potential members.

The assumption that everyone is available at all times so we can put meetings on their schedule at any time is causing even more chaos and exhaustion. Further, while the new time might suit the most senior member of the call, if they need input from the others who cannot provide it due to the time, then the meeting is a waste of time, and burnout increases.

I took a week’s vacation about three weeks ago and failed miserably. The best I managed was one day with only one call and four hours of work. Looking at my falling productivity, burnout, and listlessness, my wife and I agreed on a do-over. This week we took another vacation, and I have done much better with little work and meetings. I can already feel my energy levels and thinking improve. We all need a break, and like on airplanes, when the oxygen mask comes down, take care of yourself first, so you can then take care of others.

Thus, finding time to create that quiet space where you can reflect and recharge your batteries is a battle that many of us now face.  Many executives say the most significant thing they miss in our new world is that time on aircraft when they were effectively out of reach and had that quiet time.

Naturally, markets responded, and some airlines, none in the U.S., are offering “Flights to Nowhere.” Thousands of people have booked flights in Brunei, Taiwan, Japan, and Australia that finish where they started and are called either “scenic flights” or “flights to nowhere.”

  • Royal Brunei, since mid-August, has flown five of these flights. As Brunei has had very few coronavirus cases, passengers are not required to wear masks, but staff members are.
  • EVA, the Taiwanese airline, sold all 309 seats on its Hello Kitty-themed A330 Dream jet for Father’s Day.
  • Japan’s All Nippon Airways had a Hawaiian-resort-themed, 90-minute-flight with 300 people on board.
  • Qantas sold out its flight to nowhere over Australia in 10 minutes last Thursday. Tickets ranged in price from $575 to $2,765. The flight will go around Australia, flying over the Northern Territory, Queensland, and New South Wales.
  • Qantas has also brought back its popular sightseeing flights to Antarctica that don’t land in Antarctica but allow passengers to walk around the aircraft and have different Antarctica views.
  • Starlux, the Taiwanese airline, is working to make the flight-to-nowhere experience a luxurious one by allowing people to buy packages for the flight and a hotel stay. Since August, the airline has run six flights to nowhere and has about a dozen more scheduled through October, and most of them have sold out within 10 minutes of being announced. The airline requires masks and social distancing on all fights.

For those that see flying more than as a method of getting from A to B, these flights provide either the exciting flying experience or the quiet time they have missed due to COVID. For those who need to escape being online always. I can appreciate the quiet time flying provided. I loved long-haul flights with no WiFi and considered them a great time to read and get “thought” work done. But the idea of a “flight to nowhere” has little appeal. I have my first cross country flight since March next month, and while I may change my view, I doubt it.

However, for those executives who cannot manage to find a quiet time without getting on a plane, I would suggest revisiting your priorities and finding that peaceful time once a week of at least two hours. Make sure that:

  • You have blocked out the time on your calendar, so you cannot be disturbed;
  • You have turned off your phone;
  • If using your computer, you have turned off your email; and
  • You are somewhere where you will not be disturbed by a spouse, partner, kids, or pets.

Furthermore, start considering all the others on your multitude of video calls to ensure that the times suit them and that they will be in a position to provide the most significant input. Otherwise, you are just increasing stress and burnout and doing nothing productive.

I believe quite times to be of great value, and if you can create that habit and space now, it should serve you well after COVID has ended without a need to fight your way through airports, security, and eat lousy food. I think we all would benefit from more of this time, especially as we are “busier” than ever but are questionably productive.

 

Copyright (c) 2020, Marc A. Borrelli

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A Different Mindset

A Different Mindset

As someone who didn’t grow up in the U.S., I have a different view of time and certainty. When I arrived, I was always amazed at how people planned for longer and longer events that were way out into the future, but with a certainty that everything would go to plan, e.g., in estate planning, using generation-skipping trusts.

For me, the U.S.’s long-term view reminded me of Issac Asimov’s trilogy, the Foundation, when the Mule appears, unforeseen, and topples the Foundation contrary to expectations. In the U.S. I see the overwhelming belief that everything will fine in the long term, and while there are outlining events, everything reverts to the mean. However, there are always unforeseen events that can disrupt the trend and cause it never to return to the prior norm.

I grew up in South Africa, and many of my parent friends had done the long constant migration south. They lived in the Republic of the Congo, today the Democratic Republic of the Congo. With independence in 1960, the military revolt, the succession of Kantaga, and the influx of mercenaries and paramilitary troops to protect mining interests, they fled, many moving to Zambia where their mining skills were in demand. Zambian independence in 1964 and the fears over privatization starting in 1968, they moved onto Rhodesia, now Zimbabwe. With Rhodesia’s Unilateral Declaration of Independence “UDI” from the United Kingdom in 1965, the civil war began, which lasted until 1980 with free elections.

Many decided to move further south to South Africa, a country bound to be stable and prosperous. These moves were often made in a rush, as power structures changed, and in most cases, they lost everything they had during each relocation. Unfortunately, in South Africa, the 1976 Soweto uprising was the beginning of the end for the minority white government; it would take nearly twenty years for that to occur. My parents knew many of these people were too old to move once more and stayed on, seeing wealth evaporate with a declining economy, currency, and sanctions.

I know of a family in Zimbabwe where the patriarch was a multi-millionaire. On his death, he left everything in trust for seven beneficiaries – each receiving over a million, with the trustee’s stipulation to invest the funds in Zimbabwe. As Zimbabwe’s economy collapsed in the 2000s, with hyperinflation hitting its peak of at an estimated 79.6 billion percent month-on-month in November 2008, the value of the trust’s assets declined. The trustee, a corporation, could not move the funds overseas due to currency restrictions and would not disburse the funds to the beneficiaries because of the terms of the trust. Today each beneficiary’s interest will buy them less than a tank of gas for their car.

Finally, I attended boarding school in Switzerland in 1973. A Lebanese friend of mine’s father had interests in Lebanon and started a new business in Iran because he thought diversification was a good idea. In 1975 the Lebanese Civil war started, which was to continue to 1990, but the troubles continue. That war cost them nearly everything they had in Lebanon; however, the Iranian business did well. Having seen what had happened, he bought properties in New York, London, and Cayman as further diversification and protection. January 1979, his father was in New York watching the Shah leave and the riots and saw the bank, which held his accounts, burn. They never returned to Iran, but thankfully the portfolio of properties kept them financially afloat.

Why these stories, well, we have seen in the six months with COVID, how the world has changed. What we took for granted is no longer sure. When will return to “normality,” who knows, but according to Dr. Fauci, sometime in late 2021? As I have said in this newsletter many times, your old business plans, strategy, and financial models need to go out the window, and new ones prepared in light of what is happening.

I would add to that, as you consider the long-term outlook and your business and investment portfolio, I would look for hedges to protect for large unforeseen events. Following Nassim Taleb’s barbell strategy – you avoid the middle in favor of a linear combination of extremes across all domains from politics to economics to one’s personal life.

There is talk of the dollar falling in value and possibly losing its reserve country status. How long it takes the U.S. to recover from COVID is another uncertainty as we have yet to find a strategy. Will the U.S. and China go to war over Taiwan? What will these events do to your business? Thus, I would consider other parts of the country, other countries in supply chain protection, concerning investments, international assets as a hedge.

As for looking outside the U.S., I would not claim the authority to recommend any particular country. I definitely would not follow the Englishman’s steps in 1980; deciding the world was unsafe, moved to the Faulkland Islands as he determined the safest place to be. Less than two years later, the Argentine invaded, and the Falklands War got going.

However, realize nothing is certain! Trends don’t last forever, and while things revert to the mean, there will be a new mean after massive disruptions. Take the lesson from COVID to reexamine everything and do it regularly. Complacency has enormous costs. As David Mitchell put it so well in Cloud Atlas, when two people are discussing revolutions,
“Fantasy. Lunacy.”
“All revolutions are until they happen, then they are historical inevitabilities.”

I am not saying revolution is coming, but large, unpredictable things are, and like revolutions, most will all be historical inevitabilities, as COVID was!

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