Dan Erwin

Carol Dweck and Greg Walton on Willpower

Is willpower about your biology or your brain? Are we constrained by the narrow limits of our biology?

After nearly a two-week hiatus from blogging--and Thanksgiving week in glorious Boston with my kids, spending some of that time going over my grandson’s list of potential colleges, I’m back home again. So I chuckled to see Carol Dweck and her associate, Greg Walton, reporting still more of their ground-breaking practical research in Sunday’s NYTimes. 

The Stanford profs have studied another important issue of human capital: willpower. And they’ve found that we can actually manage our willpower. 

The authors begin by posing two important illustrations of the problem, both depicting the popular belief that willpower is about biology not mindset. In one, they quote a recent nutrition book, arguing that because of how the brain’s hypothalamus works, it is a “myth” that anyone can will himself to lose weight. A second illustration from a just published book concludes that willpower is “limited and depends on a continuous supply” of glucose. Dweck and Walton’s assessment is spot on: these theories attribute our failures of willpower to our fixed biology—and wrong. 

The theories, as Dweck and Walton point out, have an obvious appeal: attributing failures of willpower to our fixed biological limits justifies our procrastination as well as our growing waistlines. Not only that, we also get to consume more sugar. 

In stark contrast, their research has found that what’s limiting our willpower is our mindset. And when people believe that willpower is self-renewing and work hard, they’re energized to work more. 

Recognizing that many people are skeptical about renewing willpower, their research found the following: 

When the initial task was easy and willpower wasn’t required, people did well on the tricky cognitive task, making few mistakes. But when the initial task was hard and involved self-control, people who believed that willpower was limited made almost twice as many mistakes on the tricky cognitive task as did the group that performed the initial easy task. This finding replicates many studies by Dr. Baumeister and others that have been interpreted as evidence that willpower is limited and easily depleted. But, strikingly, we found that people who believed that willpower was not limited continued to perform well on the second task, making few mistakes, even after facing the difficult initial task. They were not “depleted” and kept on doing well.

This study and others put the lie to our common notions about the limitations of willpower. They also reinforce the well-known research that shows that the more we learn, the better and the faster that we can learn.

You may contend that these results show only that some people just happen to have more willpower — and know that they do. But on the contrary, we found that anyone can be prompted to think that willpower is not so limited. When we had people read statements that reminded them of the power of willpower like, “Sometimes, working on a strenuous mental task can make you feel energized for further challenging activities,” they kept on working and performing well with no sign of depletion. They made half as many mistakes on a difficult cognitive task as people who read statements about limited willpower. In another study, they scored 15 percent better on I.Q. problems.

When faced with skepticism about this kind of research I remember that old dogma dies hard. Once concepts are deeply embedded, a superstructure of assumptions and ideas grows around it. Rejecting a dogma means that many ideas are now questionable, and . . . as a result a close read of a book or thoughtful analysis of a new and complex idea is impossible. As an acquaintance of mine said about these ideas: "I don't believe it. I can't believe it. Everything I've ever learned about intelligence and achievement would go out the window." He tuned out. It was a losing battle I chose not to fight.

This research reminds parents of some very important truths for their children—and themselves as adults, businesspersons and professionals.

At stake in this debate is not just a question about the nature of willpower. It’s also a question of what kind of people we want to be. Do we want to be a people who dismiss our weaknesses as unchangeable? When a student struggles in math, should we tell that student, “Don’t worry, you’re just not a math person”? Do we want him to give up in the name of biology? Or do we want him to work harder in the spirit of what he wants to become?

So Strivers, Talent Really Matters Too?

A Sunday NYTimes article by two psychologists under the eye-catching title, Sorry, Strivers: Talent Matters, once more raises the issue of the role of academic intelligence, personal development and expertise. The authors would have you believe that people who score high on IQ inevitably do better in business than those who don’t score as high. But if you read the thirty page research report you’ll realize that they’re pushing the envelope on the interpretation of their results. They also argue, with more success, that working memory capacity, a major component of intelligence, predicts success in a wide variety of complex activities. But more about that later. 

For the uninitiated, this is another shot across the bow in the complex battle between inherent intelligence and learned intelligence. Once more, it’s a strong push for IQ intelligence (academic or analytical intelligence) as the be-all, end-all. Not so fast. 

The authors take aim at several popular writers, but two paragraphs stick out as a summary of the evils of deliberate practice: 

Malcolm Gladwell observes that practice isn’t “the thing you do once you’re good” but “the thing you do that makes you good.” He adds that intellectual ability — the trait that an I.Q. score reflects — turns out not to be that important. “Once someone has reached an I.Q. of somewhere around 120,” he writes, “having additional I.Q. points doesn’t seem to translate into any measureable real-world advantage.” 

David Brooks, the New York Times columnist, restates this idea in his book “The Social Animal,” while Geoff Colvin, in his book “Talent Is Overrated,” adds that “I.Q. is a decent predictor of performance on an unfamiliar task, but once a person has been at a job for a few years, I.Q. predicts little or nothing about performance. 

Thus, the writers argue, science tells quite a different story—that intellectual ability matters for success in many fields. 

Well. . . before you buy their argument wholesale, think about the following: 

Nowhere do the practitioners of deliberate practice argue that practice alone makes for expertise. Indeed, the gains you’ll get in practicing depend heavily on your training environment, your coach, and the quality of your feedback. I address this issue in my blogs, Are top salespeople born or made?, and Success is not just about practice, practice, practice. What I remind readers is that that feedback and expert coaching are also part of the deliberate practice model and key to the development of personal expertise. 

Furthermore, leading cognitive psychologists, including Robert Sternberg, point out that there is no way that the maximum capabilities of any person can be measured or predicted. 

The researchers in deliberate practice have also found that memory—that core measure of intelligence--can be improved.

Intelligence theorists don’t agree about much other than the ability to adapt flexibly to the environment. But most theorists, especially Robert J. Sternberg, believe that intelligence has at least three forms:

•  Analytical intelligence (IQ intelligence)--the ability to analyze and evaluate ideas, solve problems and make decisions. Hambrick and Meinz are stretching this kind of intelligence to make it into practical intelligence.  That’s too big a stretch.
• Creative intelligence—the ability to go beyond what is given to generate novel and interesting ideas.
• Practical intelligence--the ability that individuals use to find the best fit between themselves and the demands of the environment.

Although the three forms of intelligence overlap, people who succeed in business are specialists in practical intelligence. Furthermore, a significant study in which correlations between a test of practical intelligence and tests of academic or analytical intelligence reveal that the correlations between the two are significantly negative.

Let’s be candid. Intelligence testing is widespread. Many questions remain, however, as to what conventional intelligence tests actually measure. There’s also some question as to what the companies that produce most of the tests really want to find out. Tests are used in numerous settings, including schools, the military, corporations and for a variety of purposes including placement and selection. The testing business is worth billions of dollars every year. That’s right. . .  billions of dollars. If Brooks, Gladwell, Colvin and Sternberg are right, you can see plenty of intelligence shops in deep trouble.

Let’s be even more candid. I give tests and I’m trained and qualified to do so. Though they are merely snapshots or pointers to what’s going on at a given point in time with a client, an overarching reason that I give them is that clients expect them. So, well. . . ka-ching, ka-ching. But I sure as hell educate the client on the validity, usefulness, and long-term lack of predictability for most of them.

To put it bluntly, really smart people don’t necessarily make for good business people. That’s why being a member of MENSA certainly doesn’t guarantee success in business. If you’ve been around the business barn a few times, you know, like Brooks, Gladwell and Colvin, that inherent talent is really, really overrated.

How to Build a Great Work Relationship with Your Boss

Work relationships are learnable.

The work relationship between you and your boss is one of your most important investments. Your boss is key to your future and the primary source for the resources you need to get your job done. That being the case, it's an important reminder that your boss is also the one who can help you prioritize your jobs. Finally, your boss is the one who can best link you to the rest of the organization. In sum, more than anyone else, your boss can either help or hinder your career. 

So how can you go about building a great work relationship with your boss? The best way is by means of an informal social contract. But first, I want to disabuse you of some widespread, totally false notions regarding boss-subordinate relationships in all kinds of contexts. 

Whatever your boss’s style, typically it’s up to you to establish and manage the lines of communication. The first error many workers make is that they somehow believe that it’s their boss’s responsibility to communicate to them and create the work relationship. That’s a hangover from the old hierarchical mythology of the last century. It’s not true, never was true, and it won’t work that way. Furthermore, information rarely flows down. In short, if you want to know what your boss thinks, needs or wants, you’re going to have to find out for yourself. And if you think your boss is operating outside reality, you’re going to have to figure out how to tell him. 

Finally—and make certain you understand this—if you want to be noticed for your performance, influence the dimensions by which your boss will measure you, manage the powers that be and enhance the egos of those above you, the starting place is a great work relationship with your boss. [All three of these competencies are quite learnable. You’ll find a blog on influence here, one on managing up, and another on enhancing egos. Check my personalized Googler for more blogs on the subjects. It’s rare to meet anyone with these competencies, but today’s complex, diverse workforce makes them both more needful and more valuable.] In short, no one gets ahead in business without the ability to smartly suck-up to their boss (all without, hopefully, compromising their values too much). I would argue that it’s true in education, government, especially the non-profits and the church/temple/mosque ministry—and often in our own families. My brother always got in trouble with my mother—which meant he got in trouble with my dad—because he didn’t know how to suck up to mother. I learned early on, and realized that once I did the few things she really needed, I could do whatever the hell I wanted.  As a former family counselor, I should say that there are some healthy parents, but that they are few in number. 

Now back to that business of building a great work relationship with your boss. Years ago I adapted a relationship process from the work of Ed Schein, one of the world’s top experts in organizational behavior, now emeritus professor at MIT. Though originally a process for team relationships, it also works exceptionally well when applied to the boss-subordinate relationship. Indeed, bosses have requested me to coach their subordinates into the process. There’s no reason that bosses can’t manage down and teach the process to their subordinates, in spite of the fact that it is a managing-up strategy—but they just plain don’t like to spend their time communicating down. The successful bosses spend their time building a great work relationship with their own boss. 

The relationship between a boss and direct report is always rather straightforward. They need to build a work relationship, establish an emotional climate that facilitates getting things done effectively and develop a set of work methods. The underlying social and communication forces that shape the working dynamic are significantly overlooked in most boss-subordinate relationships. These work “methods,” what I call “infrastructure,” support the achievement of decision making and business processes and provide the underlying relationship logic.  Bosses and workers make all kinds of assumptions about their relationship, but this is one way of getting those assumptions on the table, talking about them, and enhancing the relationship. 

The easiest way to talk about these issues is to arrange a conversation in which you want to talk about or confirm your understanding of what your boss really wants from you. After all, you know that if your boss looks good, then you’ll look good. You’d be surprised how often you can say those actual words, get a laugh from your boss, and get all the information you need from him.  The conversations should include one or more of the following questions (you may find that your boss wants to spend the whole time on the first question you ask.  OK. Finish the other questions later. It may take several sessions.) 

How do you set mutually shared goals?

How do you prefer to solve problems?

What kind of information do you typically need to make decisions, and how do you go about it?

How do we ensure follow-through and completion of tasks?

How can we best collaborate in our efforts?

How will we keep our lines of communication open?

How do we manage our differences most effectively?

Again: These are best discussed early in a relationship. But my clients have initiated these conversations at all stages of their relationship with their boss. Although there are occasions in which this entire infrastructure has been covered in one extensive conversation—and bosses have asked for that—a conversation may include only one or two of the issues at a time. They do not need to be discussed in any special order. 

Furthermore, once you’ve gotten the information from your boss, and she thinks you understand, your boss may break her rules. That means you’ll have to renegotiate the issue once more. Renegotiation is normal for these relationships. As often as not, you won’t realize that your boss has stepped outside his agreed-upon rules until you’ve slept on it. Then you need to get right back to her, talk about the issue some more, renegotiate . . .  or whatever. And keep her happy. It should be obvious that if your boss is happy with you, you’re liable to be happy with her. 

I should also add that I’ve worked this process with 75 to 100 bosses and subordinates at some of the best companies in the world, and, without exception, they all love it. 

P.S. I note that Rosabeth Moss Kanter, the resident brain at Harvard Business School, argues similarly about boss failure, although fixing the relationship seems to be a more limited agenda.

Photo: Flickr, Hira10

The New Career Paradigm: Matt Damon vs. Johnny Depp and Steve Jobs

Matt Damon’s Jason Bourne is the classic reflection of the American career--linear and mechanistic. Bourne, like many business professionals, focuses on the choices and the actions available to achieve his objective. Driven by incentives and desires, he focuses on a single objective and takes the necessary actions to achieve that objective. Ten minutes into the movie you’ve got a pretty clear lay of the land and where it’s liable to be going. Laying out the sequences of the movie on a storyboard would be simple. It is a very traditional, linear plot.

In stark contrast, last week I went to see Johnny Depp in The Rum Diary. Both my movie storyboards and career models got waylaid. Badly.

The movie, a semi-autobiographical depiction of the early years of the life of Hunter Thompson—the famous journalist and novelist—got underway with Thompson’s alter ego Paul Kemp (played by Johnny Depp), coming to consciousness, having ravaged the minibar in a dark, trashy Puerto Rican hotel room, overlooking a glorious beach. It’s the 1950s, and his bleary disorientation is accentuated by the small plane that flies by with the banner, “Puerto Rico Welcomes Union Carbide.” Yep. Pave paradise with parking lots! Ugly Americans infest the bowling alley. Right wing capitalists plan vulgar resorts on the unspoiled army testing range at Vieques.

Aside from the enjoyable script, filled with absolutely hilarious, cynical, insolent patter, after the first twenty minutes, I was stymied. Where the hell is this going? The only objective in sight was that the young Kemp (Depp), newly arrived from New York, got a job at the San Juan Star, a newspaper edited by a lunatic. The movie quickly introduced a garrulous, frustrated news photographer and a brain-damaged crime writer that initiated him into a round of barhopping, alcohol-soused benders, and cockfighting that result in a trip to the slammer. At the end of the first thirty minutes, two things were obvious: I couldn’t storyboard the plot like a Bourne movie if I tried, and I was the only person laughing in an audience of about 50 people. But just one thing was clear about the plot: it was jumbled and chaotic, not linear.

Even the ending failed to tie the threads together. The newspaper collapsed, and Kemp (Depp) got out with his life still intact, though flawed and, I assume, made even more cynical by his experiences.

Initially, I thought, rather superficially, that it was a crappy way to begin a career. Still, the movie wouldn’t let go of me. The audience didn’t give evidence of liking it--but I couldn’t let go of it.

Indeed, the more I thought about it, the more I decided that rather than a crappy way to begin a career, it was a highly auspicious beginning for a brilliant career. The Rum Diary, in contrast to the Bourne trilogy, depicts human experience in all its warts: chaotic, fragmentary, deviating from cherished values and given to imponderable ambiguity. Thompson was a successful writer, at the least, because of his rich exposure to a variety of encounters and involvement with the discomforting unfamiliar.

Johnny Depp’s Rum Diary was a classic break with the past. In profound contrast to the calculated, linear life of choice, the sense of Rum Diary is its focus upon the vagaries of human experience. Like real human experience, the Diary is messy and filled with misadventures.

The 21^st century is going to require competencies that are not easily derived from our incrementalist business schools and linear developed careers. Think about it. The key expertise for success in a globally volatile marketplace includes adaptability, exploration and entrepreneurialism.

Take adaptability as an example. Adaptation comes out of encounters with novelty that may seem chaotic. In trying to adapt, we often have to deviate from cherished values, behave in ways that we’ve barely glimpsed and seize on clues that are merely fragmentary. What better teacher than novel experiences?

It’s obvious today, that careers and work are experiencing a break with the past as significant as that in the late eighteenth and early nineteenth centuries when parts of the world began the long process of industrialization. The twentieth century mindset ruled our careers. It was, as the Bourne movies revealed, a highly calculating, narrow, specialist’s view of career. And though I’d be the last person to reject that career model, I’m also very certain that, of itself, it’s inadequate for the demands of the 21^st century.

It was Steve Jobs, of all people, that brilliant, painfully difficult and dysfunctional executive, who pointed to the same problem when discussing professionals in the technology industry.

A lot of people in our industry haven't had very diverse experiences. So they don't have enough dots to connect, and they end up with very linear solutions without a broad perspective on the problem. The broader one's understanding of the human experience, the better design we will have.

It’s this journey of experience that The Rum Dairy so eloquently points to. And it’s this very important career shift that businesspeople, desirous of a career future, had best pay attention to. When someone can’t adapt to changes, lacks creative insight, has difficulty resolving complex problems or making decisions, one important conclusion becomes obvious: he (or she) doesn’t have enough dots to connect.

Picture: Flickr..Celine Q.

Quotation of the Week: Ross Douthat

In place of reckless meritocrats, we don’t need feckless know-nothings. We need intelligent leaders with a sense of their own limits, experienced people whose lives have taught them caution. We still need the best and brightest, but we need them to have somehow learned humility along the way.

-–Ross Douthat, NYTimes columnist 

All this, and from one of our astute, rather maturely insightful Gen-Y columnist. 

Just the other day I commented to one of my brilliant young friends that his parents had given him the gift of just enough insecurity. Facing phenomenal success in his work, that insecurity provides two especially meaningful personal characteristics, alluded to by Dothat, for today’s world: curiosity and humility. 

Curiosity: That desire to know and understand that shows itself best in the actions of both evaluating and appreciating knowledge and wisdom. 

Admittedly, insecurity can sideline us when it reaches into the depths of the soul and constricts our ability to respond to life. But insecurity can also motivate us to become more careful and thoughtful as we go about adding to our store of knowledge and wisdom. It can emphasize the practice of what Kahnemann calls “slow thinking.” One of the hazards we face in difficult decisions is our penchant for the easier one, often without realizing it. Slow thinking, in contrast, not only tells us to become more deliberative in our decision making, but it also emphasizes the necessity of figuring out what our brains are doing as they think. Curiosity, driven by insecurity, has a strong tendency to move in the direction of slow thinking—all for the good. 

Humility: Not merely that lack of boastfulness or arrogance, but a calculated sense of imperfection that makes us willing to listen to others and celebrate the potential and worth of their insights. It is not the smarmy, manipulative ingratiation that actually exists solely for the purpose of attention and further power. 

What initiated Dothat’s article was the recent failure of American meritocracy exemplified by Jon Corzine. Dothat’s insight regarding the American meritocracy serves as warning for those of us privileged by our intelligence. 

But this sudden fall from grace doesn’t make Corzine’s life story any less emblematic of our meritocratic era. Indeed, his rise, recklessness and ruin are all of a piece. For decades, the United States has been opening paths to privilege for its brightest and most determined young people, culling the best and the brightest from Illinois and Mississippi and Montana and placing them in positions of power in Manhattan and Washington. By elevating the children of farmers and janitors as well as lawyers and stockbrokers, we’ve created what seems like the most capable, hardworking, high-I.Q. elite in all of human history.

And for the last 10 years, we’ve watched this same elite lead us off a cliff — mostly by being too smart for its own good.

The article serves as an apt warning, as well as a partial explanation of the existence of the Tea Party.

Big Is Beautiful, Especially R & D

Although a lot of people have read my blog, Big is Beautiful, I've been surprised at the total lack of rejection. Now comes still more input about big corporations and their research and development, supporting my suspicions and ideas.

It's true that Steve Jobs built the first Apple computer in his garage. And also true that Mark Zuckerberg typed the original lines of code for Facebook in his dorm room. But their real genius was not the invention by itself. It was translation. 

When we talk creativity and innovation, we seem to omit the differentiating issue: translation. The ability to translate theory into practice. Robert Sternberg, the cognitive scientist, talks about creativity and innovation in three stages. First is that of creative intelligence, the ability to go beyond the given and create novel and interesting ideas. These are typically people who see connnections that other people don't see. Gates saw his basic software as connecting to IBM and Apple's computers, with the potential for making them free-standing.

Analytical intelligence, that ability to evaluate ideas, solve problems and make decisions is extremely important for creatives to analyze their own ideas and evaluate their merit. I worked for a number of years with a partner who could toss about more ideas than I could digest. But he seemed to lack the ability to evaluate the usefulness of those ideas and put them to work.

The third aspect of creativity, practical intelligence, is all about translation. It's the ability to "translate" theory into practice and abstract ideas into practical accomplishments. Translation, ultimately, is about selling. Indeed, the ability to sell your creative ideas determines whether it ends up on the scrap heap or becomes a product or service. 

3M is famous the world over for its R & D. Having consulted there for years, I've learned that the best ideas can easily go into the circular file. Thus, inventors spend a lot of time with colleagues figuring out how to use the idea and how to sell it to the leaders of the company. And if the senior execs don't buy that idea, it goes nowhere.

The Foreign Affairs writers had this to say about big companies and their contributions to research and development: 

Today, we celebrate small places with big ideas. It is true that Steve Jobs built the first Apple computer in his garage and that Mark Zuckerberg typed the original lines of code for Facebook in his dorm room. But the genius of Jobs, Zuckerberg, and many others was in turning their ideas into highly competitive global enterprises. Apple now employs 46,000 full-time employees -- and it is the combined energy of those employees that delivered the iPod, the iPhone, and the iPad.

At the turn of the twenty-first century, the National Academy of Engineers ranked the greatest achievements of the previous century based on how each innovation improved people's quality of life. Major U.S. corporations -- the Edison companies, General Electric, AT&T, and General Motors -- played significant roles in the development, production, and distribution of the majority of these achievements.

It is safe to say that without its major corporations the U.S. economy would not be, and would not remain, the largest and richest in the world. Big businesses invest significantly more in research and development than smaller firms. And they are far better placed to capture economies of scale and scope, which is crucial to making U.S. goods and services competitive abroad. Large companies account for more than 70 percent of U.S. exports. The same economies benefit U.S. consumers, too. Despite the vilification of Walmart, for example, the arrival of a Walmart Supercenter to a neighborhood leads to a 25 percent decrease in the average grocery bill for local residents.

Beyond R&D performance, sales abroad, and bargains, big business offers what the United States needs most: jobs, and many of the best in the country, at that. The largest firms pay about 50 percent more and provide 10 percent more working hours per week than small companies. These firms provide jobs to almost a third of the American work force.

In our glorification of small business, let's not throw out the baby with the bathwater. We really, really need big corporate America. Big really is beautiful.

You cannot possibly realize how deeply writing this goes against my biases and my historical mindset. But reality is reality. And I believe it's important to sing the truth, even when it is very, very difficult. Otherwise, our country will be in a long, very hard slog.

Big Is Beautiful

Small business may be beautiful, but it’s neither productive nor prosperous.

I’ve been suspicious for years about the hullabaloo from both Republicans and Democrats that small businesses are the drivers of the economy. It has crossed my mind on numerous occasions that this is merely a political calculation. There are hundreds of thousands of small business owners and they vote for tax and business policy issues. Furthermore, the small business lobby is very powerful.

But if you’re an HR person, I suspect you know the truth. Big business is the driver of the American economy. Not small business.

Think about it. If you really want an HR job (or any other function) so that you can learn the business, your first stop is at a large firm. The majority of small firms don’t even have an HR position. The office admin takes care of those matters. Don’t be too quick to occupy Wall Street. Just make sure the government gets it under control. That is, if you want a growth opportunity in HR or most any other function, and your name is not Zuckerberg. So make certain your crap detector is working the next time you hear all the bullshit about small businesses from the politicos and us small business owners. This is not a simple, straightforward issue. It’s highly nuanced, covert and subtle politics. Better reframe your mindset about big business—and small business!

He didn’t lay out the statistics, but James Surowiecki added a lot of information to the subject in a recent article, beginning with the fact that Americans have always been ambivalent about big business. Take the grocery business. In the first 50 years of the 20^th century A & P was the biggest and most important chain store. My family like most, enjoyed the low prices. But those low prices came at a cost to the small grocer. Until 1936 and the Robinson-Patman Act, suppliers could offer chain stores better deals than other retailer. That congressional act made it impossible for suppliers to legally provide the chains with better deals. The result, of course, was that prices increased for the public at large. In other words, it wasn’t consumers the government was trying to protect—but small business.

The global meltdown has surfaced still another intriguing insight about small businesses. The developed countries with the highest percentage of workers employed by small business are Greece, Portugal, Spain and Italy. Guess whose economic woes are wreaking the most havoc on financial markets. And guess which countries have the lowest percentage of workers employed in small business—Germany, Sweden, Denmark, and the U.S.—some of the strongest economies in the world. This is an intriguing set of correlations.

In his article, Surowiecki ticked off the economic advantages of big companies:

• Significantly higher productivity growth
• Economies of scale and scope
• Ability to invest in productivity-enhancing technology
• R & D spending

It has been ever thus.

In a new book, Marc Levinson shows that A & P, like the future WalMart, was able to invest in its own warehouse-and-delivery system, improve inventory management and make the supply chain more efficient. All investments not possible for the small business.

So why do people like me go into business? Well, as a recent study by Erik Hurst and Benjamin Pugsley shows, we have no interest in becoming big-business owners or even in bringing a new idea to market. Instead, most of us simply want to run a small company, do work we enjoy and have control over our financial lives. In commenting on these small business ideologies, James Surowiecki concludes his article with this:

Those are admirable goals, but they’re not going to make companies more productive. And that matters, because greater productivity is the main driver of long-term economic growth and higher living standards. Because big companies are more productive, they offer workers, on average, better wages and benefits—or, as in the case of Walmart, they offer consumers significantly lower prices. And the impact of these things on living standards is not trivial. It’s hardly a coincidence that in the decades after the Second World War, when ordinary American workers became part of the middle class, very big companies employed a huge percentage of the workforce: in the early seventies, one in five non-farm workers worked for a Fortune 500 company. Small may be beautiful. It’s just not all that prosperous.

And in a parting shot, Felix Salmon says it’s start-ups that create jobs and that the lionization of small businesses is “unhelpful.”