Monthly Archives: December 2010

Top Five Books of the Year… Number One

Don Miller's Best Work to Date

My selection of Donald Miller’s A Million Miles in a Thousand Years should come as no surprise to anyone who has spent time with me this year.

I love Miller. I think he’s a tremendous speaker and a gifted writer, something I think few of his contemporaries enjoy. For those unfamiliar with this book in particular, the premise is essentially this: Don Miller pulls a Christian Bachelor version of the Fat Jim Morrison. Instead of lounging around in leather pants and growing a gnarly beard in permanent inebriation, he eats too much ice cream and watches too much TV and rests on the laurels of being a one-hit wonder. In his early 30′s, he had arrived… and at the same time, had nothing to really say for his own story other than he had a condo in Portland and some nice royalty checks.

When two filmmakers call him and say that they want to make a movie of his story, he’s confused because really, his story is not that interesting.

This is the tale of living a better story; not how to make your life interesting. There are plenty of awful social media blogs to do that, or you can watch Youtube videos of Mr. Four Hour Work Week Tim Ferriss shooting a Kalashnikov in Slovakia to see what “interesting” looks like. But shooting a gun doesn’t make your story better. Living is not just a sequence of events, either random or planned. A Million Miles is the story of a man that on the surface is grown up and mature, leaning into life and taking risks and exposing himself to real pain for the first time in his life, so that he might actually breathe and live among the living.

Okay, that’s nice you’re probably saying. So what?

What makes the story so amazingly compelling is Miller’s self-deprecating humor mixed with his ability to sneak up on you with your own ugly truth, an ugly way of looking at yourself or the world that he shares and exposes it. Case in point, this exchange between Don and the filmmakers as they get rolling on the screenplay (we’re around page 24 and 25 here):

“What could we do to get people to like Don?” he asked.

It felt odd hearing my name but having it refer to somebody else who was also me. Ben sat for a second; then he pulled the pipe from his mouth and said Don could work in a factory, a blue-collar job. “Everybody likes the underdog,” Ben said. He said this in such a way I wasn’t sure if he was talking about me or the guy in the movie.

“Are you talking about me?” I asked.

Ben motioned the stem of his pipe toward the empty whiteboard. “The other Don. The fake you,” he said, widening his eyes.

“I never worked in a factory,” I said, mostly to myself.

“Right, Don,” Steve said. “We are going to take the essence of you and find the story.”

I made a noise as if I understood, but I didn’t understand. I know Steve had explained it before but now that we were actually making things up, it felt particular. I understood we had to come up with something interesting, but it’s not as if we were adapting a novel. Essentially, we were adapting my life. I kept quiet for as long as I could, but when ideas surfaced about me being an expert cat juggler, I had to say something.

“I mean no disrespect,” I said. “But what is wrong with the Don in the book?” The question came out of my mouth more personally that I wanted.

Steve sat thoughtfully and collected his ideas. He scratched his chin and collected some sympathy. “In a pure story,” he said like a professor, “there is a purpose in every scene, in every line of dialogue. A movie is going somewhere.”

That last line rang in my ear like an accusation.

It’s gentle. It’s subversive. It’s humorous. It’s true. The vast majority of our lives we are coveting whatever is advertised, a “Volvo with 47 airbags,” or in Don’s case, a Roomba vacuum cleaner (that one was getting personal for me).

My friends Mary Ellen Chamberlin-Owen and Kent Miller introduced me to the idea of “story” as an essential way to understand life four years ago. I was pretty miserable managing agents, totally sleep-deprived from the twins, getting fat, and in the process, getting more entrenched in my arrogance and my tiny little sphere of influence. In other words, as I consumed rather than participated, the consumption was basically consuming me. When our group exercise was asked to share stories, some part of me wised up and didn’t go first like I usually would, the usual way being me name-dropping and detail-expanding my way to wowing everyone. My story was easy to tell, as long as I could remember all the specific details. Details made the story. So I thought.

I sat and listened to people talk about a sister’s death. About divorce. About kid’s pregnancies. About the struggles of marriage. About redemption in perseverance. No one mentioned vacations. No one mentioned meeting someone. These stories were told with laughter. And tears. And trembling lips.

Miller was living a lousy story. The essence of him was good and pure. But the actions of his making that essence actually alive was absent.

In the everyday world, I’ve noticed the power of story. It’s not just important to me. At a COPPeR event three weeks ago, Brett shared a killer statement to the group of artists looking to develop their audience: “participate is the new consume.” Think about that for a second. In this consumer-everything, over media’ed world, what is increasingly relevant is the spiritual action of participation. It’s not observation. It’s participation.

The power of story is becoming frighteningly obvious in real estate circles. My client Sam wisely surmised last year “the house buys the buyer, Ben.” It’s true. Buyer’s make 30 second snap decisions, online, at the curb, and inside the entry. Homes that don’t work in these 30 second worlds are removed from contention. Immediately. The buyer can’t connect. What are they connecting with exactly? The story. Can they see themselves there? Can they imagine their world taking flight here? Or not? A trite statement I used to say in real estate training classes should actually have been aimed at my reflection: people don’t buy features, they buy benefits. I am giving you a lot of opinion, but I’m haunted by some data that supports this: the average buyer last year (47% of all buyers) was a first-time buyer, and that buyer’s average age was only 30.

They planned to live in their 2009-purchased home until 2019. How many 30 year old’s really know where they will be at 40? They plan to know. Their plan is as important (if not more) than their reality. (Incidentally, the average move-up buyer was 47 and planned to live in their home 15 years. These are long-term, non-disposable associations).

There is zero how-to in this book. This is not a series of bucket-lists. There is zero suggestion, strategic idea, or goal in mind presented by Miller. It’s the story of a man realizing that his life isn’t really a very good story. The movie makers’ goal is to convert the reflective come-to-faith memoir of Blue Like Jazz into a movie, but on it’s own, it’s just a series of events. There is no appropriation of the message, just a place of arrival. A bunch of non-connected, random events is a series of brags. A story that is happening and going somewhere (as musician Daniel Lanois says, “here is what is“), that is something worth living.

Cutting Through the Media Talking Heads

Here is an article from CNNMoney today that talks about the surprising 3000 extra units that sold nationwide in November. Those who know me, know that the talking head nonsense of mass media real estate coverage drives me batty. The lack of creativity and the lever-pulling regurgitation of soundbites is a disservice to consumers, and I might add, to journalism. So what I’m doing here is pasting the article in normal font, and inserting my thoughts in italics.

Home sales rise 5.6% in November

By Blake Ellis, staff reporterDecember 22, 2010: 11:01 AM ET

 

NEW YORK (CNNMoney.com) — Existing home sales picked up steam in November, though they are still down nearly 30% from this time last year. A

Sales of previously-owned homes jumped 5.6% in November to an annual rate of 4.68 million, the National Association of Realtors reported Wednesday. The rate was down 27.9% from 12 months earlier, when a homebuyer tax credit helped lift sales to a two-year high of 6.49 million.

The report came in slightly better than expected. A consensus of experts surveyed by Briefing.com had forecast an annualized sales rate of 4.65 million.

Okay, so picking up steam and unit sales jumping and 30% equals 27.9% and the experts predicted a sales rate of 4.65 million and it came in at 4.68 million. There are at least two stories here: one, sales are not as strong as they were last year when inventory levels were lower than expected and the first-round of the tax credit worked better than expected. The second story is that sales beat expectations in technical terms, but it was all of 3000 units annualized, which on monthly basis amounts to about 250 more sales in November NATIONWIDE then expected.

Despite low home prices and mortgage rates, the housing market has continued to struggle through the recovery. Existing home sales slowed in October, following two straight months of gains. But those gains came after home sales sank 27% in July, hitting the lowest levels in 15 years.

What am I missing? The sales rate in November was off 27% and so was July, but there is no mention of that? Weren’t both of these off 27%? Yes, but no. November is a more volatile month and the unit sales tend to be smaller this time of year. July is a more reliably strong month. A bad July for REALTORS is like a bad December for retailers.

“This report doesn’t necessarily mean the housing market is getting better,” said economist John Canally of LPL Financial. “We’ve taken a couple steps forward, one step back, and this is a step forward, but next month might be another step back — these things tend to go in fits and starts.”

In other words, I have no idea what next month might hold, what’s going on, why it’s going on, but thank you CNN for asking me for insight.

But Lawrence Yun, NAR’s chief economist, is hopeful that homebuyers will take advantage of improving affordability.

The economist is not relying on data, but hope. Cue consumer sarcasm.

“The relationship recently between mortgage interest rates, home prices and family income has been the most favorable on record for buying a home since we started measuring in 1970,” he said. “Therefore, the market is recovering and we should trend up to a healthy, sustainable level in 2011.”

Wait. That sounds fact-ish. That sounds like actual analysis. Why is this called hope?

The inventory of homes on the market dropped 4% in November to 3.71 million units. Canally said inventories are well below their peak, but a level around 2.2 million units is considered healthy.

This is where I go off… why are inventories below their peak? Is there any reason at all? What has happened to bring inventories down? I’d like to know. Seasonally, when do inventories peak? Don’t inventories peak May through August? So why would inventories be at their peak in November anyway? Why is 2.2 million units considered a healthy inventory? Is this based off the 4.68 million unit annualized projection to roughly equal 6 to 7 months of inventory? Or is this based on data from 2005 and an expectation of 5.5 million to 6.0 million sold units, which would make inventory 3 to 4 months, a definite, guaranteed, upwardly appreciating market? Who would not want such guaranteed information in any economic transaction? Why is 2.2 million considered healthy? Is this like the FDA’s 2000 calorie diet that should fit all 308 million people?

The median price of all existing homes sold during November was $170,600, up a modest 0.4% from a year ago. About two-thirds of homes sold during the month were in foreclosure, NAR said.

I’m now pounding my head against the desk. Earlier it was revealed that November 2009 was an artificially high month for sales activity because of the expiring wave of tax credits. Sales values are up from a big month for buyers. If the market is sputtering along why would value be up? But that’s not even the critical thinking, that’s the obvious thinking speaking. The bigger reality is that in November 2009, half the buyers buying were first-time buyers who were not going to miss the tax credit with a closing that lingered out of November into December. So short-sale, foreclosure and new construction properties were not the targets for buyers in November 2009: it was turnkey, handshake, non-distressed resales. This November, two out of three sales were distress sales. Buyers paid more for distress sales this November than non-distress sales in a twelve month period. Less than a month ago it was reported that the average bank-owned property sold at a 31% discount over a non-bank-owned property nationwide. I’m not at all saying that prices have increased 31% in twelve months, but I am saying junky homes in November 2010 sold for more than nice homes in November 2009. That’s a pretty serious statement about recovery happening somewhere.

“The fact home prices went up is a good sign and shows that the housing market is continuing a slow recovery,” said Canally. “But home prices are still bouncing along the bottom.”

As Mr. Canally has already said, we don’t know what might happen next month, so yet again, his soundbite is framed in a mixed bag. Poor guy. Here is what might happen in December: We might have a smaller sample pool of units that leads to lower prices. All of still-expensive California is underwater and that undoubtedly will delay some closings tweaking the national average. I’m trying to figure out why Mr. Canally said his first sentence first and his second sentence, second. Trying to reconcile “but”, but I can’t. I guess I’m too much of an optimist to psycho-analyze a pessimistic (or at least presented as pessimistic) viewpoint.

While Canally said the housing market has a long way to go on its road to recovery, he agreed with Yun that sales are likely to gradually improve in the coming year.

“Banks still aren’t willing to lend, but we’re working down that inventory, the job market is getting better and affordability is at an all-time high,” he said. “And now that we’re six months removed from the homebuyer tax credit there’s nothing pushing the market one way or another, so we’ll get a gradual recovery — no boom and no bust.” To top of page

Poor Mr. Canally. He can’t win. Why does the elimination of tax credits lead to a gradual recovery? It’s like he said something between the two sentences like “three out of four factors that influence the market are improving, so we should see some recovery next year” and that sentence was conveniently edited out. Even worse, here is all this hyper-analysis for a 250 unit “surprise gain” in November and he has this conclusive sounding statement “no boom and no bust” wrapping it all up. There is language about jumping and gaining steam, and struggle and hitting, and fits and hope and healthy (2) and bouncing along the bottom… it’s data colored by language bordering on hyperbole. Yeah, we’re accustomed to this kind of language in all of our media consumption, but words have meaning. To use words that are so all over the emotional spectrum and then conclude with “no boom and not bust…” well the rest of the report doesn’t lend itself to such a neat and tidy conclusion.

My point in writing this: data can prove anything. If you are selling a home, you’re participating in the market. A participant has the responsibility to ask critical questions. If you are buying a home, you’re participating in the market. A participant has the responsibility to ask critical questions.

Be thoughtful.

Be inquisitive.

Challenge the assertions.

Top Five Books of the Year… Number Two

For Number Two, we get more change, but now soul: Henri Nouwen, the Dutch Master Catholic Writer and Priest and one of his most notable books, Life of the Beloved: Spiritual Living in a Secular World.

This is an explicitly Christian book and no, I’m not recommending the book. I’m including it because of the personal impact the book made on me this year. It’s not for everyone. I lacked the maturity in my own story to have read this book before this year. I will need to re-read it again and again as I age for it to truly take root.

 

Henri Nouwen

I will begin with the end: Nouwen felt that he failed in this book. He wrote it for a secular Jewish friend to describe his own spiritual understanding of the world and to make that accessible to his friend. His friend said that it was a nice book, but it was not as dramatically different from the previous books Nouwen had written and relied too heavily on some assumptive knowledge. The friend said “you are not aware of how truly secular we are.” When asked to clarify, the friend gave examples like “Who is God? Who am I? Why am I here? How can I give my life meaning? How do I get faith? When you do not help us to answer these questions, your beautiful meditations on being and becoming the Beloved remain dreamlike for us.”

 

How about that for transparent constructive criticism of the book you’ve just read? Nouwen includes this dialogue in the concluding chapter, titled in all humility “A Friendship Deepened.”

Nouwen’s purpose backfired. In the failure, he opened doors to a sort of richness that those who are struggling through the answers to the secular friend’s questions (and while maybe not arriving at answers, have put in the time to struggle) reach points of deeper clarification and meaning.

The answers to the friend’s questions do not have clean, black and white answers. They are muddy answers. They are answers that change. They are answers that expand and contract and are threatened and ennobled and mature and age. Who is God? Who am I? These are the questions of the last 3000 years of recorded history.

Yet for those in the process (not the destination), who have chewed on these questions and started to see some of the glimmers, this book lays out the startling concept of becoming the Beloved. In it’s simplest terms, that means the object of God’s Love. As a know-it-all college sophomore I mocked the movement of the Church of the Relational Jesus. It seemed so odd to someone so brilliantly smart and 19 as myself to take relationship (with the unknowable) and blend that with the institutional (and likely corrupt). Philosophically sound, guarded cynically in logic, I maintained this position for years. I’ve been stuck on 19 for almost half my life. Having kids, a marriage, gray hairs, a hernia, some debt, some failure, a career change or three… that’s living in change. In the midst of changing, it’s amazing to see what doesn’t change. It is even more startling to see how appetites change. In my personal experience, when you’re smart and sexy and unstoppable, there is little thirst for identification in the eyes of God as the object of his movement of Love. In the words of Bob Dylan, “I was older than, I’m younger than that now”.

This year has been the culmination of many undercurrents of change that I have been afraid to explore and the indulgence in risks that I previously had not permitted myself to take. Before a seminal weekend retreat (better called an advance) in June, I finished Life of the Beloved. The sequence of these event was perfectly timed. I read a book that opened my heart to change and then was given the lens to see the profound change at work in my own life. Nouwen’s tender words cleaved off a lot of the scar tissue of my heart, but also a lot of the wax from my ears and scales from my eyes.

Nouwen: “To identify the movements of the Spirit in our lives, I have found it helpful to use four words: taken, blessed, broken and given… Most importantly, however, they summarize my life as a human being because in every moment of my life somewhere, somehow the taking, the blessing, the breaking and the giving are happening. I must tell you at this point that these four words have become the most important words of my life. Only gradually has their meaning become known to me, and I feel that I won’t ever know their full profundity.” There is a system to this book: claim that we are taken (a conscious choice of free will, not a demand, thus the dream-like quality to the secular friend since this blows up all the other questions. There is a 180 degree difference between being told you are taken and knowing you are taken. There is no compelling or convincing someone to the point of “taken”. It’s a conscious choice); live in a world that is blessed, from the Latin idea of if, meaning we can “speak good of it” ; converse with and share our broken lives; and  participate by giving of ourselves to others.

I have been sharing with a few friends the lessons of the Thirties Decade Advance (I’m just gonna call it what it was!). It’s hard to share them with men in their 20′s, or men who just turned 30. It’s discouraging news. Turn thirty and the experimentation ends, and things get started, right? The reality is that this decade is a year of hidden wonders, much blessed failure, and my inavailability for much of the trappings of what I thought the decade would be about. I came into this decade driving a fancy car that was bought with two stupid loans and trying to figure out if I could own property in three states and two countries by forty and retire by sixty. Five years on into the real estate meltdown, I’m figuring out new ways to build up my emergency fund to six months reserves and laughing at my retirement accounts because the whole idea of ever retiring seem preposterous. I didn’t ask questions when I was 29. Today, I rarely shut up with the questions.

I’m asking questions like:

  • “Where was I placed in the role of king, too early?”
  • “What did I expect to be that I’m not?”
  • “What did I expect to have that I don’t?”

And I come to realizations like:

  • “If maturity lies in integrity and integrity lies in truthfulness and truthfulness lies in faithfulness… then the house I’ve built is made of cards.”
  • “Let’s try contentedness on for size”
  • “The oaks of righteousness are gnarly, weathered chunks of wood made perfect in their blemishes”
  • “I like dirt on my sandal-tanned toes”

Nouwen’s friendship with the subject of his book came about in a time of his friend’s own uncertainty in his marriage and career and Nouwen’s own depression. Brokenness. My life has been dominated by the first of my questions above, becoming a king too soon. I was the youngest in my class several years in school. I finished CC a semester early. I was asked to a vestry at 23. I was being groomed to be a sales director at 24. I was in self-created debt to my eyeballs by 29 and had no clue. I was thinking about buying a real estate company at 32. All of these arenas succeeded or failed on me. All of these instances were places where I was told I was needed and critical… and I gave those demands their life.

Taken in the context of Nouwen’s circular design, I could never be taken in any of these situations. I could not enjoy blessing. The last thing I should do was admit to being broken, and correspondingly, I could not give.

A word I keep coming back to this year is Catalyst. A catalyst causes reactions, and in chemical applications, the catalyst itself is not consumed by the reaction. A catalyst doesn’t create a reaction with everything it comes into contact with, but only in the right applications. Perhaps last year, and definitely three years ago or more, Life of the Beloved would have left me unmoved. I would have found the meditations pleasant and dreamlike. Because I have changed, and I am different, and I am broken and taken and blessed and understand giving a little better than before, it has made a huge impact in my life.

 

 

Top Five Books of the Year: Number Three…

Joe Boylan turned me onto Seth Godin four years ago.

In the passing time, I’ve been a loyal devotee of the Seth-fueled-business gospel, one that I have found to conveniently revolve around merit as opposed to flash and trash.

Godin is an interesting dude who writes in a simplistic style and conveys very obvious ideas about markets, social interaction, leadership and communities in an easy to read manner. I would imagine many professors in the academic establishment have a hard time recommending him because he does not come across as scholarly or pedantic enough in his writing to win their acclaim (even though he’s a Stanford MBA). Usually, this style of writing annoys me to no end.

But it doesn’t with Seth. The reason is that Seth is like a great surfer of knowledge, a business-prophet-Kelly-Slater who rides the waves of competition with perfection, but also shows up at the 50 foot monsters and is the best in the world there, too. Seth smells what’s happening as it is happening and tells the story of the movement before most anyone else realizes the movement is happening. Seth is a trendspotter who is moving into philosophy and calling it a business book.

Linchpin is the latest example of that.

Linchpin operates on the premise that there is a third (and new) class of people in work; whereas there was management and labor, now there are also linchpins. These are the people who lead, the people who solves problems without a map, the people who achieve critical break-through actions. Many of these people are smart, but it’s their emotional intelligence that makes the indispensable. It’s a nice idea in an economy with 10% unemployment… “how to be irreplaceable at work.” But it could also be a death sentence. For those looking for more security, they won’t find an ounce of it here.

Seth can take an idea (the schools are broken) and unpack that idea into something challenging and meaningful. He asserts (I believe correctly) that the entire education system was constructed to create helpless, lever-pulling, button-pushing automatons for the factory-based modern world. No one has moved in to understand the reasons behind the origins of the system and whether or not those origins are aligned properly with our present day reality. Look at the relentless obsession with school metrics and testing and filling in bubbles for scanners and ask: how will that help lead anyone? How will that solve a problem of the future? How will this connect people into something more… civilized? But because we are products of a “take stability, be afraid, find security in the factory” mentality, most people are unimaginative and ingrained in the rudimentary tasks of the day. So they build more factories. Whether these factories are the micromills for steel Fred Crowley fancies popping up around El Paso County, a cube at T. Rowe price, or a static real estate website doing the same old SEO everyone else is doing… creative answers are rare, and that makes leadership and initiative all the more vital.

Sounds obvious, right? Well think about your life. What fear-based illusion do you keep active in exchange for apparent stability somewhere else? If it is so

What to get Ben for Christmas

obvious a trap, why does everyone continue to engage in this agreement?

 

Linchpin was the idea behind Catalyst, which was the idea behind Pikes Peak Urban Living.

Today was a fantastic example of what Hannah and I have tried to do with PPUL: neither of us have been to the office. We’ve texted probably 50 times today. We’ve talked three times. We’ve helped five different powerful alliances form between creative business people before lunch. We are both off to attend our elementary school functions this afternoon where we will be ourselves and be interested (genuinely) in what’s going on in the lives of others this afternoon. Hannah and I are both big picture thinkers and both love connecting people. Connecting people is deeply satisfying for us both. Helping people get where they need to go – the right way, with critical information that is not spun-up justification for a payday -  is hugely important to us both. It’s why we work well together, respect one another, and people come to us for something of value.

This is the magic of Godin: Seth puts words to something we know to be true and says over our shoulder:

“Do you see that? You do see what you’re doing, right? That right there? That’s your art. Don’t under-use that term, please. If you don’t connect those two, no one else will. By connecting those two, is there more possibility now, or is there less? Do you see what you just did? Do you see why that is good?”

The power of Linchpin is in the criticism of Godin. His previous book Tribes was criticized by one reviewer because he didn’t provide a map for leadership, and said it was as if someone picked up the phone and was hit by leadership lightning. Seth’s reply? “And…?” Essentially, that critique is correct. But the fact that someone is looking for the how-to-manual is evidence of how deep the fear of failure is in society and the need for people to be told what to do. There is no map for leadership. There is no how-to manual for connecting people. There is no perfect system to unlock artistry, initiative or over-coming massive road blocks. There is no creativity pill. It takes action. It takes being willing to make mistakes, and ship.

You might not like Linchpin. I can more readily recommend both Purple Cow and The Dip. Purple Cow is still the most relevant book ever written on the permission-based marketplace and The Dip is Linchpin inside-out, educating people on quitting, and keeping people from agreeing that quitting is failure. But Linchpin is the most revolutionary book Seth has written since Purple Cow, because instead of using the idea of indispensability as the security blanket, he instead forces the reader to equate indispensability with their own defined terms, their personal passions, and ultimately, their satisfaction.

It’s cements the need for heretics, unicorns in balloon factories and helping people deepen relationships. That’s not a bad read.

Top Five Books of the Year: Number Four…

I was looking for a photo of Malcolm Gladwell for my commentary on Outliers and laughed when the photo I wanted sent me to the Design Your Life blog; their book, is on my reading list for 2011. Like just about everyone else I know, they also read Outliers this year. I found the Eastons’ comments about Outliers spot on: “The book bills itself as a treatise on success; after all, it’s an airport book, and everyone in Terminal B is seeking to go up, up, and away”. Gladwell is a science writer, and his TED talk on spaghetti sauce is my all-time favorite. He’s an incredible storyteller who can connect the dots of modern science in a way that few can.

But Outliers is an airplane book, more so than his previous works like Tipping Point and considerably more so than Blink, both books that were less interesting in their story-telling narrative but possibly more applicable to day-to-day, life. Outliers is a popular book in the 70 hour-a-week world I operate in because the author enjoys a massive permission asset promising to reveal the real story of success. Outliers examines the optimal conditions for success, and that’s a message that the go-getters of the world must read, right? Almost (almost) everyone I know in the real estate world that wants to build their business is looking for an edge, a thing that will make them awash in dollars. So anyone in this business who reads, reads Outliers, with the hope that they too can become an Outlier. What do they find?

The book delivers… just not in the way I think the majority of the audience hoped it would. Outliers is a devastating tale of pre-destination. If you’re on that upward trajectory and want to make it to the top… guess what, it’s too late, baby.

You are a product of your environment. Your childhood and upbringing: it mattered. Past tense.

If you’re Bill Gates, your chance to get 10,000 hours of critical computer programming in before anyone else on the planet was doing it, gave you a talent and perspective that no other person on the planet enjoyed. If you’re a Beatle, playing live two to three times a night eight days a week in Hamburg were the seminal events of your later financial windfall. Correspondingly, the great humor I find in this book and in Gladwell himself: yep, the secret is here and he has both the science and the narrative to deliver that secret; problem is, 99 out of 100 who buy the book were hoping there was something they could do to cash in that secret. For 99 out of 100, it’s too late.

If you are a Columbian second officer on an airplane, your cultural inability to correct superiors about a flight’s fuel gauge is going to have devastating consequences.

If you are a 1950′s WASPY attorney in Manhattan, your days are numbered, and you have no clue that your about to be trumped by the sons of the Jewish tailoring industry.

If you are a self-employed entrepreneur looking to make more money or more anything in your presently chosen career path… find another career path. Find something that only your upbringing, your world view, your already 10,000 hours of intentional investment can produce a unique, un-scalable result.

As opposed to Tipping Point (Chaos Theory) and Blink (Thinking without Thinking) which give clues to the future, Outliers is really about one of two things: a historical examination of how environmental circumstances produce success; and the need to understand your story in the now. The irony of course is that 99 out of 100 copies are probably purchased by people trying to get ahead now, and the message ultimately is spend 10,000 hours of focused, intentional, cutting edge work on a format no one else on the planet is yet working on. The comments I’ve seen from colleagues, bloggers and on Facebook about the book are so often  “wow, I have to spend 10,000 hours on my blog/my SEO/my speaking presentations” and while it’s great that they want to sharpen the saw, they’re almost always consistently off the mark. The message is to be in the right place at the right time, then dedicate the hours to a pursuit that no one else is doing yet; or, be the by-product of a specific culture that encourages a certain result (Southeast Asian rice-farming leads to superior math results; American Independence leads to superior aircraft piloting).

Outliers is the historical re-telling of how spectacular success (and some spectacular failures) happened. Past tense. Those looking for silver bullets and short cuts to amplify their life, will find great story-telling and the tale of how massive talent under ideal circumstances created spectacular success. But this is not E-Myth. This is not building a better system. It’s instead the story of the petri dish.

I’m a husband. I’m a dad. I was a history major. My best teacher was Carol Neel. Carol didn’t give me A’s. Carol didn’t like my writing. Carol challenged me, and relished conceptual thinking supported by extensive critical documentation. One of here best statements was “there is the truth, and then, there is the meta-truth.” A great example of this is that Rome was sacked by the Vandals. Content-based education helps you remember the dates, which I don’t, but I have Wikipedia to figure that out. Concept-based education like the second floor of Palmer Hall at CC teaches, leads you to root origins that go all the way to 399 B.C. and Socrates’ suicidal execution to understand the telling and retelling of history. Socrates condemnation and Rome’s Failure have origins in mass hubris. That’s meta-truth. Gladwell’s book is an airplane read that deals in meta-truth. Not many meta-truth books sell millions of copies.

Kierkegaard said “life can only be understood backwards, but it must be lived forwards.” Having digested a substantial amount of science and putting together the patterns of how these are linked, Gladwell is to be commended. But it is as a story-teller where he should be praised. Unpacking the past of these spectacular successes is an amazing lesson in how to bring up children. Here are the visceral images of both the benefit and the cost of spectacular success. Like so much in life, it gets down to doing what others dare not do, and then doing a whole lot of that. With the exception of airline pilots, this whole “lot of what others dare not do”, has to do with hands-on, live-fire, real-world, getting dirt under the nails. The amazing pattern is that while dedication and hours matter, there is no linear pattern that is common in any of the tales. There is no objective system. There are causes and there are effects, but there is no way of predicting either.

It leads me to think, if I’m setting up my kids for a systematized education of test-taking, grade-based, button-pushing, I’m probably doing them a disservice. Number Three on this year’s list unpacked that idea… and then some.

Top Five Books of the Year: Number Five…

I could have done without A Boy and His Horse.

I found the casting of Aslan’s Voice in the books on tape dreadful.

I still think Peter Pevensie is a little too big for his britches, and wish Lewis truly cut him down to size before leaving him in London-town.

But I finally reached the age when I was ready for an epic volume of child literature, and if anything, CS Lewis has been the bassline undercurrent of my 2010. To that end, I have thoroughly enjoyed my year in Narnia. Number Five on this year’s list is the bassline (yes, with two s’s), The Chronicles of Narina.

 

One of my favorite heretics, CS Lewis

My oldest son Andrew turned seven this year, and right before his birthday, we began reading The Chronicles of Narnia together. It is hard to describe fully the impact the Narnian Odyssey has had on the Day Family. For one, I feel like my children are receiving what Lewis would call an education of “the right books.” Their already rich imaginations are more fertile, their innate masculinity has more purpose. By example, no character in Narnia is more painful to read then Eustace Scrub, a boy who is a dullard and who reaches the age of ‘tween with scarcely an imaginative bone in his body. Correspondingly, he runs away on a deserted island and becomes a hideous dragon. Now that’s a moral lesson for the seven and under set! The “right book” education has come alive in my children in their walks in the woods, in spotting a bobcat in the backyard, in Isaiah’s obsession with beauty (and recently, rainbows), in Jeremiah’s early confidence and strength, and Andrew’s Peter-styled leadership. We just found out last night that Andrew is captain of his recess soccer team. He has been all year. They always lost until Andrew decided to start marking the movements of the other team’s best player and ordered his teammates to start studying that player’s preferred tendencies. They created a trap defense (they’re 6 and 7, and playing at recess) and now they’re winning all the games. Again, we just found this out. It’s not quite carrying a sword around the first grade, but the taste of the heroic life is on the tongues and hearts of my kids.

 

For me, Lewis has always represented the challenge in Christian exegesis. I have always respected his deep intellect, but never really embraced the vitality of his thoughts. This year, that changed. The haunting teaching a friend shared from Screwtape Letters has echoed in my head for the last six months: The Enemy lives in the past and the future; God lives in the Present and Eternity. So many wise men who have gone before me have told me, “Ben, these years, your mid-30′s, they’re the best years. Don’t miss them.” The adventure, humor, and overall grand story of Narnia brings that home. So many of these men missed some or all of these years. My present is my glimpse into eternity, be it with my children, my wife or my own story.

To that end, I will cherish my family’s year in Narnia.

 

Football Friday from Dive Valley

I’m imagining (key word and concept) a better future for the Broncos. This future has a safe harbor for my Broncos Santa Hat and my Snuggie.

I have not given up on the snarling horse of the apocalypse.

But in my reflecting on the lessons of the Josh McDaniels-era in Denver, I keep coming back to how many of the mistakes the Broncos made are mistakes I have made too. It’s the tale of decision-making in our modern lives.

First, a movie clip. One of the great scenes in movie history, “Rip it Out” from Dead Poet’s Society.

Apparently, Dr. Jay Allen Pritchard, PhD (he’s a double doctor, a great little joke I’m sure Williams put into the script) has infected the brains of so many football scribes and the Denver Broncos leadership. Dr. Pritchard, PhD is what Seth Godin calls the “The Lizard Brain”. Others I know call it the Resistance, Satan, Crowdthink, The Other, That Voice in My Head, etc. The point: we seek greatness because we know it is good, but then we damn that greatness to hell with our insatiable desire to measure and quantify said greatness. The whole idea of measuring poetry (or art of any kind) is moronic. Providing a graphic mass of consequence as a tool to determine greatness? Idiocy.

But that’s what the Broncos did with McDaniels. Sketch him out. He fits the profile. The guy is smart. He’s an offensive guru. He’s a math guy. He is of good stock. He plots well.

But he had (has) no people skills. He’s infected with hubris. He had no background in personnel decisions – at all – and was entrusted with those decisions in addition to head coaching duties, play calling duties and offensive coordinator duties.

Pat Bowlen and Joe Ellis are just like you and me. We let the Lizard make these decisions for us all the time. I see it in how REALTORS try and run their business. It is the thirst to quantify everything. More listings. More ads. More photos. More apps on their iPad. Are they graphing any higher? Sure. Are they happier. Ha. Trust me, I know of what I speak. Guilty as charged.

Politicians do this. More pork, more press conferences, more sound bites, more Sunday morning shows. Are their citizens any better?

Your boss might be doing this. More meetings. More productivity. More slogans. More more. Are you going anywhere.

You might be doing this if you’re looking for a job. More time on the resume. More applications. More posts in your blog reader to read more about more.

Where is any of this measurable-more going? Is there any story behind it? Is there even the semblance of a plot?

The reason to bring this to light is the ability to lead people is often overlooked. In football terms, the brilliance of Mike Tomlin as a hire in Pittsburgh had nothing to do with where he plotted on any graphs. It had to do with his ability to be a Pittsburgh Steeler, understand 80 years of football obsession and culture, and then ratchet that up even more. There are many articles out there this week about Bill Bellichek’s hollow coaching tree, that he can’t spin off great coaches who use his system. I’m sorry, that’s not at all fair to Bellichek, and I don’t care what you think of him. He’s 10-2 right now and has the best team in football despite a lousy defense. He allocates his strengths better than anyone else in the league. What’s the hardest stadium to play in right now? Foxboro. I think the dude knows what’s going on. Like the aforementioned Godin says in Linchpin, in terms of leadership, there is no map when leadership is at stake.

The era of systems (in business-terms, the 80′s and 90′s, in football-terms, Bill Walsh) is dead. We live in a tribal culture (Twitter, Facebook, MobileMe, Ning) and an increasingly tribal economy. The internet is a tool that profoundly expands the ability of individuals to connect with one another and disseminate ideas. At the same time, what it does best is tighten bonds in small audiences. The small audience of ardent fans is the most important. It’s much harder to go and get new converts, then it is to maximize the benefits of the already-on-board diehards.

If Shannon Sharpe is elected to the Pro Football Hall of Fame this winter, will the entire Denver Broncos franchise show up for his induction next summer? No way. When Dick LeBeau was inducted this summer, did the entire Steelers organization show up? Yes.  Now some will be quick to point out that when Elway was inducted, there was a huge turn out of Broncomaniacs. Fair enough. But Elway was a transcendent player, possibly the best quarterback ever, and the first Bronco ever inducted into the Hall. Dick LeBeau never even played for the Steelers, he’s their flippin’ Defensive Coordinator, and there are something like 5678 members of the Steelers organization already in Canton. Is it likely that on a Friday morning in Pittsburgh, a small group of friends get together, and heading out the door plop their Steelers lid on the mussed-up hair? No. But there were multiple people wearing Steelers gear this morning at Panera at 6:45 in Colorado Springs (The Broncos were shut out).

To that end, Mike Tomlin is as good a business decision as he is a football coach. I have nothing more to measure this on other than the fact that his tribe is growing. The Broncos tribe is shrinking.

The Denver Broncos are yet another dinosaur that is clinging to the Dr. Pritchard, PhD, school of measuring greatness. A lot of businesses are still clinging to stupid graphs. Rather than making art, they’re worried about defining measurable metrics and creating some mass and hoping that this mass (what some might better call a tumor) has weighty enough stuff to go forth and do good. They call this a plan. It’s sabotage.

If you were to do an unflinching SWOT analysis of your business or your career, would you spend your time really looking at your strengths (like you should), or would you look instead at what other people were doing and focus entirely on your shortcomings? Clearly, the Denver Broncos take the SWOT approach and focus on the W & T and forget the S & O. Think about this for a second: is your career or your business doing what the Broncos do?

Here is what the Broncos are doing (compare this to your career or your business): The Broncos have for too long under-utilized John Elway (“The Duke of Denver”) as a marketing engine for the company. He’s practically begging his way back in. STRENGTH: Put Elway on as the face of your franchise. He’s Colorado Royalty. They have the perfect quarterback (Tebow) to run the Oregon Blur Offense which would be particularly devastating for teams that have to travel to Denver and play at an elevation 4000 feet higher than any other stadium in the league. STRENGTH: Tebow sells more jerseys than any player in the league, could run a unique offense, and make Denver a terrifying place to play again. A once loyal and passionate fan base is shut out of training camp because the team practices in a sterile suburban setting called “Dove Valley” (which I have misappropriated “Dive Valley” for this post). STRENGTH: Practice two weeks in Greeley or Pueblo and make the team accessible to the masses for at least a few weeks out of the year. This will re-energize the common citizenry to actually save up to pay for tickets for a game or two a year. The teams colors are blue and orange.

They insist on wearing navy uniforms, which excite no one, and have reduced a potentially hallucinatory color in their pallet to secondary status (orange, see example, Barrelman). STRENGTH: revert to orange and blue. There is no mistaking where you’re playing when the blur offense is gassing you and 72,000 fans are re-energized behind their team, for good or for bad, as they don a hideously loud shade of orange apparel. That’s gonna be good for a win or three a year.

This is not the story you want people talking about

How many more wins will these actions produce? Silence, Lizard! It may not create more wins in the short-term. But it does creates a story worth talking about. That’s long-term value. It creates something (a tribe) worth buying into. Todd Haley famously wagged his finger at McDaniels and said “There’s a lot of #*@! being said about you.” That’s not worth talking about. That’s the stuff that jeopardizes teams abilities to grow, sign talent and improve. The Dr. Pritchard, PhD graph might measure things well, but it eventually is the last thing you want someone talking about.

What the Broncos have done over the last 15 years (yes, the start of the Shanahan-era) is take everyone of their strengths and found a way to convert it into a weakness. They have abandoned what made them lovable and unique, and instead chosen to follow what everyone else did. They were orange, and they went navy. In the end, the organization itself has become like so many others. Except, they’ve become insufferable because the only thing people can measure – their record – is terrible.

This behavior is not unique to Bronco-Town. People sabotage their own careers, businesses and lives all the time in similar ways.

  • What strengths have you kept under wraps for too long?
  • What leadership stake have you not exercised?
  • What story can your business and career tell better?

December 2010 Market Report: A Difference of 10%

Moving into 2011, there are several trends worth paying attention to:

  1. Buyers are refusing to pay top-of-market prices. Quite simply, price sensitivity is enormous. If a home is nice and of interest, but overpriced by 2 or 3%, a buyer simply won’t offer. Last month in Briargate, the price differential (sold price divided by final list price) was 99.5%. In Central, it was 104%.
  2. There is really no such thing as an improvement or updating to a home any longer. Updating or improvements are expected and required for a home to sell at market value. A home that doesn’t have updating or improvements still might sell, but at a fractional percentage of market value.
  3. The buyers are younger than ever (47% of buyers in the last 12 months were first-time buyers. Average age of first-time buyers: 30).
  4. Sellers are wising up to these trends and getting increasingly aggressive with their pricing, matching it to market needs.

For the year, there have been 15,927 new listings (a 4% increase over 2009, but the pace of listing has slowed since August). There have been 7,554 sales (down 7.0% from 2009). In normal every day terms, a 4% gain here and a 7% drop there are incremental movements. That is not the case with these percentages. The probability of sale marketwide this year is 47.4%. At this time last year, the probability was 53.0%. That is a 10.6% difference in probability. That means it is an additional 10% MORE DIFFICULT for a seller to sell their home this calendar year than the previous year.

That 10% is expressed in Buyer’s Actions. Buyer’s are:

  • 10% more price-conscious   
  • 10% more suspicious of defects
  • 10% more demanding of perfect condition
  • 10% more likely to expect updating carpeting, paint, lighting and plumbing fixtures
  • 10% more likely to associate this “updating” as “standard” and not as “improvements”

The big question moving forward in 2011 is who the buyer will be. Will the buyer be as tough and as demanding as the 2010 Buyer? Will the buyer be making cold-hearted economic calculations on every single decision? Or will the buyer be a different buyer, one who is moving on with life and has to actually buy something to change a situation that is no longer tenable? (job relocation, expanded family, marriage, divorce, long commute, change in lifestyle… you know, the reasons people used to buy homes)

The Mortgage Interest Tax Deduction Sacred Cow

Yesterday at 3:30 pm MST I received an email with an all-ready-to-roll call-to-action campaign designed to blitz Washington DC with the sound of reason. The cause at hand: the mortgage interest tax deduction was on the fiscal responsibility chopping block. Sparing you the details of how to turn into a human robo-phone, here’s the pitch to call:

“I’m disappointed that anyone in Congress — or on a Presidential Commission — would even suggest limits to the Mortgage Interest Deduction. Mortgage interest has been deductible for nearly 100 years, and the proposed changes will affect all 75 million home owners in the United States. We must act now to make sure the MID is not changed.

“Ever since the Deficit Commission announced its conclusions, the news media have been buzzing about the report. And what do they emphasize? Proposals to limit or even eliminate the Mortgage Interest Deduction. I’m concerned because all this does is scare the public — and potential buyers — away from the housing market. The last thing the housing industry needs right now (and for the foreseeable future) is another bucket of ice water to be thrown on the market. People who hear these news reports don’t differentiate between a proposal and a done deal. They just know that a tax provision they actually understand and rely on is under siege. This is just unacceptable.”

Well, what is this proposal that will “affect all 75 million home owners in the United States?” It would roll back the mortgage interest tax deduction for non-primary residence loans, home equity loans, and mortgages in excess of… $500,000.

This fashionable 59 year-old Frenchman could get a job emailing me. But that would be work. And he's not doing that again in 11 months.

Yep, $500,000 primary residence loans still get a mortgage tax deduction. Last I checked, that’s the MAJORITY of mortgages in the United States and the SUPER MAJORITY of mortgages presently being issued in the present market. What is so incredibly disappointing is that this is exactly the type of  hyperbole from the real estate industry that got America into the real estate mess 4 years ago (“buy now or be shut out forever”… rue those words and please learn from them!). Instead of focusing on the really central issues effecting real estate markets (uh, like trust, hoped-for futures, job creation), or even better, taking a position of fiscally responsible leadership, the NAR argument is essentially “don’t throw coldwater on the already unenthusiastic.” It’s like saying “stop reporting negative economic news, even if it’s true.” Instead, an email blitz equivalent of French Pensioners complaining that they can’t retire until their 62 shows up in 1.1 million inboxes.

If the consumer really knew the costs and the ins-&-outs of the mortgage interest tax deduction, seeing it used to carve up the deficit might actually make consumers enthusiastic.

Your over $500,000 Mortgage Interest Deduction? That's right. It's Toasted.

The reason for this post is twofold. One, I need a creative outlet to vent my frustration that NAR is such an enormously powerful lobbying organization and this is how it blows it’s trust asset with the public: by whining about a sacred cow that is projected to cost the American public $131 billion in 2012. I for one think that strategy will backfire in building consumer trust for a profession that requires huge amounts of trust. The second reason is that your mortgage interest tax deduction is probably safe, and that MID annually costs our government about what each year cost in Iraq. The seven-year commitment in Iraq cost $751 billion. Those quick on your toes can figure out that the mortgage tax deduction costs more on an annual basis then the most expensive war operation ever mounted in world history. Simpson and Bowles are intellectually bankrupt NOT to suggest cutting the MID. The budget for all of HUD in 2011 is around $45 billion. As far as fiscal responsibility, the MID is the fatted cow. With a phased-in implementation, this is one of the most logical line items in the government’s budget to attack.

Thus the phone blitzkrieg on Washington from the special interest group I have membership in.

The argument that it will dampen sales is 1.) dumb and 2.) false. NAR’s own data proves it is false. Last year, 47% of all buyers were first-time buyers. The average age of a first-time buyer was 30 years old. These are young pups on their third or fourth career already. Think about that for a second. The average 30 year-old is on their 3rd full career. Seven years out of college, three major work changes. Now, when polled how long they thought they would live in their home they responded on average, that they planned on 10 years of life in that home. Ten years is bordering on an eternal length of time for any 30-something. Does this tell us that the 30-something has eyes focused on only the now, or just as much on the future? The future is just as important to this 30-year old, and a bankrupt nation impacts that future pretty significantly. In today’s market, they are 47% of all buyers, and, less than 1% of them had mortgages over $500,000. The majority of repeat buyers expected to live in their home 15 years. Less than 5% obtained mortgages in excess of $500,000. Sounds like that market isn’t drying up anytime soon.

The reason people are not buying homes is because they do not see the future clearly. Another name for this is: fear. I am not so cynically wrapped up in my profession to think that the average consumer equates some rich person’s loss of their mortgage interest tax deduction to the same kind of fear that surrounds their job, their career, their kid’s school district, their ineffective city government, or the rat-infested foreclosed home next door. We are at the point where the economic ideas to buy can not get any better: Colorado Springs is down 17% from peak, home buyers today have 28% more money leverage due to interest rate declines then they did at the peak of the blistering market in June 2006. That means buyers have 45% more power, have desperate sellers in some cases and 4800 single family homes to choose from during the low-tide of inventory known as December. That’s the economics of the situation. The data says buying is logical. The reason people are not buying is not illogical. It is fear. What keeps people from buying are the broken fundamentals of the economy: trust, a clearer future, job creation. Actions that get the country going in the right direction help everyone. Without getting political, a fair-shake rebuilds trust. Slashing the national debt improves the future. Trust and future give employers reasons to hire.

Okay, but it throws icewater on the high-end recovery, at least in the short-term, right? Again, not necessarily true. There is math and then there is dumb math. Buying a house and paying interest on a debt to obtain a $0.30 on the dollar tax credit is stupid. It doesn’t make any fiscal sense. “Hi, I paid $40,000 in mortgage debt this year. I could have paid $30,000. But I paid $40,000. So give me my $12,000 in tax credit.” Yeah, it’s nice, and it is a benefit of homeownership, but that above math doesn’t make sense. Counseling people to defend their right to participate in dumb math sounds a bit, um, well, devious is not the right word, but not exactly above board. It sort of reminds me of the first episodes of Mad Men when they’re working on the Pall Mall account and can no longer advertise that they are healthful tobacco products and come up with “it’s toasted.” That’s why the over $500,000 mortgages will be exempt. Cut those numbers in half: still valid. The majority of Americans with mortgages have less than $500,000 mortgages. Since this is in the proposal phase, I’d be willing to bet that they also account for the pricey Northeast, CA and WA and make corresponding adjustments for conforming loan limits just as jumbo loans are $417,001 in CO, but over $700,000 in these pricey areas.

But the icing on the cake is this: the rich are coming back on their own, and to prove they don’t give a rip about the mortgage interest deduction (or perhaps they’re rich because they’re smart and they see the numbered days for the MID), they’re paying cash. Crazy market stat: at the end of the hyped-up financing run in 2007, there were 27 million dollar MLS sales in the PPAR MLS in 3rd quarter. Six of those were cash. This was the last quarter of easy, stupid, money, adjustable, interest-only, piggyback 2nds on everything died a quick, ruthless death in September, 2007 and Jumbo loan rates went up 2% overnight shutting down the market for cheap cash on McMansions. Interestingly, unemployment locally then was around 4%. Third quarter of 2010 saw 12 million dollar MLS sales in the PPAR MLS and how many were cash? Seven. That’s only one more than than the same quarter three years prior, but on a percentage basis was twice as large. Unemployment now locally is over 9%. Anecdotal information, a colleague at Selley Group builds high-end homes, with an average price of over $700,000. He has seven contracts over $700,000 in the last 90 days… everyone of them cash.  My point is: there is no mortgage interest deduction for any of these cash buyers… because there’s no mortgage. If NAR wanted to get the high-end really rolling, a “cash is sexy” campaign might be more effective than browbeating about the possible demise of the MID.

The only way out of this economic mess is if consumer activity begins to churn on it’s own two feet, if everyone acts cooperatively to help the big three goals of economic activity get a move-on (trust, clearer future, job creation), and those that are in a position of influence and education use their gifts accordingly. Encouraging dumb math as a way out of the recession when it favors only your profession doesn’t help. If anyone should be freaking out about the Simpson-Bowles recommendations it’s the accounting profession. Hand in hand with the MID ideas are lowering the tax rates and creating only three tax brackets so that lucrative deductions can be removed from returns. Yeah, common sense ideas like simplifying the tax code and not spending money in order to get it back on deduction (hmmm, is there a pattern here?) is prevalent in these bipartisan brainstorms. Thoughtfully examining the proposals en masse might be a service to ourselves and our constituents.

But I admit… it would be fun to prance around in Che Guevara t-shirts waving red flags with slogans painted on our pants.