Archive | August, 2012

On Creativity

25 Aug

Note:  On July 30, 2012, Jonah Lehrer resigned his position at The New Yorker after it was revealed that he fabricated quotes by singer Bob Dylan for his latest book, Imagine: How Creativity Works, and then engaged in a series of lies and misdirection in order to cover up his fabrications.  This comes only a month after it was revealed that he had “self-plagiarized’ – using three paragraphs of his own work previously published in The Wall Street Journal for a blog post.

Fabrication and “self-plagiarism” aside, Lehrer’s books have also been criticized as pop-science; cherry picking questionable studies in order to legitimize his self-help theories.  Isaac Chotiner, a contributor to The New Republic, compares Lehrer to Malcolm Gladwell and David Brooks – two other authors whose work I find insightful and enjoyable, stating that “Their sponging off science is what gives these writers the authority that their readers impute to them, and makes their simplicities seem very weighty.  Of course, Gladwell and Brooks and Lehrer rarely challenge the findings that they report, not least because they lack the expertise to make such a challenge.”

It is unfortunate that Lehrer’s indiscretions will detract from the many insights his writings (and the supporting studies) provide into the inner workings of the mind and the creative process.

5 key points to be gleaned from Lehrer’s work:

  1. You have to do the work.  There is no way around it, truly creative endeavors require effort – doing the research, writing draft after draft, prototyping, making sketch after sketch or taking hundreds of photographs.
  2. Set it aside.  On the plus side, there is room for leisure.  After you have done the heavy lifting, set it aside and let your subconscious mind work on it – work on a totally unrelated project, take a long walk, go on vacation, play a sport – anything to get your mind off of the subject.  How many times have you searched your memory in vain for the title of a movie, only to have it “pop” into your head in the shower?
  3. Let your ideas see the light of day.  Traditional brainstorming rarely works as it skips 1 and 2 above – and exposes fresh ideas to review and scrutiny before they have had a chance to percolate.  What I commonly see is an effort to provide solutions without fully understanding the problems.  Conversely, too few people expose their ideas to the fresh perspectives of others for fear of rejection, criticism or having to change direction.  Find trusted advisors and seek their insight.
  4. Rinse and repeat.  Creativity is a continuous endeavor that may require several runs through 1 – 3.  What separates the truly creative from those of us just trying to manage is the persistence (or grit) to keep trying to find the “it”.
  5. You know when you have arrived at “it”.  Recent research provides fascinating insight into that moment when you “know” you have found what you were looking for – a viable new business idea, the solution to a problem, the painting, poem or photograph that captures the essence of what you were trying to convey.

I am not prescribing this as a sure-fire process to groundbreaking creativity – but as a guide for approaching everyday challenges from writing a business plan or school paper to creating works of artistic expression.  I have seen first-hand the negative effects of trying to apply rigorous approaches to the creative process (such as implementing Six Sigma methodologies to R&D in an attempt to reduce the time/cost involved in finding “the next big idea”). The modern history of innovation at 3M offers a potent example.

For more information on the minds’ creative processes, check out Jonah Lehrer’s books including:

  1. Proust Was a Neuroscientist (2008)
  2. How We Decide (2010)
  3. Imagine: How Creativity Works (2012)

Hear Jonah Lehrer discuss his work in this podcast:


Indicator 4 – Employment Statistics

18 Aug

As we enter the final months of the 2012 Presidential election season, a lot of the political rhetoric will focus on the employment statistics – more specifically, on the unemployment rate.  Why?  Because unemployment it is an emotional issue for most citizens; and citizens vote with their emotions.

“Recession is when your neighbor loses his job. Depression is when you lose yours. And recovery is when Jimmy Carter loses his.” – Ronald Reagan.  Use of this quote should not be construed as an endorsement of any political party.

Current Employment Statistics (CES) provides comprehensive data on national employment, unemployment, and wages and earnings data across all non-agriculture industries, including all civilian government workers.  The employment data is based on a survey of 300,000 establishments across 600 industries, which account for approximately one-third of all payroll employees.  Industries include retail trade, manufacturing and construction.  CES provides details on numbers of hours worked and earnings of all surveyed across the nation.

The “employed” are defined as all full- and part-time workers and temporary and intermittent employees who received pay for the cited period.  It includes those on paid vacation or sick leave, and excludes business proprietors, self-employed, unpaid family members and volunteers.  Topic for further research – has the higher than average unemployment rate over the past 3-4 years been offset by an increase in self-employment?

Breakdown of Employment Statistics:

Full employment describes a labor market where the number of job seekers and job openings matches up very tightly.  It DOES NOT mean there is  zero unemployment; even in the very best of times there will be “frictional” unemployment, as people move around between jobs, or take some time trying to upgrade to a better job.

Economists define full employment as the lowest unemployment rate consistent with stable inflation.  Right now, according to the Congressional Budget Office, that corresponds to a jobless rate of 5.5%.

Recent Statistics:

Unemployment in the United States reached 10.0% at its highest peak in October 2009 when more than 3 million jobs were lost.  Since then, economy has added more than 4.1 million jobs – dropping down as low as 8.2% as of March 2012. However, the unemployment rate only measures those who are currently looking for work, a separate number called the “U-6” provides a more complete measure – in July 2012, the “U-6” rate was 15%.

Economists focus on the monthly change in total non-farm payrolls and in which sectors jobs were gained or lost.  Interesting trends can also be derived from the payroll data, such as the average number of hours per week worked and the average hourly earnings. This data gives an indication of how tight the labor market is – tight labor markets can translate into wage inflation.

Investors study the labor report to look for trends in disposable income, wage inflation and employment statistics, many studying industries of personal interest to them.  Analysts will usually conclude that if payrolls are increasing and wages are rising, then personal consumption statistics like retail sales will advance as well, as more money will be in the pockets of consumers.  As a result, the major markets react to employment numbers.

A weaker-than-expected June 2012 jobs report dominated investors’ attention in early July, pushing all three major U.S. stock indexes down more than 1%.  The Bureau of Labor Statistics jobs report, which showed that the economy added just 80,000 jobs in June, came in below expectations and pointed to signs of a deceleration in employment growth.   The Dow Jones Industrial Average closed down 124 points, or 1%, the S&P 500 fell 13 points, or 0.9%, and the NASDAQ shed 39 points, or 1.3%.

Then in July 2012, the economy added 163,000 jobs – the unemployment rate stayed essentially unchanged, even nudging up slightly from 8.2 percent to 8.3 percent (actually, if you want to get technical, it went from 8.22 percent to 8.25 percent).  Consequently, the Dow Jones Industrial Average added 217 points (1.7%) to 13,044, the S&P 500 rose 18 points (2%) to 1,383, and the NASDAQ rose 37 (2%) points to 2,946.


As with all the economic indicators we have examined (or will examine in future posts) Employment Statistics are subject to interpretation.  While the economy has added more jobs between 2009 and 2012 than were lost during the economic collapse of 2008-2009, unemployment remains well above the pre-recession average.  The job market may appear to be improving, but the overall economy remains fragile.  Question: What defines an “ideal” economy?

5 “Must Read” Books for Small Business Owners

4 Aug

1. The E-Myth Revisited by Michael E. Gerber – work on your business, not in it.
2. The Lean Startup by Eric Ries – think big, start small.
3. Guerrilla Marketing by Jay Conrad Levinson – everything you do is a marketing opportunity.
4. Raising Capital by Andrew J. Sherman – options for funding.
5. Getting to Yes by Roger Fisher, William L. Ury and Bruce Patton – creating win-win situations.