Build It

The global population is due to tick up to 8 billion. So in reality, any practical implementation of a Universal Basic Income is going to have to have simplifying assumptions. “Human Rights” are a goal... an agreement of how we should live. We then need to build that reality. 

I prefer the model of bottom-up collaborative savings vehicles, or “Community Wealth Funds”. A Stokvel 2.0 or a “Stokvel that went to Harvard”. England was in a bad way after the Napoleonic Wars. One of the ways we used to deal with hard times was to head to frontiers. We don’t really have the ability to head somewhere with nothing but a strong backbone and willingness to work. The area the 1820 Settlers arrived in had been a warzone between the isiXhosa and Dutch settlers for more than a hundred years. They had cattle markets, and that was where the word Stokvel came from. An Afrikaans name given by isiXhosa people to an English market, and made their own. 

“Collective Savings Vehicles” are not uniquely South African, and the mixed-kitchen origin of the idea would have come from and gone all over. There are growing Sovereign Wealth Funds, like Norway’s Oil Fund. Australia has changed the countries savings culture over time through the gradual introduction of powerful Superannuation Funds. 

Wealth needs to be built over time. It is a slow process that has to start somewhere, and with protection, can slowly gather increasing momentum. The key question is “how do you sustainably pay for a good idea?”

Nguni Cattle

Good Green Vibes

Two of my referees for my return to Old Mutual were the same two referees when I left the company and ventured overseas 12 years ago. As part of my first day reading, I was going through the Annual Report to Shareholders which referred to the 175-year-old company motto of “a certain friend in uncertain times”. The line between colleague, client, and friend can become very fuzzy given how much time we spend dedicated to work. I like that fuzziness. I like the fluidity which recognises that we are not just cogs in the machine. I think the warmth with which I have been welcomed back reflects well on the company, in a world where we have to acknowledge that wealth is created in containers. That can sometimes lead to excess competition, secrecy, and dehumanisation. Old Mutual is both a 175-year-old institution and a large publicly listed company. It isn’t a human and doesn’t own the humans in it. I don’t want to deify or anthropomorphize it, but I do look forward to seeing the people in it again and working with them, and the various stakeholders affected by buildings with green roofs.

Touched with Green

Somebody Else

In my job hunting I have had many conversations with friends, former colleagues, recruitment agents, and friendly strangers on LinkedIn. Covid means I have not done the coffee circuit. I probably saw more people in week-long visits to Cape Town than I have seen in the (just more than a) month I have been properly back. Conversations move slowly. Even when there is an obvious vacancy. Corporates have to go through the process of advertising jobs, screening candidates, and rounds of interviews. I am doing the same in reverse. There are periods of silence. There are forms to fill in. People who do not turn up for calls. Sometimes repeatedly. I am still of the view that a job is a bigger deal for the candidate than the company. Someone will fill the role and the company will carry on doing its thing. As Tim Minchin says in a love song to his wife, “If I didn’t have you… I really think I would have somebody else.” For the candidate, it feels like more of a big deal. How you are going to spend a big chunk of your time. Where? With who? Tim’s point probably still holds true if you do not connect too deeply to any single opportunity. Push on with a little yogic detachment. It matters, but it does not define you.

If I didn't have you

False Gods

Money makes money. This allows wealth to compound (the growth also produces), if not everything that is produced is consumed. If some of the fruit is planted, and given the space to grow. This is both powerful and dangerous. Ideally, you want to fail hard and memorably early on, to knock the delusions of grandeur out of you. You do not want to be that false god who complains that the (clean and comfortable) guest room is not up to the standards to which they are accustomed. Because if you do not regularly suffer some misfortune, chances are life will one day smack you hard and repeatedly in the face. Probably when you are managing other peoples’ money. As Mike Tyson said, “Everyone has a plan until they get punched in the mouth”. You cannot just judge yourself on how your path has played out. You cannot judge others without looking in a mirror and reflecting on your potential unwalked paths. We are communal animals, and every path is an alternative reality. One you could have easily been on. The key is not profit making and ego building. It is reinvestment, and building buffers and capacity for whatever punches are thrown.

Nergal Gate in Ninevah

Fighting over Scraps

The Corporate world is a game, best played as a game. I wasn’t good at it because I wasn’t willing to accept the veil of meritocracy. I took it too seriously and literally. I was too deep soaked in Righteous Indignation. It is more a club with increasing levels of loyalty when you prove yourself. Layer 1 is for cogs. Paid a salary and with a notice period. Your salary is the price it would cost to replace your skills and knowledge. Layer 2 is longer term incentives. Tying you in so breaking loyalty will cost you. Layer 3 is participation in profits (and losses). The club aims to reward you enough to stay, but not enough that you can afford to leave. Layer 4 is ownership. That private club isn’t open to everyone. Wealth creation gets institutionalised, so the first three layers are sufficient to create the value while closing the door to layer 4. Layer 4 is for immortality beyond individual contribution. Enough underconfident overachievers will do the work in the first three layers to make sure layer 4 is exclusive. Harsh reality? Layer 4 is available to those who start from scratch. The first three layers are attractive enough that people will fight over the scraps. Institutions change unwillingly. Pick your layer 4 and build new institutions.

Finding Balance

Key Performance Indicators (KPIs) and Balanced Scorecards are ways of managing performance. They are particularly challenging in areas that are hard to quantify and articulate. A lot of my work for money involved taking technical concepts, trying to wrap my head around them, then trying to make them easier for others to wrap their head around. Understanding is incredibly hard to quantify. Trust even more so. It takes years to build, and can be broken in an instant. Particularly if you are looking for reasons or data points to not trust someone. Everyone is holey. Everyone is flawed. A bigger flaw is looking for holes in other people. To look for reasons to distrust. The problem with KPIs is the list gets long fast. So if a task (maintain trust) is “worth 2%” of a year’s assessment, the quantifying or checklist becomes a spurious form of false confidence. Easier is to have a list of things you won’t do. Even better is to have an incredibly short list (three key things), and to trust people. Trusting doesn’t mean being a sucker. You can build buffers, checks and balances. But it does mean accepting that not everything can be controlled or quantified. It does mean building systems that aren’t designed to cut people off like gangrenous limbs.

Asking Questions

In the film Equilibrium (2002), John Preston (Christian Bale) is the best enforcement officer. The best “cleric”. In a future world that outlaws feelings and artistic expression, to maintain the peace. A fight with the second best isn’t even a fight. A play on 1984, Father is the leader. Except he isn’t. He is just a story that is maintained even after the original Father’s death. Businesses, like Father, are legal people. We speak of them using human words. We anthropomorphize. A merger occurs when two separate entities join to form a new one. An Acquisition is when one company becomes part of another. Time passes. Colleagues leave. Management changes. The nature of business changes. Nokia was founded as a Pulp Mill in 1865. Warren Buffett’s Berkshire Hathaway started as a textile manufacturing company in 1839. Institutions change. They are there to serve us, not the other way around. When Preston skipped a dose of emotion suppressant, he started asking questions. And as the best, did something about it. Always ask questions.

Consenting Adults

Some people like hierarchy. That’s okay. Everyone has their kinks, and anything that goes on between consenting adults is fine. It’s the consent part that bothers me. I believe in institution building, but I worry about the power of “legal people” over people. When the institution gets so big that the individuals become abstractions. Roles, categories, functions, grades. Turning people into numbers for memos to pass up to boardrooms. Particularly when the negotiating power is lopsided, and on one side there is a person “speaking for the institution” (be it a Country, Company or a The People). For markets and communities to function well, there has to be full transparency and a sense of peers working together. Otherwise it is just bullying. Using the fact that someone has limited job opportunities or capital to incentivise them to do as they are told. 

Need a Crown?

The Word "No"

“No one expects the dramatic Trevor John”, says my friend Stuart. I am generally a positive and optimistic person, but I have had to work very hard at the skill of Detachment. Detachment doesn’t mean not caring, it just means not caring too much. Not allowing any single thing to be more important than everything else. Allocating appropriate attention, but not more. I wear my heart on my sleeve a little too much for the Corporate Environment sometimes. Another friend's favourite trick was to “Poke Trev” before I went into my Annual Reviews. To touch me on my Righteous Indignation. I could easily take work too seriously, and insist on too much consistency. Sometimes you need to play the game. I wasn’t good at that. I don’t like that companies can treat people as disposable. As simple transactional inputs where there isn’t balanced negotiating power between ordinary people and the powerful “legal people” we create. The only real way to detach is to have an independent source of power. The word “no”.

Build through Empowerment

Wealth Compounds. It builds on what came before. On what has soaked deep. It builds on what we pay attention to, and what we see as relevant. It builds on the meaning we create. Not in a straight line, and within complex systems. It builds through cycles of sleep, death, unlearning, feedback, reflection and hibernation. It builds through memory and perception. It builds through context and comparison. Looking at things that are the same, but not. Looking at what we can understand, and what we can’t. It builds by understanding constraints, and the constraints on our understanding. It builds through bridges and communication. Through buffers and firebreaks. Through places to connect. Places to withdraw. To breathe. In stillness. In gaps. Wealth builds to accommodate the ambiguous and the random. To adjust. To accommodate. To create. Everything is connected. Wealth builds as we see and release the power of those connections. Wealth builds through empowerment.

Zoom in

Be an Owner

One of my pet peeves is the line, “Think like an Owner”. You can’t fake Ownership. Ownership gives you a vested interest in the distant future. It turns you from an extraction, to a foundation-building mindset. The most important wealth creation factors are time and compounding. Building something that exists beyond you. Building institutions. I have seen first-hand the difference in mindset of someone walking into, and out of, a meeting where they are given part ownership. Suddenly, they are interested in all areas of the business. Suddenly, their silo melts and they are able to see the importance of communication, cooperation, circles of competence, and institution building. Ownership isn’t a share of the profits. Ownership is a share of the future. A future that isn’t just about you. Don’t think like an Owner. Be an Owner.

Extraction isn't Ownership

Alpha on Nothing

Wealth Building and Institution Building are closely connected. The biggest determinant of the “Bang for Buck” of your Merit is the country and community you are born in. Meritocracy rewards the marginal action… the last decision. How much value did you create based on what you did, and how much would there have been if you hadn’t done it? That is completely blind to the “Institution Value”. Alpha in the investment world is a way of leveling the playing field. “Time Weighted Rate of Return (TWRR)” allows comparison of individual performance. TWRR versus a Benchmark gives a sense of merit. But Alpha on Nothing is Nothing. At the end of the day, it is what we build together and over time that counts. It only makes sense to build something if you have real ownership that extends beyond your marginal actions. Far into the future. Compounding means what you do now matters far more to what happens long after you are gone, than what you can see now. Real ownership matters. Real institution-building matters. What you do, matters.

Natural Stock Keeping

Investing is unavoidably philosophical. It is challenging to build up evidence when there is so much noise. A choice between too short for the noise to wash out, and so long that the evidence is stale. A single decision, whether right or wrong, large or small, is almost irrelevant in the very long run. It is the process that matters. “Time in the market, rather than timing the market”. An individual career (15-40 years) barely lets proper compounding kick in. Real wealth is created across generations, within communities, through institution building. My philosophy has shifted towards that of my father-in-law’s approach to Natural Bee Keeping, and a friend working on re-Wilding in farming. Focusing on Endurance and Resilience. Letting the Bees, Nature and Businesses do the work. A single decision that ends things does matter, so the focus needs to be on Custodianship. Keep breathing. Keep moving. Keep creating. Sustainable Growth is the pumping heart that keeps the cycle of creation and reinvestment going.

Your Head

I am a big believer in Institution Building. One of the reasons for the stretching of the pay scale from those on the bottom to the top is that human excellence gets institutionalised. Those at the bottom are paid their cog value (how much it would cost to replace them). Those at the top divide up what is created. I am a Yoga Teacher. In training, and under supervision, I was often reminded not to let students experience of Yoga go to my head. If they love the class, they may give me all the credit. It’s not me. It’s the Yoga. Yes, I played a role. The same is true in big institutions. Decision makers at the top will credit themselves with the full “marginal impact” of their actions. They will justify huge salaries as meritocracy. “What would have happened if I hadn’t done that?”. What they don’t do is say, “What would have happened if the Institution wasn’t behind me?”. We build on what came before. We build together. Every single individual is replaceable if you are thinking in transactional terms.