Here’s a guest post from Whitney Hoffman:
Mistakes Were Made, And How To Handle Whatever Comes Up
Things in the economy are pretty shaky right now, and the mistakes and misjudgments of the few are causing wide-spread problems for the many. If you’re looking to understand the crisis, I can’t recommend any better source than the awesome pieces done by NPR and This American Life- The Giant Pool of Money and Another Frightening Show About the Economy. Understanding what’s happened is important, if only so we can avoid making the same mistakes again in the future.
One of the best books I’ve read recently is Mistakes Were Made (but Not By Me):Why We Justify Foolish Beliefs, Bad Decisions, and Hurtful Acts by Carol Travis and Eliot Aronson. It talks about how blind we can sometimes be to errors, and then even when we recognize them, how hard it is to have someone take responsibility for them. No one wants to be fully culpable for mistakes; yet sometimes, we need to know who will take responsibility, if only for the clean up.
This, of course, can be applied to any one of the links in the financial chain that’s led to the recent economic problems- but somewhere, along the line, many people contributed to the mess. We passed the collective blame and rationalizations around, and no one seemed to listen when a few people started to say- “This doesn’t seem like a good idea.” Now, it seems like all we need is a big enough or good enough scapegoat to be our lamb to the slaughter, and the we can go back about our business.
What I hope we learn from this crisis, and by books like Mistakes Were Made, is how to understand the problem and address it; fix the situation at hand and spend less time trying to figure out who we can leave holding the bag. Punishment is fine, I guess, but doesn’t always lead to long term change in how things are done. What I’d really like to see is people in leadership roles to take responsibility, not just figure out how to save themselves and let everyone else drown. And I think by reading Mistakes Were Made, we can better understand why we have a hard time avoiding the blame game.
This brings me to the book I just picked up called The Knack: How Street Smart Entrepreneurs learn to Handle Whatever Comes up, by Norm Brodsky and Bo Burlingham of Inc. Magazine. This book outlines the basic things everyone considering their own business should know, from cash flow issues to scalability. And certainly those involved with startups should understand these basic principals of what constitutes good business and bad, if only to make more solid, long term decisions. (I also think the principals apply equally well to learning how to manage your family’s money, as I think all families are essentially a small business involved in raising children and saving capital for long term projects, ie retirement, dream house, or college education for kids…but that’s me.) Moreover, all the ideas and information are presented in a way where you don’t feel like you’re reading an accounting text book. You see real life people, with real life problems, trying to figure out whether they have a viable business, and what the have to do to make it work for them. Norm and Bo give you advice you can use, and it’s advice I dole out all the time over on my blog- acknowledge the facts, plan and chart a way towards your long term goals. May seem boring, but that’s what works, time and again- substance.
What books have you read lately that have changed the way you view things? What would you recommend to others? What constitutes your personal curriculum? Let us know in the comments!
Please also check out Whitney Hoffman’s own site