Sunday, November 20, 2016

Emotional Investment

I'm of two minds bout watching stuff while I draw/am supposed to be drawing. On the one hand I know for a matter of fact that I draw better when not distracted by anything, (same goes for writing) but on the other I find I don't draw at all if I can't find something to persuade me to actually sit still that long.

This requires a carefully balanced solution - you want some background noise that is entertaining but not engrossing. Something formulaic and repetitive strikes a pretty good balance and hopefully in sufficient quantity that you don't have to emerge and search for other well-balanced solutions.

So lately my background entertainment has been Gordon Ramsey's Kitchen Nightmares. Now I suspect it is a common inclination to poo-poo the show as pure theatre, and perhaps dismiss it's content for the reasons fairly accurately parodied here:

And I got to say, I came in with the Dale Carnegie critique of Ramsey's approach being mostly not helpful - namely kicking over the beehive to gather honey. I would hope it's a strong intuition that losing your shit with people is a good way to achieve mutually beneficial outcomes.

But here's the benefit of watching a formulaic show (especially once Kitchen Nightmares moved to the US) back to back to back to back to back to back. And the benefit is that patterns emerge. And I have to say, in the special circumstances of Kitchen Nightmares I'm coming around to Ramsey's kicking over the beehive.

Turns out there aren't too many different ways restaurants fail. It reminds me of Gabor Mate's correction of Tolstoy - namely that unhappy families are all alike, and not unique as Tolstoy claims in the opening of Anna Keranina. And again, as per Mitchell and Webb, there's shit that crops up regularly when Gordon Ramsey visits - The restaurant's menu is too long, the restaurant uses frozen bulk bought ingredients instead of fresh local produce etc. But what Mitchell and Webb couldn't capture as a common recurring theme was restaurant owners and/or head chefs emotionally invested in failing.

And Ramsey may be reputed for cussing like a sailor, but the words he really throws around liberally are 'you're in denial' and often, he is right.

Kitchen Nightmare's is a rich source of this common human failing. Just glancing back I see 'failing' repeated two times in the last three sentences, so let me get to the 'balls' of the matter as Ramsey would unironically diagnose. Basically whatever is running the business into the ground is always within the managements control, which means it is actually always the management that is running the business into the ground. Incompetence can come into play, which is what you would expect, except that from watching a bunch of episodes it is more than mere incompetence. Between the owner and the head chef (often the same person) one has an emotional investment in the way they are doing things, and the way they are doing things is failing but to admit this is not so simple because that is to accept the identity that they are a failure.

Thus often these wannabe's require intervention because they must be living in some state of cognitive dissonance. Understanding the realities of their business failing, but not able to recognize any opportunities to change anything without tacitly admitting to their own incompetence/stupidity etc. Even the most 'business minded' owners featured fail to be empirical about their own practice and they have no fucking passion for food. They have purchased a business that was successful or inherited it and then driven away it's customers and often simultaneously increased it's expenses and then enter the downward spiral.

I've been curious for a while now about why empirical thinking, despite it's track record is not actually commonplace but rare among the general population. Even among highly educated people. I myself am an over-educated underachiever, aware of concepts like emotional investment, rationalization, projection, group think, bystander effect etc. and I myself have spent years before I gathered enough data to realize pursuing a non-starter relationship was never going to go anywhere. The amount of people persisting in failing relationships, and crucially relationships failing due to fundamental mismatches, also stands testimony to emotional investment.

Emotional investment remains a mystery to me, so please lower expectations of any coherent exploration on the topic. Now fully disclaimed, I want to compare it to financial investment - a much easier concept to grasp. Being financially invested means that you've actually purchased with dollars some claim. A financial investment can generally be resold, which is to say you can convert your cash to an investment and then convert your investment back into cash. The trick is that the prices fluctuate on your capital, so for example you can invest $10,000 into a business and then a year later find that the sale price could be $20,000 (that's good) or $1,000 (that's bad) or hold steady with a 4% inflation $10,400 (that's actually breaking even).

But for all y'all that got your finance education from baby boomer parents urging you to save up for real estate, what makes something an 'investment' is not the resale value of your capital, but the income that capital generates. To be an investment something has to earn money aka pay dividends. And theoretically the sale price of your investment is meant to be based on that dividend payments - something that has not been true of house prices in the Australian Market for years.

Thus leaping back into emotional investments, the worth of an emotional investment must be based on some kind of emotional income - how you feel based on what you are emotionally invested in. What is troublesome is that there's no market for emotional investment. I can't do a stellar job of my lifelong values and then trade those values for some of the happiness of some incredibly happy person walking around, like I can with a financial investment.

There are a bunch of terms to describe the dividends of an emotional investment, economists tried 'utility' and even units of 'utils' which remains vague, other economists have used the term 'psychic income' and I myself just prefer the clinical psychologists' hueristic of asking yourself 'how does this make me feel?' because emotions probably need to remain unintelligible to preserve their value.

Here emotional investment gets really fuzzy for me, and its something I observe easier in anxious people around me (there's plenty, hopefully not because of me) is like there's one prickle or thorn between stepping from cold shadows into warm sunlight and choosing to stay in the cold rather than just stepping on that thorn to warmth and sunshine. And for some reason, brief sharp pain trumps constant misery.

So what's confusing is when emotional investment and financial investment intertwine - in finance circles there's the concept of 'escalation of commitment' captured in sayings like 'throwing good money after bad' and captured in behaviors by naive investors. I recall a PBS News Hour story about investor behavior that described common intuitions and emotional decision making. The investor holds (for simplicity) two shares, at the end of the year - one has doubled in value and the other is halved in value. Rationally speaking, the investor should sell the under-performing share and hold the performing share. But because selling a share that has dropped in value crystalizes the loss, it is an admission of failure which in turn makes the investor feel bad. So instead investors often do the opposite and sell the performing share to feel good and hang onto the dud share. Hoping it will turn around.

Which isn't the way to bet, and it was relatively recently pointed out to me - when discussing my trolling habit of changing my position mid-argument, that to some extent I at least hold a value of not being too emotionally invested in a position - to perhaps avoid the handicap of having my ego attached to my argument. That's pretty domain specific though - arguing politics, religion and other bullshit.

But most of us sooner defend our ego than our argument, above and beyond any rational limit as to how much we should care whether we are pro-small government or not. That's a common enough behavior I hope it speaks to your direct experience, that somewhere in our lives all of us have had that salient moment where we throw our hands up and ask why we care so much about the argument we've been having.

I observe a rarer behavior I simply label 'unacceptable solutions' and it's hard not to be judgmental in this regard because I haven't had a mirror crop up to let me see it in myself clearly. That absence of evidence though is not evidence of absence. So you may or may not have heard of the Norwegian Prison system, noted for it's humane treatment of prisoners to the extent that many hearing of the treatment have a visceral reaction to the notion that Norway sends its prisoners to a 5 star resort.

Yet Norway has one of the lowest rates of incarceration among its population, and a much lower rate of recidivism than nations where prison could be regarded as so truly unpleasant as to deter people from commiting crimes.

So it turns out that having prison loom large as a horrible place you never want to go works (or more accurately, doesn't work) much worse than having prison sit squarely as a healing institution where you have to go to get your life back together.

Looking at the numbers, the hard data every nation in the world should be embracing the Norwegian system and perhaps even religious institutions weighing up how much emphasis they give fire and brimstone. I hope there's a slow revolution taking place world wide to move towards the Norwegian philosophy but I imagine if you go poll the voting populaces of the world - whether it works or not the mere suggestion that you might improve the lives of someone anti-social is seen as rewarding bad behavior and thus an 'unacceptable solution'.

More broadly 'unacceptable solutions' are things that contradict people's views of how things should be. Emotional images of how management is done, or what marriage is all about, or how to raise your kids or even which smart phone is best. My marketing training taught me that you should never campaign against 'what everybody knows' eg. saying RCA are better than IBM but instead find your niche. But in marketing you don't have autonomy over what people think. In management and your personal lives you often do have autonomy - namely to make different decisions.

So in my life I've come across my share of managers that 'know' as 'everybody knows' that management consists of spending no money, driving your staff hard and charging as much as possible. I've reduced their beliefs into their essence to illustrate how easily modest versions of these beliefs can become a disaster cocktail when stacked together and repeated. I also see people invested in the belief that the higher up an organisational chart a person is, the smarter they must be and hence who talks and who listens must always go in the same direction.

These beliefs can sweep aside a lot of empirical evidence to support business practices like 'value for money' 'team morale' 'low turnover' 'quantity' 'quality' 'customer relations' etc.

Here emotional investment can leave someone playing a role rather than being a person. Acting out the image you wish were true, and your emotions can then make a puppet of yourself. Here Ramsey's show is a goldmine for observing the behaviors spawned by emotional investment.

It bears some resemblance to rationalization, which as I was taught it - in terms of a process - is solving problems by starting with the solution you want and then working backwards. In the nightmare kitchen's though, it's more a negative screening process of rationalization, it's eliminating the problems you don't want to be true and then working backwards to generate solutions for problems you can handle.

Ramsey talks about denial a lot, but all the means of avoiding responsibility are aften paraded out - so denial may be 'our food is good' and excuses are 'the people around here don't like [insert cuisine] food, they aren't educated' to blaming 'my staff are lazy' and even diversion/telling a story crops up from time to time 'let me tell you about my farm project'. You get a Jungian stable of archetypal behavior as a result - you can't admit your food sucks so it must be that you aren't cooking the right dishes and the menus get too long. You can't admit you don't know what you're doing so you fire the staff or hamstring the staff that do. Or you ignore all criticism and then cut costs as the business shrinks claiming ignorance of where you are going wrong.

In this regard, people seem as prone to throwing good emotions after bad as they are doing the equivalent with money. The show highlights how easily with something like a restaurant you can set yourself into a spiral of self destruction all because you can't step on that one thorn to correct the course at the soonest opportunity.

What's to take away from all this cognition aside from an awareness of emotional investment as a problem? Let's look to critics of Ramsey and the naive dismissal of the show.

And the show is theater - particularly once it migrated to the US, involving makeovers and surprise new head-chefs and other stunts that make it feel more a game show than documentary. But the criticism is usually that walking into a place and telling people how fucking shit they are at everything disagrees with our intuition (dare I say, emotional investment) that speaking calmly and reasonably is more productive.

The thing is, people that are doing what they do for emotional reasons cannot be reasoned with. There probably are more diplomatic ways to work past that emotional guard and get people feeling vulnerable enough to accept change, but historically speaking - and across disciplines - battering down a defense with overwhelming force is also a legitimate tactic for achieving the same objective. Rest assured, I would caution people against attempting Ramsey style language with their boss, and generally speaking it is not a good idea to ever try and manage your boss. It works for Ramsey because he has both leverage and authority though it can get ludicrous how often a completely untrained chef will dismiss Ramsey as not knowing what he's talking about.

I can't believe how passionate I feel about defending a reality show hosted by Gordon Ramsey, and Gordon Ramsey himself. I mean you can google the success rate of the show. It appears to stand at 30% of the Kitchen Nightmares remained open as at 2012 - seemingly a not impressive result. In a 10 episode season, only 3 of those businesses got turned around by the Ramsey method.

Except we aren't talking about 10 restaurants Gordon Ramsey opened, picking location, menu, staff, decor, promotion etc. but businesses on the brink of failure with poor relationships and existing staff, contracts, leases and reputations. He has a week to run an intervention (although somewhat ironically the reality show 'intervention' has a 55% success rate as of September 2015 which is amazing when you talk about addiction).

And so the point is you really have to look at those numbers. The first thing being that these are restaurants. With a substance abuse problem - sobriety results in less work and more free resources than having to hussle to feed your addiction. So you have to discount the closures for natural attrition, and furthermore I'd even argue that you would expect many of the restaurateurs to actually offload their miserable business as soon as they got the reputation back up to having some resale value - which is to say some of the closures may have actually been successful extractions allowing people to actually retire or return to previous professions without being financially ruined by creditors.

The other big thing being that past performance is the best indicator of future performance. Thus the default expectation is that most of these restaurants would revert back to their failed states the next time the owners are faced with replacing key staff or perhaps a menu change. So by default you would expect a business that was failing to close, and thus 30% staying open is pretty phenomenal.

The big irony is, that our belief that people are rational and can be reasoned with is in itself a position that we are emotionally invested in, and ignore a lot of evidence to the contrary. If you are the kind of person that reads blog posts, semi-coherant blog posts right to the end, you may be afflicted with these emotions holding you back in life.

You may engage in arguments online about double standards with people who don't believe they exist and wonder how they can be so blind. You may wonder why the boss implemented the workers suggestion then actively sabotaged it, then concluded that they'd tried what was suggested and it didn't work. You may not want to try the Gordon Ramsey method, but perhaps it is worth suggesting that in the face of very stubborn and stalwart emotions, you might want to try something other than reason.

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